Judge: H. Jay Ford, III, Case: 22SMCV00186, Date: 2022-09-15 Tentative Ruling

Case Number: 22SMCV00186    Hearing Date: September 15, 2022    Dept: O

 Case Name:  Hurricane Holdings, LLC v. Gonzalez, et al.

SUBJECT:               SLAPP MOTION

MOVING PARTY:  Defendant Victoria Gonzalez

RESP. PARTY:        Plaintiff Hurricane Holdings, LLC

TENTATIVE RULING

            Defendant Victoria Gonzalez’s SLAPP Motion is GRANTED.

“Litigation of an anti-SLAPP motion involves a two-step process. First, the moving defendant bears the burden of establishing that the challenged allegations or claims arise from protected activity in which the defendant has engaged.  Second, for each claim that does arise from protected activity, the plaintiff must show the claim has “at least ‘minimal merit.  If the plaintiff cannot make this showing, the court will strike the claim.”  Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1009 (where moving party seeks to strike an entire cause of action alleging multiple factual bases, court does not determine whether 1^st step is met based on “gravamen” test but must determine whether each factual bases supplies the element of claim or merely provides context). 

I.  1^st step

On the 1^st step, “courts are to consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability.  The defendant's burden is to identify what acts each challenged claim rests on and to show how those acts are protected under a statutorily defined category of protected activity.”  Bonni, supra, 11 Cal.5th at 1009. 

“The moving defendant must show that the challenged claim or claims arise from the defendant's constitutionally protected free speech or petition rights.  A defendant need only make a prima facie showing at this stage.”  Ojjeh v. Brown, supra, 43 Cal.App.5th at 1035–1036.  A defendant has the “burden of identifying all allegations of protected activity” on the 1^st prong of SLAPP.”  See Bel Air Internet, LLC v. Morales (2018) 20 Cal.App.5^th 924, 936-937.  Defendant only meets this burden by demonstrating that the act underlying the plaintiff’s cause of action “fits one of the categories spelled out in section 425.16, subdivision (e).”  See Sprengel v. Zbylut (2015) 241 Cal.App.4th 140, 150. 

Where the plaintiff alleges multiple factual bases for a particular cause of action and the defendant moves to strike the entire cause of action, the defendant must demonstrate that each factual basis qualifies as protected activity and supplies an element of the challenged claim, as opposed to being merely contextual or incidental.  Bonni, supra, 11 Cal.5^th at 1011-1012.  If a defendant seeks to strike an entire cause of action with multiple factual bases, it is defendant’s burden to address each factual basis.  Id. at 1011.  If the defendant fails to address a particular subpart or factual basis, the defendant fails to carry its first prong burden as to that subpart or claim.  Id.  “If a cause of action contains multiple claims and a moving party fails to identify how the speech or conduct underlying some of those claims is protected activity, it will not carry its first-step burden as to those claims.  The nonmovant is not faced with the burden of having to make the moving party's case for it.”  Id.   

Defendant Gonzalez argues ¶25 alleges protected conduct based on (e)(1) and (e)(2), which include “any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law” and “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.”  CCP §425.16(e)(1) and (2).

In ¶25 of the fraud cause of action, Plaintiff alleges, “Only after her mother passed away did GONZALEZ falsely claim to the Seller, to HH and to the City of Los Angeles, that now BOTH Units 2 and 4 were her primary residence, a claim that cannot be true as a matter of law.”  Complaint, ¶25.  Plaintiff alleges that Defendants “made said false representations deliberately for the purpose of inducing Seller and Plaintiff to allow Gonzalez to continue to occupy both units at rental rates severely below market rates…”  Id. at ¶26. 

A.  Protected conduct alleged in complaint 

Defendant establishes that ¶25 references her formal complaint with the Los Angeles Housing Department and her statements to them regarding her tenancy.  See SLAPP Motion, Dec. of V. Gonzalez, ¶8.  Defendant filed the complaint after receiving a notice to vacate from the owner at the time, Daniel Palo.  The complaint and Plaintiff’s statements in connection therewith are protected conduct under CCP §425.16(e)(1) and (e)(2).  Petitioning activity includes “seeking administrative action.”  Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1115; Dible v. Haight Ashbury Free Clinics (2009) 170 Cal.App.4th 843, 850.

B.  Plaintiff establishes that protected conduct only supplies essential element of fraud claim but not trespass or conversion

Defendant was required under Bonni to identify what precise element of each cause of action is supplied by the alleged protected conduct.  Neither Defendant nor Plaintiff cite or discuss Bonni.  Plaintiff references the “gravamen” test in connection with the 1^st step.  However, the Supreme Court expressly rejected the gravamen test in Bonni.  See Bonni, supra, 11 Cal.5th at 1009 (where moving party seeks to strike an entire cause of action alleging multiple factual bases, court does not determine whether 1st step is met based on “gravamen” test but must determine whether each factual bases supplies the element of claim or merely provides context).

