Opinion
G061711
04-25-2024
EMERSON MAINTENANCE ASSOCIATION, Plaintiff and Respondent, v. ALAN E. GORENBERG et al., Defendants and Appellants.
Anderson Law and Martin W. Anderson for Defendant and Appellant Alan E. Gorenberg. The Vanderpool Law Firm, Douglas B. Vanderpool, Michael J. Fairchild, Brooke L. Bove; Lubin Pham + Caplin, Namson N. Pham and JC Chimoures for Defendant and Appellant Ladan Hariri. Lopez, Bark &Schulz and Michael E. Lopez for Plaintiff and Respondent.
NOT TO BE PUBLISHED
Appeal from orders of the Superior Court of Orange County, No. 30-2018-01027462 Glenn R. Salter, Judge. Affirmed.
Anderson Law and Martin W. Anderson for Defendant and Appellant Alan E. Gorenberg.
The Vanderpool Law Firm, Douglas B. Vanderpool, Michael J. Fairchild, Brooke L. Bove; Lubin Pham + Caplin, Namson N. Pham and JC Chimoures for Defendant and Appellant Ladan Hariri.
Lopez, Bark &Schulz and Michael E. Lopez for Plaintiff and Respondent.
OPINION
BEDSWORTH, ACTING P. J.
INTRODUCTION
This case presents us with the unique and dubious honor of reviewing our second appeal in as many years pertaining to the exact same motion. Husband and wife appellants Alan Gorenberg and Ladan Hariri filed a special motion to strike under Code of Civil Procedure section 425.16 (the anti-SLAPP statute) as to the complaint filed against them by their homeowners association, respondent Emerson Maintenance Association (HOA). A defendant may file such a motion within 60 days of service of the complaint "or, in the court's discretion, at any later time upon terms it deems proper." (§ 425.16, subd. (f).) Appellants filed their motion more than a year after they were first served with said complaint. Unquestionably, it was filed late.
All statutory references are to the Code of Civil Procedure unless otherwise indicated.
The trial court denied the motion initially because it concluded the HOA's complaint did not arise out of protected activity. We reversed in an unpublished opinion (Emerson Maintenance Association v. Gorenberg et al. (Mar. 30, 2022, G059246) [nonpub. opn.]) (Emerson I), but remanded so the trial court could consider whether the late motion should even have been heard in the first place. The HOA had argued it should not, and the lower court did not address the issue the first time around.
On remand, the trial court declined to exercise its discretion to allow the motion to be considered late. The court indicated it would have sanctioned some delay in filing the motion to allow the parties freedom to pursue settlement. However, appellants failed to file the motion for several months after it appeared to the court that settlement negotiations had stalled. It was not willing to overlook such a months-long delay.
Appellants argue the trial court improperly took the status of settlement negotiations into account when deciding whether to hear the late motion, and also made inaccurate assumptions in doing so. Given the totality of the record, however, the trial court's consideration of the settlement negotiations was part and parcel of a proper analysis of whether hearing the motion late would advance the purposes of the anti-SLAPP statute. Reasonable minds might disagree as to whether hearing the motion late would advance those goals, but in this instance, the trial court felt it would not. This was its prerogative and it did not abuse its discretion in declining to hear the untimely motion. We therefore affirm.
FACTS
The underlying dispute itself is not terribly pertinent to the procedural question we resolve here; those facts are laid out in detail in Emerson I. For purposes of this appeal, we stick only to the facts which are relevant to the issue of timeliness.
Appellants and HOA have been involved in a years-long disagreement over construction and/or remodeling work appellants have undertaken on or near their property in Tustin. On October 23, 2018, the HOA filed a complaint against appellants for breach of conditions, covenants, and restrictions (CC&R's), specific performance, and injunctive and declaratory relief. The crux of the dispute was appellants' alleged failure to secure HOA approval for planned construction work on their property and on common areas maintained by the HOA. The HOA also claimed appellants had sought and obtained a permit from the City of Tustin for work which had not been approved by the HOA first.
Ladan Hariri was personally served with the complaint on November 8, 2018, and her husband Alan Gorenberg was served via substituted service on November 09, 2018.
