Arrow Disposal Services v. Gronemeier & Associates CA2/2 ( 2021 )

Filed 12/16/21 Arrow Disposal Services v. Gronemeier & Associates CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
ARROW DISPOSAL B308001
SERVICES, INC.,
(Los Angeles County
Plaintiff and Appellant, Super. Ct. No.
19PSCV00961)
v.
GRONEMEIER &
ASSOCIATES, PC, INC. et al.,
Defendants and
Respondents.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Gloria L. White-Brown, Judge. Affirmed.
Evgeny Swarovski for Plaintiff and Appellant.
Law Office of Gronemeier & Hickambottom, Dale L.
Gronemeier, and Elbie J. Hickambottom, Jr. for Defendants and
Respondents.
******
In this lawsuit, a litigant from a prior case sued its
adversary’s lawyers for their conduct in (1) explaining to a third
party they had subpoenaed in the prior case the reasons for the
subpoena, and (2) sending a letter with a settlement demand in
the prior case. The trial court granted summary judgment to the
lawyers, finding that their conduct fell squarely within the
litigation privilege (Civ. Code, § 47), and thus was not actionable.
This was undeniably correct, so we affirm.
FACTS AND PROCEDURAL BACKGROUND
I. Facts
A. The prior case
In December 2016, a construction and demolition debris
hauler named Clean Up American, Inc. (Clean Up) sued one of its
competitors, Arrow Disposal Services, Inc. (Arrow), for engaging
in anticompetitive conduct—namely, illegally dumping waste
meant for recycling facilities at regular landfills and covering its
tracks by falsifying the weight tickets to conceal where the to-be-
recycled waste had actually been dumped. Arrow filed a cross-
claim alleging other anticompetitive conduct by Clean Up.
B. Conduct by Clean Up’s counsel in the prior case
In the prior case, Clean Up was represented by Elbie J.
Hickambottom, Jr. (Hickambottom), who was at the time working
at a law firm called Gronemeier and Associates, Inc. (the law
firm).
In late December 2017, Hickambottom sent Arrow a
settlement demand letter that (1) outlined some of the evidence
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Clean Up had acquired to prove Arrow’s fraudulent scheme, (2)
shared his intention to “subpoena” one of the businesses for
whom Arrow hauled away debris, called Skanska, “to
authenticate that the [falsified] weight certificates came from
Arrow,” and (3) offered to “resolve” the entire case (including
dismissal of the cross-complaint) for $2.5 million. The letter gave
Arrow one week to respond to the demand; Arrow ignored it.
On January 3, 2018, Hickambottom issued a subpoena
duces tecum to Skanska seeking production of the weight tickets
that Arrow had provided to Skanska. When the lawyer for
Skanska called the next day for an explanation of “the relevancy
of the documents requested,” Hickambottom explained that the
weight tickets Arrow had provided to obtain reimbursement from
the government entity that hired Skanska as a contractor had
been falsified, and that obtaining Skanska’s copies of those
tickets would confirm when Arrow had created false tickets.
Hickambottom then sent a written letter to Skanska’s lawyer as
a “follow up” to their call. In the follow-up letter, Hickambottom
reiterated Clean Up’s theory as to how Arrow had been illegally
dumping recyclable debris, and explained why Skanska’s
documentation would help “confirm[]” Arrow’s scheme.
Skanska responded to the subpoena with its copy of the
weight tickets that confirmed that Arrow had falsified them.
Soon thereafter, Skanska terminated its hauling contract with
Arrow.
II. Procedural History
In November 2018, Arrow sued Hickambottom and the law
firm (collectively, defendants).1 Specifically, Arrow sued
1 The action was filed in Riverside County Superior Court,
but was later transferred to Los Angeles Superior Court.
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defendants for inducing a breach of contract, intentional
interference with contractual relations, and intentional and
negligent interference with prospective economic relations. In
support of each claim, Arrow alleged that defendants subpoenaed
documents from Skanska and answered Skanska’s questions
about the subpoena “in order to extract a favorable settlement”
from Arrow; that they made “derogatory” and “disparaging”
comments about Arrow in the course of doing so; and that those
comments prompted Skanska to cancel its contract.
Defendants moved for summary judgment based on, among
other things, the litigation privilege. After further briefing and a
hearing, the trial court granted the motion.
Arrow appealed from the order granting defendants’
summary judgment motion. The judgment was not entered for
another ten weeks.
DISCUSSION
Arrow argues that the trial court erred in granting
summary judgment for defendants.
Defendants point out several procedural defects with
Arrow’s appeal. To begin, Arrow took its appeal from the order
granting summary judgment, which is not an appealable order.
