Kahn v. Dillon
| Decision Date | 27 January 2014 |
| Docket Number | D062715 |
| Parties | CARL KAHN, Plaintiff and Appellant, v. TIMOTHY P. DILLON et al., Defendants and Appellants. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Super. Ct. No. 37-2012-00091827-
CU-NP-CTL)
APPEALS from an order of the Superior Court of San Diego County, William S. Dato, Judge. Affirmed.
Burkhardt & Larson and Philip Burkhardt for Plaintiff and Appellant.
Wingert Grebing Brubaker & Juskie LLP, Charles R. Grebing and Andrew A. Servais for Defendants and Appellants.
These appeals are from an order granting in part and denying in part a special motion to strike Carl Kahn's claims against Timothy P. Dillon and his law firm, Dillon & Gerardi, APC (collectively Dillon), for malicious prosecution and abuse of process basedon Dillon's representation of a client in a prior action against Carl and his sister Margaret Kahn.1 Carl appeals the portion of the order striking the abuse of process claim, and Dillon appeals the portion refusing to strike the malicious prosecution claim. We affirm.
Dillon represented Mohammed Namvar in a prior action against Margaret and Carl and other defendants for damages for "gross mismanagement" of Namvar's real property assets. In the complaint, Namvar alleged Margaret was a real estate broker and mortgage broker whom he knew from prior business dealings and to whom he granted a power of attorney to allow her to manage his properties while he sought treatment for substance abuse. Namvar complained that Margaret "engaged in a continuous pattern of mismanagement," including putting title to his properties in her own name, refinancing properties on unfavorable terms, selling properties for less than they were worth, failing to rent out properties, and failing to account properly for her management activities.
Namvar's claims against Carl arose out of Margaret's management of one of Namvar's properties located in La Quinta. According to Namvar, Margaret used the power of attorney he had granted her to convey the property to Carl, who one month laterconveyed it to Margaret in her name alone. When Namvar demanded that Margaret convey the property back to him, she refused. Namvar alleged these conveyances caused him to lose his equity in the property and to suffer adverse income tax consequences. Based on these allegations, Namvar sued Carl for compensatory and punitive damages for aiding and abetting Margaret's tortious conduct and for negligence in failing to inquire into the reasons for the conveyances or whether Namvar consented to them.
Michael Bishop, an attorney with Dillon's law firm, deposed Carl. Carl was unrepresented by counsel during the deposition. Bishop asked Carl many questions about his financial situation, including his sources of income for the previous 20 years; the real properties he has owned, how he financed the purchases, and at what prices he sold them; his credit rating; and where he did his banking. Carl did not object to or refuse to answer any of these questions.
Margaret settled with Namvar. The case proceeded to a bench trial against Carl on causes of action for negligence and aiding and abetting Margaret's tortious conduct.
In its statement of decision, the trial court (Hon. William R. Nevitt, Jr.) found that after a series of conveyances by which Namvar and Margaret became joint tenants of the La Quinta property, Margaret, acting on her own behalf and as Namvar's attorney in fact, conveyed the property to Carl so that he could try to refinance the property. One month later, Carl conveyed the property to Margaret after he determined he could not do so. Approximately two months later, Namvar conveyed the property to Margaret so that shecould try to refinance it. Margaret then refinanced the property with a negative amortization loan, but refused Namvar's demands that she convey the property back to him. Margaret eventually sold the La Quinta property for less than the amount due on the loan. The court also specifically found that Carl had no knowledge of or involvement in Margaret's decisions to refinance the property with a negative amortization loan or to refuse to convey the property to Namvar.
Based on these findings, the trial court concluded Namvar did not establish any of the essential elements of his claims for negligence and aiding and abetting Margaret's misconduct and entered judgment for Carl.
