Century Surety Company v. Dennis Prince ( 2019 )

FILED
NOT FOR PUBLICATION
JUL 22 2019
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
CENTURY SURETY COMPANY, Nos. 17-16645
18-15945
Plaintiff-Appellant,
D.C. No.
v. 2:16-cv-02465-JCM-PAL
DENNIS PRINCE; GEORGE RANALLI;
SYLVIA ESPARZA, MEMORANDUM*
Defendants-Appellees.
Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding
Argued and Submitted July 10, 2019, as to No. 17-16645
Submitted July 10, 2019, as to No. 18-15945**
Portland, Oregon
Before: FERNANDEZ, GRABER, and OWENS, Circuit Judges.
Plaintiff Century Surety Company appeals the with-prejudice dismissal of its
state-law complaint against Defendants Dennis Prince, George Ranalli, and Sylvia
Esparza. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision without
oral argument. Fed. R. App. P. 34(a)(2).
1. The district court did not err by granting Prince’s special motion to
dismiss under Nevada Revised Statutes section 41.660, although it did apply an
incorrect legal standard. Because we have de novo review over a district court’s
grant of a special motion to dismiss under a state’s anti-SLAPP law, Makaeff v.
Trump Univ., LLC, 715 F.3d 254, 261 (9th Cir. 2013), we address the merits
instead of remanding for the district court to apply the correct legal standard.
See Farris v. Seabrook, 677 F.3d 858, 865, 868–69 (9th Cir. 2012) (reviewing de
novo where the district court failed to apply a necessary factor before granting a
preliminary injunction and affirming the preliminary injunction).
Under the pre-2013 version of the anti-SLAPP statute, Defendants had the
"initial burden of production and persuasion" to show that Plaintiff’s lawsuit was
"based on a protected communication," as defined in Nevada Revised Statutes
section 41.637. Delucchi v. Songer, 396 P.3d 826, 831 (Nev. 2017) (internal
quotation marks omitted). The parties agree that Prince’s allegations that Michael
Vasquez was in the course or scope of his employment with Blue Streak at the time
of the accident fit within one of section 41.637’s enumerated categories. And
Defendants made their initial threshold showing that Prince’s challenged
communications were truthful or made without knowledge of their falsehood.
Nev. Rev. Stat. § 41.637.
2
The following evidence justified Prince’s allegations: (1) according to the
police incident report, "Vasquez stated he had just gotten off work" before the
accident; (2) Blue Streak’s website advertised that its detailing service was "always
available"; and (3) the license plate on Vasquez’ truck read "JSTDTLD." Plaintiff
argued that Prince failed to meet his initial burden because he never submitted a
declaration attesting to the truth of the allegations. But, although
Delucchi accepted a declaration as sufficient to meet the moving party’s initial
burden, Delucchi did not hold that a declaration is necessary for the moving party
to meet its initial burden. 396 P.3d at 833. And, although Prince did not submit a
declaration, he did sign the state-court complaint. Per Nevada Rule of Civil
Procedure 11, Prince’s signature certified that, "to the best of [his] knowledge,
information, and belief," the complaint’s "factual contentions ha[d] evidentiary
support." In other words, Prince attested to the truth of the allegations, albeit not
under oath. Given the supporting evidence and the signed complaint, Prince
shifted the burden to Plaintiff. John v. Douglas Cty. Sch. Dist., 219 P.3d 1276,
1286–87 (Nev. 2009).
To survive Prince’s special motion to dismiss, Plaintiff had to demonstrate a
genuine issue of material fact "regarding whether the communications were
untruthful or made with knowledge of their falsehood." Id. at 1287. Plaintiff
3
never came to grips with this burden, instead arguing that its evidence raised a
genuine issue of material fact as to whether Vasquez was acting in the course or
scope of Blue Streak’s business at the time of the accident. But what a fact-finder
might determine at trial from conflicting course-and-scope evidence is irrelevant to
whether Prince’s allegations were "untruthful or made with knowledge of their
falsehood" when he made them. Id.Here, Plaintiff simply "has not provided any evidence that the
communications were untruthful or made with knowledge of falsehood." Id.Indeed, Plaintiff conceded that "there was some conflicting evidence to support
Prince’s statements." Yet Plaintiff repeatedly pointed to selected evidence that
supported its position that Vasquez was running personal errands at the time of the
accident. But Plaintiff cannot explain why Prince should have been required to
accept as true Vasquez’ affidavit that contradicted the initial incident report, or
Vasquez’ lay opinion that Plaintiff should not bear any financial responsibility for
the accident. Knowledge of contradictory information is not the same thing as
knowledge of falsehood.
2. The district court did not abuse its discretion by denying Plaintiff the
opportunity to conduct discovery. Plaintiff never filed a Federal Rule of Civil
Procedure 56(d) affidavit or declaration seeking further discovery. Although
4
Plaintiff raised the issue of more discovery when it opposed the discovery stay
under Nevada Revised Statutes section 41.660(4), Plaintiff did so perfunctorily at
best. On appeal, Plaintiff still could not state with any specificity what discovery it
requires to respond to the special motion. Given the significant record here and the
opportunity that Plaintiff had to conduct discovery on similar issues in the state-
court proceedings, Plaintiff failed to explain—under Rule 56(d) or section
41.660(4)—what "information that is essential to its opposition" that it "has not
had the opportunity to discover." Metabolife Int’l, Inc. v. Wornick, 264 F.3d 832,
846 (9th Cir. 2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250
n.5 (1986)).
