Opinion
B222459
10-25-2011
ELITE AVIATION, LLC, Plaintiff, Cross-defendant and Respondent, v. JETCARD PLUS, INC. et al., Defendants, Cross-complainants and Appellants.
Theodora Oringher Miller & Richman and Stephen D. Weisskopf for Defendants, Cross-complainants and Appellants. O'Rourke, Fong & Manoukian and Marina Manoukian for Plaintiff, Cross-defendant and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. LC085370)
APPEAL from an order of the Superior Court of Los Angeles County, Bert Glennon, Jr., Judge. Reversed with directions.
Theodora Oringher Miller & Richman and Stephen D. Weisskopf for Defendants, Cross-complainants and Appellants.
O'Rourke, Fong & Manoukian and Marina Manoukian for Plaintiff, Cross-defendant and Respondent.
INTRODUCTION
Cross-complainant JetCard PLUS, Inc. appeals from an order granting a special motion to strike (Code Civ. Proc., § 425.16) by cross-defendant Elite Aviation, LLC. We reverse.
Other cross-complainants are parties to the litigation by virtue of their association with JetCard PLUS, Inc. For purposes of this appeal, we refer to them collectively in the singular.
FACTUAL AND PROCEDURAL BACKGROUND
Elite Aviation, LLC (Elite) is in the business of contracting on behalf of private-aircraft owners who want to lease their aircraft for air transportation. Defendant JetCard PLUS, Inc. (JCP) is in the business of obtaining privately chartered flights for its customers, much like a travel agent. Elite alleges that JCP failed to pay a total of $221,716.24 for chartered flights JCP contracted on behalf of JCP's customers in the months of February and March 2009. Around late April 2009, Elite sent collection letters to JCP customers who flew Elite chartered flights, advising them that "the costs and expenses associated with that flight [had] not been paid" and that "[a]s a third party beneficiary of the flight . . . [they were] personally responsible for payment." Elite subsequently filed a complaint on May 4, 2009, against JCP, its three owners (Owners), and 16 JCP customers who flew on Elite chartered flights that remained unpaid (Passengers). A. Allegations of JCP's Cross-complaint
On July 7, 2009, JCP filed a cross-complaint, the operative complaint here, against Elite alleging seven causes of action stemming from the collection letters and an email Elite sent to some members of the aviation community. In its cross-complaint, JCP alleges as follows: (1) In the course of attempting to collect the alleged debt, Elite sent illegal collection letters to Passengers for a debt not due or owed by Passengers and defamatory emails to the aviation community; and (2) Elite was not, and never has been, in direct contractual privity with either the Passengers or Owners. The gravamen of JCP's cross-complaint is that Elite sent the collection letters and emails as an illegal attempt to coerce the payment of a debt dispute by engaging in defamation and tortious interference with the contractual relations between JCP and Passengers.
There is a dispute between the parties as to whom and how many persons received the email. However, since this appeal only deals with the letters, those claims will not be addressed.
JCP amended its cross-complaint twice, however, the three pertinent causes of action on appeal remain: The third cause of action, for defamation, based on the emails to third parties in the aviation industry; the fourth cause of action for tortious interference with contractual relationship, based on the emails to third parties in the aviation industry and the letter to Passengers; and the fifth cause of action for tortious interference with prospective economic relations, again based on both the emails and the letters. B. The Anti-SLAPP Motion
A special motion to strike is also known as an anti-SLAPP (Strategic Lawsuit Against Public Participation) motion. A SLAPP suit is intended to chill the exercise of the right of free speech or the right to petition the government for redress of grievances. (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055.)
Elite filed both a demurrer to JCP's cross-complaint and an anti-SLAPP motion (Code Civ. Proc., § 425.16). In opposition to the motion, JCP presented the following evidence:
All further statutory references are to the Code of Civil Procedure, unless otherwise stated.
