Silas v. Wegman CA2/7 ( 2023 )

Filed 7/13/23 Silas v. Wegman CA2/7
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
MARTINA A. SILAS, B321219
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No.
v. 21STCV28185)
BARRY R. WEGMAN,
Defendant and Appellant.
APPEAL from an order of the Superior Court of Los
Angeles County, Maurice Leiter, Judge. Affirmed.
Debra J. Wegman for Defendant and Appellant.
Martina A. Silas, in pro. per.; June E. Poyourow for
Plaintiff and Respondent.
INTRODUCTION
Attorney Martina A. Silas filed this action against attorney
Barry R. Wegman and other attorneys to recover money Silas
alleges a third party, attorney James Ellis Arden, wrongfully
transferred to them instead of her. Wegman filed a special
motion to strike the complaint under Code of Civil Procedure
section 425.16 (section 425.16), arguing Silas’s claims against
him arose from activity protected under the statute because the
money he received from Arden was payment for legal services
Wegman provided in connection with litigation in Arden’s
bankruptcy case. Rejecting that argument, the trial court denied
Wegman’s motion, and he appealed. We, too, reject that
argument, and affirm.
FACTUAL AND PROCEDURAL BACKGROUND
A. Silas Files This Action
The parties involved in this dispute have been litigating
through the state and federal courts for decades. In January
2008 Silas filed a malicious prosecution action against Arden in
state court, based on an underlying legal malpractice action
Arden litigated against Silas beginning in 2003. In June 2011
Silas prevailed in her malicious prosecution action after a jury
trial and obtained a judgment against Arden for $300,756, plus
costs and interest.1 In December 2011 the trial court in that case
1 As the Court of Appeal explained in affirming that
judgment: “Silas represented [a client] in a personal injury
action resulting in a jury award that was later overturned on the
2
assigned to Silas various of Arden’s rights to payment, including
the right to payment for services from any of Arden’s clients and
the right to collect money from any third party. The order also
restrained Arden from encumbering, assigning, spending, or
disposing of any assets subject to the order.
Silas had difficulty collecting on her judgment against
Arden. According to Silas, Arden “‘repeatedly thwarted [her]
efforts to enforce the assignment order and collect on the
judgment.’” Consequently, Silas looked to third parties.
In July 2021 Silas filed this action against Wegman and
two defendants, Fox Law Corporation, Inc. and attorney Steven
Robert Fox (collectively, Fox), who are not parties to this appeal.
The operative, first amended complaint asserted causes of action
against the defendants for fraudulent transfer, fraud and
concealment, conversion, money had and received, and an
accounting.2 Silas sought to recover at least $87,252 from Fox
grounds that workers’ compensation was the exclusive remedy.
[The client] filed a malpractice action against Silas, asserting she
failed to assert a meritorious defense to workers’ compensation
exclusivity, and [the client] was represented by Arden in that
action.” (Silas v. Arden (2012) 213 Cal.App.4th 75, 79; see
Gunnell v. Metrocolor Laboratories, Inc. (2001) 92 Cal.App.4th
710, 714 [affirming the order granting judgment notwithstanding
the verdict because “the exclusive remedy provision of the
Workers’ Compensation Act barred” the action by Silas’s client].)
Silas filed the personal injury action in 1995. (Silas, at p. 79.)
2 An accounting is not an independent cause of action, but a
type of remedy that depends on the validity of underlying claims.
(Batt v. City and County of San Francisco (2007) 155 Cal.App.4th
65, 82, disapproved on another ground in McWilliams v. City of
3
and $11,440 from Wegman, claiming Arden wrongfully
transferred those sums to them instead of her. Silas alleges Fox
and Wegman “conspired with Arden, and with each other, to
fraudulently transfer, convert, and deprive Silas of funds” the
defendants knew Silas was entitled to.