Plaintiff also argued that, under Planned Parenthood Federation of America,
Inc. v. Center for Medical Progress, 890 F.3d 828, 834 (9th Cir. 2018), cert.
denied, 139 S. Ct. 1446 (2019), "discovery must be allowed" under Rule 56 "when
an anti-SLAPP motion to strike challenges the factual sufficiency of a claim." But
Planned Parenthood involved an anti-SLAPP motion under California law, not
Nevada law. Id. at 830–31. California’s anti-SLAPP statute, unlike the applicable
version of section 41.660, requires a plaintiff responding to an anti-SLAPP motion
to show "that there is a probability that the plaintiff will prevail on the claim" to
avoid dismissal. Id. at 833 (quoting Cal. Civ. Proc. Code § 425.16(b)(1)). By
5
contrast, Plaintiff here did not have to show a probability of prevailing on its
claims to avoid dismissal. Indeed, Prince’s special motion to dismiss did not
challenge "the factual sufficiency" of Plaintiff’s claims, but rather challenged the
fact that the claims targeted good-faith communications. So, Planned Parenthood
does not require discovery here.
3. Because Plaintiff was not entitled to conduct discovery, the district court
also did not abuse its discretion in denying leave to amend the complaint. See
Yagman v. Garcetti, 852 F.3d 859, 863 (9th Cir. 2017) ("[A] district court should
grant leave to amend . . . unless it determines that the pleading could not possibly
be cured by the allegation of other facts." (quoting Ebner v. Fresh, Inc., 838 F.3d
958, 963 (9th Cir. 2016))). The problem with Plaintiff’s complaint is not the
sufficiency of the allegations, but the very nature of the allegations—that they
target protected communications in an effort to suppress those communications.
Thus, no matter how many additional allegations of fraud and conspiracy Plaintiff
added to its complaint, Nevada’s anti-SLAPP statute would still doom the
complaint.
4. The district court erred by awarding $9,784.50 in attorney fees to Ranalli
under Nevada Revised Statutes section 41.670(1)(a) for work done on a Rule
6
12(b)(6) motion to dismiss.1 Nevada law does not address whether Ranalli may
recover fees in this circumstance. Absent controlling Nevada precedent, Nevada
courts look to California law for guidance in interpreting Nevada’s anti-SLAPP
statute when the relevant provisions are similar. Shapiro v. Welt, 389 P.3d 262,
268 (Nev. 2017).
In Graham-Sult v. Clainos, 756 F.3d 724, 752 (9th Cir. 2014), we affirmed a
fee award under California’s anti-SLAPP statute that included fees for time that the
defendants’ lawyers spent "not exclusively in pursuit of the anti-SLAPP motion,"
such as hours "spent on the motion to dismiss." But a more recent California case
undermines Graham-Sult and guides us here. See Wolfson v. Watts (In re Watts),
298 F.3d 1077, 1083 (9th Cir. 2002) ("Our interpretation in [a prior opinion] was
only binding in the absence of any subsequent indication from the California courts
that our interpretation was incorrect." (quoting Owen ex rel. Owen v. United
States, 713 F.2d 1461, 1464 (9th Cir. 1983))). After we decided Graham-Sult, the
California Court of Appeal clarified that "a fee award under the anti-SLAPP statute
may not include matters unrelated to the anti-SLAPP motion, such as . . . summary
judgment research," because such matters are not "incurred in connection with the
1
We review de novo legal questions concerning a party’s entitlement to
attorney fees under state law. PSM Holding Corp. v. Nat’l Farm Fin. Corp., 884
F.3d 812, 828 (9th Cir. 2018).
7
anti-SLAPP motion." 569 E. Cty. Blvd. LLC v. Backcountry Against The Dump,
Inc., 212 Cal. Rptr. 3d 304, 310–11 (Ct. App. 2016) (internal quotation marks
omitted). Thus, because Ranalli’s Rule 12(b)(6) motion was unrelated to Prince’s
anti-SLAPP motion, we vacate the $9,784.50 portion of Ranalli’s fee award
attributable to the Rule 12(b)(6) motion.
5. The district court did not err by awarding $15,600 in attorney fees to
Prince under section 41.670(1)(a) for work done by a partner at his current law
firm with whom he had an attorney-client relationship.2 Under Nevada law, an
attorney representing himself and a law firm represented by one of its own
attorneys may not recover attorney fees because they do not actually incur fees.
Dezzani v. Kern & Assocs., Ltd., 412 P.3d 56, 63 (Nev. 2018). But Nevada law
does not address the precise question here: whether an attorney represented by a
current law partner may recover fees where the represented attorney’s current firm
is not a party to the case and the case concerns events that happened while the
represented attorney worked elsewhere. We turn to California law for guidance.
In Gilbert v. Master Washer & Stamping Co., 104 Cal. Rptr. 2d 461, 467–69
(Ct. App. 2001), the defendant partner had been sued personally and his law firm
2
Plaintiff did not challenge the district court’s factual finding that Prince had
an attorney-client relationship with his law partner, and that finding was not clearly
erroneous.
8
was not a party to the case (Prince’s situation exactly). The court affirmed an
award of attorney fees to the defendant and held that the defendant "incurred" fees
because he would either "experience a reduced draw from the partnership . . . to
account for the amount of time his or her partners or colleagues have specifically
devoted to his or her representation, or absorb a share of the reduction in other
income the firm experiences because of the time spent on the case." Id. at 467. As
a Nevada court would, Shapiro, 389 P.3d at 268, we follow Gilbert and affirm
Prince’s fee award.
AFFIRMED IN PART and VACATED IN PART. In case no. 18-15945,
the parties shall bear their own costs on appeal.
9