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Court of Appeal:
Threat in Answer to Settlement Demand Wasn’t Extortion
Grimes Says Mention of Prospect That Employer Would Learn of Demanding Party’s Receipt of Illegal Kickbacks
If Litigation Were to Ensue Was Not Outside the Bounds of Professional Ethics; Anti-SLAPP Motion Not Barred
By a MetNews Staff Writer
An attorney’s letter in response to the threat of litigation against his client, a contractor, in which he pointed to the prospect of the would-be plaintiff’s employer learning of the employee’s criminal conduct if the dispute were not settled did not amount to extortion, the Court of Appeal for this district held yesterday.
Accordingly, Justice Elizabeth A. Grimes of Div. Eight said, the conduct does not preclude the granting of the attorney’s anti-SLAPP motion in an action against him for civil extortion and violation of the Ralph Civil Rights Act.
At issue was whether the California Supreme Court’s 2006 decision in Flatley v. Mauro bars the special motion to strike under the anti-SLAPP statute, Code of Civil Procedure §425.16, brought by San Jose attorney Gordon J. Finwall. The lawyer was sued, along with his client Robert Pendergrast, by homeowner Jason Flickinger.
Flickinger’s lawyer was the recipient of the Dec. 14, 2016 letter in which Finwall disclaimed liability on the part of his client and pointed to possible repercussions if Pendergrast were sued.
In Flatley, the high court declared, in an opinion by then-Justice Carlos Moreno, now a mediator/arbitrator, that “a defendant whose assertedly protected speech or petitioning activity was illegal as a matter of law, and therefore unprotected by constitutional guarantees of free speech and petition, cannot use the anti-SLAPP statute to strike the plaintiff’s complaint.”
Grimes’s Opinion
Grimes wrote:
“We interpret Flatley as holding an attorney’s prelitigation communication is extortion as a matter of law only where the attorney’s conduct falls entirely outside the bounds of ordinary professional conduct. We find that defendant’s letter falls within the boundaries of professional conduct and therefore the Flatley exception to anti-SLAPP protection does not apply. We therefore conclude that defendant made a prima facie showing under the first prong of the anti-SLAPP analysis.”
Under the first prong, the defendant must show that the lawsuit is predicated on protected conduct, and under the second prong, the plaintiff must show a probability of prevailing on the merits. Although Santa Clara Superior Court Judge Christopher G. Rudy did not reach the second prong in denying the anti-SLAPP motion, Grimes did reach it, declaring that, in light of the litigation privilege, Flickinger cannot prevail, and the motion must be granted.
Finwall sent the letter in question in response to a demand by Flickinger for $125,000 based on construction work that Pendergrast had not completed or shoddily performed before walking off the job. Flickinger had allegedly confessed to Pendergrast earlier that, as an employee of Apple, he had received illegal kickbacks from vendors in China.
Wording of Letter
The lawyer said in the letter:
“I am not sure how you came up with the figure of $125,000. This outrageous demand appears like a threat to further torment Mr. Pendergrast by all means possible, and Mr. Flickinger has already made retaliatory claims to the Labor Commissioner and CSLB [Contractors State License Board] and now he makes another one through you. If Mr. Flickinger initiates litigation, Mr. Pendergrast’s position will not change and he will aggressively defend himself. I suggest you discuss with Mr. Flickinger how such litigation may result in Apple opening an investigation into Mr. Flickinger’s relationships with vendors.”
Flickinger did sue Pendergrast over the unfinished construction, and later brought a second action against Pendergrast and Finwall, alleging that the prelitigation letter was an effort to intimidate him into dropping his claims. (In the first action, Flickinger was awarded $169,000.)
‘Stark Contrast’
In her opinion reversing the denial of the anti-SLAPP motion, Grimes said:
“Defendant’s conduct here stands in stark contrast to [Illinois attorney D. Dean] Mauro’s in Flatley. Defendant’s purportedly criminal communication was his December 2016 letter, sent to plaintiffs counsel and not to plaintiff directly, in response to a demand from plaintiffs counsel. In it, defendant addressed the merits of plaintiffs claims and offered facts relevant to his client’s claimed lack of liability. He made no threat to report plaintiff to any prosecuting authorities. His only express ‘threat’ was that his client, Pendergrast, would ‘aggressively’ defend himself in litigation.”
She continued:
“The statement from which plaintiff and the trial court implied a further threat—defendant’s suggestion that plaintiffs counsel advise plaintiff about how litigation ‘[could] result in Apple opening an investigation into [plaintiffs] relationships with vendors’—is not a threat that Pendergrast would report plaintiff to prosecuting authorities, and it does not lie so far outside the bounds of professional communication to amount to criminal extortion as a matter of law.”
Argument in Brief
In his brief on appeal, Flickinger argued that the order denying the anti-SLAPP motion must be affirmed because, under Flatley, “where the threat is ‘entirely unrelated’ to the litigation dispute, the extortionate threat will not be protected.”
He insisted that “there is nothing that inextricably ties, or even reasonably connects, Mr. Pendergrast’s deficient workmanship in a residential remodel job with the accusations that Respondent, while working for Apple overseas in China, engaged in money laundering.”
Grimes disagreed. Specifying that the test under Flatley is whether a threat is “reasonably connected” to possible litigation and not whether it is “inextricably tied,” she said that reference to the alleged illegal kickbacks “bore a reasonable connection to the parties’ dispute.”
Flickinger was contending that Pendergrast was in breach of contract because he did not obtain the required permits, she pointed out, while Pendergrast’s defense was that the homeowner told him not to get those permits because he did not want a record of him living beyond his ostensible means.
The case is Flickinger v. Finwall, 2022 S.O.S. 5846.
That case was one of 40 shifted on Aug. 9 from the Sixth District Court of Appeal to the Court of Appeal for this district.
Copyright 2022, Metropolitan News Company