Opinion
NOT TO BE PUBLISHED
APPEALS from orders of the Superior Court of San Diego County No. 37-2008-00095728-CU-BT-CTL, Timothy B. Taylor, Judge.
McDONALD, J.
Defendant Dixieline Builders Fund Control, Inc., (Dixieline) appeals an order denying its Code of Civil Procedure section 425.16 motion, commonly known as an anti-SLAPP (strategic lawsuit against public participation) motion, to dismiss plaintiff Patrick Tropio's complaint that alleges causes of action for defamation, intentional interference with contractual relations, and intentional interference with prospective economic advantage. On appeal, Dixieline contends the trial court erred by: (1) concluding that its alleged conduct underlying Tropio's causes of action was not in furtherance of its exercise of its constitutional right to free speech in connection with a public issue or an issue of public interest within the meaning of section 425.16, subdivision (e)(4); and (2) not considering its new section 425.16, subdivision (e)(2), argument and evidence that it first presented in or with its reply brief filed in the trial court in support of the motion. Tropio filed a cross-appeal contending the trial court abused its discretion by denying his request for an award of attorney fees incurred in opposing Dixieline's anti-SLAPP motion.
All further statutory references are to the Code of Civil Procedure unless otherwise specified.
FACTUAL AND PROCEDURAL BACKGROUND
In 2003, Tropio became an employee of First Republic Bank (Bank) and managed client accounts. During the following five-year period, he was Bank's largest producer of accounts in San Diego. In early 2007, Tropio, Jason Kaimer, and Lennie Alickman assumed responsibility for managing Dixieline's account with Bank. Among other services, Bank provided checking-related services to Dixieline. Apparently because of federal banking regulations known as "Regulation Q" (12 C.F.R. § 217 et seq.; see also 12 U.S.C. § 371a), Bank could not pay Dixieline interest on its checking account deposits, but instead awarded Dixieline "earnings credits" pursuant to which Bank would pay Dixieline for certain banking-related expenses it incurred.
In November 2007, Dixieline submitted to Bank for payment certain self-generated invoices for banking-related expenses it purportedly incurred over the preceding several months. Based on Regulation Q, Tropio rejected those invoices, and subsequent self-generated or internal invoices, submitted by Dixieline for payment using accrued earnings credits. During 2008, Tropio and Kaimer communicated to Dixieline's representatives Bank's policy regarding self-generated invoices under Regulation Q, as well as Bank's 90-day limit for using accrued earnings credits. On August 20, Dixieline submitted to Bank invoices for payment of second quarter expenses. On August 25, Tropio informed Dixieline of Bank's decision to deny payment of those invoices. Dixieline withdrew its multimillion dollar deposits from Bank. On August 26, Cathy Osberg, Dixieline's president, and Don Polich, its chief financial officer, went to San Francisco and met with Margaret Mak, Bank's executive director of preferred banking. Joe Petitti, a Bank executive vice president, apparently participated in the meeting via videoconferencing. On or about August 28, Mr. Mena, Bank's senior managing director (and apparently Tropio's supervisor), told Tropio that he (Tropio) "took a beating" at the San Francisco meeting and that Dixieline "threw" Tropio "under the bus." On September 15, Bank terminated Tropio's employment. Mena gave Tropio a one-word explanation for his termination: "Dixieline." Shortly after Bank terminated Tropio's employment, Osberg, on behalf of Dixieline, apparently called Bank to reestablish its accounts with Bank. Bank declined her offer.
On or about March 6, 2009, Tropio filed, in the United States District Court for the Southern District of California, a first amended complaint against Dixieline, alleging causes of action for defamation, intentional interference with contractual relations, and intentional interference with prospective economic advantage. Tropio alleged, on information and belief, that Dixieline, through Osberg and Polich, made false and defamatory statements to Bank management about him, with the intent to cause, and did cause, Bank to terminate his employment. The federal court remanded the case to the San Diego County Superior Court.
