Graham-Sult et al v. Clainos et al

Filing 93

ORDER GRANTING DEFENDANT CLAINOSS 33 ANTI-SLAPP MOTION TO STRIKE AND FOR ATTORNEYS FEES ; GRANTING GREENE DEFENDANTS 27 ANTI-SLAPP MOTION TO STRIKE AND FOR ATTORNEYS FEES AND DENYING AS MOOT THEIR 28 MOTION TO DISMISS ; GRANTING BGA DEFENDANTS 23 MOTION TO DISMISS ; AND GRANTING PLAINTIFFS 85 MOTION FOR LEAVE TO SUPPLEMENT THE RECORD. Signed by Judge Claudia Wilken on 6/24/2011. (ndr, COURT STAFF) (Filed on 6/24/2011)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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ALEXANDER GRAHAM-SULT and DAVID
GRAHAM,

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Plaintiffs,

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United States District Court
For the Northern District of California

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No. C 10-04877 CW

v.
NICHOLAS P. CLAINOS, an individual;
RICHARD L. GREENE, an individual;
LINDA MCCALL, an individual; GREENE
RADOVSKY MALONEY SHARE & HENNINGH
LLP, a limited liability partnership;
BILL GRAHAM ARCHIVES LLC, d/b/a
WOLFGANG’S VAULT, a limited liability
company; NORTON LLC, a limited
liability company; and WILLIAM E.
SAGAN, an individual,
Defendants.
/

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ORDER GRANTING
DEFENDANT CLAINOS’S
ANTI-SLAPP MOTION
TO STRIKE AND FOR
ATTORNEYS’ FEES
(Docket No. 33);
GRANTING GREENE
DEFENDANTS’ ANTISLAPP MOTION TO
STRIKE AND FOR
ATTORNEYS’ FEES
(Docket No. 27) AND
DENYING AS MOOT
THEIR MOTION TO
DISMISS (Docket No.
28); GRANTING BGA
DEFENDANTS’ MOTION
TO DISMISS (Docket
No. 23); AND
GRANTING
PLAINTIFFS’ MOTION
FOR LEAVE TO
SUPPLEMENT THE
RECORD (Docket No.
85)

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Pursuant to California Code of Civil Procedure section 425.16,

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commonly known as California’s anti-Strategic Lawsuit Against

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Public Participation (anti-SLAPP) statute, Defendant Nicholas P.

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Clainos and Defendants Greene Radovsky Maloney Share & Henningh LLP

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(Greene Law Firm), Richard L. Greene and Linda McCall

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(collectively, Greene Defendants) separately move to strike

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Plaintiffs Alexander Graham-Sult and David Graham’s claims against

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them and move for attorneys’ fees.

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Defendants Bill Graham Archives LLC, Norton LLC and William E.

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The Greene Defendants and

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Sagan (collectively, BGA Defendants) separately move to dismiss

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Plaintiffs’ claims against them.

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The motions were heard on April 7, 2011.

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Plaintiffs moved for leave to supplement the record.

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the Greene Defendants opposed Plaintiffs’ motion.

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Plaintiffs oppose the motions.
After the hearing,
Clainos and

Having considered oral argument and the papers submitted by
the parties, the Court GRANTS Plaintiffs’ motion for leave to

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supplement the record; GRANTS Clainos’s anti-SLAPP motion to strike

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and for attorneys’ fees; GRANTS the Greene Defendants’ anti-SLAPP

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United States District Court
For the Northern District of California

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motion to strike and for attorneys’ fees and DENIES as moot their

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motion to dismiss; and GRANTS the BGA Defendants’ motion to

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dismiss.

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BACKGROUND
Plaintiffs Graham-Sult and Graham, who are New York and

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Pennsylvania citizens respectively, are sons of Bill Graham, a

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concert promoter who worked in the San Francisco Bay Area.

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Graham was the sole owner of Bill Graham Enterprises, Inc. (BGE),

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through which he conducted his concert promotion business.1

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October 25, 1991, Bill Graham died in a helicopter crash.

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time, Plaintiffs Graham-Sult and Graham were fourteen and twenty-

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three years old respectively.

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the ownership of intellectual and tangible property Plaintiffs

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claim their father owned before his death.

Bill

On
At that

This lawsuit concerns a dispute over

The background recited

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25
1

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BGE owned a number of subsidiary entities: Fillmore
Corporation; Bill Graham Presents, Inc.; Bill Graham Management,
Inc.; and Shoreline Amphitheatre, Ltd. Greene Decl. ¶ 2. The
Court refers to BGE and these subsidiaries collectively as “BGE.”
2

1
2

below is based on evidence proffered by the parties.2
Clainos, an attorney licensed to practice in California, was

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appointed executor of Bill Graham’s estate under Bill Graham’s Last

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Will and Testament, dated August 2, 1976, and Second Codicil, dated

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December 22, 1981.

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created trusts for the benefit of Plaintiffs and named Clainos as

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the trustee to serve until the trusts terminated when Plaintiffs

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reached twenty-five years of age.

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Firm to represent him in his role as executor of the estate and

Bill Graham’s testamentary documents also

Clainos retained the Greene Law

United States District Court
For the Northern District of California

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trustee of the testamentary trusts.

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the Greene Law Firm and Greene, specifically, were counsel to Bill

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Graham and BGE.

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represented by Philip B. Feldman, an attorney with the law firm

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known then as Coblentz, Cahen, McCabe & Breyer.

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Prior to Bill Graham’s death,

During the probate proceedings, Plaintiffs were

On November 7, 1991, the Marin County Superior Court granted

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Clainos discretionary powers over Bill Graham’s estate, which

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included BGE.

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served as executor until August 8, 1995, when probate closed

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pursuant to the state court’s final order of accounting.

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Decl. ¶ 4.

Greene Decl., Ex. E.

According to Clainos, he

Clainos

In his role as executor, Clainos decided that

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22

2

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Generally, on a motion to dismiss, courts may consider only
the complaint. Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992,
998 (9th Cir. 2010). Courts may also consider documents “on which
the complaint necessarily relies if: (1) the complaint refers to
the document; (2) the document is central to the plaintiff's claim;
and (3) no party questions the authenticity of the copy attached to
the 12(b)(6) motion.” Id. (citation and internal quotation marks
omitted). However, because this Order addresses anti-SLAPP motions
to strike, the Court also considers declarations proffered by the
parties. See Cal. Civ. Proc. Code § 425.16(b)(2); see also Mindys
Cosmetics, Inc. v. Dakar, 611 F.3d 590, 598 (9th Cir. 2010).

