Mogan v. Sacks, Ricketts & Case LLP
| Decision Date | 10 January 2022 |
| Docket Number | 21-cv-08431-TSH |
| Court | U.S. District Court — Northern District of California |
| Parties | MICHAEL MOGAN, Plaintiff, v. SACKS, RICKETTS & CASE LLP, et al., Defendants. |
Plaintiff Michael Mogan sues Airbnb and three of its employees, Jeff Henry, Dave Willner and Sanaz Ebrahini (collectively, the “Airbnb Defendants”) and counsel that represented the Airbnb Defendants in an underlying state court action Sacks, Ricketts & Case, LLP and two of its attorneys, Michele Floyd and Jacqueline Young (collectively, the “SRC Defendants”) for claims related to a sanction award against him. The Airbnb Defendants now move to dismiss all claims against them as being barred by the litigation privilege or, alternatively, on grounds of issue preclusion. ECF Nos. 12 (Airbnb Mot.). The SRC Defendants move to dismiss and for an order striking Mogan's sole claim against them for abuse of process pursuant to California Code of Civil Procedure Section 425.16. ECF No. 16 (SRC Mot.). Mogan opposes both motions. ECF Nos. 21 (Airbnb Opp'n), 26 (SRC Opp'n). The Court finds these matters suitable for disposition without oral argument. See Civ. L.R. 7-1(b). Having considered the parties' positions, relevant legal authority, and the record in this case, the Court GRANTS both motions for the following reasons.[1]
As an initial matter, the parties request the Court take judicial notice of over 60 documents from the underlying state court action and related arbitration proceedings, consisting of documents that were filed and correspondence between the parties. ECF Nos. 12-1. 16-1, 21, 26.
In general, the Court may not look beyond the four corners of a complaint in ruling on a Rule 12(b)(6) motion, except for documents incorporated into the complaint by reference and any relevant matters subject to judicial notice. Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007) (per curiam); Lee v. City of L.A., 250 F.3d 668, 688-89 (9th Cir. 2001). The Court may take judicial notice of matters that are either (1) generally known within the trial court's territorial jurisdiction or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. Fed.R.Evid. 201(b).
A court may “take judicial notice of undisputed matters of public record, including documents on file in federal or state courts.” See Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 & n.6 (9th Cir. 2006) (); Porter v. Ollison, 620 F.3d 952, 954-55 & n.1 (9th Cir. 2010) (); McCurdy v. Davey, 2020 WL 43110, at *5 n.1 (N.D. Cal. Jan. 2, 2020) (same). The same holds true for arbitration filings. See Trs. of the Operating Eng'rs Pension Tr. v. Smith-Emery Co., 2018 WL 5983551, at *2 n.3 (C.D. Cal. Nov. 14, 2018) (); Glob. Indus. Inv. Ltd. v. Chung, 2020 WL 5355968, at *4 (N.D. Cal. Sept. 7, 2020) (same). Further, because Mogan's complaint references many of the documents, including pleadings and communications and orders leading to the sanction award against him, the Court may fairly consider those exhibits under the doctrine of incorporation by reference, without converting the motion into one for summary judgment. Paulsen v. CNF Inc., 559 F.3d 1061, 1071 (9th Cir. 2009); United States v. Ritchie, 342 F.3d 903, 907-08 (9th Cir. 2003); Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1160 (9th Cir. 2012) (); In re NVIDIA Corp. Sec. Litig., 768 F.3d 1046, 1058 n.10 (9th Cir. 2014) ().
Accordingly, the Court GRANTS the parties' requests for judicial notice.
Mogan is an attorney licensed to practice in California. Compl. ¶ 17, ECF No. 1. In 2018 he filed a civil complaint in San Francisco Superior Court on behalf of his client, Veronica McCluskey, “after . . . Airbnb employees destroyed her business in retaliation for reaching out to Fox News and the Los Angeles Police Department about Airbnb Inc's inaction towards an Airbnb Superhost William Hendricks who was trafficking illegal drugs through the United States mail including at his Airbnb rental in Los Angeles.” Id.; see also McCluskey v. Henry et al., San Francisco County Superior Court Case No. CGC18567741. After the Airbnb Defendants filed a motion to compel arbitration based upon an agreement executed between Airbnb and McCluskey, the court granted the motion and stayed the case pending the outcome of arbitration proceedings. Compl. ¶ 19.