On June 17, 2009, Dixieline filed an anti-SLAPP motion to strike Tropio's complaint, arguing its alleged statements underlying Tropio's causes of action were made in connection with a public issue or an issue of public interest (i.e., Regulation Q) and therefore were protected by section 425.16, subdivision (e)(4). On or about September 11, Tropio filed his opposition brief and supporting papers. Tropio argued that Dixieline's alleged defamatory statements to Bank that he lied, was incompetent, and/or had mishandled its account were private statements involving a private dispute and did not meet the public issue requirement of section 425.16, subdivision (e)(4). Tropio also requested an award of attorney fees incurred in defending against Dixieline's motion. On or about September 18, Dixieline filed its reply brief, restating its section 425.16, subdivision (e)(4), argument and adding a new argument that its alleged statements were protected as prelitigation conduct pursuant to section 425.16, subdivision (e)(2). In support of its reply, Dixieline submitted a supplemental declaration of Osberg. Tropio objected to both the new argument raised in Dixieline's reply and the new evidence submitted in its support (i.e., Osberg's supplemental declaration). Tropio also submitted his own supplemental declaration.
On September 25, 2009, following arguments of counsel, the trial court confirmed its tentative ruling and denied both Dixieline's anti-SLAPP motion and Tropio's request for attorney fees. The court sustained Tropio's objections to Dixieline's new argument in its reply brief on due process grounds and to Osberg's supplemental declaration as untimely filed. It did not consider Tropio's supplemental declaration because it was untimely filed. On the substantive anti-SLAPP issue, the trial court stated:
"Based on a review of the amended complaint and the opposing affidavits, the court finds that the principal thrust of the complaint is defamatory comments allegedly made during conversations between bank representatives and Dixieline representatives, which allegedly gave rise to a decision to end [Tropio's] employment at the bank. Any conversation about Reg. Q (assertedly an issue of public concern) was merely incidental or collateral to [Dixieline's] alleged acts underlying [Tropio's] cause of action: a business conversation between bankers and a bank customer. Accordingly, Dixieline has not made the threshold showing that the challenged cause[s] of action [are ones] 'arising from' a protected activity, and there is no occasion to reach the second part of the SLAPP analysis. The court's decision is consistent with the recent cases holding that actions taken for the furtherance of a business interest are not subject to the anti-SLAPP statute."
The court also denied Tropio's request for an award of attorney fees pursuant to section 425.16, subdivision (c), finding Dixieline's anti-SLAPP motion was not frivolous or intended solely to cause unnecessary delay.
Dixieline timely filed a notice of appeal challenging the denial of its anti-SLAPP motion. Tropio timely filed a notice of cross-appeal challenging the denial of his request for an award of attorney fees.
Section 425.16, subdivision (i) provides: "An order granting or denying a special motion to strike [i.e., an anti-SLAPP motion] shall be appealable under Section 904.1."
DISCUSSION
I
Anti-SLAPP Law Generally
"A special motion to strike under section 425.16, the so-called anti-SLAPP statute, allows a defendant to gain early dismissal of a lawsuit that qualifies as a SLAPP." (Siam v. Kizilbash (2005) 130 Cal.App.4th 1563, 1568.) The anti-SLAPP statute provides: "A cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim." (§ 425.16, subd. (b)(1).) "The purpose of the statute is to encourage participation in matters of public significance by allowing a court to promptly dismiss unmeritorious actions or claims brought to chill another's valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances. ([§ 425.16, subd. (a).]) In furtherance of this purpose, the anti-SLAPP statute is to be construed broadly. (Ibid.)" (Ramona Unified School Dist. v. Tsiknas (2005) 135 Cal.App.4th 510, 518.)
"Under [section 425.16], the party moving to strike a cause of action has the initial burden to show that the cause of action 'aris[es] from [an] act... in furtherance of the [moving party's] right of petition or free speech.' [Citations.] Once that burden is met, the burden shifts to the opposing party to demonstrate the 'probability that the plaintiff will prevail on the claim.' [Citations.] 'To satisfy this [second] prong, the plaintiff must "state[] and substantiate[] a legally sufficient claim." [Citation.] "Put another way, the plaintiff 'must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.' " ' " (Zamos v. Stroud (2004) 32 Cal.4th 958, 965.)
