Opinion
B292493
04-01-2020
SECRET RECIPES, INC. et al., Plaintiffs, Cross-Defendants, and Respondents, v. FELIX LOPEZ et al., Defendants, Cross-Complainants, and Appellants.
Michael A. Abramson for Defendants, Cross-Complainants, and Appellants. Kermani, and Hani Ganji for Defendants, Cross-Complainants, and Appellants.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. EC065007) APPEAL from an order of the Superior Court of Los Angeles County, Benny C. Osorio, Judge. Affirmed. Michael A. Abramson for Defendants, Cross-Complainants, and Appellants. Kermani, and Hani Ganji for Defendants, Cross-Complainants, and Appellants.
* * * * * *
The trial court struck three claims from a cross-complaint pursuant to the anti-SLAPP statute (Code Civ. Proc., § 425.16). The cross-complainants appeal, arguing that the trial court should have denied the anti-SLAPP motion as too untimely to entertain and on the merits. We conclude the court did not abuse its discretion in considering the untimely motion and correctly ruled on the merits. Accordingly, we affirm.
"SLAPP" is short for Strategic Lawsuit Against Public Participation.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
FACTS AND PROCEDURAL BACKGROUND
These facts are drawn from evidence presented in connection with the anti-SLAPP motion; the remaining background facts are drawn from the undisputed allegations of the pertinent complaints and cross-complaints.
A. Failed sale of restaurant assets and sublease
In November 2014, Felix Lopez (Lopez) met with Andreh Koygani (Koygani) to discuss having Koygani and his business partner Hovik Grigorian (Grigorian) take over a restaurant in Glendale operated by Lopez and his business partner Luis Rodriguez (Rodriguez). Lopez and Rodriguez did not own the land under their restaurant; instead, they were, by virtue of an assignment, leasing it from a woman named Kathleen McBride (McBride) as trustee of a different trust.
In a series of contracts dated March 1, 2015 and April 1, 2015, Lopez and Rodriguez agreed to (1) sell to Koygani and Grigorian the assets of their restaurant and their liquor license for a total of $310,000, and (2) assign their sublease and further sublet the underlying property to Secret Recipes, Inc. (Secret Recipes), a company formed by Koygani and Grigorian, for a monthly rent of $19,250 plus a security deposit of $21,000.
Koygani and Grigorian paid the security deposit, took possession of the property and paid the first few months' rent, but stopped paying rent when they learned that Lopez and Rodriguez had never obtained McBride's consent to their further sublease, which was a requirement of the lease between McBride and Lopez and Rodriguez.
In November 2015, Koygani and Grigorian abandoned the premises. That same month, Lopez and Rodriguez obtained an unlawful detainer judgment by default against Secret Recipes for possession of the property and for $99,036 in unpaid rent and other damages.
B. Attempts to re-let the property
After Koygani and Grigorian abandoned the property, Lopez and Rodriguez sought to sublet it to someone else. They eventually signed a contract with Ahed Rabadi (Rabadi) to do so. However, McBride refused to consent to the further sublease and assignment to Rabadi. As a consequence, Rabadi "terminated" his contract with Lopez and Rodriguez.
In a collateral proceeding, an arbitrator found that McBride's refusal to consent was unreasonable.
II. Procedural Background
A. Secret Recipes's action
On April 1, 2016, Koygani, Grigorian, and Secret Recipes (collectively, Secret Recipes unless otherwise indicated) sued Lopez and Rodriguez.
On May 18, 2016, Secret Recipes recorded a notice of lis pendens in the county recorder's office setting forth that the underlying property was the subject of its pending lawsuit. Although Secret Recipes voluntarily withdrew the notice on October 5, 2016, the trial court nevertheless went on to formally expunge the notice on October 14, 2016 "to ensure that there is a Court order removing the lis pendens recorded on the property."
On October 20, 2016, which was six days after the first notice of lis pendens was expunged by the trial court, Secret Recipes recorded a second notice of lis pendens. The trial court expunged this second notice on November 2, 2016.
