Opinion
NOT TO BE PUBLISHED
Contra Costa County Super. Ct. No. C09-00196.
Haerle, J.
I. INTRODUCTION
Defendant and appellant Blackhawk Country Club (Blackhawk) appeals from an order denying its motion to strike the class action complaint filed by plaintiff and respondent, Steven M. Roif (Roif), against Blackhawk. The court held that the complaint was not, as Blackhawk argued, a SLAPP (strategic lawsuit against public participation) suit as defined under Code of Civil Procedure section 425.16. We agree and affirm the order.
All further statutory references are to the Code of Civil Procedure, unless otherwise noted.
II. FACTUAL AND PROCEDURAL BACKGROUND
Roif’s class action complaint sought damages for conversion, fraudulent concealment, breach of contract, breach of fiduciary duty, and violation of the Consumer Legal Remedies Act (CLRA) against Blackhawk, a not-for-profit mutual benefit corporation that operates a country club in Danville, Contra Costa County. Blackhawk is a “private member-owned country club, ” with three “distinct classes of equity or propriety owned memberships: golf, tennis and swim.”
Roif was a tennis member at Blackhawk from July 1, 1997, until October 2000, when he upgraded to a golf membership. In July of 2008, he sold his membership. His complaint has to do with the manner in which Blackhawk divided the proceeds of the sale of his membership.
In 1995, Blackhawk sought membership approval of an assessment on all classes of members. In order to induce the members to approve this assessment, Blackhawk promised the members that the 1995 assessment would be refunded to members when their memberships were sold. In addition, upon the sale of a membership, a member would be entitled to retain the net proceeds of the sale after a 40 percent “transfer fee” was assessed, a fee Blackhawk was entitled to retain under its bylaws.
In 1998, Blackhawk again sought to impose an assessment on its members. This assessment, however, was voted down. In order to induce the membership to change its vote, Blackhawk again promised a full refund of the assessment upon sale, with the 40 percent transfer fee assessed against the proceeds of the sale of a membership.
The complaint alleges that Blackhawk made the 1998 promises in order to raise money to make capital changes to the club, which its Board of Directors believed would increase the value of memberships by an amount sufficient to justify the refund of the assessment amount upon the sale of a membership.
Under Blackhawk’s bylaws, when a member sells a membership, Blackhawk is entitled to deduct a “transfer fee” from the proceeds of the sale. Until July of 2007, the transfer fee was “computed as forty percent of the gross sales price with the balance (sixty percent) being paid to the selling member.” Before July of 2007, the proceeds of a membership sale were distributed as follows: if a membership sold for $35,000, the member would be entitled to retain 60 percent of $35,000 which is $21,000. “[F]or a member who was also entitled to a refund of the 1995 assessment of $2,000 and the 1998 Assessment of $9,400, ” the total amount retained by the member would be $21,000 plus assessment refunds totaling $11,400, which would equal $32,400. In other words, the 40 percent transfer fee was assessed against the sale of the membership and not the refund of the assessment.
The complaint further alleges that “between July and September of 2007” the Board, without notice to its members, “amended the Bylaws” of the club “in order to change how the net proceeds of sale of a membership were calculated.” Members were never permitted to vote on the change in the bylaws.
The change in the bylaws amended the “definition of selling price” in such a way as to “materially affect[] the Transfer Rights of selling members.” It did so, essentially, by totaling the amount of the sales price and the amount of the assessment paid by the member and assessing a 40 percent transfer fee against that amount. In the past, however, the 40 percent transfer fee was assessed only against the sales price of the membership and not against the assessment refund. The complaint alleges that this change in the bylaws thus “wrongfully deprived Plaintiff and all other similarly situated members of the class of $5,640 of the proceeds of the sale of the membership.”
Roif alleged that he, and a class consisting of former golf, tennis and swim members who sold memberships after the 2007 bylaw change, had been injured by this change in the bylaws. He sought damages for conversion, fraudulent concealment, breach of contract, breach of fiduciary duty, and violation of the California Consumers Legal Remedies Act.
