Judge: H. Jay Ford, III, Case: 22SMCV01722, Date: 2023-03-16 Tentative Ruling

Case Number: 22SMCV01722    Hearing Date: March 16, 2023    Dept: O

  Case Name:  5916 S. Village Dr LLC v. Flying Tigers, Inc.

SUBJECT:                 SLAPP MOTION

MOVING PARTY:   Defendant Flying Tigers, Inc.

RESP. PARTY:         Plaintiff 5916 S. Village Dr LLC

TENTATIVE RULING

            Defendant Flying Tigers, Inc.’s SLAPP Motion is GRANTED as to ¶¶18-21, 23 and 24 and DENIED as to ¶¶4 and 15.

I.  The Court exercises its discretion to hear it the arguably untimely motion.

            “The special motion may be filed within 60 days of the service of the complaint or, in the court's discretion, at any later time upon terms it deems proper. The motion shall be scheduled by the clerk of the court for a hearing not more than 30 days after the service of the motion unless the docket conditions of the court require a later hearing.”  CCP §425.16(f). 

Plaintiff served Defendant Flying Tigers by posting on 10-10-22 and mailing on 10-11-22.  Service was complete 10 days after posting and mailing on 10-21-22.  CCP §415.45(c).  Flying Tigers filed this SLAPP motion on 2-6-23, 109 days after service was complete and 49 days late under CCP §425.16(f).  In that time, Defendant filed two motions to quash and a motion to set aside default, all of which were mooted or denied.  Defendant Flying Tigers fails to provide any excuse or explanation for the delay in seeking relief under CCP §425.16.  Although not required, Flying Tigers did not seek leave to file an untimely motion. 

Defendant was required to set aside the default prior to doing anything in the action.  Defendant was also entitled to challenge service by motion to quash, even if the motion to quash was denied.  Defendant’s SLAPP motion was also only 1 ½ months late.  Given these facts, the Court exercises its discretion to hear the motion. 

II. Defendant satisfies its burden on the first step of SLAPP with regard to ¶¶18-21, 23 and 24 but not ¶¶4, 15

            “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 1st prong is met based on “gravamen” test but must determine whether each factual bases supplies the element of claim or merely provides context).

            On the 1st 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.

            Defendant Flying Tigers, Inc. moves to strike ¶¶4,15,18-21, 23 and 24 from Plaintiff’s complaint for unlawful detainer pursuant to CCP §425.16(e)(1), (2) and (4).  Paragraphs 4 and 15 allege entry of a fraud judgment against Remington Chase.  See Complaint, ¶¶4 and 15.  Paragraphs 18-21, 23 and 24 allege Defendant’s statements during Plaintiff’s first unlawful detainer action, including Defendant’s verified statements in its answer and discovery responses.  See Complaint, ¶¶18-21.  These allegations allege protected conduct under CCP §425.16(e)(1) and (2).

Defendant does not cite Bonni or apply the elements test set forth in Bonni.  However, Defendant states in a conclusory manner that Plaintiff’s UD action is based on the “breaches” alleged in these paragraphs.  Accordingly, Defendant is arguing that the conduct alleged in ¶¶4,15,18-21, 23 and 24 supply the “breach” element of Plaintiff’s UD claim. 

The conduct that forms the basis of a UD action must first be identified in a notice to cure or quit that is properly served on a tenant.  CCP §1161(2) and (3).  As such, the basis of Plaintiff’s UD action can be determined by examining the notices to cure or quit attached as Exhibits 2 and 3 to the complaint. 

Based on the 3-day notices to cure or quit attached as Exhibits 2 and 3 to the complaint, Plaintiff’s UD action is not based on the Securities and Exchange Commission’s case against Chase or the fraud judgment the SEC obtained against him.  See Complaint, ¶28, Ex. 2.  As such, Defendant fails to satisfy the first step of SLAPP as to ¶¶4 and 15.

However, it is clear from ¶28 of the Complaint and Exhibit 2 to the Complaint that the protected conduct alleged in  ¶¶18-21, 23 and 24 form the basis of Plaintiff’s UD complaint.  Plaintiff alleges in ¶28, “The first of the Cure Notices (Cure Notice #1) informed Flying and all others in possession that Flying’s declarations under penalty of perjury in the First Action…constituted breaches of the Lease Contract and a repudiation of the Lease Contract.”  See Complaint, ¶28.  Cure Notice #1 therefore includes Defendant’s statements in the first UD action as a breach of the lease.  See Complaint, Ex. 2.  Cure Notice #1 states that in order for Defendant to cure this breach, it must submit a notarized declaration under penalty of perjury from an officer or director admitting that the Lease is enforceable against Defendant.  Id. 

In opposition, Plaintiff’s declaration confirms that his UD action is based on Cure Notice #1.  Plaintiff testifies that Defendant’s statements under penalty of perjury in the first UD action is listed as one of the breaches that must be cured to avoid eviction.  See Opposition, Dec. of M. Shaaban, ¶15, Ex. 10.1. 

Plaintiff argues the statements alleged in ¶¶18-21, 23 and 24 are merely “evidentiary” in nature, collateral or incidental to the UD claim.  Plaintiff’s 3-day notice to cure or quit refutes any assertion that the statements alleged in ¶¶18-21, 23 and 24 are incidental or collateral to the claim. 

