Opinion
G062530
03-27-2024
MARYAM FAZEL, Plaintiff and Respondent, v. PETE FOWLER CONSTRUCTION SERVICES, INC., Defendant and Appellant.
Miller Johnson Law, Jon B. Miller and Scott A. Johnson for Defendant and Appellant. The Tarassoly Law Group and Vida Tarassoly for Plaintiff and Respondent.
NOT TO BE PUBLISHED
Appeal from an order of the Superior Court of Orange County, No. 30-2022-01244957 David A. Hoffer, Judge. Affirmed.
Miller Johnson Law, Jon B. Miller and Scott A. Johnson for Defendant and Appellant.
The Tarassoly Law Group and Vida Tarassoly for Plaintiff and Respondent.
OPINION
BEDSWORTH, ACTING P. J.
Defendant Pete Fowler Construction Services, Inc. (Fowler Construction Services) appeals the partial denial of its anti-SLAPP motion under Code of Civil Procedure section 425.16. Plaintiff Maryam Fazel sued Fowler Construction Services on six causes of action. The trial court granted the anti-SLAPP motion as to four of those causes of action but denied the motion as to negligence and breach of contract causes of action. The trial court found those two causes of action did not arise from protected activity and, thus, denied the anti-SLAPP motion on the first step of the analysis.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated. "A 'SLAPP' is a '"strategic lawsuit against public participation"' [citation], and special motions to strike under section 425.16 are commonly referred to as '[a]nti-SLAPP motions' [citation.]" (Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1007, fn. 1 (Bonni).)
On appeal, Fowler Construction Services argues the trial court erred because the negligence and breach of contract causes of action arise from protected activity. Their argument is that those two causes of action arise from its expert report on behalf of the opposing party to Fazel in a prior litigation. We conclude the trial court was correct that the negligence and breach of contract causes of action do not arise from protected activity. The gravamen of these counts is not what the report says, it's the work that produced that report.
Additionally, Fazel argues in her respondent's brief the trial court erred in granting the anti-SLAPP motion as to the other causes of action, but we do not address the merits of this argument as Fazel did not appeal the order. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Prior Litigation
In June 2020, Fazel filed a complaint against Alan Sakai and Monique Christensen, who allegedly lived in the house next door to Fazel's house. Fazel alleged her property flooded following a rainstorm and water had leaked into her property for some time as there was mold. According to the complaint, Sakai and Christensen's "defectively constructed planter, patio, sidewalk and weep screed was the cause of the flooding and damage to [Fazel's] property." Fazel asserted causes of action for nuisance, negligence, trespass, and injunctive relief
In October/November 2020, Fazel, Sakai, and Christensen executed a "Release and Settlement Agreement" (Settlement). Among other things, the Settlement contained certain release provisions and stated Fazel shall receive one settlement draft of $8,250. She agreed "to provide entry of dismissal with prejudice of her complaint against [Sakai and Christensen] upon [her] counsel's receipt of the settlement draft." (Capitalization omitted.) Additionally, the Settlement provided that Sakai and Christensen "agree to provide documentation establishing that necessary repairs have been made to their property" and "[t]he repairs are to be performed by a licensed contractor."
On the settlement agreement, Fazel's signature appears to be dated October 31, 2020, and Sakai's and Christensen's signatures appear to be dated November 4, 2020.
However, Fazel's property purportedly flooded after she executed the Settlement and she did not immediately dismiss the complaint. Sakai and Christensen moved to enforce the Settlement, and on January 12, 2022, the court granted the motion to enforce the Settlement. The court held, "[b]ased on the plain language of the settlement agreement, the repairs to the property are not a condition precedent to [Fazel's] dismissal of [Sakai and Christensen]. [Citation.] As drafted, the settlement agreement does not condition [Sakai and Christensen's] dismissal on the repairs, let alone the 'adequacy' of the repairs." (Italics omitted.) On January 27, 2022, Fazel filed the consequent request for dismissal.
