Opinion
G053323
05-02-2018
ERIC WILFORD et al., Plaintiffs, Cross-defendants and Respondents, v. SURF N TURF PARADISO, LLC, et al., Defendants, Cross-complainants and Appellants.
Thorsnes Bartolotta McGuire, Vincent J. Bartolotta, Jr., and Karen R. Frostrom, for Defendants, Cross-complainants, and Appellants Surf N Turf Paradiso, LLC and Surf Lagoons, Inc. Law Offices of Andrew A. Smits and Andrew A. Smits for Plaintiffs, Cross-defendants, and Respondents Eric Wilford and James Nielsen. Kutak Rock, Edwin J. Richards, Antoinette P. Hewitt, Christopher D. Glos for Cross-defendant and Respondent, City of San Clemente.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2014-00759162) OPINION Appeal from an order of the Superior Court of Orange County, Kim Garlin Dunning, Judge. Affirmed in part and reversed in part. Thorsnes Bartolotta McGuire, Vincent J. Bartolotta, Jr., and Karen R. Frostrom, for Defendants, Cross-complainants, and Appellants Surf N Turf Paradiso, LLC and Surf Lagoons, Inc. Law Offices of Andrew A. Smits and Andrew A. Smits for Plaintiffs, Cross-defendants, and Respondents Eric Wilford and James Nielsen. Kutak Rock, Edwin J. Richards, Antoinette P. Hewitt, Christopher D. Glos for Cross-defendant and Respondent, City of San Clemente.
* * *
Plaintiffs and cross-defendants Eric Wilford, James Nielsen, and others filed an action for investor fraud against defendants and cross-complainants Surf N Turf Paradiso, LLC (Surf N Turf), Surf Lagoons, Inc. (Surf Lagoons), their principals, defendants Michael Ruffner and Jourdan Groves, and others in an effort to recover $905,000 plaintiffs invested in a San Clemente development slated to include a miniature golf course, artificial wave pool, and food service facility (the project). The City of San Clemente (the City) owns the property. In response to the investor fraud action, Surf N Turf and Surf Lagoons filed a tort and breach of contract cross-complaint against Wilford and Nielsen. They also named the city as a cross-defendant, adding a cause of action for violation of the Brown Act (Gov. Code, § 54950 et seq.).
The City filed a special motion to strike (anti-SLAPP motion) under Code of Civil Procedure section 425.16 (the anti-SLAPP statute). Wilford and Nielsen filed a separate anti-SLAPP motion. The court granted both motions, concluding, as to the City, its conduct is protected under section 425.16, subdivision (e)(4) because the project is a matter of public interest and Surf N Turf and Surf Lagoons did not make a prima facie showing on any cause of action alleged against the City. As to Wilford and Nielsen, in addition to finding their conduct protected for the same reason, the court found their statements are protected under section 425.16, subdivision (e)(2) because they were made in connection with an issue under consideration or review by an executive body. The court also found Surf and Turf and Surf Lagoons did not make a prima facie showing on any cause of action alleged against Wilford and Nielsen.
All further statutory references are to the Code of Civil Procedure unless otherwise stated.
We agree with the ruling granting the anti-SLAPP motion as to the claims against Wilford and Nielsen, and thus affirm that ruling. With respect to the claims against the City, however, we conclude that the causes of action for breach of contract, interference with prospective economic advantage, conversion, and negligence do not arise from activity protected under the anti-SLAPP statute. Accordingly, we reverse the order granting the City's anti-SLAPP motion on those causes of action. We affirm the order granting the City's anti-SLAPP motion with respect to the causes of action for violation of the Brown Act and intentional misrepresentation.
FACTS
We summarize only those facts necessary to resolve the anti-SLAPP issues before us, relying on the operative pleading and accepting as true the evidence favorable to Surf N Turf and Surf Lagoons. (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1067 (Park); § 425.16, subd. (b)(2).)
First Amended Complaint
The operative first amended complaint was filed by several individual investor plaintiffs including Wilford and Nielsen, against several individuals, Surf N Turf, and other companies. It alleges causes of action for breach of contract, fraud, breach of fiduciary duty, violation of securities law (Corp. Code §§ 25401, 25501 & 25501.5), accounting, and enforcement of rights to obtain information and inspect records. Plaintiffs allege together they loaned $905,000 to defendants to develop an amusement and food concession project located on land owned by the C ity. Wilford and his wife loaned $250,000. Nielsen and his wife loaned $55,000.
The development was to be on a one-acre parcel within the Vista Hermosa Sports Park, and was to include a miniature golf amusement, an artificial wave pool for surfing and body boarding, and food concessions. Plaintiffs allege the City terminated its relationship with defendants because defendants failed to satisfy their lease and related contractual obligations for the project.
First Amended Cross-complaint
After obtaining leave of court, Surf N Turf and Surf Lagoons filed an unverified first amended cross-complaint (FACC) naming the City, Wilford, Nielsen, and others as cross-defendants. The FACC alleges Surf N Turf is in the business of operating a recreational project at Vista Hermosa Sports Park in San Clemente and is owned by Ruffner and Groves. Surf Lagoons is in the business of marketing, selling, and distributing recreational Infinite Wave and other artificial wave systems and is owned by Ruffner and Groves.
The FACC alleges causes of action for violation of the Brown Act and breach of contract against the City; breach of contract and defamation against Wilford and Nielsen; intentional interference with prospective advantage, conversion, intentional misrepresentation, and negligence, against all cross-defendants; and unfair competition against all cross-defendants except the City.
The FACC also alleges causes of action against other cross-defendants who are not parties to this appeal. And it alleges conspiracy against all cross-defendants, but cross-complainants dismissed the conspiracy cause of action.
According to the FACC (as it relates to the City, Wilford, and Nielsen), Michael "Scott" Melcher began planning the project in 2006. The City eventually approved a miniature golf course and wave park application in December 2010. Melcher began to seek investors and later brought Groves into the project. In 2012, Ruffner discovered the project and offered his participation. Sometime later, Surf N Turf took over the project fundraising and raised about $530,000 which was spent on project planning and development. But more money was needed, so Surf N Turf developed a plan to combine equity sales, debt financing, and a hard money loan.
Although it is not spelled out clearly in the FACC, in August 2013, the City and Surf N Turf entered into a lease for the project. The FACC does not attach the lease but instead largely ignores its provisions, several of which are significant to the City's involvement in the project.
The FACC alleges that in June 2014 the City approved an amended application for the project with modifications including a new wave feature product, an expanded restaurant, and additional parking. The FACC alleges that for many months after approval of the project, city staff ignored many requests and refused to provide Surf N Turf with a signed hard copy of the conditional use permit needed for construction, and therefore its architect and engineer could not process plans.