Blackhawk filed a motion to strike Roif’s complaint. It argued that the complaint was aimed at political statements and conduct made by Blackhawk while in the midst of a debate about club policy. The trial court denied the motion to strike. It held that “Defendant has failed to meet its burden to show that the actions alleged in the complaint arose from protected activity. The complaint involves private conduct, conducted in a non-public forum, affecting a discrete group (members of Blackhawk Country Club) thus this action does not arise from an ‘act in furtherance of a person’s right of petition or free speech... in connection with a public issue.’” The court went on to find that “the statement/conduct did not involve a person or entity in the public eye; 2. conduct that could affect a large number of people beyond the direct participants; or 3. A topic of widespread interest.”
This timely appeal followed.
III. DISCUSSION
A. Legal Principles
Blackhawk’s motion to strike was filed under section 425.16, subdivision (b)(1). This section provides that “[a] cause of action against a person arising from any act of that person in furtherance of the person’5s 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.” Section 425.16, subdivision (e) provides further that “As used in this section, ‘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; (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; (4) or any other 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.”
In Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260 (Soukup), our Supreme Court discussed the applicable law in this area. The court explained that “‘Section 425.16 posits... a two-step process for determining whether an action is a SLAPP. First, the court decides whether the [moving party] has made a threshold showing that the challenged cause of action is one arising from protected activity.... If the court finds that such a showing has been made, it must then determine whether the [opposing party] has demonstrated a probability of prevailing on the claim.’ [Citation.] ‘Only a cause of action that satisfies both prongs of the anti-SLAPP statute-i.e., that arises from protected speech or petitioning and lacks even minimal merit-is a SLAPP, subject to being stricken under the statute.’ [Citation.]” (Id. at pp. 278-279.) The “purpose of section 425.16 is to prevent the chilling of the ‘valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances’ by ‘the abuse of the judicial process.’ (§ 425.16, subd. (a).)” (Flatley v. Mauro (2006) 39 Cal.4th 299, 313.)
We review an order granting or denying a motion to strike under section 425.16 under the de novo standard. (Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049, 1056.) We consider “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” (§ 425.16, subd. (b)(2).) However, we neither “‘“weigh credibility [nor] compare the weight of the evidence. Rather, ... [we] accept as true the evidence favorable to the plaintiff [citation] and evaluate the defendant’s evidence only to determine if it has defeated that submitted by the plaintiff as a matter of law.” [Citation.]’ [Citation.]” (Flatley v. Mauro, supra, 39 Cal.4th at pp. 325-326.) In determining whether defendant has sustained its initial burden, the court considers the pleadings, declarations and matters that may be judicially noticed. (Brill Media Co., LLC v. TCW Group, Inc. (2005) 132 Cal.App.4th 324, 330, 339.)
Finally, “[w]e are not bound by the trial court’s stated reasons, if any, supporting its ruling; we review the ruling, not its rationale.” (Stratton v. First National Life Ins. Co. (1989) 210 Cal.App.3d 1071, 1083.)
With these principles in mind, we turn now to this appeal.
B. Conduct Arising out of Protected Activity
The trial court found that Blackhawk failed to meet its burden of proving that Roif’s claims arose out of protected activity, that is, Blackhawk’s constitutionally-protected free speech or petitioning activities. We agree.
Preliminarily, we note that the trial court also stated in its order that the complaint involved private conduct conducted in a non-public forum affecting only a discrete group and therefore did not arise out of protected activity. Blackhawk argues at length that the trial court’s reasoning was incorrect and, therefore, its ruling should be reversed. However, we need not determine whether the trial court’s reasoning here is correct because we review only the result it reached. As we explain at greater length herein, the trial court did not err for the fundamental reason that the claims in the complaint did not arise from constitutionally-protected free speech or petitioning activities.