B. The Current Litigation
After dismissal of the prior litigation, Fazel filed this lawsuit against Fowler Construction Services, Avex Builders Inc. (Avex), and Sakai. The complaint makes similar allegations regarding flooding to Fazel's property. The complaint further alleges, "[u]nder the Settlement . . . [,] Sakai agreed to provide documentation establishing that necessary repairs have been made to their property" by a licensed contractor. But according to the complaint, "[i]nstead of hiring one licensed contractor to formulate and perform the entire necessary repairs, . . . Sakai hired two licensed contractors:" Fowler Construction Services and Avex. The complaint asserts Fowler Construction Services "formulated the repairs necessary to prevent the water intrusion into [Fazel's] property" and Avex "performed] the construction work."
The complaint further alleges, on August 14, 2020, Fowler Construction Services performed an inspection of Fazel's and Sakai's properties and "formulated the necessary work to prevent water intrusion" from Sakai's property to Fazel's property. It asserts Avex completed the construction work, and Sakai provided to Fazel a report from Fowler Construction Services and some invoices from Avex "to establish that the necessary repairs have been made to . . . Sakai's [property, and the repairs were performed by licensed contractors." Fazel allegedly signed the Settlement in reliance on that report from Fowler Construction Services and the Avex invoices, and "under the reasonable belief that what the two contractors performed would prevent further water intrusion[.]" However, Fazel alleges, after signing the Settlement, her property again flooded and she realized Fowler Construction Services and Avex had not made the necessary repairs to prevent water intrusion.
Fazel also alleges, after the prior litigation was dismissed, she discovered Avex had informed Sakai while Avex was working on Fazel's property that a tree abutting Fazel's foundation was the cause of the water intrusion. Sakai, however, allegedly directed Avex not to touch or remove the tree despite Avex informing Sakai the tree needed to be removed to stop the water intrusion. According to the complaint, Fowler Construction Services and Avex "knew or should have known that the work they formulated and performed was defective and inadequate to prevent water intrusion" and Fowler Construction Services "knew or should have known that the mature tree must have been removed in order to stop water intrusion[.]" Fazel further asserts the report from Fowler Construction Services "falsely represented that the necessary work was performed to prevent further flooding of [Fazel's] [property and was meant to deceive [Fazel] and induce her into executing the Settlement[.]"
The complaint asserts six causes of action against Fowler Construction Services (and certain other defendants, depending on the cause of action) for (1) intentional misrepresentation, (2) negligent misrepresentation, (3) negligence, (4) violation of Business and Professions Code section 7160, (5) breach of contract (third party beneficiary), and (6) fraudulent concealment. We are primarily concerned with the negligence and breach of contract causes of action. For the negligence cause of action, Fazel alleges, among other things, Fowler Construction Services and Avex "formulated and performed the work necessary to prevent water intrusion from . . . Sakai's to [Fazel's] [property" and had a "special duty" to Fazel "to formulate and perform the correct repairs to prevent water intrusion," but Fowler Construction Services and Avex "breached that duty when the repairs they formulated and performed were defective and inadequate." According to Fazel, because of those defective repairs, her property flooded with water when the first heavy rainfall occurred and she has suffered damages as her property continues to flood after every heavy rainfall. For the breach of contract cause of action, Fazel alleges, among other things, that Sakai "hired the services of Fowler Construction Services and Avex "to perform the necessary repairs to prevent water intrusion," and although Fazel was not a party to the contract between Sakai and Fowler Construction Services and Avex, she was a third party beneficiary. According to the complaint, Fowler Construction Services and Avex breached the contract by performing "defective and inadequate construction work that was necessary to prevent water intrusion," and there continues to be flooding on Fazel's property.
The complaint asserted other causes of action that were not against Fowler.
Fowler Construction Services filed an anti-SLAPP motion seeking to strike all of the causes of action against it, along with a declaration by Michael Villalba (a Fowler Construction Services employee) and a request for judicial notice. Fowler Construction Services argued it had been sued because of statements made in an expert report on behalf of Sakai in the prior litigation, which is protected under the anti-SLAPP statute, and Fazel cannot establish a probability that she will prevail.
