Opinion
NOT TO BE PUBLISHED
Kane, J.
APPEAL from a judgment of the Superior Court of Mariposa County. Super. Ct. No. 2432 Wayne R. Parrish, Judge.
McCormick, Barstow, Sheppard, Wayte & Carruth LLP and Timothy J. Buchanan for Plaintiff and Appellant.
Dooley Herr & Peltzer, Attorneys at Law, LLP, Leonard C. Herr and Ron Statler for Defendants and Respondents.
OPINION
For a considerable time, appellant Yosemite Oaks, Inc. (YOI) and one of its shareholders, respondent Allan A. Smith (Smith), have been at odds in a legal dispute over the question of Smith’s right to continue using a home built on YOI land. When negotiations failed, each party initiated a separate lawsuit arising out of the dispute -- namely, Smith’s dissolution complaint and YOI’s unlawful detainer complaint, filed in that order. Smith then made a special motion to strike the unlawful detainer complaint pursuant to Code of Civil Procedure section 425.16, otherwise known as an “anti-SLAPP” motion, on the grounds that his dissolution complaint was filed first and the unlawful detainer proceeding was commenced to punish him for pursuing such judicial relief. The trial court granted the motion and thus dismissed the unlawful detainer complaint. YOI appeals, contending the trial court erred in granting the motion because Smith failed to show, as was his burden, that the unlawful detainer complaint arose from Smith’s exercise of his right of petition or free speech. We agree and reverse the trial court’s order.
Unless otherwise indicated, all further statutory references are to the Code of Civil Procedure.
SLAPP is an acronym for “‘strategic lawsuit against public participation.’” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 732, fn. 1.)
BACKGROUND FACTS
The Underlying Dispute
In the 1920’s, several family members formed YOI as a corporation to manage approximately 1,080 acres of land owned by them in Mariposa County. The land was placed in the corporate name and the family members became shareholders. Ownership of the shares has since passed by inheritance, sale or otherwise to the current shareholders. Prior to November of 2006, YOI had five shareholders: Glenn L. Allen (10,000 shares), Arthur Carlson (10,000 shares), Suzanne Mangus (10,000 shares), Allan Smith (15,000 shares) and Allen Thomas (5,000 shares). In November 2006, Smith apparently acquired Mr. Thomas’s shares and thereby became a 40 percent shareholder.
Several dwellings are present on YOI land. Suzanne Mangus, the President of YOI since 2004, stated that there has existed “a longstanding oral custom based on the mutual trust and respect between the shareholders of YOI that the YOI shareholders could enjoy temporary, recreational occupancy of a dwelling on the YOI property as long as the occupancy of the dwelling did not conflict in any way with the interests of YOI.” However, in late 2003, she became aware that Smith was using one of the dwellings as a permanent residence.
Apparently, for an unstated period of time, Smith had been residing with his family in one of the dwellings on YOI land, situated at 4991 Triangle Road, Mariposa. Smith’s declaration in support of the anti-SLAPP motion claimed that the dwelling was “our family home that my father built with his own money and I have maintained with my own money.”
According to Ms. Mangus’s declaration in opposition to the anti-SLAPP motion and the minutes of YOI meetings that were attached thereto, Smith began in early 2004 to indicate his wish to acquire personal ownership of the parcel of land on which the house is located. At the April 2004 shareholders meeting, Smith’s proposal was presented by his wife to divide or parcel the YOI land among the shareholders, which step would require certificates of compliance (or “certification”) concerning seven historical parcels, followed by five plot line moves to divide the property. The shareholders deferred any decision on the proposal. At the July 27, 2004 board meeting, Smith announced that he had proceeded on his own to have the YOI historical parcels “certified,” even though consent and approval of YOI had not been obtained. According to the minutes, several members of the board expressed shock that Smith would unilaterally take such action without corporate authorization.
At the February 18, 2005 annual meeting of shareholders and directors, YOI’s corporate attorney presented Smith and Leonard Herr (Smith’s attorney) with a proposed draft of a “tenancy at will” contract regarding Smith’s continued use of the dwelling on YOI property. Smith agreed to respond within 90 days. Ms. Mangus also gave Smith the option of removing the dwelling from YOI land. YOI never received a response to these proposals.