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3

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Plaintiffs, among other beneficiaries named in Bill Graham’s

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testamentary documents, would receive Bill Graham’s “personal

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possessions located at his home in Corte Madera, commonly known as

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‘Masada.’”

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were ten scrapbooks, which contained original prints of posters

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used in concerts promoted by Bill Graham.

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Greene conducted an inventory of these personal effects.

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Greene Decl. ¶ 17.

Allegedly among these possessions

Neither Clainos nor

On December 9, 1991, Greene investigated the intellectual
property rights owned by Bill Graham’s estate.

Greene met with

United States District Court
For the Northern District of California

10

Jerry Pompili, one of BGE’s vice presidents, who informed Greene

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that “The Fillmore” trademark and copyrights for most of the

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posters produced by BGE were registered in Bill Graham’s personal

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name.

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represented that “BGE paid for all application and registration

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fees” and “BGE received all revenues from the sales and licensing

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of the intellectual property.”

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representations, Greene concluded that BGE owned the intellectual

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property registered in Bill Graham’s name.

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Greene Decl. ¶ 16.

However, according to Greene, Pompili

Id.

Based on Pompili’s

In January 1994, Clainos brokered a deal to sell BGE to BGE’s

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so-called “key employees.”

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he did so to placate these employees, who threatened to leave BGE

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if they were not given the opportunity to purchase it.

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to Clainos, this action was necessary to preserve the value of BGE.

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Plaintiffs’ trusts were signatories to the sale.

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Greene Decl. ¶ 18.

Clainos claims that

According

To consummate the transaction, the employees formed BG

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Presents, Inc. (BGP), which acquired all shares of BGE.

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the sale, Plaintiffs’ respective testamentary trusts each received

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4

As part of

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a ten-percent share of BGP.

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stake.

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the BGE Archives, which were defined to include “all posters,

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handbills, tickets, photographs, slides, videos, audio tapes and

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other archival material produced or obtained prior to October 25,

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1991 in connection with [BGE] prior to October 25, 1991.”

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Decl., Ex. O, at 4.

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third-party offer to purchase BGE or the BGE archives, Plaintiffs,

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along with other beneficiaries, had the option “to purchase all,

Clainos acquired a thirteen-percent

The transaction also encompassed an agreement concerning

Greene

The agreement provided that, in the event of a

United States District Court
For the Northern District of California

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but not less than all, of the Remaining Archives on the same terms

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and conditions as offered by the third party.”

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documents related to the transaction, including the BGE Archives

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agreement, did not specifically identify the intellectual property

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held by BGE.

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17

Id. at 4-5.

The

On August 8, 1995, the state court entered its final order of
distribution.
On or about August 31, 1995, Richard Idell, who was apparently

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“special counsel to BGE,” wrote Greene to inquire about “how the

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transfer/assignment of copyrights and trademarks was handled in the

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sale of [BGE] to the key employees.”

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In a letter dated September 1, 1995, Greene responded as follows:

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1.
As I presume you are aware, most of the
tradenames/trademarks/copyrights have always been owned
by and in the name of BGE since I understand from Jerry
Pompili that BGE paid all the expenses for the
applications that he filed.

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Greene Decl., Ex. O, at 1.

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2.
Apparently, on some occasions, Jerry put some of the
above items in Bill’s name. Thus, to solve that problem
we prepared and sent yesterday to Jerry for Nick and
Gregg to sign the enclosed Assignment and Acceptance of
Assignment. Once that is done, this should solve any

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5

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1

title problems.

2

Greene Decl., Ex. O, at 2.

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The assignment was “executed as of August 1, 1995” by Clainos,

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in his role as executor of Bill Graham’s estate.

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CTR01212.

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BGE was registered in Bill Graham’s name and that the assignment’s

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purpose was to “confirm BGE’s ownership of” the intellectual

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property.

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The preamble stated that intellectual property used by

Id.

The assignment provided,

Assignor hereby assigns, transfers and conveys to BGE
(“Assignee”) any and all right, title and interest of the
Decedent in any and all copyrights, tradenames,
trademarks and servicemarks claimed by or registered in
the name of the Decedent, other than the copyright to the
Decedent’s autobiography.

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United States District Court
For the Northern District of California

Compl., Ex. B, at

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Id.

On July 29, 1996, the assignment was recorded in the U.S.

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Copyright Office.
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In December 1997, BGP was sold to SFX Broadcasting, Inc.

In

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accordance with the BGE Archives agreement explained above, SFX’s
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offer to purchase BGP triggered Plaintiffs’ right of first refusal,
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which Plaintiffs declined to exercise.

The parties’ statement of

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intent regarding the sale, to which Plaintiffs’ trusts were
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signatories, recited that SFX’s acquisition of BGP included “all
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intellectual property rights used in the operation of BGP’s
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business (including the rights to the names ‘Fillmore’ and ‘Bill
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Graham Presents.’).”

Greene Decl., Ex. S, at 3.

Section 3.18 of

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the SFX Purchase Agreement, entitled “Intellectual Property;
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Software,” provided,
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Schedule 3.18 attached hereto contains, to each Selling
Shareholder’s Knowledge, a true and complete list of all
trade names, trademarks, trade dress, domain names,
service marks, logos, copyrights, patents, and/or similar

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4
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rights (including registrations and applications to
register or renew the registration of any of the
foregoing), trade secrets, inventions, know-how,
specifically developed computer software and other
intellectual property rights or other proprietary rights
or confidential information (“Intellectual Property”)
owned or used by the Company or material to the conduct
of the Company’s business, including whether such
Intellectual Property is owned or licensed by the
Company.

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Id., Ex. T § 3.18.

Schedule 3.18 was labeled “Intellectual

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Property and Software Owned or Used by the Company.”

Id. at ii.

