Opinion
B314014
11-22-2022
JOSE MENDOZA, Plaintiff and Respondent, v. CITY OF MAYWOOD et al., Defendants and Appellants.
Richards, Watson & Gershon, T. Peter Pierce, Steven A. Nguy for Defendants and Appellants. DRE Law, Darren M. Richie, Antonio Castillo for Plaintiff and Respondent.
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County, No. 20NWCV00592 Raul Anthony Sahagun, Judge. Affirmed.
Richards, Watson & Gershon, T. Peter Pierce, Steven A. Nguy for Defendants and Appellants.
DRE Law, Darren M. Richie, Antonio Castillo for Plaintiff and Respondent.
COLLINS, J.
INTRODUCTION
Plaintiff Jose Mendoza planned to open a business, LA Labs, Inc., in the City of Maywood, and began working with city officials to obtain a conditional use permit. Mendoza alleged that during this process, planning commission members Reyna Mendez and Carmen Perez misled him, lied to neighboring property owners, and lied to the city planning commission. He also alleged that Maywood mayor Eddie De La Riva attempted to extort $350,000 from him, and that Mendez and Perez conspired with De La Riva in the extortion attempt. Mendoza alleged that the planning commission then denied his conditional use permit application for pretextual reasons.
Mendoza and LA Labs sued De La Riva, Mendez, Perez (collectively, defendants), and the city, asserting causes of action including civil conspiracy, civil RICO, attempted extortion, and intentional infliction of emotional distress (IIED). Defendants filed a special motion to strike under Code of Civil Procedure section 425.16, the anti-SLAPP statute, asserting that certain causes of action arose out of protected activity under the statute. The superior court granted the motion in part, but denied the motion for the IIED cause of action, finding that the IIED cause of action was based on the RICO allegations and alleged attempt to extort Mendoza, so the defendants failed to establish that it arose out of protected activity.
RICO refers to the federal Racketeer Influenced and Corrupt Organizations Act. (18 U.S.C. § 1961 et seq.)
"SLAPP" stands for "strategic lawsuits against public participation." (FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7 Cal.5th 133, 139.) All further section references are to the Code of Civil Procedure unless otherwise indicated.
Defendants appealed the superior court's ruling as to the IIED claim. We affirm; defendants have not established that the cause of action arises out of protected activity.
FACTUAL AND PROCEDURAL BACKGROUND
A. Complaint
In October 2020, plaintiffs filed a complaint including the following allegations. We focus on the allegations most relevant to the appeal.
In 2018, Mendoza planned to open LA Labs, a cannabis testing laboratory, in Maywood. The business was a testing laboratory only, and would not provide retail cannabis sales. In September 2018, Mendoza visited Maywood City Hall to determine zoning for the property he planned to use. A code officer told Mendoza that the property qualified for his proposed use. Mendoza then signed a five-year lease for the property, and began the application process to get a conditional use permit from the city. Over the next few months, Mendoza discussed his business and plans with De La Riva and other city officials. Mendoza alleged that various city employees, including De La Riva, encouraged him and led him to believe that his permit application would be approved. Up to mid-2019, city employees told Mendoza that the various phases of his application had been approved, and Mendoza moved forward with his plans. In July 2019, Mendoza met defendant Perez, chair of the city's planning commission, who told Mendoza "not to worry" about his application.
On September 3, 2019, defendant Mendez, who was vice chair of the planning commission, went to a business near Mendoza's proposed business, and spoke with the business owner, Blanca. Mendez falsely represented to Blanca that Mendoza intended to operate a retail cannabis dispensary open to the public, which would "overwhelm" the available parking in the area. Mendez encouraged Blanca to go to the planning commission meeting that evening, but Blanca did not attend the meeting. At the September 3 meeting, Mendez told the planning commission that she had spoken to neighboring business owners and they did not approve of LA Labs. The planning commission requested additional information and continued the hearing to September 17. Mendoza then reached out to neighboring business owners, provided them with information about his planned business, and gathered signatures in support of LA Labs.
