Judge Teresa A. Beaudet, Case Number: 22STCV30940, Date: 2023-08-14 Tentative Ruling

SL RETAIL OWNER, LLC, Plaintiff, vs. NOWHERE SILVER LAKE, LLC, dba EREWHON., et al. Defendants.	Case No.:	22STCV30940
	Hearing Date:	August 14, 2023
	Hearing Time: 2:00 p.m. [TENTATIVE] ORDER RE: SPECIAL MOTION TO STRIKE FIRST AMENDED CROSS-COMPLAINT
AND RELATED CROSS-ACTION

Plaintiff SL Retail Owner LLC (“SL Retail”) filed this action on September 21, 2022 against Defendants Nowhere Silver Lake, LLC dba Erewhon (“Erewhon”) and Nowhere Holdco, LLC. The Complaint alleges causes of action for (1) breach of contract and (2) declaratory judgment.

On October 13, 2022, Erewhon filed a Cross-Complaint against Cross-Defendants SL Retail, Sportsmen’s Lodge Owner, LLC and Midwood Management Corp. aka Midwood Investment & Development (collectively, “Cross-Defendants”). Erewhon filed a First Amended Cross-Complaint (“FACC”) on December 20, 2022, asserting causes of action for (1) breach of contract (specific performance), (2) breach of contract, (3) breach of the implied covenant of good faith and fair dealing, (4) intentional interference with prospective economic advantage, (5) negligent interference with prospective economic advantage, (6) fraud (intentional misrepresentation), (7) fraud (concealment), (8) negligent misrepresentation, (9) violation of Business and Professions Code section 17200 (unfair competition), (10) private nuisance, (11) public nuisance, (12) declaratory relief, and (13) breach of the covenant of quiet enjoyment.

Cross-Defendants demurred to each of the causes of action of the FACC and moved to strike portions of the FACC.

On May 31, 2023, the Court issued an Order sustaining Cross-Defendants’ demurrer to the second, third, fourth, fifth, sixth, eighth, tenth, and eleventh causes of action of the FACC, with leave to amend. The Court overruled the demurrer to the first, seventh, ninth, twelfth, and thirteenth causes of action. The Court also granted Cross-Defendants’ motion to strike as to paragraphs 13, 40, 41, 42, and 132 of the FACC, with leave to amend, and denied the motion to strike as to the identified portions of paragraph 83 and paragraph 102.

As set forth in the Court’s May 31, 2023 Order, the Court ordered Erewhon to file and serve an amended cross-complaint, if any, within 20 days of the May 31, 2023 Order. The May 31, 2023 Order further provides that if no amended cross-complaint is filed within 30 days of the Order, Cross-Defendants are ordered to file and serve their answer within 40 days of the May 31, 2023 Order.

On June 30, 2023, Erewhon filed the operative Second Amended Cross-Complaint (“SACC”), alleging causes of action for (1) breach of contract (specific performance), (2) breach of contract, (3) breach of the implied covenant of good faith and fair dealing, (4) fraud (concealment), (5) negligent misrepresentation, (6) violation of Business and Professions Code section 17200 (unfair competition), (7) declaratory relief, and (8) breach of the covenant of quiet enjoyment.

Cross-Defendants now move to strike certain portions of the FACC filed by Erewhon pursuant to Code of Civil Procedure section 425.16. Specifically, Cross-Defendants “request the Court strike Paragraphs 13, 40, 41, and 42 from the FACC – and to dismiss each claim in the FACC to the extent it incorporates by reference and is based on the conduct described in those paragraphs.” Erewhon opposes.

As an initial matter, Erewhon asserts that the instant motion is premature and moot.

Erewhon notes that the instant motion is directed to the FACC, which is not the operative complaint in this matter. Cross-Defendants filed the instant motion on March 27, 2023. Thereafter, on May 31, 2023, the Court issued an order sustaining in part (with leave to amend) and overruling in part Cross-Defendants’ demurrer to the FACC. The Court also granted in part (with leave to amend) and denied in part Cross-Defendants’ motion to strike portions of the FACC. On June 30, 2023, Erewhon filed the operative SACC.

Erewhon cites to JKC3H8 v. Colton (2013) 221 Cal.App.4th 468, 477, where the Court of Appeal noted that “[b]ecause there is but one complaint in a civil action…the filing of an amended complaint moots a motion directed to a prior complaint.” The JKC3H8 Court noted that “[s]o too does an amended complaint render moot an anti-SLAPP motion directed to a prior complaint, with the following caveat: A plaintiff or cross-complainant may not seek to subvert or avoid a ruling on an anti-SLAPP motion by amending the challenged complaint or cross-complaint in response to the motion.” ((Id. at pp. 477-478.)

