Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County., Los Angeles County Super. Ct. No. BC316696., Irving S. Feffer, Judge.
Law Office of Gary Kurtz and Gary Kurtz for Plaintiff and Appellant.
Philip D. Dapeer for Defendants and Respondents.
ASHMANN-GERST, J.
Appellant Four Star General Properties, LLC (Four Star) contends that respondents Yana Henriks (Henriks), Blue Water Sunset, LLC (Blue Water) and its attorney, Philip Dapeer (Dapeer), intimidated, threatened and bribed a witness to submit a false declaration that enabled Blue Water to improperly obtain an order putting property owned by Four Star into a receivership estate. According to Four Star, the trial court erred when it denied its petition under Civil Code section 1714.10 for leave to file a proposed cross-complaint alleging that Blue Water, Dapeer and Henrik conspired to commit abuse of process.
All further statutory references are to the Civil Code unless otherwise indicated.
We find no error and affirm.
FACTUAL HISTORY
Four Star did not provide U.S. with a statement of facts that establishes the context of this appeal. Nor could we find an adequate summary of the facts in the record. For purposes of context only, we set forth the background provided in the respondents’ brief filed by Blue Water, Dapeer and Henriks.
“ This is an action for dissolution and winding up of certain limited liability companies in which [Blue Water] is at least a 50 [percent] equity owner. After the filing of the complaint, [Blue Water] moved for the appointment of a receiver to take charge of all of the real property assets of the defendant limited liability companies. Each of the defendant entities was being managed by defendant Philip Markowitz [(Markowitz)], who was also named as an individual party defendant. [Blue Water] came to discover that without its prior knowledge [and] consent, [Markowitz] caused various parcels of real property belonging to one of the defendant limited liability companies, Rail Prop, L.L.C., to be transferred to a newly formed limited liability company known as [Four Star]. [Blue Water] was never made a member of [Four Star]. [Markowitz] was the sole member and manager. In the case of the other defendant limited liability companies, [Markowitz] . . . claimed to be a 50 [percent] equity owner along with [Blue Water]. [¶ ] When . . . the fraudulent creation of [Four Star was discovered], [Blue Water] caused [Four Star] to be joined as a party defendant, and moved the writs and receivers department of the trial court to expand the original receivership order to cover the parcels of real property that had been taken from defendant Rail Prop, L.L.C. and transferred by Markowitz to . . . [Four Star].”
PROCEDURAL HISTORY
Proceedings in Department 86
Blue Water’s motion
Blue Water filed a motion in Department 86 of the superior court to expand the receivership estate. It submitted a declaration by Micah Irby (Irby).
Irby declared that over the years he collected rent on behalf of Markowitz from tenants who parked trucks, vehicles and trailers on properties that comprised Markowitz’s parking lot business. Irby deposited rent income into accounts at Washington Mutual Bank and City National Bank. At one point he was told to collect as much advance rent as possible because there was a motion for appointment of a receiver. After the receiver was appointed, Markowitz told Irby to pick up a plastic bag of cash from City National Bank. Irby understood that the bag of cash represented the balance of the account at that bank. Irby was then told to collect rental payments mailed to the company’s mail drop and deposit them into Markowitz’s accounts even though the money was supposed to go to the receiver. Money orders payable to Wilmington Storage (which is the catch-all name that Markowitz used to describe the parking lots) were altered to make Markowitz the payee.
The opposition
In opposition, Four Star submitted a second declaration from Irby. He declared that he provided his declaration to Blue Water only after he had been threatened by Henriks with criminal and civil prosecution and the loss of his job. If he cooperated, Henriks promised to give him a job at MetLife for $25 an hour. Dapeer paid Irby $2,000 and was told that the payment was for his declaration. After Irby signed the declaration, Henriks said Irby had to sign an altered declaration. He refused because the altered declaration was inaccurate. Henriks said she would follow through with her threat of pursuing adverse court action.
Department 86’s ruling
Blue Water’s motion was granted.