The moving party bears the initial burden of making a prima facie showing that the other party’s cause of action arises from the moving party’s free speech or petition activity. (People ex rel. 20th Century Ins. Co. v. Building Permit Consultants, Inc. (2000) 86 Cal.App.4th 280, 283-284.) In determining whether a cause of action arises from protected activity “‘the critical consideration is whether the cause of action is based on the defendant’s protected free speech or petitioning activity.’” (Department of Fair Employment & Housing v. 1105 Alta Loma Road Apartments, LLC (2007) 154 Cal.App.4th 1273, 1284.) To determine whether this requirement is met, we look to “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” (§ 425.16, subd. (b)(2); Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.)
Blackhawk has failed to meet this initial burden. The causes of action in the complaint arise out of two types of conduct on Blackhawk’s part. Neither is protected free speech or petitioning. First, the complaint alleges that Blackhawk improperly revised its bylaws in order to change the manner in which refunds of membership fees were calculated. A challenge to an organization’s allegedly improper revision of its bylaws does not arise out of protected speech and Blackhawk does not seriously contend that it does.
The second type of activity which forms the basis of the complaint occurred in 1995 and again in 1998, when Blackhawk “in an effort to induce the membership to approve an assessment on all classes of membership, promised the members of [Blackhawk], both orally and in writing that the... Assessment would be, upon sale, refunded... along with the net proceeds of sale of a membership after reduction of the 40 percent Transfer Fee, which the Club was entitled to retain upon the sale of a membership, as provided for in the Bylaws of BHCC.” Blackhawk, however, contends that this representation is protected speech under section 425.16. We disagree.
In addressing Blackhawk’s arguments, we begin by noting that the trial court’s explanation for its denial of the motion to strike, an explanation that is based on language in World Financial Group, Inc. v. HBW Insurance & Financial Services, Inc. (2009) 172 Cal.App.4th 1561 (World Financial Group), is incorrect to the extent that the trial court is making a blanket statement that, in no instance, can speech concerning the governance of a non-public organization be considered of public interest. In fact, speech made in the course of governing a non-public organization can be of public interest and can form the basis of a motion to strike under the anti-SLAPP statute.
Thus, for example, in Foothills Townhome Assn. v. Christiansen (1998) 65 Cal.App.4th 688 (Foothills), disapproved on other grounds in Equilon Enterprises v. Consumer Cause, Inc., supra, 29 Cal.4th at page 58, a private homeowners’ association sued a member to collect an assessment it believed was owing to it. The member alleged that “this suit was in retaliation for his opposition to Foothills’ governing board and its actions, particularly concerning assessments.” (Foothills, supra, 65 Cal.App.4th at p. 695.) Although the court ultimately did not find a violation of the anti-SLAPP statute, it did find that that the member’s “alleged activities involved matters of sufficient public interest made in a sufficiently public forum to invoke the protection of section 425.16.” (Id. at pp. 695-696; see also Damon v. Ocean Hills Journalism Club (2000) 85 Cal.App.4th 468 (Damon) [motion to strike granted where former manager of homeowners association sued the association for defamation over statements made about manager’s policies because this controversy was “inherently political”].)
Nevertheless, the trial court reached the correct result here. Blackhawks’ decision to amend its bylaws in order to change the method for calculating refunds and its statements regarding this method are not protected speech-if these actions were considered protected speech then any lawsuit involving a business’s representations to its customers would fall under the anti-SLAPP statute.
In World Financial Group, supra, 172 Cal.App.4th at pages 1571-1572, the court noted a line of cases in which anti-SLAPP motions have been denied because they were based on commercial activity rather than on free speech. One such case, Jewett v. Capital One Bank (2003) 113 Cal.App.4th 805 (Jewett), is particularly on point. In Jewett, a consumer’s group sued Capital One Bank for making credit card solicitations that the consumer’s group alleged constituted deceptive and unfair business practices and violated the Consumers Legal Remedy Act. (Id. at pp. 808-809.) On appeal of a trial court order granting Capital One’s anti-SLAPP motion, Capital One argued that its solicitations pertained to a matter of public interest and therefore were protected speech. The Court of Appeal disagreed. Instead, it held that “the solicitations were designed solely for the purpose of commercial activity, and... to allow such solicitations the protection of section 425.16 by virtue of the fact that they touch upon matters of general public interest would eviscerate the unfair business practices laws.” (Id. at p. 815; see also In Consumer Justice Center v. Trimedica International, Inc. (2003) 107 Cal.App.4th 595 [statements advertising herbal breast enhancing product not speech on a matter of public interest; Nagel v. Twin Laboratories, Inc. (2003) 109 Cal.App.4th 39 [company’s product labels and Web site listing of ingredients of its product not protected speech on a public issue]; and Commonwealth Energy Corp. v. Investor Data Exchange, Inc. (2003) 110 Cal.App.4th 26 [defendant’s telemarketing sales promotion not made in connection with a public issue or an issue of public interest].)
