Judge Lisa K. Sepe-Wiesenfeld, Case Number: 24SMCV00519, Date: 2024-05-30 Tentative Ruling

Judge: Lisa K. Sepe-Wiesenfeld, Case: 24SMCV00519, Date: 2024-05-30 Tentative Ruling

Defendant Kraig Hill (“Defendant”) moves the Court for an order striking Plaintiffs Lacy J. Harber and Dorothy J. Harber (“Plaintiffs”)’s claims against him pursuant to Code of Civil Procedure section 425.16 on the grounds that Plaintiffs’ claims arise from acts in furtherance of rights of petition and free speech, as the claims are based on Defendant’s privileged statements in a letter sent to Plaintiffs’ real estate agents concerning an issue that is still pending before the Malibu City Council and is a matter of public interest, and Plaintiffs cannot succeed on their claims. Plaintiffs ask the Court to deny the motion as not having been timely filed, as it was filed 61 days after service of the complaint (Code Civ. Proc., § 425.16, subd. (f)), but the Court exercises its discretion to consider this motion given the interest in allowing the valid exercise of the constitutional right of freedom of speech (Code Civ. Proc., § 451.16, subd. (a)). The Court also notes that Plaintiffs’ opposition was not timely filed, but Defendant has replied to Plaintiffs’ opposition, such that the Court has considered Plaintiffs’ opposition in the interest of resolving this motion in a timely manner and on its merits.

Plaintiffs are the co-owners of the property known as Los Angeles County Assessor’s Parcel Nos. 4450-023-002, a contiguous 32-acre parcel of undeveloped land in Malibu zoned for residential development with legal access by way of a recorded easement on a private road, Seaboard Road. (Compl. ¶¶ 1, 2, 7.) Defendant resides at a house in the same neighborhood near the property. (Compl. ¶ 8.) On May 11, 2023, Plaintiffs entered into an agreement with Sotheby’s International Realty, Inc. (“Sotheby’s”) to list the property for sale at a purchase price of $9,500,000, and on June 30, 2023, Plaintiffs entered into a separate agreement with a subsidiary of Sotheby’s, Concierge Auctions, LLC (“Concierge”), to conduct an auction of the property. (Compl. ¶ 9.) An auction was scheduled to take place between August 25 and September 18, 2023, and Sotheby’s and Concierge conducted a variety of marketing strategies, including the distribution of flyers in the local area describing the property and the auction. (Compl. ¶ 10.)

On August 18, 2023, Defendant sent a letter via email to Sotheby’s employees Lea Johnson and Cristian E. David in regard to the property and upcoming auction advising the employees that he has lived on Seaboard Road for decades, that he owns a piece of Seaboard Road, that he is an officer of the road association, and that he is on the Malibu Planning Commission and the Las Virgenes Homeowners Federation Board. (Compl. ¶¶ 11-12.) Defendant stated that the information in the flyers were neither complete nor accurate, the property is landlocked without legal road access to any public street, the property does not have legal easement over private Seaboard, the only legal means of ingress and egress for the property must be via Flores Mesa, and any owner of the property would not have the right to exclusive possession and use of the property. (Compl. ¶¶ 13-17.)

Plaintiffs allege that the property’s Boundary and Topo Survey graphically depicts legal access to the property via Seaboard Road, and there exists a recorded notice of consent to use of land under Civil Code section 813, which constitutes conclusive evidence that any use of the land during the time the notice is in effect by the public or any other user for any purpose is permissive and may be revoked. (Compl. ¶¶ 18-19.) Plaintiffs allege that Defendant intended to discourage the sale of the property for his own benefit by preventing development on the land. (Compl. ¶ 20.) Plaintiffs postponed the auction to make a full disclosure of the allegations set forth in Defendant’s letter, and the auction was rescheduled for September 18 to September 30, 2023. (Compl. ¶¶ 21-22.) The highest bid received was for only $3,550,000, and the land was sold to the highest bidder for $3,225,000 on December 14, 2023, well below the purchase price expected by Plaintiffs. (Compl. ¶¶ 22-23.)

Accordingly, section 425.16 posits a two-step process for determining whether an action is a strategic lawsuit against public participation (SLAPP). First, the Court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. (See Code Civ. Proc., § 425.16, subd. (b)(1).) “A defendant meets this burden by demonstrating that the act underlying the plaintiff’s cause fits one of the categories spelled out in [section 425.16,] subdivision (e).” (Braun v. Chronicle Publishing Co. (1997) 52 Cal.App.4th 1036, 1043.) Those categories include “(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).) If defendant makes a threshold showing that the challenged cause of action is one arising from protected activity, the burden shifts to the plaintiff to establish a likelihood of prevailing on the complaint. (See Code Civ. Proc., § 425.16, subd. (b)(1).)

To invoke Code of Civil Procedure section 425.16, a defendant need only demonstrate that a suit arises from the defendant’s exercise of free speech or petition rights. (See Code Civ. Proc., § 425.16, subd. (b); City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78.) This is determined by “the gravamen or principal thrust of the action.” (See In re Episcopal Church Cases (2009) 45 Cal.4th 467, 477.) “In the anti-SLAPP context, the critical point is whether the plaintiff’s cause of action itself was based on an act in furtherance of the defendant’s right of petition or free speech.” (City of Cotati v. Cashman, supra, 29 Cal.4th at p. 78.) “In making its determination, the court shall consider 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).)

