1

Connor Lynch (SBN 301538)

2 [email protected]
Brian Lynch (SBN 292511)
3
[email protected]
4 LYNCH LLP
4470 W. Sunset Blvd. No. 90096
5 Los Angeles, CA 90027
Phone: (949) 229-3141
6
7 Attorneys for Defendants

8
9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
10 STANLEY MOSK COURTHOUSE
11

12 LegalForce RAPC Worldwide, P.C., Case No. 19STCV42619

Legal Force, Inc., Raj V. Abhyanker
13 Notice of Motion and Special Motion to Strike
Plaintiff, Complaint Pursuant to C.C.P. §425.16 (Anti-
14 v. SLAPP); Memorandum of Points and
15 Authorities in Support
Stephen McArthur, Michael Papiz, Jon
16 Sanders, DNA Vapor, LLC, Does 1-1000, Judge: Hon. William Fahey
Inclusive, Dept.: 69
17 Action Filed: November 21, 2019
Defendants.
18 Hearing Date: January 31, 2020
19 Hearing Time: 9:30 a.m.

20 RESERVATION ID: 195550236757

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Defendants’ Special Motion to Strike

 Notice of Motion and Special Motion to Strike Pursuant to
1 California Code of Civil Procedure § 425.16
2 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
3 PLEASE TAKE NOTICE that on January 31, 2020 at 9:30 a.m., or as soon thereafter as the
4 motion may be heard in Department 69 of the above-captioned Court, located at 111 N. Hill Street, Los
5 Angeles, California 90012, Defendants will and hereby do move to specially strike the Complaint
6 without leave to amend pursuant to California Code of Civil Procedure § 425.16(c).
7 Defendants bring this special motion to strike on the grounds that 1) the alleged oral statements
8 made by Stephen McArthur in connection with settlement and post-settlement arbitration in Case No.
9 BC7000152 are protected speech activity under the anti-SLAPP statute, and 2) Plaintiffs cannot
10 demonstrate any probability of prevailing on any cause of action a) because the alleged conduct is
11 protected by litigation privilege, b) the allegations are barred by res judicata, c) the allegations are

12 inconsistent with Plaintiffs earlier representations to the Court, and d) even if this case were recast as a
13 petition to vacate the award, Plaintiffs fail to allege facts sufficient to do so.
14 The movants also request that the Court award them their attorneys’ fees and costs per California
15 Code of Civil Procedure § 425.16(c).
16 This motion is based on the notice of motion; the accompanying memorandum of points and
17 authorities; the declarations of Stephen McArthur and Connor Lynch; matters considered at hearing; and
18 such other facts and matters of which the Court may take notice.