Erewhon also cites to Oakland Bulk & Oversized Terminal, LLC v. City of Oakland (2020) 54 Cal.App.5th 738, 741, where “[t]he City of Oakland (City) entered into a series of agreements with Oakland Bulk and Oversized Terminal, LLC (OBOT), for the development of the land at the site of the former Oakland Army Base.” In Oakland Bulk, “OBOT (along with an affiliate) filed suit against the City, alleging 12 causes of action, including three for breach of contract and seven for tort. The City filed a demurrer and a standard motion to strike, followed weeks later by a special motion to strike (SLAPP motion) that sought to strike ‘in part’ the complaint—a motion that thus recognized the case would proceed. The court advanced the SLAPP motion so it came on for hearing with the other two matters, which hearing began with the court making early mention of the SLAPP motion, observing that it ‘might be premature.’ The hearing dealt primarily with the demurrer, which the trial court had addressed in a tentative ruling, overruling it in most part, and sustaining it in part with leave to amend. Days later, the trial court entered an order on the SLAPP motion, that it was ‘denied without prejudice,’ going on to describe it as ‘premature’ in light of the amended complaint to come. The City did not wait for the amended complaint, and appealed.” ((Id. at pp. 741-742.)

The Court of Appeal in Oakland Bulk noted that “[t]he City’s appeal argues at length that the trial court erred in allowing amendment, but then goes on to ask us to decide the SLAPP motion. We do that, and decide that it has no merit, that plaintiffs’ complaint is not based on protected activity. We thus remand with instructions to the trial court to enter an order denying the SLAPP motion…” ((Id. at p. 742.) The Court of Appeal also noted that “[t]he parties devote a significant amount of briefing to the issue of whether any amendment was proper after the SLAPP motion was filed, the City arguing it was not and that Judge Lee committed error. We disagree.” ((Id. at p. 750.) The Court noted that “[t]he City also cites Martin, supra, 198 Cal.App.4th 611 as indicating that the preferred procedure is to decide the SLAPP motion first, before the demurrer. Not only is Martin unavailing, we fail to see the efficacy of this, especially as the situation was caused by the City’s own conduct. Put otherwise, no one made the City file the demurrer or the standard motion to strike, both set for hearing, we note, weeks before the scheduled hearing date of the SLAPP motion. In sum, Judge Lee wisely did what she did rather than analyze what would have been a superseded complaint. She did not err.” (Id. at p. 751.)

Erewhon asserts that “[t]he same is true here. Cross-Defendants could have moved to have the Motion heard before the Demurrer and Motion to Strike…They did not to do so. Accordingly, the Court has already stricken the challenged language (for unrelated reasons) and Erewhon has already filed an amended cross-complaint. That amended cross-complaint is the operative pleading now, and it does not contain the allegations addressed in the Motion. Erewhon did not amend to avoid the ruling on Cross-Defendants’ motion. Accordingly, the Motion is premature and moot.” (Opp’n at p. 9:10-15.) As set forth above, the Court granted Cross-Defendants’ motion to strike as to paragraphs 13, 40, 41, 42, and 132 of the FACC, with leave to amend. (See May 31, 2023 Order.) Other than paragraph 132, these are the paragraphs of the FACC that Cross-Defendants move to strike in the instant motion. (See Notice of Mot. at p. 2:9-10.)

In the reply, Cross-Defendants assert that “[t]he fee request in Cross-Defendants’ anti-SLAPP motion is not rendered moot by virtue of Erewhon’s Second Amended Cross-Complaint.” (Reply at p. 3:22-23.) Cross-Defendants cite to Sandlin v. McLaughlin (2020) 50 Cal.App.5th 805, 821, where the Court of Appeal noted that “[a] trial court’s resolution of the underlying action does not moot a fee request under the SLAPP statute. To the contrary, because a defendant who has been sued in violation of his or her free speech rights is entitled to an award of attorney fees, the trial court must, upon defendant’s motion for a fee award, rule on the merits of the SLAPP motion even if the matter has been dismissed prior to the hearing on that motion. This requirement makes sense. If a writ petitioner files a meritless SLAPP petition, he should not be permitted to avoid the anti-SLAPP statute’s attorney fee provision simply because the trial court resolves the writ petition first. A contrary rule would nullify the anti-SLAPP statute’s fee provision.” (Internal quotations and citations omitted, emphasis in original.)