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It contained a copy of Clainos’s 1995 Assignment and the
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recordation of the assignment in the U.S. Copyright Office, and
United States District Court
For the Northern District of California

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indicated that various copyrights and “The Fillmore” trademark were
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owned by BGP.

Id., Ex. T.

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Feldman, who also represented Plaintiffs during the SFX sale,
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was given a copy of the SFX Purchase Agreement.

Greene Decl. ¶ 29;

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Greene Supp. Decl. ¶ 6 and Ex. SC.3

However, Feldman has “no

15
recollection of seeing or receiving Schedule 3.18, which contains
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the Assignment, prior to 2011.”

Am. Feldman Decl. ¶ 2.

He does

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3

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Plaintiffs object to Exhibit SC of the Greene Supplemental
Declaration, which contains a December 11, 1997 letter faxed by
Greene to Feldman concerning the SFX Purchase Agreement.
Plaintiffs argue that, because the letter is unsigned, it lacks
relevance. Plaintiffs, however, do not object to paragraph six of
the Greene Supplemental Declaration, in which Greene states that
Exhibit SC “is a true and correct copy of correspondence I faxed to
Plaintiffs’ attorney, Philip Feldman, on or about December 11, 1997
(the same day the SFX Acquisition Agreement was signed), following
a conversation we had on that day.” Greene Supp. Decl. ¶ 6.
Greene also states that he sent Feldman “certain excerpts from the
Agreement relating to intellectual property . . . , including the
intellectual property representations and warranties, which
incorporate by reference the liability-limiting disclosure schedule
setting forth a description of the intellectual property owned by
BGE.” Id. For his part, Feldman does not deny that he had this
conversation with Greene or that he received Greene’s faxed letter.
Because Exhibit SC is relevant, Plaintiffs’ objection is OVERRULED.

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not assert that he did not receive a copy of the SFX Purchase

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Agreement in 1997.

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Graham’s trust,4 and Clainos, on behalf of Plaintiff Alexander

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Graham-Sult’s trust, agreed to the terms of the transaction.

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Jacques Fabert, on behalf of Plaintiff David

Thereafter, Clear Channel Communications, Inc., purchased SFX.
Clear Channel allegedly transferred the copyrights previously held

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by BGE and portions of the BGE Archives to Bill Graham Archives,

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LLC.

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to Sagan and Norton, LLC, which is allegedly owned by Sagan.

10
United States District Court
For the Northern District of California

6

Plaintiffs assert they were not aware of Clainos’s 1995

In July 2002, Clear Channel sold Bill Graham Archives, LLC,

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Assignment until February 2009, when they discovered it in a box of

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documents at the former headquarters of BGE.

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assignment in an “SFX Sales Binder;” the assignment was located in

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“Schedule 3.18.”

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also allege that, in 2009, they learned that Clainos had

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transferred scrapbooks contained in their father’s “personal

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warehouse” to a “BGE offsite corporate warehouse” so that the

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scrapbooks could be included in the BGE Archives.

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Graham-Sult Decl. ¶ 4; Godinez Decl. ¶ 6.

They

Compl. ¶ 25.

Plaintiffs filed their lawsuit on October 27, 2010.

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They found the

DISCUSSION
I.

Anti-SLAPP Motions to Strike

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California’s anti-SLAPP statute provides,

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A cause of action against a person arising from any act
of that person in furtherance of the person’s right of
petition or free speech under the United States
Constitution or the California Constitution in connection

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25
26
27
28

4

After Plaintiff David Graham’s trust terminated when he
reached twenty-five years of age, he transferred its assets to
another trust, for which Fabert served as trustee.
8

1

with a public issue shall be subject to a special motion
to strike, unless the court determines that the plaintiff
has established that there is a probability that the
plaintiff will prevail on the claim.

2
3

Cal. Civ. Proc. Code § 425.16(b)(1).

California anti-SLAPP motions

4
to strike are available to litigants proceeding in federal court.
5
Thomas v. Fry’s Elecs., Inc., 400 F.3d 1206, 1206 (9th Cir. 2005).
6
Courts analyze these motions in two steps.

“First, the

7
defendant must make a prima facie showing that the plaintiff's suit
8
arises from an act in furtherance of the defendant’s rights of
9
petition or free speech.”

Mindys, 611 F.3d at 595 (citation and

United States District Court
For the Northern District of California

10
internal quotation marks omitted).

“Second, once the defendant has

11
made a prima facie showing, the burden shifts to the plaintiff to
12
demonstrate a probability of prevailing on the challenged claims.”
13
Id.
14
“At [the] second step of the anti-SLAPP inquiry, the required
15
probability that [a party] will prevail need not be high.”

Hilton

16
v. Hallmark Cards, 580 F.3d 874, 888-89 (9th Cir. 2009).

A

17
plaintiff must show “only a ‘minimum level of legal sufficiency and
18
triability.’”

Mindys, 611 F.3d at 598 (quoting Linder v. Thrifty

19
Oil Co., 23 Cal. 4th 429, 438 n.5 (2000)).

The plaintiff need only

20
“state and substantiate a legally sufficient claim.”

Mindys, 611

21
F.3d at 598 (citation and internal quotation marks omitted).

In

22
conducting its analysis, the “court ‘does not weigh the credibility
23
or comparative probative strength of competing evidence,’ but
24
‘should grant the motion if, as a matter of law, the defendant's
25
evidence supporting the motion defeats the plaintiff’s attempt to
26
establish evidentiary support for the claim.’”
27
28

9

Id. at 599 (quoting

1
2

Wilson v. Parker, Covert & Chidester, 28 Cal. 4th 811, 821 (2002)).
Unless an action is brought pursuant to certain sections of

3

the California Government Code, “a prevailing defendant on a

4

special motion to strike shall be entitled to recover his or her

5

attorney’s fees and costs.”

6

also Bernardo v. Planned Parenthood Fed. of Am., 115 Cal. App. 4th

7

322, 360-367 (2004) (explaining policy behind mandatory fees and

8

costs provision of anti-SLAPP statute).

9
United States District Court
For the Northern District of California

10

A.

