Tabas v. Boshes CA2/7

Filed 6/16/14 Tabas v. Boshes CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

JOEL TABAS, as Trustee in Bankruptcy, B247374

Plaintiff and Respondent, (Los Angeles County

Super. Ct. No. SC116169)

v.

RALPH BOSHES,

Defendant and Appellant.

APPEAL from an order of the Superior Court of Los Angeles County, Gerald

Rosenberg, Judge. Reversed and remanded.

Nemecek & Cole, Jonathan B. Cole, Mark Schaeffer and David B. Owen, for

Defendant and Appellant.

Law Offices of Randall Rich and Randall Rich, for Plaintiff and Respondent, Joel

Tabas, trustee of the bankruptcy of Raul Serrano.

_________________

Ralph Boshes appeals from an order denying his special motion to strike pursuant

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to Code of Civil Procedure section 425.16 the first cause of action for fraud in a

complaint filed by Joel Tabas, Trustee of the Bankruptcy Estate of Raul Serrano, which

also alleged causes of action against Boshes for professional negligence and breach of

fiduciary duty. We agree with the trial court Tabas’s fraud claim arises at least in part

from Boshes’s protected speech or petitioning activity within the meaning of section

425.16—letters written by Tabas to the Contractor’s State Licensing Board (CSLB) on

behalf of his client Serrano Const—but disagree Tabas established a reasonable

probability of prevailing on that claim. Accordingly, we reverse.

FACTUAL AND PROCEDURAL BACKGROUND

On March 2, 2012 Tabas, the trustee of Serrano’s bankruptcy estate, filed a

complaint and on October 16, 2012 a first amended complaint against attorney Boshes

and 20 Doe defendants asserting claims for fraud, professional negligence and breach of

fiduciary duty. According to the operative first amended complaint Serrano obtained a

California contractor license (No. 409333) in 1981 as a sole proprietor under the name

Serrano Construction. In November 1988 Jorge Barajas applied to the CSLB for a

contractor license in the name of JB Construction. The application was thereafter revised

to request a partnership license in the name of Serrano Const with Barajas and Serrano

named in the revised application as partners and Serrano identified as the qualifying

partner. Contractor license 571998 was issued to Serrano Const, a general partnership.

Tabas alleged Serrano was not aware of, and did not consent to, the application for the

partnership license. The pleading alleged Boshes aided Barajas in obtaining the license

and thereafter assisted in filing biannual renewals for the Serrano Const license with the

CSLB from 1991 through 2009 without Serrano’s consent.

The first amended complaint further alleged Barajas obtained an individual

California contractor license in 1996. In March 1998 Barajas submitted an application to

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Statutory references are to the Code of Civil Procedure unless otherwise indicated.

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the CSLB to change the qualifying partner for license number 571998 from Serrano to

Barajas. On May 15, 1998 the CSLB returned the application to Barajas requesting

additional documentation to effect the change requested. In part the letter stated, “If Raul

Domingo Serrano is disassociating from this partnership he must complete a Notice of

Disassociation. This license will then be automatically cancelled. [¶] If Jorge Barajas is

replacing him only as the qualifier on this license, a letter must be submitted stating he

will remain on the license as the general partner.”

On July 30, 1998 and August 14, 1998 Boshes wrote the CSLB, advising it that

Serrano would remain a general partner in Serrano Const, that Barajas and Serrano had

reconstituted their partnership and that earnings and profits from January 1, 1998 on

would be distributed 30 percent to Serrano and 70 percent to Barajas. On August 19,

1998 the CSLB sent Serrano Const a letter accepting the application to change the

qualifying partner for license number 571998 from Serrano to Barajas. Tabas alleged

Serrano had no knowledge of these communications between Boshes and the CSLB and

neither authorized nor consented to Boshes’s purported representation of him. Rather,

the two letters, which contained knowingly false information, were created by Boshes as

part of a fraudulent scheme to allow Barajas to continue contracting under license

number 571998 notwithstanding the fact that Serrano had retired and was no longer

living in California.

On September 25, 2006 John Brandon entered into a home improvement contract

with Serrano Const, signed by Barajas. On November 6, 2007 Boshes filed a complaint

for breach of contract on behalf of Barajas, “individually and dba Serrano Construction,”

against Brandon. On December 28, 2007 Brandon filed a cross-complaint against

Serrano Const, a partnership, and its general partners Barajas and Serrano. Boshes

answered the cross-complaint on behalf of Serrano Const and Barajas. Boshes did not

represent Serrano, and no answer was filed on his behalf. On May 23, 2008 a default was

entered against Serrano on the cross-complaint. Following a bench trial, on March 12,

2009 a judgment on the cross-complaint was entered against Serrano Const, Barajas and

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Serrano in the sum of $214,832.00 plus prejudgment interest from January 7, 2009. In

early 2011 Brandon initiated a collection action against Serrano in Florida, where he

lived. In response to the collection action Serrano filed for Chapter 7 bankruptcy

protection. (Barajas has also filed for bankruptcy protection.) Tabas, as trustee of

Serrano’s bankruptcy estate, identified the claims asserted in the instant lawsuit as an

asset of the bankruptcy estate.

