Opinion
A143562
11-06-2017
DERRICK FOSTER, Plaintiff and Appellant, v. KAY FOSTER-DORN, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Alameda County Super. Ct. No. RG14729132)
This case arises from a contentious familial dispute. Derrick Foster sued his estranged mother, Kay Foster-Dorn, for civil extortion and unjust enrichment after she filed a police report alleging he had forged checks and misappropriated funds from her recently deceased mother's bank account. Kay successfully demurred to the unjust enrichment cause of action. The trial court also granted her special motion to strike the extortion cause of action pursuant to the anti-SLAPP statute. (Code Civ. Proc., § 426.16.) On appeal, Derrick contends the trial court erred by sustaining the demurrer without leave to amend as to the unjust enrichment cause of action and by concluding that Kay's extortive conduct was protected activity under the anti-SLAPP statute. For reasons explained post, we conclude the court properly sustained the demurrer without leave to amend as to the unjust enrichment claim. However, we conclude the civil extortion claim does not arise from protected activity. Therefore, we will reverse the order granting the special motion to strike.
For purposes of clarity, we shall refer to the parties by their first names.
"SLAPP is an acronym for 'strategic lawsuit against public participation.' " (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 732, fn. 1.)
All further undesignated statutory references are to the Code of Civil Procedure.
BACKGROUND
Derrick's complaint alleged as follows. Derrick's grandmother and Kay's mother, Earnestine Scott, died in 2012. At the time of Earnestine's death, Kay had been estranged from her mother and her son for at least 30 years. At various times during that 30-year span (1981 to 2012), Derrick lived with Earnestine and helped to take care of her and her husband. After Earnestine's husband died, Derrick, for many years, lived with Earnestine and acted as her primary caregiver.
On several occasions prior to her death, Earnestine promised Derrick that, in exchange for the care and comfort he provided during her lifetime, she would name him as the successor of her estate. During her lifetime, Earnestine gave Derrick access to her bank account, including use of the ATM card associated with the account. On Earnestine's instruction, Derrick would make withdrawals from the account to purchase groceries and other items she needed. During the last few years of her life, Earnestine had Derrick write checks for basic necessities and had him use a credit card for all other things she might need. Earnestine also allowed Derrick to use her bank account and credit card for his own basic necessities.
In addition to managing Earnestine's finances, Derrick also arranged for in-home care for Earnestine. Derrick enlisted the help of his aunt, Wallace Mae Broadnax, who he understood was a retired registered nurse, to coordinate various care providers. Wallace Mae, along with Ronald Carthon and Willie Adams, provided services to Earnestine. At the time of her death, Earnestine owed money to Wallace Mae, Ronald, and Willie.
After Earnestine's death, Derrick, believing he was still obligated to pay his grandmother's bills, paid Wallace Mae, Ronald, and Willie for the services they had provided to Earnestine. Unbeknownst to Derrick, Earnestine died without a will. In the absence of a will, Derrick's mother, Kay, stepped up and claimed the right to administer Earnestine's estate. When Kay learned, as she put it, that Derrick had "stolen" Earnestine's money to pay her bills, Kay sent Derrick a letter, demanding that he immediately give back the money and "do other things" or she would report him to the police. Upon her request, the bank reimbursed the estate in an amount equal to the value of the three checks Derrick had written. At no time did the bank refer the matter to law enforcement or make a claim against Derrick.
When Derrick did not respond to Kay's letter, she notified the Oakland Police Department that Derrick had stolen nearly $7,000 from Earnestine's estate. Derrick was arrested and charged with multiple crimes. Derrick's attorney declared in an "Appendix" to his opposition to the demurrer and special motion to strike that, after spending almost nine months in jail, Derrick, against his civil attorney's advice, pleaded guilty just so he could get out of jail. As part of his sentence, Derrick was ordered to pay restitution in the amount of the checks he had written.