According to Villalba's declaration, Sakai's counsel retained Villalba to provide expert consultant services to Sakai and requested Villalba "to conduct a visual inspection of the two neighboring properties and to form opinions regarding: defenses to plaintiff Fazel's claims; the estimated scope of work which would be necessary to repair the problems complained of by Fazel; and the estimated costs of such work." Villalba declared he was requested to prepare a report for Sakai regarding Villalba's inspection and opinions, which was attached to his declaration and dated August 27, 2020. The cover page for the report was titled "Fazel v. Sakai," and the next page addressed the report to Sakai's counsel, stated it was regarding "Estimate & Inspection Summary," and noted it was "[f]or mediation purposes only" and "[protected under all applicable evidence codes." The report had a project overview section and an inspection summary, which contained certain observations of both the Fazel and Sakai properties. The report then had an estimated scope of work section, which noted, among other things, "[t]he water intrusion from the Sakai Residence into the Fazel Residence was a result of the Sakai[ ]garden area, that is immediately adjacent to the Fazel property, being too high in relation to the wall/foundation plate line" and "[t]he tree that is adjacent to the wall did not have an [e]ffect on the water intrusion, nor are there any sign[s] of damage to the Fazel wall or foundation from the tree." The report then listed "repair recommendations to resolve the problems with the garden, stucco wall, and damage to Fazel interior finishes," which included repair recommendations to both the Fazel and Sakai properties. The report also included additional information regarding cost estimates for both the Fazel and Sakai properties.
There is no evidence in the record on appeal that a mediation occurred, and no party has argued a mediation privilege applies here.
Villalba's declaration stated his work on behalf of Sakai included preparing a request for a proposal to submit to licensed contractors to bid the scope of work in the report, but neither he nor Fowler Construction Services "had any involvement in the selection of contractors ultimately awarded the job of working on either property, or follow-up contact with any of the contractor candidates on this matter after [he] submitted the requests for proposal." Villalba further noted Avex was retained by Sakai's counsel to perform the work on both the Fazel and Sakai properties, but Villalba said he did not participate in that decision and he and Fowler Construction Services did not have "any role in the actual repairs or monitoring of the work done by Avex after they were hired by Sakai's counsel." Villalba said, after Avex finished work at the Fazel and Sakai properties, he returned to the Sakai property, at the request of Sakai's counsel, to conduct a follow up inspection and water testing because of purported flooding at Fazel's property. Villalba noted Sakai, Fazel, and Fazel's expert consultant were present, Villalba and Fazel's expert consultant agreed on the need for additional grading between the two properties, and Villalba later shared his observations with Sakai's counsel. Villalba also stated Fowler Construction Services "was paid directly by State Farm for the expert consultant services [he] provided to its insured Sakai," Fowler Construction Services received no payment from and had no contract with Fazel, he had no communications with Fazel or her counsel regarding the scope of recommended work or cause of the water intrusion issues, and he expected Fazel to rely on her own counsel's and expert consultant's recommendations in making decisions affecting her property.
Fazel opposed the anti-SLAPP motion, and her opposition was supported by a declaration from Fazel's counsel and an affidavit from Yvette LaMarque (who was a part owner of Avex). According to LaMarque's declaration, Sakai's counsel informed her, in or around September 2020, that Fowler Construction Services had prepared a scope of work for the Sakai property, and Avex was asked to bid that scope of work. LaMarque also stated, "[b]efore the bid was accepted, Avex walked . . . Sakai's property with Fowler Construction [Services] to ensure the accuracy of the scope of work prepared by Fowler Construction [Services]."
