Opinion
D070225
08-01-2017
WOLFGANG HAHN et al., Plaintiffs and Respondents, v. ALEJANDRO DIAZ-BARBA et al., Defendants and Appellants.
Law Offices of D. Anthony Gaston and David Anthony Gaston, Caldarelli Hejmanowski Page & Leer and William J. Caldarelli, David H. Lichtenstein for Defendant and Appellant Martha Barba de la Torre; Seltzer Caplan McMahon Vitek and David M. Greeley for Defendants and Appellants Michael, Nicholas and Alexander Kocherga; James & Waddle and Scott D. Waddle for Defendant and Appellant Alejandro Diaz-Barba; Duckor Spradling Metzger & Wynne and Robert M. Shaughnessy for all Defendants and Appellants. Cooley and Ali M. M. Mojdehi, Janet D. Gertz, Allison M. Rego for Plaintiffs and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 37-2009-00083805-CU-BT-CTL) APPEAL from an order of the Superior Court of San Diego County, Joel M. Pressman, Judge. Affirmed. Law Offices of D. Anthony Gaston and David Anthony Gaston, Caldarelli Hejmanowski Page & Leer and William J. Caldarelli, David H. Lichtenstein for Defendant and Appellant Martha Barba de la Torre; Seltzer Caplan McMahon Vitek and David M. Greeley for Defendants and Appellants Michael, Nicholas and Alexander Kocherga; James & Waddle and Scott D. Waddle for Defendant and Appellant Alejandro Diaz-Barba; Duckor Spradling Metzger & Wynne and Robert M. Shaughnessy for all Defendants and Appellants. Cooley and Ali M. M. Mojdehi, Janet D. Gertz, Allison M. Rego for Plaintiffs and Respondents.
Defendants and appellants Alejandro Diaz-Barba (Diaz), Martha Barba De La Torre (Barba), Michael Kocherga, Nicholas Kocherga and Alexander Kocherga (the Kochergas) appeal from an order denying their Code of Civil Procedure section 425.16 special motions to strike the second amended complaint of plaintiffs and respondents Wolfgang Hahn and Nikita II, S.A. (at times respectively Hahn and Nikita). Defendants contend the trial court erred by denying their motions because the six causes of action alleged in the operative pleading assertedly arose from constitutionally-protected petitioning activity, namely defendants' alleged demand—as a condition to a proposed company share purchase and sale agreement—that bankruptcy adversary proceedings be dismissed. According to defendants, in reaching its ruling as to the first step of the section 425.16 analysis, the court did not consider the test applicable to a "mixed" cause of action arising from both protected and nonprotected petitioning activity recently set out in Baral v. Schnitt (2016) 1 Cal.5th 376. They ask us to reverse the order and direct the court to enter a new order granting the motions on grounds their acts were privileged and defendants cannot show a probability of prevailing on any claim arising from protected petitioning activity.
Statutory references are to the Code of Civil Procedure unless otherwise specified. Section 425.16 is commonly referred to as the anti-SLAPP (Strategic Lawsuit Against Public Participation) statute. (Navellier v. Sletten (2002) 29 Cal.4th 82, 85.)
We conclude that defendants' anti-SLAPP motions were untimely filed with respect to the first through fourth causes of action for interference with/inducing breach of contract and intentional and negligent interference with economic advantage, and that with respect to the fifth and sixth causes of action for deceit and aiding and abetting deceit, defendants did not meet their burden to show those causes of action arise from activity protected by section 425.16. Accordingly, we affirm the order.
FACTUAL AND PROCEDURAL BACKGROUND
We take the background facts from plaintiffs' second amended complaint as well as the admissible portions of the declarations submitted in connection with the anti-SLAPP motions. Plaintiffs suggest it is improper for a court to consider defendants' declarations on the first prong of the anti-SLAPP analysis, but courts do indeed consider such declarations—to the extent they state the facts on which the liability or defense is based—in deciding whether the "arising from" requirement is met. (§ 425.16, subd. (b); City of Cotati v. Cashman (2002) 29 Cal.4th 69, 79; see also Cruz v. City of Culver City (2016) 2 Cal.App.5th 239, 244 [in the first step of the anti-SLAPP analysis, the trial court "reviews the pleadings, declarations and other supporting documents to determine what conduct is actually being challenged, not whether that conduct is actionable"].)
Hahn is the owner of land development company Nikita, which in 2007 was the majority owner of Impulsora S.A. (Impulsora), a Mexican company. Hahn is also the sole owner of a company called Kismet. Hahn was planning a high-end development project on Impulsora land.
In about 2004, Diaz and Barba purchased an interest in Mexican coastal property, Villa Vista Hermosa, from an entity controlled by a chapter 7 bankruptcy debtor. Villa Vista Hermosa is immediately adjacent to and surrounded by the Impulsora land. The sale eventually resulted in a bankruptcy trustee initiating adversary proceedings for fraudulent transfer against Diaz and Barba in bankruptcy court. Eugene Kocherga had introduced Diaz and Barba to the debtor. Eugene was a minority shareholder in Impulsora, and the other Kochergas had beneficial interests Eugene's shares. At some point after April 2006, Eugene and Diaz entered into a secret agreement concerning Diaz's acquisition of a 20 percent interest in Eugene's shares in Impulsora, and backdated the agreement to July 2003.
As do the parties, we refer to Eugene Kocherga by his first name to avoid confusion. The parties point out that though Eugene was named as a defendant in the second amended complaint, plaintiffs had not served him with that pleading by the time defendants filed their anti-SLAPP motions, and he is not a party to this appeal. We likewise refer to Michael Kocherga, Nicholas Kocherga and Alexander Kocherga individually by their first names and collectively as the Kochergas.
In mid-2006, Hahn's company Kismet purchased the bankruptcy estate assets, including the fraudulent transfer actions, from the bankruptcy trustee, and Kismet became the plaintiff in those actions. Thereafter, Barba, Diaz and the Kochergas entered into a scheme to convince or force Hahn to dismiss the fraudulent transfer actions. As part of that scheme, Diaz and Barba offered the Kochergas a part ownership interest in Villa Vista Hermosa.