Derrick filed a complaint against Kay for damages for slander, extortion, and unjust enrichment. The first cause of action alleged civil extortion and libel; the second alleged unjust enrichment. The gist of the complaint is that Kay, as the sole beneficiary of Earnestine's estate, received a windfall by receiving both the reimbursement from the bank and restitution from Derrick for expenses owed by the estate. According to the complaint, Kay obtained this windfall by means of her tortious conduct and she was unjustly enriched at the expense of Derrick's liberty and property.
DISCUSSION
A. The Trial Court Properly Sustained the Demurrer Without Leave to Amend.
We review the trial court's order sustaining Kay's demurrer independently, and "[o]ur task in reviewing a judgment of dismissal following the sustaining of a demurrer is to determine whether the complaint states a cause of action." (Coast Plaza Doctors Hospital v. Blue Cross of California (2009) 173 Cal.App.4th 1179, 1185-1186.) When the trial court has sustained a demurrer 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." (City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865.) It is the burden of the plaintiff to show that he could have amended the complaint to cure the defect. (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 959.)
As noted, the second cause of action in Derrick's complaint is captioned as one for unjust enrichment. After incorporating the factual allegations summarized above, this cause of action averred that Kay was unjustly enriched by Derrick's repayment to the estate funds he used to pay for Earnestine's in-home care services because the estate would have had to pay these "lawful obligations" if Derrick had not done so.
In sustaining the demurrer without leave to amend, the trial court ruled, among other things, that Derrick's unjust enrichment claim was not viable because he had admitted culpability by entering a guilty plea concerning the check writing. And, as a result of that plea, Derrick was ordered to pay restitution for those checks. In so ruling, the court reasoned that Derrick could not now allege that his admission of guilt and resulting order to pay restitution were invalid, or otherwise unjust. The court appeared to rely on judicial estoppel, as well as res judicata and issue preclusion, as grounds for its ruling. We need not discuss the preclusive effect, if any, of Derrick's guilty plea because, under any theory, he failed to state a viable cause of action for unjust enrichment.
"Unjust enrichment is not a cause of action, however, or even a remedy, but rather ' " 'a general principle, underlying various legal doctrines and remedies' " . . . . [Citation.] It is synonymous with restitution. [Citation.]' (Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793.) Unjust enrichment has also been characterized as describing ' "the result of a failure to make restitution . . . ." ' [Citations.]" (McBride v. Boughton (2004) 123 Cal.App.4th 379, 387 (McBride).)
In reviewing a ruling sustaining a general demurrer, we ignore " '[e]rroneous or confusing labels if the complaint pleads facts which would entitle the plaintiff to relief.' " (McBride, supra, 123 Cal.App.4th at p. 385.) Thus, we must look to the actual gravamen of Derrick's complaint to determine what cause of action, if any, he stated, or could have stated if given leave to amend. In accordance with this principle, we construe Derrick's purported cause of action for unjust enrichment as an attempt to plead a cause of action giving rise to a right to restitution.
"There are several potential bases for a cause of action seeking restitution. For example, restitution may be awarded in lieu of breach of contract damages when the parties had an express contract, but it was procured by fraud or is unenforceable or ineffective for some reason. [Citations.] Alternatively, restitution may be awarded where the defendant obtained a benefit from the plaintiff by fraud, duress, conversion, or similar conduct. In such cases, the plaintiff may choose not to sue in tort, but instead to seek restitution on a quasi-contract theory (an election referred to at common law as 'waiving the tort and suing in assumpsit'). (See, e.g., Murrish v. Industrial Indemnity Co. (1986) 178 Cal.App.3d 1206, 1209 [election to waive tort and sue in assumpsit is a fiction that broadens remedies available to plaintiff, but does not create a contract where none existed] . . . .) In such cases, where appropriate, the law will imply a contract (or rather, a quasi-contract), without regard to the parties' intent, in order to avoid unjust enrichment. [Citations.]" (McBride, supra, 123 Cal.App.4th at p. 388, fn. omitted).)