Mendoza alleged that sometime between September 8 and September 15, 2019, he was in the front yard of his home when a man approached him and said, "We need three hundred and fifty thousand dollars to move your project forward." The man pointed to a black Honda Accord without license plates, which was parked on the street. The tinted window of the car rolled down, and Mendoza saw Mayor De La Riva inside the car. Mendoza waved, but De La Riva did not wave back. Mendoza alleged that he became "confused, worried, and stressed," and he felt the project would not move forward if he did not pay the sum demanded.
On September 16, De La Riva sent Mendoza a text message stating that Mendoza's signature gathering was a "bad move," because "I told you to be patient and let the process take its course. You put the city, the counsel and especially me in a very difficult position." On September 17, Mendez returned to Blanca's business and again "tried to convince" Blanca to oppose LA Labs.
Before the scheduled planning commission meeting on September 17, Mendoza received an email from the city clerk stating that pursuant to the city attorney's request, a "resolution of denial" was attached, apparently denying Mendoza's request for a conditional use permit. Mendoza attended the planning commission meeting nonetheless, and presented the additional information the commission had requested at the September 3 meeting. Mendez live-streamed the meeting to Facebook, and "threatened" Mendoza that De La Riva was watching. Mendez and Perez said they had visited neighboring businesses. Perez represented that Mendoza had been "aggressive" toward neighboring business owners, and "the commission" accused Mendoza of "intimidating the business owners to obtain their signatures." The planning commission denied Mendoza's permit request based on factors that "had not been mentioned any time previous to this meeting." On September 25, 2019, the city council voted against Mendoza's plan; De La Riva voted "no."
Mendoza and LA Labs filed a complaint alleging 15 causes of action against the city, De La Riva, Mendez, and Perez: (1) civil conspiracy, (2) civil RICO, (3) attempted civil extortion, (4) fraudulent misrepresentation, (5) intentional misrepresentation, (6) breach of the covenant of good faith and fair dealing, (7) equitable estoppel, (8) defamation and slander per se, (9) "false, misleading statements," (10) intentional interference with prospective economic relations, (11) negligent interference with prospective economic relations, (12) intentional interference with contractual relations, (13) IIED, (14) negligent infliction of emotional distress, and (15) negligence. Only the 13th cause of action, IIED, as it relates to Mendez and Perez, is at issue in this appeal.
B. Anti-SLAPP motion
Defendants filed a special motion to strike under section 425.16, asserting that 11 causes of action were based on protected activity, including the cause of action for IIED. Notably, defendants did not challenge the causes of action under RICO or for attempted extortion. Defendants argued that the 11 challenged causes of action arose from protected speech because each of the defendants' statements were made in connection with Mendoza's conditional use permit application, such as encouraging Mendoza about the project, discussing the project with neighboring business owners, and making statements at planning commission meetings. They argued that Mendez's and Perez's statements were protected activity under the anti-SLAPP statute because they were made during planning commission meetings (§ 425.16, subd. (e)(1)) and in connection with an issue under review by the city (id., subd. (e)(2)). Defendants also asserted that Mendoza could not show a probability of prevailing on his claims because the communications were privileged under Civil Code section 47, and defendants were immune from liability under Government Code sections 821.2 and 822.2.
Plaintiffs opposed the motion, asserting that the causes of action did not arise out of protected activity. Plaintiffs asserted that defendants were attempting to use the anti-SLAPP statute "as a shield for their illegal wrongdoing." Plaintiffs also argued they had a probability of prevailing on the merits. Mendoza submitted a declaration in support of the opposition, reiterating many of the allegations of the complaint. Defendants filed a reply in support of their motion.
