Judge: Gregory Keosian, Case: 21STCV26756, Date: 2022-08-11 Tentative Ruling
Case Number: 21STCV26756 Hearing Date: August 11, 2022 Dept: 61
Plaintiff
and Cross-Defendant Ultimate Action, LLC’s Special Motion to Strike
(Anti-SLAPP) Pacific City Bank’s Cross-Complaint is DENIED. No sanctions are
awarded.
I. SPECIAL MOTION TO STRIKE
In 1992 the Legislature enacted Code of Civil
Procedure section 425.16 as a remedy for the “disturbing increase in lawsuits
brought primarily to chill the valid exercise of the constitutional rights of
freedom of speech and petition for the redress of grievances.” (Code Civ.
Proc., §425.16, subd. (a); Wilcox v.
Superior Court (1994) 27 Cal.App.4th 809, 817.) The lawsuits are commonly referred to as
“SLAPP” lawsuits, an acronym for “strategic lawsuit against public
participation.” (Equilon Enterprises, LLC
v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57, fn. 1.) A defendant
opposing a SLAPP claim may bring an “anti-SLAPP” special motion to strike any
cause of action “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 with a public issue . . . .” (Code
Civ. Proc., § 425.16, subd. (b)(1).) An anti-SLAPP motion may be addressed to
individual causes of action and need not be directed to the complaint as a
whole. (Shekhter v. Financial Indemnity
Co. (2001) 89 Cal.app.4th 141, 150.)
In ruling on an anti-SLAPP motion, a trial
court uses a “summary-judgment-like procedure at any early stage of the
litigation.” (Varian Medical Systems,
Inc. v. Delfino (2005) 35 Cal.4th 180, 192.) This is a two-step
process. First, the defendants must show
that the acts of which the plaintiff complains were taken “in furtherance of
the [defendant]’s right of petition or free speech under the United States of
California Constitution in connection with a public issue.” (Code Civ. Proc.,
§425.16 subd. (b)(1).) Next, if the defendant carries that burden, the burden
shift to the plaintiff to demonstrate a probability of prevailing on the claim.
(Code Civ. Proc., § 425.16 subd. (b)(3).)
In making both
determinations the trial court considers “the pleadings, and supporting and
opposing affidavits stating the facts upon which the liability or defense is
based.” (Code Civ. Proc., § 425.16, subd. (b)(2); Equilon Enterprises, supra,
29 Cal.4th at p. 67.)
A.
PROTECTED ACTIVITY
The anti-SLAPP statute defines protected
activities as:
(1) any written or oral statement or writing
made before a legislative, executive, or judicial proceeding, or any other
official proceeding authorized by law, (2) any written or oral statement or
writing made in connection with an issue under consideration or review by a
legislative, executive, or judicial body, or any other official proceeding
authorized by law, (3) any written or oral statement or writing made in a place
open to the public or a public forum in connection with an issue of public
interest, or (4) any other conduct in furtherance of the exercise of the
constitutional right of petition or the constitutional right of free speech in
connection with a public issue or an issue of public interest.
(Code Civ. Proc., § 425.16, subd. (e),
emphasis added.)
To determine whether a given
complaint arises from protected activity, courts “disregard the labeling of the
claim and instead “examine the principal thrust or gravamen of a plaintiff's
cause of action to determine whether the anti-SLAPP statute applies.” (Hylton
v. Frank E. Rogozienski, Inc. (2009) 177 Cal.App.4th 1264, 1272, intenal
quotation marks and citations omitted.) Courts “assess the principal thrust by
identifying the allegedly wrongful and injury-producing conduct that provides the foundation for the claim.”
(Ibid., internal quotation marks and alterations omitted.)
Courts have “have adopted a fairly expansive view of what
constitutes litigation-related activities within the scope of section 425.16.”
(Kashian v. Harriman (2002) 98 Cal.App.4th 892, 908.) “Correspondence
made in anticipation of litigation “contemplated in good faith and under
serious consideration can be a petitioning activity protected by the anti-SLAPP
statute.” (Lunada Biomedical v. Nunez
(2014) 230 Cal.App.4th 459, 472.) The court is mindful that the defendant bears
the burden of making this initial showing. (See
Navellier v. Sletten (2002) 29 Cal.4th 82, 88.)
