A-Ju Tours, Inc. v. Alleghany Corp.

A-JU TOURS, INC., et al., Plaintiffs and Appellants, v. ALLEGHANY CORPORATION et al., Defendants and Respondents.

B256956

B259567

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

January 14, 2016

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. BC498813)

APPEALS from judgments and a postjudgment order of the Superior Court of Los Angeles County, Frederick C. Shaller, Judge. Affirmed.

Rehm & Rogari and Ralph Rogari for Plaintiffs and Appellants A-Ju Tours, Inc., Pyoung Sik Bahk, Trustee of the A-Ju Tours, Inc. Trust Account.

Frandzel Robins Bloom & Csato, Hal D. Goldflam and Brad R. Becker for Defendant and Respondent Hanmi Bank.

Nelson & Fulton, Henry Patrick Nelson and Rina Mathevosian for Defendants and Respondents County of Los Angeles and former Sheriff LeRoy Baca.

____________________ A-Ju Tours, Inc. and Pyoung Sik Bahk, Trustee of the A-Ju Tours, Inc. Trust Account (collectively, the Travel Agency) sued Hanmi Bank (the Bank) for alleged misconduct arising out of a writ of execution issued against the Travel Agency's account at the Bank. Upon receipt of the writ of execution, the Bank froze the full levied-upon amount and notified the Travel Agency of its action. Despite repeated demands by the Travel Agency, the Bank refused to release the funds absent either an agreement between the Travel Agency and its judgment creditor or a court order. In response to the Bank's refusal, the Travel Agency sought to obtain release of the funds through the claim of exemption procedure (Code Civ. Proc., § 703.010 et seq.¹). The County of Los Angeles, however, refused to serve the exemption claims on the judgment creditor, because the Travel Agency was not a "natural person." (§ 703.020, subd. (a).) In response to these refusals, the Travel Agency sued the Bank and the County and former Sheriff Leroy Baca (collectively, the County), asserting a wide array of claims.

The Bank responded by, among other things, arguing that the Travel Agency's complaint was a "strategic lawsuit against public participation" or SLAPP suit. Specifically, the Bank argued that its allegedly improper communications and communicative conduct taken in response to the writ and resulting court orders were protected activities under the anti-SLAPP statute (§ 425.16) and that the Travel Agency could not prevail on any of its claims against the Bank because its communications and conduct related to the writ were protected by the litigation privilege. The trial court agreed, granting the Bank's motion, entering judgment in its favor and subsequently awarding it its attorney fees.

As for the County, it repeatedly and successfully demurred to the Travel Agency's claims, arguing that the Travel Agency had failed to state a claim against it. Eventually, the trial court sustained the County's demurrer to the Travel Agency's second amended complaint without leave to amend and entered judgment in favor of the County.

The Travel Agency appeals from both judgments and from the award of attorney fees to the Bank. Pursuant to the parties' stipulation, the appeals were consolidated for the purposes of briefing, oral argument, and decision. We affirm.

BACKGROUND

I. The Travel Agency's Account with the Bank

The Travel Agency sells travel tours and other travel services to customers in the United States. Under the "seller of travel" law (Bus. & Prof. Code., § 17550 et seq.), the Travel Agency is required deposit all funds it receives from its customers into a trust account.

In 2007, the Travel Agency opened a trust account with the Bank. As a condition to opening and maintaining the account, the Travel Agency agreed to certain terms. The Travel Agency was advised that "[a]ccounts opened with trust or fiduciary designations . . . may be subject to levies and other legal process . . . ." The Travel Agency agreed that if the Bank was "served with a subpoena, restraining order, writ of attachment or execution, levy . . . or similar order relating to [its] account, [the Bank] will comply with that legal action." The Travel Agency also agreed that the Bank "must comply with any legal order to hold or remit funds held in [the Travel Agency's] account(s) . . . which [the Bank] believe[s] to be valid and which [the Bank] believe[s] applies to [the Travel Agency's] account, even if [the Bank is] not a party." In addition, "[i]f there is a dispute of any kind relating to [its] account, including conflicting instructions from [the Travel Agency] and other person(s) claiming to have rights, control or any interest whatsoever in [the] account, including the funds contained therein," the Travel Agency "expressly" authorized the Bank "at [its] sole discretion to freeze all activity in [its] account in order to maintain a status quo" and "to maintain the freeze until a satisfactory resolution of the dispute." Finally, the Travel Agency agreed that "[a]ny legal fees or expenses [the Bank] incur[s] in responding to any legal action (including, without limitation, attorney's fees . . .) may be charged against [the Travel Agency's] account." These basic terms and conditions governing the Bank's relationship with the Travel Agency remained in effect at all relevant times.

