Opinion
H042853
04-24-2018
SUSAN BASSI, Plaintiff and Respondent, v. JAMES BUTERA et al., Defendants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. CV280064)
Plaintiff Susan Bassi filed a complaint for professional negligence against defendants James Butera and McCahan, Helfrick, Thiercof and Butera Accountancy Corporation (MHT&B). The trial court denied defendants' motion to strike the complaint pursuant to the anti-SLAPP statute (Code Civ. Proc., § 425.16). Defendants contend: the trial court erred in concluding that Bassi's complaint was not based on protected activity; and Bassi failed to show a probability of prevailing on her complaint. We reverse.
All further statutory references are to the Code of Civil Procedure unless otherwise stated.
I. Factual and Procedural Background
Bassi is a party in a marital dissolution action. Butera is a certified public accountant and a partner in MHT&B.
Bassi has requested that this court take judicial notice of the records in the marital dissolution action. We deny the request since those proceedings are unrelated to any issue in this appeal.
On February 7, 2014, Judge Mary Ann Grilli issued an order which states: "The parties stipulate to designate Mr. Butera, Certified Public Accountant, being the Court's expert under Evidence Code 730 in this case. Mr. Butera will carry out such assignments as either side requests of him. Each party is equally liable for the gross fees of Mr. Butera, subject to the Court's right to reallocate. Any communication with Mr. Butera, other than scheduling, shall always be copied to the other side, within the confines, however, of the non-disclosure agreement. [Robert Bassi] has disclosed Mr. Butera commence[d] work on this case on being hired by Mr. Roggia."
Bassi requests that this court take judicial notice of a retention agreement, which provides, among other things, that the parties agree that any dispute over fees will be submitted for resolution by arbitration. She argues that this court should consider defendants' refusal to participate in arbitration. First, this court is neither required to nor has discretion to take judicial notice of this document. (Evid. Code, §§ 451, 452.) Second, defendants objected to the consideration of this document, because plaintiff had failed to establish a foundation for it. (§ 425.16, subd. (b)(2); Cal. Rules of Court, rule 3.1306(a).) Thus, Bassi's request is denied.
Following his appointment as the court's expert, Butera prepared two reports: an April 7, 2014 report regarding income available for marital support from two business entities owned by Bassi and her husband; and a July 3, 2014 preliminary postseparation accounting of the period from September 1, 2010 through December 31, 2013. The latter report was in response to the court's order on April 28, 2014, for an accounting of what either party had taken from any accounts since September 2010. On May 2, 2014, Butera also testified at a temporary support hearing regarding the April 7, 2014 report, which was introduced as an exhibit at that hearing.
On July 15, 2014, Bassi e-mailed Butera and requested information regarding MHT&B's errors and omissions insurance policy. Based on this request and Bassi's recent expression of dissatisfaction with the conclusions in his reports, Butera suspected that she was considering a lawsuit against him and MHT&B.
About a week later, at the advice of his insurance carrier, Butera wrote to the parties' counsel to notify them that he would cease any further work unless the parties stipulated that his work was covered by the litigation privilege as codified in Civil Code section 47. Bassi refused to sign the addendum and Butera ceased any further work.
Bassi asserts that defendants failed to disclose that she filed a complaint with the California Board of Accountancy in November 2014. Even assuming Bassi had established a proper foundation for this document (§ 425.16, subd. (b)(2); Cal. Rules of Court, rule 3.1306(a)), that she filed a complaint is irrelevant to any issue on appeal.
On April 30, 2015, Bassi filed a complaint for professional negligence against defendants. She alleged that Butera "testified and issued reports in a family law litigation matter where he was retained by [her] and her husband as a joint CPA to perform forensic accounting." She further alleged that Butera "performed his duties below the required standard of care in numerous ways, including, but not limited to, the following: During his testimony Mr. Butera misrepresented and omitted many key financial facts, failed to properly investigate, failed to use objectively available information, failed to accurately report the parties' tax filing, failed to address an instance of payroll fraud, failed to appear at required hearings, failed to file necessary reports, and failed to report instances of fraud." As a result of Butera's conduct, Bassi suffered damages.
