Anti-SLAPP Motion Fails When Plaintiff Makes a Showing That the Petitioning Activity Was a Breach of Contract
Midland Pacific Building Corp. v. King (11/28/07, 2d Civil No. B192017, Second Dist.)
12 p. opinion
Rehearing Opinion
157 Cal.App.4th 264
A developer brought suit against a landowner for breach of contract and fraud. The contract had provided that the landowner would obtain City approval of a draft tract map.
After the landowner presented a different, higher density tract map for approval at a planning commission hearing, the developer sued for breach of contract and fraud. The landowner brought an anti-SLAPP motion, arguing the suit was brought in response to the landowner's statements at an official proceeding in furtherance of his right of petition and free speech.
The Court of Appeal found that the breach of contract cause of action arose out of the petitioning activity. Indeed, the petitioning activity was the primary obligation of the landowner under the contract. However, it also found that the developer had shown a probability of prevailing.
The fraud cause of action was based upon private communications between the parties and therefore not based upon protected activity.
The anti-SLAPP motion had been correctly denied.
Presiding Justice Gilbert wrote the opinion. Justices Yegan and Coffee concurred.
Showing posts with label anti-SLAPP. Show all posts
Showing posts with label anti-SLAPP. Show all posts
Wednesday, November 28, 2007
Sunday, September 30, 2007
A Minor Who Made a Statement to the Police that She Had Been Abused Was Protected by Absolute Litigation Privilege
Penal Code Section 11172 Liability for False or Reckless Reports of Child Abuse Applies Only to Third Parties and Not to the Alleged Victim
Chabak v. Monroy (Sept. 10, 2007, F049069, Fifth District)
19 p. opinion
A person cannot sue a minor for telling the police that the person had abused her. The statements that the minor made to the police are absolutely protected under the litigation privilege in Civil Code section 47(b).
The plaintiff here had argued that the controlling statute was Penal Code section 11172(a) which provides that someone who is not a mandated reporter is immune from suit "unless it can be proven that a false report was made and the person knew that the report was false or was made with reckless disregard of the truth or falsity of the report, and any person who makes a report of child abuse or neglect known to be false or with reckless disregard of the truth or falsity of the report is liable for any damages caused."
The Court of Appeal concluded that section 11172(a) was intended by the legislature to apply only to reports made by third parties. It would run completely contrary to the purpose of the Legislature's statutory scheme to increase reporting of child abuse to impose civil liability upon victims of child abuse.
The defendant in this action was 17 at the time of the alleged abuse. She made a statement to the police and, at the suggestion of the police, to her parents. She also spoke to a paralegal who was assisting her in filing a motion in court about the plaintiff's conduct. All of these conversations were covered by the litigation privilege.
As a result she had a complete affirmative defense to the plaintiff's action for false report of child abuse and slander. As a matter of law the plaintiff could not prevail. The defendant's anti-SLAPP motion to strike the complaint should have been granted.
Justice Cornell wrote the opinion. Acting Presiding Justice Vartabedian and Justice Wiseman concurred.
Chabak v. Monroy (Sept. 10, 2007, F049069, Fifth District)
19 p. opinion
A person cannot sue a minor for telling the police that the person had abused her. The statements that the minor made to the police are absolutely protected under the litigation privilege in Civil Code section 47(b).
The plaintiff here had argued that the controlling statute was Penal Code section 11172(a) which provides that someone who is not a mandated reporter is immune from suit "unless it can be proven that a false report was made and the person knew that the report was false or was made with reckless disregard of the truth or falsity of the report, and any person who makes a report of child abuse or neglect known to be false or with reckless disregard of the truth or falsity of the report is liable for any damages caused."
The Court of Appeal concluded that section 11172(a) was intended by the legislature to apply only to reports made by third parties. It would run completely contrary to the purpose of the Legislature's statutory scheme to increase reporting of child abuse to impose civil liability upon victims of child abuse.
The defendant in this action was 17 at the time of the alleged abuse. She made a statement to the police and, at the suggestion of the police, to her parents. She also spoke to a paralegal who was assisting her in filing a motion in court about the plaintiff's conduct. All of these conversations were covered by the litigation privilege.