Regarding the first prong of the anti-SLAPP law, a defendant meets the burden of showing a plaintiff's cause of action arises from a protected activity by showing the acts underlying that cause of action are within one of four categories of conduct, including "any... 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).) In considering a particular cause of action, "we disregard the labeling of the claim [citation] and instead 'examine the principal thrust or gravamen of a plaintiff's cause of action to determine whether the anti-SLAPP statute applies' and whether the trial court correctly ruled on the anti-SLAPP motion. [Citation.] We assess the principal thrust by identifying '[t]he allegedly wrongful and injury-producing conduct... that provides the foundation for the claim.' [Citation.] If the core injury-producing conduct upon which the plaintiff's claim is premised does not rest on protected speech or petitioning activity, collateral or incidental allusions to protected activity will not trigger application of the anti-SLAPP statute." (Hylton v. Frank E. Rogozienski, Inc. (2009) 177 Cal.App.4th 1264, 1272 (Hylton).) "[A] defendant in an ordinary private dispute cannot take advantage of the anti-SLAPP statute simply because the complaint contains some references to speech or petitioning activity by the defendant." (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 188.) "[W]hen the allegations referring to arguably protected activity are only incidental to a cause of action based essentially on nonprotected activity, collateral allusions to protected activity should not subject the cause of action to the anti-SLAPP statute." (Ibid.)
On appeal, we review de novo, or independently, the trial court's order denying Dixieline's anti-SLAPP motion to strike Tropio's complaint alleging three causes of action against it. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3; Hylton, supra, 177 Cal.App.4th at p. 1271; Bernardo v. Planned Parenthood Federation of America (2004) 115 Cal.App.4th 322, 339.) We review independently the trial court's determination that Dixieline did not meet its threshold burden to show the first anti-SLAPP prong was satisfied. (Governor Gray Davis Com. v. American Taxpayers Alliance (2002) 102 Cal.App.4th 449, 456.) "In deciding whether the initial 'arising from' [first prong] requirement is met, a court considers 'the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.' (§ 425.16, subd. (b).)" (Navellier v. Sletten (2002) 29 Cal.4th 82, 89.) If we conclude Dixieline has not met its first prong burden to make a prima facie showing that Tropio's complaint is subject to section 425.16, we need not address whether Tropio met his second prong burden. (Hylton, at p. 1271.)
II
Section 425.16, subdivision (e)(4)
Dixieline asserts the trial court erred by concluding it did not meet its first prong burden to show its alleged conduct underlying Tropio's complaint was in furtherance of the exercise of its constitutional right of free speech in connection with a public issue or an issue of public interest pursuant to section 425.16, subdivision (e)(4).
A
Dixieline filed an anti-SLAPP motion to strike Tropio's complaint against it, arguing its alleged statements underlying Tropio's causes of action were made in connection with a public issue or an issue of public interest (i.e., Regulation Q) and therefore were within the ambit of section 425.16, subdivision (e)(4). Dixieline argued: "Because the alleged statements upon which [Tropio's] claims are based concern the manner in which all commercial deposit accounts at a large, national bank are governed, they are protected by the anti-SLAPP statute as a matter of 'public interest' and/or 'public concern' [under section 425.16, subdivision (e)(4)]." In support of its argument, Dixieline cited certain allegations in Tropio's complaint, including its alleged defamatory statements that Tropio lied to it or was incompetent regarding payment of improper "sham" invoices for earned credits and that he was culpable in paying its illegal or "sham" invoices in violation of Regulation Q. Dixieline argued those alleged statements it made to Bank concerned Bank's compliance with Regulation Q, or violation thereof, which "is a serious issue that could have enormous repercussions for thousands of depositors." Furthermore, Dixieline argued whether it submitted improper invoices under Regulation Q was a matter of public interest.
In opposing Dixieline's anti-SLAPP motion, Tropio argued that Dixieline had focused on only a few of his complaint's allegations and, in any event, those allegations focused more on Bank's conduct in purportedly violating Regulation Q, rather than on Dixieline's conduct in making defamatory statements regarding Tropio. Furthermore, he argued that the gravamen of his complaint was Dixieline's defamatory statements regarding him and those statements did not concern a matter of public interest. The trial court denied Dixieline's anti-SLAPP motion, finding it had not met its burden to show its statements were made in connection with a public issue or an issue of public interest within the meaning of section 425.16, subdivision (e)(4).
