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Louise Peirona et al v. Tmt Associates

December 17, 2010


(Alameda County Super. Ct. No. HG09429443)

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


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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

This case arises from related litigation over ownership and income distribution rights of TMT Associates, LLC (TMT), a single asset real estate holding limited liability company. Kiet Nguyen (Nguyen) was one of two members of TMT, and the other was Thomas Peirona. Thomas Peirona died suddenly in 2005, and his estate and his surviving spouse, Louise Peirona (Peirona; collectively Plaintiffs), sued Nguyen claiming entitlement to distributions from TMT's income (the San Mateo County Litigation). (Peirona v. Nguyen et al. (Super. Ct. San Mateo County, 2005, No. CIV445795).)

In the San Mateo County Litigation, the trial court issued a preliminary injunction limiting Nguyen's use of TMT funds and the claims were referred to arbitration under the terms of TMT's Operating Agreement, with a stipulation that the injunction would remain in effect until the arbitration was concluded. While arbitration was pending, the commercial property owned by TMT went into foreclosure and Nguyen, acting on behalf of TMT, signed an agreement to reinstate financing (Loan Reinstatement Agreement) with TMT's lender that Plaintiffs alleged violated the terms of the injunction and stipulation.

In this action, Plaintiffs sued TMT and its attorney, David L. Andersen (collectively Defendants), alleging they wrongly induced Nguyen to sign the Loan Reinstatement Agreement in violation of the injunction in the San Mateo County Litigation. The trial court struck the complaint as a strategic lawsuit against public participation (SLAPP),*fn1 finding it arose from Defendants' protected litigation activities and that Plaintiffs had not established a probability of prevailing on the merits. We affirm. We also impose sanctions against Plaintiffs and their counsel for pursuing a frivolous appeal.


On January 7, 2009, Peirona, as an individual and the surviving spouse of Thomas Peirona, and Joseph Della Santina, as administrator of Thomas Peirona's estate, filed the complaint in this matter against Defendants. The complaint made the following allegations.

TMT was formed in 1996 by Nguyen and Thomas Peirona. Its sole asset is commercial property located at 150 Industrial Road, San Carlos, California (the Property). Under the TMT Operating Agreement and subject to certain limitations, Nguyen and Thomas Peirona were respectively entitled to 51 percent and 49 percent distributions of TMT's net income. However, Nguyen took far greater distributions than his proportionate share. After Thomas Peirona's death in February 2005, Peirona succeeded to his economic interest in TMT and attempted to obtain monthly distributions from the company, a return of excessive money taken from TMT by Nguyen, and an accounting of TMT. When her efforts were unsuccessful, Peirona sued Nguyen in San Mateo County Superior Court in March 2005.*fn2

The parties entered into a written stipulation later incorporated into a stipulated amended preliminary injunction that was filed January 6, 2006 (January 6, 2006 Preliminary Injunction). The January 6, 2006 Preliminary Injunction permitted Nguyen to make four specified expenditures of TMT funds, required him to obtain Peirona's consent before making any other expenditures, and provided that TMT's net income be distributed 51 percent to Nguyen and 49 percent to Peirona. "In consideration for the requirements set forth [in the January 6, 2006 Preliminary Injunction], [P]laintiffs agreed to arbitrate the claims" raised in the San Mateo County Litigation. Plaintiffs alleged that the stipulated January 6, 2006 Preliminary Injunction was a "contract" between them and Nguyen.*fn3

TMT had been in default on a loan with Wachovia Bank (Lender) secured by the Property since about October 2004. In April 2007, the parties in the San Mateo County Litigation stipulated to the appointment of a receiver for TMT, which constituted an additional default event under the loan documents. Nevertheless, Lender "forebore these defaults and continued to receive mortgage payments from [TMT], albeit with superinflated interest rates and additional fees . . . ." TMT failed to pay off the loan balance by its December 11, 2007 due date, and in April 2008, Lender filed a foreclosure action in San Mateo County (the Foreclosure Action; CSFB 1997-C2 1515 Industrial Way LP v. TMT Associates, LLC et al. (Super. Ct. San Mateo County, 2008, No. CIV 472342)). In the Foreclosure Action, Lender requested appointment of a new receiver, but "the hearing thereon was continued numerous times in return for [TMT's] agreement to pay all of the monthly rent proceeds from the [mortgaged property] to [Lender]. [Peirona's] consent for such an agreement was never sought nor did she agree to such an arrangement." On August 1, 2008, TMT signed the Loan Reinstatement Agreement with the Lender, requiring TMT to pay all of its monthly rental income from the Property to Lender. Peirona's consent for that agreement was never sought nor obtained. Peirona had received an average of $20,000 per month under the terms of the January 6, 2006 Preliminary Injunction, but she stopped receiving distributions after February 2008.

In their complaint, Plaintiffs alleged causes of action against TMT for inducing breach of contract and intentional interference with contractual relations, on the theory that Nguyen's execution of the Loan Reinstatement Agreement was a violation of "the stipulated preliminary injunction/contract," apparently referring to both the January 6, 2006 Preliminary Injunction and the June 6, 2006 Stipulation. They also sued Andersen for breach of fiduciary duty. Plaintiffs alleged that Andersen owed a fiduciary duty to Nguyen as TMT's sole remaining member and to Peirona as an "economic interest holder" in TMT. Plaintiffs alleged that Andersen breached his fiduciary duty to TMT by inducing Nguyen to breach his contract with them; causing TMT to interfere with performance of that contract; agreeing to the distribution of all of TMT's monthly income to Lender without Peirona's consent; and executing the Loan Reinstatement Agreement without Peirona's consent.

Defendants filed a special motion to strike the complaint as a SLAPP pursuant to Code of Civil Procedure section 425.16.*fn4 They argued that Plaintiffs' claims arose from Defendants' "settling a lawsuit brought against TMT by a third party[,] . . . [i.e.,] the exercise of constitutionally protected rights of speech and petition in connection with a judicial action." Defendants argued that "Plaintiffs complain of the litigation tactics involved in that lawsuit and the advice given to TMT and its manager, [Nguyen], by TMT's attorney regarding the decision to effect a settlement of that suit. This is speech and petition [activity] which arises from a judicial proceeding and is protected." They also argued Plaintiffs could not establish a probability of prevailing on the merits because Defendants' conduct was protected by the litigation privilege (Civ. Code, § 47) and in any event did not give rise to any valid legal claim. Andersen separately argued that Plaintiffs had offered no legal theory or evidence to establish that he owed them a fiduciary duty.

The trial court granted the motion to strike, stating "Defendants have met their initial burden of demonstrating that Plaintiffs' Complaint contains causes of action arising from an act in furtherance of Defendants' right of petition or free speech. [Citation.] Moreover, Plaintiffs have failed to establish a probability that they will prevail on their claims. [Citation.]." The court dismissed the action and awarded Defendants' attorney fees pursuant to section 425.16, subdivision (c).


A. Anti-SLAPP Motion to Strike

Plaintiffs argue that the trial court erred by striking their complaint pursuant to the anti-SLAPP statute.

Section 425.16, the anti-SLAPP statute, provides in relevant part: "A cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established ...

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