Opinion
A116929 A117835
7-30-2008
ZAHRA HOMAYUN et al., Plaintiffs and Appellants, v. PORTOBELLO RESIDENTIAL OWNERS ASSOCIATION et al., Defendants and Respondents.
Not to be Published
Zahra and Mohamad Homayun, individually and doing business as Za Zoos, a restaurant and nightclub, sued the Portobello Residential Owners Association (the Association), Association President Raul Axtle, and Jay Adams for defamation and other causes of action arising from a dispute over Za Zoos operation. Defendants filed anti-SLAPP motions to strike the complaint (Code Civ. Proc., § 425.16), which were granted as to Adams, and partially granted as to the Association and Axtle, and defendants were awarded attorney fees for prevailing on the motions. In these appeals, plaintiffs contest the orders on the anti-SLAPP and fee motions. The allegations in the stricken causes of action involved precisely the sort of conduct the anti-SLAPP law was designed to protect, plaintiffs procedural argument with the respect to the anti-SLAPP motions is untenable, and the fee awards were within the courts discretion. We therefore affirm the orders.
All further statutory references are to the Code of Civil Procedure.
I. BACKGROUND
The Community of Portobello is a development in Oakland consisting of 200 residential units, Za Zoos restaurant, a commercial office building, and a marina. Plaintiffs lease the restaurant property from a partnership managed by Fuad Sweiss, and operate Za Zoos as a nightclub, with a capacity of 250 to 300 people, on Saturday nights pursuant to a cabaret permit issued to Zahra Homayun by the City of Oakland (City).
On November 7, 2001, a public hearing was held before a City Administrative Hearing Officer "in response to complaints from neighboring residents of noise and other nuisance stemming from events at [Za Zoos]." The hearing officer determined that Ms. Homayun had improperly changed the restaurants music format, and revoked the cabaret permit. Ms. Homayun appealed to the city council, which overturned the revocation and added additional conditions to the permit. The hearing officer added further conditions to the permit in June 2004 based on more complaints from nearby residents of excessive noise.
The hearing officer conducted another public hearing on February 2, 2006, in response to complaints of Portobello residents of "ongoing excessive noise and other nuisances caused by the operation of [Za Zoos]." Defendant Adams testified at the hearing that he had lived at Portobello for 15 years, and that Za Zoos activities were disrupting his sleep and that of other Portobello residents. Adams said that "[Za Zoos] ha[d] been cooperative, by, for example hiring additional security, but [Adams] believe[d] that there [was] no solution for the situation, as one cannot expect 200 young people, who have come to [Za Zoos] due to advertising on KMEL, to start up cars and depart quietly." Employees of the company providing security for Portobello testified that Za Zoos customers were "unruly, drunk, rude, abusive," "initiate fights and riots," "urinate and vomit on the Portobello grounds," and "sleep over in their cars."
An employee of Za Zoos security company testified that the club had been turning away 700 people a night since the closing of a club in San Jose. Ms. Homayun admitted that she did not obtain City permission, as required by the cabaret permit conditions, to change the music format from jazz and blues to hip hop and rhythm and blues. She said that "she doesnt know much about the music, but that is what people dance to these days." Plaintiff Mohamad Homayun "accused the residents who testified of [lying], and . . . claimed that [defendant] Axtle asked Portobellos former security staff to falsify reports regarding [Za Zoos]."
In her February 17, 2006 decision, the hearing officer ordered Ms. Homayun "to cease and desist the unapproved [music] format immediately. Additionally, [Za Zoos] conditions of approval will be augmented to include conditions that the City is currently requiring for new cabaret and problem cabarets. These conditions shall be in force for at least 6 months from the date of this decision. In the month preceding the expiration of the 6 months, the Hearing Officer will conduct a review of the effectiveness of the conditions to determine whether they should remain in effect or whether any other action should be taken."
At the Associations request, the hearing officer held another public hearing on April 24, 2006, to address continuing problems of "excessive noise, fighting, littering, and other nuisance activity" at Za Zoos. The Association and Za Zoos were represented by counsel at the hearing. The evidence included videotape from February 25, 2006, showing "fighting in the parking lot and the arrival of police cars, two ambulances, and a fire truck." Reports from Portobello security "consistently list[ed] the same problem activity with [Za Zoos] patrons from week to week: noise of people talking, cursing, and yelling coming and going from the club, loud music from cars, drinking and smoking marijuana in the parking lot, urinating in the parking lot and against the buildings, horns honking, and patrons remaining in the parking lot in cars drinking and making noise well after the 2 a.m. closure." The Associations videotapes "showed a remarkable absence" of Za Zoos security staff.