Silas alleged in her complaint in this action that in
June 2013 Arden filed for bankruptcy under Chapter 7 of the
United States Bankruptcy Code, which automatically stayed
postjudgment collection proceedings in her state court action
against him. (See 11 U.S.C. § 362(a)(2).) Silas alleged that
Arden’s bankruptcy petition indicated Fox represented him in the
proceeding, that Arden had earned at least $109,990 subject to
the December 2011 assignment and restraining orders, and that
he had paid only $888.29 on his judgment debt to Silas. Silas
alleged that she filed an adversary proceeding in the bankruptcy
court to preclude discharge of Arden’s judgment debt and that in
April 2014 the court granted her motion for summary judgment
in that proceeding. In July 2015, however, the Bankruptcy
Appellate Panel for the Ninth Circuit (BAP) reversed. On
remand, the bankruptcy court held a trial and, in
December 2018, ruled Arden’s judgment debt was not
dischargeable. Arden appealed that ruling to the United States
Court of Appeals for the Ninth Circuit, which affirmed.
Meanwhile, on determining in December 2018 Arden’s debt
based on Silas’s judgment was not dischargeable, the bankruptcy
court lifted the automatic stay of the collection proceedings in
Silas’s state court action. Thus freed from the bankruptcy stay,
Silas in August 2019 subpoenaed bank records from Arden to
Long Beach (2013) 56 Cal.4th 613, 626; Duggal v. G.E. Capital
Communications Services, Inc. (2000) 81 Cal.App.4th 81, 95.)
4
conduct a judgment debtor examination. From these she learned
that “in 2018-2019” Arden issued checks to Wegman totaling at
least $11,440. Silas filed a motion in the collection proceedings in
her state court action “to set aside” these payments to Wegman
on the ground they were “fraudulent transfers.” Wegman filed an
opposition, arguing, among other things, Silas “was required to
file a separate action to recover the funds.” Wegman also
submitted a declaration in which he stated the payments at issue
were for legal work he performed in Arden’s bankruptcy case,
specifically, on the appeal to the BAP from the bankruptcy court’s
order granting Silas’s motion for summary judgment in the
adversary proceeding. In January 2020, without reaching the
merits of Silas’s claim the payments were fraudulent transfers,
the trial court denied Silas’s motion without prejudice to her
right to seek relief by a separate action.
Still trying after 10 years to collect $11,000 of her $300,000
(plus, plus) judgment against Arden, Silas filed this action
(“without necessarily agreeing that a separate action is
required”). She alleged Wegman’s statement (in his declaration
in opposition to her motion to set aside fraudulent transfers) that
he worked on Arden’s appeal to the BAP in the adversary
proceeding was false. According to Silas, that appeal “was fully
concluded by July of 2015,” and both Wegman and Arden had
stated in declarations “they did not meet until December 2018.”
Moreover, Silas averred,3 Wegman never appeared as an attorney
3 “To aver means ‘to assert or affirm confidently,’ or ‘to
declare in a positive or even peremptory way.’ To allege is ‘to
assert without proof,’ hence, less confidently. (Block, Language
Tips (1998) 70 N.Y.St. B.J. 58; see Garner, Dictionary of Modern
5
of record in Arden’s bankruptcy proceeding, nor did he ever
disclose receiving compensation from Arden in that matter, as
the Bankruptcy Code requires of an attorney representing a
debtor. (See 11 U.S.C. § 329(a).) Silas alleged “Wegman did not
actually perform any work for Arden” in the bankruptcy
proceeding. So, she said, the money Arden paid Wegman was a
fraudulent transfer of money Arden owed her.
B. Wegman Files a Special Motion To Strike, Which the
Trial Court Denies
In February 2022 Wegman filed a special motion to strike
Silas’s complaint. He argued Silas’s claims arose from protected
activity under section 425.16 because the allegedly fraudulent
transfers from Arden to him were payments for work he
performed on Arden’s appeal to the Ninth Circuit from the
bankruptcy court’s December 2018 ruling in Silas’s adversary
proceeding (not, as he allegedly stated previously, Arden’s earlier
appeal to the BAP). Wegman maintained Arden paid him a total
of $11,440 to “research issues and make recommendations”
relating to that appeal and “to draft an appellate brief for
Mr. Fox’s signature, who was still counsel of record” in Arden’s
bankruptcy case. Wegman supported these assertions with a
declaration, copies of a retainer agreement between him and
Arden (dated December 24, 2018 and describing the work to be
done on Arden’s appeal to the Ninth Circuit), invoices from
Wegman to Arden totaling $11,440, canceled checks from Arden
Legal Usage (2d ed. 1995) p. 93 [“aver” refers to an “affirmation[ ]
of fact, usually with no implication that an oath has been
taken”].)
