Pacific Attorney Group v. Panahi CA2/4 ( 2023 )

Filed 3/21/23 Pacific Attorney Group v. Panahi CA2/4
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
PACIFIC ATTORNEY GROUP, B311435
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. 20STCV41299)
v.
FRED PANAHI et al.,
Defendants and Appellants.
APPEAL from an order of the Superior Court of
Los Angeles County, Dennis J. Landin, Judge. Affirmed.
Jeff Lewis Law, Jeffrey Lewis and Sean C. Rotstan for
Defendants and Appellants.
Pacific Attorney Group, Michael P. Hollomon, Jr. for
Plaintiff and Respondent.
INTRODUCTION
Client Fred Panahi retained Pacific Attorney Group (PAG)
to represent him in a legal matter under a contingency fee
agreement. Panahi later replaced PAG with attorney Kamelia
Jalilvand and her law firm, Jalilvand Law Corporation (JLC).
The legal action was settled with a payment to Panahi.
PAG sued Panahi, Jalilvand, and JLC, asserting that PAG
was owed attorney fees under the contingency fee agreement and
resulting lien. PAG asserted multiple causes of action alleging
that the defendants wrongfully excluded PAG from the
settlement agreement, as well as a cause of action for declaratory
relief. Jalilvand and JLC filed a special motion to strike under
the anti-SLAPP statute, Code of Civil Procedure, section 425.16. 1
The superior court granted the motion as to all causes of action
except a single claim for declaratory relief. Jalilvand and JLC
appealed, asserting that the declaratory relief cause of action also
arose from protected activity, and therefore the motion should
have been granted as to that cause of action as well.
We affirm. The cause of action for declaratory relief
regarding the attorney lien did not arise from protected speech or
petitioning activity.
FACTUAL AND PROCEDURAL BACKGROUND
A. Complaint
PAG filed its complaint on October 28, 2020, alleging the
following facts. Panahi was in a car-versus-bicycle accident
involving Uber on March 13, 2017; he retained PAG to represent
1 “SLAPP” stands for “strategic lawsuits against public
participation.” (FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7
Cal.5th 133, 139.) All further section references are to the Code
of Civil Procedure unless otherwise indicated.
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him in a personal injury claim. Panahi signed a contingency fee
agreement promising to pay PAG one-third (33.33 percent) of the
gross amount recovered from any source in connection with the
claim, or if Panahi were to terminate PAG’s representation, to
pay the value of PAG’s services from any recovery connected with
the claim.
In December 2018, Panahi terminated PAG’s
representation and retained attorney Jalilvand and her firm, JLC
(collectively, appellants). PAG notified appellants about its
attorney lien. In May 2019, Panahi settled his claim. In June
2019 JLC informed PAG that the claim had been settled for
$450,000, but in August 2019 JLC told PAG that the claim had
been settled for $415,000.
PAG alleged that Panahi and appellants had notice that
PAG “has a valid lien for attorneys fees and costs,” and PAG’s
name was required to be on any payment draft or settlement
dispersal. PAG alleged that Panahi and appellants “refused to
confirm the true amount of the settlement,” refused to share the
settlement agreement with PAG, and refused to honor the
attorney lien. PAG alleged that it had not been paid, and Panahi
and appellants “continue to withhold” the owed fees.
PAG alleged 10 causes of action: (1) intentional
interference with prospective economic advantage, (2) negligent
interference with prospective economic advantage, (3) fraud, (4)
conversion, (5) breach of written contract (against Panahi only),
(6) unjust enrichment, (7) declaratory relief, (8) accounting, (9)
constructive trust, and (10) money had and received. Only the
seventh cause of action for declaratory relief is at issue in this
appeal.
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In the first, second, third, and eighth causes of action, PAG
alleged defendants had a duty to include PAG’s name in the draft
settlement agreement for Panahi’s claims. Allegations included,
for example, that the defendants “acted consciously” to disrupt
PAG’s rights “by promising to include [PAG’s] name on the
settlement draft, then wrongfully excluding [PAG’s] name from
the settlement draft, or forging [PAG’s] endorsement thereon.” In
the fourth, sixth, and ninth causes of action, PAG alleged that
after the settlement had been paid, defendants withheld the
funds that should have been paid to PAG. The fifth and tenth
causes of action alleged that Panahi and defendants had not paid
money owed to PAG.