Thus, beginning in September 2006, Michael and Eugene told Hahn that Eugene desired to sell his shares in Impulsora to Hahn and the men engaged in discussions about the sale. As part of those discussions, Hahn informed Michael that the majority shareholders of Impulsora would refrain from a planned merger and recapitalization. In February 2007, Hahn and Eugene entered into a letter agreement concerning the terms of the sale, and Hahn designated Nikita as the assignee of his rights under that agreement. In connection with the negotiations leading up to the letter agreement, neither Eugene nor the Kochergas informed Hahn that they had been promised part ownership of the Villa Vista Hermosa, that they were preparing to file a shareholder retirement action against Impulsora, or that their intent was to compel Hahn to dismiss the fraudulent transfer actions. It was not until March 2007, while the parties were working on a definitive purchase and sale agreement for Eugene's shares in Impulsora, that Michael informed Hahn that Eugene would refuse to perform the letter agreement unless Hahn dismissed the fraudulent transfer actions against Barba and Diaz.
As a result of Eugene's breach of the letter agreement, plaintiffs' planned development project suffered delays, they incurred carrying costs and increased expenses, they were prevented from effectuating their merger plan, and their majority ownership interest in Impulsora was reduced in value.
Eventually, the bankruptcy court entered a judgment requiring Barba and Diaz to transfer Villa Vista Hermosa to Kismet. When Kismet began enforcing the judgment, Eugene, with the assistance of funding from Diaz and Barba, filed lawsuits in Mexico in an effort to harass Hahn and prevent him from enforcing the judgment.
Proceedings Leading to the Present Appeal
In early 2009, plaintiffs sued defendants, alleging causes of action for interference with and inducing breach of contract (first and second causes of action), intentional and negligent interference with prospective economic advantage (third and fourth causes of action), and conspiracy (fifth cause of action). They alleged generally that Diaz and Barba sought to use threats, bribes and unlawful methods to force Hahn to dismiss the fraudulent transfer actions, and in doing so, induced Eugene and the Kochergas to assist them in the scheme. Plaintiffs filed a first amended complaint in July 2009 omitting the conspiracy cause of action in response to an order granting in part Barba's motion to strike. Thereafter, on the defendants' motions, the superior court in October 2009 stayed the action on grounds of the existence of a more convenient forum (Mexico), and an appeal in this case ensued after which this court affirmed the stay order in an April 2011 decision. (Hahn v. Diaz-Barba, supra, 194 Cal.App.4th at pp. 1182, 1199.)
Diaz and Barba separately filed motions, which the Kochergas joined. (Hahn v. Diaz-Barba (2011) 194 Cal.App.4th 1177, 1184-1185.) The register of actions shows the motions and joinder were filed on September 17, 2009.
In June 2014, the superior court granted plaintiffs' motion to lift the stay, and several months later, granted plaintiffs leave to file a second amended complaint. (Diaz-Barba v. Superior Court (2015) 236 Cal.App.4th 1470, 1473-1474, 1479, 1481.) Before that pleading was filed, defendants brought a writ petition challenging that order, and the matter was stayed yet again. (Id. at p. 1481.) In April 2015 this court denied defendants' writ petition, in part holding the superior court properly lifted the stay because Mexico turned out not to be a suitable alternate forum. (Id. at p. 1489.) The parties proceeded to engage in discovery, resulting in the filing of motions to compel. In June 2015, the parties agreed to, among other things, a briefing schedule to decide the choice of law to be applied to the case. The matter was set for a January 2017 trial date.
In August 2015, plaintiffs filed a second amended complaint. This triggered further proceedings during which defendants objected to the form of the pleading and resulted in the court striking proposed seventh, eighth, and ninth causes of action. Plaintiffs then filed an excised second amended pleading in early October 2015. The second amended complaint contains the same causes of action as in the first amended pleading, and also alleges a fifth cause of action for deceit against Michael individually and Diaz, Barba, Nicholas and Alexander as conspirators, as well as a sixth cause of action for "aiding and abetting" deceit against defendants Diaz, Barba, Nicholas and Alexander. Plaintiffs allege in the first cause of action for intentional interference with contract that defendants knew of the existence of the letter agreement between plaintiffs and Eugene and interfered with Eugene's performance of the letter agreement so as to cause him to breach it by refusing to perform and demanding the fraudulent transfer actions against Diaz and Barba first be dismissed by Hahn. In the second cause of action for inducing breach of contract, plaintiffs allege that Diaz and Barba, knowing the transfer of Villa Vista Hermosa to them was fraudulent, were "desperately looking for some leverage against Plaintiffs" to force Hahn to dismiss the fraudulent transfer actions against them and thus deliberately interfered with the letter agreement and used their influence with the Kochergas by offering them an ownership in the Villa Vista Hermosa property. They allege that as a result of the offer to Eugene and the Kochergas, Eugene was induced to breach the letter agreement and refused to close the transaction for sale of his Impulsora shares to plaintiffs. Plaintiffs allege in support of the third and fourth causes of action for intentional and negligent interference with economic advantage that plaintiffs had a prospective economic relationship with Eugene for the sale of his shares with the probability of substantial continuing and future economic benefit to plaintiffs, of which defendants knew or should have known, but Diaz and Barba wanted leverage to blackmail or force Hahn into dismissing the fraudulent transfer actions and thus either deliberately attempted to interfere with plaintiffs and Eugene's arrangement, or knew that interference in the sale arrangement was certain or substantially certain to occur by their actions. They alleged that as a result of the defendants' actions, Eugene did not proceed with the sale arrangement, did not appear for the closing, and did not transfer or deliver the shares to Hahn or Nikita. In support of their claim for deceit, plaintiffs allege that before and after Eugene's signing of the letter agreement, Eugene and Michael made untrue statements of material fact and omitted material facts concerning Eugene's intent to perform in order to induce plaintiffs to take certain actions in reliance on the transaction's closing, including steps in commencing the development project and refraining from causing a merger and recapitalization of Impulsora. Plaintiffs allege that Diaz, Barba, Nicholas and Alexander entered into a conspiracy to assist Eugene and Michael in inducing plaintiffs' reliance on the fraud and force Hahn to dismiss the fraudulent transfer actions. As for aiding and abetting deceit, plaintiffs allege Diaz, Barba, Nicholas and Alexander assisted Eugene and Michael's misrepresentation, including by Diaz and Barba offering Eugene an ownership interest in the Villa Vista Hermosa, and by funding litigation against Hahn so as to induce Hahn's reliance and force him to dismiss the fraudulent transfer actions.