Secret Recipes filed its operative Second Amended Complaint on November 28, 2016. In that pleading naming Lopez and Rodriguez as defendants, Secret Recipes sues for (1) specific performance of the contracts to sell the restaurant assets and sublease the property, (2) breach of those contracts, (3) conversion of escrow moneys, (4) constructive trust, (5) fraud, (6) breach of fiduciary duty, (7) negligence, (8) intentional infliction of emotional distress, (9) money had and received, (10) rescission, and (11) declaratory relief.
The pleading also initially named Oak Escrow, Inc. as a defendant, but Secret Recipes subsequently filed a voluntary dismissal as to that defendant.
B. Lopez's and Rodriguez's cross action
1. Original cross-complaint
On April 28, 2017, Lopez and Rodriguez filed a cross-complaint against Secret Recipes. Generally, the cross-complaint alleges that these parties engaged in an "illegal scheme and plan to prevent [Lopez and Rodriguez] from subleasing, selling, assigning or otherwise enjoying the beneficial use" of the property underlying the restaurant. More specifically, the cross-complaint alleges that Koygani and Grigorian effectuated this "scheme" and "plan" by (1) "fil[ing] two false Notices of Lis Pendens . . . to manufacture a 'Default' which would justify [McBride's] refusal to consent to the Rabadi sublease and assignment," and (2) filing the "groundless action [(that is, the main action)] for damages." The cross-complaint alleges claims for (1) intentional interference with contractual relations, (2) intentional interference with a prospective economic advantage, (3) negligent interference with a prospective economic advantage, (4) defamation, (5) slander, and (6) unfair competition.
The cross-complaint initially named two other defendants—Katherine Bergh and Marcus & Millichap—but Lopez and Rodriguez subsequently filed dismissals as to those cross-defendants.
2. First-amended cross-complaint
Following an exchange of letters in which Secret Recipes's counsel pointed out perceived deficiencies in the cross-complaint, Lopez and Rodriguez on July 10, 2017, filed (1) a first amended cross-complaint, and (2) a notice of filing of that amended pleading, in order to take "off calendar" a then-pending demurrer to the original cross-complaint. The first amended cross-complaint did not alter any of the original six claims, but added two new claims—for (7) successor in interest liability and (8) a creditor's suit.
On July 24, 2017, Lopez and Rodriguez filed a stipulation indicating that Secret Recipes consented to have Lopez and Rodriguez "promptly file their first amended cross-complaint."
On August 11, 2017, the trial court rejected the stipulation because two of the then-pending cross-defendants had not signed the stipulation.
For the next four months, Lopez and Rodriguez took no further action to file their first amended cross-complaint. Instead, they engaged in settlement discussions by participating in a mandatory settlement conference in November 2017.
When the settlement discussions did not bear fruit, Lopez and Rodriguez on December 12, 2017, filed a motion seeking leave of court to file a first amended cross-complaint. When Secret Recipes did not oppose the motion, the trial court granted the motion. Lopez and Rodriguez filed the first amended cross-complaint on January 9, 2018.
Lopez and Rodriguez also added one of Lopez's companies, Loracast, Inc., as a cross-complainant after Secret Recipes added that company as a defendant in the second amended complaint.
3. Anti-SLAPP motion
On February 22, 2018, Secret Recipes filed a motion asking the trial court to dismiss the first six claims in the first amended cross-complaint under the anti-SLAPP statute. After Lopez and Rodriguez opposed the motion as untimely as well as on the merits, after Secret Recipes filed its reply, and after the trial court held a hearing on the motion, the court issued a written ruling partially granting and partially denying the motion.