Under section 415.20, subdivision (a), a person on whom personal service cannot be effectuated may be served by personally delivering papers to a competent member of the household, in this case Hariri, and mailing the papers to the person thereafter. This method of service is deemed complete on the 10th day after mailing. Since the papers were mailed to Alan Gorenberg on November 9, 2018, service was complete as of November 19, 2018.
On November 14, 2018, the HOA filed a first amended complaint, but the only perceptible difference between it and the preceding complaint was a reclassification from limited to unlimited civil jurisdiction.
On November 21, 2018, the trial court issued a notice of hearing setting a case management conference for February 28, 2019. Only the HOA's counsel was served, as appellants had not yet entered an appearance in the case. A little more than a week before the scheduled date, HOA counsel filed a case management statement indicating the parties had conducted a mediation on February 7, 2019, and were planning another session within 60 days. Appellants' counsel was served with this document.
At the February 28, 2019 hearing, only HOA counsel appeared. The trial court continued the case management conference to May 2, 2019, and ordered the parties to file a joint case management statement 15 days prior. HOA counsel was ordered to give notice.
No joint case management statement was filed. Rather, on April 25, 2019, HOA counsel filed its own case management statement, representing that appellants had provided new plans to the HOA and a second mediation session would likely be scheduled during the month of May. Again, appellants' counsel was served with this document. Only HOA counsel appeared at the May conference, and the trial court continued it again after being advised "the parties continue to work towards resolution short of trial."
The next conference was set for July 11, 2019, and appellants' counsel was notified of the new date. Neither side filed a case management statement this time. Instead, HOA counsel told the court the parties were still trying to mediate the case, and were hoping to do a private mediation in August. The court was willing to continue the case management conference once more, to September 26, 2019. However, it noted "that if the matter is not resolved, the parties are required to appear on 09/26/19." The HOA was ordered to give notice.
The HOA did give notice, but it was not a verbatim recitation of the court's order. It notified appellants of the new date, but stated "that if the case is not settled prior to the next hearing . . . Defendants are ordered to respond to the Complaint."
Prior to the September conference date, both sides filed very different case management statements. The HOA's statement was conspicuous for the absence of any reference to mediation, in stark contrast to its previous filings. Appellants, on the other hand, signaled willingness to engage in mediation, settlement conference, and neutral evaluation, and stated "[n]o effort has been made regarding litigation matters while this dispute is being mediated." They indicated the parties had been mediating before Retired Judge James P. Gray "[p]ursuant to a written mediation agreement[.]" Appellants suggested the case "should be ordered to mediation pursuant to Civil Code section 5955."
Civil Code section 5955 permits the trial court to refer an enforcement action involving common interest developments to alternative dispute resolution upon written stipulation of the parties. (Id., subd. (a).)
On September 25, 2019, appellants filed an answer and verified crosscomplaint, alleging in part the HOA continually objected to work it had already approved and failed to communicate in good faith with appellants about the work. The crosscomplaint sought $100,000 in damages.
At the September 26 case management conference, counsel for both sides appeared. The trial court noted that appellants had filed responsive pleadings, but the parties continued to negotiate a resolution. The court continued the case management conference to January 30, 2020, and indicated it intended to set a trial date then if the matter had not settled.
Appellants amended their cross-complaint on November 5, 2019, removing all but their declaratory relief claim, and seemingly withdrawing their claim for money damages. They filed their anti-SLAPP motion one month later, on December 6, 2019. The motion targeted the complaint as a whole, but also, specifically, the allegation about appellants' seeking a building permit from the City of Tustin without permission.
In the motion, appellants requested the court exercise its discretion to consider the motion even though it was filed beyond the 60-day time window under section 425.16, subdivision (f), citing the parties' efforts from the inception of the lawsuit to resolve the case outside of court. Appellants' then-counsel, James Percival, filed a declaration attaching correspondence with HOA counsel and detailing his efforts to resolve the matter. In particular, he mentioned a cease and desist and mediation agreement (CDMA) the parties had executed in or around January 3, 2019, by which appellants would cease construction and the parties would not actively litigate the case while they attempted an informal resolution. He attached a copy of the CDMA to his declaration.
