Opinion
NOT TO BE PUBLISHED
Appeal from an order of the Superior Court of Orange County, No. 30-2008-00104774, Robert D. Monarch, Judge. Affirmed.
Rus, Miliband & Smith, Joel S. Miliband and M. Peter Crinella; Wenzel & Associates and Kenneth J. Wenzel, for Cross-defendant and Appellant.
Wordes, Wilshin & Conner and Frank A. Conner for Cross-complainant and Respondent.
OPINION
BEDSWORTH, J.
Kenneth H. Hayashida appeals from an order that denied his special motion to strike three causes of action in a cross-complaint by Joseph Alingod Apostol. Hayashida argues the claims are based on protected speech, and Apostol failed to offer evidence of a probability of success. We disagree on the first point and affirm.
FACTS
Hayashida and Apostol are physicians. At one time, Apostol worked for Hayashida’s corporation, Careways Children’s Health Associates, Inc. (Careways). Hayashida interested Apostol in investing in a medical condominium, and they formed Exodus Properties LLC (Exodus), to acquire the property. Hayashida and Apostol are equal owners of Exodus, and they contributed equal amounts toward the purchase price of the condominium. In 2006, Apostol left Careways. The parties agreed to seek a tenant for the condominium and agreed each would pay $1,800 a month to cover the mortgage, until a tenant was located.
The facts are drawn from the cross-complaint and the evidence submitted on the special motion to strike.
In 2007, Hayashida said he wanted to buy out Apostol, but they were unable to agree on a price. Hayashida retained possession of the condominium without making any attempt to rent or sell it, refused to pay a reasonable rent to Exodus, and failed to pay the debt service, taxes, or association charges. Hayashida retained control of Exodus as well, having possession of its books, records, and bank accounts. When Apostol hired a real estate broker to seek a tenant, Hayashida would not agree to list the property.
At some point, Hayashida commenced an action against Apostol, but the complaint is not in the record. Apostol filed a cross-complaint against Hayashida, Careways, and Exodus, followed by the amended cross-complaint in issue. The amended cross-complaint alleged the facts recited above. Causes of action were set out for dissolution of Exodus (Hayashida and Exodus), breach of fiduciary duty (Hayashida), recovery of reasonable rental value of the condominium by Exodus (Hayashida and Careways), and an accounting (Hayashida, Careways, and Exodus).
The original cross-complaint set out two causes of action, for dissolution of Exodus and breach of fiduciary duty by Hayashida and Careways. Punitive damages were sought on the fiduciary duty claim. Hayashida successfully moved to strike allegations of malice – and the punitive damage claim – on the ground the cross-complaint failed to plead facts supporting the claim. Apostol responded with the amended cross-complaint.
The fiduciary duty claim alleged Hayashida failed to pay rent for the condominium, failed to make reasonable efforts to lease it or pay carrying charges and taxes, and his failure to pay the mortgage resulted in foreclosure threats and affected Apostol’s credit. It alleged Apostol had to bring an action before the Labor Commissioner to recover wages owed him by Hayashida. Apostol won, but Hayashida appealed and demanded a trial in superior court. Apostol won again, but Hayashida refused to pay the judgment. Hayashida demanded additional contributions to Exodus’ capital, even though he knew Apostol was working two jobs to support his family. The pleading further alleged Hayashida acted with malice in harassing and threatening Apostol’s new employer and had deposed the new employer (Dr. Abelowitz), “prying into the personal and business operations” of the new employer’s practice. It alleged “Hayashida has done these acts” with malice, so punitive damages were proper. The subsequent claims for reasonable rental value and accounting incorporated by reference the allegations of the fiduciary duty claim, but they did not seek punitive damages.
Hayashida moved to strike the fiduciary duty, rental value, and accounting causes of action under the anti-SLAPP statute. He argued the appeal and deposition allegations showed these claims were based on protected speech. In opposition, Apostol offered his response to interrogatories propounded by Hayashida, and a copy of the Abelowitz deposition. The trial court sustained Hayashida’s objections to both and denied the motion.
DISCUSSION
Hayashida contends a cause of action that includes protected speech is subject to the anti-SLAPP statute unless those acts are merely incidental to unprotected conduct, and here the protected speech was a basis for Apostol’s claims. Apostol counters it is the gravamen of a pleading that determines whether it is subject to the statute, and the gravamen of his claim was that Hayashida had mismanaged Exodus. We agree with Apostol.