In his first cause of action for fraud Tabas alleged Boshes undertook a variety of

fraudulent actions to create Serrano Const and to allow it to continue in business despite

the fact Serrano had retired to Florida and ceased all construction business in California

and, in furtherance of the fraud, Boshes actively concealed important facts from Serrano

concerning his and Barajas’s activities. Boshes’s conduct, the complaint alleged, was a

substantial factor in causing harm to Serrano (that is, the judgment against him obtained

in the Brandon litigation). In the second cause of action for professional negligence,

Tabas alleged Boshes owed a duty to Serrano when he undertook representation of

Serrano Const in the Brandon litigation and thereafter breached that duty, in part, by

failing to notify Serrano of the complaint or cross-complaint, to answer the cross-

complaint on behalf of Serrano or to communicate to Serrano settlement offers made by

Brandon. The third cause of action for breach of fiduciary duty alleged Boshes as

attorney for Serrano Const in the Brandon litigation owed a fiduciary duty to Serrano as a

general partner and breached that duty by failing to properly handle the Brandon

litigation on his behalf. Damages for each cause of action were alleged to exceed

$600,000. The complaint also prayed for punitive damages for fraud.

On November 6, 2012 Boshes moved pursuant to section 425.16 to strike the fraud

cause of action in the first amended complaint. In a declaration submitted in support of

the motion Boshes stated he had represented Barajas and Serrano Construction for

approximately 20 years. Barajas had at all times advised Boshes that Serrano

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Construction was a partnership consisting of Barajas and Serrano. Sometime in the early

1990’s Barajas advised Boshes that Serrano was retiring from active involvement in

Serrano Construction but would remain a partner. Barajas also informed Boshes that

Barajas would be the managing partner for Serrano Construction and provided Boshes

with a notarized power of attorney, dated November 11, 1992, signed by Serrano

allowing Barajas to act on his behalf. (A copy of the power of attorney was attached to

the declaration.) According to Boshes, “[a]t no time did I have any reason to know or

suspect that the power of attorney provided to me by Mr. Barajas was not valid and

legitimate.”

The Boshes declaration explained that, after Barajas received the May 15, 1998

letter from CSLB identifying problems with the request to change the qualifying partner

in Serrano Const from Serrano to Barajas, Barajas retained him to respond. Pursuant to

Barajas’s request, Boshes then wrote two letters to the CSLB—the July 30 and

August 14, 1998 letters—based on information provided to him by Barajas. Boshes

insisted he believed the information he provided the CSLB was true. He acknowledged

he had not had any communication with Serrano for at least 10 years and did not consult

with him in connection with the CSLB letters.

Tabas filed an opposition to the motion, which included a declaration from

Brandon, but not Serrano, and a request for judicial notice that contained portions of

deposition testimony by Serrano in the bankruptcy proceedings. Tabas also moved to

strike and objected to portions of the declaration by Boshes. Boshes filed a reply

memorandum and objections to the evidence submitted in opposition to the motion.

At the hearing on January 10, 2013 the court announced its tentative ruling to deny

the motion on the ground Boshes had failed to establish the fraud claim arose from

protected conduct within the meaning of section 425.16: “The fraud claim is based upon

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Although his declaration refers to “Serrano Construction,” elsewhere Boshes

makes it clear he represented the partnership entity, Serrano Const, not the sole

proprietorship, Serrano Construction.

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concealment not the submission of documents.” The court also indicated it had sustained

all objections to Tabas’s request for judicial notice and overruled all but one objection to

Boshes’s declaration. The court then heard oral argument and took the matter under

submission.

Later the same day the court entered its ruling denying the motion. The court

concluded the cause of action for fraud was a mixed cause of action “in that at least one

of the underlying alleged acts is protected. . . . [T]he allegations relative to the

submission of applications and letters for evaluation by the Contractor’s Licensing Board

are protected under Code of Civil Procedure, Section 425.16(e)(2), as they qualify as a

written or oral statement or writing made in connection with an issue under consideration

or review by a legislative, executive or judicial body, or any other official proceeding

authorized by law.” Nonetheless, the court ruled Tabas had established the claim of fraud

was legally sufficient and supported by a prima facie showing of facts sufficient to

sustain a favorable judgment: “The submission of the applications and letters to the

licensing board may be privileged. However, the failure to advise Serrano of the contents

of the submissions may support a claim for fraud based upon concealment.”

Boshes filed a timely notice of appeal.

