Optional Capital, Inc. v. Akin Gump Strauss, Hauer & Feld LLP

• Decision Date: 16 November 2017
• Docket Number: B275274
• Citation: 226 Cal.Rptr.3d 246,18 Cal.App.5th 95
• Court: California Court of Appeals Court of Appeals
• Parties: OPTIONAL CAPITAL, INC., Plaintiff and Appellant, v. AKIN GUMP STRAUSS, HAUER & FELD LLP et al., Defendants and Respondents.

18 Cal.App.5th 95

226 Cal.Rptr.3d 246

OPTIONAL CAPITAL, INC., Plaintiff and Appellant,

v.AKIN GUMP STRAUSS, HAUER & FELD LLP et al., Defendants and Respondents.

B275274

Court of Appeal, Second District, Division 1, California.

Filed November 16, 2017

Rogari Law Corporation, Ralph Rogari, Los Angeles; Law Offices of Mary Lee and Mary Lee for Plaintiff and Appellant.

McDermott, Will & Emery, Gordon A. Greenberg and Charles Edward Weir, Los Angeles, for Defendant and Respondent Akin Gump, Strauss, Hauer & Feld LLP.

Lewis Brisbois Bisgaard & Smith, Raul L. Martinez, Kenneth C. Feldman and Larissa G. Nefulda, Los Angeles, for Defendants and Respondents Parker Shumaker Mills LLP, David Parker and William Mills.

JOHNSON, J.

Optional Capital, Inc. (Optional or Plaintiff) sued various entities and individuals, including DAS Corporation (DAS) and its counsel—Akin Gump Strauss Hauer & Feld LLP (Akin) and Parker Shumaker Mills LLP, David Parker and William Mills (collectively, Parker) (collectively with Akin, Defendants)—for conversion and fraudulent transfer. Plaintiff sought to recover from Defendants on theories of vicarious liability (conspiracy and aiding and abetting).

In response, Defendants, pursuant to section 425.16 of the Code of Civil Procedure,¹ filed special motions to strike all claims asserted against them— so-called anti-SLAPP motions.² In their motions, Defendants argued that their respective representations of DAS were protected petitioning activity under the anti-SLAPP statute and that Plaintiff could not show a probability of prevailing on any of its claims due, among other things, to the litigation privilege. The trial court eventually granted Defendants' motions.

On appeal, Plaintiff argues that Defendants' alleged misconduct is not protected activity under the anti-SLAPP statute and, even if it were, Plaintiff presented the trial court with sufficient evidence to establish a probability of prevailing on the merits of its claims. In addition, Plaintiff argues that our decision in a prior appeal involving DAS's anti-SLAPP motion ( Optional v. DAS Corp. (2014) 222 Cal.App.4th 1388, 166 Cal.Rptr.3d 705 ( Optional I )) is "the law of the case" and, as a result, Defendants' reliance on the litigation privilege is unavailing. We disagree with Plaintiff on each point and, accordingly, affirm.

BACKGROUND³

Plaintiff is a Korean venture capital firm, whose investors included DAS. ( Optional I , supra , 222 Cal.App.4th at pp. 1392–1393, 166 Cal.Rptr.3d 705.) In 2001, according to Plaintiff, DAS and certain individuals (the Kim parties) conspired to and did take control of Optional, converting more than $35 million of Optional's funds. ( Ibid . ) The Kim parties created a California corporation, Alexandria Investments, Inc. (Alexandria), and then transferred the money misappropriated from Plaintiff into bank accounts in the name of Alexandria at United Commercial Bank in Rowland Heights, California. ( Ibid . )

I. The underlying lawsuits

A. THE STATE COURT ACTION

In May 2003, DAS sued the Kim parties and others in California state court (the state court action), alleging, among other things, fraud, breach of contract, and breach of fiduciary duty. ( Optional I , supra , 222 Cal.App.4th at pp. 1392–1393, 166 Cal.Rptr.3d 705.) As part of the state court action, DAS alleged that the Kim parties had transferred the funds looted from Plaintiff into the United States. Later in 2003, after DAS had inaugurated the state court action, Alexandria transferred more than $15 million of Plaintiff's converted money to a bank account at Credit Suisse in Geneva, Switzerland. ( Ibid . )

B. THE FEDERAL FORFEITURE ACTION

Beginning in 2004, the United States Government, based on the conduct of the Kim parties in running Optional, commenced a series of forfeiture proceedings in California federal district court that were later consolidated into one proceeding (the federal forfeiture action). ( Optional I , supra , 222 Cal.App.4th at pp. 1393–1394 & fn. 3, 166 Cal.Rptr.3d 705.) "At the request of the United States government, the Swiss government froze the Credit Suisse account.... Both Optional and DAS were claimants in the forfeiture action arising out of the Kim parties' looting of Optional, and both Optional and DAS filed claims to the various assets, including the monies in the Credit Suisse account." ( Id . at p. 1394, 166 Cal.Rptr.3d 705.) Beginning in 2005, Parker represented DAS in the federal forfeiture action.