At the February 16, 2006 annual meeting of shareholders and directors, it was reported by YOI’s corporate counsel that Smith had still not signed the tenancy contract that was proposed by YOI. Further, corporate counsel “reported that it was a matter of concern that it had been discovered that [Smith] had obtained an assessor’s parcel number for his residence on YOI property without notice to YOI and with the tax bill to be sent to [Smith], not YOI.” In response to these developments, the board voted to authorize corporate counsel to determine if Smith’s position was adverse to the interests of YOI and to take whatever action was legally required to protect YOI’s legal rights. Thereafter, Ms. Mangus received a written consent from four of the five shareholders and directors (i.e., all except Smith) which expressly “[authorized] President Suzanne Mangus to consult with and retain legal counsel to seek all legal remedies advised by counsel regarding Allan Smith’s continued tenancy on YOI land and his failure to sign a lease agreement with YOI, as authorized by the Board.”
In the fall of 2006, the parties through their respective legal counsel continued to negotiate possible terms of a tenancy or lease arrangement in an effort to resolve their ongoing dispute, but such efforts were unsuccessful. Smith was apparently unwilling to agree to a lease unless there was a commitment on YOI’s part to buy out his interest and/or to divide the land among the shareholders.
By this time, attorney Jeffrey Kaufman was retained by YOI, while attorney Leonard Herr continued to represent Smith.
The Timing of the Lawsuits
On October 13, 2006, YOI’s counsel sent a letter to Smith’s counsel indicating that YOI “has concluded that the best course of action to resolve this matter is through the filing of an unlawful detainer action.” A “Notice of Termination of Tenancy” was enclosed with the letter, along with a request that Smith’s counsel accept service on behalf of his client so that personal service on Smith and his wife would be unnecessary. The Notice of Termination of Tenancy required that Smith and his wife leave the premises by November 30, 2006. When YOI’s counsel received no response to his letter, he had the Notice of Termination of Tenancy served “on the Smiths.” The proofs of service show that Smith and his wife were served on October 24 and 25, 2006.
In November of 2006, Smith’s counsel sent two letters making settlement proposals and stating that if settlement is not reached, his client would proceed with dissolution. There was no indication in these letters that a dissolution action had already been filed. In reality, Smith’s dissolution action was filed in Merced County Superior Court on October 27, 2006. YOI’s counsel stated in his declaration that he did not learn of Smith’s dissolution action until December 1, 2006, and only then indirectly through a court filing service.
Smith’s first amended complaint for corporate dissolution was filed on December 7, 2006 (the dissolution complaint), and was received by YOI’s counsel about one week later. The dissolution complaint alleged, among other things, that Ms. Mangus and YOI had improperly sought “to remove [Smith] and his family from their family home, which is by mutual agreement, understanding, and practice available for [Smith’s] use until such time as [YOI] transfers its interest in the real property upon which it is located.”
On December 20, 2006, YOI’s unlawful detainer complaint was filed in Mariposa County Superior Court (the unlawful detainer complaint). According to YOI’s counsel, the unlawful detainer complaint was prepared by him following the expiration of the 30-day Notice of Termination of Tenancy served on the Smiths, and it was not filed in response to the dissolution complaint, “but in accordance with the intent to pursue an Unlawful Detainer action that was disclosed to Mr. Herr back on October 13, 2006.” The unlawful detainer complaint alleges, among other things, that “[YOI] and its shareholders have had a long oral custom of allowing shareholders to build and maintain improvements on [YOI] property for temporary occupancy. [Smith is] currently using the improvements as a permanent residence without [YOI’s] consent.”
The Anti-SLAPP Motion
Smith filed a special motion to strike YOI’s unlawful detainer complaint pursuant to section 425.16, also known as an anti-SLAPP motion, on February 2, 2007. The motion was made on the ground that the unlawful detainer action was commenced to retaliate against Smith for his pursuit of redress in the courts in the form of his complaint for dissolution. In support of the motion, Smith referred to the parties’ respective pleadings and to YOI’s motion for a protective order in response to his (Smith’s) efforts to depose individual members of the board in connection with the unlawful detainer proceeding. The only declaration filed in support of the anti-SLAPP motion was that of Smith himself. Smith stated therein that he asked the board of YOI to buy him out, to allow him to buy them out, or to dissolve the corporation, but his requests were ignored and now “[t]he president and the board are trying to evict me and my family from our family home that my father built with his own money and I have maintained with my own money.” Smith opined that the only reason the unlawful detainer action was filed was “because I exercised my Constitutional right to go to court and have my rights determined in that court.” Smith further noted that the unlawful detainer action was unnecessary because there was no urgency or need to have him and his family evicted from their home.