The seventh cause of action for declaratory relief alleged
that there was a controversy between PAG and defendants as to
their respective rights and duties regarding whether defendants
were “obligated to pay [PAG] in connection with the legal services
rendered by [PAG] to . . . Panahi.” Although the cause of action
incorporated earlier paragraphs, it did not allege any wrongdoing
by Panahi or appellants with respect to the litigation or
settlement.
B. Anti-SLAPP motion
Appellants filed an anti-SLAPP special motion to strike
under section 425.16. Appellants admitted that Panahi settled
his action for $415,000. Emails attached to the motion indicated
that on June 11, 2019 JLC informed PAG about the settlement
and asked about a lien, and on June 21 PAG responded that it
did indeed have a lien. Appellants stated in their motion that a
check was issued in full satisfaction of the settlement, and “[t]he
settlement check makes no mention of” PAG. The check,
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attached to the motion as an exhibit, was made out to “Fred
Panahi, Jalilvand Law, and any applicable lien holders.”
Appellants argued that PAG’s claims arose from protected
activity because they were connected to Panahi’s lawsuit.
Although they argued that the “gravamen of [PAG’s] claims is
unintelligible, legally untenable, and equitably irreconcilable
with the facts of this case,” they also asserted that “protected
settlement activity . . . lies ‘at the heart of’ the claims asserted
by” PAG. Appellants further asserted that PAG’s claims had no
probability of success for multiple reasons, including immunity
under the litigation privilege (Civ. Code, § 47) and because PAG
could not prove its claims.
In its opposition, PAG asserted that the anti-SLAPP law
“cannot act as a complete bar to PAG’s rights of action in the civil
court to recover on its lien.” It asserted that its claims did not
arise from protected activity, because “PAG is not suing Jalilvand
for anything Defendants may have said or done in court,” and its
claims did not implicate any public issue. PAG argued that
defendants’ actions were “collateral and incidental” to any
protected activity. PAG further contended that it had a
probability of prevailing, as demonstrated by the evidence
submitted by appellants with their motion, stating that
“Jalilvand concedes PAG’s right to attorney’s fees” and the issue
“is simply a dispute as to how much.” Appellants filed a reply in
support of their motion.
C. Hearing and ruling
At the hearing on the motion, the court asked appellants’
counsel to distinguish a case cited in the opposition, California
Back Specialists Medical Group v. Rand (2008) 160 Cal.App.4th
1032 (California Back Specialists), which held that an action
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involving a medical lien in a personal injury case did not arise
from protected activity under section 425.16. Appellants’ counsel
asserted that California Back Specialists was distinguishable
because here there was no evidence of a lien. Counsel for
appellants added, “[I]t would be one thing if it was a singular
cause of action for declaratory relief; it’s a whole other ballgame
when they’re asserting causes of action . . . for fraud, conversion,
constructive trust, intentional interference . . . .” She continued,
“[T]hey could have just, you know, resolved this dispute by
bringing a dec[laratory relief] action, they didn’t want to do that.”
The court and counsel discussed some additional cases, and the
court took the matter under submission.
In a written ruling, the court denied appellants’ motion as
to the seventh cause of action for declaratory relief, and granted
it for all of the remaining causes of action. Addressing the first
step of the anti-SLAPP analysis, the court held that all but the
seventh cause of action arose from protected activity. The court
reasoned that the “‘principal thrust or gravamen’ of PAG’s claims
is that Defendants wrongfully deprived PAG of a one-third
contingency fee from the settlement proceeds,” so “protected
settlement activity” formed the basis of the challenged claims.
The court stated that the same was not true for the seventh
cause of action for declaratory relief, which “does not allege
Defendants engaged in wrongdoing in the settlement. . . . Rather,
it simply asks the court to declare the parties’ respective rights to
attorney fees; it does not seek to prevent Defendants from
exercising their right to their protected activity.” The court held
that the “cause of action alleges the existence, validity, and value
of PAG’s lien, which is a separate issue from the petitioning
settlement activity. Therefore, the Court finds that the seventh
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cause of action does not arise from Defendants’ protected activity
and is therefore not subject to a special motion to strike under
Section 425.16.”
The court turned to the second step of the anti-SLAPP
analysis for the non-declaratory relief claims, and held that PAG
had not demonstrated a probability of prevailing. The court
therefore granted the motion as to all causes of action except the
one for declaratory relief. The court awarded appellants attorney
fees as prevailing party.
Appellants timely appealed.
DISCUSSION
Appellants contend the superior court erred by denying the
motion for the declaratory relief cause of action, because the
“foundation for PAG’s claim was protected activity – the
negotiation and settlement of the Panahi action.” They also
contend PAG cannot show a probability of prevailing on this
cause of action. PAG asserts that defendants’ failure to pay the
lien is not protected activity, even if the lien is related to
litigation. We find no error.