DISCUSSION

1. Section 425.16: The Anti-SLAPP Statute3

Section 425.16, subdivision (b)(1), provides, “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 that there is a probability that the plaintiff

will prevail on the claim.” Pursuant to subdivision (e), an “‘act in furtherance of a

person’s right of petition or free speech under the United States or California Constitution

3

SLAPP is an acronym for “strategic lawsuit against public participation.” (Vargas

v. City of Salinas (2009) 46 Cal.4th 1, 8, fn. 1.)

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in connection with a public issue’ includes: (1) any written or oral statement or writing

made before a legislative, executive, or judicial proceeding, or any other official

proceeding authorized by law, (2) any written or oral statement or writing made in

connection with an issue under consideration or review by a legislative, executive, or

judicial body, or any other official proceeding authorized by law, (3) any written or oral

statement or writing made in a place open to the public or a public forum in connection

with an issue of public interest, or (4) any other conduct in furtherance of the exercise of

the constitutional right of petition or the constitutional right of free speech in connection

with a public issue or an issue of public interest.”

In ruling on a motion under section 425.16, the trial court engages in what is now

a familiar, 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. (§ 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. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.)

a. Step one and mixed causes of action

The moving party’s burden on the threshold issue is to show “the challenged cause

of action arises from protected activity.” (Rusheen v. Cohen (2006) 37 Cal.4th 1048,

1056; see Scalzo v. Baker (2010) 185 Cal.App.4th 91, 98.) “[T]he statutory phrase ‘cause

of action . . . arising from’ means simply that the defendant’s act underlying the

plaintiff’s cause of action must itself have been an act in furtherance of the right of

petition or free speech. [Citation.] In the anti-SLAPP context, the critical point is

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whether the plaintiff’s cause of action itself was based on an act in furtherance of the

defendant’s right of petition or free speech. [Citation.] ‘A defendant meets this burden

by demonstrating that the act underlying the plaintiff’s cause [of action] fits one of the

categories spelled out in section 425.16, subdivision (e) . . . .’” (City of Cotati v.

Cashman (2002) 29 Cal.4th 69, 78.) “If the defendant does not demonstrate this initial

prong, the court should deny the anti-SLAPP motion and need not address the second

step.” (Hylton v. Frank E. Rogozienski, Inc. (2009) 177 Cal.App.4th 1264, 1271.)

When a special motion to strike pursuant to section 425.16 challenges a cause of

action that involves both protected and nonprotected activity (sometimes referred to as a

“mixed” cause of action), “if the allegations of protected activity are only incidental to a

cause of action based essentially on nonprotected activity, the mere mention of the

protected activity does not subject the cause of action to an anti-SLAPP motion.” (Scott

v. Metabolife Internat., Inc. (2004) 115 Cal.App.4th 404, 414; accord, World Financial

Group, Inc. v. HBW Ins. & Financial Services, Inc. (2009) 172 Cal.App.4th 1561, 1574.)

On the other hand, if the allegations of nonprotected conduct are collateral to the

substance of the cause of action, their presence does not prevent the court from applying

the statute. As we explained in Fox Searchlight Pictures, Inc. v. Paladino (2001)

89 Cal.App.4th 294, 308, “[A] plaintiff cannot frustrate the purposes of the SLAPP

statute through a pleading tactic of combining allegations of protected and nonprotected

activity under the label of one ‘cause of action.’” (Accord, Mann v. Quality Old Time

Service, Inc. (2004) 120 Cal.App.4th 90, 103.)

In applying section 425.16 to mixed causes of action, “it is the principal thrust or

gravamen of the plaintiff’s cause of action that determines whether the anti-SLAPP

statute applies [citation], and when the allegations referring to arguably protected activity

are only incidental to a cause of action based essentially on nonprotected activity,

collateral allusions to protected activity should not subject the cause of action to the anti-

SLAPP statute.” (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181,

188; see Episcopal Church Cases (2009) 45 Cal.4th 467, 477-478 [“This dispute

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[involving ownership of property] and not any protected activity is ‘the gravamen or

principal thrust’ of the action. [Citation.] The additional fact that protected activity may

lurk in the background—and may explain why the rift between the parties arose in the

first place—does not transform a property dispute into a SLAPP suit.”]; see also Club

Members for an Honest Election v. Sierra Club (2008) 45 Cal.4th 309, 319 [“[t]he

‘principal thrust or gravamen’ test has been used to determine whether an action fits

within the scope of the anti-SLAPP protection provided by section 425.16 when a

pleading contains allegations referring to both protected and unprotected activity”].) That

is, “the cause of action is vulnerable to a special motion to strike under the anti-SLAPP

statute only if the protected conduct forms a substantial part of the factual basis for the

claim.” (A.F. Brown Electrical Contractor, Inc. v. Rhino Electric Supply, Inc. (2006)

137 Cal.App.4th 1118, 1125.)

This analysis does not require an either-or determination or mean the gravamen of

a cause of action must be based only on protected activity or on nonprotected activity.