We find the motion for protective order has no bearing whatsoever on the anti-SLAPP motion, and Smith’s argument on that matter is nothing more than conjecture as to what motivated that motion.
YOI filed its opposition to the anti-SLAPP motion on February 26, 2007. The opposition emphasized that weeks before the dissolution complaint was filed, Mr. Herr was specifically notified by Mr. Kaufman of the decision by YOI to initiate unlawful detainer proceedings, and even requested that Mr. Herr accept service on behalf of his clients of the Notice of Termination of Tenancy. This fact was supported by the declaration of Mr. Kaufman. YOI also submitted the declaration of Ms. Mangus, who summarized the nature of the dispute regarding Smith’s continuing use of the dwelling and of Smith’s unilateral actions in connection therewith that appeared to be contrary to YOI’s interests. Her declaration included as attachments the minutes of relevant corporate meetings. No further evidence was presented to the trial court. Smith filed a reply, but it consisted solely of argument.
The trial court heard the anti-SLAPP motion on March 19, 2007. At the hearing, the trial court noted that unlawful detainer proceedings were by nature limited in scope and could only resolve the issue of immediate possession, while a dissolution action was more comprehensive in scope and therefore a preferable forum for resolving the entirety of the parties’ dispute. Needing more time to consider the matter, the trial court continued the hearing. On April 3, 2007, the continued hearing date, the trial court granted the anti-SLAPP motion, explaining as follows:
Two other motions in this case were scheduled to be heard concurrently with the anti-SLAPP motion: YOI’s discovery motion for protective order and Smith’s demurrer to the unlawful detainer complaint. Because the trial court granted the anti-SLAPP motion, the other two motions became moot.
“The Court finds that the unlawful detainer action filed in Mariposa County was filed and penalized [Smith] for other litigation, specifically the file in Case No. 149836 in Merced County. [¶] The Court further finds that all issues regarding the [Smiths’] continued residency in the property can and will be resolved in the Merced County action, and issues regarding [YOI’s] use of the property are not properly litigated in an unlawful detainer action, a summary proceeding not intended to resolve shareholder disputes.”
On April 23, 2007, the trial court filed its written order granting Smith’s anti-SLAPP motion and dismissing YOI’s unlawful detainer action. This appeal followed.
DISCUSSION
YOI claims the trial court erred on two grounds when it granted the anti-SLAPP motion: (1) Smith failed to meet his threshold burden of showing that the challenged unlawful detainer complaint arose out of protected activity (i.e., the right to petition or free speech), and (2) YOI had a reasonable probability of prevailing on the merits of the unlawful detainer complaint. Because we hold the first ground fully disposes of this appeal, it is unnecessary to reach the second.
I. Standard of Review
We review a trial court’s ruling on an anti-SLAPP motion de novo (Flatley v. Mauro (2006) 39 Cal.4th 299, 325), employing our independent judgment (Santa Monica Rent Control Bd. v. Pearl Street, LLC (2003) 109 Cal.App.4th 1308, 1317). “‘We consider “the pleadings, and supporting and opposing affidavits … upon which the liability or defense is based.” (§ 425.16, subd. (b)(2).) However, we neither “weigh credibility [nor] compare the weight of the evidence. Rather, [we] accept as true the evidence favorable to the plaintiff [citation] and evaluate the defendant’s evidence only to determine if it has defeated that submitted by the plaintiff as a matter of law.” [Citation.]’ [Citation.]” (Flatley v. Mauro, supra, at p. 326.)
II. Smith Failed to Show the Cause of Action Arose From Protected Activity
Section 425.16 provides that “[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 or 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), italics added.)
Thus, resolution of an anti-SLAPP motion “requires the court to engage in a two-step process. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving defendant’s burden is to demonstrate that the act or acts of which the plaintiff complains were taken ‘in furtherance of the [defendant]’s right of petition or free speech under the United States or California Constitution in connection with a public issue,’ as defined in the statute. (§ 425.16, subd. (b)(1).) If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim.” (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.)