In it, the parties agreed to schedule a mediation in January 2019 to resolve their dispute, and the HOA agreed that appellants need not respond to the complaint until 15 days after the conclusion of mediation. The parties also agreed that while the mediation was ongoing, they would "refrain from engaging in formal discovery or otherwise actively litigating the Action[.]"
The parties engaged in mediation before Judge Gray on February 7, 2019. There was no resolution, but they agreed the mediation process had not concluded. The parties again mediated before Judge Gray on August 21, 2019, which was again unsuccessful, though discussions between the parties were clearly ongoing.
Percival indicated in his declaration he thought the court was requiring appellants to answer the complaint before the next case management conference, and so that is what he did. However, he always believed the parties were still bound by the CDMA. He asked HOA counsel to provide dates for a third mediation session, but after his clients had filed their cross-complaint seeking damages, the HOA had tendered its defense to its insurance company, and was awaiting a resolution of coverage issues. With no third mediation date in sight, Percival advised the HOA he no longer considered the CDMA effective. He filed the anti-SLAPP motion two days later.
The HOA opposed the motion on its merits, but primarily because it was untimely. The trial court issued a minute order on June 18, 2020, denying the motion because it did not think appellants' application for building permit constituted protected activity. In so ruling, the court noted it was not addressing the HOA's timeliness argument, "given this was not protected activity in the first instance." We disagreed with the trial court's analysis of the motion in Emerson I, and remanded for consideration of the timeliness argument. The remittitur was filed on June 1, 2022, in the trial court.
Within a month of remand, appellants, represented by two sets of counsel, brought separate motions seeking over $150,000 in appellate attorney fees as a prevailing party on appeal pursuant to section 425.16, subdivision (c). It is unclear why the couple preferred or required separate attorneys at this point, given they filed their anti-SLAPP motion jointly. The HOA of course opposed the motions.
Section 426.16, subdivision (c)(1) entitles a prevailing defendant on an anti-SLAPP motion to recover his or her attorney fees and costs. It also permits a prevailing plaintiff to recover costs and reasonable attorney fees if the court finds the motion is "frivolous or is solely intended to cause unnecessary delay[.]" (Ibid.)
After allowing supplemental briefing on the timeliness issue, the trial court heard oral argument on both the timeliness of the anti-SLAPP and the attorney fee motions on August 18, 2022, taking the matters under submission. It issued a minute order the following day finding the anti-SLAPP motion was untimely. The court made clear it respected the parties' initial efforts to settle the case, but it was faced with the question of when it must "say enough is enough[.]" Had appellants sought to file their anti-SLAPP motion in September 2019, the trial court would have been willing to allow it, because "[e]fforts to resolve the matter short of litigation had been made up to that point in good faith." Because it denied the anti-SLAPP motion on timeliness grounds, the court also denied appellants' attorney fee motions as moot. Once again, an appeal ensued.
DISCUSSION
Let us first clear the air regarding our standard of review which was quite a contentious subject in the briefing. The trial court's decision whether to consider an anti-SLAPP motion filed more than 60 days after service of the complaint is one we review for abuse of discretion. (See Kunysz v. Sandler (2007) 146 Cal.App.4th 1540, 1543 (Kunysz).) Nevertheless, appellants contend we should review this matter de novo because, supposedly, the facts and inferences to be drawn from those facts are undisputed. Even if we were to stray from our normal standard, the requisite circumstances to do so are not present here. The facts and inferences are very much disputed. Yes, the parties signed the CDMA, but they clearly did not agree as to whether it extended appellants' time to file an anti-SLAPP motion. They also do not agree on when the CDMA's provisions expired. Appellants claim the CDMA did not expire until two days before their anti-SLAPP motion was filed. The HOA claims it had long since expired by then. The depth of the dispute regarding the facts and inferences here is evidenced by the lengthy discussions in appellants' briefing about how to correctly interpret the parties' behavior between November 2018 and December 2019. The trial court had a front seat to this and is owed deference in such matters.
Appellants filed separate opening and reply briefs on appeal.