In the present case, neither Derrick's complaint nor his briefing on appeal makes clear upon which of these theories his unjust enrichment claim is based. It clearly is not based on the existence of a contract that is unenforceable. Thus, the only possible premise of Derrick's cause of action for unjust enrichment is that he is entitled to restitution from Kay on a quasi-contract or assumpsit theory based on her tortious conduct.
"Under the law of restitution, '[a]n individual is required to make restitution if he or she is unjustly enriched at the expense of another. [Citations.] A person is enriched if the person receives a benefit at another's expense. [Citation.]' [Citation.] However, '[t]he fact that one person benefits another is not, by itself, sufficient to require restitution. The person receiving the benefit is required to make restitution only if the circumstances are such that, as between the two individuals, it is unjust for the person to retain it. [Citation.]' " (McBride, supra, 123 Cal.App.4th at p. 389, original italics.)
"In keeping with the doctrine's focus on the unjust nature of the enrichment, '[i]t is well settled that restitution will be denied where application of the doctrine would involve a violation or frustration of the law or opposition to public policy. [Citations.]' [Citation.] Thus, '[d]etermining whether it is unjust for a person to retain a benefit may involve policy considerations. For example, if a person receives a benefit because of another's mistake, policy may dictate that the person making the mistake assume the risk of the error.' [Citation.] Moreover, a person otherwise entitled to restitution may lose that entitlement if 'restitution would seriously impair the protection intended to be afforded by common law or by statute to persons in the position of the transferee or of the beneficiary, or to other persons.' " (McBride, supra, 123 Cal.App.4th at p. 389.)
Applying these principles to the present case, we conclude the state's public policy of providing crime victims with direct restitution for all the losses they suffer (see Cal. Const., art. I, § 28, subd. (b), par. (13)) precludes us from requiring Kay to make restitution to Derrick based on his claim of unjust enrichment. The direct crime victim was the estate. (Pen. Code, § 1202.4, subd. (k)(2).) By law, Derrick was required to make restitution to the estate. That Kay, as the sole beneficiary of the estate, profited from Derrick's mistaken payments does not override the important policy considerations of protecting crime victims. Derrick's claim that Kay, as the administrator of the estate, would have had to pay for the challenged expenses fails for the same reason. Finally, to the extent Derrick claims that Kay obtained a windfall by receiving both the court-ordered restitution and reimbursement from the bank, the claim would be against the estate and it would belong to the bank, not Derrick. As discussed, Derrick was required by law to reimburse the estate; the bank was not under any such obligation. Therefore, any claim for reimbursement would be for the bank to establish.
The time for bringing a claim against Earnestine's estate has long since passed. (See Prob. Code, § 9100, subd. (a) [creditor's claim must be filed within four months after letters issued, or 60 days after notice of administration].)
In sum, the allegations of Kay's tortious conduct do not give rise to a claim for restitution. B. The Court Erred in Granting the Special Motion to Strike Because Kay's Extortionate Conduct Was Not a Protected Activity.
1. Anti-SLAPP Statute and Standard of Review.
"A SLAPP suit—a strategic lawsuit against public participation—seeks to chill or punish a party's exercise of constitutional rights to free speech and to petition the government for redress of grievances. [Citation.] The Legislature enacted Code of Civil Procedure section 425.16—known as the anti-SLAPP statute—to provide a procedural remedy to dispose of lawsuits that are brought to chill the valid exercise of constitutional rights." (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055-1056.)
In considering the application of the anti-SLAPP statute, courts engage in a 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 . . . . 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.' " (Taus v. Loftus (2007) 40 Cal.4th 683, 712 (Taus).) " ' "The defendant has the burden on the first issue, the threshold issue; the plaintiff has the burden on the second issue. [Citation.]" [Citation.]' [Citations.] '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.' " (Governor Gray Davis Committee v. American Taxpayers Alliance (2002) 102 Cal.App.4th 449, 456.) Our review of the denial of a motion to strike under the anti-SLAPP statute is de novo. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3 (Soukup).)