A. Meaning of “Arising From”
Here, we are concerned with the first step of the analysis: namely, whether the challenged cause of action (i.e., the unlawful detainer complaint) was shown to arise from protected activity under the statute. Of course, filing litigation -- that is, making a claim for relief in the courts -- is itself an exercise of the constitutional right to petition. (Navellier v. Sletten (2002) 29 Cal.4th 82, 90; Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1115.) The anti-SLAPP statute expressly includes as protected activity “any written or oral statement or writing made before a … judicial proceeding.” (§ 425.16, subd. (e).) However, simply because one lawsuit is filed after or in response to another does not mean that it arose from the prior petitioning activity for purposes of the anti-SLAPP statute. The “critical consideration” is whether the subsequent cause of action “is based on the defendant’s protected … petitioning activity.” (Navellier v. Sletten, supra, at p. 89; and see City of Cotati v. Cashman (2002) 29 Cal.4th 69, 76-78.)
In City of Cotati v. Cashman, supra, 29 Cal.4th 69, the owners of a mobilehome park filed a federal court action against the city challenging the validity of a rent control ordinance, and the city responded by filing a lawsuit in state court seeking declaratory relief that the ordinance was valid. (Id. at pp. 71-72.) The Supreme Court addressed the issue of whether the second action arose out of protected activity, and held that it did not, explaining as follows:
“It is indisputably true … that [the] City’s action was filed shortly after [the] Owners filed their claim in federal court. But the mere fact an action was filed after protected activity took place does not mean it arose from that activity. The anti-SLAPP statute cannot be read to mean that ‘any claim asserted in an action which arguably was filed in retaliation for the exercise of speech or petition rights falls under section 425.16, whether or not the claim is based on conduct in exercise of those rights.’ (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1002; see also Briggs v. Eden Council for Hope & Opportunity, supra, 19 Cal.4th at p. 1114 [‘arise from’ means ‘based upon’].)
“While [the] City’s complaint repeatedly refers to the underlying subject matter of [the] Owners’ federal action (i.e., the mobilehome park rent stabilization ordinance and arguments respecting its validity), it contains no reference to the action itself. California courts rightly have rejected the notion ‘that a lawsuit is adequately shown to be one “arising from” an act in furtherance of the rights of petition or fee speech as long as suit was brought after the defendant engaged in such an act, whether or not the purported basis for the suit is that act itself.’ [Citation.]
“To construe ‘arising from’ in section 425.16, subdivision (b)(1) as meaning ‘in response to,’ as [the] Owners have urged, would in effect render all cross-actions potential SLAPP’s. We presume the Legislature did not intend such an absurd result.” (City of Cotati v. Cashman, supra, 29 Cal.4th at pp. 76-77.)
Moreover, the mere fact that the second lawsuit may have been filed as an oppressive litigation tactic does not mean the second lawsuit arose out of protected activity. “That a cause of action arguably may have been triggered by protected activity does not entail that it is one arising from such. To focus on [the] City’s litigation tactics, rather than on the substance of [the] City’s lawsuit, risks allowing [the] Owners to circumvent the showing expressly required by section 425.16, subdivision (b)(1) that an alleged SLAPP arise from protected speech or petitioning.” (Id. at p. 78.)
The Supreme Court then stated the test for determining when a cause of action arises from protected activity: “[T]he statutory phrase ‘cause of action … arising from’ means simply that the defendant’s act underlying the plaintiff’s cause of action must itself have been an act in furtherance of the right of petition or free speech. (See ComputerXpress, Inc. v. Jackson, supra, 93 Cal.App.4th at p. 1001, and cases cited.) In the anti-SLAPP context, the critical point is whether the plaintiff’s cause of action itself was based on an act in furtherance of the defendant’s right of petition or free speech. [Citations.] ‘A defendant meets this burden by demonstrating that the act underlying the plaintiff’s cause fits one of the categories spelled out in section 425.16, subdivision (e) ….’ [Citations.]” (City of Cotati v. Cashman, supra, 29 Cal.4th at p. 78.)