1. Howard L. Stone's (Stone) Declaration
Stone was a JCP customer since December 31, 2007. He placed funds on deposit until he needed a chartered flight. On February 18, 2009, Stone, along with his wife, chartered an Elite plane through JCP from Santa Monica, California to Eagle, Colorado. On April 28, 2009, Stone received what he perceived as "an improper, and arguably illegal, 'dunning' letter from John L. Wilkins, [Elite's] Chief Officer, alleging that [Stone] was 'personally liable for payment of all costs and expenses' associated with the February 18, 2009 flight" for a total of $10,285.00. Stone did not believe that he or his wife owed the debt but that they "were merely passengers" on the flight and "had never been in direct contractual privity with [Elite]."
Stone stated that he has never "specifically requested 'air transportation' from, or, to the best of [his] knowledge, [or] had any direct contact with [Elite] prior to boarding . . . on February 18, 2009." Additionally, at no time did he or his wife "enter into any direct contract for 'air transportation' with [Elite]."
Stone considered such allegations of failure to pay a debt "a personal affront" and "very damaging to [his] reputation and business interests." He "was subsequently appalled to learn that a copy of the [complaint], wrongfully identifying [him and his wife] as defendant parties, was attached to an e-mail [sic] . . . ." It was Stone's belief that "[t]he obvious inference to be taken from being identified as a co-defendant . . . alleged to have committed the felony of embezzlement in the email . . . [is that he and his wife] were somehow involved in such activity [and this] has caused irreparable harm to [their] reputations, damage to [their] business and investments and great personal anguish."
Finally, Stone stated that "based on the allegations contained in the April 28, 2009 'dunning' letter for the February 18, 2009 flight [], and unaware of the facts related to the dealings between [JCP] and [Elite, he and his wife], although otherwise to that date satisfied with the service provided by [JCP] . . . immediately sought to terminate [their] Gold FlightCard Membership Agreement with [JCP]. But for the improper and illegal April 28, 2009 'dunning letter' and wrongful lawsuit brought by [Elite], [he and his wife] would still be maintaining [their] Gold FlightCard Membership and continuing to fly on private jets utilizing the services of [JCP]."
2. Joshua Hebert's (Hebert) Declaration
Hebert is the founder and Chief Executive Officer of Magellan Jets, LLC (Magellan), a direct competitor of JCP in the "jet card" sales market of the private aviation business. Magellan has on occasion done business with JCP. On May 5, 2009, Hebert received an email containing the following message: "BEWARE—JETCARD PLUS fails to pay nearly $250k and appears to be embezzling money from Customers. See Attached File." The attached file was a copy of the complaint filed by Elite against JCP. C. The Trial Court's Ruling
The trial court granted Elite's anti-SLAPP motion as to the collection letters but denied the motion as to the emails sent to third parties. The legal effect of the court's ruling was that the letters could not be the source for the cross-claim as to the fourth and fifth causes of action. In granting the motion, the trial court found that the facts as presented led to a "reasonable" interpretation that "if passengers utilized [a] service, there [was] a possibility that they may ultimately be responsible for it . . . [and that] the carrier could send a letter to the passengers saying, 'we haven't been paid, and we expect you to pay for it.'" Second, the trial court found a distinction between the recipients of the letters, i.e. passengers for flights that were provided by Elite, and the recipients of the emails, i.e. third parties that were not related to the unpaid flights. The trial court stated specifically that this difference was the "reason for the ruling." JCP timely appealed.
DISCUSSION
A. California's Anti-SLAPP Statute
Section 425.16 provides that "(b)(1) [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. [¶] (2) In making its determination, the court shall consider the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based. [¶] . . . [¶] (e) As used in this section, [an] 'act in furtherance of a person's right of petition or free speech under the United States or California Constitution in connection with a public issue' includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) 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, subds. (b)(1) & (2), (e).)
