Plaintiff CEO Was Unable To Prove His Claim Against Employee And His Counsel For Their Efforts To Add Him As Judgment Debtor To Underlying Lawsuit Stemmed From Malicious Prosecution As Opposed To Protected Activity.
Khanna v. Sonasoft Corp. – from our July 13, 2016 and October 15, 2019 posts – is the underlying case for this next one.
In that case, an employee had sued his employer and its CEO for failure to promptly and fully pay his wages. In the first appeal, employer was unsuccessful in challenging postjudgment awards of attorneys’ fees, costs and interest. However, its CEO, Andy Khanna (unrelated to the employee Vince Khanna), was successful in that appeal in challenging an amendment that added him as a judgment debtor under an alter ego theory. In the second appeal, CEO sought to reverse the trial court’s denial of his request for fees incurred on the first appeal. There, the 6th District affirmed – finding CEO was not entitled to fees as he had failed to demonstrate that employee had brought the action against him in bad faith as required by Labor Code section 218.5(a).
Now, in Khanna v. Khanna, Case Nos. H044973 and H045555, (6th Dist., April 3, 2020) (unpublished), CEO appeals the trial court’s order granting employee and his counsel’s anti-SLAPP motions brought in response to CEO’s lawsuit against them for malicious prosecution stemming from the alter-ego allegations and adding CEO as judgment debtor – alleging the trial court erred in finding that employee and his counsel made the required threshold showing that CEO’s single cause of action arose from a protected activity, and in finding that CEO failed to demonstrate the required probability of prevailing on the claim. Additionally, CEO appeals the trial court’s orders granting employee and his counsel’s motions for attorneys’ fees and costs – alleging the trial court abused its discretion in awarding fees in their “entirety” and by not reducing the fees to reasonable amounts.
However, CEO fared no better on appeal – with the 6th District finding no error, nor abuse of discretion, in the trial court’s orders and affirming.
First, as to the anti-SLAPP motions, the 6th District found that CEO failed to provide sufficient evidence that employee and his counsel pursued the alter ego theory and had him added as judgment debtor through malice, fraud, or concealment. Employee and his counsel pursued CEO as additional judgment debtor when employer failed to perform under the parties’ settlement agreement and demonstrated no intention of performing and paying the judgment.
Second, as to the attorneys’ fees, the trial court – finding employee and his counsel had each met their burden of establishing entitlement to fees, and of documenting the time spent/hourly rates charged – awarded to attorney defendants their requested $86,365.50 in fees, with no multiplier, and $1,267.90 in costs for defeating CEO in malicious prosecution claim. Likewise, the trial court also awarded employee $49,920.00 in fees – with no multiplier – and $947.18 in costs. Additionally, the trial court also awarded the attorney defendants with an additional fees-on-fees award of $33,007.50 in fees, without a multiplier, and $325.15 in costs for litigating their first motion for attorney fees and costs.
The 6th District found no abuse of discretion as to any of the fee awards. Rather, they found that employee and his counsel were entitled to fees under Code Civ. Proc. section 425.16(c)(1) for successfully defeating the malicious prosecution claim with their anti-SLAPP motions. CEO failed to show that the Anti-SLAPP motions were simple or routine as he asserted, the requested hourly rates were supported by evidence, and CEO failed to support his claims of block-billing and unnecessary, redundant or excessive hours.
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