Adams testified again that Za Zoos was interfering with his sleep. Za Zoos counsel asked Adams whether he was bothered that most of the nightclub patrons were African-Americans, and Adams replied "he wouldnt care if they were green, as long as they `shut up." Richard Meier, a Portobello Office Building Association board member, testified that Portobello allowed a change in the CC&Rs to permit the restaurant to operate as a cabaret based on the prior owners representation that "the diners could have nice quiet blues and jazz background music," but the place had "morphed into a hip hop club that disturbs the neighborhood." Meier requested revocation of the cabaret permit because of the current owners failure to "prevent[] unruly behavior as required," but expressed concern that the owners political influence would prevent any change from occurring. Meier said "[h]e has been told that, no matter what they do, they cant change the situation because the economic powers have clout, and that no matter what comes about here, it will be overturned at other levels. He finds that discomfiting and undemocratic. He has been told that the owner has political clout and has seen with his own eyes many political functions going on there."
Restaurant property owner Fuad Sweiss testified that the problems alleged with respect to Za Zoos were exaggerated, that Axtle and another Association board member "d[id] not represent the community," and that Adams should be able to adjust to the noise at Za Zoos, which was quieter than that of trains passing by the property. Sweiss, who had bought the restaurant property in 2005, said that he had "heard from homeowners that three board members wanted to buy the restaurant, but they didnt get it because they wanted it for cheap." Sweiss asked Meier whether he had tried to buy the restaurant, Meier replied, "Thats right, because I wanted the building, not the restaurant," and Sweiss responded, "I wanted the building too." Sweiss said that if plaintiffs lost the cabaret permit they would lose the major part of their income and go out of business, he would be unable to pay his mortgage, and he would be forced to sell the property at an unreasonable price.
In her May 25, 2006 decision, the hearing officer imposed additional detailed conditions on Za Zoos cabaret permit, along with various followup measures. Za Zoos was required to furnish plans required by previously-imposed conditions to the hearing officer by June 30, 2006; Za Zoos and the Association were directed to submit a joint report of their progress on an issue by that date; and Za Zoos was required to begin keeping certain records and to provide them to the hearing officer upon request.
Plaintiffs complaint asserted causes of action for libel, slander, "interference with contracts and business," civil harassment, civil conspiracy, and violations of the Unruh Civil Rights Act. The complaint itself is not in the appellate record, but portions of it were quoted in the Association and Axtels motion. According to the motion, the cause of action for civil harassment alleged that defendants had "accused the owners of [Za Zoos] of paying a number of politicians, including Mayor Jerry Brown, in order to retain their cabaret permit; told potential customers passing by that the restaurant was closed permanently or would be closing soon; told members in the community that fights, gunshots, profanity, parking violations and `side-shows were taking place constantly at [Za Zoos] . . . ." The cause of action for civil conspiracy alleged that defendants had "committed an overt act in furtherance of the conspiracy by making false representations regarding [Za Zoos] orally and in writing . . . ."
In support of their motion, the Association and Axtel submitted the hearing officers February and May 2006 findings and decisions, from which the above-described background facts were taken. Adams lodged his declaration and that of Meier, his attorney, in support of his anti-SLAPP motion. Adams stated in his declaration that plaintiffs had not complied with the conditions imposed by the hearing officer "and because of this I have written to the City of Oakland that the permit should be revoked. It is solely because of my petitions to the City of Oakland on this most public issue that I have been sued."
The courts decision on the motions refers also to a declaration from defendant Axtle, but there is no declaration from him in the appellate record.
Plaintiffs initially submitted no evidence in opposition to the motions, but asserted in their points and authorities that they could establish a probability of prevailing on the merits "if given adequate time to collect the necessary evidence." In response to plaintiffs argument that they had not been timely served with the motions, the court continued the hearing on the motions from January 9, 2007 to February 1, 2007, "so that [they] could establish probability of prevailing or whatever else [they needed] to defeat the motion[s]." Plaintiffs thereafter filed their declarations, and those of Gabriel Cervantez, Rosco Miller, and Chaune Williams against the motions.