II. The Writ of Execution

In 2011, following a bench and jury trial, Ok Song Chang, a former employee of the Travel Agency, obtained a judgment against the Travel Agency for approximately $62,000 in damages and $300,000 in attorney fees. (Henry M. Lee Law Corp. v. Superior Court (2012) 204 Cal.App.4th 1375, 1378.)

Ms. Chang's attorney, Henry M. Lee Law Corporation (HML), subsequently and ultimately successfully moved to intervene and amend the Chang judgment so that the attorney fee award was payable to it. (Henry M. Lee Law Corp. v. Superior Court, supra, 204 Cal.App.4th at pp. 1388-1389.) On July 18, 2012, a writ of execution (money judgment) (the Writ) was issued for the attorney fees portion of the Chang judgment. The Writ identified the Travel Agency as the judgment debtor and HML as the judgment creditor.

On August 2, 2012, the Writ, along with a notice of levy was served on the Bank. The notice of levy provided that the property to be levied upon was "any and all accts in the name of the judgment debtor." Like the Writ, the notice of levy identified the Travel Agency as the judgment debtor and HML as the judgment creditor. On that same day, the Bank took two actions: First, it froze and segregated from the Travel Agency's account the sum of $347,128.20 plus a $100 legal process fee. Second, the Bank sent to the Travel Agency a "Notice to Customer Named in Process," advising it of the notice of levy and the Bank's action in accordance with the notice of levy.

III. The Travel Agency's Initial Response to the Writ of Execution

The Travel Agency moved to quash the Writ. On August 7, 2012, before the Bank delivered the funds to the levying office, the Court of Appeal issued an order temporarily staying the Writ.²

In addition, on August 8, 2012, the Travel Agency spoke with the Bank and demanded the immediate release of the frozen funds. The Bank, however, refused to release the funds. Instead, the Bank advised the Travel Agency that it would "maintain the status quo by keeping the funds segregated." The Bank further advised that it would not release the funds to anyone absent either (1) an agreement between the Travel Agency and its judgment creditor, HML, as to the disposition of the funds, or (2) a further order from the Court of Appeal "affecting the Bank's obligations in this matter."

Although the Travel Agency did not seek from the Court of Appeal some form of further relief "affecting the Bank's obligations," it did take a number of other steps to secure the release of its funds which it needed for its business. First, it requested that HML voluntarily withdraw the Writ, but this request went unanswered. Second, the Travel Agency repeatedly sought relief from the Chang trial court. On August 3, 2012, the Travel Agency filed an ex parte application before the judge overseeing the Chang action, seeking "an order compelling return of any monies seized from its bank account." That application was denied on August 3, 2012, for lack of proper notice. Third, the Travel Agency attempted to use the claim of exemption procedure. On August 9, 2012, the Travel Agency delivered three exemption claims to the County. The County, however, refused to serve the claims on HML, because the Travel Agency was not a "natural person." As a result, on August 17, 2012, the Travel Agency filed an ex parte application in department 90 of the superior court seeking an order determining that the levied-upon funds were exempt property. This application was denied on August 17, 2012, because, among other things, the Travel Agency "failed to follow" the claim exemption procedure.

IV. The Travel Agency's Lawsuit

On January 9, 2013, the Travel Agency filed its complaint in this action, alleging 16 causes of action against 10 different defendants. With regard to the Bank, the TravelAgency asserted the following five causes of action: breach of contract; breach of the implied covenant of good faith and fair dealing; conversion; unfair business practices; and "injunction." With regard to the County, the Travel Agency asserted two causes of action: violation of its constitutional rights under title 42 United States Code section 1983; and "injunction."

On February 19, 2013, the Bank demurred to the complaint. In addition, the Bank filed a special motion pursuant to the anti-SLAPP statute to strike all causes of action against it. Alternatively, the Bank also moved to strike the punitive damage claims...