Plaintiff here argues that
Pacific’s cross-complaint targets protected activity because its claims for
quiet title, declaratory relief, and an equitable lien necessarily take as
elements of their claims Plaintiff’s prosecution of the present lawsuit, which
seeks to invalidate Pacific’s security interest in certain real property.
(Motion at pp. 13–14.) Because an element of any quiet title claim is “adverse
claims to the title of the plaintiff” (Code Civ. Proc. § 761.020, subd. (c)),
and because an element of any claim for declaratory relief is an “actual
controversy relating to the legal rights and duties of the respective parties”
(Code Civ. Proc., § 1060), Plaintiff argues that crucial elements of Pacific’s
claims can arise only from Plaintiff’s initiating lawsuit, which supplies both
the adverse claims and actual controversy upon which Pacific’s claims depend. (Motion
at pp. 13–16.) Plaintiff submits cases which it contends support subjecting
quiet title and declaratory relief claims to the anti-SLAPP statute. (Motion at
pp. 13–14, citing RGC Gaslamp, LLC v. Ehmcke Sheet Metal Co., Inc.
(2020) 56 Cal.App.5th 413; Colyear v. Rolling Hills Community Assn. of
Rancho Palos Verdes (2017) 9 Cal.App.5th 119, 123; Trapp v. Naiman (2013)
218 Cal.App.4th 113, 120.)
Plaintiff’s arguments are
unpersuasive. Pacific’s cross-complaint does not take as its target Plaintiff’s
filing of a lawsuit, but seeks only to adjudicate the same underlying
controversy — i.e. the validity of Pacific’s security interest — that
Plaintiff’s lawsuit identifies.
Two cases are instructive: City
of Cotati v. Cashman (2002) 29 Cal.4th 69, and Copenbarger v.
Morris Cerullo World Evangelism (2013) 215 Cal.App.4th 1237. In
the City of Cotati case, mobile-home park owners sued to invalidate a
municipal rent stabilization ordinance, and the city, in a separate, second
lawsuit, sought a declaration that the same ordinance was valid. (City of
Cotati, supra, 29 Cal.4th at p. 71.) When the trial court
granted the park owners’ anti-SLAPP motion again the city’s suit, the
California Supreme Court held that the anti-SLAPP statute did not apply,
because the city’s declaratory relief action, although filed after the park
owners’ action, did not arise from the prior action. (Id. at pp. 76–77.)
The following passage from that decision is well-suited to the present
proceedings:
It is
indisputably true, as the trial court observed, that City's action was filed
shortly after Owners filed their claim in federal court. But the mere fact an
action was filed after protected activity took place does not mean it arose
from that activity. The anti-SLAPP statute cannot be read to mean that “any
claim asserted in an action which arguably was filed in retaliation for the
exercise of speech or petition rights falls under section 425.16, whether or
not the claim is based on conduct in exercise of those rights.” [Citations]
While City's
complaint repeatedly refers to the underlying subject matter of Owners' federal
action (i.e., the mobilehome park rent stabilization ordinance and arguments
respecting its validity), it contains no reference to the action itself.
California courts rightly have rejected the notion “that a lawsuit is
adequately shown to be one ‘arising from’ an act in furtherance of the rights
of petition or free speech as long as suit was brought after the defendant
engaged in such an act, whether or not the purported basis for the suit is that
act itself.” [Citation]
To construe
“arising from” in section 425.16, subdivision (b)(1) as meaning “in response
to,” as Owners have urged, would in effect render all cross-actions potential
SLAPP's. We presume the Legislature did not intend such an absurd result.
[Citation] Absurdity aside, to suggest that all cross-actions arise from the
causes of action in response to which they are pled would contravene the
statutory scheme governing cross-complaints. [Citations] The Legislature
expressly has provided that a cross-action may “arise[ ] out of the same
transaction, occurrence, or series of transactions or occurrences as the cause
of action which the plaintiff alleges” [citations],rather than out of that
cause of action itself. Indeed, Owners' counsel, when arguing before the trial
court, acknowledged City's action could not be a SLAPP if City had filed it as
a counterclaim in Owners' federal action.
(Id. at pp. 76–77.)