As a threshold matter, the court found that the motion was untimely because it was filed more than 60 days after the initial cross-complaint, but ruled that it would nevertheless "exercise [its] discretion" to entertain the untimely motion. The court "elect[ed]" to do so because (1) the parties were "engaged in good faith meet and confer efforts regarding the substance of the complaint" prior to filing their July 24, 2017 stipulation, (2) an anti-SLAPP motion aimed at the cross-complaint would have been difficult during the period after the court rejected the parties' stipulation and before Lopez and Rodriguez sought leave to file the first amended cross-complaint because "the status of [that] pleading[] . . . was in flux," and (3) Secret Recipes filed its anti-SLAPP motion within 60 days of the conclusion of that "flux" (that is, within 60 days of the court's grant of the motion for leave to file the first amended cross-complaint).
On the merits, the court ruled that the filing of a notice of lis pendens was conduct "protected" by the anti-SLAPP statute, such that the three claims based on that conduct—namely, Lopez's and Rodriguez's claims for (1) intentional interference with contractual relations, (2) intentional interference with a prospective economic advantage, and (3) negligent interference with a prospective economic advantage—arose from "protected activity." The court further ruled that Lopez and Rodriguez had not established that those claims had minimal merit because, among other reasons, they had not adduced any evidence to support a finding that Koygani and Grigorian knew of the contract between Rabadi and Lopez and Rodriguez at the time they allegedly disrupted that contract, which was an element common to all three claims.
Thus, the court granted the anti-SLAPP motion as to the above specified claims and denied it as to the remainder. The court also awarded Secret Recipes $3,810 in attorney fees.
III. Appeal
Lopez and Rodriguez filed a timely notice of appeal.
DISCUSSION
Lopez and Rodriguez argue that the trial court erred in partially granting Secret Recipes's anti-SLAPP motion because the motion (1) was too untimely to entertain, and (2) lacked merit.
The anti-SLAPP statute "provides a procedure for weeding out, at an early stage, meritless claims arising from protected activity." (Baral v. Schnitt (2016) 1 Cal.5th 376, 384 (Baral).) "Accordingly, a trial court tasked with ruling on an anti-SLAPP motion must ask two questions: (1) has the moving party 'made a threshold showing that the challenged [claim] arises from protected activity' (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056 [(Rusheen)]) . . ., and if so, (2) has the nonmoving party 'established . . . a probability that [he] will prevail' on the challenged [claim] by showing that the claim has 'minimal merit' (§ 425.16, subd. (b)(1); Navellier v. Sletten (2002) 29 Cal.4th 82, 93-94 [(Navellier)] . . .)?" (Abir Cohen Treyzon Salo, LLP v. Lahiji (2019) 40 Cal.App.5th 882, 887 (Abir).)
I. Timeliness
The anti-SLAPP statute provides that a motion to strike under its auspices "may be filed within 60 days of the service of the complaint or, in the court's discretion, at any later time upon terms [the court] deems proper." (§ 425.16, subd. (f).) Thus, when the timeliness of an anti-SLAPP motion is at issue, we must ask two questions: (1) was the anti-SLAPP motion timely filed (that is, was it filed within "'60 days of service of the complaint'") and, if it was untimely filed, (2) did the trial court properly exercise its discretion to consider the untimely motion? We review the first question de novo (Starview Property, LLC v. Lee (2019) 41 Cal.App.5th 203, 208), and the second question for an abuse of the trial court's "considerable discretion" to consider untimely motions (Platypus Wear, Inc. v. Goldberg (2008) 166 Cal.App.4th 772, 787 (Platypus); San Diegans for Open Government v. Har Construction (2015) 240 Cal.App.4th 611, 624 (San Diegans)). Here, the trial court found that Secret Recipes's anti-SLAPP motion was untimely because it was filed more than 60 days after Lopez and Rodriguez filed their initial cross-complaint, so the question before us here is whether the court abused its considerable discretion in allowing Secret Recipes's untimely motion to be filed.
