Wittenberg v. Bornstein

CourtCalifornia Court of Appeal
DecidedJune 11, 2020
DocketA154750
StatusPublished

This text of Wittenberg v. Bornstein (Wittenberg v. Bornstein) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wittenberg v. Bornstein, (Cal. Ct. App. 2020).

Opinion

Filed 5/19/20; Certified for Publication 6/11/20 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

AMY WITTENBERG, Plaintiff and Respondent, A154750 v. DANIEL BORNSTEIN et al., (Alameda County Super. Ct. No. RG17878949) Defendants and Appellants.

Amy Wittenberg and Daniel Bornstein (Daniel)1 are the co-owners of Hertzel Enterprises LLC (Hertzel). Yosef Peretz is an attorney who formerly represented Hertzel and now represents Daniel. Wittenberg filed a lawsuit asserting various causes of action, both individually and derivatively on behalf of Hertzel, against several defendants including Daniel and Peretz. Wittenberg alleged that Peretz breached his fiduciary duties of loyalty, care, and confidentiality by (1) representing clients with interests adverse to those of Hertzel; (2) using Hertzel’s confidential business information in his representation of clients with adverse interests; and (3) conspiring with Daniel and others to dismiss with prejudice a cross-complaint that Hertzel had previously filed against Daniel.

1 For ease of identifying the Bornstein parties, we will refer to them by their first names. No disrespect is intended. Peretz filed a special motion to strike under the anti-SLAPP law (Code Civ. Proc., 2 § 425.16 et seq.), arguing the causes of action against him arose from protected litigation activity and lacked minimal merit. As relevant here, the trial court declined to strike the fourth and eighteenth causes of action for breach of fiduciary duty and conspiracy, finding they arose not out of Peretz’s litigation conduct but his alleged breaches of his professional obligations. We conclude that Peretz carried his burden to show the two causes of action arise, in part, from protected activity, and that the burden therefore shifted to Wittenberg to show minimal merit on her claims based on the allegation of protected activity, which she failed to do. Accordingly, we affirm in part and reverse in part the trial court’s order on the anti-SLAPP motion. FACTUAL AND PROCEDURAL BACKGROUND Wittenberg and Daniel are the two owners and managing members of Hertzel, a limited liability company in the business of real estate investment. In December 2012, Daniel retained Peretz to negotiate the return of an escrow deposit for Hertzel’s purchase of property located at 5327 College Avenue in Oakland (the “College Avenue property”) after Hertzel cancelled the deal. The dispute was resolved by February 2013 when Hertzel recouped most of its deposit. In September 2016, Daniel initiated proceedings to dissolve Bornstein & Bornstein (B&B), a law partnership formed in 1993 by Daniel and Jonathan Bornstein (Jonathan), who is Daniel’s brother and Wittenberg’s ex- husband.3 The B&B dissolution proceeding (Alameda County Superior Court

2 All further statutory references are to the Code of Civil Procedure unless stated otherwise. 3 The B&B dissolution complaint and other court records filed in the proceedings below were the subject of requests for judicial notice filed by both

2 case no. RG16830541; hereafter, the “541 action”) led to a slew of related claims and cross-actions, including Wittenberg’s complaint in the separate action here (Alameda Superior Court case no. RG17878949; hereafter, the “949 action”). We briefly discuss the relevant pleadings in the 541 and 949 actions below. In late September 2016, Jonathan filed a cross-complaint in the 541 action against Daniel and others alleging that Daniel improperly used his side real estate businesses including Hertzel, Legal One Realty aka Bay Property Group (Legal One or BPG), and 482 W. MacArthur LLC (482 W. MacArthur) to divert money, resources, and assets away from B&B. Also in late September 2016, Wittenberg authorized attorney Susan Breed to file a cross-complaint for Hertzel in the 541 action, alleging that Daniel, Legal One/BPG, and a BPG employee committed misconduct in their management of several properties owned by Hertzel. Breed was eventually succeeded as Hertzel’s counsel by Daniel Cravens. In March 2017, a Judicial Council form request for dismissal was filed seeking the dismissal of Hertzel’s cross-complaint with prejudice. Although the trial court initially entered the dismissal with prejudice, it later granted a motion by Wittenberg, on behalf of herself and Hertzel, to deem that the dismissal was without prejudice. Meanwhile, Daniel filed a cross-complaint and subsequently a first amended cross-complaint in the 541 action against Jonathan and Wittenberg for involuntary dissolution and accounting of Hertzel. Daniel also asserted various tort and statutory claims against Jonathan. In October 2017, Jonathan and Wittenberg initiated the instant 949 action against Daniel, his wife Renuka Bornstein (Renuka), and

parties on appeal. We deferred consideration of these requests pending consideration of the appeal on its merits. We now grant them. (Evid. Code, § 452, subd. (d).)

3 482 W. MacArthur. Their complaint named Hertzel as a nominal defendant and asserted multiple causes of action derivatively on Hertzel’s behalf for breaches of real property management and brokerage agreements and related torts. In January 2018, Wittenberg4 filed a first amended complaint (FAC), which is the pleading at issue in this appeal. The FAC added new allegations, new causes of action, and new defendants, including attorney Peretz. As relevant here, the FAC alleges that Daniel cancelled Hertzel’s purchase of the College Avenue property as part of a plan to use Hertzel’s assets to purchase property located at 482 West MacArthur Boulevard in Oakland (the West MacArthur property) for himself and his wife. The FAC further alleges that Peretz participated in a conspiracy with Daniel and others and breached his duty as an attorney to Hertzel. After the College Avenue deal was cancelled, Daniel allegedly “converted $250,000 of funds from Hertzel’s bank account,” used the funds to purchase the West MacArthur property in Renuka’s name, and placed title to that property in a company called “482 W. MacArthur,” which was solely owned and operated by Renuka. According to the FAC, these transactions operated to defraud Hertzel “in violation of both [Daniel’s] fiduciary duty to disclose the entire terms of the transaction to Hertzel and Amy Wittenberg.” All of the money used to purchase and renovate the West MacArthur property allegedly came from Hertzel, and all revenue generated by that property was taken by Daniel, Renuka, and Legal One and never returned to Hertzel. The FAC asserts 20 causes of action, individually and derivatively on behalf of Hertzel, 11 of which are brought against Peretz. These are the fourth cause of action for breach of fiduciary duty, fifth cause of action for

4 The FAC no longer named Jonathan as a plaintiff.

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Bluebook (online)
Wittenberg v. Bornstein, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wittenberg-v-bornstein-calctapp-2020.