Also in July 2014, the FACC alleges that Surf N Turf obtained a written guarantee of funding for $5 million from cross-defendant Don Wilson Builders, and that in August 2014 Surf N Turf obtained a finance agreement from cross-defendant "Clearinghouse CDFI" (Clearinghouse) signifying Don Wilson Builders could afford the guarantee. Surf N Turf advised the City of the financing plan and introduced the principals of the investment groups to city staff.
We assume Clearinghouse CDFI refers to Clearinghouse Community Development Financial Institution, a named cross-defendant.
The FACC alleges that in order to obtain financing commitments, Surf N Turf needed to disclose confidential and proprietary materials to Nielsen and others and therefore required them to sign nondisclosure agreements. Thereafter, Surf N Turf provided Nielsen and others business planning documents, the construction budget revenue forecasts, project plans and gave them access to its contractors and financial resources.
According to the FACC, eventually Surf N Turf fired Melcher and advised the City he was no longer involved. Nielsen approached Surf N Turf because he claimed to have given money to Melcher, and he wanted equity in the project. Surf N Turf agreed and Nielsen began attending city meetings. Surf N Turf met with City Manager Pall Gudgeirsson and Assistant City Manager Erik Sund to discuss the project. Gudgeirsson and Sund allegedly represented they would negotiate with the City on Surf N Turf's behalf during closed session with the city council.
The FACC alleges that in October 2014 the City "purported to terminate" the lease because it contended Surf N Turf had not met a deadline specified in paragraph 4.01.1(i) of the lease.
As will be seen, the provision requires Surf N Turf to submit evidence of sufficient financing within three months of the lease's effective date.
The FACC alleges Clearinghouse and Don Wilson Builders sent letters to the City withdrawing their financial support and the City had a proposal from them very soon after making a public announcement to the press that the lease was terminated. Clearinghouse and Don Wilson Builders derived information from Surf N Turf's proprietary documents and volunteered to take over the project using funding already promised to Surf N Turf. During that same time, Nielsen was meeting with city council members to "try and pitch this project format" to the detriment of Surf N Turf.
The FACC alleges cross-defendant, SC Surf LLC created a business plan for a wave pool and in February 2015 the City met with SC Surf LLC to negotiate price and terms. The City scheduled "an item for SC Surf LLC" for several meetings, including in December 2014 and February, March, and April 2015. At an April 2015 meeting, Wilford spoke representing to the city council that Surf N Turf could not afford to develop the project and advising they had retained a new investor. Then Nielsen spoke and represented the project had been approved by the City in 2009 but had languished ever since. The FACC alleges while the City was meeting behind closed doors with SC Surf LLC, it represented to the public that the conditional use permit was being made available to a new group of investors.
Anti-SLAPP Motions
The City's Motion
The City filed an anti-SLAPP motion against the FACC. In support, the City filed the declarations of Assistant City Manager Erik Sund and Attorney Christopher D. Glos (regarding attorney fees), as well as a request for judicial notice of several city council records and meeting agendas.
Sund declared Vista Hermosa Sports Park is city owned, i.e., public land. He declared the proposed development of the project is a matter of great public interest to the residents of the City and has been the subject of numerous city council public and "closed session" meetings, as well as numerous city planning commission, beaches, parks and recreation department, finance department, planning department, and engineering department meetings and discussions.
Sund declared the City entered into a lease with Melcher. Pursuant to Melcher's application the City approved a conditional use permit for the project in March 2011. In June 2011, the City approved an amendment to the Melcher lease to replace the flow rider wave facility with newer technology that would provide more realistic waves, and to enlarge the food and beverage facility and parking area. At that time, Melcher was to be replaced by "his company," Surf N Turf, as the lease holder. A new lease between the City and Surf N Turf was entered into in August 2013.
In June 2014, the City approved another amendment to the conditional use permit subject to certain conditions. The amended conditional use permit included information that the planning division had completed an initial environmental assessment under CEQA and determined the project did not require additional environmental review, because the La Pata/Vista Hermosa Park had an approved mitigated negative declaration and there were no additional impacts associated with the miniature golf, wave pool, or restaurant facility. According to Sund, Surf N Turf did not meet certain lease provisions and the lease automatically terminated pursuant to its "explicit terms," which Sund did not identify. This had occurred by late 2014. According to Sund "a subgroup of the investors in Surf N Turf and several purportedly new investors" began contacting the City to independently promote a new development plan. But no new agreement was ever reached.
CEQA refers to the California Environmental Quality Act. (Pub. Resources Code, § 21000 et seq.)
Sund attached numerous city council meeting agendas to his declaration. The agendas reflect between December 2014 and June 2015, the City was negotiating with SC Surf LLC the price and terms of payment for a lease of the Vista Hermosa Sports Park.
Cross-complainants filed an opposition to the City's anti-SLAPP motion along with the declaration of Groves, which referenced and purported to authenticate numerous exhibits attached to the opposition. Together they recite the following.
In October 2012, Surf N Turf filed articles of organization with the California Secretary of State. According to the later-executed September 2013 operating agreement, Surf N Turf's initial members were Groves and Ruffner.
Shortly before the operating agreement was executed, on August 20, 2013, the City entered into a lease with Surf N Turf. Its recitals provide Melcher had formed Surf N Turf and requested that the City and Melcher terminate the original lease and enter into a new agreement with Surf N Turf. According to the lease, the parties agreed to a predevelopment term commencing on the effective date and extending up to a maximum of one year, during which Surf N Turf would process through the City all required applications and obtain all required approvals and permits to develop and operate the project. Paragraph 4.01.1(i) of the lease provided that within three months of the effective date, Surf N Turf was to submit evidence of sufficient financing. Paragraph 4.01.1(ii) provided that within six months of the effective date, Surf N Turf was to submit to the City all development plans and applications necessary to obtain discretionary approval for development. Paragraph 4.01.1(iii) provided that within 12 months of the effective date, Surf N Turf was to obtain the first grading and/or building permit. After the predevelopment term, the parties agreed to a construction term of six months. The lease provides, "In the event [Surf N Turf] has not completed any of the tasks listed in clauses (i), (ii), or (iii) above within the timeframes specified therein, this Lease shall automatically terminate."
Groves declared he personally negotiated with the City on the project, including the lease between the City and Surf N Turf. The lease reflects he signed on behalf of Surf N Turf. Despite the lease's express terms, Groves declared the City gave Surf N Turf "twelve months or beyond" to develop the project, and city staff advised them the terms need not be memorialized in the lease because they would provide extensions if needed.
In November 2013 Surf N Turf entered into a memorandum of understanding with Real Estate and Loss Mitigation Company, LLC (REALM) for funding up to $4,870,000 in exchange for a membership interest in the project. In December 2013 Surf N Turf received a letter of interest from Independence Bank for a construction loan and initial working capital in the sum of $3,500,000.
Groves declared that in December 2013 Surf N Turf and Clearinghouse executed a nondisclosure agreement and in March 2014 Surf N Turf and John Caskey (of Don Wilson Builders) executed a nondisclosure agreement.