"There are two ways to show an abuse of discretion by the trial court. One way is to show the ruling was whimsical, arbitrary, or capricious, i.e., that the trial court exceeded the bounds of reason. (E.g., Shamblin v. Brattain (1988) 44 Cal.3d 474, 478.) The other way is to show the trial court erred in acting on a mistaken view about the scope of its discretion. (E.g., City of Sacramento v. Drew (1989) 207 Cal.App.3d 1287, 1297-1298.) Here that would require showing (1) the grounds given by the court for finding the anti-SLAPP motion untimely are inconsistent with the substantive law of section 425.16, or (2) the application to the facts of this case is outside the range of discretion conferred upon the trial court under that statute, read in light of its purposes and policy. (See City of Sacramento v. Drew, supra, at pp. 1297-1298.)" (Olsen v. Harbison (2005) 134 Cal.App.4th 278, 285 (Olsen).)
The trial court thought appellants correctly waited to file their motion while negotiations were happening in earnest; but ultimately, they waited too long. Up until August 2019, the HOA had represented to the court the parties were actively trying to settle the case. But in September 2019, once appellants filed their answer as well as a cross-complaint seeking $100,000 in damages, this signaled to the court a shift in focus from settlement to litigation. The court was therefore unable to understand why it took another two months to file the anti-SLAPP motion, stating: "Had the defendants filed the motion to strike in or around the September 26, 2019 hearing date, the court would have granted the request to extend time. Efforts to resolve the matter short of litigation had been made up to that point in good faith. [¶] At the hearing on the motion to strike, the court was not inclined to grant the request to extend time. It was the court's opinion that, given the filing of a cross-complaint and the lack of success at the August mediation, the defendants should only have a small window of time within which to file the motion. Waiting another three months was simply too long. The litigation ship had sailed and the defendants would have to litigate the case - including their cross-claim for damages - as the pleadings stood."
Appellants say the only reason they answered and cross-complained in September was because the HOA's notice of ruling misled them into thinking the trial court had ordered them to do so when it had not. Had appellants gone to previous case management conferences, they could have gotten accurate information directly from the court rather than relying on their adversary. But even if they were only responding to the complaint to comply with the court's orders, their choice to file an affirmative claim for damages but not an anti-SLAPP is telling. Both pleadings had the potential to stymie settlement talks, and as it happens, the cross-complaint appears to have done just that because it caused the HOA to make a demand to its insurance carrier. This triggered coverage issues, which delayed the scheduling of further mediation.
From appellants' perspective, in considering whether to exercise its discretion to hear the motion late, the trial court should not have considered whether settlement negotiations were going on in "good faith," as the possibility of settlement is not relevant when making such a ruling. Rather, the trial court should have considered the reasons for the delay in filing and whether the purposes of the anti-SLAPP statute would be met by allowing it to be heard. Appellants argue they had good cause to delay filing the motion because the CDMA prohibited them from actively litigating the case while mediation efforts were still underway, and those efforts continued well into 2020. Moreover, appellants note, the lawsuit had not moved past the pleading stage at the time the motion was filed.
While "we might have exercised the statutory discretion differently had it been ours, we cannot say the trial court's decision 'exceeds the bounds of reason, all of the circumstances before it being considered.'" (Morin v. Rosenthal (2004) 122 Cal.App.4th 673, 681, fn. omitted (Morin).) Because the ruling was within the range of the trial court's reasonable choices, we affirm it as we explain below.
"There are two potential purposes of the 60-day limitation [in the anti-SLAPP statute]. One is to require presentation and resolution of the anti-SLAPP claim at the outset of the litigation before the parties have undertaken the expenses of litigation that begin to accrue after the pleading stage of the lawsuit. The other is to avoid tactical manipulation of the stays that attend anti-SLAPP proceedings." (Olsen, supra, 134 Cal.App.4th at p. 287.)
The 60-day timeframe allows "the defendant to test the foundation of the plaintiff's action before having to 'devote its time, energy and resources to combating' a 'meritless' lawsuit." (Morin, supra, 122 Cal.App.4th at 681.) And "the availability of an interlocutory appeal from the denial of an anti-SLAPP motion is related to the requirement that most such motions will be filed within 60 days of the filing of the complaint. (Olsen, supra, 134 Cal.App.4th at p. 287.) Such procedures facilitate the primary purpose of the anti-SLAPP statute, i.e., ensuring the prompt resolution of lawsuits that impinge on a defendant's free speech rights. (Kunysz, supra, 146 Cal.App.4th at p. 1543.) In exercising its discretion in considering a party's request to file an anti-SLAPP motion after the 60-day period, a trial court must carefully consider whether allowing such a filing is consistent with this purpose." (Platypus Wear, Inc. v. Goldberg (2008) 166 Cal.App.4th 772, 776.)