As a result she had a complete affirmative defense to the plaintiff's action for false report of child abuse and slander. As a matter of law the plaintiff could not prevail. The defendant's anti-SLAPP motion to strike the complaint should have been granted.
Justice Cornell wrote the opinion. Acting Presiding Justice Vartabedian and Justice Wiseman concurred.
Saturday, September 29, 2007
To Be a SLAPP Suit an Action Must Be Based On Protected Activity
The Intent Use of Protected Speech or Activity As Evidence Does Not Mean that a Cause of Action is a SLAPP Cause of Action
Department of Fair Employment & Housing v. 1105 Alta Loma Road Apartments, LLC (Sept. 5, 2007, B194891, Second District)
18 p. opinion
An action is a SLAPP action only if it is based on the defendant's protected free speech or petitioning activity. The act of "speaking" or the act of petitioning must itself be the alleged wrong. If written correspondence and the filing of an action for unlawful detainer are going to be used as evidence to support a cause of action for alleged disability discrimination, then the lawsuit is not a SLAPP action. The plaintiff is not complaining about the correspondence or the legal filing but rather about the alleged motivation behind them. The gravamem of the complaint is disability discrimination, it is not the defendant's use of its speech or petitioning rights.
In this case the defendant decided to take a building off the rental market. One of the tenants responded to the required legal notice by notifying the defendant that she was disabled and therefore entitled to the longer relocation period that the statute provides for people with disabilities. The defendant asked the tenant to provide a letter from her physician indicating the nature of the tenant's disability.
After receiving a physician's letter stating that the tenant was totally disabled, the defendant asked for additional information. The defendant wanted a physician's letter that provided enough information to permit the defendant to determine that the tenant's disability was a qualifying disability under Government Code section 12926. The tenant declined to provide further information, citing her privacy rights. Following a lengthy correspondence the defendant brought an action for unlawful detainer against the tenant and evicted her. The DFEH then brought this action on behalf of the tenant alleging disability discrimination. The Court of Appeal affirmed the trial court's denial of the defendant's anti-SLAPP motion on the grounds that the action for disability discrimination was not based on the defendant's letters and unlawful detainer action.
Justice Johnson wrote the opinion. Presiding Justice Perluss and Justice Zelon concurred.
Department of Fair Employment & Housing v. 1105 Alta Loma Road Apartments, LLC (Sept. 5, 2007, B194891, Second District)
18 p. opinion
An action is a SLAPP action only if it is based on the defendant's protected free speech or petitioning activity. The act of "speaking" or the act of petitioning must itself be the alleged wrong. If written correspondence and the filing of an action for unlawful detainer are going to be used as evidence to support a cause of action for alleged disability discrimination, then the lawsuit is not a SLAPP action. The plaintiff is not complaining about the correspondence or the legal filing but rather about the alleged motivation behind them. The gravamem of the complaint is disability discrimination, it is not the defendant's use of its speech or petitioning rights.
In this case the defendant decided to take a building off the rental market. One of the tenants responded to the required legal notice by notifying the defendant that she was disabled and therefore entitled to the longer relocation period that the statute provides for people with disabilities. The defendant asked the tenant to provide a letter from her physician indicating the nature of the tenant's disability.
After receiving a physician's letter stating that the tenant was totally disabled, the defendant asked for additional information. The defendant wanted a physician's letter that provided enough information to permit the defendant to determine that the tenant's disability was a qualifying disability under Government Code section 12926. The tenant declined to provide further information, citing her privacy rights. Following a lengthy correspondence the defendant brought an action for unlawful detainer against the tenant and evicted her. The DFEH then brought this action on behalf of the tenant alleging disability discrimination. The Court of Appeal affirmed the trial court's denial of the defendant's anti-SLAPP motion on the grounds that the action for disability discrimination was not based on the defendant's letters and unlawful detainer action.
Justice Johnson wrote the opinion. Presiding Justice Perluss and Justice Zelon concurred.