The trial court granted in part and denied in part the anti-SLAPP motion. The trial court granted the anti-SLAPP motion as to the intentional misrepresentation, negligent misrepresentation, violation of Business and Professions Code section 7160, and fraudulent concealment causes of action. For the first step in the anti-SLAPP analysis, the trial court explained Fazel's intentional misrepresentation and negligent misrepresentation causes of action assert Fowler Construction Services "within its written report 'misrepresented to [Fazel] that [it] had formulated the work necessary to prevent water intrusion . . . .' [Citation.]" The trial court noted the violation of Business and Professions Code section 7160 cause of action alleges Fowler "misrepresented that the work formulated was the work necessary to prevent further intrusion of water and that this misrepresentation induced Plaintiff to enter into the settlement agreement with Sakai." And for the fraudulent concealment cause of action, the trial court stated that cause of action "alleges concealment based on [Fowler Construction Service's] failure to advise [Fazel] that additional work was necessary (specifically, the removal of a tree from Sakai's property" and "alleges intentional concealment to induce Plaintiff to enter into a settlement agreement." "[G]iven the allegations [Fowler Construction Services] concealed and misrepresented information, specifically for the purpose of inducing [Fazel] to settle her claims in the underlying litigation," the trial court held these four causes of action fell within the protection of section 425.16, subdivision (e)(2)
Moving to the second step of the anti-SLAPP analysis for these four causes of action, the trial court found Fazel had failed to meet her burden of demonstrating a probability of prevailing. As an initial matter, the trial court noted Fazel did not meet her burden to organize the evidence and develop her arguments for this step in the anti-SLAPP analysis. And even under an independent review of the declarations offered by Fazel, the trial court found "no evidence [Fowler Construction Services] knew or reasonably should have known that their representations were false, at the time the representations were made or prior to [Fazel's] alleged injury." The trial court found the LaMarque declaration did not establish "Fowler knew further work was necessary to prevent flooding, at the time of the alleged representations or concealments[,]" and also did not establish "there was no reasonable ground for Fowler [Construction Services] to believe the statements in their report, as necessary for negligent misrepresentation."
LaMarque's declaration also stated Fowler Construction Services "agreed that the tree needed to be removed in its entirety." However, the trial court sustained Fowler Construction Service's objection to this statement for lack of foundation because LaMarque did not explain the basis of her knowledge. On appeal, Fazel cites this declaration statement without ever indicating the trial court sustained the objection, let alone arguing why the decision was wrong. In any event, if we disregard this declaration statement for purposes of this appeal, it does not impact our conclusion below.
However, for the negligence and breach of contract causes of action, the trial court denied the anti-SLAPP motion at the first step, holding those causes of action do not arise from protected activity. As the trial court explained, the negligence cause of action alleges negligence because "the repairs formulated by [Fowler Construction Services] were defective and resulted in additional flooding" and the breach of contract cause of action alleges Fazel "was a third-party beneficiary of the contract between Sakai and . . . Fowler [Construction Services] and . . . the work performed pursuant to the contract was defective." The trial court noted, "while the litigation between [Fazel] and Sakai triggered the identified interaction between [Fazel] and . . . Fowler [Construction Services], it is not the basis of the claims." The trial court found "it wasn't [Fowler Construction Services'] report alone, nor its participation in the Sakai action which form the basis of the claims for negligence and breach of contract, but instead the quality of the work performed, with respect to [Fazel's] property." As the trial court explained, "[t]he negligence and breach of contract claims, in stark contrast to the fraudulent-inducement claims, do not rely on the existence of prior litigation and a settlement agreement," and had Fowler Construction Services "completed identical analysis of the relevant properties and provided identical recommendations for repairs, entirely removed from the litigation context, the claims asserted by [Fazel] in the [negligence and breach of contract] [c]auses of [a]ction would remain."
DISCUSSION
On appeal, Fowler Construction Services contends the trial court erred in denying its anti-SLAPP motion as to the negligence and breach of contract causes of action. We review the trial court's decision on an anti-SLAPP motion de novo. (Joslin v. Third Laguna Hills Mutual (2020) 49 Cal.App.5th 366, 371 (Joslin).) "We exercise independent judgment in determining whether, based on our own review of the record, the challenged claims arise from protected activity." (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1067.) We agree with the trial court that the negligence and breach of contract causes of action do not arise from protected activity. Additionally, Fazel argues in her respondent's brief the trial court erred in using the anti-SLAPP statute to strike her other causes of action against Fowler Construction Services. We do not address the merits of this contention as she did not appeal the trial court's decision.
A. The Negligence and Breach of Contract Causes of Action
Under the anti-SLAPP statute, "[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 Constitution or the 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." (§ 425.16, subd. (b)(1).) An anti-SLAPP motion thus requires a two-step analysis. In the first step, "'the moving defendant bears the burden of establishing that the challenged allegations or claims "aris[e] from" protected activity in which the defendant has engaged.' [Citation.]" (Bonni, supra, 11 Cal.5th at p. 1009.) On the second step, "for each claim that does arise from protected activity, the plaintiff must show the claim has 'at least "minimal merit."' [Citation.]" (Ibid.)
