Vaca v. Lewenfus CA2/4 ( 2015 )

Filed 2/5/15 Vaca v. Lewenfus 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 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 This opinion has not been certified for publication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.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
ANA VACA et al., B249885
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC479045)
v.
SHELDON LEWENFUS,
Defendant and Respondent.
APPEAL from a judgment (order) of the Superior Court of Los Angeles County,
Debre K. Weintraub, Judge. Reversed.
Law Office of Nick A. Alden, Nick A. Alden and Aleksey Sirotin for Plaintiffs
and Appellants.
Neufeld Marks, Timothy L. Neufeld and Yuriko M. Shikai for Defendant and
Respondent.
_______________________________
Appellant Ana Vaca sued her former attorney, Neil M. Howard, and his alleged
agent, employee, and co-conspirator, respondent Sheldon Lewenfus, for damages caused
by the alleged wrongful taking of her property. Lewenfus moved to strike the complaint
under Code of Civil Procedure section 425.16, the anti-SLAPP statute.1 The trial court
granted the motion and awarded Lewenfus his attorney fees. This appeal followed.
The complaint’s allegations are as follows: In furtherance of an alleged
conspiracy with Lewenfus, Howard obtained a court order authorizing a sheriff’s sale of
appellant’s residence on behalf of his client, a judgment creditor. At the sheriff’s sale,
Howard did not make a credit bid on behalf of the judgment creditor—thus leaving his
judgment unpaid—and Lewenfus, the sole bidder, purchased appellant’s residence at a
grossly inadequate price. Howard and Lewenfus obtained the property at the expense of
appellant and the judgment creditor, both former clients of Howard.
We conclude the gravamen of the complaint—which targets the alleged fraudulent
suppression of bids at a court-authorized sale—does not arise from protected activity,
even though it occurred against the backdrop of protected petitioning activity. The
judgment (order) is reversed.
FACTUAL AND PROCEDURAL BACKGROUND
As will be discussed, Howard played a significant role in several prior lawsuits in
which appellant (Ana) was a party. Howard represented Ana and her brother Enrique2 as
plaintiffs in a prior wrongful death action, in which he negotiated a settlement in their
favor (No. GC040014). After Ana invested a large portion of the settlement proceeds in
her family residence, Howard sued Ana on behalf of Enrique, who obtained a judgment
1 SLAPP is an acronym for Strategic Lawsuit Against Public Participation. All
further statutory references are to the Code of Civil Procedure unless stated otherwise.
2 We refer to Ana Vaca and her brother, Enrique Vaca, who have the same last
name, and to their sister Laura Garcia, by their first names. No disrespect is intended.
Throughout this opinion, all references to Ana are intended to include her husband,
plaintiff and appellant German Valera, except where the context demonstrates that the
references are to Ana alone.
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against Ana for misappropriating the wrongful death settlement proceeds
(No.GC041483). Ana then sued Howard for fraud, and that action is pending on appeal
(No. BC436404).
Ana filed the present action (No. BC479045) against Howard and Lewenfus after
her family residence was sold in a sheriff’s sale. The sale was conducted pursuant to an
order for sale that Howard had obtained on behalf of Enrique as Ana’s judgment creditor
in the misappropriation action (No. GC041483). Ana contends that in advance of the
sale, Howard arranged to have Lewenfus purchase her home for the grossly inadequate
price of $10,000.00. Howard allegedly conspired with Lewenfus to acquire Ana’s
property for a fraction of its fair market value by suppressing all other bids, and, in
particular, by failing to make a credit bid on behalf of Enrique, whose judgment against
Ana for $158,565.89 would have easily trumped the $10,000.00 bid by Lewenfus. Ana
claims the fraudulent sale to Lewenfus resulted in the loss of her family residence for a
fraction of its fair market value, and left her judgment to Enrique unpaid.