In determining whether an anti-SLAPP motion should be granted, the court engages in a two-step process. (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 76; Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) First, the court must determine "whether the [moving party] has made a threshold showing that the challenged cause of action arises from protected activity." (Rusheen v. Cohen, supra, 37 Cal.4th at p. 1056; Equilon Enterprises, supra, at p. 67.) Protected activity may include "communicative conduct such as the filing, funding, and prosecution of a civil action." (Rusheen, supra, at p. 1056; see Ludwig v. Superior Court (1995) 37 Cal.App.4th 8, 19.) If the moving party meets its burden, the court must then determine whether the opposing party has shown a probability of prevailing on its claim. (Rusheen, supra, at p. 1056; City of Cotati, supra, at p. 76.)
On appeal, we review an order granting or denying an anti-SLAPP motion de novo. (Rusheen v. Cohen, supra, 37 Cal.4th at p. 1055.) The questions before this court, therefore, are whether Elite has satisfied its burden of establishing that section 425.16 applies (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 999) and "whether [JCP has] satisfied [its] burden of making a prima facie showing of facts that, if proven at trial, would support a judgment in [its] favor." (Schroeder v. Irvine City Council (2002) 97 Cal.App.4th 174, 184.) B. Elite Met Its Burden of Proving That JCP's Claim Arose from Protected Activity
JCP's primary contention on appeal is that the trial court erred in finding that section 425.16 applied, because Elite is unable to show that the letters were written "in connection with an issue under consideration or review by a legislative, executive, or judicial body" within the meaning of section 425.16, subdivision (e)(2) (hereinafter section 425.16(e)(2)), and thereby protected. JCP argues that "Elite lacked any good faith belief that JCP's clients[, Passengers,] had liability to Elite on [a] third-party beneficiary or any other grounds" and therefore, the letters "were not made 'in connection with' the litigation that eventually ensued." Further, JCP asserts that the letters were not written in good faith because "Elite's threat . . . exceeded 'any legitimate purpose' . . . ." Rather, it is JCP's belief that because the letters were addressed to third parties, Passengers, who JCP argues were neither part of the contract between JCP and Elite nor knew of the contract between JCP and Elite, the letters must have been written for the purpose of presumably embarrassing JCP.
JCP assumes that section 425.16(e)(2) and Civil Code section 47, subdivision (b) (hereinafter section 47(b)), are coextensive and that the good faith requirement under section 47(b) is also required by section 425.16(e)(2). Courts have held that in determining whether a statement or writing is made in connection with an issue under consideration for section 425.16 purposes, a court may look to cases interpreting the litigation privilege, section 47(b), which has a similar requirement. (Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, 1263 (Neville).) The two statutes, however, are not in fact coextensive. (Id. at pp. 1262-1263; Flatley v. Mauro (2006) 39 Cal.4th 299, 323 ["Notwithstanding [the] relationship between the litigation privilege and the anti-SLAPP statute . . . the two statutes are not substantively the same."]; Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 737; Garretson v. Post (2007) 156 Cal.App.4th 1508, 1517, 1519 ["Although the interpretation of language in Civil Code section 47 has been used to interpret similar language in the anti-SLAPP statute [citation], we reject the broad conclusion that conduct deemed communicative for purposes of Civil Code section 47 automatically qualifies as constitutionally protected speech under section 425.16."]; Birkner v. Lam (2007) 156 Cal.App.4th 275, 284; but see Department of Fair Employment & Housing v. 1105 Alta Loma Road Apartments, LLC (2007) 154 Cal.App.4th 1273, 1288 , fn. 23 [decided prior to Neville].)
