Judge Ralph C. Hofer, Case 22GDCV00527 2023-02-03 Tentative Ruling

Plaintiff Levet, Inc. alleges that it is a general contractor primarily engaged in the business of home improvement construction projects as well as construction of Accessory Dwelling Units (ADUs). Plaintiff alleges that prior to the commencement of this action, plaintiff and defendant Amir Kacem entered into numerous agreements pursuant to which defendant was to perform architectural, design and planning work on several of plaintiff’s residential projects in the area, in exchange for compensation in accordance with the parties’ prior course of dealings.

The complaint alleges that commencing from early 2021, defendant materially breached the agreements with plaintiff by failing and refusing to honor the terms agreed to, unreasonably delaying in completion of work, negligently performing work, and repeatedly failing or refusing to perform the work altogether. Plaintiff alleges that plaintiff also began to initiate unlawful contacts with plaintiff’s clients, making improper and false representations, in an attempt to interfere with plaintiff’s contractual relations on the projects. The complaint also alleges that defendant has filed improper, false, and defective liens on the properties of plaintiff’s clients despite defendant’s breaches and failures to perform.

The complaint alleges that plaintiff has now been forced to obtain the services of another qualified architect to perform the work defendant had agreed to perform, and has incurred additional costs and been forced to delay the performance of work on many of its projects. It is also alleged that multiple clients of plaintiff have cancelled their projects due to defendant’s acts, omissions, and breaches.

The file shows that on September 27, 2022, defendant Kacem filed a special motion to strike pursuant to CCP section 425.16, seeking to strike all causes of action alleged in the complaint. On October 1, 2022, defendant filed a First Amended Special Motion to Strike, seeking an order striking the third cause of action for intentional interference with contractual relations. Evidently, defendant has withdrawn the special motion to strike as to the other three causes of action.

The motion was filed and served by email on September 26, 2022, for a November 4, 2022 hearing date, which was sixteen court days plus thirteen court days prior to the hearing, so was brought on sufficient notice. The argument appears to be that the notice continuing the hearing date was one day short of providing the required notice period. This argument actually underscores that plenty of notice was provided here, as with the continuance that has been more than sufficient time for plaintiff to respond to the demurrer, and has in fact responded on the merits, twice. The demurrer accordingly is considered by the court.

“(a) Before filing a demurrer pursuant to this chapter, the demurring party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer. If an amended complaint, cross-complaint, or answer is filed, the responding party shall meet and confer again with the party who filed the amended pleading before filing a demurrer to the amended pleading.

(1) As part of the meet and confer process, the demurring party shall identify all of the specific causes of action that it believes are subject to demurrer and identify with legal support the basis of the deficiencies. The party who filed the complaint, cross-complaint, or answer shall provide legal support for its position that the pleading is legally sufficient or, in the alternative, how the complaint, cross-complaint, or answer could be amended to cure any legal insufficiency.

(2) The parties shall meet and confer at least five days before the date the responsive pleading is due. If the parties are not able to meet and confer at least five days prior to the date the responsive pleading is due, the demurring party shall be granted an automatic 30-day extension of time within which to file a responsive pleading, by filing and serving, on or before the date on which a demurrer would be due, a declaration stating under penalty of perjury that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer. The 30-day extension shall commence from the date the responsive pleading was previously due, and the demurring party shall not be subject to default during the period of the extension. Any further extensions shall be obtained by court order upon a showing of good cause.

The meet and confer declaration submitted with the demurrer indicates that counsel for defendant provided plaintiff with an extensive list of case cites and statutes in an effort to meet and confer prior to drafting the demurrer, and that while plaintiff’s counsel appeared receptive in the most general terms to revising the complaint, he refused to indicate whether he would remove any causes of action from any amended complaint, and that counsel did not respond at all to further inquiries, including repeated telephone calls. [Broemer Decl., para. 1]. This effort is sufficient effort to meet and confer.

