Court of Appeal Adds $21,298.50 Penalty to $3,300 Sanction Imposed by Trial Court
By a MetNews Staff Writer
A Woodland Hills lawyer/litigant is saddled with an obligation to pay nearly $25,000 in sanctions as the result of making an anti-SLAPP motion in an action to gain payment for services and then appealing the denial of his motion, under a Court of Appeal opinion filed yesterday by this district’s Div. Six.
Of the $24,598.5 attorney Larry Gabriel has been ordered to pay, $3,300 of the sum is a sanction imposed by Ventura Superior Court Judge Henry Walsh in denying Gabriel’s special motion to strike under Code of Civil Procedure §425.16. Div. Six, in an opinion by Justice Kenneth Yegan, added sanctions totaling $21,298.50, with $12,798.50 to go to Clarity Co. Consulting, LLC, which brought suit for moneys it claims are owed it by a client of Gabriel’s, and $8,500 to be paid to the clerk of the appeals court.
Jointly liable for payment of the appeals sanctions are the nationwide law firm of which Gabriel is a member, Mulligan & Gabriel, and Daniel Mulligan of the firm’s San Diego office who handled the appeal.
Gabriel was general counsel to ONclick Healthcare, Inc. When ONclick failed to pay its debt for services performed by Clarity, that company sued ONclick and included Gabriel as a defendant.
Perplexed Over Suit
Pursuing an anti-SLAPP motion, Gabriel expressed bewilderment as to why he was being sued over his client’s debt. In denying the motion, Walsh observed that Gabriel “is clearly annoyed at being sued, but his remedy is a demurrer and/or a motion for summary judgment,” and that the motion “should not have been filed.”
Two causes of action in Clarity’s complaint were the focus of the appeal. It claimed misrepresentation in the form of ONclick having been portrayed as possessing the ability to pay for services when it was, in fact, without funds, and concealment, predicated on a failure to disclose that ONclick was financially unsound.
Both causes of action, Gabriel insisted is his appeal, relate to his freedom of speech in representing ONclick, including engaging in settlement discussions, and that Walsh therefore erred in finding that the first prong of the anti-SLAPP statute—protected conduct—was not satisfied. Yegan responded:
“Although…settlement discussions constitute protected activity, the fifth and sixth causes of action have nothing to do with settlement discussions. Nor do they arise out of protected free speech.”
Yegan said that litigation-related conduct is protected, but that any failure to disclose ONclick’s shaky finances preceded any discussion of a lawsuit, He explained:
“The injury-producing conduct, which both causes of action characterize as “fraudulent misconduct,” does not qualify as litigation-related protected activity. Appellant’s misrepresentations and acts of concealment were not made in contemplation or anticipation of future litigation. When they were made, there was no claim or dispute to be litigated or settled.
“Appellant’s litigation-related activity did not commence until the employment-contract negotiations ‘broke down’ and ONclick refused respondent’s request that it immediately pay respondent’s invoices. As appellant stated in his points and authorities filed in the trial court, ‘The parties then engaged in settlement negotiations’ that ‘failed.’ ”
The conduct alleged in the complaint, given that it did not relate to litigation and did not relate to any discussion of a public issue, was unprotected, and no “reasonable attorney” would argue to the contrary, Yegan said, declaring that sanctions for taking a frivolous appeal are appropriate.
Misuse of Statute
He set forth at the outset of the opinion:
“This appeal illustrates an attorney’s misuse of the anti-SLAPP statute….Appellant was given more than adequate notice in the trial court that his anti- SLAPP motion was not designed for this contractual dispute. He has been given the same notice on appeal. The warnings should have given him pause. They did not.”
Yegan, who has a penchant for quoting his own utterances in earlier opinions, repeated what he said in 1998 in the case of Estate of Gilkison:
“We...observe that trial attorneys who prosecute their own appeals, such as appellant [and his law firm], may have ‘tunnel vision.’ Having tried the case themselves, they become convinced of the merits of their cause. They may lose objectivity and would be well served by consulting and taking the advice of disinterested members of the bar, schooled in appellate practice.”
The case is Clarity Co. Consulting v. Gabriel, B311823.
Stephen M. Fishback, Dan C. Bolton of the Agoura Hills firm of Keller, Fishback & Jackson teamed with California-licensed attorney Sharon J. Arkin of Oregon in representing Clarity.
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