Weinstock Family Tr. v. Shaw

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WEINSTOCK FAMILY TRUST et al., Plaintiffs and Appellants, v. DANIEL J. SHAW et al., Defendants and Respondents.

H050438

California Court of Appeals, Sixth District

July 22, 2024

NOT TO BE PUBLISHED

Santa Clara County Super. Ct. No. 22CV397831

BAMATTRE-MANOUKIAN, ACTING P.J.

Plaintiffs filed the present action in April 2022 to challenge debt collection activities taken against them under a sister state judgment entered in California in September 2016. Defendants in this action filed a special motion to strike plaintiffs' complaint under Code of Civil Procedure section 425.16 (special motion to strike, or anti-SLAPP motion).^[1] The trial court granted the special motion to strike the complaint by order filed September 1, 2022.

This matter arose out of a nearly two-decades-old Washington real estate development project in which the developer was SV 261 LLC (hereafter, sometimes referred to as Developer). In 2007 Developers Surety &Indemnity Company (Surety) issued a surety bond on the project. In connection therewith Surety required Developer, as principal, to execute an indemnity agreement (Indemnity Agreement or Agreement) requiring Developer to pay Surety any bond premiums and to hold Surety harmless for any obligations it incurred under the bond on behalf of Developer. Surety also required that a number of Developer-affiliated entities and individuals sign the Agreement as indemnitors.

Developer defaulted under the Indemnity Agreement, and Surety filed suit against it and the indemnitors in the state of Washington (the Washington action).^[2] In September 2014, Surety obtained a judgment in the Washington action (Washington Judgment) against, among others, three of the plaintiffs herein, Michael Weinstock, Marissa Weinstock, and Weinstock Family Trust. The next month, Surety filed a special proceeding in California for entry of a sister state judgment (sister state proceeding) to enforce the Washington Judgment; that sister state judgment was entered on October 14, 2014.^[3] Through multiple assignments, the Washington Judgment was assigned to Sunnycove Capital Inc. (Sunnycove) in or about November 2016. Approximately five years later, Sunnycove commenced collection activities in the sister state proceeding against plaintiffs and appellants herein, Michael and Marissa Weinstock, Allyson Weinstock (their adult daughter), and Weinstock Family Trust (hereafter, collectively, appellants).

Appellants filed the present action alleging six causes of action, challenging the activities in the California sister-state proceeding to collect on the Washington Judgment. Appellants contended that any efforts to collect on the Washington Judgment against them were unlawful, because the underlying debt had been "extinguished." The defendants in the present action-who were likewise, with one exception (Sunnycove), named defendants in the Washington action-are Daniel Shaw, Amber Shaw, Gerald Shaw, Janet Shaw, Shaw 1993 Living Trust, W&S Investments, Inc. (W&S), and Sunnycove. (Hereafter, the defendants in the present action are collectively referred to as respondents.)

As noted, respondents filed a special motion to strike the complaint An anti-SLAPP motion is resolved through a two-step process in which the court decides (1) if the defendant has shown that the challenged claim arose out of his or her constitutionally protected petitioning or speech activity; and (2) assuming the defendant has met his or her burden to show he or she was engaged in protected activity, "whether the plaintiff has demonstrated a probability of prevailing on the claim." (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67 (Equilon Enterprises).) Respondents contended below, inter alia, that appellants' entire action was barred under the anti-SLAPP statute because the suit was based upon respondents' exercise of their constitutionally protected activity of participating in court proceedings, namely, the enforcement of the Washington Judgment entered in the California sister state proceeding. Respondents contended further that appellants could not establish the second prong, i.e., probability of prevailing, because (1) the claims were barred by the litigation privilege as provided under Civil Code section 47, subdivision (b) (Civil Code section 47(b)); and (2) the litigation privilege bar notwithstanding, appellants could not establish the legal merits of their claim that the underlying debt represented by the Washington Judgment was extinguished.