The amended opposition submits a declaration of counsel for defendant, indicating that on September 14, 2022, counsel for plaintiff emailed that plaintiff was agreeable to amend the complaint by September 28, 2022, and plaintiff then proceeded to amend the complaint to address the defects perceived by defendant, but the demurrer was filed on September 26, 2022, two days before the date on which plaintiff had agreed to file an amended complaint. [Rassamdana Decl., paras. 8-11]. The email sent on September 14, 2022, after business hours stated, “In any event, I am willing to amend the complaint provided I am given 14 days to do so. If not, proceed as you see fit.” [Rassamdana Decl., Ex. H].

To plead a cause of action for breach of contract, plaintiff must plead the following elements: Contract formed, and terms alleged verbatim or according to legal effect; plaintiff’s performance or excuse for nonperformance; defendant’s breach; and damage to plaintiff. Walsh v. Standart (1917) 174 Cal. 807.

The complaint alleges that pursuant to the agreements, defendant was “to perform architectural, design and/or planning work on several of Plaintiff’s residential projects,” and that defendant materially breached the terms of each of the agreements by “having failed to perform the agreed upon architectural and planning work,” and that

“There were numerous delays in delivery of work product from the Defendants including but not limited to properly drafted plans, clearances with the relevant municipal departments, and necessary approvals for Plaintiff to proceed with work on each of the projects, in addition to negligent performance of work, and repeated failures and/or refusals to perform the work all together.”

The complaint sufficiently sets forth the contract terms, performing architectural and planning work, and the failure to perform such work as agreed. The argument appears to be that the more detailed breaches alleged are not connected to any particular agreement. Plaintiff in the opposition argues that a demurrer is not the appropriate procedure for determining the truth of disputed facts, and that the complaint apprises defendant of the nature of the claims and their factual basis.

The complaint is not ideal, as it is not clear which breaches occurred as to which agreement, but the cause of action is sufficient to allege a claim as to at least one agreement. The opposition indicates that plaintiff has already drafted an amended complaint containing additional paragraphs addressing the perceived defects. Under the circumstances, the court will hear argument with respect to whether plaintiff would prefer to have leave to amend this cause of action to allege more clearly the breaches which allegedly occurred as tethered to the terms of the agreements.

It is well established that a covenant of good faith and fair dealing is implicit in every contract. Cates Construction, Inc. v. Talbot Partners (1999) 21 Cal.4th 28, 43. It is held that “the covenant is implied as a supplement to the express contractual covenants, to prevent a contracting party from engaging in conduct which (while not technically transgressing the express covenants) frustrates the other party's rights to the benefits of the contract.” Love v. Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1153.

The pleading has alleged a contractual relationship, and regardless of any lack of clarity as to the contractual terms, the cause of action has alleged that the implied covenant was breached by defendant misrepresenting facts concerning its performance of work on each of three projects. This showing is sufficient to allege a claim under this theory.

Defendant argues that this cause of action is improper because it is duplicative of the breach of contract claim. It has been held that a demurrer may be sustained as to a claim for breach of implied covenant which duplicates a breach of contract claim. Careau & Co. v. Security Pac. Bus. Credit, Inc. (1990) 222 Cal.App.3d 1371, 1395. The claims are not duplicative, however, as the cause of action alleges not only that contractual terms were breached but that the implied covenant was breached by misrepresentations concerning defendant’s performance of the work.

Defendant also argues that a cause of action for breach of implied covenant cannot impose substantive duties beyond those incorporated in the specific terms of the contract. Defendant does not explain how an implied duty to not misrepresent the performance of work would conflict with any specific alleged term of the agreements.

Defendant also argues that to the extent is it alleged that defendant made misrepresentations, claims of fraud are subject to a heightened pleading standard, which has not been met here. This claim is not a cause of action for fraud, but one for breach of implied covenant of good faith and fair dealing, and defendant has not cited any legal authority under which such a cause of action is subject to a heightened pleading requirement.

The cause of action is sufficient to withstand demurrer. However, again, the court notes that plaintiff in opposition has indicated that plaintiff already has drafted an amended complaint containing additional paragraphs of allegations addressing the demurrer. The court will hear argument with respect to whether plaintiff would prefer to have leave to amend this cause of action to provide more clarity.