In February 2014 the City's attorney wrote to Surf N Turf stating the capital prove-up portion of the predevelopment term expired on November 20, 2013. On that same day Surf N Turf submitted documentation to the City in an effort to satisfy the capital prove-up component. The City deemed it inadequate, because, according to the City, it failed to demonstrate a firm commitment that Surf N Turf had sufficient capital. The City attorney's letter acknowledged that in January 2014 Surf N Turf submitted additional documents to satisfy its capital prove-up obligations. However, the City deemed them inadequate as well. Citing correspondence from Clearinghouse, the City pointed out it did not represent a formal loan commitment. Citing correspondence from Independence Bank, the City pointed out it stated it was a letter of interest that required formal approval of the bank's executive loan committee. The City was also concerned Surf N Turf appeared to be leapfrogging the capital prove-up component by attempting to process its land use approvals. The City gave Surf N Turf an extension to February 21, 2014 to provide the capital necessary to construct the project. After that date, the City would deem the lease automatically terminated.
Surf N Turf responded in an undated letter outlining all its efforts to secure financing and to obtain necessary permits. Surf N Turf referenced a December 10, 2013 letter from Sund (which is not in the record on appeal) in which Sund stated the City council requested Surf N Turf prepare and submit a schedule of project approval processing that demonstrated its ability to comply with the lease, including submitting plans to the planning division. The letter stated Surf N Turf was working to finalize terms of the investment deal with REALM and working with its equity investors to have the capital requirements necessary to complete the project.
Apparently Surf N Turf submitted a "complete financial binding commitment letter" from REALM on February 21, 2014. In an e-mail to Sund in March 2014, Groves wrote they had been frozen on submitting construction plans and applications for almost two months while awaiting word from the City. However, later in March 2014 the City disapproved the REALM financing proposal.
Groves declared in June 2014 the City approved the project, but it refused to provide Surf N Turf with a signed copy of the approvals, thereby preventing Surf N Turf from applying for building or grading permits. He did not explain how Surf N Turf was still able to continue seeking financing given the apparent expiration of time. But he declared that in July 2014 Surf N Turf received a written funding commitment from Don Wilson Builders. Caskey, president of Don Wilson Builders, wrote a letter to the City stating Don Wilson Builders would fund a new LLC up to $5 million for the project and to purchase an ownership interest in Surf N Turf. However, Groves acknowledged in August 2014, he received a letter "purporting to withdraw that commitment." The letter was from Caskey to Groves and Ruffner stating that because they failed to disclose a pending lawsuit for patent infringement against Surf Lagoons, Don Wilson Builders decided to cancel its proposed investment.
Groves further declared in August 2014 Surf N Turf received a written funding commitment from Clearinghouse. He submitted an August 2014 letter from Clearinghouse to Surf N Turf stating Clearinghouse approved a $1.5 million investment in the project. Again Groves acknowledged later that month he received a letter purporting to withdraw that commitment. The August 2014 letter was addressed to Surf N Turf from Clearinghouse and cited the same failure to disclose pending litigation as a reason it had decided to terminate the relationship. The letter also cited the City's "decision not to grant the extension request to Surf N Turf." It is unclear which extension the letter was referencing.
Meanwhile, in August 2014 Sund informed Surf N Turf in writing that the City had caused a 38-day delay that may have affected the predevelopment term and therefore the City would extend the predevelopment term by 45 days to October 4, 2014.
Apparently, no additional funding sources materialized. According to city council minutes, from the October 21, 2014 city council meeting, the City attorney reported that during closed session the council had considered the Surf N Turf lease and determined the lessee did not satisfy two of the three conditions of the lease terms by the October 13, 2014 deadline. The city council considered the lease automatically terminated pursuant to its terms.
It is unclear how or if the deadline was extended from October 4, 2014 to October 13, 2014.
In November 2014 Caskey wrote to the City asking to take over the project. Groves declared that in November 2014 Caskey asked for the Surf N Turf operating agreement. Groves declared he provided it believing Caskey was trying to help the company and not knowing Caskey was trying to take over the project and "kick us out."
The e-mail exchange, however, shows it was Ruffner that provided it. Ruffner is listed as the "President/COO of Surf Lagoons, Inc."
Wilford's and Nielsen's Motion
Wilford and Nielsen also filed an anti-SLAPP motion against the FACC. Each filed a supporting declaration, and together they filed a request for judicial notice. The request for judicial notice requested the court judicially notice the FACC, a complaint filed in another action by Melcher, Groves, and Ruffner, a first amended complaint filed in another action by Melcher, and a status conference questionnaire.
Wilford declared the project was a matter of public interest from 2010 to 2015. He attached news articles about the project appearing in the Orange County Register between December 2010 and February 2015. In March 2012 Wilford and his wife invested $250,000 in the project. In or around 2014 Wilford learned the City was considering terminating the project. He personally communicated with members of the city council during 2014 with a view toward supporting the project and their investment. Wilford declared he believed investor funds for the project were misappropriated. He requested return of his investment, to no avail, and although he had demanded an accounting, it has not been produced.
Nielsen submitted a declaration in which he declared to many of the same facts. He and his wife invested $55,000 in the project. Nielsen also declared Groves and Surf N Turf authorized him to speak to the city council in support of the project on behalf of Surf N Turf.
Cross-complainants filed an opposition along with another declaration of Groves, which is substantially similar to that submitted in opposition to the city's motion. Again, it referenced and purported to authenticate several exhibits.
Groves declared he met Nielsen at a city planning commission meeting in 2014. He discussed with Nielsen and Wilford that they were negotiating with cross-defendant Oggi's Pizza and Brewing Company to open a franchise restaurant and that they had obtained written funding commitments from Don Wilson Builders and Clearinghouse. He declared no member of Surf N Turf used investment money to pay personal expenses; all money raised was used for the project.
Groves attached a November 2014 e-mail from Nielsen to the City endorsing Caskey's request for the project. In the e-mail, Nielsen explained after Surf N Turf lost the lease for nonperformance, the investor group (apparently referring to at least 8 local families that invested in the project) contacted Caskey in an effort to continue the concept the prior promotors had begun.
The record contains a January 2015 business plan prepared by SC Surf, LLC, which states SC Surf, LLC, is a new limited liability company being formed to develop the project, and that Don Wilson Builders will be its managing member. The business plan states Clearinghouse had expressed an interest in becoming an investment partner with SC Surf, LLC, but even if it did not, Don Wilson Builders would provide all the necessary equity required.
In a February 2015 e-mail from Nielsen to Sund and city council members, Nielsen communicated additional wave pool project information.