In its order granting the special motion to strike, the trial court concluded that respondents had met their burden under the first prong of the anti-SLAPP motion of establishing that the claims alleged in the complaint arose out constitutionally protected activity. The trial court held further that appellants had failed to meet their burden of showing a probability of prevailing on the claim because the litigation privilege under Civil Code section 47(b) operated as a bar to at least some, if not all, of the claims, and, in any event, appellants had not shown a likelihood that they would prevail on any claims.

Appellants challenge the trial court's order in which it concluded that the litigation privilege applied and that appellants had failed to show a probability that they would prevail on the claim. Appellants also challenge the trial court's separate order denying their motion for preliminary injunction. We conclude that the trial court did not err in granting the special motion to strike under the anti-SLAPP statute. We conclude further that appellants' challenge to the order denying preliminary injunction is not cognizable on appeal because appellants did not file a timely appeal from that separate, appealable order. We will therefore affirm the order granting the special motion to strike the complaint.

I. PROCEDURAL BACKGROUND

A. Complaint

On April 22, 2022, appellants filed a complaint alleging six causes of action. The complaint named respondents as defendants: Daniel Shaw, Amber Shaw, Gerald Shaw, Janet Shaw (collectively, the Shaws), the Shaw 1993 Living Trust, W&S, and Sunnycove.

The underlying facts and contentions as alleged in the complaint were largely based upon the history of prior litigation and purported collection efforts by respondents in 2021 in the sister state proceeding. Appellants alleged that (a) the Judgment was entered in the Washington action on September 12, 2014; (b) the named defendants in the Washington action included appellants (save Allyson Weinstock), and respondents (save Sunnycove);^[4] (c) respondents filed a pleading in the sister state proceeding stating that the Washington Judgment had been entered in the Washington action against W&S and the Shaws, individually and in their corporate capacities; (d) on October 14, 2014, Surety applied for and obtained a sister state judgment in California in the sister state proceeding; (e) on September 19, 2016, Surety assigned the Washington Judgment, "and all right to collect the 'sister state judgment', to W&S"; (f) on November 17, 2016, W&S assigned the Washington Judgment, and all rights to collect on it, to Sunnycove, which entity has the same Los Gatos address as W&S; (g) the Shaws were officers and owners of W&S and Sunnycove; (h) appellants had been "targeted by and subject to conduct, including . . . communications under the guise of legal proceedings, and other actions, through third party emissaries, initiated by Sunnycove's counsel . . . seeking to assert a right to enforce a sister state judgment that has been extinguished by [respondents'] conduct"; (i) the collection actions to which appellants had been subjected included interference with their property rights "through levy, holding of bank account funds, wage garnishment notices and charging order motions"; and (j) respondents had engaged in "unlawful, unfair, and/or fraudulent acts or practices, including . . . asserting a right to collection that [was] not supported [by] law and seeking to recover monies to which [they were] not entitled."

Appellants sought a permanent injunction (first cause of action) preventing respondents from engaging in further debt collection practices and compelling them to return any funds wrongfully collected. They also sought a judicial determination in equity that the obligation under the Washington Judgment and the judgment entered in the California sister proceeding had been extinguished, and that respondents collection efforts were barred. Appellants requested further that they receive a declaratory judgment (sixth cause of action) that respondents had no right to assert a claim relative to appellants' property. And appellants asserted legal claims for damages under theories of conversion (second cause of action), intentional infliction of emotional distress (third cause of action), and financial elder abuse, on behalf of Michael Weinstock, only (fourth cause of action), and a statutory claim for violation of Business and Professions Code section 17200 (fifth cause of action).

B. The Indemnity Agreement

Although not specifically referred to in the complaint or attached as an exhibit, the Indemnity Agreement was the basis for Surety bringing the Washington action. It was attached to the complaint in that action.^[5] The Indemnity Agreement was referenced and discussed in both the motion, the opposing memorandum, and Michael Weinstock's declaration filed in opposition to the motion. The Agreement is relevant to these proceedings and is therefore summarized here.

On January 3, 2007, Surety, SV 261, LLC, as principal, and various individuals and entities, as indemnitors, executed the Indemnity Agreement. The indemnitors executing the Agreement included plaintiffs Michael Weinstock, Marissa...