In Neville, an employer's attorney (Chudacoff) sent a letter to the employer's customers stating that an ex-employee (Neville) had misappropriated customer lists to start his own competing business several months before the employer commenced litigation against Neville. (Neville, supra, 160 Cal.App.4th at p. 1259.) The letter advised the customers that Neville may have already or may attempt to contact them and that "[i]n order to avoid any involvement in litigation that my [sic] arise between [employer] and Mr. Neville (as a material witness, or otherwise), we suggest that you have no further dealings with Mr. Neville or his company." (Id. at p. 1260.) After the employer commenced suit against Neville, Neville filed a cross-complaint against the employer and Chudacoff for defamation arising from the letter. (Ibid.) Chudacoff moved to strike the cross-complaint, arguing that the letter was "constitutionally protected" pursuant to section 425.16. (Neville, supra, at p. 1260.) Neville argued that the letter was not written "'in connection with an issue under consideration or review by a legislative, executive, or judicial body' as required by section 425.16, subdivision (e)(2)" because (1) the letter was written four months before the employer sued Neville, (2) "Chudacoff did not expressly declare that when the letter was sent, [the employer] contemplated litigation seriously and in good faith," and (3) the letter "was addressed to [the employer's] customers, who were not to be (and ultimately were not) parties to any anticipated lawsuit against Neville by [the employer]." (Neville, supra, at p. 1262.)
The Neville court reviewed several cases that considered both the scope of section 425.16(e)(2) and section 47(b). It concluded that under section 425.16(e)(2), "a statement is 'in connection with' litigation . . . if it relates to the substantive issues in the litigation and is directed to persons having some interest in the litigation." (Neville, supra, 160 Cal.App.4th at p. 1266, fn. omitted.) Similarly, a statement is privileged under section 47(b) if it is "'reasonably relevant' to pending or contemplated litigation," which makes section 47(b)'s requirement "analogous to the 'in connection with' standard of section [425.16(e)(2)]." (Neville, supra, at p. 1266; see Silberg v. Anderson (1990) 50 Cal.3d 205, 220 [communication must have some "reasonable relevancy to the subject matter of the action"]; Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049, 1058 [litigation privilege protects "prelitigation communications involving the subject matter of the ultimate litigation"].) The court found that the letters "related directly" to the employer's claims against Neville, they were written to the employer's customers, "persons whom [the employer] reasonably could believe had an interest in the dispute," and they did not contain any statements of fact about Neville that were not the based on the employer's claim against Neville. (Neville, supra, at pp. 1267-1268.) Ultimately, the court held that the letters were "'in connection with'" the employer's underlying claim against Neville under section 425.16(e)(2). (Neville, supra, at p. 1268.) Although the Neville court did not specifically address section 47(b)'s "good faith" requirement, that the employer ultimately filed a claim against Neville is evidence that he had a "good faith" basis at the time he sent the letters that litigation was probable.
In Edwards v. Centex Real Estate Corp. (1997) 53 Cal.App.4th 15, 34-35, the court outlined the requirements for statements made in advance of litigation under section 47(b) as follows: (1) "the communication must have been made preliminary to a proposed judicial or quasi-judicial proceeding," (2) "the verbal proposal of litigation must be made in good faith," (3) "the contemplated litigation must be imminent," and (4) "the litigation must be proposed in order to obtain access to the courts for the purpose of resolving the dispute."
Putting aside the good faith argument, JCP submits that this case is more similar to Paul v. Friedman (2002) 95 Cal.App.4th 853. In Paul, an attorney was accused of engaging in intrusive investigative acts into the personal life of a security broker while litigating a client's arbitration proceeding. (Id. at p. 857.) The broker sued the attorney for slander, among other causes, for disclosing "embarrassing private facts about [the broker] to clients and prospective clients, including his financial affairs, spending habits, taxes and tax liabilities, relations with his clients, and close personal relationship with another individual (as well as the allegations made in the arbitration)." (Ibid.) The attorney filed an anti-SLAPP motion, claiming that "all the acts alleged in [the broker's] complaint arose 'in connection with the investigation or prosecution of the underlying arbitration,' and therefore fell within the ambit of the anti-SLAPP statute." (Id. at p. 864.) The Court of Appeal held that the attorney's statements and acts, although connected to some proceeding, were not "in connection with or related to 'an issue under consideration or review.'" (Id. at p. 868.) The court found that the attorney's statements were irrelevant and bore no relationship to the claims he presented against the broker at the arbitration hearing. (Ibid.) Therefore, the court concluded, the "allegedly harassing investigation and related personal disclosures were [not] in connection with or related to 'an issue under consideration or review' by the arbitrators." (Ibid.)