In the Copenbarger case,
a tenant filed a complaint for declaratory relief and breach of lease shortly
after a three-day notice to cure or quit was served against it, alleging that
it had no obligation under the operative lease documents to make the cures
described in the notice. (Copenbarger, supra, 215 Cal.App.4th
at p. 1242.) The defendants filed an unlawful detainer action pursuant to the
notice and brought an anti-SLAPP motion against the tenant’s complaint, which
the trial court granted, reasoning that the tenant’s suit was based on the protected
act of filing of the three-day notice. (Id. at p. 1243.) But the
appellate court reversed, holding that “[a]lthough an unlawful detainer action
itself is protected activity, . . . [a]
complaint arising out of or based on the dispute or conduct underlying the
unlawful detainer action is not subject to a special motion to strike.” (Id.
at p. 1245.) While the service of the three day notice may have “triggered” the
tenant’s suit, the suit was not based on service of the notice, but rather “a
dispute over the parties' respective rights and obligations under certain terms
of the Ground Lease and the Sublease.” (Id. at p. 1247.) To the extent
the notices, assumed to be protected activity, were at issue, they “constituted
evidence these lease interpretation issues were genuinely in dispute.” (Ibid.)
The disposition of the present
case is identical to the Copenbarger and City of Cotati cases in
material respects. Pacific’s cross-complaint seeks judicial declarations as to
the validity of its security interest in the property. While Plaintiff has
challenged the validity of that interest in its complaint, Pacific’s claims are
not based on any alleged impropriety in Plaintiff’s lawsuit, but merely seeks
an affirmative adjudication of that interest’s validity, much as was the case with
the municipal ordinance in City of Cotati. Plaintiff’s complaint may
have “triggered” Pacific’s cross-complaint, and Pacific’s cross-complaint makes
incidental mention of Plaintiff’s “derivative” claims. But an anti-SLAPP motion
will not lie merely for a lawsuit triggered by protected activity, where the
activity itself is only evidence of the existence of an underlying controversy.
(See Navellier v. Sletten (2002) 29 Cal.4th 82, 89 [“[That a cause of
action arguably may have been ‘triggered’ by protected activity does not entail
it is one arising from such.”].]
Plaintiff in reply makes no
mention of the above authorities, which Pacific has cited in opposition. And Plaintiff’s
own supporting authorities are inapposite. The cases that Plaintiff cites hold
only for the proposition that an anti-SLAPP motion may target quiet title and
declaratory relief causes of action when those causes of action (usually
accompanied by other claims for damages) actually and specifically target
protected litigation activity. In RGC Gaslamp, LLC, the anti-SLAPP
statute applied because the complaint targeted the successive filing and
withdrawing of identical mechanic’s liens, which the court held was protected
conduct as “a necessary prerequisite to bringing a foreclosure action.” (RGC
Gaslamp, LLC, supra, 56 Cal.App.5th at pp. 418–419.) The Colyear
case held that a quiet title claim targeted protected activity when it alleged
that another HOA resident had “clouded his title with an improper encumbrance”
by “submitting [an] application” to the HOA to initiate what the plaintiff
characterized as an unfair tree-trimming process, but which the court found was
protected petitioning activity. (Colyear, supra, (2017) 9
Cal.App.5th 119, 133.) And in Trapp v. Naiman, the court held that a
complaint targeted protected litigation activity when it alleged that
Defendants “’abused the court processes by filing numerous [UD actions] when
[Defendants] knew or should have know[n] that the foreclosure was invalid,’ and
that the UD actions ‘were filed in an effort to harass Plaintiffs with
unjustified claims which [Defendants] knew or should have known were not
proper.’” (Trapp, supra, 218 Cal.App.4th 113, 118.) These cases
are fundamentally unlike the present case, which makes no issue of Plaintiff’s
lawsuit, except to note it as evidence of a controversy.
As such, the cross-complaint
does not arise from protected activity, and the anti-SLAPP motion is DENIED.
Pacific seeks sanctions under
Code of Civil Procedure § 425.16, subd. (c)(1), which states that a party who
successfully defends their claims against an anti-SLAPP motion may recoup their
fees “If the court finds that a special motion to strike is frivolous or is
solely intended to cause unnecessary delay.” Defendant seeks $14,162.00 in fees,
representing 38.8 hours of attorney work at $365 per hour. (Jain Decl. ¶¶
20–21.) The court finds that Plaintiff’s motion was not frivolous or solely
intended to cause unnecessary delay. As such, no sanctions are appropriate.