Saturday, September 8, 2007
No Anti-SLAPP When Court Filings Were Not the Gravamen of the Complaint
Anti-SLAPP Motion Was Improperly Granted Where the Protected Activity Was Incidental to Causes of Action
Freeman v. Schack (Aug. 27, 2007, D048583, Fourth Appellate District, Division One)
21 p. opinion
The plaintiffs appealed from a judgment entered after the defendant's successful anti-SLAPP motion (Code of Civil Procedure section 425.16). The plaintiffs had sued the defendant, an attorney, for breach of contract, professional negligence and breach of fiduciary duty. The motion was granted on the grounds that the actions that the plaintiffs complained of were court filings that the defendant had made on behalf of another client.
The plaintiffs, who were represented by attorney David Barry, had brought an antitrust action against a real estate sales multiple listing service. They sought to have the antitrust action certified as a class action with themselves as class representatives. Defendant Schack volunteered to help Barry with the case. Schack signed an Attorney Association and Fee Agreement in which he agreed that he had all the responsibilities toward the plaintiffs that exist in an attorney-client relationship. Barry had detailed discussions with Schack in which he disclosed confidential information, litigation strategy and work product.
Schack then filed a motion in the action on behalf of a "proposed plaintiff in-intervention", Hemphill, who he argued satisfied class representative requirements. He argued that the plaintiffs were inadequate representatives. At a settlement conference where Barry represented the plaintiffs, Schack represented Hemphill. Schack had worked out an agreement in principle with the defendants which would provide non-monetary damages for class members and $1 million in attorney's fees for Schack and his new co-counsel. Barry tried unsuccessfully to have Schack disqualified. Schack filed an new action on behalf of Hemphill and obtained preliminary approval of a settlement class that did not include the plaintiffs.
The plaintiffs settled their antitrust action. They then filed this action against Schack. Schack's anti-SLAPP motion was based upon his argument that the plaintiffs' causes of action in this case were based upon his statements and writings in the antitrust case, which was a judicial proceeding.
The Court of Appeal rejected Schack's argument. Anti-SLAPP protection is available only when the cause of action is based on acts in furtherance of the defendant's right of petition. The gravamen of the plaintiffs' complaint against Schack was based on his abandonment of them as clients and his representation of a party with interests adverse to the plaintiffs'. The allegations of Schack's court filings and oral arguments were merely incidental to their causes of action. The essence of the plaintiffs' claim was that Schack had breached his duty of loyalty to them.
Justice O'Rourke wrote the opinion. Presiding Justice Nares and Justice Aaron concurred.
Freeman v. Schack (Aug. 27, 2007, D048583, Fourth Appellate District, Division One)
21 p. opinion
The plaintiffs appealed from a judgment entered after the defendant's successful anti-SLAPP motion (Code of Civil Procedure section 425.16). The plaintiffs had sued the defendant, an attorney, for breach of contract, professional negligence and breach of fiduciary duty. The motion was granted on the grounds that the actions that the plaintiffs complained of were court filings that the defendant had made on behalf of another client.
The plaintiffs, who were represented by attorney David Barry, had brought an antitrust action against a real estate sales multiple listing service. They sought to have the antitrust action certified as a class action with themselves as class representatives. Defendant Schack volunteered to help Barry with the case. Schack signed an Attorney Association and Fee Agreement in which he agreed that he had all the responsibilities toward the plaintiffs that exist in an attorney-client relationship. Barry had detailed discussions with Schack in which he disclosed confidential information, litigation strategy and work product.
Schack then filed a motion in the action on behalf of a "proposed plaintiff in-intervention", Hemphill, who he argued satisfied class representative requirements. He argued that the plaintiffs were inadequate representatives. At a settlement conference where Barry represented the plaintiffs, Schack represented Hemphill. Schack had worked out an agreement in principle with the defendants which would provide non-monetary damages for class members and $1 million in attorney's fees for Schack and his new co-counsel. Barry tried unsuccessfully to have Schack disqualified. Schack filed an new action on behalf of Hemphill and obtained preliminary approval of a settlement class that did not include the plaintiffs.
The plaintiffs settled their antitrust action. They then filed this action against Schack. Schack's anti-SLAPP motion was based upon his argument that the plaintiffs' causes of action in this case were based upon his statements and writings in the antitrust case, which was a judicial proceeding.
