Dakhil v. Monnett

MOHAMAD DAKHIL, Plaintiff and Respondent, v. WEST MONNETT, Defendant and Appellant.

B285044

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION ONE

January 3, 2019

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. No. BC657231)

APPEAL from a judgment of the Superior Court of Los Angeles County, Susan Bryant-Deason, Judge. Affirmed.

Morris & Stone and Aaron P. Morris for Defendant and Appellant.

SLC Law Group and Louis F. Teran for Plaintiff and Respondent.

____________________ Defendant West Monnett appeals from an order denying his special motion to strike Mohamad Dakhil's defamation cause of action under Code of Civil Procedure section 425.16. We agree with the trial court that Dakhil has established a probability of prevailing on his claim and, therefore, affirm.

FACTUAL SUMMARY

A.

In February 2016, Monnett hired Dakhil, a certified public accountant, to prepare and file his 2015 federal and state tax returns. To prepare the returns, Dakhil needed to determine the amount that Monnett could deduct for depreciation of certain residential rental property in Utah. Monnett had purchased the property in 2012, lived in the residence on that property for three years, constructed improvements and additions to the residence, and began renting the property to others in 2015.¹ The amount that Monnett could deduct from his income depended in part on the depreciation basis of the residence, as determined under federal tax law.

Dakhil understood, and Monnett does not dispute, that the depreciation basis for the residence is the lesser of (1) the fair market value of the residence on the date Monnett converted the property to rental property, or (2) the adjusted basis of theresidence on that date.² Monnett states, and Dakhil does not dispute, that the adjusted basis for the residence in 2015 was $346,831.³

Regarding the fair market value of the residence, Dakhil states that he had asked Monnett for evidence of the market value, but Monnett had none. Monnett, however, states that Dakhil and he never discussed the market value.

Dakhil reviewed Utah law concerning property tax assessment, which requires county tax assessors to "annually update property values of property . . . based on a systematic review of current market data" (see Utah Code Ann., § 59-2-303.1) and the Utah State Tax Commission's property valuation standards, which require that the assessed values of property be within 10% of the "market value, as indicated by sales data." Based on this and other information, Dakhil concluded that the market value data provided by the tax assessor "was the most reasonably accurate and reliable data available." According to the tax assessor for the county in which the property is located, the market value of the residence in 2015 was $202,600.

Because the tax assessor's valuation of $202,600 was less than the adjusted basis of the residence, Dakhil used the assessor's valuation to calculate Monnett's depreciation deduction. After Monnett reviewed and approved the tax returns,⁴ Dakhil filed them. Dakhil billed Monnett $550 for his services.

B.

The following year, in February 2017, Monnett informed Dakhil that Dakhil had erred by using the tax assessor's valuation in determining the depreciation basis of the residence. According to Monnett, Dakhil should have used the adjusted basis of the residence—$346,831—to calculate the depreciation deduction.

Dakhil reviewed the file and conducted further research, then informed Monnett that he had correctly relied on the assessor's valuation, and he refused Monnett's request to file an amendment to his tax returns. He did, however, prepare amendments based on Monnett's calculations, but did not sign them as the tax preparer. Instead, Dakhil provided Monnett with the amended returns and the addresses where Monnett could send them. Dakhil billed Monnett $600 for preparing the amendments.

C.