A. Prior Wrongful Death Action
In 2007, Howard filed an action on behalf of Ana and Enrique against the
Pasadena Hospital Association for the wrongful death of their mother, who had 12
children. (Vaca v. Pasadena Hospital Association (Super. Ct. L.A. County
No.GC040014) (wrongful death action).) Ana and Enrique are California residents, as is
their sister Laura; their other nine siblings live in Mexico. After Howard settled the
wrongful death action for $1.275 million, he issued two checks to Ana and instructed her
to settle with her 11 siblings. One of the checks was for $718,931.67 and the other for
$167,291.85. The aggregate amount was $886,223.52.
Ana distributed $140,000.00 of the wrongful death settlement proceeds to Enrique,
and $50,000.00 to Laura. Ana invested most if not all of the remaining settlement
proceeds in her family residence, which she allegedly purchased with cash.
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B. Prior Misappropriation Action
A dispute arose between Ana and Enrique with respect to the distribution of the
wrongful death settlement proceeds. Howard represented Enrique in an underlying
lawsuit against Ana for misappropriation of those proceeds. (Vaca v. Vaca (Super. Ct.
L.A. County No. GC041483) (misappropriation action).)
Howard originally filed the misappropriation action on behalf of Ana’s 11
siblings. The nine siblings in Mexico dismissed their claims against Ana before trial.
Laura, who denied retaining Howard as her attorney, represented herself at trial.
Enrique, represented by Howard, sought to apportion the $718,931.67 wrongful
death settlement check that Ana had received from Howard with instructions to settle
with her siblings. Subject to offsets for Ana’s prior payments of $140,000.00 to Enrique
and $50,0000.00 to Laura, Enrique and Laura each claimed roughly one-third of the
settlement check. Howard represented to the court that Enrique’s share of the settlement
check was $237,643.89, and Laura’s was $242,543.89.
Ana, acting without an attorney, was precluded by a discovery sanction from
presenting any testimony at trial. (According to her appellate counsel, Ana does not read
or write Spanish, her native language, and does not understand English.)
The trial court apportioned $237,643.89 of the settlement check to Enrique, and
after an offset of $140,000.00, granted a net award of $97,643.89. In addition, Enrique
received $9,309.00 in prejudgment interest, $50,000.00 in punitive damages, and
$1,613.00 in costs, for a total judgment of $158,565.89.
The trial court apportioned $242,543.89 of the settlement check to Laura, and after
an offset of $50,000.00, granted a net award of $192,543.89. In addition, Laura received
$18,357.00 in prejudgment interest, $25,000.00 in punitive damages, and $530.00 in
costs, for a total judgment of $236,530.89.
C. Prior Fraud Action
Ana sued Enrique, Laura, Howard, and Howard’s associates, Aldo Flores and
Oscar Valencia, for fraud. (Vaca v. Howard (Super. Ct. L.A. County No. BC436404
(prior fraud action).) In that action, which is pending on appeal, the trial court (Judge
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Conrad Aragon) denied Howard’s special motion to strike Ana’s complaint, and notified
the State Bar of Howard’s representation of clients (Enrique and Ana) with adverse
interests as a possible violation of the Rules of Professional Conduct.
D. Execution Sale of Ana’s Residence
In order to enforce Enrique’s judgment against Ana in the misappropriation action
(No. GC041483), Howard sought an order for sale of Ana’s residence. In an
accompanying declaration, Howard stated that Ana’s residence had a fair market value of
$400,000.00. In his April 2, 2010 declaration in support of an order to show cause
concerning sale of the residence (OSC), Howard stated, based on information provided
by Enrique, that the residence was occupied by Ana, her husband, and her two sons, and
that the statutory homestead exemption available to Ana was $100,000.00. (§ 704.760,
subd. (b).)3
At the OSC hearing, the trial court (Judge Mary Thornton House) relied on
Howard’s April 2, 2010 declaration to determine that the statutory homestead exemption
available to Ana was $100,000.00 (§ 704.730, subd. (a)(2)),4 and the fair market value of
3 A judgment creditor’s application for an order for sale must include a sworn
statement, which may be based on information and belief, as to whether the dwelling is a
homestead and the amount of the homestead exemption, if any, that applies. (§ 704.760,
subd. (b).)