Whether a trial court abuses its discretion in allowing a party to file an untimely anti-SLAPP motion turns, in pertinent part, on whether its ruling so allowing is compatible with the "purposes and policy" underlying the anti-SLAPP statute's timeliness requirement. (Olsen v. Harbison (2005) 134 Cal.App.4th 278, 285 (Olsen); Platypus, supra, 166 Cal.App.4th at p. 782; Hewlett-Packard Co. v. Oracle Corp. (2015) 239 Cal.App.4th 1174, 1187-1188 (Hewlett-Packard).) The anti-SLAPP statute's timeliness requirement furthers two purposes and policies: (1) "'"to prevent [the meritless claims falling within the anti-SLAPP statute's protection] by ending them early and without great cost to the SLAPP target,'" [citation]" and (2) to minimize the "'possibility for abuse of the anti-SLAPP statute.' [Citation.]," and particularly the "tactical manipulation of the stays that attend anti-SLAPP proceedings." (Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2018) 4 Cal.5th 637, 642, 645 (Newport Harbor); Olsen, at p. 287; Playtpus, at p. 783; San Diegans, supra, 240 Cal.App.4th at p. 624.)
This analysis contemplates that there is a "point [in time] beyond which an anti-SLAPP motion simply cannot perform its intended function[s]" and is therefore untimely as a matter of law and outside a trial court's discretion to entertain (Hewlett-Packard, supra, 239 Cal.App.4th at p. 1189; Newport Harbor, supra, 4 Cal.5th at p. 645 [asking whether motion is made "far too late for the anti-SLAPP statute to fulfill its purpose"]), but recognizes that when this point has been reached turns on a number of factors. These factors include (1) whether there is "anything in the procedural history of th[e] case . . . that would justify allowing the [untimely] filing" (Playtpus, supra, 166 Cal.App.4th at p. 787; San Diegans, supra, 240 Cal.App.4th at p. 624 [examining "the reasons for the [untimely] filing"]), (2) how close to the trial date the motion is made (Kunysz v. Sandler (2007) 146 Cal.App.4th 1540, 1543; Hewlett-Packard, at p. 1189; San Diegans, at p. 624 [examining "the length of the delay"]), and (3) whether the "parties have incurred substantial expense" by the time the motion is made (Hewlett-Packard, at p. 1188; San Diegans, at p. 624 [examining "any undue prejudice to the plaintiff"]).
Applying these factors, the trial court in this case still possessed the discretion to entertain Secret Recipes's untimely motion—and did not abuse that discretion in electing to do so—because that motion had not passed the "point in time beyond which an anti-SLAPP motion cannot perform its intended function."
That is chiefly because Secret Recipes offered a viable reason for waiting to file its anti-SLAPP motion until Lopez and Rodriguez had filed their first amended cross-complaint—namely, that Secret Recipes had no specific complaint against which to direct its motion to strike until the first amended cross-complaint was filed. A motion to strike under the anti-SLAPP statute is directed at a specific "claim" or "claim[s]" alleged in a specific complaint. (§ 425.16; Lam v. Ngo (2001) 91 Cal.App.4th 832, 841 ["In context, the 'special' anti-SLAPP . . . motion is directed at a particular document, namely 'the complaint.'"].) When a party indicates an intent to amend its operative complaint, the claims alleged in that complaint become a moving target, and a party seeking to file a motion directed at those claims (such as a demurrer or anti-SLAPP motion) is stymied in its efforts to do so. (See The Home Ins. Co. v. Superior Court (2005) 34 Cal.4th 1025, 1029, fn. 2 [observing how the "changing nature" of the legal proceedings can "present[] a 'moving target'" that "delay[s] . . . resolution of the issue"].) Indeed, this is why the filing of an amended complaint renders moot a demurrer aimed at the prior complaint (Sylmar Air Conditioning v. Pueblo Contracting Services (2004) 122 Cal.App.4th 1049, 1054-1055; State Compensation Ins. Fund v. Superior Court (2010) 184 Cal.App.4th 1124, 1131) and why courts act within their discretion in denying leave to amend pleadings in order to avoid such "moving targets" (Payton v. CSI Electrical Contractors, Inc. (2018) 27 Cal.App.5th 832, 850-851). In this case, the composition of Lopez's and Rodriguez's operative claims were arguably in flux from May or June 2017 (when Secret Recipes's lawyer sent a letter to Lopez's and Rodriguez's lawyers pointing out perceived defects in the cross-complaint, and Lopez's and Rodriguez's lawyers indicated a willingness to file an amended complaint) to January 9, 2018 (when the court authorized Lopez and Rodriguez to file a specific first amended cross-complaint). Because the claims were in flux and uncertain, Secret Recipes had a viable reason for holding off in filing an anti-SLAPP motion aimed at striking certain claims. This justification also means that the purpose of Secret Recipes's delay was not to make tactical use of the anti-SLAPP statute's stay provisions; if anything, Lopez and Rodriguez are the parties prolonging the stay by seeking appellate review of the dismissal of only a subset of their claims.
