Opinion
B228615
01-17-2012
ANDREW FISHER, Plaintiff and Appellant, v. ERZSEBET GARAJSZKI et al., Defendants and Respondents.
Law Offices of Erika S. Lipcsey and Erika S. Lipcsey for Plaintiff and Appellant. Stephen A. Varga, in pro. per., and for Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. YC060570)
APPEAL from a judgment of the Superior Court of Los Angeles County, Cary H. Nishimoto, Judge. Affirmed.
Law Offices of Erika S. Lipcsey and Erika S. Lipcsey for Plaintiff and Appellant.
Stephen A. Varga, in pro. per., and for Defendants and Respondents.
In this tort action for damages, plaintiff and appellant Andrew Fisher (Fisher) appeals from a judgment of dismissal entered on September 2, 2010, after the trial court sustained the demurrer of defendants and respondents Erzsebet Garajszki, Gene H. Dreher, and Stephen A. Varga to the second amended complaint (SAC). Fisher contends the SAC sufficiently alleges causes of action for intentional interference with prospective economic advantage and civil conspiracy, and it was an abuse of discretion to deny leave to amend. We affirm.
PROCEDURAL BACKGROUND
Allegations of the SAC
A. Paragraphs 1 through 14
Plaintiffs Fisher, Andrew Fisher, Jr., and Fisher & Associates Enterprises, Inc., doing business as South Bay Mercedes and BMW Service and Repair (Fisher & Associates), alleged that Fisher owned Fisher & Associates, the property in Hermosa Beach on which Fisher & Associates was located, and a rental property in Berkeley. Fisher and his son, Andrew Fisher, Jr., (the Fishers) operated Fisher & Associates. Garajszki, Fisher's then-wife, joined the business in 2002. Varga, an attorney, represented Garajszki in her pending divorce proceeding against Fisher and in her pending tort action against the Fishers. These actions sought money damages of more than several million dollars that would displace Fisher from his residence and his business. Dreher was romantically involved with Garajszki. He worked for Varga, who represented Dreher in a proceeding brought by Fisher. In order to prosper financially, Varga went beyond his professional duty to Garajszki by presenting misleading evidence and making false claims to the trial court by remaining silent when the court concluded the Berkeley property was community property and stating that Fisher's federal lawsuit was dismissed on the merits instead of on procedural grounds.
Andrew Fisher, Jr., and Fisher & Associates did not file a notice of appeal.
B. Paragraphs 15 through 23
Plaintiffs alleged that Garajszki conspired with Varga to obtain money from the Fishers by prosecuting the pending family law and tort actions. Varga "received his part of the loot as 'attorney fees.'" Shortly after Fisher's marriage to Garajszki began to disintegrate in July 2005, Garajszki began a relationship with Dreher, who encouraged Garajszki to falsely allege that Fisher harassed her. In March 2006, Garajszki obtained a restraining order against Fisher. As Garajszki's workplace was Fisher & Associates, Fisher was prevented from conducting his business. Garajszki parked her car in front of the workplace gates, which prevented Fisher from entering. Defendants embezzled money from Fisher & Associates. In November 2005, Fisher found over $50,000 in cash hidden on the premises, and in December 2006, he discovered that over $25,000 in checks written on the Fisher & Associates account were returned for insufficient funds. In February 2007, Fisher & Associates was failing, because Fisher was unable to work with any regularity. In early 2008, Dreher told the FBI that Fisher engaged in money laundering, child pornography, and gun trafficking.
Fisher made the following allegations on information and belief: (1) Dreher, without authorization, represented himself as the owner of Fisher's real property and approached a real estate agent to sell Fisher & Associates; (2) Dreher tried to evict the tenants of Fisher's rental property in Berkeley; and (3) Fisher failed to attend a hearing in July because Dreher and Garajszki stole the notification of the hearing before it reached him.
C. First Cause of Action
The first cause of action, by Fisher & Associates, against defendants for intentional interference with business relations incorporated the allegations in paragraphs 1 through 23. In 2007, after Dreher sent a plan to Garajszki to destroy "plaintiff's business," each defendant worked to destroy Fisher's business relationship with Garajszki and prevent Fisher from conducting his business. Dreher instructed Garajszki to "'turn the shop into money' in order 'to destroy the shop in 18 months.'" Garajszki obtained an order restraining Fisher from coming onto the business premises. Garajszki wrote over 800 business checks, knowing the business account did not have sufficient funds. As a result, Fisher & Associates' business reputation and good will were ruined, and the business suffered a catastrophic loss.
