X. Young Lai v. Wen Fang Wang
| Decision Date | 10 May 2023 |
| Docket Number | H047118 |
| Parties | X. YOUNG LAI, Plaintiff and Appellant, v. WEN FANG WANG et al., Defendants and Appellants |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. 17CV308093
Plaintiff and attorney X. Young Lai formerly represented defendant Wen Fang Wang in a dissolution action in San Mateo County Superior Court. In this civil action subsequently filed in Santa Clara County Superior Court, Lai sued Wang and two attorneys (Frank Scott Moore and Michelle Melen) (collectively, defendants)[1] for malicious prosecution, abuse of process, and conspiracy and (as to Wang only) fraud, breach of contract, and common counts.
Defendants filed special motions to strike Lai's complaint under Code of Civil Procedure section 425.16 (anti-SLAPP motions).[2] The trial court granted the anti-SLAPP motions as to the causes of action for abuse of process malicious prosecution, and conspiracy. The court denied Wang's motion as to the fraud, breach of contract, and common counts causes of action.
Lai has appealed the trial court's order, and Wang has filed a cross-appeal. For the reasons explained below, we affirm the trial court's ruling granting defendants' anti-SLAPP motions as to the causes of action for abuse of process malicious prosecution, and conspiracy.
In the cross-appeal, we conclude the trial court erred in ruling that the causes of action for fraud, breach of contract, and common counts do not arise from activity protected under the anti-SLAPP statute. We further decide that, because the litigation privilege renders inadmissible Lai's evidence for these causes of action, they lack minimal merit. Accordingly, we reverse the order denying Wang's anti-SLAPP motion on those causes of action and remand with directions to grant her anti-SLAPP motion.
Lai is an attorney licensed to practice in California.[4] In 2016, Wang asked Lai to represent her in a dissolution action. According to Lai, Wang falsely told him that she did not have the funds to retain an attorney for the dissolution action; owed rent and lacked sufficient funds to buy food; and had not received any distribution of assets before her separation.
Based on Wang's assertions about her financial condition, Lai agreed to represent Wang under a "retainer agreement." The agreement, titled "legal representation fee agreement" (capitalization omitted), provided that Lai would request a court order under the Family Code for the payment of attorney fees from the opposing party. It stated in relevant part that the fee arrangement was based on an hourly fee of $300, "contingent upon the court's order for attorney's fees and costs to be paid by the other party." It also provided, Wang and Lai signed the agreement in September 2016.
Lai initiated Wang's dissolution action in October 2016 in San Mateo County Superior Court (dissolution action). Lai made a court appearance on Wang's behalf in November 2016.
On January 25, 2017, Lai appeared at a hearing in the dissolution action. The question of spousal support arose. Wang's husband's attorney[5] informed the court that Wang's husband in August 2015 had sent Wang $160,000 by wire transfer. Following that statement from her husband's attorney, Lai told the court that "we" had not received "any documentation" stating that Wang's husband had given "[Wang] such a substantial amount" and that Lai believed Wang had received "eighty or seventy thousand [] dollars" to "pay back her mother's loan." Wang's husband's attorney responded that she could confirm the wire transfer transaction records showing Wang's husband had given Wang $160,000.
Following a recess, Wang's husband's attorney stated on the record that there were two wire transfers from husband to Wang: the first on July 13, 2015, for $89,290 and the second on August 13, 2015, for $75,000. Wang's husband's attorney stated "We confirmed the routing number, the bank account number, and the instructions, and gave it to opposing counsel." Later in the hearing, Lai stated that the $75,000 was actually Wang's "brother's money" and was "for investment purposes" and was "not [Wang's] money." The court did not credit Lai's characterization of the funds and decided the $75,000 was Wang's money for purposes of support. The court concluded that the sum "leaves [Wang] money to live on" while other family law issues were adjudicated. The hearing adjourned.
Lai concluded Wang had deliberately misled him about her financial situation. On January 25, 2017 (following the court hearing), Lai sent Wang an e-mail asserting that he had "been repeatedly lied to and constantly misinformed." Lai stated he was "terminating [his] representation now" and informed Wang she had 30 days to find a new attorney. Lai requested that Wang pay $1,876 in costs that included expert witness fees to his law office "immediately."
Wang and Lai engaged in subsequent e-mail communications. On January 29, 2017, Lai sent Wang an e-mail in which he accused her of multiple misrepresentations. Lai asserted that Wang had not initially told him about the two wire transfers she had received from her husband, but rather had told him she had "no funds in [the] bank, and [she] even so stated under penalty of perjury in [her] declarations."
On January 31, 2017, Lai e-mailed Wang a letter and a "final invoice." Wang responded in an e-mail dated February 1, 2017:
In February 2017, Melen replaced Lai as Wang's attorney in the dissolution action.
At some point thereafter, Wang filed a complaint against Lai with the State Bar of California.
In April 2017, Lai initiated this civil action by filing a complaint against Wang and as yet-unnamed "Doe" defendants in Santa Clara County Superior Court alleging three causes of action: breach of contract, common counts, and fraud.
Wang subsequently requested binding arbitration pursuant to the Mandatory Fee Arbitration Act (MFAA) (Bus. &Prof. Code, § 6200 et seq.) for her dispute with Lai over his attorney fees. On behalf of Wang, Melen filed a petition for fee arbitration pursuant to the MFAA. In November 2017, Melen filed a notice of stay of the civil action based on the fee arbitration.
In March 2018, Moore replaced Melen as Wang's counsel in the fee arbitration. Wang designated Melen as an expert in the arbitration.
Lai and Wang submitted arbitration briefs to a three-member arbitral panel from the Santa Clara County Bar Association. Moore submitted to the panel materials on Wang's behalf, including an arbitration brief. The brief argued the retainer agreement was unenforceable and that the amount of fees claimed by Lai was unreasonable. The brief's exhibits included as "Exhibit E" what the brief described as "bank statements." Exhibit E consists of a spreadsheet describing Wang's banking activity related to her "Discover Bank" account and containing handwritten notes in English and Chinese. The brief also attached as an exhibit a transcript of the January 25, 2017 hearing in the dissolution case.
Lai submitted a brief, arguing that Wang and her attorneys were attempting to defraud the tribunal through perjury and falsified documents. He asserted Wang had admitted to him during the recess at the January 25, 2017 hearing that she "kept the $75,000 with her." Lai stated Exhibit E contained handwritten notes in Chinese that indicated Wang had given the "bank record" to him that apprised him of the $75,000 transaction before the hearing, but in fact he had never before seen the bank statement. Lai asserted Wang had "manufactured the evidence and her attorneys knew it and actively assisted her in doing it" and Lai could "prove this, easily." Lai disputed that he had had any "prior knowledge" of the $75,000 wire transfer Wang had received from her husband. He stated that he had not learned about "Wang's perjurious denial of the second transfer of the $75,000" until the recess that occurred at the January 25, 2017 hearing in the dissolution action.
The arbitration hearing was delayed, and Wang ultimately withdrew her request for arbitration. At an October 2018 case status review in the civil action, counsel informed the trial court that the matter would not proceed to arbitration. In response, the trial court lifted the stay.
On January 14, 2019, Lai filed the operative first amended complaint (complaint). The complaint asserted six causes of action: fraud, breach of contract, common counts, malicious prosecution, abuse of process, and conspiracy. Lai named Wang's current and former attorneys (Moore and...
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