We grant the unopposed motion of Hahn and Nikita to augment the appellate record with the reporter's transcript of the October 9, 2015 proceedings.
In November 2015, defendants answered the second amended complaint.
The Special Motions to Strike
On December 8, 2015, Barba, Diaz and the Kochergas separately filed section 425.16 special motions to strike the second amended complaint, and joined in each other's motions. Each argued that plaintiffs' claims arose out of protected conduct under section 425.16, subdivision (e)(2), namely "any written or oral statement or writing made in connection with an issue under consideration by a . . . judicial body, or any other official proceeding authorized by law" because they were based on Barba's and Diaz's alleged communications with the Kochergas made for the purpose of attempting to settle, or procuring the dismissal of, the claims in the bankruptcy court actions. Specifically, they argued the gravamen of plaintiffs' claims were that Barba and Diaz communicated with Eugene and the other Kochergas that they should not proceed with the sale of the Impulsora shares unless Hahn agreed to dismiss his company Kismet's bankruptcy court claims, which they stated was an "issue under consideration by a . . . judicial body." Diaz characterized the core injury-producing conduct as "settlement communications," "settlement negotiations," or a settlement "offer" intended to compel dismissal of the bankruptcy actions, similar to the conduct in GeneThera, Inc. v. Troy & Gould Professional Corporation (2009) 171 Cal.App.4th 901 involving an attorney's act of sending a settlement offer in connection with pending litigation. Diaz also argued that his financing of litigation was protected activity that was also immunized by the Civil Code section 47, subdivision (b) litigation privilege. Barba and the Kochergas similarly argued that each of the claims arose from Barba's and Diaz's communications with the Kochergas intended to settle the bankruptcy court claims; that they were based on "conduct undertaken in the course of settling litigation . . . . " Defendants filed declarations from Eugene, Barba, Diaz and Diaz's counsel in support of their motions.
In opposition, plaintiffs argued the motions were untimely; that the underlying grounds for them existed in the original 2009 complaint, and by their undue delay defendants had waived their rights to bring their motions. Plaintiffs further argued the claims did not fall within the anti-SLAPP statute as a threshold matter because, among other things, defendants did not show their statements were made in connection with any issue under consideration or review by the bankruptcy court, and their speech was both criminal and illegal as a matter of law. In part, plaintiffs pointed out none of the actions concerned the issues presented in the bankruptcy proceedings, which were whether the debtor transferred property to Diaz and Barba with the intent to hinder, delay or defraud any creditor, and whether Diaz and Barba took the property for value, in good faith, and without knowledge of the voidability of the transfer. They characterized the defendants' communications as instead "enabling a scheme to persuade Eugene Kocherga to breach a contract, which had as its underlying motive the objective of extorting a dismissal of the Bankruptcy Court fraudulent transfer proceeding." Plaintiffs submitted their own opposing declarations, and objected on various grounds to portions of defendants' supporting declarations.
Plaintiffs submitted Hahn's sworn declaration summarizing the matters at issue in the bankruptcy adversary proceedings, and also lodged as an exhibit to their opposing papers the consolidated findings of fact and conclusions of law by the bankruptcy court judge in those matters. The court overruled defendants' hearsay, foundation, and authentication objections to the bankruptcy court's findings of fact and conclusions of law, and we may take judicial notice of that document to ascertain the issues involved. (Evid. Code, §§ 452, subd. (c), 459; see Java Oil Ltd. v. Sullivan (2008) 168 Cal.App.4th 1178, 1181, fn. 1.) Hahn states: "The Barba Defendants were named as defendants pursuant to a First Amended Complaint in an adversary proceeding that had first been filed by the bankruptcy trustee on August 4, 2004[,] in connection with a chapter 7 bankruptcy case in the United States Bankruptcy Court for the Southern District of California, In re Icenhower . . . . In Kismet v. Icenhower, et al., . . . the bankruptcy chapter 7 trustee sought avoidance and recovery of a fraudulent transfer of a certain bank trust that held legal title to Mexican coastal property known as the Villa Vista Hermosa ('Villa'). The Villa was situated immediately adjacent to, and was surrounded by, the holdings of Company. Additionally, on August 3, 2006, the chapter 7 trustee in the Bankruptcy Case filed an action for alter ego and for substantive consolidation of the debtors and their wholly-owned corporation, Howell & Gardner Investors, Inc., and to avoid and recover Howell & Gardner Investors' unauthorized fraudulent postpetition transfer of the Bank Trust to the Barba Defendants . . . ."
Defendants in reply submitted their own joint objections to plaintiffs' opposing evidence. They argued the motion was timely filed within 60 days of their filing the second amended complaint, which added two new causes of action. They also submitted additional declarations from Eugene and Michael.
Ruling on the parties' evidentiary objections, the trial court denied the motions. It ruled they were timely filed within 60 days of the operative second amended complaint, and exercised its discretion to consider them, reasoning "[e]ven if the motions relate to issues that were pled in previous iterations of the complaint . . . the motions are properly heard at this time based upon the extensive litigation in this case regarding the appropriate forum and law to be applied to the case." The court further ruled that the gravamen of the claims against each defendant did not arise from protected activity; they were "not based upon direct settlement negotiations with Hahn but an alleged breach and interference with an agreement unrelated to the bankruptcy litigation." Having found the action did not fall within the anti-SLAPP statute, the court did not reach the second prong of the analysis, namely, whether plaintiffs had established a probability of prevailing on the merits.