(Levy v. Skywalker Sound (2003) 108 Cal.App.4th 753, 761, fn. 7.)
However, because a judgment was subsequently entered and
because that judgment is appealable, we have the discretion to
treat Arrow’s notice of appeal as premature and to consider the
merits of the appeal. (Castillo v. Glenair, Inc. (2018) 23
Cal.App.5th 262, 275; Mukthar v. Latin American Security
Service (2006) 139 Cal.App.4th 284, 288; Cal. Rules of Court, rule
8.104(d)(2).) We elect to exercise that discretion. Further, the
record and briefs Arrow has presented on appeal are woefully
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deficient: The record is missing several critical documents,
including the evidence in opposition to the summary judgment
motion and the tentative ruling that the trial court ultimately
adopted as its final ruling; and the briefs lack reasoned argument
on several points. Although these omissions give us the
discretion to treat Arrow’s appeal as forfeited (Gee v. American
Realty & Construction, Inc. (2002) 99 Cal.App.4th 1412, 1416
[where record is inadequate for meaningful review, appellant
defaults and judgment should be affirmed]; Cahill v. San Diego
Gas & Electric Co. (2011) 194 Cal.App.4th 939, 956 [failure to
support assertions with “reasoned argument[s]” amounts to
waiver]), we elect to exercise our discretion to reach the merits of
Arrow’s appeal.
Turning to the merits, we are tasked with determining
whether the trial court properly determined, on summary
judgment, that the litigation privilege bars Arrow’s claims.
Among other grounds, summary judgment is appropriate
when the defendant establishes an affirmative defense and
plaintiff fails to raise a “triable issue of material fact” as to that
affirmative defense. (Aguilar v. Atlantic Richfield Co. (2001) 25
Cal.4th 826, 850, 853; Huynh v. Ingersoll-Rand (1993) 16
Cal.App.4th 825, 830; Bacon v. Southern Cal. Edison Co. (1997)
53 Cal.App.4th 854, 858; Code Civ. Proc., § 437c, subds. (a)(1), (c),
(o)(2), (p)(2).) In evaluating whether there are any triable issues
of material fact, we must “strictly construe[]” the affidavits of the
moving party, “liberally construe[]” those of the opposing party,
and resolve any doubts against summary judgment. (Miller v.
Bechtel Corp. (1983) 33 Cal.3d 868, 874.) We independently
review a trial court’s grant of summary judgment. (Hampton v.
County of San Diego (2015) 62 Cal.4th 340, 347.)
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The litigation privilege is an affirmative defense that
precludes holding a person liable for making any communication
in a judicial or quasi-judicial proceeding that (1) is made by
authorized participants, (2) is made to achieve the objects of
litigation, and (3) has a logical connection to the action. (Silberg
v. Anderson (1990) 50 Cal.3d 205, 212 (Silberg); Action Apartment
Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1241
(Action Apartment).) If the privilege applies, it bars claims for
each of the types of claims Arrow asserts against defendants.
(See Knoell v. Petrovich (1999) 76 Cal.App.4th 164 [interference
with contract relations]; Pacific Gas & Electric Co. v. Bear
Stearns & Co. (1990) 50 Cal.3d 1118, 1132 [interference with
contract and prospective economic advantage]; Brody v.
Montalbano (1978) 87 Cal.App.3d 725, 737-738 [interference with
prospective economic advantage and inducing breach of
contract].)
We independently conclude that the litigation privilege
applies to the conduct by defendants that underlies each of
Arrow’s claims. Defendants’ issuance of the subpoena,
Hickambottom’s explanation to Skanska about why the subpoena
was necessary, and Hickambottom’s follow-up letter elaborating
on his explanation all fall within the privilege. Each of these is a
communication made in the midst of an ongoing judicial
proceeding—namely, the dueling lawsuits between Clean Up and
Arrow. Further, the communications are made by authorized
participants (because defendants are Clean Up’s counsel); the
subpoena and subsequent explication are meant to achieve the
objects of that ongoing litigation (because they are aimed at
obtaining evidence for use at trial); and the information sought
by the subpoena has a logical connection to the litigation (because
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it would confirm Arrow as the source of the fraudulent weight
tickets). What is more, these communications were made to
Skanska, which is a “nonpart[y] with a substantial interest in the
proceeding” due to its possession of evidence keenly relevant to
the litigation. (Susan A. v. County of Sonoma (1991) 2
Cal.App.4th 88, 94; GetFugu, Inc. v. Patton Boggs LLP (2013) 220
Cal.App.4th 141, 153; see Susan S. v. Israels (1997) 55
Cal.App.4th 1290, 1303 (Susan S.) [victim sued criminal
defendant’s lawyer for obtaining witness’s medical records by
subpoena; litigation privilege applied]; Foothill Federal Credit
Union v. Superior Court (2007) 155 Cal.App.4th 632, 635-638
[customers sued bank for producing customers’ records in
response to subpoena to bank; litigation privilege applied];
Nelson v. Tucker Ellis, LLP (2020) 48 Cal.App.5th 827, 845-846
[lawyer sued law firm employer for producing lawyer’s work
product in response to subpoena to law firm; litigation privilege
applied].) And to the extent Arrow is urging that defendants’
presubpoena settlement letter is an independent basis for
liability, that letter is also privileged because it is communication
between counsel aimed at resolving an ongoing lawsuit.