For the first step of determining whether a claim arises from protected activity, "courts are to 'consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability.' [Citation.]" (Bonni, supra, 11 Cal.5th at p. 1009 .) "The defendant's burden is to identify what acts each challenged claim rests on and to show how those acts are protected under a statutorily defined category of protected activity." (Ibid.) "'[A] claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability . . . .' [Citation.]" (Hastings College Conservation Committee v. Faigman (2023) 92 Cal.App.5th 323, 332.) "We review the parties' pleadings, declarations, and other supporting documents '"only 'to determine what conduct is actually being challenged, not to determine whether the conduct is actionable.'"' [Citation.]" (Joslin, supra, 49 Cal.App.5th at p. 371.)
Here, while there are four categories of protected activity in the anti-SLAPP statute, Fowler Construction Services argues one applies: section 425.16, subdivision (e)(2), which protects "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[.]" (§ 425.16, subd. (e)(2).) Specifically, Fowler Construction Services contends its expert report is protected activity; the negligence and breach of contract causes of action are based on its protected expert report; and thus, the negligence and breach of contract causes of action meet step one of the anti-SLAPP analysis.
We disagree. The statements made in the report are not the bases for relief of the negligence and breach of contract causes of action. "The fact that an activity protected by the anti-SLAPP statute may have triggered a lawsuit does not necessarily mean that the causes of action arose from the protected activity." (Joslin, supra, 49 Cal.App.5th at p. 373.) Here, the claims for negligence and breach of contract arise not from Fowler Construction Services' report, but rather from Fowler Construction Services' alleged other activity regarding the actual implementation of the purportedly deficient repairs. Assuming Fowler Construction Services' report is protected activity, that does not mean subsequent alleged activity by Fowler Construction Services regarding actually implementing the purportedly defective repairs is also protected, even if the allegedly inadequate scope of work provided to Avex for the repairs was the same scope of work recommended in the report. This is not allegedly a situation where all the expert did was prepare and issue a report and/or testify; instead, alleged deficient repairs were subsequently made and Fazel allegedly has suffered damages because of those deficient repairs. While Fowler Construction Services did not itself purportedly perform the construction work (Avex is alleged to have done so), Fowler Construction Services allegedly had a knowing role, to some extent, in Avex's making of the supposedly deficient repairs. According to LaMarque those included "[b]efore the bid was accepted, Avex walked . . . Sakai's property with Fowler Construction [Services] to ensure the accuracy of the scope of work prepared by Fowler Construction [Services]."
Fowler Construction Services attempts to frame the issue differently arguing "the activity that allegedly gives rise to liability is the making of written statements in an expert report prepared for use in a prior lawsuit, and Fazel's supposed reliance on that report during settlement negotiations." But liability on the negligence and breach of contract causes of action is not premised on Fazel's purported reliance on the report during settlement negotiations. The negligence cause of action alleges Fowler Construction Services and Avex had a "special duty" to Fazel "to formulate and perform the correct repairs to prevent water intrusion," they breached that duty "when the repairs they formulated and performed were defective and inadequate," and Fazel has suffered damages because her property continues to flood. Similarly, the breach of contract cause of action alleges Sakai "hired the services of Fowler Construction Services and Avex "to perform the necessary repairs to prevent water intrusion," Fazel was a third party beneficiary, Fowler Construction Services and Avex breached the contract by performing "defective and inadequate construction work that was necessary to prevent water intrusion," and Fazel's property continues to flood. As those allegations demonstrate, the purported breaches and causation are based on alleged inadequate repairs and continued flooding, not on being induced into the Settlement. Indeed, the trial court already struck the causes of action that were based on alleged misrepresentations and concealment inducing Fazel to enter into the Settlement.