Cal. Civ. Proc. Code § 425.16(c); see

Clainos’s Motion to Strike

Against Clainos, Plaintiffs bring claims for breach of

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fiduciary duty, breach of trust, conversion, intentional

12

misrepresentation, negligent misrepresentation, fraudulent

13

concealment, promissory estoppel and unjust enrichment.

14
15

1.

Arising From a Protected Activity

Clainos argues that Plaintiffs’ claims arise from his actions

16

as the executor of Bill Graham’s estate, all of which he contends

17

were in the furtherance of his right to petition.

18

Under the anti-SLAPP statute, an act in the furtherance of an

19

individual’s right to petition includes “any written or oral

20

statement or writing made before . . . judicial proceeding” and

21

“any written or oral statement or writing made in connection with

22

an issue under consideration or review by a . . . judicial body.”

23

Cal. Civ. Proc. Code § 425.16(e).

24

definitional focus is . . . the defendant’s activity that gives

25

rise to his or her asserted liability -- and whether that activity

26

constitutes protected speech or petitioning.’”

27

Metabolife Int’l, Inc., 113 Cal. App. 4th 181, 187 (2003) (quoting

28

10

The “‘anti-SLAPP statute’s

Martinez v.

1

Navellier v. Slatten, 29 Cal. 4th 82, 92 (2002); emphasis by

2

Navellier court).

3

plaintiff’s cause of action . . . determines whether the anti-SLAPP

4

statute applies.”

5

omitted; emphasis in original).

6

“protected activity and unprotected activity, it is subject to

7

section 425.16 unless the protected conduct is merely incidental to

8

the unprotected conduct.”

9

Happening House Ventures, 184 Cal. App. 4th 1539, 1551 (2010)

United States District Court
For the Northern District of California

10

The “principal thrust or gravamen of the

Martinez, 113 Cal. App. 4th at 188 (citation
Where a claim is based on

Haight Ashbury Free Clinics, Inc. v.

(citation and internal quotation marks omitted).

11

Plaintiffs’ claims are based, in part, on statements made in

12

the probate proceedings.

13

the nature of their father’s estate in documents filed in state

14

court.

15

Clainos’s fraud infected the state court’s judgment.

16

conduct before the state court is more than incidental to this

17

case.

18

They contend that Clainos misrepresented

And, as discussed further below, they complain that
Clainos’s

Because Plaintiffs’ claims are based, in substantial part, on

19

statements Clainos made in connection with an issue under

20

consideration by a judicial body, they fall within the scope of the

21

anti-SLAPP statute.

22

state and substantiate their claims against Clainos.

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24
25

2.

The burden therefore shifts to Plaintiffs to

Probability of Success
a.

Statute of Limitations

Clainos contends that Plaintiffs’ claims are barred by the

26
27
28

11

1

relevant statutes of limitations.5

2

because they brought their case in October 2010, their claims are

3

time-barred unless they have a basis for tolling relevant

4

limitations periods.

5

Plaintiffs do not dispute that,

Under California law, a limitations period may be tolled until
the basis of a claim “is discovered or with reasonable diligence

7

could have been discovered.”

8

H. Seiler & Co., 122 Cal. App. 3d 834, 855 (1981).

9

a fiduciary relationship between the parties exists at the time the

10
United States District Court
For the Northern District of California

6

claim arose, a plaintiff’s duty of diligence is relaxed because “‘a

11

fiduciary has a duty to make a full and fair disclosure of all

12

facts which materially affect the rights and interest of the

13

parties, and, where a fiduciary relationship exists, facts which

14

would ordinarily require investigation may not excite suspicion.’”

15

Id. (quoting Bennett v. Hibernia Bank, 47 Cal. 2d 540, 559-60

16

(1956)).

17

that an earlier discovery could have been made upon a diligent

18

inquiry but need show only that he made an actual discovery of

19

hitherto unknown information within the statutory period before

Elec. Equip. Express, Inc. v. Donald
However, where

In such circumstances, “a plaintiff need not disprove

20
21

5

27

Plaintiffs’ claims other than for breach of fiduciary duty
must have been brought within three years of the date they accrued.
See Cal. Civ. Proc. Code § 338(d); Cal. Prob. Code § 16460.
California courts have reached varying conclusions regarding the
limitations period applicable to claims for breach of fiduciary
duty. Compare David Welch Co. v. Erskine & Tulley, 203 Cal. App.
3d 884, 893 (1988) (applying four-year limitations period) with
City of Vista v. Robert Thomas Secs., Inc., 84 Cal. App. 4th 882,
889 (2000) (concluding that three-year limitations period applies
because plaintiff’s breach of fiduciary duty claim was grounded in
fraud). Even under the more generous four-year limitations period,
Plaintiffs’ breach of fiduciary duty claim would be barred, unless
they can justify the tolling of the statute.

28

12

22
23
24
25
26

1

filing the action.”

2

plaintiff “does have a duty to investigate even where a fiduciary

3

relationship exists when ‘he has notice of facts sufficient to

4

arouse the suspicions of a reasonable man.’”

5

Cal. App. 3d at 855 (quoting Bennett, 47 Cal. 2d at 563).

6

Bennett, 47 Cal. 2d at 563.

However, a

Elec. Equip., 122

Plaintiffs assert that their claims concerning the disputed

7

intellectual property did not accrue until they discovered the 1995

8

Assignment.

9

Clainos claims that Plaintiffs had notice of the 1995 Assignment in

See Pls.’ Opp’n to Clainos Mot. to Dismiss 5:16-17.

United States District Court
For the Northern District of California

10

1997, through the SFX sale.

11

Feldman was provided a copy of the SFX Purchase Agreement, which

12

referred to Schedule 3.18 that contained the 1995 Assignment.

13

response, Plaintiffs state that they were not aware of the 1995

14

Assignment before discovering it in the Schedule 3.18 section of

15

the SFX Sales Binder they discovered in February 2009.

16

and Fabert state that, prior to that time, they never saw the

17

binder, Schedule 3.18 or the 1995 Assignment.

18

counsel represents that she, along with other legal staff, reviewed

19

“documents from various sources, including plaintiffs and”

20

Feldman’s law firm.

21

states that none of the “correspondence” from Feldman’s firm that

22

she reviewed made reference to the intellectual property at issue

23

in this action or to the 1995 Assignment.