Following a hearing on May 6, 2015, Judge Grilli granted Butera's request to be relieved as an expert under Evidence Code section 730.
On July 21, 2015, defendants filed an anti-SLAPP special motion to strike the complaint. Butera's declaration and a request for judicial notice of three orders issued by Judge Grilli were attached to the motion.
Asserting that defendants asked this court to take judicial notice of the related dissolution case, Bassi refers to various aspects of this case in her brief. Bassi has mischaracterized the record. At defendant's request, the trial court took judicial notice of three orders in the related case.
Bassi, appearing in pro per, filed a response. As the trial court noted, the response included both "factual assertions with argument in an unsworn presentation." Bassi argued that Butera had provided false information and omitted relevant information in his reports, failed to perform work that she and/or her attorney had requested, and engaged in ex parte communications with the referee. She also argued that Butera had not been appointed by Judge Grilli. Defendants filed a reply brief in which they argued, among other things, that Bassi had failed to submit a declaration with admissible evidence and thus had not met her burden of demonstrating a probability of prevailing on her claim. Bassi filed a supplemental response in which she restated her arguments, but did not include a declaration with admissible evidence.
At the hearing on the motion to strike, Bassi referred to an exhibit that was not provided to defendants' counsel or the court. The exhibit, which was an e-mail from defendants' counsel to Bassi, is not included in the record on appeal. Defendants' counsel argued that it was irrelevant, and did not object to the court considering this e-mail.
Following a hearing, the trial court denied the motion. Relying on Robles v. Chalilpoyil (2010) 181 Cal.App.4th 566 (Robles), the trial court concluded that Bassi's complaint did not arise out of protected activity and thus was not barred by the anti-SLAPP statute. The trial court did not reach the issue of whether Bassi had demonstrated a probability of prevailing on the merits of her claim.
II. Discussion
A. Anti-SLAPP Law
Section 425.16, subdivision (b)(1) provides that "[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 or 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." This statute sets forth " 'a two-step process for determining whether an action is a SLAPP. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. . . . If the court finds that such a showing has been made, it must then determine whether the plaintiff has demonstrated a probability of prevailing on the claim.' [Citation.] 'Only a cause of action that satisfies both prongs of the anti-SLAPP statute—i.e., that arises from protected speech or petitioning and lacks even minimal merit—is a SLAPP, subject to being stricken under the statute.' " (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 278-279 (Soukup).)
A defendant satisfies the "arising from" requirement " 'by demonstrating that the act underlying the plaintiff's cause fits one of the categories [of protected activity] spelled out in section 425.16, subdivision (e)'. . . ." (§ 425.16, subd. (b)(1); Navellier v. Sletten (2002) 29 Cal.4th 82, 88.) These categories include "any written or oral statement or writing made before a . . . judicial proceeding." (§ 425.16, subd. (e)(1).) "In the anti-SLAPP context, the critical point is 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. [Citations.]" (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78.) "In making its determination, the court shall consider the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based." (§ 425.16, subd. (b)(2).)
"To establish a probability of prevailing, the plaintiff 'must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.' [Citations.] For purposes of this inquiry, 'the trial court considers the pleadings and evidentiary submissions of both the plaintiff and the defendant (§ 425.16, subd. (b)(2)); though the court does not weigh the credibility or comparative probative strength of competing evidence, it 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.' [Citation.] In making this assessment it is 'the court's responsibility . . . to accept as true the evidence favorable to the plaintiff . . . .' [Citation.] The plaintiff need only establish that his or her claim has 'minimal merit.'. . . ." (Soukup, supra, 39 Cal.4th at p. 291.)
Our standard of review is de novo. (Flatley v. Mauro (2006) 39 Cal.4th 299, 325 (Flatley).)