Fisher & Associates was the sole plaintiff in the first cause of action in the first amended complaint. Because Fisher & Associates was in receivership and the receiver had not authorized the lawsuit, plaintiffs' attorney dismissed Fisher & Associates from the action on November 3, 2009, "until such time that the Receiver has granted consent to include the plaintiff Fisher & Associates back in the instant action; or in the alternative, until such time that the Receivership is terminated." The SAC also named Fisher & Associates as the only plaintiff in the first cause of action, but the SAC continued to allege that Fisher & Associates was currently in receivership.
D. Second Cause of Action
In the second cause of action, for intentional interference with prospective economic advantage, plaintiffs incorporated the allegations contained in paragraphs 1 through 14, and further alleged the following. Plaintiffs had prospective customers and business partners. Dreher and Garajszki conspired with each other to deprive Fisher of his auto repair business and ruin plaintiffs' business reputation and good will. In 2007, after Dreher sent a plan to Garajszki to destroy "plaintiff's business," each defendant worked to destroy Fisher's business relationship with Garajszki and prevent Fisher from conducting his business, with the goal of destroying Fisher's livelihood. Dreher instructed Garajszki to "'turn the shop into money' in order 'to destroy the shop in 18 months.'" Garajszki obtained an order restraining Fisher from coming onto the business premises. Garajszki wrote over 800 business checks, knowing the business account did not have sufficient funds. The business was completely destroyed.
E. Third Cause of Action
In the third cause of action for "intentional interference with right to pursue a lawful business and civil conspiracy to commit fraud by attorney and client," plaintiffs incorporated all allegations in paragraphs 1 through 34 and further alleged the following. In March 2007, Dreher perpetrated a plan for Garajszki to obtain a restraining order to prevent Fisher from being on the business premises, and defendants conspired to restrain competition and deprive Fisher of his auto repair business by precluding him from having access to the business. In April 2007, Dreher and Garajszki engaged in a plan to destroy the business in 18 months by liquidating assets and accepting cash payments to drain the business of its financial assets. Garajszki wrote over 800 business checks without sufficient funds in 2006. During Garajszki's family law case, Dreher loaned Garajszki $150,000 for Varga's legal fees, and Dreher worked for Varga on a bartering basis.
Dreher and Garajszki hired Varga to help them finish their scheme "to take everything possible from the Fishers." Varga filed lawsuits on behalf of Dreher and Garajszki, solely to enrich defendants. Varga committed acts going beyond the performance of his professional duty to his clients by filing several actions against plaintiffs, defending Garajszki in the marital dissolution action, representing Dreher in Fisher's temporary restraining order action, and filing an anti-SLAPP motion in this action. "Varga's attorney fees are predicated on taking all of plaintiff's assets through whatever means possible in filing lawsuits." Fisher & Associates was "currently in receivership."
Pleadings on Defendants' Demurrer to the SAC
In a demurrer to the SAC, filed on May 11, 2020, defendants contended, in relevant part: (1) Fisher & Associates was dismissed from the action and the remaining plaintiffs have no standing to sue; and (2) the complaint failed to allege facts sufficient to state a cause of action because (a) it is barred by res judicata or collateral estoppel, (b) the allegations are barred by Code of Civil Procedure, section 426.30, subdivision (a) (compulsory cross-complaint) and Dreher would be subject to mandatory joinder in said cross-complaint, (c) the allegations are unclear, and (d) the causes of action are based on conduct privileged by Civil Code, section 47, subdivision (b) (statements reporting crimes and in a judicial proceeding are privileged).
In opposition, plaintiffs incorporated by reference their opposition to defendants' special motion to strike under the anti-SLAPP statute. Varga knowingly and falsely claimed in family court that Garajszki had an interest in the Berkeley property and in the state and federal courts, that Fisher's federal suit was dismissed on the merits. Varga participated in Garajszki's scheme to obtain money from plaintiffs for his own financial gain, in the form of attorney fees. Res judicata did not apply, because the issues in the federal suit were different, no final judgment on the merits was reached, and this action has a new defendant, Varga.
Plaintiffs also incorporated a request for judicial notice of two superior court cases, Fisher v. Fisher and Fisher v. Dreher. The trial court did not grant the request. Fisher does not pursue the issue in the appeal.
Plaintiffs requested leave to file a third amended complaint in order to correct inartful pleading and allege additional facts. Plaintiffs did not state what additional facts they would allege. Plaintiffs also requested the demurrer be continued to give plaintiffs time to obtain leave of court to add Fisher & Associates back into the action.
Trial Court's Rulings
On June 4, 2010, the trial court sustained the demurrer to the SAC without leave to amend, dismissed the SAC with prejudice, and entered judgment in favor of defendants. The court ruled that a pending motion to strike the SAC and a motion to strike under the anti-SLAPP statute were moot.