Morin provides helpful direction. In Morin, while the appellate court indicated it might have allowed the late-filed anti-SLAPP motion, it found the trial court did not abuse its discretion by refusing to do so. The defendants had "chose[n] to devote their time, energy and resources to moving the case from state court to federal court and, after remand from the federal court, moving the case from one branch of the superior court to another and then from one judge to another in the chosen branch. This procedural maneuvering consumed seven months or nearly one-third of the court's overall time goal for disposing of a civil case." (Morin, supra, 122 Cal.App.4th at p. 681 .) Notably, Morin was, like the present case, a case in which the anti-SLAPP motion was filed before the pleadings were closed and before effort had been expended on discovery and other litigation activities. (Id. at p. 677.)
Here, the trial court made a similar calculation as the court in Morin. We do not fault appellants for trying to settle the lawsuit and avoid litigation, but neither did the trial court. It simply asked and answered an additional - and perfectly reasonable -question: "When does a court say enough is enough?" Like the Morin appellants, appellants here chose to expend resources, time, and energy, on settlement talks rather than active litigation. In the process, they "consumed" a large share of the trial court's "overall time goal for disposing of a civil case." (Morin, supra, 122 Cal.App.4th at p. 681.) There was nothing stopping the parties continuing to talk settlement even while litigating the case; indeed, litigants do this every single day. What the parties could not do was unilaterally impose what amounts to an indefinite stay on the litigation. They could not usurp the trial court's ability to control its own caseload.
Under California Rule of Court, rule 3.714(b), trial courts are encouraged to dispose of 75 percent of all unlimited civil cases within 12 months, 85 percent of them within 18 months, and all of them within 24 months. By the time the anti-SLAPP motion was heard in June 2020, the case had been pending for approximately 20 months with very little forward motion. It is safe to say the court was not on its way to meeting its goal here, and this could very appropriately have factored into its decision.
Apropos of this observation, we address the CDMA. Appellants contend the CDMA prevented them from filing the motion any sooner, because until December, the parties' mediation had not conclusively ended. We find this unpersuasive. The CDMA was signed in January 2019 and it contemplated mediation would take place in January itself. The HOA agreed to hold off on taking any default until after the mediation had concluded. But the mediation session, held in February 2019, did not resolve the dispute. While the parties agreed their mediation had not concluded, they did not schedule another mediation session for another six months. In the meantime, the trial court made three attempts to hold a case management conference. Appellants appeared at none of these hearings, instead ceding the responsibility to the HOA's counsel to report to the court on settlement efforts. Having not seen hide nor hair of appellants for almost a year into the case, we cannot fault the trial court for failing to intuit their intentions.
But perhaps more importantly, the CDMA - whatever it represented to the parties - was not binding on the trial court. Appellants seem to think the CDMA excused their delay. But it was never presented to the trial court for approval, and therefore was not an enforceable agreement. The law allows a defendant 30 days to respond to a complaint, and the parties may only stipulate to a 15-day extension. (See Cal. Rules of Court, rule 3.110(d).) Any further stipulation required leave of court, which appellants never bothered to seek. (Ibid.) The CDMA's existence was not even disclosed to the court until June 2020, at the hearing on the anti-SLAPP motion. All the court knew up until then was the parties were talking settlement. Until the anti-SLAPP hearing, it did not know the parties had agreed on an open-ended deadline for appellants to respond to the complaint, and it certainly had not approved such an unlimited extension.
We can only conclude the CDMA was at best an agreement intended to apply to the very first mediation in the case. Read any other way, it would have allowed the parties to hold the case at a complete standstill so long as they agreed the mediation had not yet "concluded." How long should the trial court have countenanced such a delay for purposes of filing the anti-SLAPP motion? For a lawsuit filed in October 2018, it cannot be said that an anti-SLAPP motion filed over a year later and heard one and a half years later represents a prompt disposition.
