Afrand v. Fugazzi

• Court: District Court, D. Nevada
• Decided: September 1, 2025
• Docket: 2:25-cv-00285
• Status: Unknown

Opinion

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 IN RE: RICHARD FARIBORZ AFRAND Case No.: 2:25-cv-00285-APG

4 RICHARD AFRAND, Order Reversing in Part Bankruptcy Court’s Dismissal Order 5 Appellant [ECF No. 10] 6 v.

7 ALEX FUGAZZI, ESQ., et al.,

8 Appellees

9 Richard Afrand appeals the Nevada bankruptcy court’s order dismissing Afrand’s claims 10 with prejudice. In adversary proceedings before the bankruptcy court, Afrand brought third- 11 party claims against the law firm Snell and Wilmer LLP and one of its attorneys, Alex Fugazzi 12 (collectively, Fugazzi), alleging that they conspired to deprive Afrand of his legal rights by 13 stipulating to dismiss his pending state court appeals. Afrand also sued the court-appointed 14 chapter 7 trustee, Brian Shapiro, for breach of duty of neutrality, unauthorized legal actions, 15 defamation, and unjust enrichment. The bankruptcy court granted dismissed Afrand’s claims 16 against the third-party defendants with prejudice and granted Shapiro’s special motion to dismiss 17 Afrand’s defamation and unjust enrichment claims under Nevada’s anti-SLAPP1 statute. 18 Afrand argues that the bankruptcy court erred by dismissing without leave to amend, 19 improperly applying legal doctrines, violating his due process rights, and improperly granting the 20 special motion to dismiss for a statement that did not involve a public concern. The appellees 21 respond that Afrand waived his appeal because the opening brief is excessively sparse, the 22 bankruptcy court properly applied the law, and Afrand was afforded due process. 23

1 Strategic litigation against public participation. Nev. Rev. Stat. § 41.635 et seq. 1 The parties are familiar with the facts and procedural history, so I repeat them here only 2 as necessary to resolve the motion. I affirm the bankruptcy court in part. I affirm the dismissal 3 with prejudice of Afrand’s claim for conspiracy against Fugazzi and Snell and Wilmer because it 4 is barred by the litigation privilege. I also affirm dismissal with prejudice of Afrand’s claims

5 against Shapiro for breach of duty of neutrality and unauthorized legal actions because they are 6 barred by the litigation privilege and Shapiro has quasi-judicial immunity. And I affirm 7 dismissal with prejudice of Afrand’s unjust enrichment claim because he cannot allege a tangible 8 benefit he conferred on Shapiro based on an online review. I reverse and remand the bankruptcy 9 court’s dismissal with prejudice of Afrand’s defamation claim because he could conceivably 10 amend and plead additional facts to assert a plausible defamation action. And I reverse the 11 bankruptcy court’s grant of Shapiro’s special motion to dismiss because Shapiro’s underlying 12 statements were not on matters of public concern. 13 I. STANDARD OF REVIEW 14 I review de novo dismissal for failure to state a claim under Federal Rule of Civil

15 Procedure 12(b)(6). Scheibe v. ProSupps USA, LLC, 141 F.4th 1094, 1098 (9th Cir. 2025). I also 16 review de novo the application of the litigation privilege at the dismissal stage and immunity for 17 a bankruptcy trustee. In re Cedar Funding, Inc., 419 B.R. 807, 816 (B.A.P. 9th Cir. 2009). And I 18 review de novo the decision to grant or deny an anti-SLAPP special motion to dismiss. Williams 19 v. Lazer, 495 P.3d 93, 96-97 (Nev. 2021) (en banc). 20 II. ANALYSIS 21 In considering a motion to dismiss, I take all well-pleaded allegations of material fact as 22 true and construe the allegations in a light most favorable to the non-moving party. Kwan v. 23 SanMedica Int’l, 854 F.3d 1088, 1096 (9th Cir. 2017). However, I do not “assume the truth of 1 legal conclusions merely because they are cast in the form of factual allegations.” Navajo Nation 2 v. Dep’t of the Interior, 876 F.3d 1144, 1163 (9th Cir. 2017). A plaintiff must make sufficient 3 factual allegations to establish a plausible entitlement to relief. Bell Atl. Corp. v. Twombly, 550 4 U.S. 544, 556 (2007). Such allegations must amount to “more than labels and conclusions, [or] a

