Opinion
NOT TO BE PUBLISHED
APPEALS from a judgment of the Superior Court of Los Angeles County No. GC041766, Joseph De Vanon, Judge.
Law Offices of Paul S. Berra and Paul S. Berra for Plaintiff and Appellant.
Lascher & Lascher, Wendy C. Lascher and Eric R. Reed; Ferguson Case Orr Paterson and Wendy C. Lascher for Defendants and Appellants.
ALDRICH, J.
INTRODUCTION
In its action based on a defamatory statement posted on the internet, plaintiff BCG Attorney Search (BCG) appeals from the judgment entered after trial court granted the motion of defendants Robert E. Kinney and Kinney Recruiting, Inc. (together defendants) for judgment on the pleadings. Because BCG joined as a plaintiff after the statute of limitations had lapsed (Code Civ. Proc., § 340, subd. (c)), we affirm the judgment.
All statutory references are to the Code of Civil Procedure unless otherwise noted.
Defendants also appeal from the judgment contending that the trial court erred in denying their special motion to strike the complaint as to BCG under the anti-SLAPP statute (§ 425.16). We conclude that defendants’ appeal is moot and so we dismiss it.
SLAPP is an acronym for strategic lawsuit against public participation. (Navellier v. Sletten (2002) 29 Cal.4th 82, 85.)
FACTUAL AND PROCEDURAL BACKGROUND
A. Harrison Barnes is the founder and CEO of BCG and affiliated plaintiff companies Law Crossing, Employment Crossing, Professional Authority, and Law Firm Staff (together BCG). BCG is a legal recruiting company.
On May 29, 2008, ripoffreport.com posted a review of BCG entitled, “BCG Attorney Search and Affiliated Companies Company [sic] Built on a web of lies Pasadena California” and subtitled, “It’s [sic] Over for Harrison Barnes, BCG Attorney Search, Lawcrossing, Legal Authority and Employmentcrossing.” The post accused Barnes of unethical practices at BCG and warned that BCG and Barnes were not to be trusted. The post’s author was identified as “Albert, Los Angeles, California U.S.A.”
Five months later, Barnes brought a libel action on his own behalf, seeking damages and injunctive relief. Barnes named as defendants, inter alia, Xcentric Ventures, LLC aka Rip Off Reports, the owner and operator of ripoffreport.com, and a number of Doe defendants, including “Albert.” Through discovery, Barnes sought to ascertain “Albert’s” identity. Xcentric brought an anti-SLAPP special motion to strike in December 2008, triggering a discovery stay. (§ 425.16, subd. (g).)
On August 5, 2009, 14 months after the ripoffreport.com post, Barnes filed a first amended complaint to add BCG as a plaintiff, and name Kinney as the post’s author and Kinney Recruiting as defendants; and to add causes of action against defendants alleging unfair competition (Bus. & Prof. Code, § 17200 (the UCL)) and intentional interference with prospective economic relations arising out of the defamation. Kinney is the founder and CEO of Kinney Recruiting and a former employee of Barnes.
Barnes dismissed the remaining defendants on May 28, 2009.
Defendants brought a special motion to strike the complaint pursuant to section 425.16 (anti-SLAPP motion). They argued, among other things, that the causes of action were barred by the one-year statute of limitations and the post’s statements were protected by the consumer interest privilege. The trial court granted defendants’ motion, and dismissed all plaintiffs except BCG, reasoning that BCG was defendants’ competitor and hence exempt from the anti-SLAPP statute by virtue of section 425.17, subdivision (c). The trial court eventually awarded defendants $45,104.81 in fees and $268.12 in costs as the prevailing parties on the anti-SLAPP motion. (§ 425.16, subd. (c).)
Defendants then moved for judgment on the pleadings (§ 438, subd. (c)(1)(B)(ii)) as to BCG, the only remaining plaintiff, arguing the complaint failed to state a cause of action because it was barred by the one-year statute of limitations in section 340, subdivision (c). Defendants argued that they had not previously been named as Doe defendants and no allegations against them were raised in the original complaint. The first amended complaint, which named BCG as plaintiff for the first time, was filed more than a year after the post appeared on the web. BCG responded that the statute of limitations was equitably tolled. BCG explained that where Kinney had concealed his authorship of the post, the time in which to file the lawsuit was tolled until November 3, 2008, the date the original complaint was filed, because that was when Barnes could commence discovery to determine “Albert’s” identity. Alternatively, the statute of limitations should have been tolled, BCG argued, because Xcentric’s anit-SLAPP motion stayed discovery until May 28, 2009, when Barnes dismissed Xcentric from the case. BCG also asked the court to grant it leave to amend its first amended complaint to include facts supporting its tolling defense.