Rather, the proper statement of the rule, as articulated in Haight Ashbury Free Clinics,

Inc. v. Happening House Ventures (2010) 184 Cal.App.4th 1539, 1551, footnote 7 is:

“[W]here the defendant shows that the gravamen of a cause of action is based on

nonincidental protected activity as well as nonprotected activity, it has satisfied the first

prong of the SLAPP analysis.” (Accord, World Financial Group, Inc. v. HBW Ins. &

Financial Services, Inc., supra, 172 Cal.App.4th at p. 1574.)

b. Step two

If the defendant establishes the statute applies, the burden shifts to the plaintiff to

demonstrate a “probability” of prevailing on the claim. (Equilon Enterprises v.

Consumer Cause, Inc., supra, 29 Cal.4th at p. 67.) In deciding the question of potential

merit, the trial court properly considers the pleadings and evidentiary submissions of both

the plaintiff and the defendant, but may not weigh the credibility or comparative strength

of any competing evidence. (Taus v. Loftus (2007) 40 Cal.4th 683, 713-714; Wilson v.

Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821.) The question is whether the

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plaintiff presented evidence in opposition to the defendant’s motion that, if believed by

the trier of fact, is sufficient to support a judgment in the plaintiff’s favor. (Zamos v.

Stroud (2004) 32 Cal.4th 958, 965.) Nonetheless, the court should grant the motion “‘if,

as a matter of law, the defendant’s evidence supporting the motion defeats the plaintiff’s

attempt to establish evidentiary support for the claim.’” (Taus, at p. 714; Wilson, at

p. 821; Zamos, at p. 965.)

c. Standard of review

The trial court’s rulings on a special motion to strike are subject to our

independent or de novo review. (Flatley v. Mauro (2006) 39 Cal.4th 299, 325; accord,

Rusheen v. Cohen, supra, 37 Cal.4th at p. 1055.)

2. The Fraud Cause of Action Arises from Protected Petitioning Activity

The essence of Tabas’s fraud claim is that Boshes, in his communications with the

CSLB, affirmatively misrepresented both that Serrano was his client and that Serrano was

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a partner with Barajas in Serrano Const and then actively concealed those

misrepresentations from Serrano, leading to Brandon’s judgment against Serrano and

Serrano’s ultimate declaration of bankruptcy. In his respondent’s brief Tabas is emphatic

his first cause of action is based on these purported acts of actual fraud, not constructive

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fraud as Boshes suggested in his opening brief.

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Boshes’s July 30, 1998 letter begins, “This is in response and reply to your letter

to my clients, Raul Serrano and Jorge Barajas, dated May 15, 1998, addressed to Serrano

Const., returning the application to replace Mr. Barajas from Mr. Serrano as Qualifying

Individual on License Number 571998, for correction and resubmittal.”

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“A fiduciary’s failure to share material information with the principal is

constructive fraud, a term of art obviating actual fraudulent intent. (Civ. Code, § 1573.)”

(Michel v. Moore & Associates, Inc. (2007) 156 Cal.App.4th 756, 762.) “‘“Constructive

fraud is a unique species of fraud applicable only to a fiduciary or confidential

relationship.” [Citation.] [¶] “[A]s a general principle constructive fraud comprises any

act, omission or concealment involving a breach of legal or equitable duty, trust or

confidence which results in damage to another even though the conduct is not otherwise

fraudulent. Most acts by an agent in breach of his fiduciary duties constitute constructive

fraud. The failure of the fiduciary to disclose a material fact to his principal which might

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There can be no question Boshes’s July 30, 1998 and August 14, 1998 letters to

the CSLB to change the licensing status of Serrano Const, if considered in isolation,

constituted protected petitioning activity within section 425.16, subdivision (e)(1)

and (2). (See Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106,

1115 [“‘“[t]he constitutional right to petition . . . includes the basic act of filing litigation

or otherwise seeking administrative action”’”]; Birkner v. Lam (2007) 156 Cal.App.4th

275, 281 [same]; Chavez v. Mendoza (2001) 94 Cal.App.4th 1083, 1087 [same].) Tabas

does not dispute this general proposition but argues Boshes failed to meet the threshold

requirement for application of section 425.16 on three related grounds: (1) In writing the

CSLB Boshes was communicating on behalf of his clients; it was his clients who were

exercising their speech or petitioning rights, not Boshes. (2) Boshes purported to be

acting as Serrano’s counsel; an attorney may not invoke section 425.16 in response to a

lawsuit by a former client. (3) The gravamen of the fraud cause of action is not the

statements to the CSLB but Boshes’s fraud or breach of duties to Serrano in sending the

letters to the CSLB. None of these contentions has merit.