What is more, the remaining factors do not outweigh Secret Recipes's justification for waiting. Although the record, as Lopez and Rodriguez correctly assert, reflects "extensive law-and-motion practice and discovery" in the last half of 2017 and early 2018, and the associated incursion of "substantial expense," and reflects that Secret Recipes answered "ready for trial," the record does not reflect that any of the motions or discovery litigation (or its associated expense) or Secret Recipes's trial readiness have anything to do with the cross-complaint. All of this activity and readiness for trial could just as easily pertain to Secret Recipes's still-pending main action. Indeed, it is far more likely to have pertained to the main action given that the content of the operative cross-complaint was in flux this whole time, rendering discovery and motion practice pertaining to such claims all but impossible where, as here, the main action and cross-complaint rest on entirely different facts. A main action and cross-complaint are two separate actions (Westamerica Bank v. MBG Industries, Inc. (2007) 158 Cal.App.4th 109, 134), potentially with two separate trial dates (§ 1048, subd. (b)), and the record in this case is silent as to which action these docket entries pertain. Contrary to Lopez's and Rodriguez's suggestion and proffered gap-filling explanations in their appellate briefs, we must construe this silence in the record to support the trial court's ruling, not to undermine it. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564 ["All intendments and presumptions are indulged to support [the lower court's order] on matters as to which the record is silent . . . ."].)
Lopez and Rodriguez resist this conclusion with three categories of arguments.
First, they assert that the trial court abused its discretion by giving insufficient weight to the "primary purpose of the anti-SLAPP statute['s]" timeliness requirement of "ensur[ing] the prompt resolution of lawsuits" (Platypus, supra, 166 Cal.App.4th at p. 776), as evidenced by the fact that the court entertained the untimely motion and did not expressly mention this policy consideration. We reject this assertion. While a trial court certainly abuses its discretion by "misunderstand[ing] or misappl[ying] the applicable legal standard" (Hernandez v. Amcord, Inc. (2013) 215 Cal.App.4th 659, 680), the court in this case did not do so. Although the court did not expressly recite the "prompt resolution" policy underlying the anti-SLAPP statute's timeliness requirement, the court was necessarily applying that policy when it found Secret Recipes's motion to be untimely in the first place and elected to exercise its discretion to allow the untimely filing only after Secret Recipes proffered a sufficient justification to overcome its tardiness, which is one of the very factors of the test developed to guide trial courts in how to exercise their discretion when implementing the anti-SLAPP statute's timeliness requirement and its underlying policy. And to the extent that Lopez and Rodriguez suggest that filing an anti-SLAPP motion filed more than 60 days after a complaint "is ipso facto too late," we reject that suggestion as fundamentally inconsistent with the plain language of section 425.16 that grants trial courts the discretion to entertain untimely motions. It is also inconsistent with the precedent construing that statute, which has found that a trial court abuses its discretion in entertaining an untimely motion only where the party making the untimely motion has offered no justification for the late filing beyond the potential merit of the motion itself. (Platypus, at pp. 784-785; San Diegans, supra, 240 Cal.App.4th at p. 625 [stipulation changing one party's status from defendant to real party in interest was "not material" to the party's substantive liability and thus provided no justification for that party's untimely motion].)