The Court's Ruling on the anti-SLAPP motions
The court granted both anti-SLAPP motions. The court did not rule on the objections to the Grove declarations or on the City's request for judicial notice. As to the City, the court found the City satisfied the first prong under section 425.16, subdivision (e)(4) in that the project is a matter of public interest and that Surf N Turf had not made a prima facie showing on any cause of action alleged in the FACC. As to Wilford and Nielsen, the court found they made a threshold showing under section 425.16, subdivisions (e)(2) and (e)(4) and that Surf N Turf's evidence in opposition was insufficient to make a prima facie showing on any cause of action.
Surf N Turf and Surf Lagoons appeal. The order granting the special motion to strike is appealable. (§ 425.16, subd. (i).)
The balance of the procedural history, facts, and court's findings will be discussed below as relevant to the parties' contentions.
DISCUSSION
General Principles of Applicable Law
"A SLAPP suit—a strategic lawsuit against public participation—seeks to chill or punish a party's exercise of constitutional rights to free speech and to petition the government for redress of grievances." (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055.) The Legislature has made SLAPP suits subject to a special motion to strike. (Id. at pp. 1055-1056.)
"Resolution of an anti-SLAPP motion involves two steps. First, the defendant must establish that the challenged claim arises from activity protected by section 425.16. [Citation.] If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success. [The Supreme Court has] described this second step as a 'summary-judgment-like procedure.' [Citation.] The court does not weigh evidence or resolve conflicting factual claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment. It accepts the plaintiff's evidence as true, and evaluates the defendant's showing only to determine if it defeats the plaintiff's claim as a matter of law. [Citation.] '[C]laims with the requisite minimal merit may proceed.'" (Baral v. Schnitt (2016) 1 Cal.5th 376, 384-385, fn. omitted.) "'An anti-SLAPP motion is an evidentiary motion.' [Citation.] Consequently, '[t]he prima facie showing of merit must be made with evidence that is admissible at trial. [Citation.] Unverified allegations in the pleadings or averments made on information and belief cannot make the showing.'" (Contreras v. Dowling (2016) 5 Cal.App.5th 394, 405 (Contreras).) It has become common to refer to the first step as "prong one" of the analysis and the second step as "prong two."
Fundamental to the analysis of any anti-SLAPP motion is the requirement that the challenged cause of action arises from the claimed protected activity. "[A] claim is not subject to a motion to strike simply because it contests an action or decision that was arrived at following speech or petitioning activity, or that was thereafter communicated by means of speech or petitioning activity. Rather, a claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted." (Park, supra, 2 Cal.5th at p. 1060.)
With these principals in mind, we engage in the same analysis as the trial court in conducting our de novo review. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820.)
I.
The City's Anti-SLAPP Motion
The City is named as a cross-defendant in the first (Brown Act), second (breach of contract), sixth (intentional interference with prospective advantage), seventh (conversion), eighth (intentional misrepresentation), and ninth (negligence) causes of action. The conspiracy cause of action has been dismissed.
Arising from Protected Activity
We begin with the first inquiry under the anti-SLAPP statute: whether the City has made a threshold showing that the challenged causes of action arise from protected activity. (§ 425.16, subd. (b)(1).) The gravamen of the FACC as it relates to the City revolves around its decisions and its decision-making process regarding the plans for the project. (Contreras, supra, 5 Cal.App.5th at p. 405 [gravamen defined by acts on which liability based, not some philosophical thrust or legal essence of cause of action].) For example, the FACC alleges the City violated the Brown Act, by meeting in closed session to discuss terminating the lease and conveying the conditional use permit to SC Surf LLC; breached the lease for the project by terminating it without authority; interfered with cross-complainants' relationships with Clearinghouse and Don Wilson Builders; converted a "property right in the form of a real property lease" for its own benefit; made representations (through city staff) about the project; and breached some unspecified duty of care.
The City contends its alleged conduct falls under section 425.16, subdivision (e)(4), which protects "any other conduct in furtherance of the exercise of the constitutional right[s] of petition or . . . free speech in connection with a public issue or an issue of public interest." Maybe so, maybe not. As the Park court made clear, we must first consider the elements of the claims asserted in the challenged pleading and determine whether protected conduct supplies those elements. (Park, supra, 2 Cal.5th at p. 1063 ["In ruling on an anti-SLAPP motion, courts should consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability."].)
Alternatively, the City argues its statements and conduct are protected as made in connection with an issue under consideration or review by a legislative body under section 425.16, subdivision (e)(2).
Brown Act - First Cause of Action
The first cause of action for violation of the Brown Act is based on allegedly closed city council sessions between December 2014 and June 2015 in which city personnel discussed terminating Surf N Turf's lease and conveying Surf N Turf's conditional use permit to SC Surf LLC. Government Code section 54953, subdivision (a), requires all meetings of a legislative body of a local agency to be open and public, unless an exception applies under the Brown Act. Likewise, Government Code section 54953, subdivision (c)(1), prohibits a legislative body from acting by secret ballot, whether preliminary or final. Closing the doors to the public to allow the city council to discuss an issue or issues in private is unquestionably conduct undertaken in furtherance of the right of free speech, and the alleged liability for that violation manifestly arises from that conduct.
But Surf N Turf argues the City's conduct was not "taken in accordance with the pursuit of free speech or petitioning activities." It insists the case is not about the exercise of the right of free speech but about who had the right to develop the project for private gain and whether the City unlawfully took sides in that private commercial dispute. While that may be the overarching theme of Surf N Turf's claims against the City, liability for violation of the Brown Act does not arise from the alleged fact that the City took sides. Liability, if any, arises from the alleged conduct of closing doors to the public to discuss a nonexempt subject.
We also conclude that closing the doors for a private discussion about the project was done regarding a public issue or a matter of public interest. The anti-SLAPP statute does not define the terms "public issue" or "public interest." "The terms are, as one court stated, 'inherently amorphous and thus do not lend themselves to a precise, all-encompassing definition.' [Citation.] Another court has stated, somewhat tautologically, that '"an issue of public interest" . . . is any issue in which the public is interested.' [Citations.] Nevertheless, 'judges and attorneys will, or should, know a public concern when they see it.'" (Healthsmart Pacific, Inc. v. Kabateck (2016) 7 Cal.App.5th 416, 428.)
"A few guiding principles can be gleaned from decisional authorities. For example, 'public interest' is not mere curiosity. Further, the matter should be something of concern to a substantial number of people. Accordingly, a matter of concern to the speaker and a relatively small, specific audience is not a matter of public interest. Additionally, there should be a degree of closeness between the challenged statements and the asserted public interest. The assertion of a broad and amorphous public interest is not sufficient. Moreover, the focus of the speaker's conduct should be the public interest, not a private controversy . . . . [Citation.] [¶] Being based on case law, the precise boundaries of a public issue have not been defined. Nevertheless, in each case where it was determined that a public issue existed, 'the subject statements either concerned a person or entity in the public eye [citations], conduct that could directly affect a large number of people beyond the direct participants [citations] or a topic of widespread, public interest [citation].'" (Hailstone v. Martinez (2008) 169 Cal.App.4th 728, 736-737.)
Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219, 1226 (Tuchscher) is factually similar to the instant case and instructive. In Tuchscher, Tuchscher Development Enterprises (TDE) entered into an exclusive negotiating agreement with the City of Chula Vista (Chula Vista) under which they would take preliminary steps and negotiate towards a development agreement for the creation of a mixed use bayfront real estate project known as Crystal Bay. (Id. at p. 1227.) Chula Vista agreed not to negotiate with any other person or entity. (Ibid.) Deadlines passed, and they never reached an agreement to develop Crystal Bay. (Ibid.) TDE then sued the San Diego Unified Port District and one of its commissioners for inducing breach of contract, intentional and negligent interference with prospective economic advantage, and unfair competition. (Id. at p. 1226.) The gist of the complaint was that the defendants conspired to deprive TDE of the benefits of the negotiating agreement by disrupting Chula Vista's staff from negotiating the development agreement and inducing Chula Vista to cease negotiations. (Id. at p. 1228.)
The trial court granted the defendants' anti-SLAPP motion. (Tuchscher, supra, 106 Cal.App.4th at p. 1230.) On appeal, the court noted there appeared to be no dispute the proposed development of Crystal Bay was a matter of public interest. (Id. at p. 1233.) The court noted, "'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.'" (Ibid.) The court found the activity underlying each of TDE's causes of action involved communications to Chula Vista and others involving the proposed development of Crystal Bay, and the development was a matter of public concern, having broad effects on the community. (Ibid.) Therefore, the claims fell within the ambit of section 425.16, subdivision (e)(4). (Tuchscher, at p. 1235.)
Here, while Surf N Turf does not concede the project is a matter of public interest within the meaning of section 425.16, subdivision (e)(4), neither does it argue or submit evidence suggesting the project is not a matter of public interest. The omission is the equivalent of a concession.
On this issue Surf N Turf argues only that Tuchscher is not controlling because the Tuchscher development had potential environmental impacts, which were "plainly a matter of public interest." Surf N Turf urges us to instead follow Wang v. Wal-Mart Real Estate Business Trust (2007) 153 Cal.App.4th 790 (Wang), because the project had an approved mitigated negative declaration and there were no additional impacts associated with it. But the Wang decision did not turn on the environmental impact of the Wal-Mart development. Neither Tuchscher nor Wang stand for the proposition that the question of "public interest" in the anti-SLAPP context turns on whether a development is subject to CEQA.
In Wang, the plaintiffs entered into a purchase agreement to sell two parcels of their vacant San Bernardino property to a company which assigned the contract to Wal-Mart. (Wang, supra, 153 Cal.App.4th at p. 795.) The plaintiffs retained two adjoining parcels for future development. (Ibid.) The city council approved a report concerning an emergency vehicle access easement. (Id. at p. 797.) During the process, the plaintiffs cooperated with escrow and granted an extension so Wal-Mart could obtain a needed negative declaration under CEQA. (Ibid.) Escrow closed and construction started. (Ibid.)
The next year the plaintiffs visited the site and learned their parcels were now disconnected, no street had been constructed, and there was no public access to the alley behind the new Wal-Mart. (Wang, supra, 153 Cal.App.4th at p. 797.) The plaintiffs contended they received no notice from Wal-Mart or the City of San Bernardino that they would not be creating a street. (Ibid.) They contended their property now fronted a dead end or cul-de-sac and was impaired in value. (Ibid.) They filed a complaint for breach of contract, fraud, and conspiracy to defraud against Wal-Mart. (Id. at pp. 797-798.) They also filed a complaint against others, including the City of San Bernardino, for declaratory and injunctive relief and inverse condemnation. (Id. at p. 798.) The trial court granted the City of San Bernardino's and Wal-Mart's anti-SLAPP motions. (Id. at pp. 793-794.)
On appeal, the court distinguished its earlier decision in Tuchscher because in Wang, there was no concession the case was a "matter of public interest," and the parties in Wang were mainly relying on the petitioning activity of Wal-Mart in seeking governmental permit approvals, as covered by section 425.16, subdivision (e)(2). (Wang, supra, 153 Cal.App.4th at p. 804.) The court noted, "There is no bright-line rule that all cases involving developments and applications for public permits always involve the type of petitioning conduct protected by the anti-SLAPP statutory scheme. Also, this is not a matter of developing scenic bayfront property [as in Tuchscher], but rather involves a freeway-close shopping center in which a negative declaration was issued after environmental review under CEQA." (Ibid.) Finding the case did not hinge on the "public interest" in proposed developments within the meaning of section 425.16, subdivision (e)(4), the court then examined the case under section 425.16, subdivision (e)(2). (Wang, at pp. 807-808.) As to both Wal-Mart and the City of San Bernardino, the court reversed, concluding the "causes of action raised only collateral or incidental facts with respect to any conduct falling within" section 425.16, subdivision (e)(2). (Wang, at p. 809.)
Wang is distinguishable because as will be seen, the conduct of the city council in meeting behind closed doors is not collateral or incidental to the alleged violation of the Brown Act. It is the act which is alleged to create liability. (See Wang, supra, 153 Cal.App.4th at pp. 809-810.)
The City would not have been involved in the private commercial endeavor unless it had to approve the project. Everything the City is alleged to have done was done regarding the project. The project was to be located on city-owned public land. According to Sund's unrebutted declaration, the project is and continues to be a matter of great public interest to city residents and has been the subject of numerous city council public and "closed session" meetings, as well as numerous city planning commission, beaches, parks and recreation department, finance department, planning department, and engineering department meetings and discussions. Several Orange County Register articles discuss the ongoing park development process.
Accordingly, we conclude the alleged Brown Act violation was protected under the anti-SLAPP statute as "conduct in furtherance of the exercise of the constitutional right of . . . free speech in connection with a public issue or an issue of public interest." (§ 425.16, subd. (e)(4).) We need not address the City's alternate arguments that section 425.16, subdivision (e)(2) applies to this cause of action.
Intentional Misrepresentation — Eighth Cause of Action
The elements of intentional misrepresentation are "(1) a knowingly false representation by the defendant; (2) an intent to deceive or induce reliance; (3) justifiable reliance by the plaintiff; and (4) resulting damages." (Service by Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1816.) Here, Surf N Turf alleges that Sund represented to Groves that he would accurately communicate Surf N Turf's communications to the city council, but he failed to do so resulting in project delays and ultimately termination of the lease. The FACC also alleges that the City had falsely represented that it had approved the financing plan in August 2014 and that in February 2014 had falsely represented that Surf N Turf would have 12 months to construct the project. These allegations fall within the anti-SLAPP statute under either subdivision (e)(1) (statements made before a legislative proceeding), (e)(2) (statements made in connection with an issue under consideration by a legislative body), or (e)(4) ( conduct in furtherance of speech or petitioning activity on an issue of public interest). And because the alleged misrepresentations are the very basis of the cause of action for misrepresentation, the cause of action necessarily arises from the alleged misrepresentations.