B
"The most commonly articulated definitions of 'statements made in connection with a public issue' [under section 425.16, subdivision (e)(4)] focus on whether (1) the subject of the statement or activity precipitating the claim was a person or entity in the public eye; (2) the statement or activity precipitating the claim involved conduct that could affect large numbers of people beyond the direct participants; and (3) whether the statement or activity precipitating the claim involved a topic of widespread public interest. [Citations.] As to the latter, it is not enough that the statement refer to a subject of widespread public interest; the statement must in some manner itself contribute to the public debate." (Wilbanks v. Wolk (2004) 121 Cal.App.4th 883, 898, italics added.) "The definition of 'public interest' within the meaning of the anti-SLAPP statute has been broadly construed to include not only governmental matters, but also private conduct that impacts a broad segment of society and/or that affects a community in a manner similar to that of a governmental entity." (Damon v. Ocean Hills Journalism Club (2000) 85 Cal.App.4th 468, 479.) However, "in cases where the issue is not of interest to the public at large, but rather to a limited, but definable[, ] portion of the public ([e.g., ] a private group, organization, or community), the constitutionally protected activity must, at a minimum, occur in the context of an ongoing controversy, dispute or discussion, such that it warrants protection by a statute that embodies the public policy of encouraging participation in matters of public significance." (Du Charme v. International Brotherhood of Electrical Workers (2003) 110 Cal.App.4th 107, 119, fn. omitted [court held union/employer's alleged defamatory statements regarding its termination of plaintiff's employment was presumably of interest to union members, but was unconnected to any discussion, debate, or controversy and therefore not an issue of public interest] (Du Charme); cf. Rivero v. American Federation of State, County and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913, 924 [court held union's alleged libelous statements regarding plaintiff's supervision of eight custodians were not a matter of public interest, noting "unlawful workplace activity below some threshold level of significance is not an issue of public interest, even though it implicates a public policy"].)
Regarding the meaning of "public interest" under section 425.16, subdivision (e)(4), the court in Weinberg v. Feisel (2003) 110 Cal.App.4th 1122 (Weinberg) stated:
"[T]he statute requires that there be some attributes of the issue which make it one of public, rather than merely private, interest. A few guiding principles may be derived from decisional authorities. First, 'public interest' does not equate with mere curiosity. [Citations.] Second, a matter of public interest should be something of concern to a substantial number of people. [Citation.] Thus, a matter of concern to the speaker and a relatively small, specific audience is not a matter of public interest. [Citations.] Third, there should be some degree of closeness between the challenged statements and the asserted public interest [citation]; the assertion of a broad and amorphous public interest is not sufficient [citation]. Fourth, the focus of the speaker's conduct should be the public interest rather than a mere effort 'to gather ammunition for another round of [private] controversy....' [Citation.] Finally, 'those charged with defamation cannot, by their own conduct, create their own defense by making the claimant a public figure.' [Citation.] A person cannot turn otherwise private information into a matter of public interest simply by communicating it to a large number of people." (Id. at pp. 1132-1133, italics added.)
A defendant's accusations that the plaintiff engaged in criminal conduct do not necessarily make those accusations a matter of public interest. (Weinberg, at p. 1135.) In Weinberg, the court concluded defendant did not show the plaintiff's causes of action for libel, slander, and intentional infliction of emotional distress involved an issue of public interest under section 425.16, subdivision (e)(4). (Weinberg, at pp. 1131-1136.) The defendant's accusations that the plaintiff had stolen a token from him while at a token show were published in a token club newsletter to only a limited number of persons (i.e., about 700 club members) and concerned only a private dispute and not an issue of public interest. (Weinberg, supra, 110 Cal.App.4th at pp. 1128-1129, 1134-1136.) Weinberg stated: "In support of his special motion to strike, defendant did not present any evidence to show that plaintiff was anything other than a private, anonymous token collector; that their dispute was anything other than a private controversy; or that the communications were made to anyone other than a small group of other private parties." (Id. at p. 1132.) The court concluded: "Defendant has failed to demonstrate that his dispute with plaintiff was anything other than a private dispute between private parties. The fact that defendant allegedly was able to vilify plaintiff in the eyes of at least some people establishes only that he was at least partially successful in his campaign of vilification; it does not establish that he was acting on a matter of public interest." (Id. at p. 1134, italics added.)
The defendant also published his accusation against the plaintiff in a letter sent to over 20 collectors. (Weinberg, supra, 110 Cal.App.4th at p. 1128.)