The Court of Appeal rejected Schack's argument. Anti-SLAPP protection is available only when the cause of action is based on acts in furtherance of the defendant's right of petition. The gravamen of the plaintiffs' complaint against Schack was based on his abandonment of them as clients and his representation of a party with interests adverse to the plaintiffs'. The allegations of Schack's court filings and oral arguments were merely incidental to their causes of action. The essence of the plaintiffs' claim was that Schack had breached his duty of loyalty to them.
Justice O'Rourke wrote the opinion. Presiding Justice Nares and Justice Aaron concurred.
Thursday, August 23, 2007
Filing Lawsuit and Filing Demand For Fee Arbitration are Petitioning Activities
A law firms' second amended cross-complaint against a former client stated causes of action protected by the anti-SLAPP statute
Philipson & Simon v. Gulsvig (August 15, 2007, G037335, Fourth District, Division Three)
23 page opinion
154 Cal.App.4th 347
This originally unpublished decision was, on the court's own motion, ordered published on August 15. Let's hope that wasn't because the Court of Appeal thought that more than one or two members of the California State Bar could benefit from its description of how not to practice law. The opinion's priceless first paragraph provides a precis of ways for an attorney to breach his duty of loyalty to his client.
But as fascinating as the potential legal ethics issues are, the decision itself decides the question of whether the respondent law firms' second amended cross-complaint against a former client should have been stricken as a SLAPP suit, in part because the law firm did not serve the client a mandatory notice of her right to arbitrate the firm's fee claim.
P&S law firms' second amended cross-complaint stated four causes of action against former client Gulsvig - fraud, misrepresentation, breach of contract and breach of the covenant of good faith and fair dealing. The anti-SLAPP statute, Code of Civil Procedure section 425.16 requires a two step analysis (1) has the defendant shown that the cause of action is based upon actions that 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? and (2) if yes, has the plaintiff demonstrated a probability that he will prevail on the claim?
The firms' fraud and misrepresentation causes of action were based upon allegations that because of Gulsvig's fraud and misrepresentation it had been sued in this action by Gulsvig. (Yes, the Court agrees that is a very odd argument.) A lawsuit qualifies as petitioning under the anti-SLAPP law and therefore those causes of action were protected.
The breach of contract and breach of the covenant causes of action, when read in conjunction with the firms' previous cross-complaints, were essentially a claim that Gulsvig had refused to pay P&S $15,000 in fees for an $85,000 settlement payment that it had obtained for her. But P&S had deducted that $15,000 from the settlement payment and had given Gulsvig only $70,000. Because P&S had the money in its possession at all times, the only action that could fit the description "refused to pay" was Gulsvig's act of filing a request for fee arbitration with the Orange County Bar Association. Filing such a request is protected petitioning. The second amended cross-complaint contained expanded fee claims but the initial $15,000 was at the heart of the case and thus the breach of contract and breach of covenant causes of action were based, at least in part, on Gulsvig's petitioning activity.
Could P&S nevertheless sustain its burden of demonstrating probable success on the merits of the cause of action? Not as to fraud and negligent misrepresentation. P&S could never establish that it had reasonably relied upon Gulsvig's allegedly false representation that she owned the judgment for which it had negotiated the $85,000 settlement. Not when the law firm alleged that Gulsvig had spent the two years before that representation telling it that a company named Tultex owned the judgment. And in any event, the only damages P&S sought on these causes of action were the costs it would be incurring in this very action - costs which are not recoverable under the American rule.
When it came to the breach of contract and breach of the covenant causes of action, Gulsvig's problem was that in the second amended cross-complaint the fee claims had been expanded beyond the original $15,000. Gulsvig argued that the trial court's conclusion that the breach of contract and breach of the covenant claims were viable was in error because they were subject to dismissal under the Mandatory Fee Arbitration Act (Business & Professions Code section 6201 et seq.). But Gulsvig had waived her right to arbitration by filing a cross-complaint against P&S before it filed its second amended cross-complaint with the expanded fee claims. Furthermore, even if Gulsvig had not waived her right to arbitration, dismissal is discretionary under the Act and the Court of Appeal could not conclude that the trial court had abused its discretion in deciding not to dismiss these causes of action for failure to serve an arbitration notice.