After Carl obtained the favorable judgment in the prior action, he sued Dillon for malicious prosecution and abuse of process. Carl alleged Dillon lacked probable cause to commence or maintain the prior action on behalf of Namvar because Dillon knew Margaret had authority to undertake the refinancing efforts on which the action was based. Carl also alleged Dillon acted maliciously both in filing the prior action for the purpose of pressuring Margaret into a settlement and in maintaining the prior action against Carl after Margaret settled. Carl further alleged Dillon misused discovery in the prior action in order to disclose Carl's private financial information, to embarrass him, and to pressure Margaret into settling. Carl sought to recover as damages the attorney fees he had incurred in the prior action and also sought punitive damages.
Dillon filed a special motion to strike under the anti-SLAPP2 statute. (Code Civ. Proc., § 425.16.) In support of the motion, Dillon included a memorandum of points and authorities, his own declaration, and numerous exhibits. Dillon argued Carl's claims for malicious prosecution and abuse of process were subject to the anti-SLAPP statute because both claims arose out of protected litigation activity. Dillon further argued Carl could not establish a probability of success on either claim. As to the malicious prosecution claim, Dillon asserted there was probable cause to sue Carl based on his participation in transferring title of the La Quinta property from Namvar to Margaret, including the recording of "false deeds," and an expert's opinion that Margaret's conduct fell below the standard of care for real estate professionals. Dillon also contended Carl had no evidence Dillon acted with malice in prosecuting the prior action. As to the abuse of process claim, Dillon claimed the discovery taken in the prior action was protected by the absolute litigation privilege of Civil Code section 47, subdivision (b).
Carl filed opposition to the anti-SLAPP motion, including a memorandum of points and authorities, declarations from two of his attorneys and Namvar's brother, and several exhibits. Carl conceded his malicious prosecution and abuse of process claims both fell within the scope of the anti-SLAPP statute, but argued the claims had "minimal merit" and therefore should not be stricken.
As to the malicious prosecution claim, Carl argued Dillon lacked probable cause to initiate and maintain the claims for negligence and aiding and abetting Margaret's tortious conduct. Carl contended he breached no duty owed to Namvar, and Namvar's conveyance of the La Quinta property to Margaret after the conveyances between Margaret and Carl eliminated the possibility that any action by Carl caused the damages suffered by Namvar. Carl also argued Dillon acted with malice in prosecuting the prior action against Carl because attorneys with Dillon's firm stated that they (1) expected to lose the claims against Carl, (2) continued to sue Carl in order to induce Namvar to settle with Margaret, and (3) "regretted opting for a bench trial because a jury would have been more likely than a judge to punish Carl for Margaret's alleged wrongdoing."
As to the abuse of process claim, Carl contended Dillon used a deposition for an improper purpose, namely, to obtain information about Carl's private financial affairs in violation of both the constitutional right of privacy (Cal. Const., art. I, § 1) and the statutory requirement that a plaintiff obtain a court order before conducting discovery on a defendant's financial condition for purposes of liability for punitive damages (Civ. Code, § 3295, subd. (c)). Carl further contended the litigation privilege did not bar his abuse of process claim because his financial condition had no relation to Namvar's claims in the prior action.
In reply to Carl's opposition, Dillon filed a memorandum of points and authorities, declarations from himself and his colleague Bishop, and an additional exhibit. Dillon argued Carl had not met his burden to establish a probability of success on either themalicious prosecution claim or the abuse of process claim. Dillon contended Carl's undisputed participation in the various transfers of the La Quinta property established probable cause to sue him in the prior action. By failing to submit a declaration or otherwise explain that participation, Dillon claimed, Carl did not show the lack of probable cause essential to his malicious prosecution claim. Dillon also asserted Carl's purported evidence of malice showed only vigorous pursuit of a claim on behalf of Namvar. Finally, Dillon argued Carl could not prevail on his abuse of process claim because the deposition questioning that underlay the claim was clearly protected by the litigation privilege.
The trial court granted the special motion to strike the abuse of process claim, on the ground the litigation privilege barred the claim. The court, however, denied the special motion to strike the malicious prose...
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