C
Based on our independent review of the record, we conclude Dixieline has not carried its burden to show its alleged conduct underlying Tropio's complaint was in furtherance of its constitutional right of free speech in connection with a public issue or an issue of public interest within the meaning of section 425.16, subdivision (e)(4). Dixieline's alleged conduct underlying the causes of action in Tropio's complaint was its alleged defamatory statements made to Bank regarding his job performance that resulted in the termination of his employment by Bank. Tropio's complaint alleged that Dixieline, through Osberg and Polich, made false and defamatory statements to Bank management about him, with the intent to cause, and did cause, Bank to terminate his employment. All three causes of action specifically alleged that Dixieline made false and defamatory statements to Bank's management that Tropio was dishonest, incompetent, and unethical and/or engaged in criminal conduct, which statements directly resulted in the termination of his employment by Bank. Those alleged defamatory statements by Dixieline were the alleged wrongful and injury-producing conduct that provided the foundation for, and therefore constituted the "principal thrust or gravamen" of, Tropio's causes of action against it. (Hylton, supra, 177 Cal.App.4th at p. 1272.) Assuming arguendo those alleged statements involved Dixieline's exercise of its constitutional right of free speech, we nevertheless conclude those alleged statements were not made "in connection with a public issue or an issue of public interest." (§ 425.16, subd. (e)(4).)
In so concluding, we note Dixieline's alleged statements to Bank regarding Tropio's job performance were not directed toward a person in the public eye, did not involve conduct that could affect large numbers of people beyond the direct participants, and did not involve a topic of widespread public interest. (Wilbanks v. Wolk, supra, 121 Cal.App.4th at p. 898.) Rather, Dixieline's alleged defamatory statements to Bank regarding Tropio involved merely "a private dispute between private parties." (Weinberg, supra, 110 Cal.App.4th at p. 1134, italics added.) As shown by the record on appeal, that dispute was between two private parties (i.e., Dixieline and Bank) regarding a private matter (i.e., Dixieline's claim against Bank for payment of earned credits based, in large part, on Tropio's representations or misrepresentations to Dixieline made on behalf of Bank). To the extent Dixieline's alleged defamatory statements regarding Tropio during that private dispute tangentially or collaterally involved Regulation Q, those statements did not in any, much less a substantial, manner contribute to any ongoing public debate on the proper interpretation of Regulation Q. (Wilbanks, at p. 898; Du Charme, supra, 110 Cal.App.4th at p. 119.) The record shows Dixieline's alleged defamatory statements (made by its two representatives, Osberg and Polich), including its ideas regarding the proper interpretation of Regulation Q, were not communicated to any persons other than Bank's two management representatives (i.e., Mak and Petitti). (Weinberg, at p. 1132.) Dixieline's assertion of a broad and amorphous public interest in Regulation Q is insufficient in itself to establish a public interest under section 425.16, subdivision (e)(4). (Ibid.) Based on the record in this case, there was an insufficient degree of closeness between Dixieline's alleged defamatory statements (made in furtherance of its private dispute with Bank) and any asserted public interest in Regulation Q. (Ibid.)
Furthermore, the focus of Dixieline's alleged defamatory statements was to further its private interest in obtaining payment from Bank of accrued earned credits, rather than to further any public interest in the proper interpretation of Regulation Q. (Weinberg, supra, 110 Cal.App.4th at pp. 1132-1133.) We conclude Dixieline has not carried its burden to show its alleged defamatory statements were made in furtherance of its constitutional right of free speech in connection with a public issue or an issue of public interest within the meaning of section 425.16, subdivision (e)(4). (Weinberg, at pp. 1132-1134; Wilbanks v. Wolk, supra, 121 Cal.App.4th at p. 898; Du Charme, supra, 110 Cal.App.4th at p. 119; Rivero v. American Federation of State, County and Municipal Employees, AFL-CIO, supra, 105 Cal.App.4th at p. 924.) None of the cases cited by Dixieline or its arguments on appeal persuade us to reach a contrary conclusion. We reject its assertion that its alleged defamatory statements were made "in connection with" a public issue or an issue of public interest because Tropio's complaint alleged that Dixieline engaged in a scheme to violate Regulation Q and that it accused him of being complicit with that scheme.
III
Section 425.16, subdivision (e)(2)
Dixieline asserts the trial court erred by not considering its new section 425.16, subdivision (e)(2), argument and evidence first presented in or with its reply brief.
Section 425.16, subdivision (e)(2), provides that "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" is considered 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 as used in section 425.16.