24

represents that he does not recall whether he saw or received

25

Schedule 3.18 prior to 2011.

26
27
28

He cites Greene’s declaration that

Cannata Am. Decl. ¶ 3.

In

Plaintiffs

Plaintiffs’ current

In particular, counsel

Id. ¶ 4.

Feldman

Plaintiffs’ evidence does not contradict Clainos’s showing
that, in 1997, the SFX Purchase Agreement was sent to Feldman and
13

the Agreement included the 1995 Assignment.

2

dispute that Feldman was their attorney for the purposes of the SFX

3

sale.

4

did not receive the SFX Purchase Agreement in 1997.

5

approximately fourteen years later, does not recall seeing or

6

receiving Schedule 3.18 and the 1995 Assignment is not inconsistent

7

with Greene’s declaration that the SFX Purchase Agreement was

8

provided to Feldman and an inference that he received it.

9

general agency principles, “an attorney is his client’s agent, and

10
United States District Court
For the Northern District of California

1

. . . the agent’s knowledge is imputed to the principal even where

11

. . . the agent does not actually communicate with the principal,

12

who thus lacks actual knowledge of the imputed fact.”

13

L.A. Cnty. Metro. Transp. Auth., 71 Cal. App. 4th 819, 828 (1999);

14

see also Stalberg v. W. Title Ins. Co., 230 Cal. App. 3d 1223,

15

1230-31 (1991) (concluding that law firm’s knowledge of fact was

16

imputed to clients); Cal. Civ. Code § 2332 (“As against a

17

principal, both principal and agent are deemed to have notice of

18

whatever either has notice of, and ought, in good faith and the

19

exercise of ordinary care and diligence, to communicate to the

20

other.”).

21

Herman, 71 Cal. App. 4th at 828.

22

was provided to Feldman, and this Agreement referred to and

23

incorporated Schedule 3.18 by reference, Plaintiffs are charged

24

with notice of the 1995 Assignment as of 1997.

25

Plaintiffs do not

Nor do they offer a declaration from Feldman stating that he
That Feldman,

Under

Herman v.

This principle of constructive notice is irrebutable.
Because the SFX Sales Agreement

Furthermore, Section 3.18 of the SFX Sales Agreement stated

26

that, by signing the document, Plaintiffs warranted through their

27

respective trusts that BGP owned the intellectual property listed

28

14

1

in Schedule 3.18.

2

investigate the intellectual property owned by BGP, notwithstanding

3

Clainos’s role as their fiduciary, because they were affirmatively

4

representing that BGP owned the copyrights and trademark at issue

5

in this case.

6

Feldman, an investigation into the facts underlying the warranty in

7

Section 3.18 would have revealed the 1995 Assignment, which was

8

recorded with the Copyright Office.

9

SFX Sales Agreement bars Plaintiffs’ claims against Clainos for the

United States District Court
For the Northern District of California

10
11

This warranty imposed on Plaintiffs a duty to

Indeed, even if the 1995 Assignment were not sent to

Thus, Feldman’s receipt of the

disputed intellectual property.
In addition, Fabert signed the SFX Sales Agreement as trustee

12

of Plaintiff David Graham’s trust.

13

Fabert represented to Clear Channel that BGP owned the poster

14

copyrights and “The Fillmore” trademark.

15

that he never received a copy of Schedule 3.18, the 1995 Assignment

16

or the SFX Sales Binder, he does not contend that anyone prevented

17

him from obtaining a copy of Schedule 3.18, which was incorporated

18

by reference in the SFX Sales Agreement.

19

“one who assents to a contract is bound by its provisions and

20

cannot complain of unfamiliarity with the language of the

21

instrument.”

22

(1976); see also Circuit City Stores, Inc. v. Ahmed, 283 F.3d 1198,

23

1200 (9th Cir. 2002).

24

the warranty he made, he would have discovered the 1995 Assignment.

25

Thus, Plaintiff David Graham’s claims against Clainos based on the

26

disputed intellectual property are time-barred based on both

27

Feldman’s receipt of the SFX Sales Agreement and Fabert’s assent to

28

15

As noted above, in doing so,

Although Fabert asserts

Under California law,

Madden v. Kaiser Found. Hosps., 17 Cal. 3d 699, 710

Had Fabert investigated the facts underlying

1
2

it.
Finally, many of the posters contained the notice, “© Bill

3

Graham.”

4

Plaintiffs on notice, at the time of the probate proceedings, that

5

their father may have registered intellectual property in his name.

6

Indeed, Plaintiffs acknowledge that Bill Graham had registered the

7

copyrights and “The Fillmore” trademark with the Copyright Office

8

and the U.S. Patent and Trademark Office respectively.

9

Compl. ¶ 20; Nimmer Decl. ¶¶ 14-16.

Nimmer Decl. ¶¶ 14, 39-43.

This should have put

See, e.g.,

And, as Plaintiffs recognize,

United States District Court
For the Northern District of California

10

a search of publically-available records would have shown that this

11

intellectual property was registered in Bill Graham’s name.

12

e.g., Graham-Sult Decl. ¶ 4 (noting that an investigation at the

13

Copyright Office led to his “realization” that his father held

14

“over 300 poster copyrights”).

15

conclusion that Plaintiffs’ claims against Clainos concerning the

16

intellectual property are time-barred.

17

See,

All this further supports a

Plaintiffs’ claims against Clainos concerning the scrapbooks

18

fare no better.

19

period, they were responsible for identifying the personal property

20

of their father to which they were entitled.

21

BGE was sold to the key employees in 1994, Plaintiffs knew that

22

anything claimed by BGE would be included in the sale.

23

distinction -- between Bill Graham’s personal scrapbooks and the

24

BGE archives -- should have put Plaintiffs, who were represented by

25

counsel, on notice that they should investigate the nature of Bill

26

Graham’s personal holdings.

27

specific item-by-item inventory was never undertaken, Plaintiffs do

28

16

Plaintiffs do not dispute that, during the probate

And, at the time that

They did not do so.

This

Although a

1
2
3

not contend that they requested one and were denied.
Accordingly, Plaintiffs’ claims against Clainos were timebarred by the time they brought their lawsuit in October 2010.

4
5

b.