This case, however, is most analogous to Neville. The letters related directly to Elite's claim for breach of contract against JCP for failure to pay for the flights Elite provided JCP's customers. The letters were also directed at JCP's customers, who were the actual passengers on the flights that remained unpaid to Elite. The letters were an attempt to collect on the debt owed to Elite. Thus, unlike Paul, the letters bear a close relationship to the unpaid debt claims against JCP and are therefore "in connection with" the issues in Elite's lawsuit against JCP. Also, JCP cannot avoid the protection afforded litigants in section 425.16 by simply arguing that Elite sent the letters "in an attempt to illegally coerce" JCP into making the payment. (Blanchard v. DIRECTV, Inc. (2004) 123 Cal.App.4th 903, 921.)
Again, JCP's primary contention is that even if the letters were related to the underlying claim brought by Elite, they were not written in good faith because Elite lacked a legally viable claim on which it could collect from Passengers. Section 47(b)'s "usual formulation is that the privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action. [Citations.]" (Silberg v. Anderson, supra, 50 Cal.3d at p. 212.) "[A] prelitigation statement is protected by the litigation privilege . . . when the statement is made in connection with a proposed litigation that is 'contemplated in good faith and under serious consideration. [Citation.]'" (Aronson v. Kinsella (1997) 58 Cal.App.4th 254, 262.) This latter language is at the heart of JCP's appeal.
The California Supreme Court has recognized "the importance of the litigation privilege's absolute protection of access to the courts . . . '"not because [of a] desire to protect the shady practitioner, but because we do not want the honest one to have to be concerned with [subsequent derivative] actions . . . ."' [Citation.] '"[W]hen there is a good faith intention to bring a suit, even malicious publications 'are protected as part of the price paid for affording litigants the utmost freedom of access to the courts.'"' [Citation.]" (Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1244.) Though both section 425.16(e)(2) and section 47(b) "serve similar policy interests" and are both "'construed broadly, to protect the right of litigants to "'the utmost freedom of access to the courts without [the] fear of being harassed subsequently by derivative tort actions,'"'" each has its distinct requirements. (Neville, supra, 160 Cal.App.4th at p. 1263; see also Healy v. Tuscany Hills Landscape & Recreation Corp. (2006) 137 Cal.App.4th 1, 5.) "The reasonable relevancy requirement of section [47(b)] is analogous to the 'in connection with' standard of section [425.16(e)(2)]," however, whether the letter meets the requirements under section 47(b) only informs our analysis, it does not end the inquiry. (Neville, supra, at p. 1266; see also Healy, supra, at p. 6.) Nonetheless, it is not for this court today to decide whether, like section 47(b), section 425.16 requires an additional inquiry into whether litigation is brought in good faith to secure its protection in light of the fact that JCP's interpretation of the good faith requirement is erroneous.
In Herzog v. "A" Company, Inc. (1982) 138 Cal.App.3d 656, 657-658 (Herzog), the plaintiff, Herzog, claimed that his ex-employer "tortiously barred him from employment within his career field" when it wrote him a letter threatening to sue him and any competitor who employed him. The basis for the letter was an "'invention and secrecy agreement'" between the employer and Herzog that extended three years from the time employment was terminated. (Id. at p. 658.) Herzog showed the letter to a competitor, Ormco, who was interested in hiring him as a consultant. (Id. at p. 659.) Ormco provided Herzog with its own letter advising Herzog that "had it not been for ["A" Company's] letter . . . Mr. Herzog would have been hired as a consultant by Ormco." (Ibid.) Herzog sued "A" Company, and in turn "A" Company asserted the letter was privileged under section 47. (Id. at p. 660.) The Court of Appeal held that the litigation privilege was an "absolute privilege [that only applies] to communications made in pursuit of litigation . . . contemplated in good faith." (Id. at pp. 660-661.) The court found that the "letter facially exceed[ed] any legitimate purpose when it threaten[ed] Herzog and his future employers with suit based merely upon the fact of employment" rather than an actual violation of the contract's restriction of disclosing "certain confidential matters related to 'A' Company's operations." (Id. at p. 662; see also Nguyen v. Proton Technology Corp. (1999) 69 Cal.App.4th 140 [section 47(b) does not protect false and inflammatory statements made by an ex-employer to a new employer where the statements made were tenuous to the ex-employer's underlying claim against the employee for unfair competition].) Therefore, the court concluded that a "communication not related to a potential judicial action contemplated for legitimate purposes" is not protected by section 47(b) because it is not contemplated in good faith. (Herzog, supra, at p. 662.)