A
Dixieline's anti-SLAPP motion argued that its alleged statements underlying Tropio's causes of action were made in connection with a public issue or an issue of public interest (i.e., Regulation Q) and therefore were protected by section 425.16, subdivision (e)(4). Tropio's opposition papers were directed to refute that argument. Dixieline's reply brief restated its section 425.16, subdivision (e)(4), argument and then added a new argument that its alleged statements were protected as prelitigation conduct pursuant to section 425.16, subdivision (e)(2). In support of its reply, Dixieline submitted a supplemental declaration of Osberg. Tropio objected to both the new argument raised in Dixieline's reply brief and the new evidence it submitted in its support (i.e., Osberg's supplemental declaration). Tropio also submitted his own supplemental declaration.
In denying Dixieline's anti-SLAPP motion, the trial court sustained Tropio's objections to Dixieline's new argument in its reply brief on due process grounds and to Osberg's supplemental declaration as untimely filed. It also did not consider Tropio's supplemental declaration because it was untimely filed.
B
Although the parties have not cited, and we are unaware of, any published anti-SLAPP cases that address a trial court's refusal to consider new argument and evidence first presented to the trial court in a reply brief, there are analogous cases that provide us with guidance in reviewing the trial court's ruling in this case sustaining Tropio's objections to Dixieline's new argument and evidence. In the context of a summary judgment motion, one court noted "the inclusion of additional evidentiary matter with the reply should only be allowed in the exceptional case." (Plenger v. Alza Corp. (1992) 11 Cal.App.4th 349, 362, fn. 8, italics added.) In the circumstances of that case, Plenger concluded the trial court did not abuse its discretion by considering untimely filed evidence because the plaintiffs did not object to it, did not request a continuance, and did not contend on appeal that the trial court erred in considering that evidence. (Ibid.) In another summary judgment case, the court concluded the trial court violated the plaintiff's due process rights by considering new evidence the defendant first submitted after the plaintiff's response to the defendant's separate statement of undisputed facts. (San Diego Watercrafts, Inc. v. Wells Fargo Bank (2002) 102 Cal.App.4th 308, 316.) The court stated: "Where a remedy as drastic as summary judgment is involved, due process requires a party be fully advised of the issues to be addressed and be given adequate notice of what facts it must rebut in order to prevail." (Ibid.)
In the context of appeals, courts have concluded issues first raised in a reply brief will not be considered, absent a showing of good cause for the delay. "Consistent with well-established authority, absent justification for failing to present an argument earlier, we will not consider an issue raised for the first time in a reply brief." (Save the Sunset Strip Coalition v. City of West Hollywood (2001) 87 Cal.App.4th 1172, 1181, fn. 3.) The California Supreme Court declined to consider an argument raised for the first time in a reply brief, stating: "Obvious reasons of fairness militate against consideration of an issue raised initially in the reply brief of an appellant." (Varjabedian v. City of Madera (1977) 20 Cal.3d 285, 295, fn. 11.) Another court likewise refused to consider a new issue raised in a reply brief, stating: "Points raised for the first time in a reply brief will ordinarily not be considered, because such consideration would deprive the respondent of an opportunity to counter the argument." (American Drug Stores, Inc. v. Stroh (1992) 10 Cal.App.4th 1446, 1453.) Another court refused to consider a new issue "because, without good cause, it was not raised until the reply brief." (Neighbours v. Buzz Oates Enterprises (1990) 217 Cal.App.3d 325, 335, fn. 8.) That court quoted one secondary authority's observation: " 'Obvious considerations of fairness in argument demand that the appellant present all of his points in the opening brief. To withhold a point until the closing brief would deprive the respondent of his opportunity to answer it or require the effort and delay of an additional brief by permission. Hence the rule is that points raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before.' " (Ibid.; see also Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 764-765; Sacramento Cable Television v. City of Sacramento (1991) 234 Cal.App.3d 232, 244.) Long ago, the California Supreme Court recognized that new issues raised in reply briefs would be considered only in exceptional cases in which the party has shown in an application "meritorious reasons why the points were not made in the opening brief. Such application might be based upon sickness, inadvertence, or other excusable neglect. But in the case at bar no reason whatever is given for this departure from the ordinary method of presenting a case in this court." (Kahn v. Wilson (1898) 120 Cal. 643, 644.)