The ensuing minute order averred: “ There is evidence in support of the motion, the Declaration of [Irby], that the property sought to be added to the receivership estate is operated as a parking lot facility by [Markowitz] along with property that is presently part of the receivership estate, and that [Markowitz] is receiving rental income from both portions of the parking lot facility that he is failing and refusing to turnover to the receiver. [¶ ] Defendants present no evidence to the contrary. [¶ ] There is also evidence . . . to show that [Markowitz] has caused some of the property sought to be added to the receivership estate to be conveyed from Rail Prop, LLC to [Four Star],” a company he owns. “ Defendants . . . contend that the Irby declaration is ‘ tainted’ because Irby has given a later declaration to defendants that states that he was both threatened and bribed to give the declaration that is being used by [Blue Water] to support its motion. The second declaration, however, does not say that anything in the original declaration is false. Although the original declaration is certainly tainted by the subsequent declaration, it remains evidence sufficient to support the motion in the absence of any evidence to the contrary.”
According to Blue Water, Dapeer and Henriks, Four Star had the judge in Department 86 disqualified.
Proceedings in Department 51
The section 1714.10 petition
Four Star filed a petition in Department 51 of the superior court for leave to file a cross-complaint alleging a conspiracy to commit abuse of process against, inter alia, Blue Water’s attorney, Dapeer.
Based on statements in briefs and declarations, Four Star averred the following. In 2005, Markowitz was involved in a lawsuit with Blue Water over properties known as Wilmington Storage. On April 27, 2005, the trial court granted Blue Water’s motion to appoint a receiver over certain lots. Subsequently, Blue Water tried to expand the scope of the receivership to other lots but failed. Henriks, Blue Water’s representative, contacted Irby, who was a part time assistant for Markowitz. Irby also worked as a part time assistant for Michael Davis (Davis). Henriks claimed to have witnessed Irby receiving cash payments at Wilmington Storage after a receiver was in place. Irby denied her accusations. Henriks repeatedly threatened Irby with a civil action and criminal prosecution. Over the next month and a half, Davis asked Irby to provide a declaration that would help Henriks with her lawsuit against Markowitz. In July 2005, Davis said Henriks would give Irby one more chance to help or she would pursue charges. Eventually Henriks offered Irby and Davis $1,000 each for Irby’s declaration and stated Irby would not be sued or prosecuted if he accepted the deal. Irby was intimidated and agreed to do as asked. On August 5, 2005, Davis escorted Irby to Dapeer’s office. Under pressure, Irby signed the declaration prepared by Dapeer even thought it contained false information. Irby was given a check for $2,000, which was payable to “ cash.” Irby cashed the check, retained $1,000 for himself and gave the other $1,000 to Davis. After Blue Water submitted Irby’s declaration to Department 86, the receivership was expanded to include lots that were not part of the original order appointing a receiver.
Based on the foregoing facts, Four Star proposed to file a cross-complaint which alleged that Blue Water, Henriks, Davis and Dapeer conspired to commit abuse of process. It was alleged that they abused the court’s process when they extorted the declaration out of Irby. Four Star alleged that the wrongful acts “ were done with the ulterior motive of creating false . . . evidence in order to deceive the Court and increase the probability of expanding the scope of the Receivership in this action.” According to Four Star, the abuse of process caused it to suffer economic damages, including but not limited to the expansion of the receivership to include properties owned by Four Star.
Even though Four Star’s petition was filed under section 1714.10, it argued that section 1714.10 was not actually triggered by the proposed pleading because an exception under subdivision (c) of that statute applied, namely that Dapeer committed an unlawful or unethical act for profit. Because he billed $285 an hour for his legal services, his actions were for financial gain.
The opposition
In opposition, Blue Water and Dapeer argued that the proposed cross-complaint was barred by the litigation privilege. They also posited the following. Markowitz was found guilty of contempt for willful violation of the receivership order. As a result, he lost standing to seek judicial relief. Regardless, Four Star raised the same arguments in Department 86 in connection with the motion to expand the receivership order and lost. Significantly, Department 86 declined to find any improprieties with respect to how Irby’s declaration was obtained. The petition should be categorized as a disguised motion for reconsideration. Beyond that, Four Star improperly failed to inform Department 51 that Irby submitted a second declaration to Department 86 separate from the one allegedly extorted. Irby’s third declaration contradicted both his first and second declarations. There was no reason for Department 51 to give the third declaration any credence.