With no citation to authority, Bassi contends the standard of review is abuse of discretion. Her contention has no merit.
B. Application of Section 425.16
The trial court may appoint an expert "to investigate, to render a report as may be ordered by the court, and to testify as an expert at the trial of the action relative to the fact or matter as to which the expert evidence is or may be required." (Evid. Code, § 730.) The parties may also stipulate to the appointment of an expert pursuant to Evidence Code section 730. (See, e.g., Obos v. Scripps Psychological Associates, Inc. (1997) 59 Cal.App.4th 103, 105-106.) The cost of the expert's services may be charged to the parties as the trial court determines. (Evid. Code, § 731, subd. (c).) In In re Marriage of Adams and Jack A. (2012) 209 Cal.App.4th 1543, the Court of Appeal emphasized the importance of a neutral expert. "Over a century ago, our Supreme Court recognized the need for court-appointed 'disinterested . . . experts who shall review the whole situation and then give their opinion with their reasons . . . regardless of the consequences to either litigant.' [Citation.] Section 730 serves this function by authorizing a court to 'appoint a disinterested expert who serves the purpose of providing the court with an impartial report.' [Citation.]" (Id. at p. 1562.)
Here, Bassi and her husband stipulated to using Butera as the court-appointed expert regarding accounting issues pursuant to Evidence Code section 730. Bassi's cause of action for professional negligence alleges that Butera's reports and testimony regarding accounting issues in the dissolution proceeding fell below the standard of care and damaged her. Thus, her complaint is based on written and oral statements made in a judicial proceeding, which qualify as protected activity under the anti-SLAPP statute. (§ 425.16, subd. (e)(1).)
Even assuming that some of Butera's conduct underlying Bassi's cause of action, such as ex-parte communications with the referee, is not based on protected activity, we would reach the same conclusion. " '[W]here a cause of action alleges both protected and unprotected activity, the cause of action will be subject to section 425.16 unless the protected conduct is "merely incidental" to the unprotected conduct.' [Citation.]" (Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2005) 129 Cal.App.4th 1228, 1245.) Here, the protected conduct is not merely incidental to the unprotected conduct. The principal gravamen of Bassi's cause of action rests in Butera's written and oral statements in the underlying dissolution action.
Bassi's complaint does not include this allegation and she did not submit a declaration indicating that Butera had engaged in such conduct. However, she made this allegation in her response to defendants' motion, at the hearing on the motion, and in her brief.
Nor are we persuaded that Robles, supra, 181 Cal.App.4th 566 applies to the present case. In Robles, the plaintiffs brought an action for negligence and conspiracy to commit fraud against their own expert witness, not a court-appointed neutral expert. (Id. at p. 571.) This court stated that section 425.16 "protects litigation-related speech and petitioning activity undertaken on another's behalf [citations], but the statute should not be used to insulate those statements from recourse by the very client on whose behalf the statement was made." (Id. at p. 576.) In reaching its conclusion, the Robles court considered the analysis and holdings in Jespersen v. Zubiate-Beauchamp (2003) 114 Cal.App.4th 624, Benasra v. Mitchell Silberberg & Knupp LLP (2004) 123 Cal.App.4th 1179, Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th 1532, and Freeman v. Schack (2007) 154 Cal.App.4th 719. (Robles, at pp. 576-578.) These cases involved actions against attorneys by their former clients. The Robles court recognized that "[t]hese decisions from other appellate districts of our state are consistent with our conclusion that section 425.16 does not shield statements made on behalf of a client who alleges negligence in the defendant's representation of the client or breach of the duty of loyalty." (Id. at pp. 578-579, italics added.) Here, unlike in Robles, Bassi was not Butera's client. Butera was not serving as her advocate and his written and oral statements were not made on her behalf. Butera had been appointed by the court to provide an impartial opinion regarding accounting issues under Evidence Code section 730.