(Rothman v. Jackson (1996) 49 Cal.App.4th 1134, 1148; Aronson
v. Kinsella (1997) 58 Cal.App.4th 254, 270.)
Arrow responds with what boils down to two arguments.
First, Arrow argues that defendants’ letters do not fall
within the ambit of the litigation privilege because they
constitute an extortionist “shakedown” rather than relating to
litigation “contemplated in good faith and under serious
consideration.” (Action Apartment, supra, 41 Cal.4th at p. 1251.)
We reject this argument. The litigation privilege applies to any
covered communications, even if the communication was made
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with malice or intent to harm. (Hagberg v. California Federal
Bank (2004) 32 Cal.4th 350, 361, superseded on other grounds by
Civ. Code, § 47, subd. (b); A.F. Brown Electric Contractor, Inc. v.
Rhino Electric Supply, Inc. (2006) 137 Cal.App.4th 1118, 1126;
Susan S., supra, 55 Cal.App.4th at p. 1303.) Thus, Arrow’s
allegation that defendants acted with an extortionist motive and
acted with ill will because they subpoenaed Skanska without
providing contemporaneous notice to Arrow is irrelevant.2
(Accord, Malin v. Singer (2013) 217 Cal.App.4th 1283, 1301-1302
[allegedly extortionate demand letter; litigation privilege
applies].) Arrow ignores this precedent, instead citing the test for
determining whether the privilege reaches pre-litigation
communications, which turns on whether litigation is
“contemplated in good faith and under serious consideration.”
That test is irrelevant where, as here, the litigation was ongoing
for over a year before defendants sent the demand letter, served
the subpoena on Skanska, and communicated with Skanska’s
lawyer. We decline Arrow’s invitation to swap the governing
standard for an inapplicable one.
Second, Arrow argues that defendants cannot invoke the
litigation privilege because, at the time the demand letter,
subpoena, and communications with Skanska occurred, the law
firm was not registered with the State Bar of California as a law
2 To the extent Arrow suggested at oral argument that the
litigation privilege does not apply at all due to Hickambottom’s
failure to give contemporaneous notice to Arrow of the subpoena,
this argument is waived because it was not previously raised in
the briefing.
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corporation.3 (See Rules of State Bar, Title 3, Div. 2, Ch. 3, rule
3.150 et seq.) That is irrelevant. It is undisputed that
Hickambottom was licensed to practice law in California at all
times. And the law firm’s failure to comply with a special
registration requirement for professional corporations does not
deprive it of the ability to invoke the privilege. After all, the law
firm acted solely through Hickambottom, and the failure of the
law firm where he worked to comply with the State Bar’s
corporate registration rules does not make Hickambottom’s
communications any less privileged. (Cf. Gomes v. Roney (1979)
88 Cal.App.3d 274, 275 [attorney ineligibility not a basis for
granting relief]; Russell v. Dopp (1995) 36 Cal.App.4th 765, 778-
779 [attorney’s unlicensed status provides basis for relief only if
“the integrity of the judicial process was compromised by his
incompetency”].)
3 To support this contention, Arrow affixed to its opening
brief a letter from the State Bar stating that it had no records of
the law firm’s corporate registration. This is highly improper.
Arrow neglected to disclose to this court that the trial court had
declined to take judicial notice of this letter, and Arrow does not
challenge the trial court’s ruling on appeal. (Frittelli, Inc. v. 350
North Canon Drive, LP (2011) 202 Cal.App.4th 35, 41 [failure to
challenge trial court’s evidentiary rulings on summary judgment
obligates appellate court to honor those rulings].)
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DISPOSITION
The judgment is affirmed. Defendants are entitled to their
costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
______________________, J.
HOFFSTADT
We concur:
_________________________, P. J.
LUI
_________________________, J.
CHAVEZ
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