4 months ago

Lawyers Attempt to Protect Assets of their Clients Charged with Insurance Fraud From Seizure by State Fails
Post 5071

In The People v. David M. Browne et al., B332304, California Court of Appeals, Second District, Seventh Division (May 6, 2025)

Attorneys David M. Browne and George A. Shohet appeal from the trial court's denial of their special motion to strike (Code of Civ. Proc., § 425.16, subd. (b)(1)) an affidavit filed by the Los Angeles County District Attorney's office on behalf of the People of the State of California to initiate a civil contempt proceeding against Browne, Shohet, their clients, and others based on alleged violations of three temporary restraining orders that barred the transfer or encumbrance of specified properties and assets. The trial court issued the temporary restraining orders in three related criminal actions the People filed against multiple defendants (including the owner of one of the properties) for conspiracy to commit white collar insurance fraud. The People opposed Browne and Shohet's motion on the basis the filing of the affidavit fell within the public enforcement exemption to the anti-SLAPP statute in section 425.16, subdivision (d) (section 425.16(d)).

Browne and Shohet contended the trial court erred in denying their motion because the filing of the affidavit does not fall within the public enforcement exemption and the conduct alleged in the affidavit constituted protected petitioning activity. The People moved to dismiss the appeal, arguing that because the public enforcement exemption applies, the court's order is not directly appealable under section 425.16, subdivision (i). We agree and dismiss the appeal.

Background of the Case

In 2015, the Los Angeles County District Attorney's office charged 15 defendants, including Turley, with conspiracy to commit insurance fraud, invoking a white-collar special enhancement under Penal Code section 186.11. The trial court issued a TRO to preserve properties and assets potentially subject to seizure, including a specific property owned by Turley. The TRO was recorded and subsequently contested by Notre Dame Properties LLC, claiming ownership of the property and requesting the TRO's lifting.

The Affidavit and Contempt Proceedings

The district attorney's office filed an affidavit alleging that Browne, Shohet, and their clients violated the TROs by attempting to sell and transfer the property. The affidavit claimed that Browne and Shohet had actual knowledge of the TROs and were involved in actions that contravened these orders, including a purchase agreement and subsequent title transfer. The trial court issued an order to show cause for contempt against the involved parties.

Court's Ruling and Appeal

The court's ruling was based on the interpretation of the public enforcement exemption in the anti-SLAPP statute, which applies to actions brought by designated public prosecutors. The court found that the contempt proceeding was criminal in nature, as it was initiated to uphold the authority of the court in enforcing the TROs. Browne and Shohet's appeal was dismissed on the grounds that the order denying their motion was not directly appealable under the anti-SLAPP statute due to the applicability of the public enforcement exemption.

Conclusion

The dismissal of Browne and Shohet's appeal, affirming the trial court's decision to maintain the integrity of its orders and the public enforcement of the law. The case highlights the complexities surrounding anti-SLAPP motions and public enforcement actions in the context of civil contempt proceedings.

The Public Enforcement Exemption Applies to the Affidavit Filed by the District Attorney's Office

Civil contempt under the Code of Civil Procedure "is quasicriminal in nature," in contrast to criminal contempt prosecuted as a misdemeanor under Penal Code section 166. Where the primary object of contempt proceedings is to protect the rights of litigants, the proceedings are regarded as civil in character. On the other hand, where the object of the proceeding is to vindicate the dignity or authority of the court, they are regarded as criminal in character.

Because the Public Enforcement Exemption Applies, the Denial of the Special Motion To Strike Is Not Directly Appealable

Finally, Browne and Shohet's contention that the trial court did not rely on the public enforcement exemption in denying the special motion to strike is not persuasive. Although the court did not explicitly reference the public enforcement exemption in its oral ruling, the only argument made by the district attorney's office in opposition to the motion was that the exemption under section 425.16(d) applied. The appeal was dismissed.

ZALMA OPINION

People who commit insurance fraud are not nice people, they are dedicated criminals. When they are arrested and subject to a criminal trial they immediately attempt to protect the assets the gained from their criminal efforts. Trying to sell an asset - real property - in violation of a TRO is just another effort to profit from their crime. Their lawyers attempted to remove the TRO and were found to be in contempt along with their clients. Their efforts failed because of an exemption from the anti-SLAPP statute applied and the appeal was dismissed.

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