Plaintiff’s assertion that Defendant’s statements are merely “evidence” of the breach fails to take the holding of Bonni into account.  Under Bonni, the question is whether the protected conduct supplies an essential element of Plaintiff’s UD claim.  Based on Plaintiff’s 3-day notice to cure or quit, the protected conduct supplies the essential element of breach in the UD claim. 

Defendant satisfies the first step as to ¶¶18-21, 23 and 24.  The burden therefore shifts to Plaintiff to establish its probability of prevailing on its UD claim based on the actions alleged in 18-21, 23 and 24. 

Oddly, Defendant did not move to strike ¶28 or the portions of Exhibit 2 (Cure Notice #1) that reference Defendant’s statements in the first unlawful detainer action.  Because Defendant failed to include ¶28 and those portions of Exhibit 2 in the notice of motion to strike, they are outside the scope of this motion.  Even if Defendant successfully strikes ¶¶18-21, 23 and 24 from the complaint, it will not remove the protected conduct from this action because allegations of protected conduct are still contained in ¶28 and Exhibit 2 to the Complaint. The futility of Defendant’s victory on ¶18-21, 23 and 24 will be considered if Defendant moves for recovery of attorney’s fees. 

II.  Plaintiff fails to satisfy its burden on the second step of SLAPP as to ¶¶18-21, 23 and 24

            A.  Applicable Law

            Once defendant demonstrates that a cause of action arises from protected conduct, 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 if the evidence submitted by the plaintiff is credited.  See Navellier v. Sletten (2002) 29 Cal.4th 82, 88-89.  “Precisely because the statute (1) permits early intervention in lawsuits alleging unmeritorious causes of action that implicate free speech concerns, and (2) limits opportunity to conduct discovery, the plaintiff's burden of establishing a probability of prevailing is not high: We do not weigh credibility, nor do we evaluate the weight of the evidence. Instead, we accept as true all evidence favorable to the plaintiff and assess the defendant's evidence only to determine if it defeats the plaintiff's submission as a matter of law.  Only a cause of action that lacks ‘even minimal merit' constitutes SLAPP.”  See Overstock.com, Inc. v. Gradient Analytics, Inc. (2007) 151 Cal.App.4th 688, 699.

            “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.

The “probability of prevailing” is tested by the same standard governing a motion for summary judgment, nonsuit, or directed verdict.  Thus, in opposing a SLAPP motion, it is plaintiff's burden to make a prima facie showing of facts that would support a judgment in plaintiff's favor.  See Crossroads Investors, L.P. v. Federal National Mortgage Assn. (2017) 13 Cal.App.5th 757, 785; Taus v. Loftus (2007) 40 Cal.4th 683, 714 (a “summary-judgment-like procedure”). 

B.  Plaintiff fails to establish a probability of prevailing on an unlawful detainer claim based on the protected conduct.

“An unlawful detainer action is not based upon contract but rather “ ‘is a statutory proceeding ... governed solely by the provisions of the statute creating it.’ [Citations.] As special proceedings are created and authorized by statute, the jurisdiction over any special proceeding is limited by the terms and conditions of the statute under which it was authorized [citation], and a lessor's action to recover possession of real property is not one for unlawful detainer where he does not comply with the statutory ... requirements [citation].”  North 7th Street Associates v. Constante (2016) 7 Cal.App.5th Supp. 1.  To the extent Plaintiff’s claim is based on conduct alleged in ¶¶18-21, 23 and 24, Plaintiff fails to state a legally sufficient claim for unlawful detainer under CCP §1161(3) (“A tenant of real property...is guilty of unlawful detainer:… 3. [w]hen the tenant continues in possession...after a neglect or failure to perform other conditions or covenants of the lease or agreement under which the property is held...)

 Plaintiff fails to allege or identify any condition or covenant breached by Defendant’s statements in the first UD.  Plaintiff fails to cite to any lease provision requiring Defendant to affirmatively acknowledge the existence and validity of the lease or Plaintiff’s ownership of the property.  Plaintiff also does not identify any lease provision prohibiting Defendant from denying the existence and validity of the lease. While a repudiation of the lease might be a basis to assert a general civil claim, Plaintiff cites no authority that denying the existence of the lease forms the basis for a claim for unlawful detainer.  

In addition, Plaintiff fails to submit evidence of breach based on Defendant’s statements in the first UD action.  Plaintiff submits evidence that Defendant made the statements alleged in ¶¶18-21, 23 and 24, and it attaches a copy of the lease agreement.  See Opposition, Dec. of M. Shaaban, ¶¶8-10, 12-13, Ex. 3.  Plaintiff’s opposition and declaration do not identify the lease covenant or condition breached by Defendant’s statements in the first UD action. 

The Court need not reach Defendant’s argument that the litigation privilege bars Plaintiff’s claims, because Plaintiff does not satisfy its initial burden on the second step.  On the second prong, the Court “accept[s] as true all evidence favorable to the plaintiff and assess[es] the defendant's evidence only to determine if it defeats the plaintiff's submission as a matter of law.  Only a cause of action that lacks ‘even minimal merit' constitutes SLAPP.”  See Overstock.com, Inc. v. Gradient Analytics, Inc. (2007) 151 Cal.App.4th 688, 699.  Here, Plaintiff fails to satisfy its burden on the second step of SLAPP as to ¶¶18-21, 23 and 24 of the complaint.