Second, Lopez and Rodriguez contend that the trial court erred in its analysis of the pertinent factors. They start by positing that the moving target nature of their cross-complaint is legally irrelevant and that Secret Recipes proceeded "at [its] own risk" by not filing its motion despite the uncertainty surrounding the operative cross-complaint. We have already rejected this assertion. Lopez and Rodriguez next posit that there was insufficient evidence that their cross-complaint was a moving target. The record does not support a finding, they argue, that the parties were engaged in "cooperative negotiation" to remove claims from the initial cross-complaint to avoid anti-SLAPP problems. They are right, but the trial court made no such finding. Instead, the court found that the parties were engaged in "good faith meet and confer efforts regarding the substance of the [cross-]complaint," and this finding is supported by Secret Recipes's letter explaining perceived faults with some of the original cross-complaint's claims. Whether those faults pertained specifically to the anti-SLAPP statute does not matter because they prompted Lopez and Rodriguez to make efforts to draft a new cross-complaint, and those efforts are what put the claims at issue in the cross-action in flux. Lopez and Rodriguez also argue that Secret Recipes had no reason to wait for the formal filing of their first amended cross-complaint because Lopez and Rodriguez filed a copy of that pleading with the court in July 2017 and ended up filing the identical pleading in January 2018. This argument impermissibly relies on hindsight: Until Lopez and Rodriguez filed their first amended cross-complaint in January 2018, they could have added, dropped or modified the version filed in July 2017. (See Newport Harbor, supra, 4 Cal.5th at p. 655 [the plaintiff has control over what to allege in an amended complaint].) It was not until January 2018 that the potentially moving target became fixed. And contrary to what Lopez and Rodriguez assert, this result is not in our view perverse, let alone (as they also assert) "Orwellian in its perversity."
It is not clear from the record why the parties did not treat the first amended cross-complaint filed with the trial court on July 10, 2017 as effective. (See § 472, subd. (a).) However, it is abundantly clear that the parties and the trial court regarded it as being ineffective, as the parties felt they subsequently needed a stipulation to file that pleading, Lopez and Rodriguez felt it necessary to file a motion for leave to file the first amended cross-complaint, and the trial court felt it necessary to grant that motion.
Third, Lopez and Rodriguez urge that the trial court was procedurally without authority to entertain Secret Recipes's untimely anti-SLAPP motion because Secret Recipes never filed a formal request for leave to file its untimely motion. We reject this assertion as inconsistent with the anti-SLAPP statute and the cases construing that statute, neither of which imposes such a procedural requirement. (§ 425.16, subd. (f); Hewlett-Packard, supra, 239 Cal.App.4th at p. 1187 [observing that trial courts may so require, but may also take a more "streamlined approach"]; Chitsazzadeh v. Kramer & Kaslow (2011) 199 Cal.App.4th 676, 684 [failure to seek leave not fatal].)
In light of our conclusion that the trial court did not abuse its discretion in entertaining the motion, we have no occasion to address Lopez's and Rodriguez's arguments that they were prejudiced by its ruling.
II. The Merits
A. Protected activity
As noted above, the anti-SLAPP statute applies only to claims that "arise[] from protected activity." (Rusheen, supra, 37 Cal.4th at p. 1056.) "'[W]hether [activity] is protected under the anti-SLAPP statute' turns 'not [on] First Amendment law, but [rather on] the statutory definitions in . . . section 425.16, subdivision (e).' (City of Montebello v. Vasquez (2016) 1 Cal.5th 409, 422 . . .)." (Mission Beverage Co. v. Pabst Brewing Co., LLC (2017) 15 Cal.App.5th 686, 698.) As pertinent here, subdivision (e) of section 425.16 defines protected activity to include "any written or oral statement or writing made in connection with an issue under consideration or review by a . . . judicial body . . . ." (§ 425.16, subd. (e)(2).)