19
20
Dated: December 30, 2019 LYNCH LLP
21
22 By /s/ Connor Lynch
Connor Lynch
23 Attorneys for Defendants
Stephen McArthur, Michael Papiz, Jon
24 Sanders, DNA Vapor, LLC
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Defendants’ Special Motion to Strike
 Table of Contents
1
Memorandum of Points and Authorities ..................................................................................................... 1
2
I. Introduction ........................................................................................................................................... 1
3
II. Factual Background ............................................................................................................................... 2
4 III. Argument ............................................................................................................................................... 5
5 A. Anti-SLAPP motions under California Code of Civil Procedure § 425.16 should be granted
when the challenged claims concern protected speech activity and the plaintiff fails to
6 demonstrate a probability of success on the merits. .............................................................................. 5
7 B. Plaintiffs’ Complaint concerns conduct squarely protected by California’s anti-SLAPP
statute—oral and written statements in connection with a judicial proceeding. ................................... 6
8 C. Plaintiffs have no probability of success on the merits. .................................................................. 8
9 1. All of the alleged conduct is protected by litigation privilege. ................................................... 8
2. Plaintiffs’ breach of contract action relies on statements in connection with settlement
10
negotiations, protected by litigation privilege, and it therefore must fail........................................ 8
11 3. Plaintiffs cannot show justifiable reliance on the alleged statements as a matter of law and
fact. .................................................................................................................................................. 9
12
4. Plaintiffs’ fraud claims must also fail because they rest on Defendants’ arbitration and
13 post-settlement statements, protected by litigation privilege. ......................................................... 9
14 a) The post-settlement communications are all connected to the underlying case and
therefore protected by litigation privilege. ........................................................................ 10
15 b) The post-settlement communications are all connected to arbitration and thus
independently protected by litigation privilege. ................................................................ 10
16
5. Even if Plaintiffs’ lawsuit were construed only as a procedurally proper request for vacatur
17 of the arbitration award, which it’s not, Plaintiffs allege no plausible grounds for vacatur.......... 10
18 a) “Intrinsic” fraud is not a proper basis to vacate an arbitration award. ........................ 11
b) Plaintiffs allege only “intrinsic” fraud; their lawsuit attempts to relitigate issues
19 already decided in arbitration. ........................................................................................... 12
20 6. Plaintiffs’ claims were all litigated or could have been litigated in arbitration and are thus
barred by res judicata, which applies equally to unconfirmed final arbitration awards as it
21 does to final court judgments. ....................................................................................................... 12
22 D. Defendants are entitled to an award of attorneys’ fees. ................................................................. 13
IV. Conclusion ........................................................................................................................................... 13
23
24
25
26
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Defendants’ Special Motion to Strike
 Table of Authorities
1
Cases
2 1-800 Contacts, Inc. v. Steinberg,
132 Cal. Rptr. 2d 789 (Cal. App. 2d Dist. 2003) ..................................................................................... 6
3 B.L.M. v. Sabo & Deitsch
4 64 Cal. Rptr. 2d 335 (Cal. App. 4th Dist. 1997).................................................................................... 10
Bucur v. Ahmad,
5 198 Cal. Rptr. 3d 127 (Cal. App. 4th Dist. 2016).................................................................................. 14
Dowling v. Zimmerman,
6 103 Cal. Rptr. 2d 174 (Cal. App. 4th Dist. 2001).................................................................................... 6
Equilon Enterprises v. Consumer Cause, Inc.,
7 52 P.3d 685 (Cal. 2002) ........................................................................................................................... 5
8 GeneThera, Inc. v. Troy & Gould Prof. Corp.,
90 Cal. Rptr. 3d 218 (Cal. App. 2d Dist. 2009) ....................................................................................... 7
9 Kashian v. Harriman,
120 Cal. Rptr. 2d 576 (Cal. App. 5th Dist. 2002).................................................................................... 9
10 Kibler v. N. Inyo County Loc. Hosp. Dist.,
138 P.3d 193 (Cal. 2006) ......................................................................................................................... 8
11
Lafarge Conseils Et Etudes, S.A. v. Kaiser Cement & Gypsum Corp.,
12 791 F.2d 1334 (9th Cir. 1986) ............................................................................................................... 13
Moore v. Conliffe,
13 871 P.2d 204 (Cal. 1994) ................................................................................................................... 9, 11
Navarro v. IHOP Properties, Inc.,
14 36 Cal. Rptr. 3d 385 (Cal. App. 4th Dist. 2005)........................................................................ 5, 6, 9, 13
Navellier v. Sletten,
15
52 P.3d 703 (Cal. 2002) ................................................................................................................... 6, 7, 8
16 O’Keefe v. Kompa,
100 Cal. Rptr. 2d 602 (Cal. App. 4th Dist. 2000).................................................................................. 11
17 P. Crown Distributors v. Bhd. of Teamsters,
228 Cal. Rptr. 645 (Cal. App. 1st Dist. 1986) ....................................................................................... 12
18 Paul v. Friedman,
117 Cal. Rptr. 2d 82 (Cal. App. 2d Dist. 2002) ....................................................................................... 8
19
Pour Le Bebe, Inc. v. Guess? Inc.,
20 5 Cal. Rptr. 3d 442 (Cal. App. 2d Dist. 2003) ....................................................................................... 12
Rusheen v. Cohen,
21 128 P.3d 713 (Cal. 2006) ....................................................................................................................... 11
Seltzer v. Barnes,
22 106 Cal. Rptr. 3d 290 (Cal. App. 1st Dist. 2010) .................................................................................... 7
23 Singh v. Lipworth,
174 Cal. Rptr. 3d 131 (Cal. App. 3d Dist. 2014) ................................................................................... 13
24 Vandenberg v. Super. Ct.,
982 P.2d 229 (Cal. 1999) ....................................................................................................................... 12
25 Wilhelm v. Pray, Price, Williams & Russell,
231 Cal. Rptr. 355 (Cal. App. 2d Dist. 1986) ........................................................................................ 10
26
Statutes
27 Civil Code § 1286.2 ................................................................................................................................... 12
Civil Code § 47(b) ....................................................................................................................................... 9
28 Code Civ. Proc. § 425.16................................................................................................................... 6, 8, 15
iii
Defendants’ Special Motion to Strike
 1 Memorandum of Points and Authorities
2 I. Introduction
3 This case is a collateral attack on a settlement agreement in Case No. BC7000152 and an
4 arbitration award that resulted from a dispute over fees owed under a § 998 settlement agreement. It is a
5 textbook strategic lawsuit against public participation. It also fundamentally lacks merit.
6 Plaintiffs’ complaint relates purely to litigation conduct. It alleges that Defendant Stephen
7 McArthur, in the course of settlement negotiations as outside counsel for Defendants in Case No.
8 BC7000152 in Department 14 (the “’152 Matter”), orally represented the likely amount of attorneys’
9 fees incurred to be less than $40,000. Allegedly in reliance on that representation, Plaintiffs’ § 998
10 settlement offer included an award of attorneys’ fees “related to [Defendants] prosecuting their cross-
11 claims.” It did not cap attorneys’ fees. Plaintiffs’ § 998 settlement offer was accepted and fully executed.

12 Mr. McArthur then submitted a ledger (the “Ledger”) showing that a total of $372,430 in attorneys’
13 fees, $6,280.07 in costs, and $37,871.01 in interest had accrued in the underlying litigation. Per the
14 terms of the Settlement Agreement that they drafted, Plaintiffs insisted on arbitration, where Plaintiffs
15 argued that the Ledger was falsified and that the anticipated attorneys’ fees were much lower than the
16 amount actually requested.
17 At the arbitration, Defendants sought a total of $387,708 in attorneys’ fees, costs, and interest.
18 After a hearing, the arbitrator cut the requested amount to $158,541.41 in large part because certain

19 hours present on the Ledger were related to other litigation activity other than “prosecuting
20 [Defendants’] cross-claim.” In justifying the six-figure fee award, the arbitrator noted that Mr.
21 Abhyanker is “is a difficult and contentious litigator and [] his actions made this litigation last longer
22 and be more complicated than was necessary.”
23 On November 21, 2019, the arbitrator entered the final award.
24 Later that same afternoon, Plaintiffs filed this case to take a second bite at the apple. But their
25 case lacks teeth: California’s anti-SLAPP statute protects statements made in the course of litigation,
26 which is all of the alleged conduct, and litigation privilege provides an absolute bar to new lawsuits over
27 statements made in litigation. To compound matters, Plaintiffs allegations are inconsistent with their
28 own earlier representations to the Court, under oath, about why they offered attorneys’ fees—not once
1
Defendants’ Special Motion to Strike
 1 did they mention any oral statements by Mr. McArthur as a basis for their decision to offer attorneys’
2 fees.
3 Even if recast as motion to vacate the arbitration award, Plaintiffs allege, at best, only “intrinsic”
4 fraud, which isn’t a ground to vacate an arbitration award. Finally, res judicata applies to preclude all
5 causes of action in this lawsuit, which raises issues that were considered and rejected by the arbitrator.
6 For all of these reasons, as explained more fully below, the Court should grant Defendants’ anti-
7 SLAPP motion and award attorneys’ fees and costs of $35,425 plus fees for time spent on replying to
8 any opposition brief and preparing for and attending any hearing, which will be detailed in Defendants’
9 reply brief.
10 II. Factual Background
11 This case is the latest in a series of Plaintiffs’ attempts to stay on offense—no matter the facts.