JCP argues that the letters "were sent without any reasonable basis" because Passengers "cannot be liable to Elite on a third party beneficiary theory, or any theory for that matter." Rather, the letters were sent to Passengers "presumably to embarrass [JCP's Owners]." JCP concludes that because the letters "were not 'contemplated in good faith,' . . . [they] were not made 'in connection with' potential litigation and [section 425.16] does not apply."
JCP's argument supposes that good faith relates to a claimant's probability of winning on its claim rather than to a claimant's belief that he has a potential claim and is seriously considering bringing suit. This assumption is false and inapplicable here because section 47(b)'s good faith requirement is that a statement be "a serious proposal made in good faith contemplation of going to court." (Edwards v. Centex Real Estate Corp., supra, 53 Cal.App.4th at p. 35.)
Unlike Herzog, Elite did not threaten to sue non-parties. Elite sent letters to JCP's customers who flew on the fights JCP failed to pay Elite for. Rather, the letters merely communicated to the Passengers Elite's intentions to collect on the debt, the subject of the underlying claim between Elite and JCP. Nowhere is there any indication that Elite's purpose was to interfere with the contractual relationship between JCP and its customers. As the trial court correctly pointed out, if someone provides a service and expects to get paid for the service but is not paid, it is reasonable for the provider to attempt to collect on that debt from the person who benefited from the service. Here, that Elite did file a claim against JCP and Passengers evidences that Elite was seriously considering litigation at the time it sent the letters to Passengers, i.e., they were sent in good faith. Elite thus has met its threshold burden in showing that the letters are protected activity under section 425.16. C. JCP's Probability of Prevailing on its Claims
Turning then to the second prong, the burden is on JCP to establish a prima facie probability of prevailing on its cross-claim against Elite. Elite's letters are absolutely privileged under section 47(b). Thus, JCP cannot meet its burden to the extent its fourth and fifth causes of action are based on the letters.
Section 47(b) "provides that a '"publication or broadcast" made as part of a "judicial proceeding" is privileged.' [Citation.] The privilege is absolute and applies to all publications no matter how maliciously they were made. [Citation.] The privilege applies to any communication (1) made in judicial or quasi-judicial proceedings, (2) by litigants or other participants authorized by law, (3) to achieve the objects of the litigation, and (4) that has some connection or logical relation to the action. The principal purpose of the litigation privilege is to give litigants and witnesses the utmost access to the courts without fear of being harassed by derivative tort actions. [Citation.]" (Bisno v. Douglas Emmett Realty Fund 1988 (2009) 174 Cal.App.4th 1534, 1550.) Here, Elite sent a communication, i.e., the letters, in an effort to collect on a debt, a debt that ultimately formed the source for its claim against JCP. It is connected to the action, and therefore, the letters are covered by the litigation privilege and cannot form the basis for JCP's causes of action against Elite. Again, the communication can be made in preparation or anticipation of litigation, it does not need to be made in the proceeding itself. (Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47 Cal.App.4th 777, 784; see also Edwards v. Centex Real Estate Corp., supra, 53 Cal.App.4th at p. 35.)