The court issued a tentative ruling partially granting the motion, but denying the request to strike the cause of action for IIED. At the hearing, defendants' counsel noted that the IIED claim arose from the alleged money demand, and "the complaint does not allege" that either Mendez or Perez was "involved" in that demand. Plaintiffs' counsel countered that the complaint alleged "that Mendez and Perez were working with Mr. De La Riva in the planning of this extortion," and "they all worked together during this extortion." The court took the matter under submission.
In a written ruling the court adopted its tentative ruling, partially granting the motion but denying the request to strike the IIED cause of action. The court reasoned that "the 13th cause of action for IIED is based on attempted extortion and Civil Rico claims, alleging that an attempted extortion of $350,000 was made upon Plaintiff. [Record citation.] This act does not come under the purview of protected speech. Therefore, the 13th cause of action will not be stricken." The court also held that the first cause of action for civil conspiracy, the seventh cause of action for equitable estoppel, and the fourteenth cause of action for negligent infliction of emotional distress were "either theories imposing liability or remedies," not proper causes of action, so "the titles" of those causes of action were stricken, "but the allegations contained therein will not be stricken."
In a related demurrer ruling, the court held that statutory immunity did not apply to the RICO, extortion, IIED, or conspiracy allegations.
De La Riva, Mendez, and Perez timely appealed.
The court's order included a proof of service stating that it was served to the parties by mail. The city filed a timely notice of appeal less than 60 days later; De La Riva, Mendez, and Perez filed a notice of appeal 95 days later. In supplemental briefing requested by the court, defendants explained that service of the notice of ruling was ineffective because it was sent to an incorrect address, and therefore the second notice of appeal was timely under the 180-day deadline in California Rules of Court, rule 8.104(a)(1)(C). In the same supplemental briefing, the city and defendants admitted that the city does not have standing to appeal the order because it was not a party to the anti-SLAPP motion.
DISCUSSION
On appeal, defendants seek reversal only of the court's ruling regarding the IIED cause of action as it relates to Mendez and Perez. They assert that the IIED cause of action arises out of protected activity, and plaintiffs cannot demonstrate a probability of prevailing.
A. Anti-SLAPP and standard of review
"A cause of action arising from a person's act in furtherance of the '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 claim will prevail." (Monster Energy Co. v. Schechter (2019) 7 Cal.5th 781, 788 (Monster Energy), citing § 425.16, subd. (b)(1).) Thus, "[a]nti-SLAPP motions are evaluated through a two-step process. Initially, the moving defendant bears the burden of establishing that the challenged allegations or claims 'aris[e] from' protected activity in which the defendant has engaged." (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1061 (Park).) "If the defendant carries its burden, the plaintiff must then demonstrate its claims have at least 'minimal merit.'" (Ibid.)
"We review de novo the grant or denial of an anti-SLAPP motion. [Citation.] We exercise independent judgment in determining whether, based on our own review of the record, the challenged claims arise from protected activity. [Citations.] In addition to the pleadings, we may consider affidavits concerning the facts upon which liability is based. [Citations.] We do not, however, weigh the evidence, but accept plaintiff's submissions as true and consider only whether any contrary evidence from the defendant establishes its entitlement to prevail as a matter of law." (Park, supra, 2 Cal.5th at p. 1067.)
B. The IIED cause of action did not arise out of protected activity
"A claim arises from protected activity when that activity underlies or forms the basis for the claim." (Park, supra, 2 Cal.5th at p. 1062.) "[I]n 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." (Id. at p. 1063.) Thus, "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.)
Defendants assert Mendez's and Perez's actions constitute protected activity as described in section 425.16, subdivision (e)(1), which includes "any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law," and subdivision (e)(2), which includes "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."