It is undisputed that Plaintiffs’ claims arise from Defendant’s letter to employees of Sotheby’s and statements therein concerning the potential development of the property and Defendant’s beliefs of limitations on development of the property. (Compl. ¶¶ 14-17.) Defendant contends the statements at issue related to an issue under consideration by the Malibu City Council and other government agencies (Mot., Hill Decl. ¶ 7, Ex. 1) such that the statements concern an “issue under consideration or review by a legislative, executive, or judicial body under Code of Civil Procedure section 425.16, subdivision (e)(2). Plaintiffs argue there were no ongoing proceedings relating to the property or any nearby property at the time Defendant sent his letter, and Defendant’s evidence shows that no official proceeding has related to the property since 2016. While there may be no evidence of recent action, there is no evidence that the application closed or was resolved, and Plaintiffs advertised that city and coastal building permits were in the process of approval. (Opp’n, Roberts Decl. ¶¶ 25, 30, Exs. R, T.) Thus, the evidence shows that the potential development of the property was an issue under consideration by a legislative, executive, or judicial body. Therefore, the Court finds Defendant has satisfied the first prong of the anti-SLAPP statute, as Plaintiffs’ claims arise from protected activity.

If the defendant makes a threshold showing that the challenged cause of action is one arising from protected activity, the burden shifts to the plaintiff to establish a likelihood of prevailing on the complaint. (See Code Civ. Proc., § 425.16, subd. (b)(1).) “In order to establish a probability of prevailing on the claim, a plaintiff responding to an anti-SLAPP motion must state and substantiate a legally sufficient claim.” (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821, superseded by statute on other grounds as noted in Hutton v. Hafif (2007) 150 Cal.App.4th 527, 547, citation, quotation marks, and brackets omitted.) To do so, “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.” (Ibid., quotation marks omitted.) In considering whether a plaintiff’s claim has merit, “the trial court considers the pleadings and evidentiary submissions of both the plaintiff and the defendant,” and while “the court does not weigh the credibility or comparative probative strength of competing evidence, it should grant the motion if, as a matter of law, the defendant’s evidence supporting the motion defeats the plaintiff’s attempt to establish evidentiary support for the claim.” (Ibid., emphasis in original.)

Plaintiffs allege causes of action for (1) slander of title, (2) tortious interference with contractual relations, and (3) intentional interference with prospective economic relations. “Slander of title is effected by one who without privilege publishes untrue and disparaging statements with respect to the property of another under such circumstances as would lead a reasonable person to foresee that a prospective purchaser or lessee thereof might abandon his intentions. It is an invasion of the interest in the vendibility of property. . . . Damages usually consist of loss of a prospective purchaser.” (Phillips v. Glazer (1949) 94 Cal.App.2d 673, 677, citations omitted.) “To state a claim for slander of title, a plaintiff must allege (1) a publication, (2) which is without privilege or justification, (3) which is false, and (4) which causes direct and immediate pecuniary loss.” (Schep v. Capital One, N.A. (2017) 12 Cal.App.5th 1331, 1336.) The elements of a cause of action for intentional interference with contractual relations are “(1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (I-CA Enterprises, Inc. v. Palram Americas, Inc. (2015) 235 Cal.App.4th 257, 289.) The elements of a claim for intentional interference with prospective economic advantage include “(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional or negligent acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Crown Imports, LLC v. Superior Court (2014) 223 Cal.App.4th 1395, 1404, citations, brackets, and quotation marks omitted.) Further, “the alleged interference must have been wrongful by some measure beyond the fact of the interference itself. For an act to be sufficiently independently wrongful, it must be unlawful, that is, it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” (Ibid., citation, ellipsis, and quotation marks omitted.)

Plaintiffs point to evidence showing that the property had access rights and an easement across the length of Seaboard Road across all private properties from the edge of the property to Pacific Coast Highway, and the recorded Notice of Consent to Use of Land constitutes evidence that any use of the land during the time the notice is in effect by the public is permissive and may be revoked. (Opp’n, Sunukjian Decl. ¶¶ 1, 2, Exs. Y, Z; Roberts Decl. ¶¶ 16, 20, Exs. L, O.) However, the evidence provided by Plaintiffs has not been properly authenticated, as Plaintiffs’ counsel lacks the personal knowledge necessary to authenticate a City of Malibu Notice of Preparation and Scoping Meeting, and Guy Roberts is merely Plaintiffs’ financial adviser, such that he lacks the personal knowledge necessary to either authenticate documents showing access rights or opine as to what those documents show. Given that Plaintiffs have failed to provide admissible evidence showing that Defendant’s statements were false, the Court cannot conclude that Plaintiffs can succeed on a claim for slander of title. Further, even if the evidence were properly submitted, the Court lacks a basis to conclude that Plaintiffs suffered pecuniary loss from Defendant’s statements. Robert simply opines that the letter contributed to the lower price (Opp’n, Roberts Decl. ¶ 38), and Plaintiffs provide no evidence that the land was definitively worth the $9,500,000 they sought. Moreover, Civil Code section 47, subdivision (c), provides that “a communication, without malice, to a person interested therein, (1) by one who is also interested” constitutes a privileged publication. Defendant, Plaintiffs, and Sotheby’s had an interest in the status of the land and its potential for development, making Defendant’s statements privileged as communication made by an interested person to another interested person without malice. For these reasons, the Court cannot conclude that Plaintiffs are likely to succeed on their claims. Accordingly, Defendant Kraig Hill’s Special Motion to Strike Complaint (Code Civ. Proc. § 425.16) is GRANTED. Defendant Kraig Hill shall prepare, serve, and submit a proposed judgment as per statute.

Code of Civil Procedure section 425.16, subdivision (c), provides that “a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney’s fees and costs.” Under section 425.16, an award of fees and costs is mandatory. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131.) In that Defendant is the prevailing party, he is entitled to his reasonable attorney fees and costs, the amount of which shall be determined upon Defendant filing a noticed motion for attorney fees and memorandum of costs.