A cause of action is subject to dismissal on a special motion to strike if it arises from an act by a person in furtherance of his right of petition or free speech, unless the plaintiff shows a probability of success on the merits. (Code Civ. Proc., § 425.16.) The plaintiff’s burden is to offer facts which, if proved, would support a judgment in his favor. (Dowling v. Zimmerman (2001) 85 Cal.App.4th 1400, 1417.) We exercise our independent judgment in reviewing the record. (Sycamore Ridge Apartments LLC v. Naumann (2007) 157 Cal.App.4th 1385, 1396.)
The cases offer what at first appears to be two different tests to determine when the anti-SLAPP statute applies to a cause of action with allegations of both unprotected and protected acts. But closer scrutiny reveals the two views are reconcilable and, to the extent they are not, the “gravamen” test governs.
One articulation of the test is “it is the principal thrust or gravamen of the plaintiff’s cause of action that determines whether the anti-SLAPP statute applies [citation], and when the allegations referring to arguably protected activity are only incidental to a cause of action based essentially on nonprotected activity, collateral allusions to protected activity should not subject the cause of action to the anti-SLAPP statute.” (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 188.) Another formulation states “[t]he apparently unanimous conclusion of published appellate cases is that ‘where a cause of action alleges both protected and unprotected activity, the cause of action will be subject to section 425.16 unless the protected conduct is ‘merely incidental’ to the unprotected conduct. [Citations.]” (Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133 Cal.App.4th 658, 672.)
The two statements of the rule appear to be the same, both agreeing the anti-SLAPP statute does not apply to allegations of protected conduct that are “merely incidental” to unprotected acts. Put otherwise, where the gravamen or principal thrust of the cause of action rests on unprotected conduct, inclusion of incidental references to protected acts is not enough to invoke the statute.
But even if there is a difference, the gravamen test governs. We draw that conclusion from two recent decisions of the Supreme Court that state it is the gravamen or principal thrust of an action that determines whether it is based on protected activity. (Episcopal Church Cases (2009) 45 Cal.4th 467, 477-478; Club Members for an Honest Election v. Sierra Club (2008) 45 Cal.4th 309, 319.) Both cite Martinez v. Metabolife Internat., Inc., supra, 113 Cal.App.4th 181, as the source for the gravamen test, and we shall consider it the applicable one.
Here, the gravamen of the fiduciary duty claim is Hayashida owed Exodus a fiduciary duty as its managing partner, and he breached that duty by not paying the mortgage or taxes, and refusing to seek a tenant or purchaser. The protected conduct – appealing in another action and deposing Dr. Abelowitz in the present one – is alleged to show malice warranting punitive damages. But that goes to the remedy, and it is not the principal thrust of the cause of action. In other words, the allegations of protected conduct are incidental to the gravamen of the cause of action for breach of fiduciary duty.
The instant case is distinguishable from those relied on by Hayashida, Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP, supra, 133 Cal.App.4th 658 and Salma v. Capon (2008) 161 Cal.App.4th 1275. Peregrine Funding was a malpractice and breach of fiduciary duty action against a law firm. Key allegations were it delayed an SEC investigation and lawsuit by opposing an injunction, filing a bankruptcy petition, and in ensuing litigation provided only a portion of documents sought. The court said such allegations were not merely incidental to the claims against the firm (Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP, supra, 133 Cal.App.4th at p. 673), and it held the claims were based on protected conduct. In Salma, the court found a cause of action was properly stricken where allegations of protected conduct “represent the bulk of the allegations underlying the cause of action.” Salma v. Capon, supra, 161 Cal.App.4th at p. 1288.) Both cases illustrate when allegations of protected conduct are the gravamen of a cause of action, which is not the case here.
Hayashida argues the claims for reasonable rental value and an accounting should be stricken because they are derivative claims on behalf of Exodus that cannot be maintained by Apostol. If so, an appropriate motion should have been made, but the claims are not vulnerable under the anti-SLAPP statute.
Since the allegations of protected conduct were not the gravamen of the causes of action against Hayashida for breach of fiduciary duty, rental value, and accounting, but were only incidental to those claims, his special motion to strike was properly denied. The order appealed from is affirmed. Apostol is entitled to costs on appeal.
WE CONCUR: SILLS, P. J., O’LEARY, J.