C
Applying the above principles to the circumstances in this case, we conclude the trial court did not err by sustaining Tropio's objections to Dixieline's new argument and evidence presented for the first time in its reply brief. In its reply brief (and papers related thereto), Dixieline did not argue, or show, that it had good cause for raising its new section 425.16, subdivision (e)(2), argument in its reply brief and presenting Osberg's supplemental declaration in its support. We conclude the trial court correctly sustained Tropio's objections to Dixieline's new argument and new evidence that were untimely presented, without a good cause showing, for the first time in or with its reply brief. (Plenger v. Alza Corp., supra, 11 Cal.App.4th at p. 362, fn. 8; San Diego Watercrafts, Inc. v. Wells Fargo Bank, supra, 102 Cal.App.4th at p. 316; Save the Sunset Strip Coalition v. City of West Hollywood, supra, 87 Cal.App.4th at p. 1181, fn. 3; Varjabedian v. City of Madera, supra, 20 Cal.3d at p. 295, fn. 11; American Drug Stores, Inc. v. Stroh, supra, 10 Cal.App.4th at p. 1453; Neighbours v. Buzz Oates Enterprises, supra, 217 Cal.App.3d at p. 335, fn. 8; Reichardt v. Hoffman, supra, 52 Cal.App.4th at pp. 764-765; Sacramento Cable Television v. City of Sacramento, supra, 234 Cal.App.3d at p. 244; Kahn v. Wilson, supra, 120 Cal. at p. 644.)
To the extent Dixieline argues on appeal that the trial court erred by not considering its new argument and new evidence because Tropio filed his own new supplemental declaration and could have requested leave to file a surreply or other brief responding to its new argument, Dixieline misconstrues and/or misapplies the applicable standard of review. In this case, the trial court exercised its discretion in sustaining Tropio's objections to Dixieline's new argument and new evidence based on due process and untimeliness grounds, and therefore did not consider Dixieline's new section 425.16, subdivision (e)(2), argument. Dixieline does not cite any case holding that a trial court abuses its discretion by sustaining an opponent's objection to untimely filed arguments and evidence where the proponent of that new argument and evidence did not make a showing of good cause for the untimely filing. Assuming arguendo that Tropio had not objected to Dixieline's new argument and evidence or had Dixieline made a good cause showing for its untimely presentation of its new argument and evidence, a trial court might have reasonably acted within its discretion by considering the argument and evidence after giving Tropio sufficient opportunity to respond to such argument and present his own new evidence. However, those are not the circumstances shown by the record in this case. Because we conclude the trial court did not err by not considering Dixieline's new section 425.16, subdivision (e)(2), argument and evidence first presented in or with its reply brief, we need not address the merits of Dixieline's argument that its alleged statements regarding Tropio were made in connection with presettlement negotiations protected by section 425.16, subdivision (e)(2).
In any event, contrary to Dixieline's assertion on appeal, Tropio's brief opposing its anti-SLAPP motion did not "rewrite" his complaint's allegations, but argued that Dixieline's original supporting evidence showed its alleged conduct merely involved a private dispute between private parties and therefore it did not meet its first prong burden to show its alleged conduct was made in connection with a public issue or an issue of public interest within the meaning of section 425.16, subdivision (e)(4). Accordingly, Tropio's opposition simply refuted Dixieline's section 425.16, subdivision (e)(4), argument and did not present any new issues or evidence that would have required the trial court to allow it to present a new section 425.16, subdivision (e)(2), argument with new supporting evidence in reply to his opposition. None of the cases cited by Dixieline are apposite to this case or persuade us to conclude otherwise.
IV
Denial of Anti-SLAPP Motion
Because we concluded above that the trial court correctly found Dixieline's alleged defamatory statements were not made in connection with a public issue or an issue of public interest within the meaning of section 425.16, subdivision (e)(4), and did not err by refusing to consider Dixieline's new section 425.16, subdivision (e)(2), argument and supporting evidence that were untimely presented, the trial court correctly denied Dixieline's anti-SLAPP motion based on its failure to meet its threshold first prong burden to show that its alleged defamatory statements were protected under section 425.16. Accordingly, we need not address the merits of the "second prong" (i.e., whether Tropio made a prima facie showing he would probably prevail on his causes of action). (Hylton, supra, 177 Cal.App.4th at p. 1271.)
V
CROSS-APPEAL
Attorney Fees
In his cross-appeal, Tropio contends the trial court abused its discretion by denying his request for an award of attorney fees incurred in opposing Dixieline's anti-SLAPP motion.