The trial court correctly determined that the three claims it dismissed all arose out of Secret Recipes's recording of the notices of lis pendens tied to the main action against Lopez and Rodriguez. Because "[t]he filing of a notice of lis pendens falls squarely within" the anti-SLAPP statute's definition of "protected activity" (Manhattan Loft, LLC v. Mercury Liquors, Inc. (2009) 173 Cal.App.4th 1040, 1050; Park 100 Investment Group II, LLC v. Ryan (2009) 180 Cal.App.4th 795, 805-806; Salma v. Capon (2008) 161 Cal.App.4th 1275, 1285; Zhang v. Jenevein (2019) 31 Cal.App.5th 585, 595), all three claims arise from protected activity.
It goes without saying that Secret Recipes's filing of the main action, which also underlies some of these first three claims, also constitutes protected activity. (E.g., Trapp v. Naiman (2013) 218 Cal.App.4th 113, 120 ["'Filing a lawsuit is an act in furtherance of the constitutional right of petition, regardless of whether it has merit.'"] (Trapp).)
Lopez and Rodriguez proffer two reasons why, in their view, Secret Recipes's recording of the lis pendens is not protected activity. First, they assert that the notices did not comply with the statutory requirements for a valid notice of lis pendens: The first notice was not tied to an "action in which [a] real property claim is alleged" (as required by section 405.20) and the second notice was filed without leave of court (as required by section 405.36 once a first notice has been expunged). It is well settled, however, that otherwise protected activity does not become unprotected "merely by showing [a] statutory violation." Mendoza v. ADP Screening & Selection Services, Inc. (2010) 182 Cal.App.4th 1644, 1654.) Otherwise protected activity becomes unprotected only if it is "illegal as a matter of law" and, even then, only if that illegality is conceded or "'conclusively shown by the evidence.'" (Finton Construction, Inc. v. Bidna & Keys, APLC (2015) 238 Cal.App.4th 200, 210; Flatley v. Mauro (2006) 39 Cal.4th 299, 316, 320 (Flatley).) There has been no concession or conclusive showing of illegality in this case. Second, Lopez and Rodriguez cite to the statutory provision that excepts "[a] recorded lis pendens" from our state's litigation privilege "unless [the notice] identifies an action previously filed with a court of competent jurisdiction which affects the title or right of possession of real property." (Civ. Code, § 47, subd. (b)(4).) This exception is irrelevant to the applicability of the anti-SLAPP statute. Although the litigation privilege and anti-SLAPP statute are "related" (Flatley, at p. 322), they are "not substantively the same" (id., at p. 323). More to the point, the litigation privilege does not "operate as a limitation on the scope of the anti-SLAPP statute" (id., at p. 325), particularly where, as here, the plain language of the anti-SLAPP statute embraces the recording of a lis pendens irrespective of compliance with its statutory prerequisites.
B. Minimal merit
Once the party making an anti-SLAPP motion establishes that a claim arises from protected activity, the nonmoving party then has the burden of showing that the claim has "minimal merit" (Navellier, supra, 29 Cal.4th at p. 94), and it satisfies that burden by making a "prima facie factual showing sufficient to sustain a favorable judgment" on that claim (Baral, supra, 1 Cal.5th at pp. 384-385). In assessing the sufficiency of this showing, a court is to "consider the pleadings, and supporting and opposing affidavits" (§ 425.16, subd. (b)(2)), but must "'"accept as true the evidence favorable to the [nonmoving party] [citation] and evaluate the [moving party's] evidence only to determine if it has defeated that submitted by the [nonmoving party] as a matter of law."'" (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820.) If the nonmoving party fails to satisfy its burden, the pertinent claim must be dismissed. (Barry v. State Bar of California (2017) 2 Cal.5th 318, 321.)