2. Extortion as a Matter of Law Is Not Protected Activity.
For purposes of evaluating an anti-SLAPP motion, protected activity 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." (§ 425.16, subd. (e).)
Section 425.16 is " 'construed broadly, to protect the right of litigants to " 'the utmost freedom of access to the courts without [the] fear of being harassed subsequently by derivative tort actions.' " (Rubin v. Green (1993) 4 Cal.4th 1187, 1194; see § 425.16, subd. (a) . . . .)' " (Rohde v. Wolf (2007) 154 Cal.App.4th 28, 35.) This broad construction, however, has limits.
In Flatley v. Mauro (2006) 39 Cal.4th 299 (Flatley), the California Supreme Court concluded the anti-SLAPP statute does not apply to communications that constitute criminal extortion as a matter of law because such communications are "unprotected by constitutional guarantees of free speech or petition." (Flatley, at p. 305.) There, Michael Flatley, a well-known entertainer, sued an attorney arising out his representation of a woman who claimed Flatley had raped her. (Ibid.) Flatley alleged, among other claims, a cause of action for civil extortion based on the attorney's demand letter threatening to publicly accuse Flatley of rape unless he agreed to settle by paying a large sum of money. (Id. at 329.) Finding the attorney's communication was not protected, the Flatley court explained: " 'Extortion is the obtaining of property from another, with his consent . . . induced by a wrongful use of force or fear . . . .' (Pen. Code, § 518.) Fear, for purposes of extortion 'may be induced by a threat, either: [¶] . . . [¶] 2. To accuse the individual threatened . . . of any crime; or, [¶] 3. To expose, or impute to him . . . any deformity, disgrace or crime[.]' (Pen. Code, § 519.) 'Every person who, with intent to extort any money or other property from another, sends or delivers to any person any letter or other writing, whether subscribed or not, expressing or implying, or adapted to imply, any threat such as is specified in Section 519, is punishable in the same manner as if such money or property were actually obtained by means of such threat.' (Pen. Code, § 523.)" (Flatley, at p. 326.)
Similarly, in Mendoza v. Hamzeh (2013) 215 Cal.App.4th 799, an appellate court found a former employee's action against his employer's attorney for various claims, including civil extortion, was not subject to a special motion to strike. (Id. at pp. 802, 806-807.) In so ruling, the Mendoza court clarified that "[t]he threat to report a crime may constitute extortion even if the victim did in fact commit a crime. The threat to report a crime may in and of itself be legal. But when the threat to report a crime is coupled with a demand for money, the threat becomes illegal, regardless of whether the victim in fact owed the money demanded. [Citation.] ' "The law does not contemplate the use of criminal process as a means of collecting a debt." [Citations.]' " (Id. at p. 805.)
3. Kay Did Not Meet Her Threshold Burden of Establishing Derrick's Civil Extortion Claim Arose from Protected Activity.
Kay based her anti-SLAPP motion on the theory that her report of Derrick's alleged crime to police was a protected petition to an official body. (See § 425.16, subd. (e); Wang v. Hartunian (2003) 111 Cal.App.4th 744, 749 [report to police protected conduct]; see also Chabak v. Monroy (2007) 154 Cal.App.4th 1502, 1506, 1512 [minor's report to parent regarding physical therapist's alleged inappropriate touching protected activity].) On appeal, she similarly maintains that her report to the police is the gravamen of Derrick's civil extortion claim. We disagree.