Bassi argues that the trial court did not err in relying on Robles, supra, 181 Cal.App.4th 566, because Butera was retained by her husband prior to being appointed the court's expert. Bassi relies on the following statement in Judge Grilli's order: "[Robert Bassi] has disclosed Mr. Butera commence[d] work in this case on being hired by Mr. Roggia." Bassi claims that her husband retained Butera in 2013, but there is nothing in the record to support this claim. Butera's declaration states that he prepared two reports and testified at a support hearing after his appointment as the court's expert in February 2014. Even setting aside Butera's declaration, Bassi's own complaint refers to Butera as a "joint CPA" who "performed his duties below the required standard of care . . . ." Thus, the complaint refers to Butera's conduct after his appointment under Evidence Code section 730. Accordingly, Bassi's argument fails.
Bassi also argues that the trial court found that Butera was a retained expert and not a court-appointed expert. She relies on the portion of the order in which the trial court summarized the allegations of the complaint. Thus, the trial court did not find that Butera was a retained expert. However, even assuming that the trial court had made such a finding, our standard of review is de novo. (Flatley, supra, 39 Cal.4th at p. 325.) Here, Judge Grilli's order establishes that Butera was a court-appointed expert.
Bassi contends that the "only legal authority for appointing a joint expert in a dissolution case exists in the Civil Code of Procedure sections 638 and 639 after a matter, or issues contained in the matter, are deemed to be complex in nature." She asserts that the dissolution action was not deemed complex until two months after Butera was appointed by the court to serve as its expert pursuant to Evidence Code section 730. It appears that she is arguing that Butera could not serve as the court's expert, but only as her expert. Bassi is mistaken. Sections 638 and 639 are unrelated to the appointment of a joint expert. These code sections address the appointment of a referee. (§§ 638, 639.)
Turning to the second step of the anti-SLAPP analysis, we consider whether Bassi has met her burden of demonstrating a probability of prevailing on her claim. (§ 425.16, subd. (b)(2).) We first note that "[i]n opposing an anti-SLAPP motion, the plaintiff cannot rely on the allegations of the complaint, but must produce evidence that would be admissible at trial. [Citation.]" (HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212.) Here, Bassi failed to provide a declaration with admissible evidence. "Under the law, a party may choose to act as his or her own attorney. [Citations.] '[S]uch a party is to be treated like any other party and is entitled to the same, but no greater consideration than other litigants and attorneys. [Citation.]' [Citations.] Thus, as is the case with attorneys, pro. per. litigants must follow correct rules of procedure. [Citations.]" (Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246-1247.) Accordingly, Bassi has not met her burden.
However, even assuming that Bassi had provided a declaration in which she stated the facts on which liability was based, her claim is barred by the litigation privilege as set forth in Civil Code section 47. The litigation privilege "applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action. [Citations.]" (Silberg v. Anderson (1990) 50 Cal.3d 205, 212.)
Ramalingam v. Thompson (2007) 151 Cal.App.4th 491 (Ramalingam) is instructive. In Ramalingam, the plaintiff and her husband jointly retained a neutral accountant regarding property issues in their marital dissolution action. (Id. at p. 493.) The plaintiff subsequently brought a professional negligence action against the accountant and his firm. (Id. at p. 496.) The trial court granted the defendants' motion for summary judgment, in part, because the defendants had established as a matter of law that the plaintiff's claim was barred by the litigation privilege. (Id. at p. 498.)