But here, the instant action has not been resolved or dismissed. Cross-Defendants also cite to White v. Lieberman (2002) 103 Cal.App.4th 210, 220, where the Court of Appeal noted that “[t]he trial court ruled that because it sustained Lieberman’s demurrer without leave to amend, his motion to strike White’s complaint was moot. But a defendant who prevails in an anti-SLAPP motion is entitled to attorney’s fees. (§ 425.16, subd. (c).) The trial court therefore erred in determining that Lieberman’s motion was moot.”

In the opposition, Erewhon asserts that White is distinguishable, because “[h]ere, Cross-Defendants’ Demurrer and Motion to Strike were both sustained with leave to amend, causing Erewhon’s operative Cross-Complaint to be superseded by an amended version. Furthermore, Cross-Defendants’ Demurrer and Motion to Strike were both denied in part. They have not prevailed in the action. As was the case in Oakland Bulk, the complaint to which Cross- Defendants’ Motion was directed is no longer before this Court – a new complaint is. This was not so in White. There, the complaint to which the anti-SLAPP motion was directed was the only complaint at issue. It was never superseded, and thus the court was able to refer to that pleading in deciding the second prong of the anti-SLAPP statute. White has no application here.” (Opp’n at p. 10:1-8.)

In the reply, Cross-Defendants respond that “the granting of a motion to strike is tantamount to the sustaining of a demurrer without leave to amend, in that the stricken allegations may not be realleged.” (Reply at p. 6:26-27.) But as set forth above, the Court granted Cross-Defendants’ motion to strike as to paragraphs 13, 40, 41, 42, and 132 of the FACC, with leave to amend. (May 31, 2023 Order at p. 28:1-2.)

A discussed, “[a]n amendatory pleading supersedes the original one, which ceases to perform any function as a pleading. The amended complaint furnishes the sole basis for the cause of action, and the original complaint ceases to have any effect either as a pleading or as a basis for judgment…Because there is but one complaint in a civil action…the filing of an amended complaint moots a motion directed to a prior complaint…Thus, the filing of an amended complaint renders moot a demurrer to the original complaint. Similarly, once an amended complaint is filed, it is error to grant summary adjudication on a cause of action contained in a previous complaint…After a cause of action is amended, the court may rule in favor of the defendant if, upon subsequent motion, or perhaps renewal of the earlier motion if appropriately framed, it is shown … there are no triable material issues of fact which would permit recovery on that theory. So too does an amended complaint render moot an anti-SLAPP motion directed to a prior complaint, with the following caveat: A plaintiff or cross-complainant may not seek to subvert or avoid a ruling on an anti-SLAPP motion by amending the challenged complaint or cross-complaint in response to the motion.” ((JKC3H8 v. Colton, supra, 221 Cal.App.4th at pp. 477-478 [internal quotations, citations, and emphasis omitted].)

Here, the Court does not find that the circumstances show that Erewhon sought to avoid a ruling on Cross-Defendants’ anti-SLAPP motion by amending the FACC, because following the ruling on Cross-Defendants’ demurrer to the FACC, the Court ordered Erewhon to file and serve an amended cross-complaint, if any, within 20 days of the date of the May 31, 2023 Order.

Based on the foregoing, the Court finds that Erewhon has demonstrated that the instant motion is moot.

In the motion, Cross-Defendants “request an order awarding attorneys’ fees and costs, pursuant to CCP § 425.16(c)(1) in an amount to be proven by subsequent motion.” (Mot. at p. 2:12-13.) Pursuant to Code of Civil Procedure section 425.16, subdivision (c)(1), “[e]xcept as provided in paragraph (2), in any action subject to subdivision (b), a prevailing defendant on a special motion to strike shall be entitled to recover that defendant’s attorney’s fees and costs. If the court finds that a special motion to strike is frivolous or is solely intended to cause unnecessary delay, the court shall award costs and reasonable attorney’s fees to a plaintiff prevailing on the motion, pursuant to Section 128.5.” As the instant motion is denied as moot, the Court denies Cross-Defendants’ request for attorney’s fees.

Erewhon also seeks attorney’s fees and costs in the opposition. The Court does not find that the instant motion was frivolous or intended to cause unnecessary delay. Therefore, the Court declines to award Erewhon its attorney’s fees and costs.¿

Superior Court of California

County of Los Angeles

Department 50