McCluskey subsequently filed an arbitration claim, and on February 26, 2019, the American Arbitration Association (“AAA”) emailed the parties with a request for $200 from McCluskey and $7, 500 from the Airbnb Defendants to proceed with the arbitration. Id. ¶ 20. Mogan alleges AAA closed the arbitration proceedings because the Airbnb Defendants did not pay the $7, 500 filing fee by the due date. Id. ¶¶ 22-25. McCluskey filed a motion to lift the stay, arguing that Airbnb's purported untimely payment resulted in a “default” in arbitration such that the state litigation could move forward. Taylor Decl., Ex. 20, ECF No. 12-22. However, on August 8, 2019, the superior court denied her motion, finding the Airbnb Defendants' payment was timely and the AAA had acknowledged as much in writing. Compl. ¶ 30; Taylor Decl., Ex. 22, ECF No. 12-24. Specifically, the court found:
Contrary to Plaintiff's contention, Defendants are not in “default” in the arbitration proceeding. Rather, the American Arbitration Association made a clerical error by misapplying defendants' timely fees and then, as a result, administratively closed the case. Once the AAA realized and acknowledged its mistake, it requested confirmation from plaintiff that she wants the case reopened. Plaintiff's counsel did not respond to that repeated request by the AAA. The Court will not allow Plaintiff to take advantage of the AAA's clerical error and her own lengthy delays in order to evade her contractual obligation to arbitrate her claims, if she wishes to pursue them.
Prior to the court's ruling, and in response to McCluskey's motion to lift the stay, the SRC Defendants served a California Code of Civil Procedure section 128.7 safe harbor letter that stated their intent to file a motion for sanctions, along with a draft of the motion. Compl. ¶ 33. Mogan alleges “Defendant SRC LLP sent Plaintiff the email on behalf of all the Defendants in an attempt to force Plaintiff to choose between being extorted out of $25, 047.70 or withdrawing the motion to lift stay and paying the AAA a filing fee because based on information and belief, no $7 500 payment had been made by Airbnb Inc. on April 5, 2019 to the AAA.” Id. ¶ 38. He further alleges it was “sent to annoy and harass Plaintiff and to use the threat of disciplinary charges by the state bar to obtain an advantage in a civil dispute between Veronica McCluskey and Defendants Dave Willner, Jeff Henry and Sanaz Enrahini and with the conscious disregard of the rights of Plaintiff, and with the intent to vex, injure or annoy such as to constitute oppression, fraud or malice upon Plaintiff.” Id. ¶ 35.
After the court denied McCluskey's motion, the SRC Defendants filed a revised sanctions motion. Id. ¶ 44. On September 11, 2019, the court granted the motion in part, finding the motion to lift the stay was “both factually and legally frivolous.” Taylor Decl., Ex. 23, ECF No. 12-25. In its order, the court reiterated its findings about Airbnb's timely payment of its arbitration fee and McCluskey's improper purposes in bringing such a motion:
Defendants' motion for sanctions pursuant to Cal. Civ. Proc. Code § 128.7 is granted. The Court finds that Plaintiff Veronica McCluskey's motion to lift stay, which the Court [denied] by order dated August 8, 2019, was both factually and legally frivolous. In particular, the Court finds that plaintiff's contention that defendants were in “default” in the arbitration proceedings was entirely lacking in either evidentiary or legal support. In fact, as set forth in the order, and as was fully known to plaintiff's counsel, the American Arbitration Association had made a clerical error by misapplying defendants' timely fees and then, as a result, administratively closed the case. Once the AAA realized and acknowledged its mistake, it requested confirmation from plaintiff that she wanted the case reopened. Plaintiff's counsel did not respond to that repeated request by the AAA, but instead brought the frivolous motion to lift the stay, by which counsel sought to take advantage of the AAA's clerical error and her own lengthy delays in order to evade her contractual obligation to arbitrate her claims and to avoid the effect of the Court's earlier order granting defendants' petition to compel arbitration. Plaintiff's counsel now compounds his misconduct by accusing defendants' counsel of “continued attempts to commit fraud upon this Court and Plaintiff” and of “lying, ” among other things, accusations which the Court finds to be baseless and unprofessional.
Id. The court then ordered Mogan (but not...
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