In her declaration, Zahra Homayun stated that defendants "have circulated false statements about my business through newsletters, report, and orally to members within and outside the Portobello community that loud music comes from my restaurant on Saturday nights, that gunshots have been fired at Za Zoos and that my restaurant is driving down the real property values within the Portobello community. Additionally, false accusations have been made at meetings with the homeowners that I have paid public officials in Oakland to retain my cabaret permit and that activity which violates the [CC&Rs] of the Portobello community constantly take place at my business. I have been assessed penalties by [defendants] in excess of $64,000.00 for this alleged activity . . . [¶] . . . [¶] No trash is left in the parking lot. I see to it before I leave that the area is clean. [¶]. . . [¶] During the past few months, several people have told me that when they were on their way into my restaurant to eat, defendant Raul Axtle told them that my restaurant was closed and/or would be closing indefinitely. Defendant knew my restaurant was open for business and knows that I have no plans of closing my business. I lost potential business because of these untrue statements . . . ."
In his declaration, Mohamad Homayun stated that he had "read statements regarding Za Zoos from newsletters and reports generated by defendants that have alleged that gun shots have been fired at the restaurant, trash left in the area, my wife and I have paid public officials to keep the cabaret permit, and loud music is heard from Za Zoos. These statements were repeated orally to members in and outside of the Portobello community. [¶] All of the above statements are false . . . . [¶] One of the board members . . . told me that if I began bringing black persons to Za Zoos, they would move to shut down my establishment."
Cervantez and Miller, security personnel for Za Zoos, declared among other things that music from the night club cannot be heard outside the building. Williams declared that she attended a Portobello Community meeting in October 2006, where Adams gave Sweiss "a demand letter. Defendant Adams stated that the City of Oakland is not going to take appropriate action against Za Zoos because (sic) feeds and gives money to the local politicians."
The court found that all of the causes of action were based on conduct protected by the anti-SLAPP statute, and that all of the conduct was absolutely privileged apart from: the Association board members statement that the Association would seek to shut down Za Zoos if it brought in African-American patrons, and Axtles representations to prospective customers that Za Zoos was closed or would be closing, which supported the causes of action for interference with contract and business, and violation of the Unruh Act. Because Adams was not implicated in those two causes of action, he was dismissed from the case. The motion to strike was granted as to the other causes of action.
The court thought that Zahra Homayuns statement about penalty assessments was also outside the absolute privilege, but that the statement did not support any of the causes of action pled.
II. DISCUSSION
A. Order Granting the Motions
(1) Anti-SLAPP Issues and Scope of Review
Resolving an anti-SLAPP motion is "a two-step process. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving defendants burden is to demonstrate that the act or acts of which the plaintiff complains were taken `in furtherance of the [defendant]s right of petition or free speech under the United States or California Constitution in connection with a public issue, as defined in the statute. (§ 425.16, subd. (b)(1).) If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim. . . ." (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67 (Equilon).) Rulings on these issues are subject to de novo appellate review. (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055.)
(2) Procedural Argument
Plaintiffs contend that the anti-SLAPP motions had to be denied because of the timing of the hearings on the motions. The motions were noticed for hearing on January 9, 2007. Plaintiffs argued that the motion could not be granted on that date because the motions were not filed and served in a timely manner under sections 435, subdivision (b)(2) and 1005. Section 435, subdivision (b)(2), states that a notice of motion to strike a complaint "shall specify a hearing date set in accordance with Section 1005." Under section 1005, subdivision (b), "[u]nless otherwise ordered," moving and supporting papers are to be served and filed at least 16 court days before the hearing. The 16-court-day period is increased by two calendar days if service is effected through overnight delivery; if notice is served by mail, the period is increased by five calendar days if the addresses are in California, and by ten calendar days if an address is outside California. (Ibid.) The court may prescribe a shorter time. (Ibid.) The motion of the Association and Axtle did not comply with section 1005 because it was served by mail and filed on December 15, 2006; Adamss motion did not comply because it was served by mail on December 20, 2006 and filed on December 21, 2006.