Here, Blackhawk’s alleged promises regarding the way in which membership resales would be distributed is a commercial activity and not protected speech. Moreover, Blackhawk cannot convert this activity into protected speech simply because these statements were of interest to a large group of people.
In addition, we reject Blackhawk’s effort to characterize its activities in collecting funds from its members as protected speech because it involves “governance of... its members.” The fact that Blackhawk’s promise to its members to refund monies may have been made in public forums in which it sought to garner the support of its members, and may have been of interest to a particular community, does not convert this statement into 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....” (§ 426.16, subd. (e).) Were we to accept Blackhawk’s contrary argument, every lawsuit concerning a private organization’s business practices could be described broadly as involving “governing conduct” and would be barred under the anti-SLAPP statute. Such a result would “eviscerate the unfair business practices laws.” (Jewett, supra, 113 Cal.App.4th at p. 815.)
Nor is this result dictated by the string of cases (in addition to Foothills and Damon) cited by Blackhawk involving the issue of when conduct involves the “public interest.” (See Thomas v. Quintero (2005) 126 Cal.App.4th 635 [anti-SLAPP motion granted against landlord seeking injunction against planned demonstrations by tenants rights group]; Terry v. Davis Community Church (2005) 131 Cal.App.4th 1534 [anti-SLAPP motion granted where plaintiffs alleged libel, slander, and intentional and negligent infliction of emotional distress when church distributed report of investigation into plaintiffs’ allegedly inappropriate relationship with child]; Ruiz v. Harbor View Community Association (2005) 134 Cal.App.4th 1456 [court granted anti-SLAPP motion against libel complaint aimed at attorney’s letters to homeowners’ association regarding dispute over denial of homeowners’ application to rebuild their house]; Hailstone v. Martinez (2008) 169 Cal.App.4th 728 [allegedly defamatory statements made by labor union accusing former employee of criminal activity and breaches of fiduciary duty protected speech].) In each of these cases, motions to strike were granted where a complaint sought to suppress through injunctive relief, or libel, slander and defamation claims, political and/or non-commercial speech. Here, however, while the complaint is concerned with representations made by Blackhawk, it is very distinctly not concerned with political and/or non-commercial speech.
Having reached the conclusion that the complaint is not subject to the anti-SLAPP statute, we need not consider Roif’s additional argument that his complaint is exempt from the statute under section 425.17, which involves actions brought in the public interest.
The trial court did not, therefore, err in denying Blackhawk’s motion to strike Roif’s complaint. Because Blackhawk failed to make a prima facie showing that the SLAPP statute applies, we need not consider whether Roif showed a probability of prevailing on the merits.
C. Request for Sanctions
Roif contends in his respondent’s brief that Blackhawk’s appeal is frivolous and, therefore, he should be awarded attorney’s fees. “An appeal is frivolous and warrants the imposition of sanctions ‘when it is prosecuted for an improper motive-to harass the respondent or delay the effect of an adverse judgment-or when it indisputably has no merit-when any reasonable attorney would agree that the appeal is totally and completely without merit. [Citation.]’” (Keitel v. Heubel (2002) 103 Cal.App.4th 324, 337.) Blackhawk’s appeal, while ultimately unsuccessful, is not frivolous.
IV. DISPOSITION
The order is affirmed. Costs on appeal are awarded to respondent.
We concur: Kline, P.J., Richman, J.