Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from an order of the Superior Court of Los Angeles County No. SC092185. Allan J. Goodman, Judge.
Timothy Crayton, in. pro. per., for Plaintiff and Appellant.
No appearance on behalf Defendants and Respondents.
CHAVEZ, J.
Plaintiff and appellant Timothy Crayton (plaintiff) appeals from the trial court’s order denying his petition under Civil Code section 1714.10, and dismissing the action. We affirm the judgment.
All further statutory references are to the Civil Code, unless stated otherwise.
BACKGROUND
On December 21, 2006, plaintiff filed a verified complaint against defendants Michael A. Moe (Moe), Ronald J. Kinsling (Kinsling) (Moe and Kinsling are referred to collectively as defendants), “Attorney Doe,” and others alleging causes of action for money had and received, payment of promissory note, fraud, conversion, and racketeering. Accompanying the verified complaint was a petition for a prefiling order pursuant to section 1714.10, and plaintiff’s declaration in support of the petition.
Defendants have not appeared in this action.
In the verified complaint, plaintiff alleges that he was a managing general partner of CFF Properties and CFF Plaza, two partnership entities formed to buy, sell, and manage real estate in Venice, California. Plaintiff further alleges that he held a judgment lien in the amount of $248,431.91 against the assets of CFF Properties, CFF Plaza, and an entity named Oakwood Wesley House, Inc., after obtaining judgment against those entities in superior court case Nos. SC034739 and SC042281 on January 9, 1997, and February 5, 1997, respectively.
Plaintiff alleges that Moe is an attorney who represented certain other defendants who purchased real property assets owned by CFF Properties, or who acted as real estate brokers in that purchase transaction. Plaintiff alleges that Kinsling is an attorney who represented defendants CFF Plaza, CFF Properties, and certain other individual defendants who are also general partners of those entities.
Plaintiff alleges that in April 2004 he first received notice of a June 24, 1998 court order setting aside the judgment plaintiff obtained in superior court case No. SC042281 and removing plaintiff’s liens on the assets of CFF Properties and CFF Plaza. Plaintiff alleges that the “June 24, 1998 court order is a materially false product of deceit . . . obtained by means of fraud” and that defendants conspired with one another “to deceive the court into signing the materially false fraudulent” court order.
Plaintiff further alleges that “during judgment enforcement proceedings in Los Angeles Superior Court Case No. SC034739 and SC042281” in September 2004, defendants conspired with one another to submit two materially false declarations by Moe for the purpose of defrauding plaintiff of the $248,431.91 debt allegedly owed to him. Those declarations, dated April 13 and April 19, 2004, submitted in opposition to a motion by plaintiff in Los Angeles Superior Court case No. SC034739, state that the default judgment obtained by plaintiff in that case had been vacated and that trial had been set for April 22, 1998. Attached to the April 19, 2004 declaration is a copy of a June 24, 1998 court order setting aside a default judgment plaintiff had obtained against defendants CFF Properties Partnership, Robert O. Castille, and John Fleming, in the amount of $300.00.
The complaint alleges that Moe and Kinsling thereafter conspired with their clients to engage in the fraudulent transfer of real property assets owned by CFF Plaza and CFF Properties “for the purpose of looting the aforesaid partnership of its assets, converting and concealing those assets, and defrauding the plaintiff of the $284,431.91 judgment debt, joint venturer partnership debt owed to the plaintiff.”
By minute order dated January 11, 2007, the trial court denied plaintiff’s petition under section 1714.10 and dismissed the action in its entirety, on the grounds that plaintiff failed to comply, procedurally and substantively, with the requirements of the statute. The trial court’s order states in part: “Plaintiff’s complaint contains claims against attorneys for conspiracy with their clients. Accordingly, Plaintiff was required, under Civil Code section 1714.10, to obtain a court order determining that the claims had a reasonable probability of success before filing the action. Plaintiff failed to follow that procedure. His claims are thus barred under section 1714.10. In any event, the Court finds that Plaintiff has failed to show a reasonable probability of success.” Plaintiff filed this appeal.
DISCUSSION
I. Applicable Law and Standard of Review
Section 1714.10 requires a plaintiff seeking to sue an attorney for conspiring with a client while contesting or compromising a claim or dispute to obtain a prefiling court order authorizing the filing of such an action. The plaintiff bears the burden of substantiating his claims and showing a reasonable probability of prevailing in the action. (§ 1714.10, subd. (a); Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (2003) 107 Cal.App.4th 54, 83 (Shafer).) The statute is “intended to weed out the harassing claim of conspiracy that is so lacking in reasonable foundation as to verge on the frivolous. [Citations.]” (Evans v. Pillsbury, Madison & Sutro (1998) 65 Cal.App.4th 599, 604.)