On January 9, 2007, the court continued the hearing to February 1, 2007, when the motion was granted. Plaintiffs argued that the motion could not be granted on February 1, 2007 because that date was more than 30 days after the motion was served. This argument was based on Fair Political Practices Com. v. American Civil Rights Coalition (2004) 121 Cal.App.4th 1171 (Fair), which followed Decker v. U.D. Registry, Inc. (2003) 105 Cal.App.4th 1382 (Decker) and held that, under a prior version of section 425.16, subdivision (f), "the trial court must deny a special motion to strike that was noticed for a hearing more than 30 days after service of the motion, absent a showing that the courts docket conditions necessitated the later hearing date." (Hall v. Time Warner, Inc. (2007) 153 Cal.App.4th 1337, 1349 (Hall).)
Plaintiffs renew these arguments on appeal, venturing that the motion must be heard after the period specified in section 1005, but before the 30-day deadline set by section 425.16—a scenario that would, absent an order shortening time, leave only very few dates on which the motion could properly be heard, even in cases of overnight delivery. They cite no reported case that has applied sections 435 and 1005 to an anti-SLAPP motion, but even assuming those statutes apply there was no error. The court cured any problem under those statutes by continuing the hearing to a date that complied with them. (See Thomas v. Quintero (2005) 126 Cal.App.4th 635, 650 (Thomas) [court has discretion to continue hearing on anti-SLAPP motion].) Nor was there error under section 425.16. The hearing was originally scheduled for a date within 30 days of service as the statute requires, and the court had discretion to continue the hearing to a date beyond the 30-day period. (See Thomas, supra, at p. 650.) The Fair and Decker cases that plaintiffs cite for a contrary result were expressly overruled by the Legislature when it amended section 425.16, subdivision (f) in 2005. (Hall, supra, 153 Cal.App.4th at p. 1349.) Defendants complied with the rule of those cases in any event by noticing the hearing for a date within 30 days of service.
(3) Protected Conduct
The trial court correctly determined that the causes of action for libel, slander, civil harassment, and civil conspiracy arose from activity protected by the anti-SLAPP law. The categories of protected conduct include "any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law" (§ 425.16, subd. (e)(2)), and "conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest" (§ 425.16, subd. (e)(4)). The conduct at issue here was protected under both of these provisions.
The causes of action in question were all based on statements pertaining to the conditions or revocation of Za Zoos cabaret permit, issues that were under consideration in an official proceeding. While it appears that the civil harassment cause of action was predicated in part on unprotected statements about Za Zoos closing down altogether, "it is the principal thrust or gravamen of the plaintiffs cause of action that determines whether the anti-SLAPP statute applies" (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 188), and that cause of action was primarily grounded on remarks pertaining to the permit. Since the protected conduct alleged in that cause of action was not "`"merely incidental" to the unprotected conduct" (Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133 Cal.App.4th 658, 672), that cause of action was properly stricken along with the others.
Plaintiffs argue that the statements underlying the stricken causes of action were made after the hearing officers May 2006 decision, when issues were no longer under review in that proceeding. Apart from the statement about feeding and funding of local politicians attributed to Adams at an October 2006 Portobello Community meeting, the timing of the allegedly actionable statements was unclear from plaintiffs evidence. But the official proceeding involving the permit did not end with the May 2006 decision in any event. The hearing officer exercised continuing oversight thereafter by requiring submission of further reports and reserving the right to inspect Za Zoos records. Even if the permit proceeding could be deemed to have concluded before the statements at issue were made, the statements would still be protected as communications in anticipation of a new proceeding. (See, e.g., Rohde v. Wolf (2007) 154 Cal.App.4th 28, 35-37 [statements are protected if made when litigation is " `contemplated in good faith and under serious consideration"].) Given the history here, there can be little doubt that defendants were contemplating further challenges to the permit if, as plaintiffs claim, they were making the statements at issue after the May 2006 decision.
Moreover, whether or not the statements were connected with an issue under consideration in an official proceeding, they were protected as statements concerning "an issue of public interest." (§ 425.16, subd. (e)(4).) The conditions or revocation of Za Zoos cabaret permit were issues of interest to members of the Association, a substantial residential community (see Ruiz v. Harbor View Community Assn. (2005) 134 Cal.App.4th 1456, 1468-1469 [homeowners association disapproval of residents architectural plans was issue of public interest]; Damon v. Ocean Hills Journalism Club (2000) 85 Cal.App.4th 468, 478-480 [competence of homeowner association manager was issue of public interest]), as well as Za Zoos hundreds of nightclub patrons. Further, "the allegedly defamatory statements . . . were made not only in connection with an issue of interest to the members of the particular community, but also in the context of an ongoing controversy, debate or discussion within that community . . . . Thus protection of the statements at issue . . . serves the anti-SLAPP statutes purpose of encouraging participation in an ongoing controversy, debate or discussion." (Du Charme v. International Brotherhood of Electrical Workers (2003) 110 Cal.App.4th 107, 118.)