Breach of Contract, Intentional Interference with Prospective Advantage, Conversion and Negligence — the Second, Sixth, Seventh, and Ninth Causes of Action
The remaining causes of action, the second, sixth, seventh and ninth, for breach of contract, intentional interference with prospective economic advantage, conversion and negligence, respectively, are not SLAPP suits. These causes of action as alleged in the FACC, do not arise from speech or conduct protected by the anti-SLAPP statute.
To establish a breach of contract claim, Surf N Turf and Surf Lagoons must prove (1) a contract, (2) its performance or excuse for nonperformance, (3) the City's breach, and (4) damages. (Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1352.)
To establish intentional interference with prospective economic advantage, a plaintiff must prove "(1) the existence, between the plaintiff and some third party, of an economic relationship that contains the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentionally wrongful acts designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm proximately caused by the defendant's action" (i.e., damages). (Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal.5th 505, 512.)
"'"Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion are the plaintiff's ownership or right to possession of the property at the time of the conversion; the defendant's conversion by a wrongful act or disposition of property rights; and damages."'" (Plummer v. Dan/Eisenberg, LLP (2010) 184 Cal.App.4th 38, 45.)
Negligence requires a legal duty to use due care, breach, and proximately caused resulting injury (i.e., damages). (See Ladd v. County of San Mateo (1996) 12 Cal.4th 913, 917.)
The breach of contract and conversion claims against the City arise from its decision to declare the Surf N Sand lease terminated and to enter into a new lease of the property with SC Surf LLC. That alleged breach and the entering of a new lease with SC Surf LLC do not arise from protected activity. As the Park court made clear (if it was not clear before), a decision made following speech or petitioning activity does not mean that the claim challenging the decision arises from the speech. (Park, supra, 2 Cal.5th at p. 1060.) The simple fact that the City communicated its decision after it was made, or that its council discussed whether to declare the lease terminated, are not elements of a breach of contract cause of action. The decision itself, not the discussion before and after the declaration of lease termination and the awarding of a new lease to SC Turf LLC, is the alleged breach and conversion. The speech is just evidence of the alleged liability, or a step leading to the actual alleged breach and conversion, which are the acts upon which liability is asserted.
Two cases cited with approval by the Park court are particularly instructive on this point: San Ramon Valley Fire Protection Dist. v. Contra Costa County Employees' Retirement Assn. (2004) 125 Cal.App.4th 343 (San Ramon); Graffiti Protective Coatings, Inc. v. City of Pico Rivera (2010) 181 Cal.App.4th 1207 (Graffiti). (Park, supra, 2 Cal.5th at pp. 1064-1065.)
The Park court summarized the San Ramon case as follows. "[A] fire protection district sued a county retirement board over the pension contribution levels the board decided to impose. The board filed an anti-SLAPP motion, arguing the suit arose out of the deliberations and vote that produced its decision. The Court of Appeal disagreed. It explained that '"[t]he [anti-SLAPP] statute's definitional focus is . . . [whether] the defendant's activity giving rise to his or her asserted liability . . . constitutes protected speech or petitioning."' [Citation.] It distinguished between the board's allegedly wrongful act (the contribution level decision) and the preceding deliberations and vote. '[T]he fact that a complaint alleges that a public entity's action was taken as a result of a majority vote of its constituent members does not mean that the litigation challenging that action arose from protected activity, where the measure itself is not an exercise of free speech or petition. Acts of governance mandated by law, without more, are not exercises of free speech or petition.'" (Park, supra, 2 Cal. 5th at p. 1064.)
In Graffiti supra, 181 Cal.App.4th 1207, the allegations were remarkably similar to the allegations made here. The Park court summarized the Graffiti decision as follows. "[A] company sued a city after its government contract was terminated and a new contract awarded without competitive bidding to a rival. The trial court granted the city's anti-SLAP motion. Reversing, the Court of Appeal explained, 'In deciding whether an action is a SLAPP, the trial court should distinguish between (1) speech or petitioning activity that is mere evidence related to liability and (2) liability that is based on speech or petitioning activity. Prelitigation communications or prior litigation may provide evidentiary support for the complaint without being a basis of liability. An anti-SLAPP motion should be granted if liability is based on speech or petitioning activity itself.' [Citation.] While communications by the city preceding its decision might be helpful in establishing what events led to the change in contract, the contractor's claims were not based on them, but on the award of a new contract in alleged violation of laws regulating competitive bidding." (Park, supra, 2 Cal.5th at p. 1065.)
Graffiti is on all fours with the instant case. The breach of contract and conversion claims do not arise from protected conduct. Accordingly, the order granting the City's anti-SLAPP motion on these two causes of action must be reversed.
Likewise, the claim for interference with prospective economic advantage does not arise from any speech or petitioning activity. Rather it too arises from the City's decision to "do business" with SC Surf LLC, supported by financial commitments from Don Wilson Builders and Clearing House. For all of the reasons discussed above concerning the breach of contract and conversion claim, the interference claim is not a SLAPP suit, and the order granting the City's anti-SLAPP motion on that cause of action must also be reversed.
Finally, the negligence cause of action is not a SLAPP suit either. It arises from some unspecified duty owing from the City to Surf N Turf. But the only relationship between the City and Surf N Turf arises from the lease. If a duty was violated by the termination of the lease, as explained, that is not a claim arising from speech or petitioning activity. The order granting the City's anti-SLAPP motion on that cause of action must also be reversed.
Probability of Prevailing
We proceed to consider whether Surf N Turf and Surf Lagoons have demonstrated a probability of prevailing on the two causes of action against the City we have concluded are SLAPP suits — the alleged violation of the Brown Act and the alleged intentional misrepresentation.
Probability of Prevailing on the First Cause of Action — Violation of the Brown Act
The requirement that local legislative bodies not meet in private is subject to exceptions. The exceptions include that "a legislative body of a local agency may hold a closed session with its negotiator prior to the . . . lease of real property by or for the local agency to grant authority to its negotiator regarding the price and terms of payment for the . . . lease." (Gov. Code, § 54956.8.)
While there is evidence the city council permissibly met in closed session concerning a lease with SC Surf LLC, Surf N Turf produced no evidence of any closed session content unrelated to lease negotiations. The only evidence Surf N Turf cites is a February 13, 2015 e-mail from Wilford to Nielsen where he describes what might be up for discussion in a future closed session. The e-mail appears to be a draft open letter Wilford and his wife were considering sending to "San Clemente friends and family." Surf N Turf appears to rely on this paragraph of the proposed open letter: "This Tuesday, City Council is meeting in closed session. They may vote to approve this [apparently referring to a proposal by a new partner] and sign a new lease with us, or they may vote to scrap everything and start over with some other heretofore unknown concept. If they vote to approve, we can start building within a month. If they vote to scrap everything, it could be many years before anything else is ever done on that piece of property." Surf N Turf argues the references to approve "this" indicates the discussions are about a lease and other things. Aside from its evidentiary problems (multiple hearsay, authentication), it is speculative as to what might occur at an upcoming meeting. We cannot infer from this sole piece of inadmissible evidence that the City actually discussed an impermissible topic in a closed session.