12 The legal dispute between the parties began in January 2018, shortly after Mr. Abhyanker first became
13 aware of a potential legal malpractice claim against him. Declaration of Stephen McArthur, ¶ 10. Mr.
14 Abhyanker and his law firm, LegalForce, (1) had represented defendants Papiz, Sanders, and DNA
15 Vapor, LLC (the “DNA Vapor Defendants” in proceedings before the United States Patent and
16 Trademark Office (“USPTO”) and (2) concurrently represented another client directly adverse to the
17 DNA Vapor Defendants in a trademark cancellation proceeding attempting to cancel DNA Vapor’s
18 trademark at the USPTO. McArthur Decl. ¶ 11. After Defendants brought this conflict of interest and

19 potential malpractice claim to Plaintiffs’ attention, Plaintiffs in January 2018 filed what amounted to a
20 declaratory judgment suit against the DNA Vapor Defendants in Santa Clara County, California.
21 McArthur Decl. ¶ 12. Defendant Stephen McArthur was lead outside litigation counsel in the underlying
22 lawsuit representing the DNA Vapor Defendants. Other than being their outside litigation counsel, Mr.
23 McArthur has no relation to the DNA Vapor Defendants.
24 Predictably, the DNA Vapor Defendants soon followed with a cross-claim for legal malpractice
25 and a change of venue motion. McArthur Decl. ¶ 13. Plaintiffs responded by filing an anti-SLAPP
26 motion against the legal malpractice claim. McArthur Decl. ¶ 14. The DNA Vapor Defendants won and
27 were awarded attorneys’ fees after the Court found Plaintiffs’ motion was “completely without merit.”
28
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Defendants’ Special Motion to Strike
 1 Ex. A, December 11, 2018 Court Ruling. 1
2 Following the DNA Vapor Defendants’ victory on Plaintiffs’ anti-SLAPP motion, the parties
3 engaged in settlement negotiations. McArthur Decl. ¶ 15. Plaintiffs’ instant complaint alleges that during
4 those settlement negotiations, Mr. McArthur, counsel for the DNA Vapor Defendants, orally conveyed a
5 preliminary estimate of what its attorneys’ fees might be. Compl. ¶ 4 (“total attorney’s fees … would be
6 … likely less than $40,000 total”); ¶¶ 46, 68, 80, 87.
7 Plaintiffs have no written record or evidence of this purported statement, and it is inconsistent
8 with their prior representations to the Court about why they entered into the settlement. At a hearing on
9 Plaintiffs’ ex parte motion to set aside the settlement agreement, Mr. Abhyanker told the Court the
10 reason he thought attorneys’ fees would be lower was because of the Court’s ruling on the anti-
11 SLAPP—not because of Mr. McArthur’s alleged oral representations. Mr. Abhyanker said, “[W]e

12 thought in good faith that he’s claiming $15,000 for an anti-SLAPP hearing with 22.5 hours. There’s
13 been only three motions here. Let’s just settle this. We settled for $40,000. We’re going to offer them
14 $40,000, and we’re going to pay reasonable attorney’s fees limited to prosecuting the cross-claims. And
15 so he [Mr. McArthur] didn’t disclose anything more to us.” Ex. B at 2:17–24 (emphasis added). Later in
16 the hearing, he tells the Court again: “There’s a unilateral mistake of fact. … [I]t wasn’t caused by our
17 excessive carelessness. The day before, you [the Court] had just ruled on what those fees were. Yes,
18 they were low for the anti-SLAPP. But we in good faith made the settlement offer thinking based on

19 that.” Ex. B at 10:18–11:5 (emphasis added); see also Ex. G, Declaration of Raj Abhyanker ¶ 31
20 (Plaintiffs “were expecting that attorney’s fees would be approximately $30,000 to $35,000 given the
21 early stages of the litigation and given the amount [DNA Vapor Defendants] had claimed and were
22 awarded by this court just a day before the settlement agreement.”).
23 On December 12, 2018, the day after the Court’s ruling on Plaintiffs’ anti-SLAPP motion,
24 Plaintiffs offered to settle under California Code of Civil Procedure § 998. McArthur Decl. ¶ 16. Among
25 other things, the § 998 offer provided: (1) a $40,000 settlement payment from Plaintiffs to the DNA
26 Vapor Defendants, and (2) the DNA Vapor Defendants’ reasonable attorneys’ fees, costs, and interest in
27 1
Unless otherwise noted, citations to Exhibits are citations to the Exhibits attached to the McArthur Declaration.
28
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Defendants’ Special Motion to Strike
 1 connection with the legal malpractice cross-claim (the “Settlement Agreement”). Defendants accepted.
2 Ex. C, December 12, 2018, Settlement Agreement. That ended the matter—or so Defendants thought.
3 Pursuant to the Settlement Agreement, Mr. McArthur provided to Plaintiffs the Ledger of time
4 spent on the underlying litigation in order to collect the DNA Vapor Defendants’ attorneys’ fees, costs,
5 and interest owed under the Settlement Agreement. McArthur Decl. ¶ 17. Plaintiffs balked at the amount
6 of attorney time that they had caused the DNA Vapor Defendants’ four attorneys to spend on the matter.
7 Plaintiffs refused to pay, thus forcing the parties to arbitration. McArthur Decl. ¶ 18.
8 At arbitration, Plaintiffs argued, among other things, that they believed attorneys’ fees would
9 likely be under $40,000 before making the § 998 offer, see Ex. D, Pre-Hearing Brief at 4, and that the
10 Ledger was entirely fabricated, Ex. D at 8 (“The fees requested are … fraudulent, fabricated.”). After a
11 hearing on June 27, 2019, the arbitrator rejected these arguments and awarded the DNA Vapor