The trial court correctly determined that Lopez and Rodriguez did not carry their burden of showing that the three dismissed claims had minimal merit. Each of those three claims—for intentional interference with a contractual relationship, intentional interference with a prospective economic advantage, and negligent interference with a prospective economic advantage—requires proof that the defendant (or, in this case, the cross-defendant) "kn[ew]" of the "contract" or "prospective economic advantage" at the time it engaged in conduct disrupting that contract or advantage. (Redfearn v. Trader Joe's Co. (2018) 20 Cal.App.5th 989, 997, 1005.) To satisfy their burden, Lopez and Rodriguez were required to adduce "'competent admissible evidence'" of this element. (Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, 940 (Sweetwater).) The trial court concluded they did not, and we agree.
Lopez and Rodriguez insist that they did introduce evidence that Secret Recipes (or its principals, Koygani and Grigorian) knew of the contract or prospective advantage with Rabadi at the time they allegedly disrupted it. Lopez and Rodriguez make two arguments in this regard.
First, they point to the allegation in their unverified first amended cross-complaint that Secret Recipes "had full knowledge of [Lopez's and Rodriguez's] business relationship with Rabadi." But it is well settled that allegations in a complaint—whether that complaint is verified or unverified—are insufficient to carry a nonmoving party's burden under the anti-SLAPP statute. (Sweetwater, supra, 6 Cal.5th at p. 940; Navellier v. Sletten (2003) 106 Cal.App.4th 763, 776; Cole v. Patricia A. Meyer & Associates, APC (2012) 206 Cal.App.4th 1095, 1115.)
Second, Lopez and Rodriguez point to three portions of the record that they claim establish the requisite knowledge. They point to a declaration prepared by McBride, but the declaration asserts only that she learned of the lis pendens; it does not speak to whether Koygani and Grigorian knew of Lopez's and Rodriguez's dealings with Rabadi when they filed the lis pendens notices. They point to a declaration prepared by their attorney asserting that Koygani and Grigorian "went to . . . McBride . . . and told her not to consent to the assignment of the lease to . . . Rabadi," but that declaration does not constitute admissible evidence because it does not explain how the attorney was privy to this conversation, such that the statement (1) lacks foundation and (2) was relayed to the attorney from a third party, which renders the attorney's recounting hearsay. (Evid. Code, §§ 1400-1401, 1200.) They finally point to testimony from the arbitration between themselves and McBride, but acknowledge that they did not make this testimony part of the record below or in this court, so it cannot be used to overturn the trial court's ruling.
In light of our conclusion that the trial court properly dismissed these claims, we necessarily reject Lopez's and Rodriguez's argument that the trial court's award of attorney fees must be reversed due to error in granting the anti-SLAPP motion.
III. Attorney Fees
When a party appeals a trial court's dismissal of claims under the anti-SLAPP statute and is unsuccessful in that appeal, the anti-SLAPP statute authorizes the award of attorney fees and costs to the prevailing party on appeal. (Wilkerson v. Sullivan (2002) 99 Cal.App.4th 443, 448; GeneThera, Inc. v. Troy & Gould Professional Corp. (2009) 171 Cal.App.4th 901, 910; Trapp, supra, 218 Cal.App.4th at p. 122; see generally § 425.16, subd. (c).) Because Secret Recipes has requested such fees and Lopez and Rodriguez have offered no argument in opposition, we conclude that Secret Recipes is entitled to its costs and attorney fees on appeal. The amount of this award is to be determined by the trial court upon motion by Secret Recipes. (City of Alhambra v. D'Ausilio (2011) 193 Cal.App.4th 1301, 1310; Carpenter & Zuckerman, LLP v. Cohen (2011) 195 Cal.App.4th 373, 384.)
DISPOSITION
The order partially granting Secret Recipes's anti-SLAPP motion is affirmed. Secret Recipes is entitled to its costs and attorney fees on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
/s/_________, J.
HOFFSTADT We concur: /s/_________, P.J.
LUI /s/_________, J.
ASHMANN-GERST