Section 1714.10, subdivision (a) states in part: “No cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute, and which is based upon the attorney’s representation of the client, shall be included in a complaint or other pleading unless the court enters an order allowing the pleading that includes the claim for civil conspiracy to be filed after the court determines that the party seeking to file the pleading has established that there is a reasonable probability that the party will prevail in the action.”
Section 1714.10 sets forth two exceptions to the prefiling requirement. The statute does not apply “where (1) the attorney has an independent legal duty to the plaintiff, or (2) the attorney’s acts go beyond the performance of a professional duty to serve the client and involve a conspiracy to violate a legal duty in furtherance of the attorney’s financial gain.” (§ 1714.10, subd. (c).)
A court ruling on a petition under section 1714.10 must determine whether the “the proposed pleading is legally sufficient and the evidentiary showing to support it makes out a prima facie showing of conspiracy between the attorney and the client.” (Hung v. Wang (1992) 8 Cal.App.4th 908, 930.) The court may consider evidence in a verified complaint and in declarations made under penalty of perjury, (Burtscher v. Burtscher (1994) 26 Cal.App.4th 720, 725-726), so long as the evidence is competent and admissible. (Berg & Berg Enterprises v. Sherwood Partners, Inc. (2005) 131 Cal.App.4th 802, 817 (Berg & Berg).) A trial court’s order denying a petition under section 1714.10 is subject to de novo review. (Id. at p. 822.)
II. Waiver
Plaintiff contends that defendants waived the benefits of section 1714.10 by failing to object “at the first available opportunity” (Villa Pacific Building Co. v. Superior Court (1991) 233 Cal.App.3d 8, 12 (Villa Pacific)), which plaintiff maintains occurred upon service of the petition. Plaintiff further contends that the trial court erred by denying the petition in the absence of such an objection. Villa Pacific, on which plaintiff relies as support for this argument, is inapposite. In that case, the court concluded that the defendants, who litigated the case for a year before moving to dismiss on the basis of section 1714.10, had waived the benefits conferred by section 1714.10 by not raising that objection at the time they first appeared in the action. (Villa Pacific, at p. 12.) No waiver occurred in the instant case, as defendants have not appeared in the action, nor was the trial court precluded from ruling on plaintiff’s petition in the absence of an objection by defendants.
III. Statutory Exceptions
Plaintiff contends that his action comes within the statutory exceptions to the prefiling requirement set forth in section 1714.10, subdivision (c). He argues that Moe and Kinsling owed him an independent legal duty not to defraud him, and that both attorneys were acting for their own financial gain.
A. Independent Legal Duty
When a complaint alleges that an attorney injured the plaintiff by making an express misrepresentation, the plaintiff may state a valid claim against the attorney for conspiracy, and the requirements of section 1714.10 do not apply. (Shafer, supra, 107 Cal.App.4th at pp. 74-75, 84; Pavicich v. Santucci (2000) 85 Cal.App.4th 382, 386, 397-398.) Plaintiff contends that defendants engaged in actual fraud by submitting false declarations in Los Angeles Superior Court case No. SC034739. He claims that paragraph 2 of Moe’s April 13, 2004 and April 19, 2004 declarations were false.
Paragraph 2 of the April 13, 2004 declaration states: “In further support of the fact that the original default judgment was vacated and that a new trial was set for 4/22/98 (reference lines 8 through 10 of Opposition to Motion for Contempt Order, for Warrant of Attachment and Order for Imprisonment which is incorporated by reference and made apart hereof and of which it is requested that the Court take judicial notice), please find attached as Exhibit ‘A’ hereto a true and correct copy of the Court’s Minute Order setting a new trial date for 4/22/98.” The copy of the April 13, 2004 declaration contained in the record on appeal includes no attachment.
Paragraph 2 of the April 19, 2004 declaration states: “In further support of the fact that the original default judgment was vacated and that a new trial was set for 4/22/98 (reference lines 8 through 10 of Opposition to Motion for Contempt Order, for Warrant of Attachment and Order for Imprisonment which is incorporated by reference and made a part hereof and of which it is requested that the Court take judicial notice), please find the following: [¶] a. Attached as Exhibit ‘A’ hereto a true and correct copy of the Court’s Minute Order setting a new trial date for 4/22/98. [¶] b. Attached as Exhibit ‘B’ hereto a true and correct copy of page 7 of the Los Angeles Superior – Civil Case Summary, which references on 6/24/98 the ‘Order setting aside default [judgment] signed by the court and filed this date – Status Conference continued.” The record on appeal includes a copy of a minute order dated sometime in August 1997 in case No. SC042281 setting a trial date of April 22, 1998, and a portion of a Los Angeles Superior Court civil case summary that contains the information described in the April 19, 2004 declaration.
