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Genethera, Inc. v. Troy & Gould Professional Corp.

February 27, 2009

GENETHERA, INC., ET AL., PLAINTIFFS AND APPELLANTS,
v.
TROY & GOULD PROFESSIONAL CORPORATION ET AL., DEFENDANTS AND RESPONDENTS.



APPEAL from a judgment of the Superior Court of Los Angeles County, Kevin C. Brazile, Judge. Affirmed. (Los Angeles County Super. Ct. No. BC 377737).

The opinion of the court was delivered by: Flier, J.

CERTIFIED FOR PUBLICATION

Appellants GeneThera, Inc., GTI Corporation Transfer Agents, LLC, Antonio Milici, and Tannya L. Irizarry appeal from an order granting a special motion to strike their complaint as a strategic lawsuit against public participation (SLAPP; Code of Civ. Proc., § 425.16 et seq.),*fn1 and from the subsequent entry of judgment for respondents.*fn2 Respondents are Attorney Jeffrey Rosenfeld and his law firm Troy & Gould Professional Corporation (collectively TG) and their clients M.A.G. Capital, LLC, Mercator Momentum Fund, L.P., Mercator Momentum Fund III, L.P., and Monarch Pointe Fund, Ltd. (collectively MAG). Appellants assert the trial court erred in ruling that (1) respondents met the threshold requirement of showing appellants' action arose from protected activity, and (2) appellants had not shown a reasonable probability of success on the merits. We hold an attorney's communication of an offer of settlement to counsel for an opposing party is protected activity subject to the absolute litigation privilege, and the trial court properly ruled appellants' lawsuit is a SLAPP action. Because appellants did not show a likelihood of success, we therefore affirm the judgment.

FACTS AND PROCEDURAL HISTORY

Appellants, together with Laura Bryan (Bryan), were defendants in an action TG filed against them on behalf of MAG (MAG action).*fn3 The defendants were represented in the MAG action by Attorney Shoemaker. By agreement of counsel, MAG set Bryan's deposition to be taken in Los Angeles, California, on September 17, 2007. Bryan failed to appear for her deposition. Later the same day, TG sent a letter to Shoemaker extending an offer to settle the MAG action as to Bryan alone on favorable terms. MAG offered to dismiss with prejudice its case against Bryan for a nominal sum on condition that she agree to be telephonically deposed, to be available to MAG for consultation, and to provide truthful testimony at trial.*fn4

Appellants then filed the present action against respondents, alleging respondents' offer of settlement in the MAG action constituted an intentional interference with contractual relations and negligence. Appellants alleged the settlement offer to Bryan was designed effectively to raise a conflict of interest so that Shoemaker could not represent any party in the MAG action. Appellants asserted the MAG settlement offer was unethical and a violation of the Rules of Professional Conduct.*fn5

Respondents filed a special motion to strike appellants' complaint as a SLAPP action, contending the settlement offer at issue arose from a protected activity and appellants were unable to demonstrate a probability they would prevail on their claim. (See § 425.16, subd. (b).)*fn6

The trial court granted respondents' motion. The court expressly found appellants' complaint arose from respondents' protected activity of sending a settlement offer and appellants had not shown a reasonable probability of success on the merits.

The court entered a judgment dismissing the instant action with prejudice and awarded respondents their attorney fees and costs.

Appellants timely appealed the order granting respondents' motion and the resulting judgment.

STANDARD OF REVIEW

We review a trial court's rulings on a special motion to strike under a de novo standard of review. (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055 (Rusheen); Kajima Engineering & Construction, Inc. v. City of Los Angeles (2002) 95 Cal.App.4th 921, 929 (Kajima).)

DISCUSSION

In ruling on a special motion to strike a complaint, the court engages in a two-step process. "First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving defendant's burden is to demonstrate that the act or acts of which the plaintiff complains were taken 'in furtherance of the [defendant]'s right of petition or free speech under the United States or California Constitution in connection with a public issue,' as defined in the statute. (ยง 425.16, subd. (b)(1).) If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim. Under section 425.16, subdivision (b)(2), the trial court in making these determinations considers 'the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.'" (Equilon Enterprises v. ...


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