Finally, the abuse of process alleged by Four Star in the proposed cross-complaint was the filing of Irby’s first declaration with Department 86. But, as a matter of law, the filing of that declaration was not an abuse of process. It was never used for an improper or unlawful purpose.
Department 51’s ruling
At the hearing, the trial court in Department 51 noted that it did not have jurisdiction over the proposed cross-defendants and that the petition was not properly verified because Markowitz was disqualified from signing the verification in a representative capacity. And, as a contemnor, he was not entitled to obtain any judicial relief. Further, the trial court found that the petition was an improper motion for reconsideration because it was an attempt to avoid the prior rulings and findings in Department 86. Next, the trial court found that Four Star could not demonstrate probable validity of its claim. The filing of Irby’s declaration was protected by the litigation privilege. Regarding the merits, Irby’s declaration was not an abuse of process because it was filed for a proper purpose, which was to present evidence to the trial court in connection with a motion. Under California law, submitting a false declaration does not qualify as an abuse of process.
Four Star’s attorney conceded that the “ argument that the filing of a declaration however obtained is privileged is probably correct.” To avoid the litigation privilege, he argued that the “ prospective cross-complaint doesn’t seek to sue him for the use of that declaration, for the filing of the declaration. It seeks to sue the prospective cross-defendants for the abuse of process used to coerce the declaration.” The trial court said it was not sold.
In denying the petition, the trial court averred that the exception to section 1714.10 does not apply. “ Four Star has not satisfied the . . . ‘ financial gain’ . . . requirement of that exception.” Case law establishes that “ in furtherance of [an] attorney’s financial gain as used in [section 1714.10, subdivision (c)] means that through the conspiracy, the attorney derived and got economic advantage over and above monetary compensation that was received in exchange for professional services that were actually rendered on behalf of [the] client.” The trial court concluded that the fees paid to Dapeer did not establish financial gain. Additionally, the trial court noted that process is action taken pursuant to judicial authority. And merely obtaining or seeking process is not enough. There has to be misuse. “ Here, it appears to the [trial court] that Four Star’s proposed cross-complaint does not describe the issuance of any process of the [trial court] which was then abused.”
This appeal followed.
DISCUSSION
1. Section 1714.10.
“ 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. The court may allow the filing of a pleading claiming liability based upon such a civil conspiracy following the filing of a verified petition therefor accompanied by the proposed pleading and supporting affidavits stating the facts upon which the liability is based.” (§ 1714.10, subd. (a).)
But there is an exception. Section 1714.10, subdivision (a) “ 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.” (§ 1714.10, subd. (c).) For example, section 1714.10 “ simply does not apply to a malicious prosecution action against an attorney who is alleged to have prosecuted a claim without probable cause and adequate investigation and which any reasonable attorney would have recognized as untenable.” (Westamco Investment Co. v. Lee (1999) 69 Cal.App.4th 481, 488.)
A proceeding under section 1714.10, subdivision (a) involves questions of law and is subject to de novo review. (Berg & Berg Enterprises, LLC v. Sherwood Partners, Inc. (2005) 131 Cal.App.4th 802, 822.)
2. Section 1714.10, subdivision (c) does not apply.
According to Four Star, its proposed pleading should fall within the exception set forth in section 1714.10, subdivision (c). Four Star maintains that we should hold that it was owed an independent legal duty by Dapeer not to violate Rules of Professional Conduct, rule 5-310(B) (rule 5-310). That rule provides that an attorney shall not pay a witness if payment is contingent upon the content of the witness’s testimony. The problem is that this issue was not raised below and was therefore waived. (Hepner v. Franchise Tax Bd. (1997) 52 Cal.App.4th 1475, 1486.) Below, Four Star only argued that Dapeer’s conduct went beyond the performance of a professional duty to serve his client, and that it involved a conspiracy to violate a legal duty in furtherance of Dapeer’s financial gain.
No further analysis of this point is necessary.
For the sake of completeness, we observe that lawyers must pass the professional responsibility examination as part of the general bar examination. (Segretti v. State Bar (1976) 15 Cal.3d 878, 890.) And, generally speaking, a lawyer has “ affirmative duties concerning the administration of justice.” (General Dynamics Corp. v. Superior Court (1994) 7 Cal.4th 1164, 1185– 1186.) But there is no case law holding that a lawyer owes a duty to the opposition to refrain from violating rule 5-310. We think there is a sound reason for this. If the law were as Four Star suggests, a lawyer would simultaneously owe a duty of care to his client and an ethical duty to the opposing party. This would be untenable; it would create a conflict of interest. Violations of rule 5-310 are best remedied through disciplinary proceedings before the State Bar Court.