Tabas’s first argument is simply wrong. An attorney sued for statements made on

behalf of a client in a judicial or administrative proceeding or in connection with an issue

under review by a court or governmental agency has standing to bring a motion under

section 425.16. (Briggs v. Eden Council for Hope & Opportunity, supra,19 Cal.4th at

p. 1116 [“the statute does not require that a defendant moving to strike under section

425.16 demonstrate that its protected statements or writings were made on its own behalf

. . . rather than, for example, on behalf of its clients or the general public”]; see

Coretronic Corp. v. Cozen O’Connor (2011) 192 Cal.App.4th 1381, 1388 [“[t]he anti-

SLAPP statutes protect not only the litigants, but also their attorneys’ litigation-related

statements”]; Jespersen v. Zubiate-Beauchamp (2003) 114 Cal.App.4th 624, 629 [“an

affect the fiduciary’s motives or the principal’s decision, which is known (or should be

known) to the fiduciary, may constitute constructive fraud.”’” (Assilzadeh v. California

Federal Bank (2000) 82 Cal.App.4th 399, 415.)

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attorney who has been made a defendant in a lawsuit based upon a written or oral

statement he or she made on behalf of clients in a judicial proceeding or in connection

with an issue under review by a court, may have standing to bring a SLAPP motion”]; see

also Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton (2005)

133 Cal.App.4th 658, 670, fn. 7 (Peregrine Funding) [same].)

Tabas’s second and third arguments overlap and misstate the emerging case law

regarding the applicability of special motions to strike under section 425.16 to lawsuits

for professional negligence filed by former clients against attorneys. To be sure, a

number of appellate decisions have held section 425.16 does not apply to “a garden-

variety legal malpractice claim by clients against lawyers.” (See Thayer v. Kabateck

Brown Kellner LLP (2012) 207 Cal.App.4th 141, 158.) For example, in Freeman v.

Schack (2007) 154 Cal.App.4th 719, clients sued their former attorney, alleging he had

abandoned them to represent adverse interests in their pending class action and in a new

competing class action. The Court of Appeal found the claims did not arise from

protected petitioning activity but from the lawyer’s “undertaking to represent a party with

interests adverse to plaintiffs, in violation of the duty of loyalty he assertedly owed . . . .”

(Id. at p. 732.) The Freeman court concluded the lawyer’s litigation activity was only

incidental to the core allegations the attorney had breached his duty of loyalty in failing

to properly represent plaintiffs’ interests. (Ibid.)

Similarly, in Benasra v. Mitchell Silberberg & Knupp LLP (2004)

123 Cal.App.4th 1179, plaintiffs sued their former law firm for breach of its duty of

loyalty in representing plaintiffs’ opponent in an arbitration proceeding against plaintiffs.

The lawsuit was held not to fall within section 425.16, even though the arbitration was a

protected activity, because the law firm’s breach of its duty of loyalty had occurred when

it abandoned the client and agreed to represent the opponent. The claim did not arise

from the firm’s conduct at the arbitration. (Id. at p. 1189; see generally Chodos v. Cole

(2012) 210 Cal.App.4th 692, 705, 706 [“a ‘garden-variety’ claim for attorney malpractice

[citation] is not covered by the anti-SLAPP statute”; “[w]e deal with a claim based on a

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breach of duty—malpractice—and not with a claim based on direct communications

concerning a lawsuit”].)

The rationale for excluding professional negligence lawsuits from the ambit of

section 425.16’s first prong was explained by the court in PrediWave Corp. v. Simpson

Thacher & Barlett LLP (2009) 179 Cal.App.4th 1204, “‘A malpractice claim focusing on

an attorney’s incompetent handling of a previous lawsuit does not have the chilling effect

on advocacy found in malicious prosecution, libel, and other claims typically covered by

the anti-SLAPP statute. In a malpractice suit, the client is not suing because the attorney

petitioned on his or her behalf, but because the attorney did not competently represent the

client’s interests while doing so. Instead of chilling the petitioning activity, the threat of

malpractice encourages an attorney to petition competently and zealously.’” (Id. at

p. 1222, quoting Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th

1532, 1540.)

This rationale is plainly inapplicable to Tabas’s fraud claim against Boshes. The

substance of Tabas’s complaint is that Boshes should not have petitioned the CSLB on

behalf of Serrano at all, not that he failed to do so competently. Indeed, Tabas’s first

amended complaint alleged Serrano “neither authorized nor consented to Boshes’

purported representation of him,” a fact Boshes confirmed in this declaration in support

of the special motion to strike, which stated he had been retained by Barajas on behalf of

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Serrano Const, not Serrano individually, to respond to the CSLB.