6
to Wegman for the amounts invoiced, and a copy of the appellate
brief Wegman claimed he drafted “behind the scenes.”
The trial court denied Wegman’s special motion to strike,
ruling Silas’s claims did not arise from protected activity. The
court acknowledged that “participation in legal proceedings is
protected activity,” but concluded that “the gravamen of” Silas’s
claims “is not that Wegman provided legal services for Arden.”
Instead, the court determined, the “transfer of funds allegedly
owned by [Silas] gives rise to the claim liability.” Wegman timely
appealed.
DISCUSSION
A. Applicable Law and Standard of Review
Section 425.16, subdivision (b)(1), provides that a “cause of
action against a person arising from any act of that person in
furtherance of the person’s right of petition or free speech under
the United States Constitution or the California Constitution in
connection with a public issue shall be subject to a special motion
to strike, unless the court determines that the plaintiff has
established that there is a probability that the plaintiff will
prevail on the claim.” Section 425.16, subdivision (e), provides
that an “‘act in furtherance of a person’s right of petition or free
speech under the United States or California Constitution in
connection with a public issue’ includes: (1) any written or oral
statement or writing made before a legislative, executive, or
judicial proceeding, or any other official proceeding authorized by
law, (2) any written or oral statement or writing made in
connection with an issue under consideration or review by a
legislative, executive, or judicial body, or any other official
7
proceeding authorized by law, (3) any written or oral statement
or writing made in a place open to the public or a public forum in
connection with an issue of public interest, or (4) any other
conduct in furtherance of the exercise of the constitutional right
of petition or the constitutional right of free speech in connection
with a public issue or an issue of public interest.” The
Legislature has instructed that the statute “‘be construed
broadly.’” (Rand Resources, LLC v. City of Carson (2019)
6 Cal.5th 610, 619 (Rand).)
Courts evaluate special motions to strike under section
425.16 “through a two-step process. Initially, the moving
defendant bears the burden of establishing that the challenged
allegations or claims ‘aris[e] from’ protected activity in which the
defendant has engaged. [Citations.] If the defendant carries its
burden, the plaintiff must then demonstrate its claims have at
least ‘minimal merit.’” (Park v. Board of Trustees of California
State University (2017) 2 Cal.5th 1057, 1061 (Park); accord,
Serova v. Sony Music Entertainment (2022) 13 Cal.5th 859, 871.)
We review de novo a trial court’s order granting or denying
a special motion to strike under section 425.16. (Monster Energy
Co. v. Schechter (2019) 7 Cal.5th 781, 788.) “We exercise
independent judgment in determining whether, based on our own
review of the record, the challenged claims arise from protected
activity. [Citations.] In addition to the pleadings, we may
8
consider affidavits concerning the facts upon which liability is
based.” (Park, supra, 2 Cal.5th at p. 1067.)
B. The Trial Court Did Not Err in Denying Wegman’s
Special Motion To Strike
On the first step of the analysis, the defendant has the
burden “to identify what acts each challenged claim rests on and
to show how those acts are protected under a statutorily defined
category of protected activity.” (Bonni v. St. Joseph Health
System (2021) 11 Cal.5th 995, 1009.) Wegman argues “all Silas’
claims against him” rest on “Arden’s payment[s]” to him, which
Wegman argues is protected activity because the payments were
for litigation services he provided in Arden’s bankruptcy. In
considering whether Arden’s payments were protected activity,
our focus is not Arden’s conduct, but Wegman’s, i.e., his receipt of
the payments. (See Manlin v. Milner (2022) 82 Cal.App.5th 1004,
1019 [the “‘“requirement is to demonstrate that the defendant’s
conduct by which plaintiff claims to have been injured falls within
one of the four categories described in subdivision (e)”’”].) And
Wegman has not shown his receiving the payments was protected
activity.
As an initial matter, Wegman does not specify which of the
four categories in section 425.16, subdivision (e), he contends
applies here. (See Rand, supra, 6 Cal.5th at p. 620 [to satisfy the
first step of the analysis, defendant must demonstrate “the
‘conduct by which plaintiff claims to have been injured falls
within one of the four categories described in subdivision (e)’”].)