Here, the wrongs complained of involved a scheme to damage Mendoza and LA Labs, an extortion attempt, and resulting emotional distress. Mendoza's allegations are not directed at Mendez's and Perez's statements alone, but the contention that Mendez and Perez were acting as part of a larger design with De La Riva. Mendoza alleged defendants engaged in a scheme designed to interfere with his business relationships and extort money from him. In the IIED cause of action, plaintiffs incorporated all conspiracy and RICO allegations, and alleged defendants used their authority "to intimidate and slander plaintiff after he did not comply with their extortion demand." He described defendants as "co-conspirators [who] never intended" to approve Mendoza's business plans, but "instead sought monetary gain from" Mendoza, causing Mendoza to suffer emotional distress.
Defendants acknowledge that attempted extortion and conspiring to damage a business are not protected activities. (See, e.g., Flatley v. Mauro (2006) 39 Cal.4th 299, 305 [speech or petitioning activity that is illegal as a matter of law, including attempted extortion, is unprotected by the anti-SLAPP statute].) Defendants argue, however, that this case differs from conspiracy cases such as Spencer v. Mowat (2020) 46 Cal.App.5th 1024 (Spencer). There, a group of non-local surfers sued "the Lunada Bay Boys," described as "a group of young and middle-aged men . . . who consider themselves to be the self-appointed guardians" of a surfing area near Palos Verdes Estates. (Id. at p. 1027.) The plaintiffs alleged the defendants kept non-local surfers away from the surf site through a pattern of threats and violence. (Id. at p. 1028.) The defendants filed anti-SLAPP motions, asserting that the complaint was based on protected petitioning activity and text messages. The trial court denied the motion, and the defendants appealed. (Id. at p. 1035.)
The Court of Appeal affirmed, finding the defendants did not establish that their actions arose out of protected activity. The court noted that the plaintiffs' allegations were based in conspiracy, and "[d]ue to the secret nature of conspiracies, their existence is often inferentially and circumstantially derived from the character of the acts done, the relations of the parties, and other facts and circumstances suggestive of concerted action." (Spencer, supra, 46 Cal.App.5th at p. 1037.) The court asked, "When a tort cause of action is asserted on a conspiracy theory, which of the defendant's alleged 'acts' are considered for the purposes of the first prong anti-SLAPP analysis - the acts which constitute the tort itself, or the acts which evidence the defendant's participation in the conspiracy? . . . [I]t is the tort itself that controls, not individual acts that demonstrate the existence of a conspiracy." (Id. at p. 1037.) Thus, "[w]hen liability is asserted for the target act of a conspiracy, the preliminary speech or petitioning activity is simply evidence of the defendant's liability, not 'the wrong complained of.'" (Ibid.)
Spencer discussed Richmond Compassionate Care Collective v. 7 Stars Holistic Foundation, Inc. (2019) 32 Cal.App.5th 458 (Richmond), a case somewhat analogous to this one. In Richmond, the City of Richmond issued four medical marijuana collective permits, but later changed its laws to state that if a permitted dispensary did not open within six months of the permit being issued, the permit would be void. The plaintiff, RCCC, lost its permit. RCCC filed a complaint against other permitted dispensaries and their principals, which "alleged in essence that defendants, acting in concert, encouraged and paid for community opposition to RCCC's applications before the Richmond City Council and also purchased a favorably zoned property." (Id. at p. 461.) While the litigation was pending, one of the defendants turned against the others, and submitted a declaration with a third amended complaint stating in part, "Our group declared war on RCCC. We conspired to prevent RCCC from getting any property in Richmond. We discussed and presented leases, letters of intent to lease or purchase, and purchase agreements-all of which were bogus.... Individuals in our group went door to door to landlords to ensure that they would not lease or rent their property to RCCC." (Id. at p. 462.) The defendants filed an anti-SLAPP motion, which the trial court denied on the grounds that the defendants did not demonstrate that RCCC's claims arose out of protected activity. (Id. at p. 466.)
The Court of Appeal affirmed. It emphasized that the entire complaint must be considered for context, and stated, "The essence of RCCC's [complaint] was the private actions the [defendants] took to restrain trade and monopolize the medical marijuana market in Richmond. That was the gravamen, the thrust, of the cause of action. Whatever the protected activity, it was at the most incidental." (Richmond, supra, 32 Cal.App.5th at p. 470.)