A “dwelling” means the place where a person resides. (§ 704.710, subd. (a).) The
term “homestead” means the “principal dwelling (1) in which the judgment debtor or the
judgment debtor’s spouse resided on the date the judgment creditor’s lien attached to the
dwelling, and (2) in which the judgment debtor or the judgment debtor’s spouse resided
continuously thereafter until the date of the court determination that the dwelling is a
homestead.” (§ 704.710, subd. (c).)
4 Section 704.730 provides in relevant part that the homestead exemption of
$100,000.00 applies if the “judgment debtor or spouse of the judgment debtor who
resides in the homestead is at the time of the attempted sale of the homestead a member
of a family unit, and there is at least one member of the family unit who owns no interest
in the homestead or whose only interest in the homestead is a community property
interest with the judgment debtor.” (§ 704.730, subd. (a)(2).) A “family unit” can
include the judgment debtor and the judgment debtor’s spouse, if the spouses reside
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the home was $400,000.00. The court issued an order on June 18, 2010, authorizing a
sheriff’s sale of Ana’s property subject to three requirements. First, any bid must exceed
$100,000.00 (the amount of the statutory homestead exemption available to Ana), plus
the aggregate amount of all liens and encumbrances on the property. Second, any bid
must equal or exceed 90 percent of the appraised fair market value of $400,000.00, thus
establishing a minimum bid requirement of $360,000.00. Third, the sale proceeds were
to be applied first to the satisfaction of Enrique’s judgment, plus costs and interest; then
to the satisfaction of Laura’s judgment, plus costs and interest; then to the bond surety
company in the amount of $100,000.00; and then to Ana. As we shall discuss, this order
was superseded by a later and different order.
In November 2010, Lewenfus purchased Ana’s residence at a sheriff’s sale. His
successful bid of $10,000.00 was the only bid received at the sale.
E. Other Prior Actions
After the property was purchased by Lewenfus for $10,000.00, Ana refused to
vacate the home and filed a bankruptcy petition. Lewenfus initiated an unlawful detainer
action and obtained a judgment against Ana in December 2010. The bankruptcy court
granted Lewenfus’s motion for relief from the automatic stay in February 2011. In
February or March 2011, Ana and Lewenfus signed a settlement agreement, but the
validity of that agreement is disputed.
In February 2011, Ana’s new attorney, Nick A. Alden, recorded a lis pendens
against the disputed residence, erroneously stating that Lewenfus was a defendant in the
prior fraud action that Ana had filed against Howard (No. BC436404). Because he was
not a party to that action, Lewenfus sought leave to intervene in order to expunge the lis
pendens. The lis pendens was expunged in March 2012.
Ana also filed a lawsuit against Howard and Lewenfus in June 2011
(No. SC112953). That lawsuit was dismissed in November or December 2011 for failure
to prosecute.
together in the homestead, or the judgment debtor and a minor child. (§ 704.710, subds.
(b)(1), (b)(2)(A).)
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F. Present Action Against Howard and Lewenfus
Ana filed the present action against Howard and Lewenfus in February 2012
(No. BC479045).5 In addition to seeking to set aside the sheriff’s sale of her home to
Lewenfus (eighth cause of action), the operative first amended complaint contained
causes of action for: (1) conversion of Ana’s residence (first cause of action); (2) abuse
of process in connection with the sheriff’s sale (second cause of action); (3) conspiracy to
defraud (third cause of action); (4) conspiracy to convert (fourth cause of action); (5)
quiet title (fifth cause of action); (6) wrongful eviction (sixth cause of action); and
(7) wrongful foreclosure (seventh cause of action).