Defendants timely appeal from the order.
DISCUSSION
I. Legal Principles and Standard of Review
Section 425.16 provides: "A cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim." (§ 425.16, subd. (b)(1).) The statute identifies classes of conduct that come within its protection. (§ 425.16, subd. (e).) Relevant here, an " 'act in furtherance of a person's right of petition or free speech . . . in connection with a public issue' includes: . . . any written or oral statement or writing made in connection with an issue under consideration or review by a . . . judicial body, or any other official proceeding authorized by law . . . ." (§ 425.16, subd. (e)(2).)
The anti-SLAPP statute "provides a procedure for weeding out, at an early stage, meritless claims arising from protected activity. 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 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." (Baral v. Schnitt, supra, 1 Cal.5th at pp. 384-385.)
As for the first prong analysis, " '[t]he anti-SLAPP statute's definitional focus is not the form of the plaintiff's cause of action but, rather, the defendant's activity that gives rise to his or her asserted liability—and whether that activity constitutes protected speech or petitioning.' " (Baral v. Schnitt, supra, 1 Cal.5th at p. 393.) " '[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.' " (Ibid.) "Assertions that are 'merely incidental' or 'collateral' are not subject to section 425.16. [Citations.] Allegations of protected activity that merely provide context, without supporting a claim for recovery, cannot be stricken under the anti-SLAPP statute." (Baral v. Schnitt, at p. 394.)
In cases involving allegations of both protected and unprotected activity, the plaintiff is required to establish a probability of prevailing on any claim for relief based on the allegations of protected activity. (Baral v. Schnitt, supra, 1 Cal.5th at p. 395.) Baral described the process as follows: "At the first step, the moving defendant bears the burden of identifying all allegations of protected activity, and the claims for relief supported by them. When relief is sought based on allegations of both protected and unprotected activity, the unprotected activity is disregarded at this stage. If the court determines that relief is sought based on allegations arising from activity protected by the statute, the second step is reached. There, the burden shifts to the plaintiff to demonstrate that each challenged claim based on protected activity is legally sufficient and factually substantiated. The court, without resolving evidentiary conflicts, must determine whether the plaintiff's showing, if accepted by the trier of fact, would be sufficient to sustain a favorable judgment. If not, the claim is stricken. Allegations of protected activity supporting the stricken claim are eliminated from the complaint, unless they also support a distinct claim on which the plaintiff has shown a probability of prevailing." (Id. at p. 396.)
"We review de novo the grant or denial of an anti-SLAPP motion. [Citations.] We exercise independent judgment in determining whether, based on our own review of the record, the challenged claims arise from protected activity." (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1067.) If the defendant fails to show the lawsuit arises from protected activity, we may affirm the trial court's ruling without addressing the probability of prevailing prong. (Gotterba v. Travolta (2014) 228 Cal.App.4th 35, 41; Talega Maintenance Corporation v. Standard Pacific Corporation (2014) 225 Cal.App.4th 722, 728.)
II. Timeliness of Motions
We begin with the timeliness of the motions. Anticipating plaintiffs' appellate challenge and citing Lam v. Ngo (2001) 91 Cal.App.4th 832, defendants contend their motions were timely because the 60-day deadline for filing such a motion is not jurisdictional, and applies to amended complaints. They point out the trial court has discretion to permit the filing "at any later time upon terms that it deems proper" under section 425.16, subdivision (f), and here the court did so recognizing the "extensive litigation . . . regarding the appropriate forum and law to be applied to the case," which, defendants assert, was not an abuse of discretion.
In response, plaintiffs repeat their arguments that the anti-SLAPP motions were untimely as filed eight years too late. They argue the court's discretion to permit a late filing is limited by the policy of the statute—to expedite disposition of claims burdening speech and petition rights, and minimize costs to the parties—and because the parties had litigated extensively and incurred significant costs, permitting the motion at this stage negates that policy, requiring the motions be deemed untimely. As for the rule pertaining to amended complaints, plaintiffs argue Lam v. Ngo made clear it applies only where the preceding complaint contained no anti-free speech claims, and where, as here, the original and first amended complaints set out the same four interference claims supported by the same underlying facts, the trial court abused its discretion by ruling defendants had timely filed the anti-SLAPP motions to the second amended complaint. As we explain, we agree with plaintiffs that the motions are untimely as to the causes of action for interference with and inducing breach of contract, and intentional and negligent interference with economic advantage. A. An Amended Complaint Does Not Automatically Reopen the 60-Day Period by Which a Party Must File an Anti-SLAPP Motion
Subdivision (f) of section 425.16 provides that a special motion to strike "may be filed within 60 days of the service of the complaint or, in the court's discretion, at any time later upon terms it deems proper." Under this subdivision, "[a] party may not file an anti-SLAPP motion more than 60 days after the filing of the complaint, unless the trial court affirmatively exercises its discretion to allow a late filing." (Platypus Wear, Inc. v. Goldberg (2008) 166 Cal.App.4th 772, 775, characterized as dicta on other grounds in Baral v. Schnitt, supra, 1 Cal.5th at p. 386.)
Though the subdivision does not expressly refer to amended pleadings, in Lam v. Ngo, our colleagues in Division Three held that the words "the complaint" in section 425.16 refer to amended complaints. (Lam v. Ngo, supra, 91 Cal.App.4th at p. 840.) The Court of Appeal reasoned that if the anti-SLAPP statute applied only to original complaints, the statute's purpose could be easily subverted by holding back causes of action subject to the statute until later iterations of the pleadings. (Id. at pp. 840-841.) The court in Lam further pointed out "[i]t would make no sense to read 'complaint' to refer to an earlier complaint that contained no anti-free-speech claims, but not allow such a motion for a later complaint that had been amended to contain some," given the purpose of the statute to eliminate meritless claims at an early point in the litigation. (Id. at p. 841.) Lam held that such a result was compelled under a broad reading of the anti-SLAPP statute, resolving any ambiguity in favor of a hearing on the merits. (Ibid.)