Defendant was required to demonstrate that the protected conduct in ¶25 supplies an essential element of the fraud, trespass and conversion causes of action.  See Bonni, supra, 11 Cal.5^th at 1011-1012.  The allegation regarding City of Los Angeles cannot merely be contextual or incidental.  Id. 

Defendant fails to identify what essential elements of the trespass and conversion claims are supplied by the protected conduct.  Defendant only argues that ¶25 is incorporated by reference into the 2^nd cause of action for trespass and 3^rd cause of action for conversion.  Incorporate by reference does not establish that the protected conduct alleged in ¶25 supplies an element of either cause of action.  Defendant fails to satisfy her 1^st step burden as to these causes of action.  The SLAPP is therefore DENIED as to the 2^nd cause of action for trespass and 3^rd cause of action for conversion.

Moreover, Defendant’s representations to City of Los Angeles could not supply any element of either trespass or conversion.  The elements of trespass are (1) plaintiff’s ownership of the property; (2) defendant’s intentional, reckless or negligent entry onto plaintiff’s property; (3) lack of consent or permission for entry by plaintiff; (4) plaintiff’s harm; and (5) that defendant’s entry or conduct was a substantial factor in causing harm.  CACI 2000.  Defendant’s misrepresentation to City of LA could not satisfy the element of “entry” onto Plaintiff’s property.

The elements of conversion are (1) plaintiff’s ownership or right to possess an item of personal property; (2) defendant’s substantial interference with that property by knowingly or intentionally taking possession of the property, preventing plaintiff’s access to the property, destroying the property or refusing to return the property.  CACI 2100.  Defendant’s misrepresentation cannot satisfy the element of substantial interference through taking possession, prevention of access, destruction of property or refusal to return the property.  Plaintiff’s conversion claim is based on the difference between the reduced rent Defendant claims she is entitled to pay and the market rate.

However, Defendant argues the alleged misrepresentations pled in ¶25 form the basis of the fraud claim, i.e. the protected conduct supplies the misrepresentation element of the fraud claim.  Defendant therefore satisfies the 1^st step as to the fraud cause of action. 

            Plaintiff denies that its fraud claim is based on any statement by Defendant to the City of Los Angeles.  The complaint says otherwise.  A defendant is not entitled to “redefine the factual basis for a plaintiff’s claims,” nor is the plaintiff entitled to oppose a SLAPP motion by “disavow[ing] their own allegations in favor of evidence that is inconsistent with their complaints.”  Bel Air Internet, LLC, supra, 20 Cal.App.5^th at 936-937.  Although a court must consider affidavits as well as the pleadings in the first step analysis of SLAPP under CCP §425.16(b)(2), the court does not have license to ignore the allegations of a plaintiff’s complaint.  Id. When the pleadings themselves reveal a protected act, there is no need to provide evidentiary support.  Id.  “[I]f the complaint itself alleges acts included within section 425.16, subdivision (e), there is no reason to go beyond the scope of those allegations to determine whether a plaintiff’s claims arise from protected conduct.”  Id.

In ¶26, Plaintiff alleges that Defendants made “said false representations deliberately for the purpose of inducing Seller and Plaintiff to allow Gonzalez to continue to occupy BOTH units at rental rates severely below market rates.”  See Complaint, ¶26.  “Said misrepresentations” refers to ¶25, which includes Gonzalez’s false claims to the City of Los Angeles that both Units 2 and 4 were her primary residences.  Nothing in the complaint limits the fraud claim to the Defendant’s false claims to Plaintiff and seller.  Plaintiff fails to rebut Defendant’s showing that the 1^st step is satisfied as to the fraud claim. 

            C.  SLAPP only proceeds as to the 1^st cause of action for fraud and denied as to the 2^nd and 3^rd cause of action for trespass and fraud.

            Plaintiff satisfied the 1^st step as to the 1^st cause of action for fraud.  Plaintiff failed to satisfy the 1^st step as to the 2^nd and 3^rd cause of action for trespass and fraud.  As such, the SLAPP only proceeds to the 2^nd step as to the 1^st cause of action for fraud.  See Baral v. Schnitt (2016) 1 Cal.5th 376, 393-394, 398 (SLAPP should be used like a scalpel, just as an ordinary motion to strike is, excising the protected activity from the “mixed cause of action” but leaving the cause of action intact as to the unprotected activity). 

II.  2^nd step—Plaintiff fails to establish probability of prevailing on 1^st cause of action for fraud based on Defendant’s statements to the City

            “The second prong of the statute deals with whether the plaintiff has “demonstrated a probability of prevailing on the claim.  Under section 425.16, subdivision (b)(2), the superior court, in making these determinations, considers ‘the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.’ For purposes of an anti-SLAPP motion, the court considers the pleadings and evidence submitted by both sides, but does not weigh credibility or compare the weight of the evidence. Rather, the court's responsibility is to accept as true the evidence favorable to the plaintiff.  A plaintiff need only establish that his or her claim has minimal merit to avoid being stricken as a SLAPP.  With these descriptions in mind, we will not strike a cause of action under the anti-SLAPP statute unless it lacks even minimal merit.”  Ralphs Grocery Co. v. Victory Consultants, Inc. (2017) 17 Cal.App.5th 245, 261.

