The defendant, Goldman, had represented the plaintiff, Oasis West Realty, in 2004 in an attempt to obtain approval for a redevelopment project from the Beverly Hills City Council. After two years, Goldman terminated this relationship, and two years after that, Goldman was involved in a movement that attempted to overturn the same redevelopment project. Oasis brought a complaint for breach of fiduciary duty, professional negligence and breach of contract. The defendant attempted to strike the complaint on the basis of a California rule designed to protect free speech, but this motion was denied. The Court of Appeal reversed, finding Goldman’s activity was protected and Oasis did not show a probability of prevailing on the merits. The Supreme Court of California reversed, finding Oasis “stated and substantiated the sufficiency of its legal claims” against Goldman.
According to the complaint, in 2008 after the City Council approved the project, “paving the way for final approval,” a concerned citizen group was formed with the intent of having the approval be subject to a referendum. At this point in time, the complaint alleged Goldman supported this group, solicited signatures for a petition, and distributed a letter to residents requesting them to sign the petition. Goldman agrees he did solicit signatures, but asserted that he did not disclose his prior relationship, nor disclose any confidential information.
In their discussion of the case, the court noted that Section 425.16(b)(1) if the California Code of Civil Procedure states that a cause of action against a person’s right of petition or free speech is subject to a special motion to strike unless the plaintiff has shown a probability of success on the claim. This provision, known as anti-SLAPP, has two steps: the court must determine if the claim “’arises from’ a protective activity,” and if that is shown, whether the plaintiff has shown a probability of success on the claim. Using its inherent authority over the law, the court determined in this action that it would be appropriate to consider the second prong, as they “readily found” Oasis has shown a probability of success on the claim.
To satisfy the second prong of the analysis, the plaintiff needs to show legal sufficiency as well as support “by a sufficient prima facie showing of facts to sustain a favorable judgment.” Given this is a preliminary matter, the court accepts the evidence as true and favorable to the plaintiff, and once it has been shown that one aspect of the case has a probability of success, the motion to strike will fail on all claims.
Since only one aspect of the claim needs be valid to avoid the motion to strike, the court focused on only one claim in the complaint, that Goldman breached his fiduciary duty. Goldman, as Oasis’ counsel, was obligated to obey the duty of loyal and confidentiality, and these duties did not terminate upon completion of the relationship. When the relationship is terminated, the fiduciary is forbidden to do anything that may injure the client and may not use the information obtained by virtue of this relationship. Looking to the complaint and the alleged conduct of Goldman, the court found it was reasonable to infer that Goldman opposed the project and was “fueled by the confidential information he gleaned” during the relationship. As this is a preliminary matter, this inference meets the low standard of proof and permits the litigation to continue. Additionally, to round out the breach of fiduciary duty claim, the court also stated they found that Oasis had shown, prima facie, actual injury and entitlement to damages. The court made this finding as Oasis had to expend funds to request that Goldman cease activities detrimental to Oasis and the project. Since the court found that Oasis’ claim for breach of fiduciary duty survived Section 425.16 analysis, the remaining claims of professional negligence and breach of contract survived as well.
Oasis West Realty, LLC v. Goldman, 2011 WL 1833208 (Ca. 5/16/2011)
The opinion may be accessed at: http://www.courtinfo.ca.gov/opinions/documents/S181781.PDF