“The elements which a plaintiff must plead to state the 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.”

The pleading alleges that there were contracts between plaintiff and third parties, that defendant knew of the contracts, including plaintiff’s obligations to perform thereunder, and that “Defendant’s conduct, breaches and omissions hereinabove mentioned prevented performance or made performance more difficult for Plaintiff on each of the projects.” [Complaint, paras. 24-26].

The cause of action incorporates all previous allegations. This method of pleading generally makes it difficult to tell from the pleading which of the previously alleged actions was intended to interfere with the contracts. There is a general allegation, however, that defendant initiated unlawful contacts with plaintiff’s clients and made false representations, in “an attempt to interfere with Plaintiff’s contractual relations.” [Complaint, para. 11]. This allegation is sufficient to overcome demurrer on this ground. Again, the court notes that plaintiff in opposition has indicated that plaintiff has already drafted an amended complaint containing additional paragraphs of allegations addressing the demurrer. The court will hear argument with respect to whether plaintiff would prefer to have leave to amend this cause of action to more clearly allege in the cause of action itself the conduct defendant is alleged to have engaged in which intentionally interfered with plaintiff’s contractual relations with third parties.

Defendant also seems to argue that defendant sought payment for work he performed from a client, after the client contacted him, and after plaintiff refused to pay defendant for his efforts, and in that conversation expressed an intention to file a lien. The argument seems to be that this action is not conduct which was improper.

These facts do not appear in the pleading and are not subject to judicial notice. Under CCP § 430.30(a), an objection to a pleading may be taken by a demurrer "[w]hen any ground for objection to a complaint...appears on the face thereof, or from any matter of which the court is required to or may take judicial notice…"

For the purpose of testing the sufficiency of a cause of action, a demurrer admits the truth of all material facts properly pleaded. Serrano v. Priest (1971) 5 Cal.3d 584, 591. No matter how improbable, plaintiff’s allegations must be accepted as true for the purpose of ruling on a demurrer. Del E. Webb Corp. v. Structural Materials Co. (1981, 2nd Dist.) 123 Cal.App.3d 593, 604.

The cause of action alleges that defendant owed a duty to exercise reasonable care in the performance of architectural and planning work, that defendant failed to perform most of the work and also submitted drawings and plans which contained errors and defects, and that as a result of defendant’s negligence, plaintiff has suffered harm. This showing is sufficient to state all elements of a negligence claim.

“in every action...arising out of the professional negligence...of a person holding a valid registration as a professional...architect...on or before the date of service of the complaint or cross-complaint on any defendant or cross-defendant” the attorney for the plaintiff “shall file and serve” a certificate under subdivision (b).

Defendant argues that defendant is not a licensed architect, and the nature of defendant’s alleged duty is unclear. As pointed out in the opposition, there is no allegation that defendant was a licensed architect, and the cause of action is not for professional negligence, so there is no requirement to comply with section 411.35. The demurrer accordingly is overruled on these grounds.

Plaintiff in opposition argues that there is an exception to the economic loss rule when there is a special relationship between the parties, and that, in any case, the harm alleged includes property damage. This fact is not alleged in the pleading. The demurrer accordingly is sustained with leave to amend to permit plaintiff to plead such facts in connection with this cause of action.

This proceeding is a demurrer, not a motion to strike particular damages or relief. A demurrer may be brought only on limited grounds, including on the ground the pleading fails to state “a cause of action.” CCP § 430.10(e). For this reason, it has been held that a demurrer is not the proper procedure to attack an improper claim for relief in the prayer, since a demand for improper relief does not vitiate an otherwise valid cause of action. See Venice Town Council, Inc. v. City of Los Angeles (1996) 47 Cal.App.4th 1547, 1561-62, and cases and authorities cited therein. The demurrer on this ground is overruled.

The file shows here that the complaint was served by substituted service with follow up mailing on September 3, 2022. The amended motion was filed and served on October 19, 2022. Under CCP section 415.20, service of summons by substituted service “is deemed complete on the 10th day after mailing.” Service was therefore complete on September 13, 2022, and the motion was filed and served 36 days later, so well within the sixty days permitted. The motion is not untimely.