12 Defendants $158,541.41. Ex. E, November 21, 2019 Final Award at 22. Among other reasons for
13 approving a six-figure attorneys’ fees award, the arbitrator found that Mr. Abhyanker “is a difficult and
14 contentious litigator and [] his actions made this litigation last longer and be more complicated than was
15 necessary.” Ex. E at 20–21.
16 Mere hours after the arbitrator entered the final award, Plaintiffs filed this present case on
17 November 21, 2019. It argues and alleges the same theories that were or could have been put before the
18 arbitrator. Those theories are: (1) that the Ledger was fabricated and (2) that Mr. McArthur’s alleged

19 oral representations about the expected amount of attorneys’ fees should restrict the amount awarded.
20 Indeed, much of the present complaint seems to have been copied and pasted directly from a pleading
21 Plaintiffs filed with the arbitrator in January 2019. Compare Ex. F, January 29, 2019 LegalForce
22 Arbitration Claim, Caption, ¶¶ 3–7, 10–16, 17, 18–28, 29, 30–33, 38, 47–48, 51, 52–53, 55–56, 58–60,
23 62–63, 65–66, 68–69, 84, 85–88, 89–91, 92–94, 95–99, 100–104 with Compl., Caption, ¶¶ 5–9, 14–20,
24 22, 26–36, 38–39, 40–43, 49, 51–52, 53, 54–55, 57–58, 59–61, 62–63, 64–65, 66–67, 71, 74–77, 78–80,
25 82–84, 85–89, 90–94.
26 The “new” allegations in the Complaint relate to Mr. McArthur allegedly orally representing to
27 Plaintiffs that attorneys’ fees under the § 998 Offer would “likely” be less than $40,000. See Compl. ¶¶
28 72, 80. But these allegations were alluded to in the Pre-Hearing Brief, see Ex. D at 4 (Mr. Abhyanker
4
Defendants’ Special Motion to Strike
 1 had expected attorneys’ fees to have “an anticipated cap of $30,000 to $35,000”), and they are
2 inconsistent with his representations to the Court that his offer was based on a “unilateral mistake of
3 fact.” Ex. B at 10:18 (emphasis added).
4 Plaintiffs rely on these theories to allege breach of contract, fraud, and civil conspiracy. As
5 explained below, none of these theories have any merit.
6 III. Argument
7 Defendants anti-SLAPP motion should be granted because the gravamen of Plaintiffs’ complaint
8 concerns conduct squarely within Section 425.16’s ambit—oral and written statements in connection
9 with a judicial proceeding—and Plaintiffs have no probability of success on the merits because litigation
10 privilege provides an absolute bar to their claims, as does res judicata.
11 A. Anti-SLAPP motions under California Code of Civil Procedure § 425.16 should be
granted when the challenged claims concern protected speech activity and the plaintiff fails
12 to demonstrate a probability of success on the merits.
13 A strategic lawsuit against public participation (a “SLAPP” suit) is “a meritless suit filed
14 primarily to chill the defendant’s exercise of First Amendment rights.” Navarro v. IHOP Properties,
15 Inc., 36 Cal. Rptr. 3d 385, 389 (Cal. App. 4th Dist. 2005). In 1992, the California legislature passed into
16 law California Code of Civil Procedure section 425.16, which provides a special motion to strike against
17 SLAPP lawsuits: “A cause of action against a person arising from any act of that person in furtherance
18 of the person’s right of petition or free speech under the United States or California Constitution in

19 connection with a public issue shall be subject to a special motion to strike, unless the court determines
20 that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.”
21 Cal. Code of Civ. Proc. § 425.16(b)(1). In a 1997 amendment, the legislature directed courts to
22 “construe[] broadly” the anti-SLAPP statute to further its purpose. Navarro, 36 Cal. Rptr. 3d at 389.
23 A two-step analysis determines the success of an anti-SLAPP motion: First, the moving party
24 must show that the challenged claims arise from “in furtherance of the defendant’s right of petition or
25 free speech under the United States or California Constitution in connection with a public issue”—i.e.,
26 protected speech activity. Equilon Enterprises v. Consumer Cause, Inc., 52 P.3d 685, 694 (Cal. 2002).
27 Once that threshold showing is made, the burden shifts to the plaintiff to establish, through evidentiary
28 submission, a probability of success on the merits of the challenged claims. Id., Cal. Code of Civ. Proc.
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Defendants’ Special Motion to Strike
 1 § 425.16(b)(1). The motion should then be granted unless the plaintiff can meet that burden.
2 When assessing the plaintiff’s showing, the court must also consider evidence that the defendant
3 presents. § 425.16(b)(2). Thought the court does not weigh conflicting evidence, it must determine
4 whether the defendant’s evidence defeats the plaintiff’s showing as a matter of law, such as by
5 establishing a defense or the absence of a necessary element. 1-800 Contacts, Inc. v. Steinberg, 132 Cal.
6 Rptr. 2d 789, 802 (Cal. App. 2d Dist. 2003).
7 B. Plaintiffs’ Complaint concerns conduct squarely protected by California’s anti-
SLAPP statute—oral and written statements in connection with a judicial proceeding.
8
The anti-SLAPP statute defines protected speech activity to include: (1) “any written or oral
9
statement or writing made before a … judicial proceeding …”; and (2) “any written or oral statement or
10
writing made in connection with an issue under consideration or review by a … judicial body ….”
11
§ 425.16(e).
12
Thus, courts have repeatedly held that oral and written statements in connection with litigation
13
settlements constitute protected speech activity under the anti-SLAPP statute. See Navellier v. Sletten,
14
52 P.3d 703 (Cal. 2002); Dowling v. Zimmerman, 103 Cal. Rptr. 2d 174 (Cal. App. 4th Dist. 2001);
15
Navarro v. IHOP Properties, Inc., 36 Cal. Rptr. 3d 385 (Cal. App. 4th Dist. 2005); GeneThera, Inc. v.
16
Troy & Gould Prof. Corp., 90 Cal. Rptr. 3d 218 (Cal. App. 2d Dist. 2009) (“attorney’s communication
17
with opposing counsel … is subject to a special motion to strike”); Seltzer v. Barnes, 106 Cal. Rptr. 3d
18
290, 302 (Cal. App. 1st Dist. 2010) (citing GeneThera, holding same).
19
In Navellier, for example, plaintiffs had sued the defendant for fraud, alleging he had
20
misrepresented his intent to be bound by a settlement’s release in a previous federal action. The
21
California Supreme Court held that the defendant’s “negotiation and execution of the” settlement was
22
protected speech activity under the anti-SLAPP law because it “involved statement[s] or writing[s] made
23
in connection with an issue under consideration or review by a ... judicial body,” and defendant’s
24
arguments to the court regarding the release’s validity were “statement[s] or writing[s] made before a ...
25
judicial proceeding.” Id. at 709. The defendant’s activities, including those that allegedly constituted
26
fraud, fell “squarely within the plain language of the anti-SLAPP statute.” Id.
27
Here, the rule consistently applied in other cases controls the outcome, and the alleged conduct
28
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Defendants’ Special Motion to Strike
 1 falls within the anti-SLAPP statute’s first prong. Plaintiffs allege breach of contract, fraud, constructive
2 fraud, and civil conspiracy to commit fraud. All of Plaintiffs’ claims arise from (1) oral statements that
3 Defendant McArthur allegedly made to Plaintiff Abhyanker while negotiating settlement in Case No.
4 BC700152 and (2) statements made first to Mr. Abhyanker, then to the arbitrator, in connection with
5 Defendants seeking fees under the written terms of the settlement agreement, which this Court retained
6 jurisdiction to enforce. Both activities are protected under the anti-SLAPP statute as statements made in
7 connection with an issue under consideration by a judicial body.
8 Plaintiffs’ contract and fraud claims both arise from protected settlement communications. For
9 example, the Complaint alleges that “Mr. McArthur represented” that attorneys’ fees would be “likely
10 be less than $40,000” on a phone call to discuss settlement. Compl. ¶¶ 37–38, 72. These statements form
11 the basis of Plaintiffs’ contract claim and fraud claim. Compl. ¶¶ 72, 80.