A. Legal background
“A cause of action arising from a person’s act in furtherance
of the ‘right of petition or free speech under the United States
Constitution or the 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 claim will prevail.” (Monster Energy Co.
v. Schechter (2019) 7 Cal.5th 781, 788, citing § 425.16, subd.
(b)(1).) Section 425.16, subdivision (e) describes four categories of
acts “‘in furtherance of a person’s right of petition or free speech’”:
“(1) any written or oral statement or writing made before a
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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).)
“Anti-SLAPP motions are evaluated through a two-step
process. Initially, the moving defendant bears the burden of
establishing that the challenged allegations or claims ‘aris[e]
from’ protected activity in which the defendant has engaged.”
(Park v. Board of Trustees of California State University (2017) 2
Cal.5th 1057, 1061 (Park).) “If the defendant carries its burden,
the plaintiff must then demonstrate its claims have at least
‘minimal merit.’” (Ibid.)
“We review de novo the grant or denial of an anti-SLAPP
motion. [Citation.] We exercise independent judgment in
determining whether, based on our own review of the record, the
challenged claims arise from protected activity. [Citations.] In
addition to the pleadings, we may consider affidavits concerning
the facts upon which liability is based. [Citations.] We do not,
however, weigh the evidence, but accept plaintiff’s submissions as
true and consider only whether any contrary evidence from the
defendant establishes its entitlement to prevail as a matter of
law.” (Park, supra, 2 Cal.5th at p. 1067.) The appellant bears
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the burden of affirmatively demonstrating error. (Balla v. Hall
(2021) 59 Cal.App.5th 652, 671.)
B. Arising from protected activity
In the first step under the anti-SLAPP analysis, the court
determines whether the plaintiff’s claims arise from protected
activity. (Bonni v. St. Joseph Health System (2021) 11 Cal.5th
995, 1009.) At this stage, the “defendant’s burden is to identify
what acts each challenged claim rests on and to show how those
acts are protected under a statutorily defined category of
protected activity.” (Ibid.) “A claim arises from protected activity
when that activity underlies or forms the basis for the claim.”
(Park, supra, 2 Cal.5th at p. 1062.) “[I]n ruling on an anti-
SLAPP motion, courts should consider the elements of the
challenged claim and what actions by the defendant supply those
elements and consequently form the basis for liability.” (Id. at p.
1063.) Thus, “a claim may be struck only if the speech or
petitioning activity itself is the wrong complained of, and not just
evidence of liability or a step leading to some different act for
which liability is asserted.” (Id. at p. 1060.)
The superior court held that appellants had not met their
burden to show that the declaratory relief cause of action arose
from protected activity. The court granted the motion for the
causes of action alleging wrongdoing relating to excluding PAG
from the settlement agreement, effectively stripping those causes
of action from the complaint. The court noted that in the
remaining declaratory relief cause of action, PAG did not allege
that defendants engaged in wrongdoing based on their
representation of Panahi or in entering into the settlement.
Instead, PAG sought only a declaration of the parties’ respective
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rights with respect to PAG’s lien, which was not a cause of action
arising out of protected activity.
The court’s analysis is supported by the case law. The
court relied on Drell v. Cohen (2014) 232 Cal.App.4th 24 (Drell),
one of several cases holding that a cause of action for declaratory
relief on a lien is not barred under section 425.16, even if the lien
arose in the context of litigation. In Drell, a client retained the
defendants, an attorney and a law firm, to represent him in a car
accident case. A second attorney eventually took over
representation and settled the client’s case. The insurance
carrier issued the check to both the defendants and the second
attorney. A dispute arose about entitlement to attorney fees from
the settlement check, and the second attorney filed a declaratory
relief action to determine the parties’ respective rights. (Drell,
supra, 232 Cal.App.4th at p. 27.) The defendants filed a special
motion to strike under section 425.16, asserting that “the
complaint ‘flows entirely from the Underlying Action’” and “the
lien was asserted in anticipation of litigation and therefore
qualified as protected activity.” (Id. at p. 28.) The superior court
denied the motion and the defendants appealed.
