Counsel Concerns

Malicious Prosecution/Anti-SLAPP Motion

The Court of Appeal of California, Second Appellate District, Division Seven, upheld the denial of an attorney's motion to strike a malicious prosecution action filed against him by a company claiming, like the attorney's client, to own the right to sue entertainer Michael Jackson for failure to appear at a concert for the “Jackson Family Honors” TV show. Smith-Hemion Productions Inc. v. Segura, B171299. Jacob Segura had served as counsel to Asset Recovery Co. (ARC), which claimed it purchased at a New Jersey sheriff's sale the right of Joseph Iny to sue entertainer Michael Jackson over Jackson's failure to appear at an Atlantic City concert for “Jackson Family Honors.” (Iny had loaned money to Jackson Communications Inc.) Segura filed suit on behalf of ARC against Jackson and against Smith-Hemion Productions, the show's producer, which also claimed to own the right to sue Jackson. The Los Angeles Superior Court sustained Smith-Hemion's demurrer to ARC's complaint. The Court of Appeal then ruled that ARC lacked standing to sue Smith-Hemion because a New Jersey court had found that Iny wasn't a secured creditor of JCI. In any case, the court of appeal noted that ARC's suit was time-barred because it had been filed after California's 4-year statute of limitations for breach of Jackson's concert-appearance contract had expired.

When Smith-Hemion filed a malicious prosecution action, Segura filed a motion to strike under the anti-SLAPP statute, Calif. Code of Civ. Proc. Sec. 425.16, meant to protect against lawsuits arising from a person's right of petition or free speech. The trial court denied Segura's motion. Affirming in an unpublished opinion, the court of appeal emphasized: “Both the trial court and the Court of Appeal concluded ARC didn't possess superior rights arising out of its status as a secured creditor of JCI because it wasn't a secured creditor of JCI. This constituted a finding ARC's claim lacked merit. … Both below and on appeal, Smith-Hemion referenced the multitude of prior lawsuits ARC and its predecessors in interest brought in state and federal courts across the country concerning the Jackson Family Honors show in which the courts ruled against them based on the statute of limitations, the fact they were not secured creditors of JCI and other grounds. … With no possibility of prevailing on the claims against Michael Jackson, there was no legal basis for ARC to assert (and to continue to prosecute) the claims against Smith-Hemion. Thus, we conclude Smith-Hemion has demonstrated a probability of prevailing on the probable cause element of its malicious prosecution cause of action. … If Segura didn't realize the claims were time-barred at the time he initiated the underlying action, which is very hard to believe, he certainly knew it 11 days later when a federal district court in California [in a separate suit against Smith-Hemion] found all of ARC's claims were barred by the applicable statutes of limitations. … The inference which springs from these facts is Segura initiated and continued to prosecute the underlying action for an improper purpose not related to the legal tenability of the claims (ie, to extract a settlement from Smith-Hemion). Accordingly, we find Smith-Hemion made a sufficient prima facie showing that Segura acted with the subjective intent to deliberately misuse the legal system for personal gain at Smith-Hemion's expense.”

Malicious Prosecution/Anti-SLAPP Motion

The Court of Appeal of California, Second Appellate District, Division Seven, upheld the denial of an attorney's motion to strike a malicious prosecution action filed against him by a company claiming, like the attorney's client, to own the right to sue entertainer Michael Jackson for failure to appear at a concert for the “Jackson Family Honors” TV show. Smith-Hemion Productions Inc. v. Segura, B171299. Jacob Segura had served as counsel to Asset Recovery Co. (ARC), which claimed it purchased at a New Jersey sheriff's sale the right of Joseph Iny to sue entertainer Michael Jackson over Jackson's failure to appear at an Atlantic City concert for “Jackson Family Honors.” (Iny had loaned money to Jackson Communications Inc.) Segura filed suit on behalf of ARC against Jackson and against Smith-Hemion Productions, the show's producer, which also claimed to own the right to sue Jackson. The Los Angeles Superior Court sustained Smith-Hemion's demurrer to ARC's complaint. The Court of Appeal then ruled that ARC lacked standing to sue Smith-Hemion because a New Jersey court had found that Iny wasn't a secured creditor of JCI. In any case, the court of appeal noted that ARC's suit was time-barred because it had been filed after California's 4-year statute of limitations for breach of Jackson's concert-appearance contract had expired.

When Smith-Hemion filed a malicious prosecution action, Segura filed a motion to strike under the anti-SLAPP statute, Calif. Code of Civ. Proc. Sec. 425.16, meant to protect against lawsuits arising from a person's right of petition or free speech. The trial court denied Segura's motion. Affirming in an unpublished opinion, the court of appeal emphasized: “Both the trial court and the Court of Appeal concluded ARC didn't possess superior rights arising out of its status as a secured creditor of JCI because it wasn't a secured creditor of JCI. This constituted a finding ARC's claim lacked merit. … Both below and on appeal, Smith-Hemion referenced the multitude of prior lawsuits ARC and its predecessors in interest brought in state and federal courts across the country concerning the Jackson Family Honors show in which the courts ruled against them based on the statute of limitations, the fact they were not secured creditors of JCI and other grounds. … With no possibility of prevailing on the claims against Michael Jackson, there was no legal basis for ARC to assert (and to continue to prosecute) the claims against Smith-Hemion. Thus, we conclude Smith-Hemion has demonstrated a probability of prevailing on the probable cause element of its malicious prosecution cause of action. … If Segura didn't realize the claims were time-barred at the time he initiated the underlying action, which is very hard to believe, he certainly knew it 11 days later when a federal district court in California [in a separate suit against Smith-Hemion] found all of ARC's claims were barred by the applicable statutes of limitations. … The inference which springs from these facts is Segura initiated and continued to prosecute the underlying action for an improper purpose not related to the legal tenability of the claims (ie, to extract a settlement from Smith-Hemion). Accordingly, we find Smith-Hemion made a sufficient prima facie showing that Segura acted with the subjective intent to deliberately misuse the legal system for personal gain at Smith-Hemion's expense.”