12 Plaintiffs then rely on Defendants’ post-settlement statements related to seeking fees under the
13 same agreement. For example, they allege Mr. McArthur “created the ‘Ledger’ and then emailed it to
14 Abhyanker.” Compl. ¶ 41. This is the remaining allegedly fraudulent activity complained of. Compl. ¶¶
15 80, 87, 92. The Ledger, though, was produced as required by the Settlement Agreement. Ex. C ¶ 2.
16 Plaintiffs further allege, without specifying what the false statements were, that Defendants made
17 “false representations to both the Plaintiffs and the arbitrator.” Compl. ¶ 76. Like the Ledger itself,
18 statements to the arbitrator were to seek fees under the terms of the Settlement Agreement that this

19 Court retains jurisdiction to enforce. See Compl. ¶¶ 80, 87, 91. They thus arise under 425.16(e)(2).2
20 In short, all of the activity that underlies Plaintiffs’ complaint are statements made in connection
21
2
Some of these statements also relate to the arbitration, which is independently an “official proceeding” under section
22 425.16(e)(4). See Kibler v. N. Inyo County Loc. Hosp. Dist., 138 P.3d 193, 199 (Cal. 2006), as modified (July 20, 2006)
(official proceedings are not “limited to proceedings before governmental entities”); cf. Paul v. Friedman, 117 Cal. Rptr. 2d
23 82, 91 (Cal. App. 2d Dist. 2002) (finding that defendant could prevail on first prong if he showed that “suit arose from oral
statements or writings ‘made in connection with an issue under consideration or review’ in the arbitration”). Though two
24 recent cases, Mission Bev. Co. v. Pabst Brewing Co., LLC, 223 Cal. Rptr. 3d 547, 559 (Cal. App. 2d Dist. 2017) and Cent. 21
Chamberlain & Associates v. Haberman, 92 Cal. Rptr. 3d 249, 253 (Cal. App. 4th Dist. 2009), have held that stand-alone
25 arbitrations are not official proceedings, the arbitration here arises from a stipulated settlement entered with the Court, which
retained jurisdiction to enforce it. In any event, the analysis applied in Paul is more consistent with the purpose of section
26 425.16, which is to deter meritless lawsuits connected to petitioning activity. Litigation privilege applies to bar lawsuits based
on statements both in arbitration and in judicial proceedings for much the same reason. Thus, harmonizing “official
27 proceedings” for litigation privilege purposes and anti-SLAPP purposes would help meet the anti-SLAPP statute’s goal of
deterring meritless lawsuits connected to petitioning activity and accord with its instruction to be “construed broadly.” At
28 minimum, statements made in arbitration to pursue an objective of court litigation, as in this case, must fall within the anti-
SLAPP statute’s reach under either 425.16(e)(2) or (e)(4).
7
Defendants’ Special Motion to Strike
 1 with a case before this Court—Case No. BC700152. And they are all protected under the rule set forth in
2 Navellier and consistently applied since: statements in connection with settlement are “made in
3 connection with an issue under consideration or review by a ... judicial body.”
4 C. Plaintiffs have no probability of success on the merits.
5 Plaintiffs’ complaint alleges breach of contract, fraud, and civil conspiracy. The claims are all
6 barred by litigation privilege and res judicata, but even if Plaintiffs sought merely to set aside the
7 arbitration award, their claim would still fail because their allegations of fraud are mere attempts to
8 relitigate the substantive issues before the arbitrator. Their factual allegations are also inconsistent with
9 Plaintiffs’ own prior statements to the Court.
10 1. All of the alleged conduct is protected by litigation privilege.
11 As discussed above, every factual allegation on which Plaintiffs’ claims rest was made in
12 connection with a judicial proceeding. See Civil Code § 47(b). The California Supreme Court has held
13 that litigation privilege applies to statements made “in the course of a judicial proceeding to achieve the
14 objects of the litigation, even though the publication is made outside the courtroom and no function of
15 the court or its officers is involved.” Moore v. Conliffe, 871 P.2d 204, 208 (Cal. 1994) (emphasis
16 original). Litigation privilege applies even when statements are “fraudulent, perjurious, unethical, or
17 even illegal.” Kashian v. Harriman, 120 Cal. Rptr. 2d 576 (Cal. App. 5th Dist. 2002).
18
2. Plaintiffs’ breach of contract action relies on statements in connection with
19 settlement negotiations, protected by litigation privilege, and it therefore must fail.