The file shows that the hearing date was originally scheduled for November 11, 2022, within thirty days of the filing of the motion on October 19, 2022, but the reservation was changed to November 18, 2022, and the hearing was again continued to this date. The moving papers and the file suggest that the hearing was continued beyond the thirty day period because plaintiff had filed motion for sanctions in connection with an original special motion to strike, so that the special motion to strike was ultimately withdrawn and amended, and because plaintiff was requesting that plaintiff be permitted to conduct discovery to address defendant’s motion. Plaintiff in fact made a motion to do so, which the court granted in part on November 18, 2022. Plaintiff has accordingly sought and benefited from the delay in the scheduling of the hearing date. Defendant in reply argues that plaintiff has waived any argument with respect to the delay in the hearing date. The motion is not denied on this ground but is considered by the court on its merits.

Defendant Kacem seeks to strike the third cause of action for intentional interference with contractual relations pursuant to CCP section 425.16, arguing that the cause of action is based on defendant’s protected speech and petitioning activities, as the complaint was filed because defendant began the process of seeking liens for construction design work he had provided to various homeowners, and plaintiff has no realistic chance of prevailing on the interference with contract claim.

“(a) The Legislature finds and declares that there has been a 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. The Legislature finds and declares that it is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process. To this end, this section shall be construed broadly.

(b) (1) A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States or California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.

Subdivision (e) defines “act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue” to include statements made before an official proceeding, in connection with an issue under consideration by an official proceeding, in a “place open to the public or in a public forum” in connection with an issue of public interest, “or 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.” The latter two categories require a specific showing the action concerns a matter of public interest; the first two categories do not require this showing. Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1117-1120.

“Resolution of an anti-SLAPP motion “requires the court to engage in a two-step process. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving defendant's burden is to demonstrate that the act or acts of which the plaintiff complains were taken ‘in furtherance of the [defendant]'s right of petition or free speech under the United States or California Constitution in connection with a public issue,’ as defined in the statute. (§ 425.16, subd. (b)(1).) If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim.””

“And in a trio of opinions issued last year, we held that the plain language of the “arising from” prong encompasses any action based on protected speech or petitioning activity as defined in the statute (Navellier v. Sletten (2002) 29 Cal.4th 82, 89–95, 124 Cal.Rptr.2d 530, 52 P.3d 703 (Navellier )), rejecting proposals that we judicially engraft the statute with requirements that defendants moving thereunder also prove the suit was intended to chill their speech (Equilon, supra, 29 Cal.4th at p. 58, 124 Cal.Rptr.2d 507, 52 P.3d 685) or actually had that effect (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 75, 124 Cal.Rptr.2d 519, 52 P.3d 695).

Defendant argues here that the cause of action for intentional interference with contractual relations falls within CCP § 425.16 (e)(1) and (2), which defines act in furtherance of a person’s right of petition or free speech to 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…”

“11. Despite numerous demands from Plaintiff, Defendant failed and refused to perform the contracted work on the several projects. Furthermore, Defendant began to initiate unlawful contacts with Plaintiff’s clients making improper and false representations in a palpable and tangible attempt to interfere with Plaintiff’s contractual relations the projects. Defendant also filed improper, false and defective liens on the properties of Plaintiff’s clients despite his breaches and failures to perform work.”

Defendant relies on RGC Gaslamp, LLC v. Ehmcke Sheet Metal Co., Inc. (2020) 56 Cal.App.5th 413, in which the court of appeal found that the trial court had properly granted an anti-SLAPP motion, finding specifically that the filing of a mechanic’s lien was a protected communication under CCP section 425.16 (e)(1), that is, a written or oral statement or writing made before a legislative, executive or judicial proceeding, or under subdivision (e)(1), that is, a statement made, “in connection with an issue under consideration or review in such proceedings.” RGC Gaslamp, at 425. The court of appeal found that even the filing of duplicative mechanic’s liens after proper bonding had been posted, so that the filing of such liens was allegedly unlawful, was protected activity, regardless of whether the filing was unlawful or invalid. RGC Gaslamp, at 426-427. The court of appeal also observed that, “Statements made in preparation for litigation or in anticipation of bringing an action fall within these categories.” RGC Gaslamp, at 425.