Fowler Construction Services also asserts the trial court erred in relying on cases involving plaintiffs suing their own former expert and/or counsel, not an opposing party's expert and/or counsel. (See Robles v. Chalilpoyil (2010) 181 Cal.App.4th 566, 570 (Robles) [plaintiffs sued their expert from an underlying litigation]; Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th 1532, 1534-1536 [plaintiffs sued their law firm from an underlying litigation]; Benasra v. Mitchell Silberberg & Knupp LLP (2004) 123 Cal.App.4th 1179, [plaintiffs sued their former attorneys who represented an opposing party in an underlying arbitration].) While these cases may have some relevance here, Fowler Construction Services is correct they involve plaintiffs suing their own former expert and/or counsel. We do not rely on these cases in concluding the negligence and breach of contract causes of action do not arise from protected activity.
Fowler also points to cases applying the litigation privilege to lawsuits against an opposing or jointly retained neutral expert. (See, e.g., Carden v. Getzoff (1987) 190 Cal.App.3d 907, 912-916; Ramalingam v. Thompson (2007) 151 Cal.App.4th 491.) These cases, however, do not convince us that Fowler Construction Services has met the first step of the anti-SLAPP analysis here. Notably, "[t]he scope of protection from claims under the anti-SLAPP statute is not always the same as the scope of protection for communications under the litigation privilege." (Joslin, supra, 49 Cal.App.5th at p. 375.) As the California Supreme Court has explained, while "[p]ast decisions of [the California Supreme Court] and the Court of Appeal have looked to the litigation privilege as an aid in construing the scope of subdivision (e)(1) and (2) with respect to the first step of the two-step anti-SLAPP inquiry," "the litigation privilege and the anti-SLAPP statute are substantively different statutes that serve quite different purposes[.]" (Flatley v. Mauro (2006) 39 Cal.4th 299, 322-323.) Given that we have determined Fowler Construction Services has failed to show the first step of the anti-SLAPP analysis is met, we need not determine whether Fowler Construction Services' alleged actions were immune under the litigation privilege. (See Robles, supra, 181 Cal.App.4th at pp. 581-582.)
To be clear, we are not opining on whether Fazel's negligence and breach of contract causes of action are actionable. Merits issues, such as whether Fowler Construction Services breached any duty owed to Fazel or whether Fazel was a third party beneficiary, are not the subject of the first step of the anti-SLAPP inquiry. At this stage, we simply hold the first step of the anti-SLAPP inquiry is not met for the negligence and breach of contract causes of action.
B. The Other Causes of Action
In her respondent's brief, Fazel contends the trial court erred in granting the anti-SLAPP motion as to the intentional misrepresentation, negligent misrepresentation, violation of Business and Professions Code section 7160, and fraudulent concealment causes of action. Fazel "requests that, if possible, the court in its own discretion, reverses and remands to the [t]rial [c]ourt that portion of the [t]rial [c]ourt's order granting the [a]nti-SLAPP motion as to" those causes of action. Fazel, however, did not appeal the trial court's decision. "As a general matter, '"a respondent who has not appealed from the judgment may not urge error on appeal."' [Citation.] 'To obtain affirmative relief by way of appeal, respondents must themselves file a notice of appeal and become cross-appellants.' [Citation.]" (Preserve Poway v. City of Poway (2016) 245 Cal.App.4th 560, 585.) Thus, we do not address Fazel's argument the trial court erred in granting of the anti-SLAPP motion as to those four causes of action. (See Hicks v. Richard (2019) 39 Cal.App.5th 1167, 1175, fn. 4.)
Fowler Construction Services asserts Fazel's counsel stated, during oral argument on the anti-SLAPP motion, Fazel submits to the trial court's tentative ruling. However, "[a] party's' [submission on a tentative ruling is neutral; it conveys neither agreement nor disagreement with the analysis.' [Citation.]" (Parkford Owners for a Better Community v. Windeshausen (2022) 81 Cal.App.5th 216, 226.)
DISPOSITION
The order is affirmed. Respondent shall recover her costs on appeal.
Fazel's respondent's brief included citations to documents in the record by title but did not include any page numbers in the record. Fazel's counsel is hereby reminded to follow California Rules of Court, rule 8.204(a)(1)(C).
WE CONCUR: MOORE, J., SANCHEZ, J.