The City lukewarmly mentions the objections in its appellate brief but does not pursue them further or ask us to rule. We consider the objections waived for failure to argue the matter on appeal. (See In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 830 ["We are not bound to develop appellants' argument for them. [Citation.] The absence of cogent legal argument or citation to authority allows this court to treat the contention as waived."].)
Accordingly, Surf N Turf and Surf Lagoons have failed to meet their burden of demonstrating a probability of prevailing on the alleged Brown Act violation, and the first cause of action of the FACC must be stricken.
Probability of Prevailing on the Eighth Cause of Action — Intentional Misrepresentation
A cause of action for intentional misrepresentation requires proof of resulting damages. As observed by the trial court, Surf N Turf's only proffered evidence of damages was a business plan for the project. The business plan concluded the project was projected to be profitable (with a rate of return ranging from 18.84 percent to 38.40 percent, depending upon the assumptions) which the court found insufficient evidence of damages. We agree.
The only foundation for the proffer of the business plan was found in Groves' declaration, wherein he stated: "Surf N Turf Paradiso created a business plan about the Vista Hermosa project. A copy of that plan is attached to the motion as Exhibit 'M.' Another version of that plan is attached to the motion as Exhibit 'Y.'" That is all! No foundation was laid to qualify Groves as an expert witness. "If a witness is not testifying as an expert, his testimony in the form of an opinion is limited to such an opinion as is permitted by law, including but not limited to an opinion that is: [¶] (a) Rationally based on the perception of the witness; and [¶] [h]elpful to a clear understanding of his testimony." (Evid. Code, § 800.) Groves' declaration said nothing about the business plan other than to recite that it was attached to the opposition. Profit projections for a business that never materialized is beyond common experience and thus, if admissible at all, must be in the form of an expert opinion. (See Evid. Code, § 801.) Even if Groves had been qualified as an expert witness, "under Evidence Code section 801, the trial court acts as a gatekeeper to exclude speculative or irrelevant expert opinion. As [the Supreme Court] recently explained, '[T]he expert's opinion may not be based "on assumptions of fact without evidentiary support [citation], or on speculative or conjectural factors . . . . [¶] Exclusion of expert opinions that rest on guess, surmise or conjecture [citation] is an inherent corollary to the foundational predicate for admission of the expert testimony: will the testimony assist the trier of fact to evaluate the issues it must decide?"'" (Sargon Enterprises, Inc. v. University of Southern California (2012) 55 Cal.4th 747, 770.) The proffered business plan was plainly inadmissible.
On appeal, Surf N Turf now argues it had "valuable property rights" in the lease and "the value of a long-term possessory interest may approach the value of a fee." (Texas Co. v. County of Los Angeles (1959) 52 Cal.2d 55, 62 [determining taxable interest in leasehold].) Maybe so. But Surf N Turf offered no evidence of the value of the lease of its marketability, if any, even if Surf N Turf considered it an asset and had approved permits for the project. Surf N Turf also suggests there was proof of out of pocket damages. It argues according to the lease it was required to pay a security deposit and $1.00 in rent during the predevelopment term and approval of the project "entailed" payment of city permit fees, architectural fees, engineering fees, geotechnical fees and legal fees. Maybe so. But once again Surf N Turf offered no evidence the security deposit, rent, or fees had actually been paid and if so, by whom, and in what amounts.
Finally, Surf N Turf cites an e-mail from Nielsen to city council member Bob Baker acknowledging Surf N Turf spent $40,000 to $50,000 on the project. The language from the e-mail is: "By now I assume you have received a proposal from John Caskey, President of Don Wilson Builders to build a wave pool/miniature golf/restaurant in the parcel at the Vista Hermosa Sports Park. As you probably know, I am one of at least 8 local families that invested in this project with Scott Melcher, Jourdan Groves and Michael Ruffner. As you probably also know, the large majority of almost $850,000 has been misappropriated and/or spent foolishly by the promoters and that the actual monies spent to date on the project total approximately $40,000-$50,000." The evidence, exhibit Z in support of Surf N Turf's opposition to Wilford and Nielsen's motion, and referenced in Groves' supporting declaration, contains multiple levels of hearsay and lacks foundation. Groves did not establish his personal knowledge of either the letter or its contents. The letter was not sent or copied to Groves. And Surf N Turf has not explained how Nielsen would have adequate knowledge of Surf N Turf's actual expenses when there is no suggestion he is a member of or employed by Surf N Turf, or otherwise involved in making or authorizing expenditures for Surf N Turf.
Having failed to demonstrate the FACC is both legally sufficient and supported by a prima facie factual showing, Surf N Turf has not established the probability of prevailing on its misrepresentation claim against the City. Therefore, it did not meet its burden on prong two, and the eighth cause of action of the FACC must be stricken.
Conclusion Regarding City's anti-SLAPP Motion
In sum, the order granting the City's anti-SLAPP motion is affirmed with regard to the alleged Brown Act violation (first cause of action) and the intentional misrepresentation cause of action (eighth cause of action). The order granting the City's motion is reversed as to the causes of action for breach of contract (second cause of action), intentional interference with prospective economic advantage (sixth cause of action), conversion (seventh case of action), and negligence (ninth cause of action). We recognize that the City has several defenses to the alleged liability on the second, sixth, seventh, and ninth causes of action. We do not opine on those defenses. They are appropriately addressed by other procedural tools like a demurrer, motion for judgment on the pleadings, summary judgment motion, or trial. But those causes of action are not SLAPP suits and may not be stricken with an anti-SLAPP motion.
II.
Wilford's and Nielsen's anti-SLAPP Motion
Wilford and Nielsen are named as cross-defendants in the third (breach of contract), sixth (intentional interference with prospective advantage), seventh (conversion), eighth (intentional misrepresentation), ninth (negligence), eleventh (unfair competition), twelfth (defamation against Wilford), and thirteenth (defamation against Nielsen) causes of action. Wilford and Nielsen did not move to specially strike the third cause of action for breach of contract.
The court sustained their demurrer to the breach of contract cause of action.