In applying the test to the case before it, the Supreme Court concluded that the city’s lawsuit did not arise from the owners’ federal claims, but rather both lawsuits were based on the same underlying controversy. “[J]ust as [the] Owners’ lawsuit itself was not the actual controversy underlying [the] Owners’ request for declaratory relief in federal court, neither was that lawsuit the actual controversy underlying [the] City’s state court request for declaratory relief. Rather, the actual controversy giving rise to both actions -- the fundamental basis of each request for declaratory relief -- was the same underlying controversy respecting [the] City’s ordinance. [The] City’s cause of action therefore was not one arising from [the] Owners’ federal suit. Accordingly, [the] City’s action was not subject to a special motion to strike.” (City of Cotati v. Cashman, supra, 29 Cal.4th at p. 80, fn. omitted.) This approach has been consistently applied by the courts. (See, e.g., Kajima Engineering & Construction, Inc. v. City of Los Angeles (2002) 95 Cal.App.4th 921, 929 [anti-SLAPP statute did not apply to cross-complaint alleging claims based on the defendant’s pre-litigation bidding and contracting practices]; Santa Monica Rent Control Bd. v. Pearl Street, LLC, supra, 109 Cal.App.4th at p. 1318 [although board’s lawsuit was triggered by landlord’s filing of a petition seeking rent increase, the lawsuit was not based on said petition but on the board’s claim that landlord was charging illegal rent]; cf., Navellier v. Sletten, supra, 29 Cal.4th at pp. 89-90 [fraud action relating to release and counter-claims made in connection with prior federal suit was based on petitioning activity].)
B. Application
In deciding whether the “‘arising from’” requirement is met, we consider the pleadings and the supporting and opposing declarations submitted in connection with the anti-SLAPP motion. (City of Cotati v. Cashman, supra, 29 Cal.4th at p. 79.) The relevant papers in this case confirm that Smith failed to make a threshold showing that YOI’s unlawful detainer complaint arose from Smith’s petitioning activity. To the contrary, it is manifest from the record that both lawsuits were based on the same underlying dispute -- namely, the parties’ disagreement regarding Smith’s continuing use of the dwelling on YOI land and their inability to reach a resolution thereof. Both complaints expressly allude to and are premised on this same prelitigation controversy regarding Smith’s use of the dwelling. Further, the declaration of Ms. Mangus specifies the nature and history of the underlying dispute leading to the unlawful detainer action, which facts were never materially controverted by Smith.
Considerable uncertainty was inherent in this case on the question of the extent to which one party’s litigation may have been in response to the other’s. True, the dissolution complaint was filed first, but it is also undisputed that YOI notified Smith’s counsel beforehand of the impending unlawful detainer case and even served a Notice of Termination of Tenancy prior to the filing of Smith’s complaint. In any event, even assuming the unlawful detainer complaint was in some sense a response to the dissolution action, we conclude it was not based thereon for purposes of meeting the threshold showing under anti-SLAPP law, for the reasons explained herein.
Smith’s declaration in support of the motion relies on his assessment that YOI’s recourse to eviction was harsh and unnecessary. However, the fact that a lawsuit may be viewed as an oppressive litigation tactic is not a substitute for making the needed showing in support of an anti-SLAPP motion. (City of Cotati v. Cashman, supra, 29 Cal.4th at p. 78; Kajima Engineering & Construction, Inc. v. City of Los Angeles, supra, 95 Cal.App.4th at p. 924.) Finally, we agree with YOI that the trial court’s assessment that one forum may have been preferable to the other for resolving the parties’ entire controversy was not relevant to the determination in this case of whether Smith had made a sufficient showing in support of the anti-SLAPP motion.
We conclude that Smith failed to meet his threshold burden of showing that the challenged cause of action (i.e., YOI’s unlawful detainer complaint) arose from Smith’s petitioning activity (i.e., filing the dissolution complaint) within the meaning of the anti-SLAPP statute. Since this requirement for relief under section 425.16 was not met, the trial court erred in granting the motion. That is, because the cause of action “did not arise from such protected activity, the motion to strike must be denied.” (Santa Monica Rent Control Bd. v. Pearl Street, LLC, supra, 109 Cal.App.4th at p. 1317 [order granting motion reversed].) In light of our conclusion that Smith failed to meet his initial burden of showing that the unlawful detainer complaint was based on protected activity, we need not consider the secondary issue of whether YOI demonstrated a probability of prevailing on the merits. (City of Cotati v. Cashman, supra, 29 Cal.4th at pp 80-81.)
DISPOSITION
The order granting Smith’s special motion to strike under section 425.16 is reversed and the case is remanded to the trial court for further proceedings consistent with the views expressed herein. YOI is entitled to costs on appeal.
WE CONCUR: Vartabedian, Acting P.J., Gomes, J.