According to the allegations of that complaint, after Howard learned that Enrique
was unwilling to proceed with the forced sale of Ana’s residence, Howard conspired with
Lewenfus to obtain Ana’s home through a fraudulent sheriff’s sale. The following
allegations also were made in that pleading: Howard obtained the June 18, 2010 order
for sale of Ana’s home without informing the court (Judge House) that Enrique, the
judgment creditor, was unwilling to proceed with the sale; Ana’s home, which she
owned free and clear, was worth about $500,000.00; Howard fraudulently caused the
sheriff to seize Ana’s dwelling and sell it to Lewenfus for $10,000.00, which was about
$490,000.00 below its fair market value; and Howard “double crossed” Enrique by
failing to make a credit bid that would satisfy his judgment against Ana. As a result of
the fraudulent sheriff’s sale, Ana lost her property and Enrique’s judgment remained
unsatisfied.
Lewenfus moved to strike Ana’s complaint under the anti-SLAPP statute. He
argued the causes of action arose from Howard’s protected petitioning activities, and
were subject to the litigation privilege.
5Neither Howard nor the Los Angeles County Sheriff’s Department (which was
added as an additional defendant in this action) is a party to this appeal.
According to attorney Alden’s declaration of August 17, 2012, the trial court
denied Ana’s request to consolidate her prior fraud action against Howard
(No. BC436404, which is pending on appeal) with this action (No. BC479045).
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In opposition, Ana argued that the gravamen of her complaint targeted a
conspiracy by her former attorney, Howard, by which Lewenfus acquired her home
through a fraudulent sheriff’s sale, which is not a protected activity. She also argued that
where, as here, a sheriff’s sale involves both unfairness and an inadequate price, the court
may set aside the fraudulent sale.
The trial court (Judge Debre Weintraub) granted the special motion to strike the
complaint against Lewenfus. It found that because the claims arose from Howard’s
protected speech or petitioning activities, the first prong of the anti-SLAPP statute was
satisfied. As to the second prong—probability of success—the trial court concluded that
although Lewenfus did not meet the order of sale’s minimum bid requirement—it was
undisputed that the $10,000.00 purchase price fell short of Judge House’s minimum bid
requirement of $360,000.00—Ana produced no evidence of wrongful or dishonest
conduct on the part of Lewenfus. The court stated that on this record, it was possible that
Lewenfus simply made a “fortunate” purchase.
The trial court struck the complaint as to Lewenfus and awarded him attorney fees
of $23,961.00. Ana timely appealed.6
G. Oral Argument
By letter dated September 30, 2014, we invited the parties to discuss the following
issues at oral argument:
1. Did the sheriff’s sale satisfy the conditions of the June 18, 2010 order
authorizing a sheriff’s sale of dwelling, and section 704.800?
2. If not, is the sale nevertheless valid, or is it void or voidable?
3. If the sale is void or voidable, does that affect the second prong of the anti-
SLAPP analysis—probability of success—as to the cause of action to set aside the
sheriff’s sale and other causes of action?
In his written response, Lewenfus informed us, for the first time, of a September 9,
2010 order for sale that was entered by the trial court in the underlying misappropriation
6 The order is appealable. (§§ 425.16, subd. (i); 904.1, subd. (a)(13).)
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action (No. GC041483). The new order for sale eliminated the $100,000.00 statutory
homestead exemption and 90 percent of the appraised fair market value minimum bid
requirement of the June 18, 2010 order for sale.7 Lewenfus argued that under the new
order for sale, his purchase of the property for $10,000.00 was valid and could not be set
aside under the limited exception provided in section 701.680, which applies only where
the property is purchased by the judgment creditor (Enrique).
In her written response, Ana does not mention the September 9, 2010 order for
sale. Instead, she argues the sale to Lewenfus was invalid because it did not meet the
$360,000.00 minimum bid requirement set forth in the (superseded) June 18, 2010 order
for sale.
We informed the parties at oral argument that we would request additional
briefing, and the matter would not be submitted until a future date. After oral argument,
we obtained the superior court file in the misappropriation action (No. GC041483),
primarily to ascertain what had led to the issuance of the new order of sale. (See Evid.