3. Four Star failed to establish a reasonable probability of prevailing.
Four Star posits that its petition established a prima facie case of conspiracy to commit abuse of process. We disagree.
a. Abuse of process law.
“ The tort of abuse of process [requires] . . . wrongful use of process, not merely a request for or initiation of process. . . . [Citation.] [¶ ] Process is action taken pursuant to judicial authority. It is not action taken without reference to the power of the court.” (Adams v. Superior Court (1992) 2 Cal.App.4th 521, 530 (Adams).) Moreover, there must be “ a misuse of the judicial process for a purpose other than that which it was intended to serve. [Citations.] The gist of the tort is the improper use of the process after it is issued. [Citation.]” (Id. at pp. 530– 531.) Typically, abuse of process involves acts exterior to the lawsuit. (Id. at p. 531.) And the “ ‘ improper purpose usually takes the form of coercion to obtain a collateral advantage, not properly involved in the proceeding itself, such as the surrender of property or the payment of money, by the use of the process as a threat or a club. There is, in other words, a form of extortion, and it is what is done in the course of negotiation, rather than the issuance or any formal use of the process itself, which constitutes the tort.’ . . . [Citations.]” (Templeton Feed & Grain v. Ralston Purina Co. (1968) 69 Cal.2d 461, 466 [knowing it had no right to possession, a creditor of a turkey farm abused process by having the Sheriff seize 35,000 turkeys that belonged to a second creditor of the turkey farm in order to force the second creditor to pay the turkey farm’s debts].)
A process is not abused unless there is a definite act or threat beyond the scope of the process. (Abraham v. Lancaster Community Hospital (1990) 217 Cal.App.3d 796, 826 (Abraham).) “ Moreover, there is no tort where process is used properly albeit with a bad motive. [Citations.]” (Ibid.) As a result, the mere filing of a complaint or appeal, regardless of the motive, cannot serve as the basis for an abuse of process cause of action. (Ibid.) A cause of action lies where process is used to obtain a collateral advantage. Examples include: (1) “ seizure of a second lender’s collateral in the hands of a debtor in order to coerce the former to pay the debtor’s original obligation” ; “ attaching property which has a value greatly in excess of the amount of a legitimate claim in order to restrain the debtor from asserting a cross-claim” ; “ seizure of property of a wife to coerce her into dropping claims against her husband” ; and “ garnishing exempt wages in order to force a debtor to apply his exempt property to the payment of the debt.” (Golden v. Dungan (1971) 20 Cal.App.3d 295, 301.) Further examples include the filing of complaints in the wrong venue “ for the improper ulterior purpose of impairing adversaries’ ability to defend such suits” and the use of a writ of possession to evict tenants from their home in order to circumvent wartime housing regulations. (Abraham, supra, at p. 827.)
Abuse of process requires the existence of process. A threat to obtain process does not suffice. “ Process,” in the context of a cause of action for abuse of process, is a term of art which refers to the means by which a court compels compliance with its demands. (Woodcourt II Limited v. McDonald Co. (1981) 119 Cal.App.3d 245, 251– 252.) In our lexicon, the word process has a broader definition that it does in connection with the tort at issue. A plaintiff cannot sue for abuse of process and rely on the broader definition; only the limited definition applies. As a result, while it can be said that the filing of a complaint involves process, it is not “ process” for purposes of the law of abuse of process. (Ibid.)
b. Four Star’s argument.
In its opening brief, Four Star informs U.S. that Blue Water, Dapeer and Henriks “ acted in concert to use threats, intimidation, and bribery to procure a deceptive declaration from a third party. The ulterior purpose was to obtain a Court Order by intimidation, deception, and bribery when truthful (or, at least, less obviously deceptive) motions were unsuccessful.” In the reply brief, Four Star contends that “ the proposed cross-complaint does not seek to sue [Blue Water, Dapeer and Henriks] for their use of [Irby’s first declaration], as that use is not actionable. The proposed cross-complaint seeks to sue [Blue Water, Dapeer and Henriks] for their methods used to obtain the declaration.”