The trial court granted defendants’ motion for judgment on the pleadings. The court ruled that “the First Amended Complaint fails to state any cause of action because the facts therein disclose that all causes of action are time-barred as a matter of law pursuant to section 340(c), and the doctrine of equitable tolling does not apply.”
After the judgment was entered, BCG filed its appeal challenging the ruling on the motion for judgment on the pleadings, and Kinney cross-appealed challenging the court’s earlier ruling denying the anti-SLAPP motion as to BCG.
CONTENTIONS
In its appeal, BCG contends that the trial court erred in refusing to toll the statute of limitations for two months while discovery was stayed and it was diligently attempting to ascertain the identity of “Albert” of “Los Angeles.”
In their appeal, defendants contend they are entitled to attorney fees and costs under the anti-SLAPP statute from the date the complaint was filed until judgment, because the trial court erroneously denied their anti-SLAPP special motion to strike as to BCG.
DISCUSSION
I. Judgment on the Pleadings
a. Standard of review
“A motion for judgment on the pleadings, like a general demurrer, challenges the sufficiency of the plaintiff’s cause of action and raises the legal issue, regardless of the existence of triable issues of fact, of whether the complaint states a cause of action. [Citation.]” (Brownell v. Los Angeles Unified School Dist. (1992) 4 Cal.App.4th 787, 793.)
On appeal, we apply the same standard of review as with a general demurrer. (Baughman v. State of California (1995) 38 Cal.App.4th 182, 187.) “We treat the pleadings as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Ibid.) “We consider evidence outside the pleadings which the trial court considered without objection. [Citation.]” (Ibid.) “ ‘We review the complaint de novo to determine whether [it] alleges facts sufficient to state a cause of action under any legal theory. [Citation.]’ [Citation.]” (DiPirro v. American Isuzu Motors, Inc. (2004) 119 Cal.App.4th 966, 972.)
b. Application to this case
The statute of limitations in section 340, subdivision (c) requires that an action for defamation be filed within one year of accrual of the cause of action. A cause of action for defamation accrues at the time the defamatory statement is “published, ” that is when the defamatory statement is communicated to a third person who understands it defamatory meaning as applied to the plaintiff. (Shively v. Bozanich (2003) 31 Cal.4th 1230, 1242, 1247.) Thus, “in defamation actions the general rule is that publication occurs when the defendant communicates the defamatory statement to a person other than the person being defamed. [Citations.]” (Id. at p. 1247.)
Here, the ripoffreport.com post was published on May 29, 2008. The first amended complaint naming BCG as a plaintiff and Kinney and Kinney Recruiting as defendants was filed on August 5, 2009, i.e., 14 months later. Where all three causes of action alleged against defendants arise out of the defamation, they are all barred by the one-year statute of limitations. (Swartzendruber v. City of San Diego (1992) 3 Cal.App.4th 896, 904, disapproved on other grounds in Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 72 [under California’s primary rights theory there is only a single cause of action for the invasion of one primary right].) Thus, BCG’s three causes of action against defendants are barred by the statute of limitations.
To avoid the effect of the statute of limitations, a plaintiff must show an excuse, tolling, or some other basis for avoiding the statutory bar. (Ponderosa Homes, Inc. v. City of San Ramon (1994) 23 Cal.App.4th 1761, 1768.) BCG relies on the doctrine of equitable tolling. As it did in the trial court, BCG raises two bases for tolling: first, BCG argues that defendants concealed the identity of “Albert” from “Los Angeles, ” by posting anonymously, thereby frustrating BCG’s attempts to ascertain the identity of the real defendants. Second, BCG argues Xcentric’s anti-SLAPP motion stayed discovery hindering Barnes’ efforts to discover the post’s author. BCG cites Bernson v. Browning-Ferris Industries (1994) 7 Cal.4th 926 (Bernson) to support its contention.
Bernson held, although ignorance of the identity of a defendant is normally not a basis for tolling the statute of limitations, that when defendants intentionally conceal their identities as author or publisher of defamatory material, preventing the plaintiff from ascertaining the identities through normal discovery procedures, they should not profit from their wrongdoing, and may be equitably estopped from asserting the statute of limitations as a defense. (Bernson, supra, 7 Cal.4th at pp. 928, 932-933, 936.) The defendants in Bernson, through their attorney, had emphatically and untruthfully denied any participation in the defamatory publication. (Id. at p. 929.)