5 formulaic recitation of the elements of a cause of action.” Id. at 555. A claim is facially 6 plausible when the complaint alleges facts that allow the court to draw a reasonable inference 7 that the defendant is liable for the alleged misconduct. Ashcroft v. Iqbal, 556 U.S. 662, 678 8 (2009). 9 A. The bankruptcy court properly dismissed Afrand’s conspiracy claim with 10 prejudice because it is barred by the litigation privilege.

11 Afrand argues that the bankruptcy court erred in applying the litigation privilege because 12 he asserts that the third-party defendants’ conduct was fraudulent or malicious. Afrand also 13 argues that the bankruptcy court misapplied issue preclusion and the collateral attack doctrine 14 because the issue of fraud and collusion was not previously litigated. Fugazzi responds that the 15 bankruptcy court correctly applied all three doctrines, and each was sufficient to dismiss 16 Afrand’s claim with prejudice. 17 The Supreme Court of Nevada has adopted “the long-standing common law rule that 18 communications uttered or published in the course of judicial proceedings are absolutely 19 privileged, rendering those who made the communications immune from civil liability.” 20 Greenberg Traurig v. Frias Holding Co., 331 P.3d 901, 903 (Nev. 2014) (en banc) (quotation 21 omitted). The privilege protects both “an attorney or a nonattorney” so long as the 22 communication at issue is “related to ongoing litigation or future litigation contemplated in good 23 faith.” Williams v. Lazer, 495 P.3d 93, 100 (Nev. 2021) (en banc) (quotation omitted). The 1 privilege’s scope is “quite broad,” and I should apply it “liberally.” Fink v. Oshins, 49 P.3d 640, 2 644 (Nev. 2002). Consequently, when determining whether the privilege applies, I resolve any 3 doubt in favor of the privilege’s application. Id. 4 Afrand’s main argument is that the litigation privilege “does not cover fraudulent or

5 malicious conduct” and that Fugazzi committed “collusion, fraudulent dismissal of appeals, and 6 misrepresentations.” ECF No. 10 at 3 (emphasis omitted). But the Supreme Court of Nevada has 7 made clear that the litigation privilege applies even to knowingly false and malicious 8 communications. See Greenberg Traurig, 331 P.3d at 903. One of the only limitations to the 9 privilege is when applying it “would not further the privilege’s purpose of ensuring that an 10 attorney can zealously defend his or her client during litigation,” such as in a client’s claim 11 against his attorney for malpractice. Id. at 903-04. Fugazzi was representing his client, Nevada 12 Property 1, and Shapiro represented the bankruptcy estate. They both entered into the stipulated 13 settlement as part of their client representation, so these actions fall under the litigation privilege 14 and cannot form the basis of Afrand’s conspiracy claim.

15 Afrand also asserts that the bankruptcy court erred by dismissing his claims with 16 prejudice. “A district court should not dismiss a pro se complaint without leave to amend unless 17 it is absolutely clear that the deficiencies of the complaint could not be cured by amendment.” 18 Akhtar v. Mesa, 698 F.3d 1202, 1212 (9th Cir. 2012) (quotation omitted). Additionally, courts 19 should freely give a party leave to amend his complaint when justice so requires. Fed. R. Civ. P. 20 15(a)(2). But because Afrand’s conspiracy claim is predicated on conduct that is protected by 21 the absolute litigation privilege, it is clear that amendment would be futile.2 See Leadsinger, Inc. 22

2 Because the litigation privilege is a sufficient ground to affirm the bankruptcy court on this 23 claim, I do not reach Afrand’s issue preclusion and collateral attack arguments. However, it appears that the bankruptcy court properly applied these doctrines as well. 1 v. BMG Music Pub., 512 F.3d 522, 532 (9th Cir. 2008) (stating that denial of leave to amend 2 where amendment would be futile is proper). I therefore affirm dismissal of Afrand’s conspiracy 3 claim with prejudice. 4 B. The bankruptcy properly dismissed Afrand’s breach of duty of neutrality and unauthorized legal actions claims with prejudice because of the litigation 5 privilege.