20 Plaintiffs’ breach of contract action is nearly indistinguishable from the contract action in

21 Navarro. There, the court held that litigation privilege completely barred a claim that the plaintiff had
22 been “lied to about [defendant] IHOP’s intentions with regard to the settlement terms….” 36 Cal. Rptr.
23 3d at 393. Here, Plaintiffs claim that Defendant McArthur, as outside counsel for Defendants, orally
24 represented the likely amount of attorneys’ fees that would be sought under a settlement agreement that
25 provided “costs and attorney’s fees and interest.” As in Navarro, litigation privilege protects these
26 statements during settlement negotiations in the course of a judicial proceeding to achieve litigation
27 objectives.
28
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Defendants’ Special Motion to Strike
 3. Plaintiffs cannot show justifiable reliance on the alleged statements as a
1 matter of law and fact.
2
Even assuming the truth of Plaintiffs’ allegations, they cannot show justifiable reliance because
3
no lawyer would rely on opposing counsel’s estimates of fees owed in highly contentious litigation
4
spanning more than a year. Such reliance without independent inquiry is unreasonable as a matter of
5
law. Wilhelm v. Pray, Price, Williams & Russell, 231 Cal. Rptr. 355, 358 (Cal. App. 2d Dist. 1986)
6
(plaintiff could not show justifiable reliance because “it would not be ‘reasonable’ for Goodman to
7
accept Cohen’s representations as an adversary without an independent inquiry.”); B.L.M. v. Sabo &
8
Deitsch, 64 Cal. Rptr. 2d 335, 343 (Cal. App. 4th Dist. 1997) (holding reliance on legal opinion of
9
counterparty counsel in contract negotiations was unjustifiable as a matter of law).
10
Plaintiffs also did not in fact rely on any such opinion. At a hearing on June 18, 2019, Plaintiff
11
Abhyanker told the Court the basis for his estimation of attorneys’ fees was the Court’s ruling on the
12
anti-SLAPP motion—not Mr. McArthur’s alleged statements. Specifically, he told the Court, “[W]e
13
thought in good faith that he’s claiming $15,000 for an anti-SLAPP hearing with 22.5 hours. There’s
14
been only three motions here…. We’re going to offer them $40,000, and we’re going to pay reasonable
15
attorney’s fees limited to prosecuting the cross-claims. And so he [Mr. McArthur] didn’t disclose
16
anything more to us.” Ex. B at 10:17–24 (emphasis added). Later in the hearing, he tells the Court, “The
17
day before, you [the Court] had just ruled on what those fees were. Yes, they were low for the anti-
18
SLAPP. But we in good faith made the settlement offer thinking based on that.” Ex. B at 11:1–5.
19
(emphasis added); see also Ex. G, Abhyanker Decl. ¶ 31 (Plaintiffs “were expecting that attorney’s fees
20
would be approximately $30,000 to $35,000 given the early stages of the litigation and given the amount
21
[Defendants] had claimed and were awarded by this court just a day before the settlement agreement.”).
22
Plaintiffs’ own estimate happened to be wrong, but that does not create fraud.
23
4. Plaintiffs’ fraud claims must also fail because they rest on Defendants’
24 arbitration and post-settlement statements, protected by litigation privilege.
25 Plaintiffs’ fraud claims rely only on settlement and post-settlement communications, which are
26 protected by litigation privilege. The statements’ connection both to the case before Judge Green and to
27 arbitration are independently sufficient to invoke litigation privilege.
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Defendants’ Special Motion to Strike
 a) The post-settlement communications are all connected to the
1 underlying case and therefore protected by litigation privilege.
2 Plaintiffs allege (without evidence) that Defendants submitted, first to Plaintiffs and then to an
3 arbitrator, a fraudulent ledger to obtain reasonable attorneys’ fees under the Settlement Agreement.
4 Litigation privilege protects submission of the Ledger as made to achieve a litigation objective.
5 Post-judgment conduct in other cases has similarly been held litigation privileged. In O’Keefe v.
6 Kompa, 100 Cal. Rptr. 2d 602, 605 (Cal. App. 4th Dist. 2000), the court held that litigation privilege
7 protected post-judgment efforts to collect a judgment for attorneys’ fees because they “were … an
8 extension of that judicial process.” That the actions occurred “after trial (rather than before or during
9 trial, as in the vast majority of section 47 cases) is not meaningful. … We conclude defendants’ actions
10 were logically and legally related to the realization of a litigation objective—that is, collection of a
11 judgment.” See also Rusheen v. Cohen, 128 P.3d 713, 720 (Cal. 2006) (approving O’Keefe).