The same court acknowledged its holding in Lam v. Ngo, supra, 91 Cal.App.4th 832 but refined it in Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2016) 6 Cal.App.5th 1207 (Newport Harbor), review granted Mar. 22, 2017, S239777. In Newport Harbor, the defendants filed an anti-SLAPP motion within 60 days of the filing of plaintiffs' third amended complaint, which contained two causes of action previously pleaded in earlier complaints based on the settlement of an unlawful detainer action. (Id. at pp. 1211, 1214-1215, 1219.) The trial court denied the motion as untimely, pointing out the case had been pending for over two years and all of the pleadings referenced the same settlement agreement underlying the plaintiffs' claims. (Id. at p. 1215.)
Under California Rules of Court, rule 8.1115, the court's opinion in Newport Harbor remains published and retains persuasive value despite the Supreme Court's grant of review. (Cal. Rules of Court, rule 8.1115(e)(1) [cases pending review "may be cited for potentially persuasive value only"].)
On appeal, the Court of Appeal rejected the defendant's argument that the anti-SLAPP statute should be interpreted to mean that the filing of an amended complaint automatically reopens the period for bringing an anti-SLAPP motion. (Newport Harbor, supra, 6 Cal.App.5th at p. 1217.) It adopted the rule expressed in Hewlett-Packard Co. v. Oracle Corp. (2015) 239 Cal.App.4th 1174 that an amended pleading " 'extend[s] or reopen[s] the time limit only as to newly pleaded causes of action arising from protected conduct.' " (Newport Harbor, 6 Cal.5th at pp. 1217-1218, quoting Hewlett-Packard Co., 239 Cal.App.4th at p. 1192, fn. 11.) The Hewlett-Packard court had acknowledged the anti-SLAPP statute's incentive to reward an unsuccessful movant with a " 'free time-out' " from further litigation in the trial court by permitting an immediate appeal of the motion's denial, even where the motion entirely lacks merit. (Hewlett-Packard Co., at pp. 1184-1185, quoting People ex rel Lockyer v. Brar (2004) 115 Cal.App.4th 1315, 1318.) In reaching its conclusion about the timeliness of an anti-SLAPP motion to amended pleadings, the Hewlett-Packard court reasoned that the "rule automatically reopening a case to anti-SLAPP proceedings upon the filing of any amendment permits defendants to forgo an early motion, perhaps in recognition of its likely failure, and yet seize upon an amended pleading to file the same meritless motion later in the action, thereby securing the 'free time-out' condemned in Brar . . . ." (Hewlett-Packard, at p. 1192, fn. 11.) Our colleagues in Division Three adopted this reasoning (Newport Harbor, 6 Cal.App.5th at p. 1218), and we too are persuaded that the automatic reopening rule "would encourage gamesmanship that could defeat rather than advance" (ibid.) the statute's purpose to prevent meritless SLAPP suits by ending them early and without great cost to the SLAPP target. (Ibid., citing Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192.)
As did the Hewlett-Packard and Newport Harbor courts, we read the anti-SLAPP statute as requiring a defendant to file an anti-SLAPP motion within 60 days of service of the first complaint that pleads a cause of action coming within section 425.16, subdivision (b)(1) unless the court in its discretion permits the motion to be filed at a later time. (Newport Harbor, supra, 6 Cal.5th at p. 1219; Hewlett-Packard, supra, 239 Cal.App.4th at p. 1192, fn. 11.) Thus, we conclude an amended complaint only reopens the time to file an anti-SLAPP motion without court permission if it pleads new causes of action that could not have been the target of a prior anti-SLAPP motion, or adds new allegations that make previously pleaded causes of action subject to such a motion. (Newport Harbor, at p. 1219.)
Applying this standard, defendants' anti-SLAPP motions were untimely with respect to the first through fourth causes of action. Each of those claims was previously pleaded in both the original and first amended complaints, and all are based on allegations that Diaz and Barba sought to convince Hahn to dismiss them from the bankruptcy court fraudulent transfer actions, elicited the Kochergas' participation in part by offering them ownership in Villa Vista Hermosa, and agreed to influence Eugene to threaten breach of the February 2007 letter agreement he had entered into with plaintiffs for the sale of his Impulsora stock unless Hahn dismissed the bankruptcy actions, thus intentionally or negligently interfering with that contract and plaintiffs' prospective economic relationship. Nothing prevented defendants from filing anti-SLAPP motions against either the original or first amended complaint on the ground that their efforts assertedly constituted settlement communications with respect to the bankruptcy court claims. Instead, they waited until plaintiffs filed the second amended complaint, years after the case had commenced and after the parties had extensively litigated the matter and engaged in discovery, as the register of actions in the record reflects.
This is not the case with respect to plaintiffs' fifth and sixth causes of action for deceit and aiding and abetting deceit, which are at least partly based more narrowly on statements or writing made by defendants, especially Eugene and Michael, before and after execution of the letter agreement concerning Eugene's intent to perform and sell his Impulsora shares to Hahn or Hahn's designee, causing Hahn to rely on them to his detriment in either taking certain steps or foregoing certain actions with regard to Impulsora's consolidation or the development project. These newly pleaded claims in the second amended complaint are based on sufficiently distinct conduct so as to permit defendants to bring anti-SLAPP motions against them. B. The Court Abused its Discretion by Considering the Motions as to the First Through Fourth Causes of Action
We proceed to whether the trial court acted within its discretion to nevertheless consider the motions with respect to the first through fourth causes of action. This court considered similar questions in San Diegans for Open Government v. Har Construction, Inc. (2015) 240 Cal.App.4th 611 (Har Construction) as well as Platypus Wear, Inc. v. Goldberg, supra, 166 Cal.App.4th 772, and held in both that the trial court had abused its discretion in permitting late-filed anti-SLAPP motions. (Har Construction, at pp. 624-626; Platypus Wear, Inc. v. Goldberg, at pp. 780, 784-787.) As in those cases, we conclude the court in this case erred.