Bernson does not aid BCG. The Bernson court clarified that to avail itself of equitable tolling defense, the plaintiff must exercise reasonable diligence. The statute of limitations “will toll only until such time that the plaintiff knows, or through the exercise of reasonable diligence should have discovered, the defendant’s identity.” (Bernson, supra, 7 Cal.4th at p. 936.)
Here, even if defendants intentionally concealed Kinney’s identity, equitable tolling would not apply because BCG cannot allege it acted diligently. Viewing the record according to the applicable rules (Baughman v. State of California, supra, 38 Cal.App.4th at p. 187), BCG’s founder and CEO Barnes filed a timely complaint on his own behalf, but made the deliberate choice not to include BCG as a plaintiff. Counsel for BCG told the trial court, “BCG... made the conscious decision not to be a plaintiff at the beginning of the case.” Counsel explained that “[a]t the beginning of the case my clients had a decision to make; who is going to be a plaintiff and who are they going to sue? [¶]... [¶]... about 14 months later, that’s when it was determined, well, these posters are actually direct competitors.” Thus, as defendants note, BCG is attempting to peg accrual of the statute of limitations to a subjective standard, namely, when Barnes thought he should add BCG as a coplaintiff. That, of course, is not the law. (Shively v. Bozanich, supra, 31 Cal.4th at pp. 1246-1247; Bernson, supra, 7 Cal.4th at pp. 931-932.) Therefore, equitable tolling is not available to BCG, not because Kinney might have fraudulently concealed his identity as the post’s author, but because Barnes and BCG made the conscious decision not to name BCG as a plaintiff within the one-year statute of limitations period.
BCG justified its decision not to join in the lawsuit initially by arguing that Barnes thought the defamatory statements were directed at him individually, and not at the company, because the statements were so personal. For example, BCG notes, Albert claimed that no one trusted Barnes, including his ex-wife, father, and fraternity brothers. Had Barnes thought the statements would be coming from a competitor, he argues he would have included BCG as a plaintiff in the original complaint along with allegations of intentional interference with prospective economic relations and violation of the UCL, rather than libel.
However, a fair reading of the post indicates it was aimed at both BCG and Barnes as the founder and owner of BCG. Not only was the report entitled, “BCG Attorney Search And Affiliated Companies Company [sic] Built on a web of lies Pasadena California” (italics added), but the subheading reads, “It’s [sic] Over for Harrison Barnes, BCG Attorney Search, Lawcrossing, Legal Authority and Employmentcrossing.” (Italics added.) The entire post discusses Barnes in the context of his business practices at BCG. The post commences, “All of the following information about this company and its affiliates is based on my personal experience with its services and owner[.]” (Italics added.) The author notes that BCG claims to have a hundred employees, but “I can almost guarantee you that there are not even close to that number” and “I would bet that the majority of the people who do work for the company [and its affiliates] are probably still in India[.]” The post complains about purported misrepresentations on BCG’s website. Therefore, the post discussed BCG as well as Barnes personally and in his capacity as the owner of BCG, and so there was ample basis for making BCG a plaintiff in the original complaint. Yet, BCG made the deliberate decision not to join in the lawsuit when it was timely. BCG was simply not diligent.
BCG challenges the Bernson diligence requirement. Bernson stated that one pertinent factor in the diligence inquiry is whether the filing of a timely Doe complaint would have assisted the plaintiff in discovering the defendant’s identity within the requisite three-year period for service of process under section 583.210, subdivision (a). (Bernson, supra, 7 Cal.4th at pp. 936-937.) “[T]he plaintiff must avail himself of the opportunity to file a timely complaint naming Doe defendants and take discovery.” (Id. at p. 937.) Hence, Bernson concluded, “It is only in those relative few where the defendant asserts a statute of limitations defense and the plaintiff claims that he was totally ignorant of the defendant’s identity as a result of the defendant’s fraudulent concealment, that the issue will even arise[.]” (Id. at p. 937, italics added.)
BCG argues that this diligence requirement of filing a timely complaint naming Doe defendants where the identity of at least one defendant is known (Bernson, supra, 7 Cal.4th at p. 937) is “ill defined” or nonsensical. BCG reasons plaintiffs should be given a “reasonable opportunity to investigate the defendant’s viability.” (Italics added.) We decline BCG’s invitation to disregard Bernson, not only because it is Supreme Court precedent, but also because one express purpose of statutes of limitations is to promote diligence in plaintiffs. “In common with other statutory limitations of the period within which an action may be brought, [section 340, subdivision (c)] serves to protect potential defendants from stale claims and to encourage plaintiffs to be diligent. Such provisions, by creating limits on the period during which a person’s conduct may engender litigation and liability, promote predictability and stability. [Citation.]” (Shively v. Bozanich, supra, 31 Cal.4th at p. 1246, italics added.)