12 Likewise, Defendants’ conduct here to enforce the Settlement Agreement was “related to the
13 realization of a litigation objective”—collection of attorneys’ fees owed under the Settlement
14 Agreement. It is protected by litigation privilege, and Plaintiffs’ suit is barred.
15 b) The post-settlement communications are all connected to arbitration
and thus independently protected by litigation privilege.
16
Litigation privilege applies for another reason: the alleged statements were also made in
17
connection with the arbitration of attorneys’ fees. As the California Supreme Court has held, “statements
18
made in the course of a private contractual arbitration proceeding are protected by the litigation
19
privilege….” Moore v. Conliffe, 871 P.2d 204, 219 (Cal. 1994). Thus, Plaintiffs’ claim that fraud
20
occurred when Defendants submitted the Ledger to the arbitrator is precluded by litigation privilege.
21
5. Even if Plaintiffs’ lawsuit were construed only as a procedurally proper
22 request for vacatur of the arbitration award, which it’s not, Plaintiffs allege no
plausible grounds for vacatur.
23
As explained above, Plaintiffs’ claims for breach of contract and fraud are entirely barred by
24
litigation privilege, which exists to prevent endless litigation like that Plaintiffs seek here. But even if
25
Plaintiffs’ lawsuit were recast as a procedurally proper challenge to confirmation of the arbitration
26
award, it should still fail because they allege no cognizable grounds to set aside the award.
27
“Limited judicial review is a well-understood feature of private arbitration.” Vandenberg v.
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Defendants’ Special Motion to Strike
 1 Super. Ct., 982 P.2d 229, 238 (Cal. 1999). “Judicial interference … would [] defeat the very advantages
2 the arbitral parties sought to achieve.” Id. at 238–39. “[A]rbitrators, unless specifically required to act in
3 conformity with rules of law, may … expressly or impliedly reject a claim that a party might
4 successfully have asserted in a judicial action.” Id. at 239.
5 Thus, grounds to set aside arbitration awards are limited. See Civil Code § 1286.2. Plaintiffs’
6 complaint appeals to only one exception: “The award was procured by corruption, fraud, or other undue
7 means.” § 1286.2(1). As explained below, Plaintiffs have no valid claim to vacate the award for fraud.
8 a) “Intrinsic” fraud is not a proper basis to vacate an arbitration award.
9 California courts distinguish between “intrinsic” and “extrinsic” fraud, holding that awards may
10 only be vacated for “‘extrinsic’ fraud and not for ‘intrinsic’ fraud.” P. Crown Distributors v. Bhd. of
11 Teamsters, 228 Cal. Rptr. 645, 650 (Cal. App. 1st Dist. 1986). Extrinsic fraud is conduct that deprives

12 “either of the parties of a fair and impartial hearing to their substantial prejudice.” Id.
13 Intrinsic fraud, on the other hand, can be litigated and resolve in the first tribunal. Classic
14 examples are “perjured testimony or false documents in a fully litigated case.” Pour Le Bebe, Inc. v.
15 Guess? Inc., 5 Cal. Rptr. 3d 442, 459 (Cal. App. 2d Dist. 2003). Thus, where a party has “a reasonable
16 opportunity to appear and litigate that party’s claim or defense, fraud occurring in the proceeding is not a
17 ground for equitable relief.” Singh v. Lipworth, 174 Cal. Rptr. 3d 131, 143 (Cal. App. 3d Dist. 2014).
18 “[U]ndiscovered perjury or other intrinsic fraud must be endured in the interest of stability of final

19 judgments.” Id.
20 In one case of intrinsic fraud, the Ninth Circuit in Lafarge Conseils Et Etudes, S.A. v. Kaiser
21 Cement & Gypsum Corp., 791 F.2d 1334, 1339 (9th Cir. 1986) held that falsified documents presented
22 to an arbitrator were insufficient basis to set aside an award. The evidence in Lafarge supported the
23 falsification claim—after a grant of immunity, one witness testified to a grand jury that he falsified
24 documents used in the arbitration. Id., n. 13. But the court still held that a failure to exercise due
25 diligence during the arbitration precluded setting aside the award. Id. at 1339. In effect, the court held
26 that intrinsic fraud is fit for resolution by the arbitrator and shouldn’t be relitigated in new proceedings.
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Defendants’ Special Motion to Strike
 b) Plaintiffs allege only “intrinsic” fraud; their lawsuit attempts to
1 relitigate issues already decided in arbitration.
2 Here, Plaintiffs have neither alleged nor established any evidence of extrinsic fraud that would
3 justify vacatur of an award. Instead, they allege fraud (1) through statements about the likely amount of
4 attorneys’ fees and (2) through production of the Ledger and related testimony to the arbitrator.
5 Both allegations of fraud are “intrinsic fraud” that would not justify vacatur even if proven. The
6 first allegation—that Plaintiffs were lied to about settlement intentions—is intrinsic fraud that is nearly
7 identical to alleged conduct held to be “intrinsic” fraud in Navarro v. IHOP Properties, Inc., 36 Cal.
8 Rptr. 3d 385, 393 (Cal. App. 4th Dist. 2005) (“The type of fraud Navarro alleges is intrinsic. She claims
9 she was lied to about IHOP's intentions with regard to the settlement terms….”).
10 The second allegation—that the ledger relied upon to determine the award of attorneys’ fees was
11 falsified—is paradigmatic “intrinsic” fraud. The only distinguishing feature between the false-ledger

12 allegation in this case and the falsified-document allegations in Lafarge is that Lafarge’s allegations had
13 strong evidentiary support. Neither allegation, though, supports vacating an arbitration award.
14 6. Plaintiffs’ claims were all litigated or could have been litigated in arbitration
and are thus barred by res judicata, which applies equally to unconfirmed final
15
arbitration awards as it does to final court judgments.
16
“For purposes of res judicata, even an unconfirmed arbitral award is the equivalent to a final
17
judgment.” Bucur v. Ahmad, 198 Cal. Rptr. 3d 127, 135 (Cal. App. 4th Dist. 2016). Res judicata applies
18
when (1) a claim in a proceeding is “identical to a claim litigated or that could have been litigated in a
19
prior proceeding” and (2) “the prior proceeding resulted in a final judgment on the merits.” Id. at 134.
20
Such is the case here, where the Parties now have a final arbitration award in favor of Defendants.
21
All of Plaintiffs’ allegations here—for breach of contract and fraud—were either litigated or
22
could have been litigated in arbitration over the Settlement Agreement. Plaintiffs’ Pre-Hearing Brief, for
23
example, states that “Mr. Abhyanker is expected to testify that the § 998 offer was intended to be
24
narrowly limited to prosecuting the cross-claims without costs and interests, with an anticipated cap of
25
$30,000 to $35,000 inclusive of the attorney’s fees claimed in the anti-SLAPP hearing of $15,950.” Ex.
26
D at 4. The brief further argued that “[t]he Ledger should not be admitted because it is an outrageously
27
unreasonable fiction created for this arbitration only.” Ex. D at 6. Finally, nearly seventy paragraphs of
28
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Defendants’ Special Motion to Strike
 1 the Complaint were copied from a pleading Plaintiffs filed with the arbitrator in January 2019—
2 Plaintiffs can hardly claim they could not have presented these arguments to the arbitrator at the hearing
3 on June 27, 2019. The only arguably “new” theory in Plaintiffs’ Complaint is that they relied on
4 fraudulent misrepresentations concerning the amount of attorneys’ fees when they made the § 998 Offer.
5 They thus could have presented this theory to the arbitrator, and it is now barred by res judicata.
6 In sum, Plaintiffs had a fair opportunity to present their claims and defenses before the arbitrator.
7 They now simply disagree with the result of the arbitration and seek to relitigate it in not one but two
8 forums (this case and Case No. BC7000152). Defendants’ anti-SLAPP motion should be granted
9 because Plaintiff has no possibility of success on the merits, let alone a reasonable probability.
10 D. Defendants are entitled to an award of attorneys’ fees.
11 California’s anti-SLAPP statute provides that “a prevailing defendant on a special motion to