Justice Bedsworth wrote the opinion. Presiding Justice Sills and Justice Rylaarsdam concurred.
Comment: If you are curious about that great first paragraph, it is the quote of the week on my California Civil Litigation Quote of the Week blog.
Philipson & Simon v. Gulsvig (August 15, 2007, G037335, Fourth District, Division Three)
23 page opinion
154 Cal.App.4th 347
This originally unpublished decision was, on the court's own motion, ordered published on August 15. Let's hope that wasn't because the Court of Appeal thought that more than one or two members of the California State Bar could benefit from its description of how not to practice law. The opinion's priceless first paragraph provides a precis of ways for an attorney to breach his duty of loyalty to his client.
But as fascinating as the potential legal ethics issues are, the decision itself decides the question of whether the respondent law firms' second amended cross-complaint against a former client should have been stricken as a SLAPP suit, in part because the law firm did not serve the client a mandatory notice of her right to arbitrate the firm's fee claim.
P&S law firms' second amended cross-complaint stated four causes of action against former client Gulsvig - fraud, misrepresentation, breach of contract and breach of the covenant of good faith and fair dealing. The anti-SLAPP statute, Code of Civil Procedure section 425.16 requires a two step analysis (1) has the defendant shown that the cause of action is based upon actions that 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? and (2) if yes, has the plaintiff demonstrated a probability that he will prevail on the claim?
The firms' fraud and misrepresentation causes of action were based upon allegations that because of Gulsvig's fraud and misrepresentation it had been sued in this action by Gulsvig. (Yes, the Court agrees that is a very odd argument.) A lawsuit qualifies as petitioning under the anti-SLAPP law and therefore those causes of action were protected.
The breach of contract and breach of the covenant causes of action, when read in conjunction with the firms' previous cross-complaints, were essentially a claim that Gulsvig had refused to pay P&S $15,000 in fees for an $85,000 settlement payment that it had obtained for her. But P&S had deducted that $15,000 from the settlement payment and had given Gulsvig only $70,000. Because P&S had the money in its possession at all times, the only action that could fit the description "refused to pay" was Gulsvig's act of filing a request for fee arbitration with the Orange County Bar Association. Filing such a request is protected petitioning. The second amended cross-complaint contained expanded fee claims but the initial $15,000 was at the heart of the case and thus the breach of contract and breach of covenant causes of action were based, at least in part, on Gulsvig's petitioning activity.
Could P&S nevertheless sustain its burden of demonstrating probable success on the merits of the cause of action? Not as to fraud and negligent misrepresentation. P&S could never establish that it had reasonably relied upon Gulsvig's allegedly false representation that she owned the judgment for which it had negotiated the $85,000 settlement. Not when the law firm alleged that Gulsvig had spent the two years before that representation telling it that a company named Tultex owned the judgment. And in any event, the only damages P&S sought on these causes of action were the costs it would be incurring in this very action - costs which are not recoverable under the American rule.
When it came to the breach of contract and breach of the covenant causes of action, Gulsvig's problem was that in the second amended cross-complaint the fee claims had been expanded beyond the original $15,000. Gulsvig argued that the trial court's conclusion that the breach of contract and breach of the covenant claims were viable was in error because they were subject to dismissal under the Mandatory Fee Arbitration Act (Business & Professions Code section 6201 et seq.). But Gulsvig had waived her right to arbitration by filing a cross-complaint against P&S before it filed its second amended cross-complaint with the expanded fee claims. Furthermore, even if Gulsvig had not waived her right to arbitration, dismissal is discretionary under the Act and the Court of Appeal could not conclude that the trial court had abused its discretion in deciding not to dismiss these causes of action for failure to serve an arbitration notice.
Justice Bedsworth wrote the opinion. Presiding Justice Sills and Justice Rylaarsdam concurred.
Comment: If you are curious about that great first paragraph, it is the quote of the week on my California Civil Litigation Quote of the Week blog.
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