RGC Gaslamp found instructive the analysis in Birkner v. Lam (2007) 156 Cal.App.4th 275, in which tenants sued their landlord for wrongful eviction after the landlord violated a rent ordinance by serving and then refusing to withdraw a notice to terminate tenancy. The court of appeal reversed the trial court’s order denying a special motion to strike, finding that the service of the termination notice was a legal prerequisite to bringing an unlawful detainer action, so that service of such a notice constituted activity in furtherance of the constitutionally protected right to petition, satisfying the first prong of the CCP section 425.16 analysis. Birkner, at 282-283. The court of appeal in Birkner also found that the alleged illegality of the service of the notice given the rent ordinance violation did not exclude the conduct from coverage under the statute:

“Nor is there any merit to plaintiffs' suggestion that the exclusion from anti-SLAPP coverage for indisputably illegal conduct, recognized in Flatley, supra, 39 Cal.4th at page 320, 46 Cal.Rptr.3d 606, 139 P.3d 2, applies here. “[C]onduct that would otherwise come within the scope of the anti-SLAPP statute does not lose its coverage ... simply because it is alleged to have been unlawful or unethical.” (Kashian v. Harriman (2002) 98 Cal.App.4th 892, 910–911, 120 Cal.Rptr.2d 576; see Chavez v. Mendoza, supra, 94 Cal.App.4th at p. 1089, 114 Cal.Rptr.2d 825.) An exception to the use of section 425.16 applies only if a “defendant concedes, or the evidence conclusively establishes, that the assertedly protected speech or petition activity was illegal as a matter of law.” (Flatley, supra, 39 Cal.4th at p. 320, 46 Cal.Rptr.3d 606, 139 P.3d 2.) The exception does not apply here. The trial court found, and we concur, that the evidence does not conclusively establish that Lam's conduct of serving and refusing to rescind the termination notice was illegal.”

Defendant’s declaration indicates in connection with the lien issue that defendant does not have a legal background, but it has always been his impression that an individual who provides construction services can place a lien on property if not paid for work performed, and that in May of 2022, he advised one customer he would take steps to place a lien on her property if he did not receive payment from plaintiff Levet. [Kacem Decl., paras. 15-18]. Defendant attaches an email exchange with the customer in which he told the client the architectural fees had not been paid yet, so no construction should start, the client indicated she did not want to be dragged into issues between staff and administration of the company, and Kacem responded that he was an independent contractor, not a part of plaintiff’s company, and stated, “I understand your point, however, by june [sic] 1, I will put a lien and we will go from there….” [Kacem Decl., Ex. C].

Defendant with the reply submits a declaration indicating that defendant did mail a notice of intent to file lien to one of plaintiff’s clients in in April or May of 2022, and informed Levet of this through discovery in this matter. [See Reply Brief Declaration of Amir Kacem, para. 2].

However, as noted above, there is no “public interest” requirement under subdivisions (e) (1) and (2) of CCP section 425.16. In Briggs v. Eden Council for Hope and Opportunity (1999) 19 Cal.4th 1106, the California Supreme Court addressed the overall issue of whether a “public interest” requirement applied in connection with anti-SLAPP motions brought under subdivisions (e)(1) and (2), and found, under the reading of the plain language of the statute, and the policies underlying it, that such a requirement did not apply.

As argued in the reply, the court of appeal in RGC Gaslamp expressly noted that conduct in connection with pursuing a mechanic’s lien was protected under subdivisions (e)(1) and (2), and that, “If a statement falls into one of these categories, a defendant does not separately need to show that his or her statement was made in connection with a ‘public issue.’” RGC Gaslamp, at 425, citing Briggs, at 1123.