12 strike shall be entitled to his or her attorney’s fees and costs.” Cal. Civ. Proc. Code § 425.16(c)
13 (emphasis added). Defendants accordingly request that the Court’s order granting this motion include an
14 order that Plaintiffs pay the Defendants’ attorneys’ fees and costs of $35,425, as itemized in paragraphs
15 1–8 of the Declaration of Connor Lynch, plus time spent on reply and hearing, which Defendants will
16 provide in their reply.
17 IV. Conclusion
18 Plaintiffs’ lawsuit is a naked attempt to relitigate settlement in Case No. BC7000152 and the

19 ensuing arbitration. All of the alleged conduct relates to Case No. BC7000152 and is protected by the
20 anti-SLAPP statute, and all of the alleged claims fail because they are barred by litigation privilege and
21 res judicata. Even if recast as a challenge to confirmation of the arbitration award and presuming
22 Plaintiffs could support their allegations, Plaintiffs allege only “intrinsic” fraud—which is not a
23 cognizable ground to set aside an arbitration award.
24 For all of these reasons, as discussed more fully above, Defendants’ special motion to strike
25 should be granted and Plaintiffs should be ordered to pay Defendants’ attorneys’ fees and costs.
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Defendants’ Special Motion to Strike
 Dated: December 30, 2019 LYNCH LLP
1
2 By /s/ Connor Lynch
Connor Lynch
3 Attorneys for Defendants.

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Defendants’ Special Motion to Strike
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LEGALFORCE RAPC WORLDWIDE, P.C. vs STEPHEN MCARTHUR
Case Number: 19STCV42619     Case Type: Civil Unlimited     Category: Contractual Fraud    
Date Filed: 2019-11-21   Location: Stanley Mosk Courthouse - Department 69

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Filing Party: Location:
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/
 POS-050/EFS-050
ATTORNEY OR PARTY WITHOUT ATTORNEY: STATE BAR NO: 301538 FOR COURT USE ONLY
NAME: Connor Lynch
FIRM NAME: Lynch LLP
STREET ADDRESS: 4470 W Sunset Blvd No. 90096
CITY: Los Angeles STATE: CA ZIP CODE: 90027
TELEPHONE NO.: 949 229 3141 FAX NO. :

E-MAIL ADDRESS: [email protected]

ATTORNEY FOR (name): e hen cAr h r, ichael Pa i , on ander , A a or LLC

SUPERIOR COURT OF CALIFORNIA, COUNTY OF Los Angeles
STREET ADDRESS:111 N Hill Street
MAILING ADDRESS:
CITY AND ZIP CODE:Los Angeles 90012
BRANCH NAME:Stanley Mosk CASE NUMBER:

PLAINTIFF/PETITIONER: Legal orce RAPC Worldwide, P.C., Raj Abhyanker C

DEFENDANT/RESPONDENT: e hen cAr h r, ichael Pa i , on ander , JUDICIAL OFFICER:

DNA apor, LLC on. Willia Fahey

DEPARTMENT:
PROOF OF ELECTRONIC SERVICE

1. I am at least 18 years old.

a. My residence or business address is (specify):
4470 W Sunset Blvd No. 90096, Los Angeles, CA 90027

b. My electronic service address is (specify):

[email protected]

2. I electronically served the following documents (exact titles):

Notice of Motion and Special Motion to Strike Complaint Pursuant to C.C.P. §425.16 (Anti- SLAPP); Memorandum of Points and
Authorities in Support; Declaration of Connor Lynch in Support of Defendants’ Motion to Strike under California Code of Civil
Procedure § 425.16; Declaration of Stephen McArthur in Support of Defendants’ Motion to Strike under California Code of Civil
Procedure § 425.16, Exhibits A–G.

3. I electronically served the documents listed in 2 as follows:

a. Name of person served: Raj Abhyanker
On behalf of (name or names of parties represented, if person served is an attorney):
Raj Abhyanker, LegalForce RAPC Worldwide, P.C., LegalForce, Inc.

b. Electronic service address of person served :

raj legal orcelaw.co

c. On (date): ece ber 3 , 2019

The documents listed in item 2 were served electronically on the persons and in the manner described in an attachment.
(Form POS-050(P)/EFS-050(P) may be used for this purpose.)

Date: December 30, 2019

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Connor Lynch /s/ Connor Lynch

(TYPE OR PRINT NAME OF DECLARANT) (SIGNATURE OF DECLARANT)

Page 1 of 1

Form Approved for Optional Use

Judicial Council of California
PROOF OF ELECTRONIC SERVICE Cal. Rules of Court, rule 2.251
www.courts.ca.gov
POS-050/EFS-050 [Rev. February 1, 2017] (Proof of Service/Electronic Filing and Service)