6 Afrand raises the same arguments to support reversing the dismissal of his breach of duty 7 of neutrality and unauthorized legal actions claims against Shapiro as he did for his conspiracy 8 claim against Fugazzi. He also argues that Shapiro’s actions went beyond Shapiro’s limited 9 judicial function to receive judicial immunity. Shapiro responds that breach of duty of neutrality 10 and unauthorized legal actions are not recognized causes of action, and to the extent they assert 11 the same claim as Afrand’s conspiracy claim, Shapiro joins Fugazzi’s motion. Shapiro also 12 asserts that he is entitled to quasi-judicial immunity in his capacity as bankruptcy trustee. 13 Reading Afrand’s claims broadly, he alleged that Shapiro “acted with bias against 14 [Afrand] by conspiring to close appeals with prejudice” and that “Shapiro, along with Robert 15 Atkinson and Alex Fugazzi” filed the stipulation that dismissed Afrand’s pending appeals. ECF 16 No. 13-7 at 4. These allegations appear to be the same as those underlying Afrand’s conspiracy 17 claim against Fugazzi. See id. at 6. For the same reasons as described above, Shapiro stipulating 18 to dismiss the claims is protected by the litigation privilege. I therefore affirm dismissal of 19 Afrand’s breach of duty of neutrality and unauthorized legal actions claims with prejudice. 20 C. The bankruptcy court did not err in dismissing Afrand’s unjust enrichment 21 claim with prejudice.

22 Afrand does not specifically argue in favor of his unjust enrichment claim in his opening 23 brief. He argues generally that he should have been given the opportunity to amend his 1 complaint, that the bankruptcy court erred in applying the anti-SLAPP statute, and that he was 2 denied his due process rights.3 Shapiro responds that Afrand failed to allege that he conferred a 3 benefit on Shapiro by posting a Google review. 4 “Unjust enrichment exists when the plaintiff confers a benefit on the defendant, the

5 defendant appreciates such benefit, and there is acceptance and retention by the defendant of 6 such benefit under circumstances such that it would be inequitable for him to retain the benefit 7 without payment of the value thereof.” Certified Fire Prot. Inc. v. Precision Constr., 283 P.3d 8 250, 257 (Nev. 2012) (quotation omitted). Afrand alleges that Shapiro’s response to Afrand’s 9 Google Maps review was used to promote Shapiro’s business, unjustly enriching him. Afrand 10 does not identify any benefit he conferred on Shapiro, only that Shapiro benefitted from his own 11 response to Afrand’s negative review. I have reviewed the allegedly defamatory online 12 exchange and agree that Afrand could not allege any additional facts that would plausibly show 13 that Afrand conferred a benefit onto Shapiro. See ECF No. 10 at 54.4 Thus, I affirm dismissal 14 with prejudice of Afrand’s unjust enrichment claim.