A
In opposing Dixieline's anti-SLAPP motion, Tropio requested an award of attorney fees incurred in defending Dixieline's frivolous motion. He argued Dixieline had clearly failed to meet its threshold burden to show his causes of action arose from protected activity and therefore section 425.16 had no possible application. The court denied Tropio's request for an award of attorney fees pursuant to section 425.16, subdivision (c), finding Dixieline's anti-SLAPP motion was not frivolous or solely intended to cause unnecessary delay.
B
"The anti-SLAPP statute allows a trial court to award attorney fees against a party who, in its discretion, files a frivolous motion to dismiss." (Foundation for Taxpayer & Consumer Rights v. Garamendi (2005) 132 Cal.App.4th 1375, 1387 (Foundation).) Section 425.16, subdivision (c)(1), provides in pertinent part: "If the court finds that a special motion to strike is frivolous or is solely intended to cause unnecessary delay, the court shall award costs and reasonable attorney's fees to a plaintiff prevailing on the motion, pursuant to section 128.5." That statute's reference to section 128.5 "means a court must use the procedures and apply the substantive standards of section 128.5 in deciding whether to award attorney fees under the anti-SLAPP statute." (Decker v. U.D. Registry, Inc. (2003) 105 Cal.App.4th 1382, 1392, superseded by statute on another ground as noted in Hall v. Time Warner, Inc. (2007) 153 Cal.App.4th 1337, 1349.) "[T]o impose sanctions under section 128.5, there must be a showing the action or tactic was meritless or frivolous and that it was pursued in bad faith, and whether the action is taken in bad faith must be judged by a subjective standard. [Citations.] While the trial court may infer subjective bad faith from the pursuit of a frivolous tactic [citation], 'it is within a court's discretion not to draw that inference if convinced the party was acting in the good faith belief the action was meritorious.' " (Shelton v. Rancho Mortgage & Investment Corp. (2002) 94 Cal.App.4th 1337, 1346.) "A determination of frivolousness requires a finding the motion is 'totally and completely without merit' [citation], that is, 'any reasonable attorney would agree such motion is totally devoid of merit.' " (Decker, at p. 1392.)
On appeal, "[w]e review an award [or denial of an award] for attorney fees and costs for abuse of discretion." (Foundation, supra, 132 Cal.App.4th at p. 1388.) "The appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason." (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478.)
C
Based on our review of the record, we do not conclude the trial court exceeded the bounds of reason by denying Tropio's request for an award of attorney fees. The trial court could rationally find a reasonable attorney might discern some possible merit in Dixieline's anti-SLAPP motion. As Dixieline asserts, the allegations in Tropio's complaint included references to Regulation Q and allegations that Dixieline submitted to Bank improper or "sham" invoices for earned credits. The trial court could rationally find a reasonable attorney might believe those references and allegations involved an issue of public interest and therefore there could be merit in an anti-SLAPP motion based on section 425.16, subdivision (e)(4). The fact that the trial court, and now this court, concluded Dixieline did not meet its threshold burden to show its alleged conduct was protected activity under section 425.16, subdivision (e)(4), does not necessarily prove that its anti-SLAPP motion was totally and completely without merit and therefore frivolous. On the contrary, the trial court could reasonably find that Dixieline's anti-SLAPP motion was not frivolous even though it denied that motion on its merits. We conclude the trial court did not abuse its discretion by finding Dixieline's anti-SLAPP motion was not frivolous.
Because Tropio did not substantively argue, or show, below that Dixieline's anti-SLAPP motion was solely intended to cause unnecessary delay, we need not address the merits of whether the trial court abused its discretion in finding that alternative basis for an award of attorney fees under section 425.16, subdivision (c)(1), did not apply.
Furthermore, although the trial court did not expressly so find, we presume the court implicitly found Dixieline did not act in subjective bad faith in filing its anti-SLAPP motion. Based on our review of the record, we do not conclude the trial court acted unreasonably in so finding. We conclude the trial court did not abuse its discretion by denying Tropio's request for an award of attorney fees. (§ 425.16, subd. (c)(1); Decker v. U.D. Registry, Inc., supra, 105 Cal.App.4th at p. 1392; Shelton v. Rancho Mortgage & Investment Corp., supra, 94 Cal.App.4th at p. 1346; Foundation, supra, 132 Cal.App.4th at p. 1388.).
DISPOSITION
The orders are affirmed. Each party shall bear its costs on appeal.
WE CONCUR: BENKE, Acting P.J., O'ROURKE, J.