Code, §§ 452, subd. (d)(1), 459, subd. (a) [reviewing court may take judicial notice of
records of any court of this state]; 1 Witkin, Cal. Evidence (5th ed. 2012) Judicial Notice,
§ 48, p. 177.) After examining the file, we advised the parties of our discovery of two
additional relevant documents: Enrique Vaca’s ex parte application for an order
“correcting” the order of sale, and Howard’s supporting declaration of September 5,
2010.
Howard’s September 5, 2010 declaration stated that because there was no recorded
homestead exemption, Ana had the burden of showing that the residence qualified as a
homestead. The declaration also stated that Ana had failed to satisfy her burden of proof,
and “[c]onsequently, the order of June 18, 2010 appropriately provided that the subject
property is not subject to any homestead exemption.” (Italics added.)
Howard’s statement—that the original order of sale “appropriately provided that
the subject property is not subject to any homestead exemption” (italics added)—
7
We granted the request by Lewenfus to take judicial notice of the September 9,
2010 corrected order for sale.
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misrepresented the fact that the court had imposed a statutory homestead exemption of
$100,000.00, based on Howard’s April 2, 2010 declaration. In his April 2 declaration,
which was filed in compliance with the requirements of section 704.760, Howard stated
that the dwelling was occupied by Ana, her husband, and her two sons, and that the
available homestead exemption was $100,000.00.
We invited the parties to address the relevance of these additional materials.
H. Supplemental Briefing
In her supplemental brief, Ana argued that since Howard’s April 2, 2010
declaration had established the necessary factual basis to impose a statutory homestead
exemption of $100,000.00, no further evidence was required from her on that point. She
contended that because the trial court had been misled by Howard’s September 5, 2010
declaration (which erroneously stated that no homestead exemption had been imposed in
the June 18, 2010 order for sale), it had mistakenly eliminated the homestead exemption
from its September 9, 2010 new order for sale.8 Ana argued that the sale was void.
In his supplemental brief, Lewenfus argued that Howard’s September 5, 2010
declaration did not mislead the trial court to omit the homestead exemption from the new
order for sale. He pointed out that the trial court was not precluded from referring to
Howard’s prior declaration of April 2, 2010, which was in the superior court file. He also
argued that Ana could have challenged elimination of the homestead exemption, opposed
Howard’s ex parte request to correct the order for sale, presented evidence to establish
the existence of a homestead exemption, sought reconsideration of the corrected order for
sale, or appealed from the corrected order for sale. Lewenfus asserted that because the
litigation privilege applies to all of Howard’s statements in the underlying
8 Ana has asked that we take judicial notice of documents that were recently
obtained from the sheriff’s department. She contended the documents were relevant to
show that Howard and Lewenfus had conspired to steal her property in breach of
Howard’s fiduciary duty to Ana and Enrique. Because the documents were not provided
to the trial court, we deny the request for judicial notice.
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misappropriation action, including Howard’s postjudgment enforcement activities, Ana is
incapable of demonstrating a probability of prevailing on the merits of her complaint.9
DISCUSSION
A special motion to strike is a procedural remedy to dispose of lawsuits brought to
chill the valid exercise of a party’s constitutional right of petition or free speech.
(Castillo v. Pacheco (2007) 150 Cal. App. 4th 242, 248.) The purpose of the anti-SLAPP
statute is to encourage participation in matters of public significance and prevent
meritless litigation designed to chill the exercise of First Amendment rights. (§ 425.16,
subd. (a).)
A claim is subject to a special motion to strike if the defendant shows that it arises
from an act in furtherance of the defendant’s constitutional right of petition or free speech
in connection with a public issue and the plaintiff fails to demonstrate a probability of
prevailing on the merits. (§ 425.16, subd. (b)(1); Equilon Enterprises v. Consumer
Cause, Inc. (2002) 29 Cal. 4th 53, 67.) In determining the plaintiff’s probability of
success, the court cannot weigh the evidence, but must determine as a matter of law
whether the evidence is sufficient to support a judgment in the plaintiff’s favor. (Taus v.