Plaintiff in opposition also seems to argue that the complaint is not limited to this one mention in the general allegations of lien activity and seems to concede that plaintiff does not intend to pursue the cause of action on this theory. Plaintiff indicates that plaintiff erred in not stating paragraph 11 “on information and belief,” because plaintiff did not have any actual knowledge of any liens having been filed when the complaint was filed, and it is now clear that no liens were ever filed, recorded, or pursued by defendant, and defendant concedes as much in the moving papers. The declaration in support of the motion, after mentioning the one customer defendant emailed and mentioned a lien, then states, “I have had no other conversations with any customers or potential customers in which this topic came up.” [Kacem Decl., paras. 15-18]. This statement is contradicted by the reply, in which the same declarant indicates he has in fact mailed a notice of intent to file a lien to one of plaintiff’s clients. [Reply Kacem Decl., para. 2]. Plaintiff also argues that defendant had no right to file or record a lien because he would not qualify under the mechanic’s lien statute as a party entitled to do so, as discovery has shown that defendant was not a design professional and did not have written contracts with any of the landowners.

Plaintiff argues that the cause of action is proper as based on conduct undertaken by defendant which interfered with the project, such as failing and refusing to honor the terms of the agreement and holding up the projects and initiating contact with plaintiff’s clients and making representations to them which plaintiff argues were intended to and did ultimately disrupt plaintiff’s contractual relationships.

Plaintiff appears to concede practically speaking that the allegations concerning the pursuit of liens may be stricken to the extent they are incorporated into the third cause of action. The court under the circumstances will find that to the extent the cause of action incorporates the lien allegation, that allegation arises from protected activity.

This finding shifts the burden to plaintiff to show a probability of prevailing on its claim. In determining whether plaintiff has met this burden, the court does not weigh the evidence, or determine questions of credibility. It merely determines whether plaintiff has established by admissible evidence, a prima facie case, which, if believed by the trier of fact, would result in judgment for the plaintiff. Mattel, Inc. v. Lude, Forward, Hamilton & Scripps (2002, 2nd Dist.) 99 Cal.App.4th 1179, 1188; Nagel v. Twin Laboratories (2003) 109 Cal.App.4th 39, 45-46.

Plaintiff has failed to submit any evidence to show that it can establish a prima facie case with respect to defendant’s alleged pursuit of liens. Plaintiff submits the declaration of its Vice President, Ron Modaraei, who states that defendant engaged in conduct, such as failing or refusing to perform contracted work on several projects, that this conduct prevented performance or made performance more difficult on projects, and that clients of plaintiff have cancelled projects because of defendant’s conduct. [Moraraei Decl., paras. 5, 6, 8]. In connection with the lien issue, the declaration states,

The motion to strike the allegation of this conduct accordingly is granted. The court strikes from the third cause of action the incorporation of the allegation at paragraph 11 of the complaint, that “Defendant also filed improper, false and defective liens on the properties of Plaintiff’s clients despite his breaches and failures to perform work.”

With respect to the balance of the cause of action, concerning the allegations that defendant interfered with plaintiff’s contractual relations by failing to perform contracted work, and contacting plaintiff’s clients and discouraging them from continuing to work with plaintiff, the moving papers do not address those aspects of the cause of action or attempt to establish that such conduct would be protected under CCP section 425.16. The moving papers focus on the allegations of the conduct involving the lien, stating only in a footnote, “In a May 2022 Cease and Desist Letter Plaintiff also accused Defendant of making public statements deleterious to Plaintiff’s reputation. The accusation is false and would in any event be protected, as set forth in the motion.” No further argument is offered.

As set forth above, the complaint alleges in the very paragraph defendant relies on that defendant interfered with contractual relations by failing and refusing to perform the contracted work on the project and initiating unlawful contact with plaintiff’s clients and making false representations in order to interfere with plaintiff’s contractual relations on the projects. [Complaint, para. 11]. The cause of action itself, while incorporating preceding paragraphs, makes no mention of liens, but alleges that plaintiff engaged in conduct which prevented performance or made performance of contracts more difficult for plaintiff, and that several of plaintiff’s clients have terminated their projects because of such acts. [Complaint, paras. 24-28].