Instead, he appears generally to suppose the statute protects all
litigation-related activity by an attorney. The law does not
support that supposition.
9
Section 425.16 does indeed protect “qualifying acts
committed by attorneys in representing clients in litigation.”
(Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056, italics added
(Rusheen); see Optional Capital, Inc. v. Akin Gump Strauss,
Hauer & Feld LLP (2017) 18 Cal.App.5th 95, 113 [“‘“all
communicative acts performed by attorneys as part of their
representation of a client in a judicial proceeding or other
petitioning context are per se protected,”’” italics omitted].) And
courts applying the statute “have adopted ‘a fairly expansive view
of what constitutes litigation-related activities.’” (Optional
Capital, at p. 113; see, e.g., Trilogy Plumbing, Inc. v. Navigators
Speciality Ins. Co. (2020) 50 Cal.App.5th 920, 931
[communications during settlement negotiations “‘“are regarded
as having been made in connection with the underlying lawsuit
for purposes of section 425.16, subdivision (e)(2)”’”].) Still, “‘[n]ot
all attorney conduct in connection with litigation, or in the course
of representing clients, is protected by section 425.16.’” (Trilogy
Plumbing, at p. 933; accord, Miller v. Zurich American Ins. Co.
(2019) 41 Cal.App.5th 247, 257; see Trilogy Plumbing, at p. 924
[“While the alleged acts were generally connected to litigation,
they did not include any written or oral statement or writing
made in connection with an issue under consideration or review
by a judicial body and therefore do not constitute protected
activity under section 425.16.”]; Optional Capital, at p. 114
[“‘‘conduct is not automatically protected merely because it is
related to pending litigation . . . ,’’” italics omitted]; see also
Rand, supra, 6 Cal.5th at p. 620 [“the terms of subdivision (e)(2)
make clear that ‘it is insufficient to assert that the acts alleged
were “in connection with” an official proceeding’”].)
10
Wegman therefore had to demonstrate his receiving
payment from Arden for litigation services was an act falling
within one of the four categories described by section 425.16,
subdivision (e). Because Wegman makes no mention of any
“public issue” or “issue of public interest” connected with his
conduct, subdivision (e)(4) does not apply. (See § 425.16,
subd. (e)(4) [protecting “any . . . conduct in furtherance of the
exercise of the constitutional right of petition . . . in connection
with a public issue or an issue of public interest”].) Activity
protected by the remaining subdivisions is limited to making, in
various circumstances, a “written or oral statement or writing.”
(§ 425.16, subd. (e)(1)-(3).) Wegman, however, has not cited any
statement or writing by him as the basis for Silas’s claims.4
Though it’s unclear, Wegman appears to suggest receiving
payment for litigation services is, by itself, a statement or writing
that qualifies as protected activity under section 425.16,
subdivision (e)(2). (See § 425.16, subd. (e)(2) [protecting “any
written or oral statement or writing made in connection with an
issue under consideration or review by a . . . judicial body”].) For
example, he cites the Supreme Court’s statement in Rusheen,
supra, 37 Cal.4th 1048 that protected activity under section
425.16 includes “communicative conduct such as the filing,
funding, and prosecution of a civil action.” (Rusheen, at p. 1056.)
But this statement does not help Wegman. For one thing, it does
not identify “funding” in a disjunctive list of acts qualifying as
statements or writings under the statute, but as one feature of a
particular kind of conduct the Supreme Court was concerned
4 Wegman denies arguing Silas’s claims rest on his invoices
to Arden.
11
with, namely, “communicative” conduct that might also qualify
for protection under the litigation privilege codified in Civil Code
section 47.5 (See Rusheen, at p. 1052.) For another thing,
Wegman did not “fund” anything; he received funds. Even
assuming funding litigation, by itself, is protected activity, that
does not establish the converse, i.e., that receiving funding for
litigation is also protected.