In considering whether the litigation privilege applied, the Ramalingam court stated: " 'To effectuate its vital purposes, the litigation privilege is held to be absolute in nature.' [Citation.] The principal purpose of the litigation privilege is to ' "to afford litigants and witnesses [citation] the utmost freedom of access to the courts without fear of being harassed subsequently by derivative tort actions. [Citations.]" ' [Citation.]" (Ramalingam, supra, 151 Cal.App.4th at pp. 499-500.) After setting forth the test for application of the privilege, this court discussed Gootee v. Lightner (1990) 224 Cal.App.3d 587 in which the reviewing court held that the litigation privilege barred the plaintiff's professional negligence action against a jointly retained child custody expert in a custody dispute between the plaintiff and his wife. (Ramalingam at pp. 500-501.) It also focused on statements in Gootee that " '[f]reedom of access to the courts and encouragement of witnesses to testify truthfully will be harmed if neutral experts must fear retaliatory lawsuits from litigants whose disagreement with an expert's opinions perforce convinces them the expert must have been negligent in forming such opinions.' [Citation.] . . . '[T]he protective mantle of the privilege embraces not only the courtroom testimony of witnesses, but also protects prior preparatory activity leading to the witnesses' testimony.' [Citations.]" (Ramalingam, at p. 501.) Moreover, this court observed: "The fact that [the plaintiff] alleges that [the accountant] was negligent in his investigation and preparation of his opinions regarding the Johnson & Johnson stock does not alter our conclusion. As we have discussed, it is well established that where the gravamen of a complaint is communicative conduct, the litigation privilege necessarily protects related noncommunicative conduct [citation], including activities done in preparation for testifying [citation]. Thus, [the accountant's] allegedly negligent investigation of the status of the Johnson & Johnson stock in preparation for testifying at the trial on property issues is also protected by the section 47(b)(2) litigation privilege." (Id. at p. 504.) The Ramalingam court held that communications by a neutral expert in a judicial proceeding are covered by the litigation privilege. (Ibid.)
Here, Bassi's complaint for professional negligence alleges that "[d]uring his testimony, Mr. Butera misrepresented and omitted many key financial facts, failed to properly investigate, failed to use objectively available information, failed to accurately report the parties' tax filing, failed to address an instance of payroll fraud, failed to appear at required hearings, failed to file necessary reports, and failed to report instances of fraud." The gravamen of Bassi's complaint is communicative conduct, and thus the related noncommunicative conduct, such as the failure to properly investigate, is also protected by the litigation privilege. Since she seeks to hold him liable for his communications while serving as the court-appointed neutral expert regarding accounting issues in the dissolution proceedings, her complaint is barred by the litigation privilege.
Since we have held that Bassi's complaint is barred by the litigation privilege, we need not consider whether her complaint is also barred by quasi-judicial immunity.
Bassi also argues that Butera had a conflict of interest while serving as the court's expert in the dissolution action. However, since her complaint does not allege any conflict of interest and she did not submit any evidence regarding any conflict of interest, Bassi also failed to meet her burden of demonstrating a probability of prevailing on her claim on this theory.
Relying on Hayward v. Superior Court (2016) 2 Cal.App.5th 10 (Hayward), plaintiff argues that the referee in the underlying dissolution proceedings "engaged in communication and orders that impacted [Butera's] assignment." Plaintiff's reliance on Hayward is misplaced. In Hayward, an attorney appointed as a temporary judge failed to disclose grounds for disqualification. (Id. at p. 16.) The Hayward court considered "whether the rulings made by the temporary judge prior to her disqualification [were] void or voidable and, if so, the legal consequences." (Ibid.) No such issues are involved in the present case.
In sum, Bassi's complaint is based on protected activity and Bassi cannot meet her burden of showing a probability of prevailing on her claim because it is barred by the litigation privilege. Accordingly, the trial court erred when it denied defendants' motion to strike Bassi's complaint.
Bassi contends that this appeal must be dismissed, because defendants have failed to show prejudicial error. The trial court's error in denying defendants' motion was clearly prejudicial. --------
III. Disposition
The order is reversed. On remand, the trial court is directed to: (1) vacate its order and enter a new order granting defendants' motion to strike Bassi's complaint; and (2) determine the amount of attorney's fees and costs to be awarded to defendants under section 425.16, subd. (c)(1), including their fees and costs on appeal.
/s/_________
Mihara, J. WE CONCUR: /s/_________
Elia, Acting P. J. /s/_________
Bamattre-Manoukian, J.