The trial court ruled the first cause of action of the SAC was moot because it was asserted only by Fisher & Associates, and Fisher & Associates was dismissed from the action on November 3, 2009.
Fisher does not challenge this ruling on appeal.
On the second cause of action, for intentional interference with prospective economic advantage, the Fishers failed to establish they had standing to assert the cause of action. The cause of action was brought solely for interference with the auto repair business, but counsel's November 3, 2009 declaration stated, and the allegations of the SAC confirmed, the business was currently in receivership. Further, only allegations 1 through 14 were incorporated into the second cause of action, with the result that the SAC contains no facts to meet the elements of the cause of action.
The trial court took judicial notice of its own file.
Concerning the third cause of action, for intentional interference with right to pursue a lawful business and civil conspiracy, the trial court ruled that no recognized cause of action was stated, and conspiracy does not constitute a cause of action in the absence of a valid underlying civil claim. To the extent the allegations mirror those in the second cause of action, the demurrer was sustained without leave to amend. As against Varga, the Fishers failed to obtain a court order as required by Civil Code section 1714.10, subdivision (a) and failed to establish that an exception under Civil Code section 1714.10, subdivision (c) applied. The accusations against Varga were "merely conclusory with no factual basis."
Civil Code section 1714.10, subdivision (a) provides, in pertinent 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."
Civil Code section 1714.10, subdivision (c) provides: "This section shall not apply to a cause of action against an attorney for a civil conspiracy with his or her client, 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."
Plaintiffs' counsel requested leave to file a third amended complaint. Counsel stated he needed to obtain leave of the court in order to bring Fisher & Associates back into the case as a plaintiff. Concerning the second cause of action, leave to amend was requested to incorporate the facts from the first cause of action. As to the third cause of action, counsel stated he received new evidence recently from counsel in the family court action which would cure the problem with the pleadings. Counsel did not identify the new facts. The trial court stated the Fishers would have to file a noticed motion for leave to amend the complaint if they wanted to amend the complaint. The court declined to dismiss the complaint, because a motion to amend might be filed.
Pleadings on Plaintiffs' Motion for Reconsideration and for Leave to File Third Amended Complaint
On June 14, 2010, plaintiffs filed a motion for reconsideration and for leave to file a third amended complaint based on facts that came to light after June 4, 2010. Plaintiffs did not file a proposed third amended complaint with the motion. Counsel's declaration stated that on June 3, 2010, Fisher's attorney in the dissolution matter and in a matter brought by Garajszki and Dreher for damages for abuse of process told counsel that Varga knew Garajszki acquired a credit card under the name of Elizabeth H. Fisher, not her true name, and made charges in excess of $150,000 with Dreher. "This information was not available to me as I am not involved in the Fisher Dissolution." Garajszki abandoned "South Bay Mercedes and BMW Repair" in 2007 and started a competing business. Plaintiffs contended these facts would cure the defects of the SAC, in that they showed interference with prospective economic advantage of plaintiffs and show why Fisher has standing to sue Garajszki as owner of "South Bay Mercedes and BMW Repair."
Defendants opposed the motion on the grounds it failed to satisfy the jurisdictional requirements of a motion for reconsideration under Code of Civil Procedure section 1008. Moreover, the proffered facts were inadmissible hearsay, plaintiffs failed to show why the facts were not presented sooner, and the new matter did not cure the defects in the pleadings.
On July 9, 2010, the trial court denied the motion. The motion did not comply with Code of Civil Procedure section 1008. No new facts were alleged to justify reconsideration of the prior order sustaining the demurrer without leave to amend. The evidentiary facts provided were not new and did not cure the deficiencies of the SAC. Moreover, the trial court was aware of such facts at the time of the hearing on the demurrer when it sustained the demurrer without leave to amend.
Judgment of Dismissal
On September 2, 2010, the trial court ordered the action dismissed with prejudice. This timely appeal was filed on November 1, 2010.
The order of dismissal noted that Fisher &Associates had been dismissed from the action on November 3, 2009.
DISCUSSION
Fisher contends the SAC sufficiently alleges causes of action for intentional interference with prospective economic advantage and civil conspiracy and it was an abuse of discretion to deny leave to amend. We hold that the trial court did not abuse its discretion in sustaining the demurrer and denying leave to amend.
Standard of Review
"In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. 'We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.' [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff." (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
The Demurrer Was Properly Sustained
"In order to prove a claim for intentional interference with prospective economic advantage, a plaintiff has the burden of proving five elements: (1) an economic relationship between the plaintiff and a third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) an intentional act by the defendant, designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the defendant's wrongful act, including an intentional act by the defendant that is designed to disrupt the relationship between the plaintiff and a third party." (Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 944.)