6

The limited record presented in support of and opposition to Boshes’s special

motion to strike provides few details of the actual relationship among Boshes, Barajas

and Serrano over the years. Serrano indicated he had known Boshes since 1989 and

apparently Boshes represented Serrano in several lawsuits. Serrano stated he has had no

contact with Boshes after 1996, and, as discussed, both men vigorously deny Boshes was

representing Serrano in 1998 when he corresponded with the CSLB on behalf of Serrano

Const. Serrano and Barajas had some business dealing with each other in the early

1990’s, but Serrano insisted he was never a partner with Barajas in a construction

business (or with anyone else, for that matter). In a debtor examination in connection

with enforcement of Brandon’s judgment, in contrast, Barajas testified Serrano was a

limited partner in his construction business, Serrano Const.

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Moreover, contrary to Tabas’s attempt to create a bright-line rule that governs the

case at bar, other cases recognize the applicability of section 425.16 to lawsuits between

lawyer and former client. In Peregrine Funding, supra, 133 Cal.App.4th 658 investors

who had lost millions of dollars in a large Ponzi scheme and the bankruptcy trustee

representing entities that were used to perpetrate the scheme sued a law firm for legal

malpractice and breach of fiduciary duty, claiming its negligence and affirmative

misconduct had aided the perpetrators of the scheme avoid detection and prosecution by

securities regulators. The court held section 425.16 applied, reasoning plaintiffs’ claims

were based in significant part on the law firm’s simultaneously representation of a “co-

client” in Securities and Exchange Commission proceedings—protected petitioning

activity. In the court’s view this differentiated the matter from cases in which attorney’s

communicative action was merely evidence of liability rather than the basis of the

liability. (See Peregrine Funding, at p. 673.) Here, Tabas’s fraud claim is based in

significant part on Boshes’s representation of Serrano Const in petitioning the CSLB, not

solely on any claimed incompetence in representing Serrano individually (who, as noted,

has expressly disavowed any attorney-client relationship existed with Boshes in

connection with the CSLB application).

Perhaps even more directly on point, in Fremont Reorganizing Corp. v. Faigin

(2011) 198 Cal.App.4th 1153, our colleagues in Division Three of this court

distinguished the garden variety legal malpractice cases relied upon by Tabas and held

section 425.16 applicable to a claim a former in-house counsel had violated professional

duties he owed to his former corporate clients by making statements to the Insurance

Commissioner as liquidator of a related company that led to the initiation of an adversary

Although Serrano and Boshes agree Boshes was not representing Serrano in 1998

or at any time thereafter, because Boshes referred to Serrano as his client in the July 30,

1998 letter (although not in the August 14, 1998 letter) to the CSLB, Tabas contends

Boshes should be estopped from denying the existence of an attorney-client relationship.

Resolution of that issue is not necessary to our analysis of Boshes’s special motion to

strike the fraud cause of action.

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action against his former clients in the liquidation proceedings: “These cases are

distinguishable because the gravamen of FRC’s counts for breach of confidence, breach

of fiduciary duty, and equitable indemnity is that Faigin violated his professional duties

owed to his former clients by making the statements to the Commissioner, rather than by

some other conduct. Faigin’s statements made to the Commissioner are not merely

incidental to these cause of action.” (Id. at p. 1170; see also Thayer v. Kabateck Brown

Kellner LLP, supra, 207 Cal.App.4th at p. 158 [distinguishing a client’s cause of action

against attorney based on acts on behalf of the client and a cause of action based on

attorney’s statements or conduct on behalf of different clients; the former class of claims

“may not be within the ambit of SLAPP”; the other kinds of actions “are”].)

Although Tabas has alleged Boshes improperly concealed from Serrano his

July 30 and August 14, 1998 letters to the CSLB, it is the allegedly false content of the

letters themselves—the petitioning activity on behalf of Serrano Const—that is the

gravamen or principal thrust of the lawsuit. Thus, paragraph 10 of the first amended

complaint alleged, “these two letters contained knowingly false information and were

created by Boshes as part of a fraud whose purpose was to allow Barajas to continue

contracting under license number 571998 . . . .” And paragraph 20 alleged “Serrano was

harmed by Boshes’ actions . . . . These fraudulent acts include but are not limited to:

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aiding Barajas in obtaining CSLB partnership license number 571998[ ] . . . ; fabricating

the content of the July 30, 1998 letter to the CSLB stating that Serrano would remain a

general partner when he had not had contact with Serrano for two years; fabricating the

August 14, 1998 letter to the CSLB stating that on or about March 1, 1998, Barajas and

Serrano agreed to reconstitute the partnership . . . .” Moreover, according to Tabas, it

was the creation and continuation of Serrano Const, and in particular the July 30, 1998

and August 14, 1998 letters from Boshes to the CSLB confirming Serrano’s ongoing role

7

Although the first amended complaint alleged Boshes had assisted Barajas in the

original license application for Serrano Const, no evidence was presented to support that

allegation in the opposition to Boshes’s special motion to strike.