Such conduct would not involve petitioning activity but could arise from speech. To qualify for protection under the statute, however such speech would have to be established to have been made in connection with a public issue or an issue of public interest under CCP section 425.16 (e)(3) or (4). Defendant has failed to argue, other than the brief footnote quoted above, that the alleged conduct of failing and refusing to perform on the projects, or initiating contact with plaintiff’s clients, and making false representations to interfere with relationships is protected activity. Defendants have failed to establish that such activity was speech, rather than conduct, or that any speech was made in public or made in connection with a public issue or issue of public interest. Defendant in the reply again confirms that the conduct defendant argues is protected is the petitioning activity of the lien claims, which defendant argues does not require a showing that it is made in connection with a public issue or issue of public interest, so that plaintiff’s argument in the opposition concerning this public aspect is incorrect and irrelevant. The reply continues to argue that defendant’s conduct “aimed at the placement of liens,” is protected activity. Defendant does not argue that the protected activity or public interest requirement is satisfied with respect to the other conduct alleged in the third cause of action.

Defendant has accordingly failed to meet any initial burden with respect to the conduct alleged in the balance of the cause of action. Accordingly, the motion to strike is denied as to the balance of the third cause of action, which is a mixed cause of action, based on both protected and unprotected activity.

“Although the issue arose here at the second step of the anti-SLAPP procedure, identification of causes of action arising from protected activity ordinarily occurs at the first step. For the benefit of litigants and courts involved in this sometimes difficult area of pretrial procedure, we provide a brief summary of the showings and findings required by section 425.16(b). At the first step, the moving defendant bears the burden of identifying all allegations of protected activity, and the claims for relief supported by them. When relief is sought based on allegations of both protected and unprotected activity, the unprotected activity is disregarded at this stage. If the court determines that relief is sought based on allegations arising from activity protected by the statute, the second step is reached. There, the burden shifts to the plaintiff to demonstrate that each challenged claim based on protected activity is legally sufficient and factually substantiated. The court, without resolving evidentiary conflicts, must determine whether the plaintiff's showing, if accepted by the trier of fact, would be sufficient to sustain a favorable judgment. If not, the claim is stricken. Allegations of protected activity supporting the stricken claim are eliminated from the complaint, unless they also support a distinct claim on which the plaintiff has shown a probability of prevailing.”

The allegations of protected activity, in effect, those allegations involving liens, accordingly is eliminated from the complaint, leaving the allegations of unprotected activity to be litigated. Defendant has failed to establish any statutory protection applies to the remaining alleged conduct, so plaintiff has no obligation to establish a probability of prevailing on its claim at this early stage of the litigation.

The motion is GRANTED with respect to the incorporation by reference into the third cause of action of the complaint by paragraph 23 of the complaint the allegation of paragraph 11 of the complaint set forth in the sentence, “Defendant also filed improper, false and defective liens on the properties of Plaintiff’s clients despite his breaches and failures to perform work.”

The moving papers have sufficiently established that this allegation arises out of protected activity, an act in furtherance of defendant’s right of petition or free speech under the United States or California Constitution, as the filing of mechanic’s liens or prelitigation activity in connection with such filings or recordings constitutes a written statement made before a judicial or official proceeding or a written statement made in connection with an issue under consideration or review by a judicial body.

This finding shifts the burden to plaintiff to establish a probability that plaintiff will prevail on plaintiff’s claim for intentional interference with contractual relations based on such protected activity. Plaintiff in opposition has failed to meet this burden but concedes that there are no facts which would support plaintiff’s allegation in this regard, which allegation should have been made on information and belief.

The motion is DENIED as to the other allegations alleged in the third cause of action to support the cause of action for intentional interference with contractual relations. Defendant has failed to sufficiently argue or establish that the other conduct alleged in the cause of action arises from protected activity under any of the statutory grounds included in CCP section 425.16.

Objection No. 3 is SUSTAINED to the sentence, “Defendant began to initiate unlawful contacts with Plaintiff’s clients making improper and false representations in a palpable and tangible attempt to interfere with Plaintiff’s contractual relations.” Objection is otherwise OVERRULED.

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