Appellants contend the length of the delay is mitigated by the lack of substantial investment of time and resources on active litigation. We concede one of the aims of the anti-SLAPP statute is to avert such investment on lawsuits which aim to chill protected activity. "Because these meritless lawsuits seek to deplete 'the defendant's energy' and drain 'his or her resources' (Simmons v. Allstate Ins. Co. (2001) 92 Cal.App.4th 1068, 1074), the Legislature sought '"to prevent SLAPPs by ending them early and without great cost to the SLAPP target"' (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 65). Section 425.16 therefore establishes a procedure where the trial court evaluates the merits of the lawsuit using a summary judgment-like procedure at an early stage of the litigation. [Citation.] In doing so, section 425.16 seeks to limit the costs of defending against such a lawsuit. (See Equilon Enterprises, at p. 65 [noting that the 'short time frame for anti-SLAPP filings and hearings' and the 'stay of discovery' pending resolution of the motion evidences the Legislature's intent to minimize the litigation costs of SLAPP targets].)" (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192.)
But in looking at the parties' activities in the year before the anti-SLAPP motion was filed, it is clear the parties invested considerable resources in the dispute all the same. Even appellants' counsel, Percival, admitted "substantial time, effort, and expense were devoted to the generation and review of detailed information exchanged by the parties" between the February and August mediation sessions. The aims of the anti-SLAPP statute are not met where considerable sums of money (and time as well) are expended on the case prior to filing the motion, whether they are expended on discovery or on mediations. A dollar is a dollar, and time spent is time spent. It is all of a piece.
Incidentally, we would not normally expect a garden-variety SLAPP lawsuit to be the subject of such protracted and complex settlement talks, which is another reason to think the trial court did not abuse its discretion in refusing to entertain the motion late.
Appellants are correct that we ruled in their favor on the merits in Emerson I, but the merits of the motion are irrelevant in this inquiry. "Discretion to permit or deny an untimely motion cannot turn on the final determination of the merits of the motion." (Olsen, supra, 134 Cal.App.4th at p. 286.) Indeed, a meritorious anti-SLAPP motion is best filed at the outset of a case, because even meritorious motions no longer serve the purposes of the statute if they are "not brought until after the parties have incurred substantial expense." (Hewlett-Packard Co. v. Oracle Corp. (2015) 239 Cal.App.4th 1174, 1188.) Again, the statute is not intended simply to stop meritless lawsuits; it is intended to stop them early. Especially where, as here, the allegations to be stricken do not dispose of the entire case.
Appellants remind us that it is a well-established policy of the law to favor pretrial settlements. That it is. But the anti-SLAPP statute's goal is not just to resolve lawsuits short of trial, but to resolve them early and quickly.
Lest we forget, the protected activity to be stricken by appellants' anti-SLAPP motion is but one component of the allegedly offending conduct. The HOA also seeks relief for appellants' other alleged breaches of the CC&R's. Excising one portion of the HOA's overall complaint so many years after it was filed hardly creates the efficiencies the Legislature envisioned when it passed the anti-SLAPP statute. The remainder of the case must still be litigated. And as we stated in Kunysz, the same issues appellants raised in their anti-SLAPP motion, plus perhaps more, "could just as easily have been raised by, for example, a motion for summary judgment or a motion for judgment on the pleadings." (Kunysz, supra, 146 Cal.App.4th at p. 1543.) Unfortunately, it seems the anti-SLAPP motion in this case has done precisely the opposite of what the Legislature intended. It has elongated and delayed the resolution of the lawsuit, and caused both sides to incur sizeable expense in the process. Hearing the motion late would not have been consistent with the substance and purpose of section 425.16.
The HOA has asked us to take judicial notice of documents relating to the consolidation of this matter with other lawsuits between the parties. Because the record before us is sufficient, we do not require these documents to make our conclusions, and deny judicial notice of them.
Because we affirm the trial court's denial of the anti-SLAPP motion, we also affirm its denial of appellants' motions for attorney fees.
DISPOSITION
The orders denying appellants' anti-SLAPP motion as untimely and their motions for attorney fees are affirmed. The parties shall bear their own costs on appeal.
WE CONCUR: MOORE, J. SANCHEZ, J.