Loftus (2007) 40 Cal. 4th 683, 713–714.) The court must consider not only facts
supported by direct evidence, but also facts reasonably inferable from the evidence.
(Oasis West Realty, LLC v. Goldman (2011) 51 Cal. 4th 811, 822.)
“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.” (Navellier v. Sletten (2002) 29
Cal. 4th 82, 89.) On appeal, we independently review both of these determinations. (Hall
v. Time Warner, Inc. (2007) 153 Cal. App. 4th 1337, 1345–1346.)
In considering whether a complaint arises from protected activity, “we disregard
the labeling of the claim (Ramona Unified School Dist. v. Tsiknas (2005) 135
9Lewenfus has asked that we take judicial notice of the recent sale of Ana’s
residence to a third party. Because those documents were not presented to the trial court,
the request is denied.
11
Cal.App.4th 510, 522) and instead ‘examine the principal thrust or gravamen of a
plaintiff’s cause of action to determine whether the anti-SLAPP statute applies’ and
whether the trial court correctly ruled on the anti-SLAPP motion. (Ramona Unified
School Dist., at pp. 519–522.) We assess the principal thrust by identifying ‘[t]he
allegedly wrongful and injury-producing conduct . . . that provides the foundation for the
claim.’ (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal. App. 4th 181, 189.)”
(Hylton v. Frank E. Rogozienski, Inc. (2009) 177 Cal. App. 4th 1264, 1272.) We review
the parties’ pleadings, declarations, and other supporting documents at this stage of the
analysis only “to determine what conduct is actually being challenged, not to determine
whether the conduct is actionable. [Citation.]” (Coretronic Corp. v. Cozen O’Connor
(2011) 192 Cal. App. 4th 1381, 1389.)
In this case, the allegation that Howard and Lewenfus conspired to suppress all
other bids at the sheriff’s sale of Ana’s residence, thus enabling Lewenfus to acquire
Ana’s residence at a grossly inadequate price, serves as the foundation for each cause of
action in the operative complaint. Although the titles of some causes of action—such as
conversion, conspiracy to convert—may not apply to the fraudulent taking of real
property, the allegations are sufficient to allege a theory of misappropriation.
In Blackburn v. Brady (2004) 116 Cal. App. 4th 670, 677, the court held that
bidding on property at a court ordered sale “is a purely business type event or
transaction” and is not a protected activity. Although the sheriff’s sale of Ana’s
residence was preceded by protected petitioning activities—Howard’s petitioning for
issuance of the court orders necessary for the sale—the gravamen of the complaint
attacks the fraudulent suppression of bids, particularly by the judgment creditor, in order
to facilitate the pre-arranged sale to Lewenfus for an inadequate price. We conclude that
the conduct at issue, the fraudulent suppression of bids at a sheriff’s sale, does not arise
from protected petitioning activities.
We note that the allegations, if proven, could raise questions concerning a possible
breach of Howard’s fiduciary duty of loyalty to former clients, Ana and Enrique. (See
Benasra v. Mitchell Silberberg & Knupp LLP (2004) 123 Cal. App. 4th 1179, 1189
12
[breach of fiduciary duty is not a protected activity]; Oasis West Realty, LLC v. Goldman,
supra, 51 Cal.4th at p. 821 [attorney’s fiduciary duty of loyalty to former clients remains
in force even after the representation ends].) However, we express no opinion as to the
viability of those possible claims.
In light of our determination that the complaint does not arise from protected
activity, the judgment (order) granting the special motion to strike and awarding fees
must be reversed.
DISPOSITION
The judgment (order) is reversed. Appellants are awarded their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
EPSTEIN, P. J.
We concur:
MANELLA, J.
COLLINS, J.
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