Plaintiffs contend that the statements in question were not protected under the anti-SLAPP law to the extent they could be construed to allege criminal bribery of public officials or criminal creation of public nuisances. Plaintiffs cite Weinberg v. Feisel (2003) 110 Cal.App.4th 1112 (Weinberg), for the proposition that "[t]he anti-SLAPP statute does not apply to causes of action arising out of false allegations of criminal conduct: (1) when no charges are pending against the accused party and (2) where defendant has taken no action intended to result in a criminal investigation or prosecution." However, plaintiffs misread Weinberg.
Weinberg rejected "the claim that assertions of criminal conduct automatically fall within the public interest" for purposes of the anti-SLAPP law. (Weinberg, supra, 110 Cal.App.4th at p. 1135, italics added.) Weinberg did not hold that such allegations could never be protected under the anti-SLAPP law, or that, in order to be protected, the accused must necessarily be subject to pending charges or reports to law enforcement. Rather, Weinberg identified a number of considerations that, on a case-by-case basis, could be used to distinguish between issues of public and private interest. The court reasoned, for example, that "a matter of public interest should be something of concern to a substantial number of people," and not merely "to the speaker and a relatively small, specific audience." (Id. at p. 1132.)
Looking at this and other criteria, including the facts that "defendant did not report his suspicions to appropriate prosecutorial authorities, criminal charges [were] not pending against plaintiff, and plaintiff [was] not involved in the criminal justice system"—facts that would have given the allegations "official proceeding" protection under section 425.16, subdivision (e)(2) (see Hagberg v. California Federal Bank (2004) 32 Cal.4th 350, 355; A.F. Brown Electrical Contractor, Inc. v. Rhino Electric Supply, Inc. (2006) 137 Cal.App.4th 1118, 1125-1126)—Weinberg held that "allegations of criminal conduct, made under circumstances like those alleged in this case, are not subject to the anti-SLAPP statute." (Weinberg, supra, at pp. 1127, 1134, italics added.) Such allegations did not turn an otherwise private matter into a public one. (Ibid.) Here, unlike Weinberg and as we have explained, the challenged statements related to issues of public interest, namely the conditions or revocation of the cabaret permit.
For these reasons, we independently agree with the trial court that the statements alleged in the stricken causes of action are protected under the anti-SLAPP law.
(4) Probability of Prevailing
Plaintiffs are therefore required to demonstrate a probability of prevailing on these causes of action. (Equilon, supra, 29 Cal.4th at p. 67.) Since they make no attempt to do so in their appellate brief, we need not address the question. (State Farm Fire & Cas. Co. v. Pietak (2001) 90 Cal.App.4th 600, 610 [" `[t]he burden of affirmatively demonstrating error is on the appellant"].)
B. Orders Awarding Fees
Defendants moved for attorney fees under section 425.16, subdivision (c); the Association and Axtel requested $18,494, and Adams requested $21,195. The court awarded the Association and Axtle $10,175, and Adams $7,000.
Plaintiffs contend that Portobello and Axtle should not have been awarded fees because their motion did not succeed in striking all of the causes of action. The argument lacks merit. "[A] party who partially prevails on an anti-SLAPP motion must generally be considered a prevailing party unless the results of the motion were so insignificant that the party did not achieve any practical benefit from bringing the motion." (Mann v. Quality Old Time Service, Inc. (2006) 139 Cal.App.4th 328, 340.) The trial court could reasonably find that Portobello and Axtle were prevailing parties under this standard. (Ibid. [determination is reviewed solely for abuse of discretion].)
Plaintiffs submit that the amounts awarded were unreasonable, and that Portobello and Axtle were not entitled to "full attorney fees" because they did not fully prevail on their motion. The court did not award defendants all the fees they requested, and, again, we find no abuse of discretion. (Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 686 [limited scope of review as to amount awarded].)
III. CONCLUSION
The orders on the anti-SLAPP and attorney fee motions are affirmed.
We concur:
Swager, J.
Margulies, J.