Res Judicata

Clainos also asserts that Plaintiffs’ action lacks merit

6

because, based on the state court’s final order, it is barred by

7

the doctrine of res judicata.

8
9

The final order of a probate court “releases the personal
representative and the sureties from all claims of the heirs or

United States District Court
For the Northern District of California

10

devisees and of any persons affected thereby based upon any act or

11

omission directly authorized, approved, or confirmed in the

12

judgment or order.”

13

“not apply where the judgment or order is obtained by fraud or

14

conspiracy or by misrepresentation contained in the petition or

15

account or in the judgment as to any material fact.”

16

§ 7250(c).

17

material fact.”

Cal. Prob. Code § 7250(a).

This rule does

Id.

Such a misrepresentation may include “the omission of a
Id.

18

Plaintiffs contend that the order closing probate was based on

19

Clainos’s misrepresentations and omissions concerning the nature of

20

their father’s estate.

21

regarding the disputed scrapbooks are precluded by the state

22

court’s final order.

23

contend that the scrapbooks did not appear on any inventory

24

compiled by Clainos or the Greene Law Firm.

25

Greene state, and Plaintiffs do not dispute, that no specific

26

inventory of Bill Graham’s personal memorabilia was ever made.

27

And, as noted above, Plaintiffs do not contend that they sought

28

However, Plaintiffs’ claims against Clainos

To make out their claim of fraud, Plaintiffs

17

However, Clainos and

1

such an inventory, only to be denied.

2

Clainos “controlled our access as well as the definition of what

3

specific Archive items we could have” and that they “were never

4

given complete access to the Archives.”

5

Even if this were true and even if it prevented them from

6

discovering items in their father’s personal collection, Plaintiffs

7

were represented by counsel and could have objected in the probate

8

proceedings.

9

responsible for “going through” their father’s personal items.

Graham-Sult Decl. ¶ 7.

Indeed, they do not dispute that they were

10
United States District Court
For the Northern District of California

Plaintiffs assert that

Greene Decl. ¶ 17.

11

concerns before the state court.

Plaintiffs, however, did not raise their

12

Accordingly, to the extent they are based on the disputed

13

scrapbooks, Plaintiffs’ claims are barred by the state court’s

14

final order.

15

against Clainos regarding the scrapbooks lack merit.

16
17

For this additional reason, Plaintiffs’ claims

c.

Litigation Privilege

California Civil Code section 47(b) provides that

18

communications made in or related to judicial proceedings are

19

absolutely immune from tort liability.

20

Court explains that the purpose of the privilege is “to afford

21

litigants . . . the utmost freedom of access to the courts without

22

fear of being harassed subsequently by derivative tort actions.”

23

Silberg v. Anderson, 50 Cal. 3d 205, 213 (1990).

24

privilege applies to any communications (1) made in a judicial

25

proceeding; (2) by litigants or other participants authorized by

26

law; (3) to achieve the objects of the litigation; (4) that have

27

some connection or logical relation to the action.”

28

18

The California Supreme

“The litigation

Sharper Image

1

Corp. v. Target Corp., 425 F. Supp. 2d 1056, 1077 (N.D. Cal. 2006)

2

(citing Silberg, 50 Cal. 3d at 212).

3

met, § 47(b) operates as an absolute privilege.

4

3d at 216.

5

resolved in favor of applying it.”

6

App. 4th 892, 913 (2002).

7

Once these requirements are
Silberg, 50 Cal.

“Any doubt about whether the privilege applies is
Kashian v. Harriman, 98 Cal.

As noted above, a substantial portion of Plaintiffs’ action is

8

based on statements Clainos made in the probate proceedings.

9

e.g., Compl. ¶ 59.

See,

Thus, to the extent that Plaintiffs’ claims are

United States District Court
For the Northern District of California

10

based on these statements, the litigation privilege immunizes

11

Clainos from liability.

12

Association, Inc. v. City of Santa Monica, 41 Cal. 4th 1232 (2007),

13

is unavailing.

14

privilege is trumped by statutes that are “more specific than the

15

litigation privilege” and that “would be significantly or wholly

16

inoperable” if the privilege were asserted.

17

requirements are met by criminal statutes penalizing perjury and

18

subornation of perjury and statutes related to state bar

19

discipline.

20

that their claims arise under statutes to which the litigation

21

privilege does not apply.

22

state courts have recognized the continued breadth of the

23

litigation privilege, reaffirming that it “immunizes defendants

24

from virtually any tort liability (including claims for fraud),

25

with the sole exception of causes of action for malicious

26

prosecution.”

27

(citation omitted).

28

Plaintiffs’ reliance on Action Apartment

Action Apartment teaches that the litigation

Id.

Id. at 1246.

These

Plaintiffs, however, do not cite any authority

Indeed, following Action Apartment,

Olsen v. Harbison, 191 Cal. App. 4th 325, 333 (2010)

19

1

Because Plaintiffs have not otherwise stated claims against

2

Clainos, their action is stricken as a SLAPP.

3

amend may be granted,6 Plaintiffs present no evidence or argument

4

suggesting that amendment would change the outcome.

5

amend is denied as futile.

6

entitled to attorneys’ fees and costs.

7

§ 425.16(c).

8

B.

9

Against the Greene Defendants, Plaintiffs bring claims for

Although leave to

Thus, leave to

As a prevailing defendant, Clainos is
Cal. Civ. Proc. Code

Greene Defendants’ Motion to Strike

United States District Court
For the Northern District of California

10

aiding and abetting a breach of fiduciary duty, conversion,

11

intentional misrepresentation, negligent misrepresentation and

12

fraudulent concealment.

13

based on the Greene Defendants’ “wrongful participation in the

14

conversion of estate assets and coverup.”

15

Firm Defs.’ Mot. to Strike 14:10.

16
17

1.

Plaintiffs state that these claims are

Pls.’ Opp’n to Greene

Arising from Protected Activity

Plaintiffs’ claims against the Greene Defendants are subject

18

to the anti-SLAPP statute for the same reasons that their claims

19

against Clainos are.