Plaintiff alleges in his complaint that the foregoing statements are “factually and materially false”; however, he fails to specify how or why they are untrue. Plaintiff also fails to provide any evidence of the alleged falsity. He has thus failed to establish any express misrepresentation by defendants, and accordingly has failed to demonstrate that the independent legal duty exception under section 1714.10, subdivision (c)(1) applies.
B. Financial Gain
The prefiling requirement of section 1714.10 may not apply if the attorney took action “in excess of his or her official representative capacity in service to his or her client” and “violated a legal duty running to the plaintiff . . . in furtherance of the lawyer’s own financial advantage.” (Berg & Berg, supra, 131 Cal.App.4th at p. 833.) A lawyer acts in excess of his capacity as a legal representative by acting for his or her own benefit. (Ibid.) An improper financial advantage is “a personal advantage or gain that is over and above ordinary professional fees earned as compensation for performance” of the legal representation. (Id. at p. 834.) Plaintiff argues that defendant’s Moe and Kinsling acted in furtherance of their own personal financial benefit because both hold financial interests in two realty companies that are also named as defendants in this action. Plaintiff’s complaint, however, contains no allegation of such financial interest, and plaintiff presented no evidence to support such an allegation. The financial gain exception accordingly does not apply.
IV. Reasonable Probability of Prevailing
Because plaintiff cannot establish that either of the exceptions to section 1714.10 apply, he must demonstrate a reasonable probability of prevailing in the action. (Berg & Berg, supra, 131 Cal.App.4th at p. 815.) In an action for attorney-client conspiracy to defraud, the plaintiff must allege and establish both the elements of fraud and the elements of conspiracy in order to make a prima facie showing under section 1714.10. The elements of fraud are a misrepresentation, knowledge of its falsity, intent to defraud, justifiable reliance, and resulting damage. (Universal By-Products, Inc. v. City of Modesto (1974) 43 Cal.App.3d 145, 151.) Fraud causes of actions must be pled with specificity. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) “‘“[A] [g]eneral pleading of the legal conclusion of ‘fraud’ is insufficient; the facts constituting the fraud must be alleged. . . . Every element of the cause of action for fraud must be alleged in the proper manner (i.e., factually and specifically), and the policy of liberal construction of the pleadings . . . will not ordinarily be invoked to sustain a pleading defective in any material respect.”’ [Citation.]” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 47, citing Committee on Children’s Television, Inc. v. General Foods Corp., supra, 35 Cal.3d at p. 216.) To establish the element of conspiracy, plaintiff must show (1) formation and operation of the conspiracy; (2) wrongful act or acts done pursuant thereto; and (3) resulting damage. (Quelimane, at p. 47.)
Plaintiff’s complaint fails to allege facts sufficient to establish a prima facie case of fraud. Under the fraud cause of action of the complaint, plaintiff alleges, “[b]ased on personal knowledge, information and admissions”, that defendants Moe and Kinsling conspired with their clients “to use the license authority of Don Glunts Realty, Inc., to loot CFF Properties partnership of its assets for the purpose of defrauding the plaintiff of his partnership joint venturer judgment debt owed in the amount of $284,431.91 plus interest, and thereafter converting and concealing the money as their personal property and covering up the aforesaid unlawful fraudulent acts with the corrupt legal expertise of” Moe and Kinsling. The balance of the allegations under plaintiff’s fraud cause of action describe allegedly improper transfers of CFF Properties’ real property assets to defendants Juan and Celia Padilla. The complaint alleges no specific misconduct by Moe or Kinsling. There is no allegation that Moe or Kinsling made any knowingly false representation in connection with the allegedly fraudulent property transfers, or that they personally benefited from those transfers. Moe and Kinsling’s only connection to the challenged transactions was in their professional capacity, representing the purchasers or sellers of the property. That connection is insufficient to state a viable claim for conspiracy to defraud. (Doctors’ Co. v. Superior Court (1989) 49 Cal.3d 39, 45.)
Plaintiff’s allegations that Moe and Kinsling conspired with their clients to submit false declarations in a separate action by plaintiff against CFF Properties are similarly deficient. Although plaintiff alleges that statements contained in Moe’s April 2004 declarations attesting to the authenticity of a 1998 court order setting aside a 1997 default judgment plaintiff had obtained against CFF Properties and its general partners are false, he fails to present any evidence to controvert those statements. Plaintiff thus failed to establish a prima facie case of conspiracy to defraud him. (Universal By-Products, Inc. v. City of Modesto, supra, 43 Cal.App.3d at p. 151; Committee on Children’s Television, Inc. v. General Foods Corp., supra, 35 Cal.3d at p. 216.)
DISPOSITION
The order is affirmed.
We concur: BOREN, P. J., DOI TODD, J.