The Court of Appeal affirmed the holding that the claim did
not arise out of protected activity. It stated, “[A] complaint is not
a SLAPP suit unless the gravamen of the complaint is that
defendants acted wrongfully by engaging in the protected
activity. The complaint here did not allege defendants engaged
in wrongdoing by asserting their lien. Rather, the complaint
asked the court to declare the parties’ respective rights to
attorney fees. The complaint necessarily refers to defendants’
lien, since their demand letter is key evidence of plaintiff’s need
to obtain a declaration of rights,[ ] but the complaint does not
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seek to prevent defendants from exercising their right to assert
their lien.” (Drell, supra, 232 Cal.App.4th at p. 30.) The court
added, “None of the purposes of the anti-SLAPP statute would be
served by elevating a fee dispute to the constitutional arena,
thereby requiring a party seeking a declaration of rights under
an attorney lien to demonstrate a probability of success on the
merits in order to obtain equitable relief.” (Ibid.)
Drell relied on California Back Specialists, supra, 160
Cal.App.4th 1032, the case the superior court asked about at the
motion hearing. In that case, clients retained the defendant
attorney to represent them in personal injury cases, and the
medical provider plaintiffs, CBSMG, provided treatment to the
clients pursuant to liens on their personal injury actions. The
actions were settled, and the attorney disbursed the proceeds
without notifying CBSMG or satisfying the medical liens.
CBSMG sued the attorney for payment of the liens, and the
attorney filed a special motion to strike under section 425.16.
The superior court denied the motion, finding that the claim did
not arise out of protected activity. (California Back Specialists,
supra, 160 Cal.App.4th at pp. 1035-1036.)
The Court of Appeal affirmed. It noted that the “anti-
SLAPP statute does not apply where protected activity is only
collateral or incidental to the purpose of the transaction or
occurrence underlying the complaint.” (California Back
Specialists, supra,160 Cal.App.4th at p. 1037.) The court stated,
“CBSMG’s complaint is based on the underlying controversy
between private parties about the validity and satisfaction of the
liens. These issues were never under consideration in any court
or official proceedings until CBSMG filed the current action.”
(Ibid.) The court continued, “Not all attorney conduct in
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connection with litigation, or in the course of representing clients,
is protected by section 425.16. [Citations.] The trial court
correctly determined that CBSMG’s claims did not arise from any
act in furtherance of appellant’s right to petition or his right to
free speech.” (Id. at p. 1037.)
Drell also cited Personal Court Reporters v. Rand (2012)
205 Cal.App.4th 182 (Personal Court Reporters), in which the
plaintiff court reporters sued attorneys who used the reporters’
services but did not pay their fees. The defendant attorneys filed
a special motion to strike under section 425.16, which the
superior court denied. (Personal Court Reporters, supra, 205
Cal.App.4th at pp. 186-188.) This Division affirmed the ruling on
the basis that “nonpayment of overdue invoices” was
“nonprotected activity.” (Id. at p. 190.) We stated,
“Notwithstanding that the complaint was filed after court
reporting services were provided in the underlying cases, we
conclude the acts alleged in the complaint did not arise from the
underlying lawsuits for purposes of the anti-SLAPP statute.” (Id.
at p. 189.) We noted that any protected activity was “only
incidental to the causes of action for breach of contract and
common counts, which are based essentially on nonprotected
activity—the nonpayment of overdue invoices.” (Id. at p. 190.)
We concluded, “We therefore hold that because the allegations of
arguably protected activity are only incidental to the ‘principal
thrust or gravamen’ of the complaint [citation], the anti-SLAPP
statute does not apply to the complaint in this case.” (Id. at p.
191.)
The reasoning of these cases applies squarely here, where
PAG’s declaratory relief cause of action seeks a declaration of the
parties’ rights regarding the lien, but does not assert any
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wrongdoing with regard to appellants’ representation of Panahi.
A cause of action is subject to a special motion to strike “only if
the speech or petitioning activity itself is the wrong complained of
(Park, supra, 2 Cal.5th at p. 1060), and Drell, California Back
Specialists, and Personal Court Reporters all hold that failure to
pay a lien—the wrong complained of by PAG—is not protected
litigation activity.
Appellants acknowledge the holding of Drell, but assert
that this case is more like O&C Creditors Group, LLC v. Stephens
& Stephens XII, LLC (2019) 42 Cal.App.5th 546 (O&C Creditors).
That case has a much more complex background and is not
similar to this one. In O&C Creditors, a client, Stephens,
retained an attorney to represent him in a claim against his
insurance company, Fireman’s Fund. Fireman’s Fund was
represented by law firm Akin Gump. Stephens and his attorney
had an unsigned attorney-client fee agreement purporting to give
rise to a lien on any recovery. The attorney was forced into
bankruptcy and then died. Stephens, working with a different
attorney, eventually settled the underlying claim against
Fireman’s Fund for $5.8 million. Stephens settled an attorney
fee claim with the bankruptcy trustee, but a bankruptcy creditor
purchased any remaining claim to the settlement proceeds.