A. Second Cause of Action
The trial court correctly ruled the SAC failed to state facts showing Fisher had standing to sue for intentional interference with prospective economic advantage. Accordingly, the trial court did not abuse its discretion in granting the demurrer to the second cause of action.
"Every action must be prosecuted in the name of the real party in interest[.]" (Code Civ. Proc., § 367.) "Generally, the real party in interest is the person who has the right to sue under the substantive law. It is the person who owns or holds title to the claim or property involved, as opposed to others who may be interested or benefited by the litigation. [Citations.] [¶] Real party in interest issues are often discussed in terms of plaintiff's 'standing to sue.' [Citations.]" (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2011) ¶ 2:2, p. 2-2, italics omitted.)
Reasonably interpreted, the SAC alleged that Fisher & Associates, a California corporation currently in receivership, was the entity wrongfully interfered with, making Fisher & Associates the real party in interest in this action. The real party in interest of claims of a corporation in receivership is the receiver. (O'Flaherty v. Belgum (2005) 115 Cal.App.4th 1044, 1062-1063.) The SAC does not allege facts showing Fisher's authority to sue on behalf of the receiver. The SAC did not allege facts showing Fisher's authority to sue for injury to the corporation. This is not a shareholders' derivative action (Corp. Code, § 800), and it was not alleged this suit was authorized by the corporation's board of directors or initiated by its president or managing officer (Anmaco, Inc. v. Bohlken (1993) 13 Cal.App.4th 891, 899, fn. 2).
Fisher contends he has standing to sue because the SAC alleges his economic interests were integrally related to those of Fisher & Associates. Fisher did not assert this theory in the trial court, and the SAC is not reasonably susceptible to that interpretation.
B. Third Cause of Action
The trial court correctly ruled no cause of action was stated in the third cause of action for "intentional interference with right to pursue a lawful business and civil conspiracy to commit fraud," because no underlying cause of action was stated. (See Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616, 631 ["To state a cause of action for conspiracy the complaint must allege: (1) the formation and operation of the conspiracy; (2) the wrongful act or acts done pursuant thereto; and (3) the damage resulting."].)
Fisher does not challenge the ruling that intentional interference with the right to pursue a lawful business is not a recognized cause of action. Fisher instead contends the SAC stated facts sufficient to support underlying causes of action for fraud, conversion, and breach of fiduciary duty, theories he did not assert in the trial court. We disagree with the contention.
The SAC did not plead the elements of fraud. The elements of a cause of action for fraud are: (1) misrepresentation; (2) knowledge of falsity; (3) intent to defraud; (4) justifiable reliance; and (5) resulting damage. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) The circumstances of the misrepresentation, such as how, when, where, to whom, and how the misrepresentation was made must be pleaded with particularity. (Id. at p. 645.) The SAC contains no allegation a misrepresentation was made by one or more defendants to Fisher, much less an allegation of misrepresentation that was pleaded with particularity.
The SAC did not plead conversion. "The elements of a conversion are the plaintiff's ownership or right to possession of the property at the time of the conversion; the defendant's conversion by a wrongful act or disposition of property rights; and damages." (Oakdale Village Group v. Fong (1996) 43 Cal.App.4th 539, 543-544.) The alleged embezzled funds belonged to the corporation in receivership, Fisher & Associates, not to Fisher, and the SAC did not allege Fisher owned or had a possessory right to any other property alleged to have been converted.
The SAC did not plead breach of fiduciary duty. "In order to plead a cause of action for breach of fiduciary duty, there must be shown the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach." (Pierce v. Lyman (1991) 1 Cal.App.4th 1093, 1101.) The SAC contains no factual allegation Garajskzi had a relationship of trust to Fisher concerning the funds embezzled from Fisher & Associates or concerning check overdrafts on the account of Fisher & Associates. The SAC contains no allegation Fisher was damaged by the embezzlement and check overdrafts.
C. Leave to Amend
The trial court did not abuse its discretion in denying Fisher leave to amend the complaint, because, as the court correctly ruled, the "new" facts Fisher provided in his request for leave to amend the SAC were neither new to the court nor adequate to cure the deficiencies of the SAC in stating a cause of action. In his appeal, Fisher has not carried his burden of showing that it is reasonably probable the deficiencies could be cured by amendment. (See Blank v. Kirwan, supra, 39 Cal.3d at p. 318.)
DISPOSITION
The judgment is affirmed. Costs on appeal are awarded to respondents.
Respondents' motion for appellate sanctions is denied.
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KRIEGLER, J.
We concur:
ARMSTRONG, Acting P. J.
MOSK, J.