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as a partner in the construction business, that directly led to his being named a cross-

defendant in the Brandon litigation, the entry of judgment against him in that lawsuit and

his eventual bankruptcy when faced with Brandon’s collection efforts.

Even acknowledging Tabas has also alleged the purported concealment “was a

substantial factor in causing Serrano’s harm” and any such concealment or failure to

disclose may well be nonprotected activity, the allegations of protected petitioning

activity are far from collateral to the fraud cause of action; to the contrary, they form a

substantial part of the factual basis for the claim. Accordingly, the trial court correctly

ruled Boshes satisfied the first prong of the section 425.16 analysis. (See Haight Ashbury

Free Clinics, Inc. v. Happening House Ventures, supra, 184 Cal.App.4th at p. 1551, fn. 7;

World Financial Group, Inc. v. HBW Ins. & Financial Services, Inc., supra,

172 Cal.App.4th at p. 1574.)

3. Tabas Has Failed To Establish a Probability of Prevailing on the Fraud Claim

Because Boshes made a threshold showing that section 425.16 applies to Tabas’s

fraud cause of action, it became Tabas’s burden to “‘demonstrate that the complaint is

both legally sufficient and supported by a sufficient prima facie showing of facts to

sustain a favorable judgment.’” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th

728, 741.) “The plaintiff may not rely solely on its complaint, even if verified; instead,

its proof must be made upon competent admissible evidence.” (Paiva v. Nichols (2008)

168 Cal.App.4th 1007, 1017; accord, City of Costa Mesa v. D’Alessio Investments, LLC

(2013) 214 Cal.App.4th 358, 376.) Tabas’s limited evidentiary presentation in the trial

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court failed to make the required showing.

8

Although the trial court’s tentative ruling was to sustain most of Boshes’s

objections to Tabas’s evidentiary presentation and to overrule all but one of Tabas’s

objections to Boshes’s declaration, its order denying the special motion to strike did not

include any ruling on the parties’ objections. Accordingly, we have reviewed all of the

material presented with the special motion to strike and the opposition to the motion.

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According to Tabas’s evidence, Serrano did not retain Boshes in connection with

Barajas’s effort to replace Serrano as the qualifying partner for Serrano Const and was

unaware of the two letters Boshes wrote to the CSLB concerning Serrano Const until

Brandon’s efforts to enforce the judgment entered on his cross-complaint in litigation

initiated by Boshes on behalf of Barajas “individually and dba Serrano Construction.”

Serrano was not a partner in Serrano Const (at least for purposes of the fraud cause of

action) and did not sign the power of attorney authorizing Barajas to act on his behalf.

(Barajas, in contrast, in deposition testimony attached to Tabas’s request for judicial

notice in opposition to the special motion to strike, insisted Serrano gave him the power

of attorney.) Serrano also testified Boshes did not contact him or disclose anything with

respect to Serrano Const or the CSLB letters during the relevant time period.

Boshes, on the other hand, presented evidence—uncontradicted by Tabas—that he

was retained in 1998 by Barajas to respond on behalf of Serrano Const to the CSLB’s

May 15, 1998 inquiry. As instructed by his client Serrano Const, and in reliance on the

notarized power of attorney, which designated Barajas as Serrano’s attorney-in-fact,

Boshes wrote the CSLB. The information in the two letters was provided by Barajas to

Boshes, and Boshes believed it all to be true. Boshes supplied copies of his letters to

Serrano Const, and all the information provided by Boshes to the CSLB was a matter of

public record and could be accessed at the CSLB website.

Contending the power of attorney was facially defective (that is, ineffective for

reasons other than Serrano’s claim he did not sign it), Tabas asserts Boshes’s reliance on

the document, together with his admitted lack of contact with Serrano in 1998 when

corresponding with the CSLB, is sufficient evidence of an intent to defraud for the

purpose of establishing a probability of prevailing on the fraud claim. The premise for

Both Tabas and Boshes have moved to supplement the appellant record with

material contained in motions to augment, for judicial notice and to take new evidence on

appeal. To the extent we have not previously ruled on those motions, they are denied.

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this argument—Tabas’s challenge to the validity of the power of attorney—rests on a

fundamental misreading of the instrument.

According to Tabas, the power of attorney would only become effective on

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Serrano’s incapacity. Tabas fails to recognize the document granted Barajas a general

power of attorney that included an optional durable power of attorney. The general (or

nondurable) power of attorney was effective immediately, and the attorney-in-fact’s

powers would normally be terminated by the principal’s incapacity (see Prob. Code,

§§ 4152, subd. (a)(7), 4155, subd. (a)). The optional durable power of attorney, set forth

in paragraph (h), became effective upon the principal’s (Serrano’s) incapacity but did not

otherwise impair the powers granted. As recited in paragraph (g), “This Power of

Attorney shall not be affected by subsequent incapacity of the principal (and shall remain

effective for a period of one year[] after the disability or incapacity occurs).” Under