On February 21, 2017, Monnett posted the following on the "Yelp" website pertaining to Dakhil's tax preparation business: "[Dakhil] is a nice guy, but he unfortunately isn't knowledgeable enough to do what he does. One of the reasons we ended up going with him was due to his positive reviews. We went with him when we did our 2015 taxes, and it wasn't until doing our taxes this year, that we found his error. We own rental property, and simply put, he put the value of it (which determines the tax write-off) at almost half of what it was worth at the time. He based his numbers off the tax assessed value of the building, and he got those numbers from our property tax bill. In doing our taxes this year, we learned that the value is supposed to be based off either the [f]air [m]arket [v]alue (what somebody is willing to pay) or the amount of money you had put into it, and we also learned that tax assessors are rarely in line with the true market value, and that they don't even attempt to be, regardless of what state you live in. We brought this to his attention, but he insisted that the tax assessed value is the same thing as the market value. A quick ["G]oogle["] search will confirm that this is far from the truth, but he refused to accept this. We then sent him a link to the IRS's website hoping that it could clear things up, as well as links to how property is assessed, but he seemingly ignored them, and doubled down. This mistake would cost us 10's of thousands of real money over the years, as he was off by nearly . . . 150 thousand. We now have to file amendments to try and fix his mess, as he has no interest in fixing it himself. It's one thing that he didn't understand one of the basics of his job, but it's another thing to ignore the evidence once it's presented.I would never trust him to do my taxes again, as he simply lacks the knowledge required."

Dakhil personally, and later through counsel, demanded that Monnett remove his Yelp post. Monnett did not remove the post. Instead, on March 21, 2017, he updated his Yelp post with the following.

"I don't know how trustworthy the [Y]elp rating is for [Dakhil's firm], because if other negative reviewers are like me, you get a fancy certified parcel from . . . Dakhil's lawyer, telling you to delete your negative review or they'll take you to court and make you pay for it. Luckily I'm defiant enough, and I have the proper supporting evidence to show that he did my taxes wrong, that I won't allow his strong-arm tactics to keep me from performing this public service, by warning others before dealing with this person.

"Since my experience was so poor, for time's sake, I will only mention the highlights from the rest of our dealings with him.

"After leaving my first review, pointing out that I didn't think . . . Dakhil understood how to report the value of rental property, I was lucky enough to speak with him on the phone. It was then that he finally admitted to me that he values property differently than the [Internal Revenue Service (IRS)] instructs him to[] (wait! what?!?) because he is afraid that if he did it as the guidelines say, th[e]n he would have to worry about providing evidence to support the figures, and he's afraid that clients can't do that, so he takes a 'conservative approach.' According to him, if you undervalue your rental property tax write offs, by using the tax assessed value instead of the market value, you are less likely to get audited, and he's afraid of getting audited. No joke, this iswhat he said to me. If he had given me the option, and informed me that he strays a bit from IRS guidelines, before he ever did our taxes, th[e]n I wouldn't be complaining right now, but he did this without our knowledge or consent.

"Honestly, I was happy to finally get him to admit that the IRS guidelines were different than what he kept claiming, just because it was so frustrating, especially since the IRS is so clear on how to do it, and I was ready to end the relationship right then and there somewhat satisfied, but then he went ahead and said that he wanted me to feel good about having dealt with him, so he offered to fix our taxes for free. Yay! Finally! Mission accomplished, right? Well, no, he billed us for it. He sent us another certified gem in the mail that was a bill for his 'free' services—very underhanded. What's odd, is that all he had to do was change one form, and then print out the amendment forms, and he would be done. Like seriously, easy peasy, but for some reason, even though he offered to do it for 'free[,'] he felt compelled to charge us more than he had originally, when he first did our taxes, all the while making sure we were under the impression that it was 'free' and to foster goodwill. This showed an extreme amount of deceitfulness. After sending his bill, he went into hiding, and refused to answer my phone calls or emails.

"Anyway, we did end up receiving the paperwork so we could amend our initial return, but at this point we don't trust him, so there is no way we're sending our tax paperwork in, as prepared by him, especially since he conveniently left out the portion that identifies himself as the tax preparer, even though legally he's not suppose[d] to do anyone's taxes without providing that information.

"I have never in my life had a worse experience in dealing with a 'professional' regardless of their field of practice. I would avoid, avoid, avoid. Now that I updated this review, I wonder if he'll sic his lawyer on me again . . . . Oh, and I take back my initial comment about him being nice."

D.

In April 2017, Dakhil filed a complaint in the superior court against Monnett alleging a single cause of action: defamation. He set forth the text of Monnett's posts to the Yelp website...