20

misrepresentations and non-disclosures of which they complain were

21

contained in documents these Defendants prepared and filed in state

Plaintiffs plead that some of the alleged

22
23
24
25
26
27
28

6

California law prohibits state courts from affording leave
to amend following a grant of a motion to strike under the antiSLAPP statute. See, e.g., Simmons v. Allstate Ins Co., 92 Cal.
App. 4th 1068, 1073-74 (2001). However, federal district courts
retain discretion to grant leave to amend, notwithstanding such a
motion. See Greensprings Baptist Christian Fellowship Trust v.
Cilley, 629 F.3d 1064, 1066 n.1 (9th Cir. 2010) (citing Verizon
Del., Inc. v. Covad Commc’ns Co., 377 F.3d 1081, 1091 (9th Cir.
2004)).
20

1

court.

2

before the state court was more than incidental to Plaintiffs’

3

claims.

See, e.g., Compl. ¶ 42(a)-(d).

These Defendants’ conduct

4

Because Plaintiffs’ claims are based, in substantial part, on

5

the Greene Defendants’ statements made in connection with an issue

6

under consideration by a judicial body, they fall within the scope

7

of the anti-SLAPP statute.

8

Plaintiffs to state and substantiate their claims against the

9

Greene Defendants.

United States District Court
For the Northern District of California

10

2.

11

The burden therefore shifts to

Probability of Success

Plaintiffs’ claims against the Greene Defendants are barred by

12

the statute of limitations and the litigation privilege7 for the

13

reasons stated above.

14

claims against the Greene Defendants, their action is stricken as a

15

SLAPP.

16

no evidence or argument suggesting that amendment would change the

17

outcome.

18

defendants, the Greene Defendants are entitled to attorneys’ fees

19

and costs.

20
21
22
23

Because Plaintiffs have not otherwise stated

Although leave to amend may be granted, Plaintiffs present

Thus, leave to amend is denied as futile.

As prevailing

Cal. Civ. Proc. Code § 425.16(c).

The Greene Defendants’ motion to dismiss is denied as moot.
II.

BGA Defendants’ Motion to Dismiss Pursuant to Rule 12(b)(6)
A complaint must contain a “short and plain statement of the

claim showing that the pleader is entitled to relief.”

Fed. R.

24
7

25
26
27
28

Plaintiffs’ claims against the Greene Defendants concerning
the disputed scrapbooks are based on these Defendants’ “preparing
and filing false inventories and accountings with the Probate
Court” and “making intentionally false representations to
plaintiffs and the Probate Court.” This conduct clearly falls
within the scope of the litigation privilege.
21

1

Civ. P. 8(a).

2

claim is appropriate only when the complaint does not give the

3

defendant fair notice of a legally cognizable claim and the grounds

4

on which it rests.

5

(2007).

6

state a claim, the court will take all material allegations as true

7

and construe them in the light most favorable to the plaintiff.

8

Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986).

9

However, this principle is inapplicable to legal conclusions;

Dismissal under Rule 12(b)(6) for failure to state a

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

In considering whether the complaint is sufficient to

United States District Court
For the Northern District of California

10

“threadbare recitals of the elements of a cause of action,

11

supported by mere conclusory statements,” are not taken as true.

12

Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937, 1949-50 (2009)

13

NL

(citing Twombly, 550 U.S. at 555).

14

When granting a motion to dismiss, the court is generally

15

required to grant the plaintiff leave to amend, even if no request

16

to amend the pleading was made, unless amendment would be futile.

17

Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911

18

F.2d 242, 246-47 (9th Cir. 1990).

19

would be futile, the court examines whether the complaint could be

20

amended to cure the defect requiring dismissal “without

21

contradicting any of the allegations of [the] original complaint.”

22

Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990).

23

Leave to amend should be liberally granted, but an amended

24

complaint cannot allege facts inconsistent with the challenged

25

pleading.

26
27
28

In determining whether amendment

Id. at 296-97.

Against the BGA Defendants, Plaintiffs bring claims for
conversion, promissory estoppel, unjust enrichment, copyright
22

1

infringement and declaratory relief.

2

they “and/or the Estate of Bill Graham are the rightful owners of”

3

the copyrights discussed above and “approximately ten (10)

4

scrapbooks.”

5

scrapbooks at issue in their complaint.

Compl. ¶ 102.

They seek a declaration that

Plaintiffs do not identify the

6

A.

7

Under California law, a claim for conversion requires a

8

plaintiff to allege (1) “ownership or right to possession of

9

property;” (2) a defendant’s wrongful act toward the property,

Conversion

United States District Court
For the Northern District of California

10

causing interference with the plaintiff's possession; and

11

(3) damage to the plaintiff.

12

Fink, Jacobs, Glaser, Weil & Shapiro, LLP, 150 Cal. App. 4th 384,

13

394 (2007).

14

PCO, Inc. v. Christensen, Miller,

The 1995 Assignment precludes Plaintiffs’ claim against the

15

BGA Defendants for the alleged conversion of copyrights.8

16

Plaintiffs do not allege any facts indicating that they had any

17

right to possession of the disputed copyrights in July 2002, the

18

month the BGA Defendants acquired them.

19

Plaintiffs’ allegations, the copyrights already had been

20

transferred from Bill Graham’s estate to BGE to BGP to SFX to Bill

21

Graham Archives.

22

suggesting that the BGA Defendants engaged in wrongdoing.

23

they contend that Sagan should have known that the 1995 Assignment

By that time, even under

Furthermore, Plaintiffs do not plead facts
Although

24
8

25
26
27
28

As noted above, the Court generally may consider only the
complaint on a motion to dismiss. However, the 1995 Assignment is
properly before the Court on the BGA Defendants’ motion because
Plaintiffs’ complaint refers to the document, it is central to
Plaintiffs’ claim, and no party questions its authenticity. See
Daniels-Hall, 629 F.3d at 998.
23

1
2

was defective, they plead no facts to support this contention.
Similarly, Plaintiffs do not allege facts suggesting that they

3

had an ownership interest in the ten scrapbooks.

4

copyrights, Plaintiffs allege that these items were transferred

5

between several entities before the BGA Defendants acquired them in

6

July 2002.

7

Defendants acted improperly with respect to the ten scrapbooks.

8
9
United States District Court
For the Northern District of California

10

Like the

Furthermore, Plaintiffs do not allege how the BGA

Accordingly, Plaintiffs’ conversion claim against the BGA
Defendants is dismissed.