Arising from Protected Activity
The gravamen of the FACC as it relates to Wilford and Nielsen revolves around their involvement as investors in the project under consideration by the City, including certain alleged conduct and statements made to advance the project in the hopes the City would approve it so they could protect their investments. (Contreras, supra, 5 Cal.App.5th at p. 405 [gravamen defined by acts on which liability based, not some philosophical thrust or legal essence of cause of action].) The FACC scarcely mentions Wilford and Nielsen by name, but it lumps them together with other cross-defendants in several paragraphs without specifying either's involvement. The FACC alleges Nielsen was retained by Surf N Turf to obtain project approvals from the City and that Wilford is a close acquaintance of Nielsen's. Nielsen is alleged to have approached Surf N Turf to advise them he had given money to Melcher and he wanted equity in the project in exchange for supporting the project. Nielsen allegedly signed a nondisclosure agreement, but it is not attached to the FACC. Nielsen allegedly had political clout with the City and Surf N Turf agreed to give him a 1.5 percent equity position in the project. Thereafter, he began to attend the City hearings and have informal discussions with the City. The FACC also alleges he met with city council members to pitch a project format that was detrimental to Surf N Turf. The FACC alleges Wilford and Nielsen spoke at a city council meeting (apparently on April 21, 2015, but it is not clear). Wilford sent an e-mail to city council member Bob Baker concerning the project, as did Nielsen.
Notably, some of the conduct and statements are alleged to have occurred after Wilford, Nielsen, and others filed their complaint on December 2, 2014. The Wilford e-mail was allegedly written on December 10, 2014. The meeting at which Wilford and Nielsen allegedly spoke occurred in April 2015. The only evidence in the record as to Wilford's and Nielson's alleged activities were statements they made to advocate their positions before the City and its council.
Wilford and Nielsen contend their communications with the City are protected under section 425.16, subdivisions (e)(2) and (e)(4). Subdivision (e)(2) protects "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." (Id., subd. (e)(2).) As used in section 425.16, subdivision (e)(2), a matter is "under consideration" if it "is one kept 'before the mind', given 'attentive thought, reflection, meditation.' [Citation.] A matter under review is one subject to 'an inspection, examination.'" (Braun v. Chronicle Publishing Co. (1997) 52 Cal.App.4th 1036, 1049.)
The City as an entity is an executive body, and its city council is a legislative body, which were considering whether and how the project could be implemented on city-owned land. All the alleged statements made by Wilford and Nielsen were made in connection with city hearings and informal discussions and/or e-mails with the City concerning the project, a matter under consideration or review by the City. In one of the first cases to interpret the anti-SLAPP statute, we made clear the statute protected both public and private speech by the defendant regarding a proposed homeless shelter because the private speech was also in connection with an issue of public interest. (Averill v. Superior Court (1996) 42 Cal.App.4th 1170, 1174-1175.) Here, as to the alleged written or oral statements or writings by Wilford and Nielsen, we agree they are protected under section 425.16, subdivision (e)(2).
To the extent Wilford and Nielsen engaged in conduct, for the same reasons discussed ante concerning the City's motion, the conduct is protected under section 425.16, subdivision (e)(4) as made in furtherance of speech and petitioning activity in connection with a public issue or an issue of public interest. We conclude Wilford and Nielsen met their burden under the first prong of the anti-SLAPP analysis. We now turn to prong two.
Probability of Prevailing
Initially we note in their briefs on appeal, Surf N Turf and Surf Lagoons failed to address the defamation causes of action. We therefore deem arguments concerning those causes of action waived. When legal argument with citation to authority is not furnished on a particular point, we may treat the point as waived and pass it without consideration. (Maral v. City of Live Oak (2013) 221 Cal.App.4th 975, 984-985.) Surf N Turf and Surf Lagoons failed to meet their burden to establish a prima facie case of defamation against either Wilford or Nielsen.
As discussed ante, intentional interference with prospective economic advantage (Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc., supra, 2 Cal.5th at p. 512), conversion (Plummer v. Dan/Eisenberg, LLP, supra, 184 Cal.App.4th at p. 45), intentional misrepresentation (Service by Medallion, Inc. v. Clorox Co., supra, 44 Cal.App.4th at p. 1816), and negligence (Ladd v. County of San Mateo, supra, 12 Cal.4th at p. 917), all require proof of damages. We previously concluded Surf N Turf failed to produce sufficient evidence of damages. Regarding Wilford and Nielsen, Surf Lagoons makes one additional argument, urging us to find it was damaged by Surf N Turf's loss of the project "because it was the company that was going to sell and install the wave park feature and Cross-Defendants as developers did not intend to use Surf Lagoons." The argument is speculative, and in any case, neither Surf N Turf nor Surf Lagoons produced admissible evidence of any lost profit concerning the project.
The only remaining cause of action is for unfair competition. An action for unfair competition under Business and Professions Code section 17200 is derivative of the others. "'"By proscribing 'any unlawful' business practice, 'section 17200 "borrows" violations of other laws and treats them as unlawful practices' that the unfair competition law makes independently actionable."' [Citation.] 'Virtually any law — federal, state or local — can serve as a predicate for a [UCL] action.' [Citations.] When a statutory claim fails, a derivative UCL claim also fails." (Aleksick v. 7-Eleven, Inc. (2012) 205 Cal.App.4th 1176, 1185.) Hence if no underlying cause of action survives, neither does the action for unfair competition.
As to Surf Lagoons, it presented no evidence in opposition to Wilford's and Nielsen's anti-SLAPP motion. Wilford and Nielsen argue the appeal of Surf Lagoons is frivolous in the absence of evidence. Cross-complainants fail to address the argument in their reply brief. We agree Surf Lagoons did not make any evidentiary showing on the anti-SLAPP motions and therefore failed to carry its evidentiary burden.
Conclusion regarding Wilford's and Nielsen's anti-SLAPP Motion
Having failed to demonstrate the FACC is legally sufficient and supported by a prima facie factual showing, neither Surf N Turf nor Surf Lagoons has established the probability of prevailing on its claims against Wilford and Nielsen.
DISPOSITION
The order granting the anti-SLAPP motions is affirmed in part and reversed in part. The order granting the City's anti-SLAPP motion is affirmed as to the Brown Act violation (first cause of action of the FACC), and the intentional misrepresentation cause of action (the eighth cause of action of the FACC), but reversed as to the breach of contract action (second cause of action of the FACC), the intentional interference with prospective economic advantage action (sixth cause of action of the FACC), the conversion action (seventh cause of action of the FACC), and the negligence action (ninth cause of action of the FACC). The order granting the anti-SLAPP motion of Wilford and Nielsen is affirmed in full. Wilford and Nielsen shall recover their costs on appeal against Surf N Turf and Surf Lagoons, as well as attorney fees to be determined by the trial court. (§ 425.16, subd. (c)(1).) As to the City and Surf N Turf and Surf Lagoons, each party shall bear their own costs on appeal with respect to the arguments made on the City's anti-SLAPP motion.
Respondents' motions to dismiss the appeals and their requests to take judicial notice, filed on January 25, 2018, are denied. Appellants' requests to take judicial notice, filed on February 20, 2018, are granted. --------
IKOLA, J. WE CONCUR: ARONSON, ACTING P. J. GOETHALS, J.