15 / / / / 16

17 3 Afrand’s due process arguments are without merit. Due process requires notice and an opportunity to be heard. Mathews v. Eldridge, 424 U.S. 319, 348-49 (1976). Afrand filed an 18 opposition to the motions to dismiss and attended the bankruptcy court hearing on the motions where he was given the opportunity to speak, which he declined. ECF Nos. 16-9; 16-11 at 12. 19 4 Although I cannot consider the Google review for purposes of determining whether Afrand stated a claim because it was not attached to his complaint in the bankruptcy court, I can consider 20 it to determine whether amendment would be futile. See Broam v. Bogan, 320 F.3d 1023, 1026 n.2 (9th Cir. 2003) (“In determining the propriety of a Rule 12(b)(6) dismissal, a court may not 21 look beyond the complaint to a plaintiff’s moving papers, such as a memorandum in opposition to a defendant’s motion to dismiss” but “[f]acts raised for the first time in plaintiff’s opposition 22 papers should be considered by the court in determining whether to grant leave to amend or to dismiss the complaint with or without prejudice.”); Orion Tire Corp. v. Goodyear Tire & Rubber 23 Co., 268 F.3d 1133, 1137 (9th Cir. 2001) (considering representations in a reply brief in determining whether amendment would be futile). 1 D. The bankruptcy court properly dismissed Afrand’s defamation claim but should have given leave to amend. 2

3 Afrand does not specifically argue that the bankruptcy court erred by dismissing his 4 defamation claim but argues generally that it erred by dismissing with prejudice and denying him 5 an opportunity to amend. Shapiro responds that Afrand failed to plead a specific false and 6 defamatory statement and that no amendment based on the Google review could state a claim. 7 To bring a claim for defamation in Nevada, Afrand must plausibly allege “(1) a false and 8 defamatory statement; (2) an unprivileged publication to a third person; (3) fault amounting to at 9 least negligence; and (4) actual or presumed damages.” Clark Cnty. Sch. Dist. v. Virtual Educ. 10 Software, Inc., 213 P.3d 496, 503 (Nev. 2009) (simplified). A statement is defamatory if it 11 “would tend to lower the subject in the estimation of the community, excite derogatory opinions 12 about the subject, and hold the subject up to contempt.” Pegasus v. Reno Newspapers, Inc., 57 13 P.3d 82, 88 (Nev. 2002) (quotation omitted). In determining whether a statement is actionable 14 for defamation, I must ask “whether a reasonable person would be likely to understand the 15 remark as an expression of the source’s opinion or as a statement of existing fact.” Id. (quotation 16 omitted). 17 Afrand failed to plausibly allege a claim for defamation but should have been given leave 18 to amend. He alleged that Shapiro posted “derogatory and confidential information about 19 [Afrand] on Google Maps, thereby harming the debtor’s reputation . . . .” ECF No. 13-7 at 3. 20 This conclusory statement lacks a sufficient factual basis to state a claim. However, in response 21 to Shapiro’s motion to dismiss, Afrand argued that he identified specific statements Shapiro 22 made regarding Afrand concealing assets and engaging in fraudulent behavior during the 23 1 bankruptcy proceeding, and that those statements were false. See ECF No. 16-9 at 6. In his 2 response to Afrand’s Google review, Shapiro wrote in part, 3 For those that are reading this and are contemplating filing for bankruptcy, one can learn a lesson from Mr. Afrand’s case: full disclosure of assets is paramount. 4 Attempting to conceal any information could lead to undesirable consequences. If you do not fully disclose your assets and advise your attorney about ongoing issues 5 . . . bad things can happen. You can lose your discharge, you can be held in contempt or as in Mr. Afrand’s case, lose over a million dollars. 6

7 ECF No. 10 at 54. I cannot say as a matter of law that Afrand could not plead any additional 8 facts based on the Google review to state a plausible claim for defamation because a reasonable 9 person reading the review may understand that Shapiro is accusing Afrand of concealing assets 10 during his bankruptcy proceeding. Therefore, Afrand should have been given leave to amend his 11 claim. 12 E. Shapiro’s special motion to dismiss should have been denied because his 13 statements were not connected to a matter of public concern.