As the California Supreme Court explained in City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78, "[t]hat a cause of action arguably may have been triggered by protected activity does not entail that it is one arising from such." (Italics added.) Derrick's civil extortion claim is based on Kay's "threats" to call the police if he did not take the actions she demanded. He further alleged that when he did not comply with Kay's "demands," she reported his conduct to the police. Although Derrick alleged that Kay's report to the police caused to him be arrested, charged with a crime, and ordered to pay restitution, he alleges these consequences resulted from Kay's reporting him to the police because he failed to comply with Kay's demand letter. In opposing Kay's special motion to strike, Derrick focused on the demand letter as the source of his civil extortion claim. In a supporting "Appendix," Derrick's attorney averred, under penalty of perjury, that "[a]t no time has [Kay] ever denied she sent that extortion letter to [Derrick]." A copy of the letter was included with the appendix. On appeal, Kay contests the admissibility of this letter. Kay does not point us to any indication in the record that she objected to Derrick's evidence in the trial court, and we find none; therefore this issue was not properly preserved. (Flatley, supra, 39 Cal.4th at pp. 328-329 [finding that, in the trial court proceedings, plaintiff did not deny that he sent a demand letter and concluding, "We may therefore view this evidence as uncontroverted"]; Soukup, supra, 39 Cal.4th at p. 291, fn. 17 [deeming waived evidentiary objections made in the context of an anti-SLAPP motion because the parties failed to press the trial court for rulings on them].)
Despite the failure to raise the issue below, on appeal Kay purports to challenge the authenticity of the letter, arguing that it is unsigned and that there is no proof of who actually sent it. In any event, this otherwise forfeited claim fails on the merits. Contrary to her contention, the burden of proof at the first step in an anti-SLAPP analysis rests squarely on the defendant. (Taus, supra, 40 Cal.4th at p. 712.) Only if a defendant is able to establish that the challenged activity arises from protected activity does the burden shift to plaintiff to demonstrate the merit of the claim by establishing a probability of success. (Id. at p. 714.) It is this second step—not the first—that is described as "summary-judgment-like procedure." (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192.) Kay's argument that Derrick was required to present sufficient evidence that she sent the letter attempts to shift the burden on the first issue to Derrick and to circumvent the requirement of section 425.16, subdivision (b) that she show that an alleged SLAPP arose from protected activity. (See, e.g., City of Cotati v. Cashman, supra, 29 Cal.4th at pp. 78-79 [refusing to focus on plaintiff's litigation tactics rather than the substance of its action at the first step of anti-SLAPP analysis].)
The anti-SLAPP statute does not apply to the threats at issue in Kay's demand letter. Kay threatened to report Derrick to "the Oakland District of Attorney [sic] under California Penal Code, 470 PC for th[eft], fraud and forgery (after the death of the decedent) to include checks and ATM withdrawals," if Derrick did not "surrender the vehicle and make arrangements with the contact to vacate the premises in accordance with the Probate Court." Regardless of whether Derrick committed any wrongdoing or owed the estate money, Kay's threat to report criminal conduct, coupled with the demand for property, constitutes "criminal extortion as a matter of law," as articulated in Flatley. (Flatley, supra, 39 Cal.4th at p. 330.) That Kay actually made good on the threat and filed a police report does not place her conduct within the ambit of the anti-SLAPP statute. In other words, regardless of whether the police report was protected activity, Kay's demand letter was not because it constituted extortion as a matter of law.
The trial court erred in granting Kay's special motion to strike because the anti-SLAPP statute does not apply to the threats in Kay's demand letter on which Derrick's civil extortion cause of action is based. Because Kay did not make a threshold showing that Derrick's civil extortion cause of action arose from protected activity, we need not decide whether Derrick has demonstrated a probability of prevailing on the merits.
By reason of this holding, we need not address the effect, if any, of Kay's alleged defamatory statements.
DISPOSITION
The order sustaining the demurrer without leave to amend as to the second cause of action for unjust enrichment is affirmed. The order granting Kay's special motion to strike the first cause of action for civil extortion and awarding her attorney fees and costs is reversed. Each party to bear their own costs on appeal.
/s/_________
KENNEDY, J. We concur: /s/_________
RUVOLO, P. J. /s/_________
STREETER, J.
Judge of the Superior Court of California, County of Contra Costa, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. --------