In March 2007, the United States District Court granted the Kim parties' summary judgment motion against the United States government in the federal forfeiture action, a decision the Ninth Circuit affirmed in 2008, thereby extinguishing the United States government's forfeiture claim and the government freeze on the Credit Suisse account. ( Optional I , supra , 222 Cal.App.4th at p. 1394, 166 Cal.Rptr.3d 705.)

In October 2009, the federal district court granted summary judgment in favor of the Kim parties on all remaining properties, resulting in the dismissal of DAS's and Plaintiff's claims. Both DAS and Plaintiff appealed.

C. PLAINTIFF'S FEDERAL COURT ACTION

In 2004, Plaintiff filed a lawsuit in federal district court in California against the Kim parties and Alexandria seeking damages for fraud and conversion based on the looting of Optional (Plaintiff's federal court action). ( Optional I , supra , 222 Cal.App.4th at p. 1394, 166 Cal.Rptr.3d 705.)

In 2008, the jury returned a verdict in Plaintiff's federal court action, finding that the Kim parties and Alexandria converted approximately $15.5 million from Optional. ( Optional I , supra , 222 Cal.App.4th at p. 1394, 166 Cal.Rptr.3d 705.) The federal district court, however, subsequently vacated the jury award, extinguishing Plaintiff's judgment lien. ( Ibid . )

D. DAS'S CRIMINAL ACTION IN SWITZERLAND

In April 2007, after the Kim parties won their summary judgment motion against the United States government in the federal forfeiture action, DAS instituted criminal proceedings in Switzerland against Alexandria, thereby obtaining a second freeze on the Credit Suisse funds (DAS Freeze). ( Optional I , supra , 222 Cal.App.4th at p. 1394, 166 Cal.Rptr.3d 705.) "Although it was aware of the DAS Freeze on the funds, Optional did not take any action on its own in Switzerland to freeze the funds." ( Ibid . )

E. A CONFLUENCE OF EVENTS IN 2010-2011

During the period 2010-2011, a number of events occurred in rapid succession in the underlying proceedings that would give rise to Plaintiff's claims below.

In November 2010, the parties to the state court action, through private mediation, reached a confidential settlement. ( Optional I , supra , 222 Cal.App.4th at p. 1395, 166 Cal.Rptr.3d 705.) At the time of the settlement, Akin represented DAS.

In December 2010, funds became available to fund the settlement in the state court action. Shortly after the parties to the state court action had settled their dispute, the Swiss investigating magistrate was informed of the settlement. ( Optional I , supra , 222 Cal.App.4th at p. 1395, 166 Cal.Rptr.3d 705.) At a hearing in February 2011, "with DAS and Alexandria present, the Swiss government lifted the DAS Freeze and the funds on deposit at Credit Suisse were released to DAS. Optional did not participate in these proceedings." ( Ibid . )

Also, in December 2010, the Ninth Circuit reversed and reinstated both DAS's and Plaintiff's claims in the federal forfeiture action. One month later, in January 2011, the Ninth Circuit reinstated Plaintiff's recovery on its conversion claim. ( Optional I , supra , 222 Cal.App.4th at p. 1395, 166 Cal.Rptr.3d 705.)

In May 2011, with its restored judgment against the Kim parties, Plaintiff sought a contempt order against DAS and its counsel (attorneys from both Parker and Akin), arguing, among other things, that the settlement in the state court action was "designed to thwart [the federal district court's] jurisdiction and deprive Optional of its opportunity to pursue its claims" on the funds in the Credit Suisse account. Plaintiff asked the federal district court to order the return of the funds from Credit Suisse account.

In June 2011, the federal district court denied Plaintiff's requests. While the district court recognized that DAS's conduct had, in effect, "bypassed [its] in rem jurisdiction over the Credit Suisse accounts," neither DAS nor its counsel violated any court order. In fact, "DAS obtained the relief it sought from a legitimate authority that had both jurisdiction and actual control over the [Credit Suisse] accounts."

In November 2011, the district court, over Plaintiff's objection, dismissed DAS from the federal forfeiture action.

II. Plaintiffs' claims against Defendants

On December 1, 2011, Plaintiff filed its initial complaint in the action below. Plaintiff alleged that DAS, Defendants, and various other individuals and entities, including the United States government, "agreed on a common plan ... to fraudulently transfer 13 million dollars from the Credit Suisse Bank account to DAS and thereby hinder, delay or defraud OPTIONAL in recovering that property." Although Plaintiff did not provide any details about the formation and operation of the alleged conspiracy, it alleged that the DAS Freeze was a result of the conspiracy and that Parker had made misleading representations to the federal district court and to the Ninth Circuit.

Plaintiff's initial complaint spurred a number of anti-SLAPP motions from various defendants. DAS filed the first of these motions on March 27, 2012. On April 4, 2012, the same day that Akin filed its anti-SLAPP motion, Plaintiff voluntarily dismissed Akin from the case. On April 12, 2012, Plaintiff and Parker stipulated that Parker could defer filing its anti-SLAPP motion until after an appeal was decided on the then-pending anti-SLAPP motions.

The trial court granted DAS's anti-SLAPP motion and Plaintiff appealed. ( Optional I , supra , 222 Cal.App.4th at pp. 1396–1397, 166...