JCP, nonetheless, argues that the litigation privilege does not extend to statements made in violation of the "California debt collection statute." Civil Code section 1788.2, subdivision (c) (hereinafter section 1788.2(c)), defines the term "'debt collector'" as "any person who, in the ordinary course of business, regularly, on behalf of himself or herself or others, engages in debt collection." Similarly, under its federal counterpart, 15 United States Code section 1692a, a "'debt collector' . . . is either (1) 'a person' the 'principal purpose' of whose business is the collection of debts (whether on behalf of himself or others); or (2) 'a person' who 'regularly' collects debts on behalf of others (whether or not it is the principal purpose of his business)." (Izenberg v. ETS Services, LLC (C.D.Cal. 2008) 589 F.Supp.2d 1193, 1199.)
Here, the trial court observed that Elite does "not engage regularly in the business of debt collection" but rather that Elite was collecting on its own behalf. (Izenberg v. ETS Services, LLC, supra, 589 F.Supp.2d at p. 1199.) Therefore, the trial court correctly found that section 1788.2(c) does not apply because Elite is not a "debt collector" as defined by the statute. Thus, this argument fails JCP.
Since the letters are protected under the litigation privilege and cannot be the basis for the causes of action against Elite, JCP is unable to demonstrate a probability of prevailing on the fourth and fifth causes of action against Elite to the extent those causes of action are based on the letters. D. Whether an Anti-SLAPP Motion May Be Granted as to Part of a Cause of Action
Subsequent to the briefing in this case, the First District decided Wallace v. McCubbin (2011) 196 Cal.App.4th 1169. Wallace addresses the language of the anti-SLAPP statute that states that it applies to "[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 . . . 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), italics added.) Wallace concludes that the anti-SLAPP statute, by its language and in accordance with legislative intent, applies to entire causes of action only. (Wallace, supra, at pp. 1195-1212.) Thus, "if there is any probability of prevailing on any act alleged under the heading of a 'cause of action,' then the cause of action is not meritless and should not be stricken. In effect, section 425.16 was not intended to relieve a defendant from the burden of defending against meritless allegations of liability based on protected activity; instead, it was intended to remove a meritless cause of action from a complaint if the plaintiff happened to include in that cause of action an allegation of liability based on protected activity." (Id. at p. 1212.)
A petition for review was filed in Wallace on August 8, 2011, and the time for grant of review was extended to November 4, 2011.
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Wallace relies, in part, on the recent Supreme Court case of Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811. In Oasis, the court framed the second step of the analysis as follows: "If the plaintiff 'can show a probability of prevailing on any part of its claim, the cause of action is not meritless' and will not be stricken." (Id. at p. 820.) In looking at the cause of action before it, the court observed that "[t]he complaint identifies a number of acts of alleged misconduct and theories of recovery, but for purposes of reviewing the ruling on an anti-SLAPP motion, it is sufficient to focus on just one." (Id. at p. 821.)
"Stated differently, the anti-SLAPP procedure may not be used like a motion to strike under section 436, eliminating those parts of a cause of action that a plaintiff cannot substantiate. Rather, once a plaintiff shows a probability of prevailing on any part of its claim, the plaintiff has established that its cause of action has some merit and the entire cause of action stands." (Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 106.)
Based on the foregoing, the fact that the letters are protected under the litigation privilege and cannot be the basis for the causes of action against Elite is not the end of our inquiry. If JCP is able to demonstrate a probability of prevailing on the third, fourth and fifth causes of action against Elite to the extent those causes of action are based on the emails, then the anti-SLAPP motion must be denied.
The trial court made no finding as to JCP's probability of prevailing on the third, fourth and fifth causes of action based on the emails. Once it found that the emails were not protected activity, it ended its inquiry with respect to the emails. Accordingly, it is appropriate that we remand the case to the trial court to allow it to make a determination as to whether JCP demonstrated a probability of prevailing on the merits of the third, fourth and fifth causes of action on any basis. If so, the anti-SLAPP motion must be denied.
DISPOSITION
The order is reversed. The trial court is directed to reconsider the anti-SLAPP motion and to issue a ruling consistent with the views expressed herein. The parties are to bear their own costs on appeal.
JACKSON, J. We concur:
PERLUSS, P. J.
WOODS, J.