" 'Discretion' refers to a zone of latitude within which a trial court's actions must be upheld on appeal. [Citation.] 'The legal principles that govern the subject of discretionary action vary greatly with context. [Citation.] They are derived from the common law or statutes under which discretion is conferred.' [Citation.] [¶] In the anti-SLAPP context, courts have identified two particular ways in which a refusal to entertain a late anti-SLAPP motion might be shown to constitute an abuse of discretion: (1) if 'the grounds given by the court . . . are inconsistent with the substantive law of section 425.16,' and (2) if the court's application of the statute to the facts of the case is 'outside the range of discretion conferred upon the trial court under that statute, read in light of its purposes and policy.' " (Hewlett-Packard, supra, 239 Cal.App.4th at pp. 1187-1188; see also Har Construction, 240 Cal.App.4th at p. 624; Platypus Wear, Inc. v. Goldberg, supra, 166 Cal.App.4th at pp. 775-776; Olsen v. Harbison (2005) 134 Cal.App.4th 278, 285.) "Discretion to permit or deny an untimely motion cannot turn on the final determination of the merits of the motion." (Olsen, at p. 286.)
Though a trial court " 'enjoys considerable discretion' " (Har Construction, supra, 240 Cal.App.4th at p. 624) in permitting a late-filed anti-SLAPP motion, it nevertheless " 'must be wary about freely granting a party the right to file an anti-SLAPP motion past the 60-day deadline.' [Citation.] In determining whether to permit a late motion, the most important consideration is whether the filing advances the anti-SLAPP statute's purpose of examining the merits of covered lawsuits in the early stages of the proceedings. [Citations.] Other relevant factors include the length of the delay, the reasons for the late filing, and any undue prejudice to the plaintiff." (Har Construction, 240 Cal.App.4th at p. 624.) We observe too that the purpose of the short statutory deadline is " ' "to avoid tactical manipulation of the stays that attend anti-SLAPP proceedings." ' " (Har Construction, at p. 624.)
Thus, in Platypus Wear, this court held the trial court had abused its discretion in granting an application to file a late anti-SLAPP motion approximately two years after the statutory deadline and after the parties had completed substantial discovery, where the defendant could not provide a compelling explanation for the delay and the court's reasons did not relate to the purposes of the anti-SLAPP statute. (Platypus Wear, Inc. v. Goldberg, supra, 166 Cal.App.4th at pp. 784-785, 787.) We characterized the delay as "extreme" (id. at p. 787), and observed that nothing in the procedural history of the case—including a stay of litigation pending an appeal—would justify allowing the late filing: "Although the litigation in the trial court was stayed for approximately a year, while Luce Forward appealed a denial of the trial court's order denying its motion to compel arbitration, there were approximately five months before the stay and approximately six months after the stay during which Goldberg could have attempted to file an anti-SLAPP motion. The lengthy delay in bringing the matter to trial occasioned by Luce Forward's interlocutory appeal is, if anything, a factor that weighs against granting Goldberg's application." (Id. at p. 787; see also Har Construction, supra, 240 Cal.App.4th at pp. 624, 626 [reversing trial court's decision to permit anti-SLAPP motion filed more than 16 months after the first amended complaint, after the parties had appeared before the court on various motions and the parties had served written discovery requests, and recognizing that "there was obvious prejudice involved in halting all discovery . . . ."; "the purpose of the anti-SLAPP statute was not served by the court's consideration of the untimely motion"].)
Here, defendants on appeal do not rely on the various stays to justify the timing of their motions. Nor do they attempt to explain how the trial court's decision to consider their untimely motions advances the purposes of the statute. They merely cite the court's reasoning—the fact that the parties had previously engaged in extensive litigation regarding the appropriate forum and law to be applied—and assert there was no abuse of discretion. But the court's reasoning was not only unrelated to the purposes of the anti-SLAPP statute but contrary to it. Defendants simply did not establish a compelling reason to permit them to file their motion years into the course of litigation, after the parties had engaged in discovery as well as other motions and the matter was set for trial.
Defendants below merely took the position that their motions were timely filed within 60 days of the service of the second amended complaint.
This court explained in Har Construction that "[a]n anti-SLAPP motion is not a vehicle for a defendant to obtain a dismissal of claims in the middle of litigation; it is a procedural device to prevent costly, unmeritorious litigation at the initiation of the lawsuit. When a case has been pending long after the 60-day period, the parties have presumably engaged in pretrial litigation and the purposes of an anti-SLAPP motion are no longer applicable. In this case, [plaintiffs] served written discovery requests . . . and the parties appeared before the court on various motions . . . . At that point, the parties were free to bring other dispositive motions (e.g., a motion for summary judgment or judgment on the pleadings), but the procedurally complex anti-SLAPP statutory scheme was no longer applicable." (Har Construction, supra, 240 Cal.App.4th at pp. 625-626; see also Hewlett-Packard, supra, 239 Cal.App.4th at p. 1189 [affirming trial court's decision not to permit defendant's motion filed beyond the 60-day time limit; "a defendant incurs costs—and permits the plaintiff to incur costs—that a timely motion might be able to avert. As these costs accumulate in the course of conventional discovery and motion practice, the capacity of an anti-SLAPP motion to satisfy the statutory purpose diminishes"].) "[A]n anti-SLAPP motion cannot fulfill the statutory purpose, and may indeed subvert that purpose, if the parties have already incurred substantial expense preparing the case for a more conventional disposition." (Hewlett-Packard, supra, 239 Cal.App.4th at p. 1190.) Such is the case here. We cannot say, at least as to the first four causes of action in the second amended complaint, that the court applied the statute in a manner compatible with its actual mandate or with its purposes and policy. (Hewlett-Packard, at p. 1188.) C. Defendants Have Not Shown Plaintiffs' Causes of Action for Deceit and Aiding and Abetting Deceit Arise from Protected Activity
In the second amended complaint's newly pleaded causes of action for deceit and aiding and abetting deceit, plaintiffs allege that while in San Diego executing the February 2007 letter agreement, Eugene made both untrue statements of material fact and concealed material facts needed to make his statements not misleading. In particular, they allege that both before and after entering into the letter agreement, Eugene made representations concerning his intent to perform under the agreement and close the transaction for the sale of Impulsora shares to plaintiffs. They allege that in March 2007, Michael wrote e-mails to Hahn confirming the earlier representations, representing that Hahn's continued pursuit of the fraudulent transfer actions would not impact Eugene's intent to fully perform, and reiterating that the mutually agreed arrangement for the share transfer was " 'in place.' " Plaintiffs allege that Eugene and Michael misrepresented to Hahn the true nature of the backdated Diaz agreement for an interest in Eugene's Impulsora shares, and did not disclose that Diaz had asserted some control over the shares under that backdated agreement. Plaintiffs allege that neither Eugene nor the Kochergas disclosed to Hahn any of the facts relating to their agreement with Diaz and Barba or that:
- Diaz and Barba had promised Eugene and the Kochergas a part ownership in the Villa Vista Hermosa if they were successful in obtaining a dismissal of the fraudulent transfer actions;
- Eugene and the Kochergas were actively preparing to file a shareholder retirement action against Impulsora;
- Eugene and the Kochergas were working with Diaz's lawyer cousin to discover information for use in litigation against Hahn and that Diaz and Barba had agreed to fund and were funding the share retirement action litigation;
- it was the intent of Eugene and the Kochergas to cause Hahn to rely on the closing of the share transaction only to refuse to perform shortly before the closing, but Michael falsely told Hahn they were " 'all on board' " to sell the shares and close the transaction.