Because amendment would be futile, the

Court does not afford leave to amend.

11

B.

12

To state a claim for promissory estoppel, a plaintiff must

Promissory Estoppel

13

plead “(1) a promise clear and unambiguous in its terms;

14

(2) reliance by the party to whom the promise is made; (3) the

15

reliance must be both reasonable and foreseeable; and (4) the party

16

asserting the estoppel must be injured by his reliance.”

17

Ecology, Inc. v. State, 129 Cal. App. 4th 887, 901 (2005) (citation

18

and internal quotation and editing marks omitted).

19

US

Plaintiffs’ promissory estoppel claim against the BGA

20

Defendants is based on Clainos’s and the Greene Defendants’ alleged

21

promises to give them all of Bill Graham’s scrapbooks.

22

do not contend that the BGA Defendants ever made them a promise.

23

Because Plaintiffs fail to allege that the BGA Defendants promised

24

them anything, Plaintiffs’ promissory estoppel claim against the

25

BGA Defendants is not cognizable.

26
27
28

Plaintiffs

Neither Powers v. Pacific Diesel Engine Company, 206 Cal. 334
(1929), nor Burgess v. California Mutual Building and Loan
24

1

Association, 210 Cal. 180 (1930), require a contrary conclusion.

2

Powers stands for the proposition that an original owner may be

3

estopped from asserting ownership over property in light of a bona

4

fide purchaser’s claim if the original owner negligently entrusted

5

the property to a third party who sold the property to the

6

purchaser.

7

2d 669, 675 (1960) (explaining that Powers reflects the principle

8

of “upholding claims of bona fide purchasers when any basis of

9

estoppel could be found to exist”).

206 Cal. at 341; see also Reynolds v. Reynolds, 54 Cal.

The Powers court relied on the

United States District Court
For the Northern District of California

10

precept that, “where one of two innocent persons must suffer by the

11

act of a third, he, by whose negligence it happened, must be the

12

sufferer.”

13

not applicable to the promissory estoppel claim in this case.

14

BGA Defendants did not originally own the scrapbooks, nor did they

15

negligently entrust them to Clainos.

16

party enforcing a promise made by a promisor to another party.

17

Cal. at 186-88.

18

allege any promise by the BGA Defendants.

19

206 Cal. at 339 (citation omitted).

This principle is
The

Burgess concerned a third
210

Here, as noted above, Plaintiffs have failed to

Accordingly, Plaintiffs’ promissory estoppel claim against the

20

BGA Defendants is dismissed.

21

alleged promises made by Clainos and the Greene Defendants and

22

there is no indication that amendment would save this claim, this

23

dismissal is without leave to amend.

Because this claim is based on

24

C.

25

Plaintiffs’ unjust enrichment claim is based on their

Unjust Enrichment

26

allegations that the BGA Defendants “wrongfully acquired the

27

copyrights and the scrapbooks.”

28

Compl. ¶ 93.
25

However, assuming

1

that unjust enrichment is a cognizable cause of action under

2

California law, Plaintiffs allege no facts to suggest that the BGA

3

Defendants acted improperly.

4

plead how the BGA Defendants knew or should have known that SFX’s

5

ownership of the copyrights and the scrapbooks was improper.

6

As stated above, Plaintiffs do not

Accordingly, Plaintiffs’ unjust enrichment claim against the

7

BGA Defendants is dismissed.

8

amendment would save this claim, this dismissal is without leave to

9

amend.

Because there is no indication that

United States District Court
For the Northern District of California

10

D.

11

To bring a claim for copyright infringement, a plaintiff must

Copyright Infringement

12

be the “legal or beneficial owner of an exclusive right under a

13

copyright” and allege “infringement of that particular right

14

committed while he or she is the owner of it.”

15

As already stated, based on the 1995 Assignment and the alleged

16

subsequent transfers of the disputed copyrights, Plaintiffs do not

17

own the copyrights at issue.

18

infringement claim against the BGA Defendants is dismissed.

19

Because amendment would not save this claim, this dismissal is

20

without leave to amend.

17 U.S.C. § 501(b).

Accordingly, their copyright

21

E.

22

The Declaratory Judgment Act (DJA) permits a federal court to

Declaratory Judgment

23

“declare the rights and other legal relations” of parties to “a

24

case of actual controversy.”

25

Terminals v. Asarco, Inc., 792 F.2d 887, 893 (9th Cir. 1986). The

26

“actual controversy” requirement of the Declaratory Judgment Act is

27

the same as the “case or controversy” requirement of Article III of

28

26

28 U.S.C. § 2201; see Wickland Oil

1

the United States Constitution.

2

F.3d 142, 143 (9th Cir. 1994).

Am. States Ins. Co. v. Kearns, 15

3

Plaintiffs’ declaratory judgment claim against the BGA

4

Defendants fails because they have not alleged facts showing that

5

there is an actual case or controversy.

6

dismissed.

7

save any of their claims and permit them to show an actual case or

8

controversy, this dismissal is without leave to amend.

Because there is no indication that amendment would

9
United States District Court
For the Northern District of California

10

Accordingly, this claim is

CONCLUSION
For the foregoing reasons, the Court GRANTS Plaintiffs’ motion

11

for leave to supplement the record; GRANTS Clainos’s anti-SLAPP

12

motion to strike and for attorneys’ fees; GRANTS the Greene

13

Defendants’ motion to strike and for attorneys’ fees and DENIES as

14

moot their motion to dismiss; and GRANTS the BGA Defendants’ motion

15

to dismiss.

16

Defendants are stricken as SLAPPs.

17

Defendants are dismissed without leave to amend.

18

Plaintiffs’ actions against Clainos and the Greene
Their claims against the BGA

As noted above, under the anti-SLAPP statute, Clainos and the

19

Greene Defendants are entitled to attorneys’ fees and costs.

20

Defendants may seek fees and costs in accordance with Civil L.R.

21

54-1 and 54-5.

22

The Clerk shall enter judgment and close the file.

23

These

IT IS SO ORDERED.

24

Dated: 6/24/2011
CLAUDIA WILKEN
United States District Judge

25
26
27
28

27