Here, defendants contend this case is more similar to Contreras v. Dowling (2016) 5 Cal.App.5th 394 (Contreras), in which a tenant, Contreras, sued her landlords and their attorney for tenant harassment and other causes of action arising out of the landlords' entries into the tenant's apartment. Contreras alleged that the landlords' attorney, Dowling, aided and abetted the landlords' wrongful actions. (Id. at p. 399.) Dowling filed a special motion to strike under section 425.16, which the trial court denied.
The Court of Appeal reversed. It noted that generally, "'all communicative acts performed by attorneys as part of their representation of a client in a judicial proceeding or other petitioning context are per se protected as petitioning activity by the anti-SLAPP statute.'" (Contreras, supra, 5 Cal.App.5th at p. 409, quoting Cabral v. Martins (2009) 177 Cal.App.4th 480.) Thus, all of Dowling's actions that involved advising or working on behalf of his clients constituted protected activity. The court stated that Contreras's allegations of conspiracy did not affect the analysis, because "conspiring in or aiding and abetting tenant harassment is merely the cause of action Contreras asserts. [Citation.] In deciding whether her cause of action arises from protected activity, however, our focus is not on such labels but rather on Dowling's actual activities." (Contreras, supra, 5 Cal.App.5th at p. 410.) The court continued, "the only acts Dowling has been shown to have committed were giving advice to a client and writing a letter to opposing counsel. These are unquestionably protected activities." (Id. at p. 411.) The court also stated, "Contreras does not claim [Dowling] personally took part in the alleged wrongful entries, and the Complaint alleges no facts showing how Dowling might have assisted his clients' wrongful conduct.[ ] Conclusory allegations of conspiracy or aiding and abetting do not deprive Dowling's actions of their protected status." (Id. at p. 413.)
Spencer contrasted Contreras, stating, "Contreras is distinguishable, both because it involved the factual scenario of an attorney allegedly acting in concert with his clients, and because the appellate court concluded the plaintiff's allegations of conspiracy were conclusory and alleged nothing beyond the provision of routine legal services.... [Contreras] found the only acts alleged against counsel were in advising his client, protected activity." (Spencer, supra, 46 Cal.App.5th at p. 1039.)
Here, the allegations supporting a nefarious scheme are not as robust as those in Spencer and Richmond, but they are not as conclusory as those in Contreras. Mendoza's claim is not simply that Mendez and Perez disparaged Mendoza's business to neighboring business owners, made statements at the planning commission meetings, and voted to deny Mendoza's application. Rather, his claim-the gravamen of the IIED cause of action-is that Mendez and Perez participated with De La Riva in a scheme spanning several weeks with the intent to interfere with Mendoza's business plans and extort money from him, which is not protected activity. Mendoza alleges that in furtherance of that scheme, Mendez and Perez made certain statements to neighbors and at the planning commission meetings, and voted to deny Mendoza's application. Mendoza also alleges that Mendez and Perez were working with De La Riva, such as when Mendez stated that she live-streamed the planning commission meeting to Facebook, and "threatened" that De La Riva was watching. As the Supreme Court stated in Park, supra, 2 Cal.5th at p. 1064, courts must "respect the distinction between activities that form the basis for a claim and those that merely lead to the liability-creating activity or provide evidentiary support for the claim." Here, the discrete activities that constitute evidence of the alleged conspiracy are not protected under the anti-SLAPP statute.
Defendants have failed to establish that the cause of action for IIED arose from protected activity. We therefore affirm the trial court's ruling on that basis, and do not consider the parties' remaining contentions regarding the second prong of the anti-SLAPP test.
DISPOSITION
The court's order on the anti-SLAPP motion is affirmed. Mendoza is entitled to costs on appeal.
We concur: MANELLA, P. J. CURREY, J.