Plaintiffs allege Diaz, Barba, Nicholas and Alexander assisted Eugene's and Michael's deceit by offering Eugene an ownership interest in Villa Vista Hermosa, funding litigation against Hahn, and making misrepresentations about the backdated Diaz agreement.
Defendants contend these claims fall within the anti-SLAPP statute because they are based on "communications made in connection with the attempted settlement, resolution, and dismissal of issues under consideration or review by" the bankruptcy court. They criticize the trial court for failing to acknowledge allegations of assertedly protected activity—what they characterize as "negotiations related to the settlement and dismissal of the adversary proceedings"—and focusing wrongly on the nonprotected conduct of interfering with a contract. Thus, defendants argue, the trial court "failed to analyze the very reason for such purported interference and breach," namely defendants' "efforts to procure a settlement and dismissal of the adversary proceedings." (Italics added.)
We note that plaintiffs respond in part that these causes of action are not protected under the anti-SLAPP statute because they allege "concealment" or failure to disclose, which is "not speech." They assert that the anti-SLAPP statute covers only written or oral communication, not failure to speak, which makes the alleged conduct collateral and unprotected. But the California Supreme Court has applied anti-SLAPP protection to an action alleging "misrepresentations and omissions" in connection with the signing of a release in underlying litigation. (Navallier v. Sletten, supra, 29 Cal.4th at p. 89, italics added; see also Suarez v. Trigg Laboratories, Inc. (2016) 3 Cal.App.5th 118, 123.) Thus, "failure to disclose can be protected petitioning activity for purposes of section 425.16." (Suarez, at p. 124.)
We reiterate that defendants' burden is to make a prima facie or initial showing that the claims arise from protected activity (Baral v. Schnitt, supra, 1 Cal.5th at p. 384; City of Montebello v. Vasquez (2016) 1 Cal.5th 409, 424), which entails defendants identifying all allegations of protected activity and the claims for relief supported by them. (Baral, at p. 396.) " ' "As courts applying the anti-SLAPP statute have recognized, the 'arising from' requirement is not always easily met. [Citations.]" [Citation.] A claim does not arise from constitutionally protected activity simply because it is triggered by such activity or is filed after it occurs. [Citation.] Rather, the focus is on the substance of the lawsuit. "[T]he 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.]" [Citation.] In other words, " ' "the act underlying the plaintiff's cause" or "the act which forms the basis for the plaintiff's cause of action" must itself have been an act in furtherance of the right of petition or free speech.' " ' " ' " (Aguilar v. Goldstein (2012) 207 Cal.App.4th 1152, 1160; see also Park v. Board of Trustees of California State University, supra, 2 Cal.5th at p. 1063; Baral v. Schnitt, supra, 1 Cal.5th at p. 393; Optional Capital, Inc. v. DAS Corp. (2014) 222 Cal.App.4th 1388, 1399 ["The mere fact that a lawsuit was filed after the defendant engaged in protected activity does not establish the complaint arose from protected activity under the statute because a cause of action may be triggered by protected activity without arising from it"].) "[I]f the allegations of protected activity are only " 'merely incidental' or 'collateral" to a cause of action, the claim is not subject to section 425.16. (Baral, at p. 394; see also Scott v. Metabolife Internal., Inc. (2004) 115 Cal.App.4th 404, 414; accord, Kenne v. Stennis (2014) 230 Cal.App.4th 953, 967-968; Hylton v. Frank E. Rogozienski, Inc., (2009) 177 Cal.App.4th 1264, 1271-1272 ["collateral or incidental allusions to protected activity will not trigger application of the anti-SLAPP statute"].)
Relevant to defendants' specific contention here, the analysis under section 425.16, subdivision (e)(2) "can be broken down into three components: (a) was there an 'issue under consideration or review by a . . . judicial body'; (b) were the [defendants'] statements made 'in connection with' this issue; and (c) did the causes of action pleaded by [the plaintiff] 'aris[e] from' the [defendants'] statements?" (City of Costa Mesa v. D'Alessio Investments, LLC (2013) 214 Cal.App.4th 358, 372-373, fn. omitted; accord, Paul v. Friedman (2002) 95 Cal.App.4th 853, 866 [section 425.16 "does not accord anti- SLAPP protection to suits arising from any act having any connection, however remote, with an official proceeding. The statements or writings in question must occur in connection with 'an issue under consideration or review' in the proceeding" (italics added)].) "Cases construing [subdivision (e)(2) of section 425.16] hold that 'a statement is "in connection with" litigation . . . , if it relates to the substantive issues in the litigation and is directed to persons having some interest in the litigation.' " (Seltzer v. Barnes (2010) 182 Cal.App.4th 953, 962, italics added, citing Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, 1266; see also McConnell v. Innovative Artists Talent and Literary Agency, Inc. (2009) 175 Cal.App.4th 169, 179.)