More important, the doctrine of equitable tolling is based in equity (Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 388, dis. opn. Werdegar, J.), which requires that the plaintiff demonstrate that it exercised reasonable diligence. (Sanchez v. South Hoover Hospital (1976) 18 Cal.3d 93, 99; see Lantzy v. Centex Homes, supra, at pp. 379-380 [tolling where plaintiff uses “diligent efforts”]; Wood v. Elling Corp. (1977) 20 Cal.3d 353, 359-360, fn. 4 [no tolling where sole available avenue of legal recourse not diligently pursued].) Regardless of whether Barnes exercised diligence or was foiled in his attempts to diligently determine “Albert’s” identity, Barnes always knew of BCG’s identity and yet was not diligent in naming BCG as a plaintiff.
In any event, the filing of a complaint naming Doe defendants is permitted exactly so that plaintiffs may then investigate to discover the identities of the Doe defendants. BCG’s founder and CEO Barnes did file a timely complaint naming Doe defendants and was capable of amending to name individuals whose identity he ascertained within three years of that complaint. (§§ 474 & 583.210, subd. (a).) BCG has presented no justification for failing to do the same. As noted, the amendment naming BCG was brought two months after the statute of limitations had run. Had BCG been a plaintiff in the original complaint, it could have amended to name Kinney as a Doe defendant well within the three years under section 583.210, subdivision (a). The trial court correctly ruled that BCG cannot state a cause of action because its complaint is barred by the statute of limitations and BCG cannot invoke the doctrine of equitable tolling.
Accordingly, it is unclear why BCG argues so strenuously that the relation back doctrine does not apply here. The relation back doctrine is exactly the purpose behind section 583.210, subdivision (a). As Bernson explained, “Code of Civil Procedure section 583.210, subdivision (a), provides that the summons and complaint shall be served upon a defendant within three years after the complaint is filed. When the complaint is amended to substitute the true name of the defendant for the fictional name, the amended complaint ‘relates back’ to the timely original complaint and hence is not barred by the statute of limitations. [Citations.]” (Bernson, supra, 7 Cal.4th at pp. 932-933, fn. 4.) Had BCG been a plaintiff in the original complaint, it would have had three years, not merely one year, in which to identify Kinney and amend to name him as a Doe, which amendment would have related back to the date of the complaint.
Also, because Barnes named ripoffreport.com as a defendant in the original complaint, the trial court did not err in ruling that BCG had a defendant to sue in the original complaint, BCG’s contention to the contrary notwithstanding.
II. Anti-SLAPP motion
Defendants contend the trial court erred in denying its special motion to strike BCG. (§ 425.16.) Defendants’ appeal is moot.
We conclude the appeal is moot. “ ‘A case is moot when any ruling by this court can have no practical impact or provide the parties effectual relief. [Citation.]’ [Citation.] ‘[A] matter is considered moot if, as a result of changed circumstances, its determination by declaratory relief will no longer significantly affect the legal relations of the parties. [Citation.]’ [Citation.] ‘ “[A]n action which originally was based upon a justifiable controversy cannot be maintained on appeal if all the questions have become moot by subsequent acts or events. A reversal in such a case would be without practical effect, and the appeal will therefore be dismissed.” [Citations.]’ [Citation.]” (Carson Citizens for Reform v. Kawagoe (2009) 178 Cal.App.4th 357, 364.)
The trial court here granted defendants’ special motion to strike the complaint as to all plaintiffs except BCG based on the exemption under section 425.17, subdivision (c). Although normally, section 425.16, subdivision (i) makes an order denying an anti-SLAPP motion immediately appealable under section 904.1 (§§ 425.16, subds. (i) & (j); 904.1, subd. (a)(13)), section 425.17, subdivision (e) created an exception to that rule. Subdivision (e) states: “If any trial court denies a special motion to strike on the grounds that the action or cause of action is exempt pursuant to this section, the appeal provisions in subdivision (j) of Section 425.16 and paragraph (13) of subdivision (a) of Section 904.1 do not apply to that action or cause of action.” (§ 425.17, subd. (e).) Thus, defendants could not have appealed from the court’s order denying its anti-SLAPP motion as to BCG because, where one plaintiff remained in the action, there was no final judgment. (In re Marriage of Griffin (1993) 15 Cal.App.4th 685, 689.)