Wegman also cites Sheley v. Harrop (2017) 9 Cal.App.5th
1147, disapproved in Park, supra, 2 Cal.5th at p. 1071, where the
court, asserting that “‘litigation funding decisions’ . . . constitute
protected petitioning activity,” agreed with the appellants in that
case that, “insofar as a cause of action is based on the payment of
funds to maintain a lawsuit, this constitutes protected activity”
under section 425.16. (Sheley, at p. 1166.) Sheley, however, does
not aid Wegman. First, Wegman does not contend Silas’s claims
rest on any decision or payment he made to fund Arden’s
litigation. Second, again, even assuming the court in Sheley was
correct that “payment of funds to maintain a lawsuit” is protected
activity,6 that does not establish that receiving such funds is also
5 In Rusheen, supra, 37 Cal.4th 1048 the Supreme Court
considered the scope of the litigation privilege to determine
whether it precluded the plaintiff from demonstrating a
probability of prevailing on his abuse of process claim in step two
of the section 425.16 analysis. (Rusheen, at pp. 1052, 1055; see
id. at p. 1058 [“a ‘threshold issue in determining the applicability’
of the [litigation] privilege is whether the defendant’s conduct
was communicative or noncommunicative”].)
6 We question whether Sheley is correct on this point. The
sole authority the court cited for its blanket assertion that
“‘litigation funding decisions’” are protected activity was
12
protected. And third, because the appellants in Sheley argued
the conduct in question—“use of corporate assets to fund [a]
lawsuit”—was protected under section 425.16, subdivision (e)(4)
(Sheley, at p. 1160), the case can hardly be read to stand for the
proposition that receiving payment for litigation services
constitutes a protectable statement or writing under the
remaining subdivisions of the statute.
Because Wegman did not carry his burden on step one, we
do not consider whether Silas’s claims lack minimal merit in
connection with step two. Thus, we do not address Wegman’s
Tuszynska v. Cunningham (2011) 199 Cal.App.4th 257. In that
discrimination case, the attorney-plaintiff claimed the defendants
denied her case referrals because she was a woman. (Id. at
p. 269.) The court concluded, for purposes of section 425.16, her
claims were necessarily based on “defendants’ attorney selection
and litigation funding decisions themselves and, concomitantly,
communications defendants made in connection with making
those decisions.” (Tuszynska, at p. 269.) But in Park, supra,
2 Cal.5th 1057, decided shortly after Sheley, the Supreme Court
rejected the notion that, for purposes of section 425.16, “a claim
arising from a decision inevitably arises from the
communications leading to that decision.” (Park, at p. 1071.) In
doing so, the Supreme Court disapproved Tuszynska to the extent
it presupposed courts deciding motions under section 425.16
“cannot separate an entity’s decisions from the communications
that give rise to them, or that they give rise to.” (Park, at
p. 1071; see Gaynor v. Bulen (2018) 19 Cal.App.5th 864, 886
[rejecting the appellant’s reliance on Tuszynska “for the
proposition that litigation funding ‘“decisions”’ are protected
communications under section 425.16, subdivision (e)(2),” because
“the Park court disapproved of Tuszynska to the extent it held the
plaintiff’s claims arose from communications rather than from
the alleged discriminatory actions”].)
13
argument that Silas’s supposed failure to comply with Civil Code
section 1714.10 [setting forth procedural requirements for certain
causes of action against an attorney that allege an attorney-client
conspiracy] “warrants dismissal of her claims.”7 (See ibid.)
7 It is not clear whether, in making this argument, Wegman
also (or instead) seeks review of a separate, adverse ruling by the
trial court relating to Civil Code section 1714.10. If so, he has
failed to satisfy the basic requirement of identifying such a
ruling. (See County of Orange v. Smith (2005) 132 Cal.App.4th
1434, 1443 [“‘[i]t is the appellant’s burden to demonstrate the
existence of reversible error,’” and “[a]s part of that burden, the
appellant must identify each order that he asserts is erroneous,
cite to the particular portion of the record wherein that ruling is
contained, and identify what particular legal authorities show
error with respect to each challenged order”]; see also see Coral
Construction, Inc. v. City and County of San Francisco (2010)
50 Cal.4th 315, 336 [“‘[i]t is axiomatic that we review the trial
court’s rulings and not its reasoning’”].)
14
DISPOSITION
The order denying Wegman’s special motion to strike is
affirmed. Silas’s motion for sanctions is denied. Silas is to
recover her costs on appeal.
SEGAL, J.
We concur:
PERLUSS, P. J.
FEUER, J.
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