Stephens then filed a declaratory relief action against the
creditor, and the creditor “filed a cross-complaint for $2.32
million against Stephens (for unpaid legal fees) and against Akin
Gump and Fireman’s Fund (for settling the insurance coverage
lawsuit in derogation of the alleged attorney lien).” (O&C
Creditors, supra, 42 Cal.App.5th at pp. 553-556.)
Fireman’s Fund and Akin Gump filed a special motion to
strike the cross-complaint under section 425.16. (O&C Creditors,
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supra, 42 Cal.App.5th at p. 559.) The superior court granted the
motion and a majority of the Court of Appeal affirmed. The
majority observed that the “gist of [the creditor’s] cross-complaint
is that Fireman’s Fund and its attorneys at Akin Gump . . . acted
in derogation of a purported attorney lien by settling the
underlying insurance coverage lawsuit and executing a
settlement with Stephens.” (Id. at p. 565.) The court stated,
“Stephens’s and Fireman’s Fund’s protected settlement
activity . . . underlie the elements of [the creditor’s] claim.[ ] The
protected settlement activity thus lies ‘at the heart of’ the claims
asserted” by the creditor. (Id. at p. 568.) The court contrasted
the facts of Drell, in which the litigation activity constituted
evidence of the parties’ rights, but was not the basis for the claim.
The O&C Creditors court stated, “Far from providing mere
evidentiary support for or being incidental to the challenged
claims, the settlement agreement is the crux of cross-defendants’
allegedly wrongful conduct.” (Id. at p. 571.) The court concluded
that the creditor’s claims “are thus based on and arise from a
purportedly wrongful settlement agreement,” which was
protected activity under section 425.16.2 (Ibid.)
Appellants argue that O&C Creditors is more akin to this
case because PAG’s complaint included several causes of action
alleging intentional wrongdoing by appellants in their
2 Notably, Justice Streeter, concurring in part, disagreed
with this aspect of the majority opinion. He concluded that
“[t]his sort of attorney lien litigation has nothing to do with free
speech or petitioning activity.” (O&C Creditors, supra, 42
Cal.App.5th at p. 577.) He also stated, “[T]he cross-defendants’
act that gave rise to these causes of action was the disbursement
of money in derogation of an attorney lien. Such conduct is not
speech or petitioning activity in any sense.” (Id. at p. 578.)
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representation of Panahi and their handling of the settlement.
However, the court struck the claims asserting intentional
wrongdoing. Thus, even if PAG’s initial allegations were similar
to those in O&C Creditors regarding wrongful adoption of a
settlement agreement, those causes of action are no longer viable.
It was appropriate for the court to strike the claims that arose
from protected activity and reserve the claim that did not. (See,
e.g., Bonni, supra, 11 Cal.5th at p. 1011 [“Striking a cause of
action that rests in part on unprotected activity constrains a
plaintiff’s ability to seek relief without advancing the anti-
SLAPP’s goals of shielding protected activity, which would have
been fully served by striking from the complaint only the
allegations of protected activity.”].)
The sole remaining cause of action for declaratory relief
seeks only a declaration of existing rights as to the lien, and does
not assert that any of defendants’ actions in the litigation were
wrongful. (See, e.g., Optional Capital, Inc. v. Akin Gump
Strauss, Hauer & Feld LLP (2017) 18 Cal.App.5th 95, 111 [in the
first-step analysis, the court considers “‘the acts on which liability
is based’”].) The declaratory relief cause of action attacks neither
the terms of the settlement agreement nor appellants’ litigation-
related conduct. Indeed, even appellants’ counsel at the hearing
below agreed that a declaratory relief action would be
appropriate under the circumstances. Defendants’ involvement
in Panahi’s litigation may be evidence of the parties’ respective
rights to attorney fees, but is not the basis for PAG’s claim.
PAG’s cause of action for declaratory relief therefore did not arise
from protected activity.
Because appellants did not meet their burden on the first
step of the anti-SLAPP analysis, we do not consider their
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alternative, second-step argument that PAG failed to
demonstrate a probability of success on this cause of action.
DISPOSITION
The order is affirmed. PAG is entitled to its costs on
appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
COLLINS, J.
We concur:
CURREY, ACTING, P.J.
STONE, J. 
 Judgeof the Los Angeles County Superior Court, assigned
by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
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