In Four Star’s view, “ [i]t is well settled that threats to use legal process are sufficient to state an abuse of process claim even without any process ever being initiated. Threats to use legal process, such as the threats alleged in the proposed cross-complaint, are actionable.”
Boiled down to its essence, Four Star contends that Blue Water, Dapeer and Henriks can be held liable for conspiracy to commit abuse of process because Henriks threatened legal action against Irby.
c. There is no evidence of a process being abused.
Four Star did not offer any evidence that the purported conspiracy of Blue Water and Dapeer to coerce Irby to sign a false declaration involved judicial process and the subsequent misuse of that process. In other words, there is no suggestion that court orders were abused. The only question is whether the threat of obtaining process supports a cause of action. But as we have previously explained, no tort lies unless process actually issued. In other words, like the Sword of Damocles, there must be some existing court order or process hanging over a plaintiff’s head. There must be an imminent danger that the court order or process will be executed. We note that the threat of asking the court to issue a court order or process does not involve the courts in the defendant’s extortion. Therefore, a mere threat to obtain process is not misuse of process, which is the essence of the tort.
Four Star’s lifeline, we are told, is contained within Seidner v. 1551 Greenfield Owners Assn. (1980) 108 Cal.App.3d 895 (Seidner) and Tellefsen v. Key System Transit Lines (1961) 198 Cal.App.2d 611 (Tellefsen). The long and short of Siedner and Tellefsen, per Four Star, is that the mere threatened use of legal process is sufficient to support a cause of action. But a review of those cases reveals that Four Star has pinned its hopes on a misunderstanding.
In Siedner, a company and the appellant entered into a partnership to build condominium homes. When the project was completed, the company sued the appellant to dissolve the partnership. Then the company filed a separate lawsuit against the appellant for breach of the implied warranty to construct the project in a workmanlike manner. The appellant filed a cross-complaint and alleged that the company committed abuse of process because it decided to file the implied warranty action to put pressure on the appellant to settle. (Seidner, supra, 108 Cal.App.3d at pp. 897– 899.) The trial sustained a demurrer to the abuse of process cause of action, and the appellate court affirmed. (Id. at p. 906.) It held that abuse of process requires more than the mere filing of a lawsuit. (Id. at p. 904.) In the same philosophical vein, Tellefsen held that the mere filing of an appeal does not qualify as an abuse of process. (Tellefsen, supra, 198 Cal.App.2d at pp. 615– 616 [some definite act or threat not authorized by the process, or aimed at an object not legitimate in the use of the process, is required before a party can sue for abuse of process.)
Neither Seidner nor Tellefsen offer Four Star assistance. They are consistent with the law we surveyed in part 3.a., ante.
It is clear that Four Star believes that it has a cause of action if there was a threat of civil or criminal prosecution even though an action was never filed and no court orders were ever issued. Indeed, Tellefsen refers to a threat as being sufficient for abuse of process. But, as Adams explained, “ although abuse of process may consist of a threat that process will be invoked, and therefore could also consist of an attempt to invoke such process, process must in fact issue at the defendant’s behest.” (Adams, supra, 2 Cal.App.4th at p. 531.) Restated, the defendant who plays the role of the extortionist must have a court process firmly in hand and wield it like a club in order to obtain a purpose not contemplated by the process. If he swings the club, or threatens to, only then has he acted wrongfully.
Finally, it does not appear that Four Star has standing to pursue a claim for abuse of process. It was not coerced into doing anything. If, as alleged, Irby was coerced into signing his first declaration, he is the one who might have a grievance if a mere threat of obtaining process was sufficient.
This necessarily concludes Four Star’s appeal. All other issues raised by the parties are moot.
In its appellate briefs, Four Star offered considerable argument as to whether the litigation privilege protected Blue Water, Dapeer and Henrik. Then, at oral argument, Four Star dwelled on this issue. But because Four Star cannot get past section 1714.10, the litigation privilege is moot.
DISPOSITION
The order is affirmed. Blue Water, Dapeer and Henriks are entitled to recover their costs on appeal.
We concur: BOREN, P. J., CHAVEZ, J.