            A plaintiff must “state and substantiate a legally sufficient claim.   Put another way, the plaintiff must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment by the plaintiff is credited.”   Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4^th 811, 820. 

            Plaintiff fails to demonstrate the probability of prevailing on the 1^st cause of action for fraud.  Plaintiff was required to state a sufficient claim for fraud and submit prima facie evidence showing facts to sustain favorable judgment.  Plaintiff must therefore allege sufficient facts to satisfy each element of the fraud claim and submit prima facie evidence of each element.

            Justifiable reliance is an essential element of Plaintiff’s fraud claim.  See Lazar v. Supr. Ct. (1996) 12 Cal.4^th 631, 638.  “Actual reliance occurs when a misrepresentation is an immediate cause of a plaintiff's conduct, which alters his legal relations, and when, absent such representation, he would not, in all reasonable probability, have entered into the contract or other transaction.  It is not necessary that a plaintiff's reliance upon the truth of the fraudulent misrepresentation be the sole or even the predominant or decisive factor in influencing his conduct.  It is enough that the representation has played a substantial part, and so has been a substantial factor, in influencing his decision.”  Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 976–977.

            Plaintiff admits in its opposition that it never believed or relied on Defendant’s misrepresentation that she is the legal tenant of both Unit 2 and Unit 4.  “By making these false representations to the Seller and to the Buyer as justification for her remaining in Unit 4, she demonstrated an intent to defraud, and to induce reliance. While Plaintiff has not accepted these false representations, the eviction moratorium has prevented it from challenging these claims.”  See Plaintiff’s Opposition, 9:17-21. 

            Plaintiff’s evidence also fails to establish a prima facie case of reliance, much less justifiable reliance.  Plaintiff’s manager, Richard Bry, testifies that the seller disclosed the situation with Defendant and her claim of tenancy over Units 2 and 4.  See Dec. of R. Bry, ¶3.  Bry testifies that Palo provided the Estoppel Certificates executed by Defendant and her mother indicating that Defendant’s primary residence was Unit 2 and Defendant’s mother’s primary residence was Unit 4.  Id. at ¶¶4-6.  Bry testifies that Defendant’s claim of tenancy has depressed the market value of the property.  Id.

            Nowhere in Bry’s declaration is any testimony that he or the seller ever relied on the truth of Defendant’s claim of tenancy over Unit 4, nor does Bry testify that Plaintiff changed its immediate conduct in reliance on the truth of Defendant’s claims.  Plaintiff’s other documentary evidence does not address the justifiable reliance element.  The Assignment Agreement between Plaintiff and the seller, the estoppel certificates, rent checks for Unit 4 from Defendant’s mother and the seller’s notice to vacate to Defendant are submitted to demonstrate that Defendant does not have any legal claim to Unit 4, not justifiable reliance.

            In addition, as acknowledged by Plaintiff, its failure to evict or challenge Defendant’s claim to tenancy was not due to reliance on the truth of Defendant’s claims.  Plaintiff states that it has not challenged Defendant’s claim of tenancy due to the eviction moratorium.  See Plaintiff’s Opposition, 9:17-21.

           In addition, based on the 1-13-22 letter from the Los Angeles Housing Department, the City of Los Angeles determined that Defendant submitted sufficient evidence of a legally recognized tenancy in connection with her complaint and Palo’s notice to vacate.  See SLAPP Motion, Ex. C.  The City indicated that based on its determination, Defendant enjoyed all the legal protections under the Rent Stabilization Ordinance, including protection from no-fault eviction and COVID-19 renter protections.  Id.  Plaintiff cannot void or circumvent the City of Los Angeles’ finding by suing Plaintiff for fraudulent misrepresentation.

            Plaintiff’s factual allegations also expressly disclaim any reliance on Defendant’s alleged fraudulent claim that she is the legal tenant of both Unit 2 and Unit 4.  Plaintiff alleges that neither the Seller nor Plaintiff has accepted rent from Defendant for Unit 4, because neither party believed or relied on Defendant’s representation that she is the legal tenant of Unit 4.  See Complaint, ¶¶14-15.  There are no allegations of justifiable reliance in the 1^st cause of action for fraud either.  Id. at ¶¶23-29. 

            Plaintiff has the burden of establishing that it has stated a legally sufficient claim for fraudulent misrepresentation and submitting prima facie evidence of each element of the cause of action.  Plaintiff fails to satisfy this burden due to Plaintiff’s failure to plead or prove justifiable reliance on Defendant’s alleged misrepresentation. 

            Defendant’s Motion to Strike is GRANTED.  The reference to Defendant’s claims to the City of Los Angeles is stricken from paragraph 25.