Even construing the statute broadly as we must (§ 425.16, subd. (a)), our review of the allegations of the deceit and aiding and abetting deceit causes of action compels us to conclude defendants have not shown those claims are either based on, or arise from, written or oral statements or writings made in connection with issues under consideration or review by the bankruptcy court. (§ 425.16, subd. (e)(2).) The facts underlying plaintiffs' claims are defendants' false statements or writings concerning Eugene's intent to proceed with the letter agreement for the sale of Impulsora shares, Diaz's interest in those shares, and their offer to Eugene of an interest in Villa Vista Hermosa as well as their steps regarding a possible shareholder retirement action. The deceit involved the Impulsora share purchase and sale agreement and the parties' business dealings over those shares, a nonprotected business dispute having nothing to do with the issues under consideration in the bankruptcy fraudulent transfer proceedings, i.e., whether there was a unity of interest and ownership between the debtor and the company that sold the Villa Vista Hermosa property and whether the debtor's transfer of the Villa Vista Hermosa property from the bankruptcy estate to Diaz and Barba was an unauthorized post-bankruptcy petition transfer avoidable under the bankruptcy code.
It is apparent that plaintiffs' deceit claims only incidentally involve the bankruptcy fraudulent transfer actions; though defendants' alleged injury-producing conduct may have been triggered or motivated by those judicial proceedings and referred to them (acting with the hope or intent that Hahn would dismiss those actions or, as defendants put it, the bankruptcy fraudulent transfer proceedings were the "very reason" for the purported interference), the conduct does not relate to the substantive matters at issue or under review in the bankruptcy fraudulent transfer proceeding. (Seltzer v. Barnes, supra, 182 Cal.App.4th at p. 962.) Defendants' arguments thus confuse the motivation for the alleged fraud with the underlying fraudulent behavior itself: defendants' misrepresentations concerning Eugene's willingness to perform and the failure to disclose certain side agreements between the Kochergas, Diaz and Barba designed to encourage Eugene and Michael to lie. (Accord, In re Episcopal Church Cases (2009) 45 Cal.4th 467, 477.) "The . . . fact that protected activity may lurk in the background—and may explain why the rift between the parties arose in the first place—does not transform a property dispute into a SLAPP suit." (Id. at p. 478; see also Park v. Board of Trustees of California State University, supra, 2 Cal.5th at p. 1066 ["arising from" requirement should not be read as applying to speech leading to an action or evidencing an illicit motive; to do so could render the anti-SLAPP statute fatal for most harassment, discrimination and retaliation actions against public employers].)
Nor can we say the acts constituting the alleged fraud or aiding and abetting fraud amount to protected settlement efforts or negotiations. Plaintiffs' fraud claims against defendants and the alleged injuries suffered by plaintiff are not based on or arise from settlement talks between counsel, like the causes of action held protected in GeneThera, Inc. v. Troy & Gould Professional Corp., supra, 171 Cal.App.4th 901. There, the plaintiffs alleged that an attorney's communication of a settlement offer to their counsel in ongoing litigation was designed to raise a conflict of interest so as to interfere with their attorney-client contractual relationship and constitute negligence. (Id. at pp. 904, 906.) The Court of Appeal held both claims were based on the communication of the settlement offer, which was a matter connected with issues under consideration or review by a judicial body. (Id. at p. 908.) "An attorney's communication with opposing counsel on behalf of a client regarding pending litigation directly implicates the right to petition and thus is subject to a special motion to strike." (Ibid.) Likewise, in Seltzer v. Barnes, supra, 182 Cal.App.4th 953, the court held protected the defendant attorney's settlement communications to opposing counsel, which was the subject of the plaintiffs' lawsuit alleging that the attorney—hired by plaintiff's insurer to defend her—had secretly negotiated or colluded with opposing counsel to dismiss claims covered by insurance. The Court of Appeal held that the attorney's "negotiations with the [Homeowners] Association did constitute petitioning activity on behalf of [the insurer], which had ultimate authority over settlement of the covered claims" and that the attorney's "role and the basis for his asserted liability was his negotiation of the agreement, which is conduct within the scope of section 425.16." (Id. at pp. 968, 969, fn. 11; see also Suarez v. Trigg, supra, 3 Cal.App.5th at pp. 122-123 [opposing party's communications made "in the course of settlement negotiations" are protected activity in lawsuit seeking to rescind the prior settlement agreement based on asserted fraudulent nondisclosure of information that induced the plaintiff to settle his claims for a fraction of their value].) The facts of these cases are materially different from those here, where plaintiffs' alleged injuries were caused by their reliance on statements concerning Eugene's willingness to proceed with the share purchase and sale agreement and his later decision to breach the letter agreement, not from any discussions concerning the bankruptcy court matters, which are not reasonably characterized as settlement discussions in any event.
In sum, the deceit and aiding and abetting causes of action alleged in the second amended complaint do not allege liability arising from protected conduct under the anti-SLAPP statute. Because defendants have not carried their burden of showing these claims arose from protected activity, we need not and do not reach the secondary inquiry of whether plaintiffs satisfied the burden of showing probable success on the merits. (Trilogy at Glen Ivy Maintenance Association v. Shea Homes, Inc. (2015) 235 Cal.App.4th 361, 371-373.) The trial court did not err by denying defendants' special motions to strike.
DISPOSITION
The order is affirmed. Respondents shall recover their costs on appeal.
O'ROURKE, J. WE CONCUR: McCONNELL, P. J. HUFFMAN, J.