Probate Code section 4303, because the power of attorney was presented to Boshes by

the attorney-in-fact designated in the instrument and the power of attorney appeared valid

on its face and included a notary public’s certificate of acknowledgment, Boshes’s good

faith reliance on the power of attorney immunized him from liability for claims brought

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by, or in the name of, Serrano. Tabas’s evidentiary presentation did nothing to

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Tabas also contends, in the peculiar, inconsistent pleading-in-the-alternative style

that characterizes his lawsuit, because Serrano was not actually a partner in Serrano

Const and the power of attorney was applicable by its terms only to “mechanics liens or

other interests belong[ing] to me,” the power of attorney did not authorize Barajas to act

as Serrano’s attorney-in-fact with respect to Serrano Const. (In the third cause of action

for breach of fiduciary duty, Tabas pleaded Boshes, as counsel for Serrano Const, owed

fiduciary duties to Serrano as a partner of Serrano Const.) Putting aside how Boshes

could have a duty to disclose information to Serrano if he was neither his client nor a

partner in Serrano Const, a question we need not reach (see fn. 6, above), for purposes of

establishing an intent to defraud, the issue is Boshes’s good faith belief, not the truth of

the underlying facts.

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Probate Code section 4303 provides, “(a) A third person who acts in good faith

reliance on a power of attorney is not liable to the principal or to any other person for so

acting if all of the following requirements are satisfied: [¶] (1) The power of attorney is

presented to the third person by the attorney-in-fact designated in the power of attorney.

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undermine the applicability of this statutory immunity to Serrano’s activities at the

request of Barajas and on behalf of Serrano Const.

In sum, the evidence before the trial court, considered without weighing credibility

or comparative strength, was insufficient to establish a prima facie case that Boshes acted

with knowledge of the falsity of his statements to the CSLB (to the extent the claim is

based on affirmative misrepresentations) or intentionally concealed or suppressed

material information (to the extent the claim is one for concealment) and that, in doing

so, he acted with an intent to defraud Serrano—essential elements of his cause of action.

(See Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th

858, 869 [“In the context of fraud by affirmative false statements, the mental element is

commonly stated in terms of intent to induce ‘reliance’ [Citation.] In the context of

fraud by concealment, the more precise formula is probably intent to induce conduct—

action or inaction—that differs from what the plaintiff would have done if informed of

the concealed fact.”]; see generally Robinson Helicopter Co., Inc. v. Dana Corp. (2004)

34 Cal.4th 979, 990 [“[t]he elements of fraud are: (1) a misrepresentation (false

representation, concealment, or nondisclosure); (2) knowledge of falsity (or scienter);

(3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting

damage”]; Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830,

850 [“the elements of a cause of action for fraud based on concealment are: ‘“(1) the

defendant must have concealed or suppressed a material fact, (2) the defendant must have

been under a duty to disclose the fact to the plaintiff, (3) the defendant must have

intentionally concealed or suppressed the fact with the intent to defraud the plaintiff,

(4) the plaintiff must have been unaware of the fact and would not have acted as he did if

[¶] (2) The power of attorney appears on its face to be valid. [¶] (3) The power of

attorney includes a notary public’s certificate of acknowledgment or is signed by two

witnesses. [¶] (b) Nothing in this section is intended to create an implication that a third

person is liable for acting in reliance on a power of attorney under circumstances where

the requirements of subdivision (a) are not satisfied. Nothing in this section affects any

immunity that may otherwise exist apart from this section.”

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he had known of the concealed or suppressed fact, and (5) as a result of the concealment

11

or suppression of the fact, the plaintiff must have sustained damage”’”].) At most, the

evidence suggested Boshes may have been less than diligent in relying solely on

Barajas’s statements and the power of attorney without confirming the information

provided with Serrano, not that he had the requisite fraudulent intent. The special motion

to strike the first cause of action for fraud should have been granted.

DISPOSITION

The order denying Boshes’s special motion to strike is reversed. The cause is

remanded to the trial court with directions to enter a new order granting the motion and to

conduct further proceedings to determine the amount of attorney fees and costs to be

awarded Boshes as the prevailing party on the motion. Boshes also is to recover his

attorney fees and costs on appeal in an amount to be determined by the trial court.

PERLUSS, P. J.

We concur:

ZELON, J. SEGAL, J.*

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Because we find the evidence on the element of scienter insufficient, we do not

address Boshes’s additional arguments that Tabas’s fraud claim is barred by the

applicable statute of limitations, that Boshes’s letters to the CSLB are absolutely

privileged under Civil Code section 47, subdivision (b), and that Boshes had no duty to

communicate directly with Serrano because his client was Serrano Const, not its

individual partners, and he was entitled to deal exclusively with the person he understood

to be its managing partner, Barajas, regarding partnership matters.

* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to

article VI, section 6 of the California Constitution.

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