14 Afrand argues that the bankruptcy court erred by granting Shapiro’s special motion to 15 dismiss because the underlying statements were not of a public concern and were therefore not 16 protected under Nevada’s anti-SLAPP statute. Shapiro responds that comments posted to a 17 Google review are matters of public concern and therefore protected. 18 I evaluate an anti-SLAPP motion using a two-step analysis. Spirtos v. Yemenidjian, 499 19 P.3d 611, 614 (Nev. 2021). At step one, I must “[d]etermine whether the moving party has 20 established, by a preponderance of the evidence, that the claim is based upon a good faith 21 communication in furtherance of the right to petition or the right to free speech in direct 22 connection with an issue of public concern.” Nev. Rev. Stat. § 41.660(3)(a). Second, if the 23 1 movant has met its burden, I must “determine whether the plaintiff has demonstrated with prima 2 facie evidence a probability of prevailing on the claim.” Id. § 41.660(3)(b). 3 The anti-SLAPP statute protects speech in four categories: 4 (1) Communication that is aimed at procuring any governmental or electoral action, result or outcome; 5 (2) Communication of information or a complaint to a Legislator, officer or 6 employee of the Federal Government, this state or a political subdivision of this state, regarding a matter reasonably of concern to the respective governmental 7 entity;

8 (3) Written or oral statement made in direct connection with an issue under consideration by a legislative, executive or judicial body, or any other official 9 proceeding authorized by law; or

10 (4) Communication made in direct connection with an issue of public interest in a place open to the public or in a public forum. 11

12 Id. § 41.637. Shapiro asserts that his statements in response to the Google review fall under the 13 fourth category. 14 In determining whether an issue is in the public interest, I use the following guiding 15 principles: 16 (1) public interest does not equate with mere curiosity;

17 (2) a matter of public interest should be something of concern to a substantial number of people; a matter of concern to a speaker and a relatively small specific 18 audience is not a matter of public interest;

19 (3) there should be some degree of closeness between the challenged statements and the asserted public interest—the assertion of a broad and amorphous public 20 interest is not sufficient.

21 (4) the focus of the speaker’s conduct should be the public interest rather than a mere effort to gather ammunition for another round of controversy; and 22 (5) a person cannot turn otherwise private information into a matter of public 23 interest simply by communicating it to a large number of people. 1 Stark v. Lackey, 458 P.3d 342, 346 (Nev. 2020) (en banc) (quotation omitted). In an unpublished 2 opinion, the Supreme Court of Nevada conceded that online reviews could be considered 3 consumer information and therefore a matter of public concern. Curtis v. Davidson, No. 78157, 4 466 P.3d 939, 2020 WL 3604040, at *1 (Nev. July 1, 2020). However, an online review that

5 appears to stem from a personal dispute and does not directly relate to the claimed public interest 6 is not a matter of public interest or concern. Id. (finding online review warning that a business 7 discriminates against military and recommending against supporting the business was not an 8 issue of public concern). 9 Shapiro’s response to Afrand’s Google review is not a matter of public concern. It stems 10 from a personal dispute between the two over Afrand’s bankruptcy. And although Shapiro 11 addressed his statement to “those that are reading this and are contemplating filing for 12 bankruptcy,” it is clear that Shapiro is responding to Afrand’s negative review and speaking 13 about their personal dispute. Whether Afrand concealed assets in his bankruptcy is not a matter 14 of concern to a substantial number of people, the statement was not focused on the public interest

15 as opposed to the two’s private dispute, and the matter did not turn into a matter of public 16 interest merely because it was posted on Google. Because Shapiro’s statements do not fall under 17 one of the four protected categories in the anti-SLAPP statute, the bankruptcy court should have 18 denied Shapiro’s special motion to dismiss. 19 III. CONCLUSION 20 I THEREFORE ORDER that the judgment of the bankruptcy court is affirmed in part and 21 reversed in part. I reverse dismissal with prejudice of Afrand’s defamation claim against Brian 22 Shapiro and remand with instructions to allow him leave to amend that claim only. I reverse the 23 1} grant of Brian Shapiro’s special motion to dismiss. I affirm the judgment of the bankruptcy 2|| court on all other issues. 3 DATED this Ist day of September, 2025. 4 > ANDREW P.GORDON sits 6 CHIEF UNITED STATES DISTRICT JUDGE

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