Section 425.16, subdivision (i) reads, “An order granting or denying a special motion to strike shall be appealable under Section 904.1.”
After the ruling denying its special motion to strike the complaint, defendants obtained a dismissal of the entire lawsuit including BCG, through their successful motion for judgment on the pleadings. The trial court’s subsequent order granting judgment on the pleadings put an end to the entire controversy in defendants’ favor, with the result there is no relief we can give defendants. (Carson Citizens for Reform v. Kawagoe, supra, 178 Cal.App.4th at p. 364.) Nor does the exception to the mootness rule apply here. (See id. at p. 365[appellate court has inherent discretion to resolve moot issue if action involves matter of continuing public interest and is likely to recur].)
Defendants argue their appeal is not moot because “the erroneous denial [of their special motion to strike] left Kinney exposed to extensive unnecessary attorney fees and costs... despite the dismissal.” Effectively, defendants contend that their appeal is not moot because they are entitled to attorney fees and costs for the time and effort spent in moving for judgment on the pleadings.
Section 425.16, subdivision (c)(1) reads in relevant part: “a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney’s fees and costs.” (Italics added.) Thus, as one court explained, “the party prevailing on a special motion to strike [may] recover only those fees expended in connection with the motion, and not the entire action. [Citation.] Specifically, the legislative history of the fees provision includes the following statement: ‘ “[Senate Bill No. 1264] would provide attorney’s fees and costs to a prevailing defendant in a motion to strike. [¶]... [¶] The provision applies only to the motion to strike, and not to the entire action.” ’ [Citation.]” (Chambers v. Miller (2006) 140 Cal.App.4th 821, 826, italics added.) The attorney fee provision in the anti-SLAPP statute was not intended to provide “general monetary relief to SLAPP victims, ” but only to reimburse the defendants for the fees and costs actually incurred in succeeding on the special motion to strike. (Ibid.)
Here, defendants’ anti-SLAPP motion resulted in dismissal of all plaintiffs except BCG. The trial court awarded defendants $45,104.81 in fees and $268.12 in costs pursuant to section 425.16, subdivision (c) for that successful special motion to strike. The dismissal of BCG was obtained on defendants’ motion for judgment on the pleadings, not on the special motion to strike. (Chambers v. Miller, supra, 140 Cal.App.4th at p. 826.) Thus, there are no additional fees to which defendants are entitled under the anti-SLAPP statute.
Defendants argue they are nonetheless entitled to recover all of the fees and costs they incurred since BCG filed its complaint. They cite White v. Lieberman (2002) 103 Cal.App.4th 210 and Pfeiffer Venice Properties v. Bernard (2002) 101 Cal.App.4th 211 to argue that “dismissal of the underlying action does not moot a fee request under the anti-SLAPP statute.” In both cases, the trial court had refused to consider a pending anti-SLAPP motion because the case had already been dismissed on other grounds. Hence, the trial court in those cases never considered the fee requests under the anti-SLAPP statute. Both cases were reversed to allow the trial court to consider the attorney fee question. (White v. Lieberman, supra, at pp. 220-221; Pfeiffer Venice Properties v. Bernard, supra, at p. 215.) Here, the court ruled on the anti-SLAPP motion first and granted it in large part. The court then awarded defendants fees and costs on that motion. Defendants successfully obtained a dismissal of BCG with their motion for judgment on the pleadings, but they are not entitled to fees for that procedure. (7 Witkin, Cal. Procedure (5th ed. 2008) Judgment, § 149, p. 684 [circumstances under which attorney fees are recoverable].)
For the foregoing reasons, defendants’ appeal is dismissed as moot. We do not reach the substantive arguments raised in defendants’ appeal.
DISPOSITION
The judgment is affirmed. Defendants’ appeal is dismissed. Each party to bear its own costs on appeal.
We concur: CROSKEY, Acting P.J., KITCHING, J.
Section 425.16, subdivision (j) reads in part: “Any party who files a special motion to strike pursuant to this section... shall, promptly upon so filing, transmit to the Judicial Council... a copy of any related notice of appeal....”
Section 904.1, subdivision (a)(13) then provides, “An appeal, other than in a limited civil case, may be taken from any of the following: [¶] (13) From an order granting or denying a special motion to strike under Section 425.16.”