SJO Investments v. Riedel CA2/2 ( 2022 )

Filed 3/1/22 SJO Investments v. Riedel CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
SJO INVESTMENTS, LLC, B311943
Plaintiff, Cross-defendant and (Los Angeles County
Appellant, Super. Ct. No. YC073077)
v.
MICHAEL WAYNE RIEDEL et al.,
Defendants, Cross-
complainants and Respondents.
APPEAL from an order of the Superior Court of
Los Angeles County. Elden S. Fox, Judge. Affirmed.
The Enochs Law Group, Jon Alan Enochs and Jeffrey D.
Poindexter for Plaintiff, Cross-defendant, and Appellant.
Van Antwerp Law Firm and L. Walker Van Antwerp III for
Defendants, Cross-complainants, and Respondents.
______________________________
Plaintiff, cross-defendant, and appellant SJO Investments,
LLC, (SJO) challenges the trial court order denying its motion to
strike portions of the first amended cross-complaint (FACC) filed
against it by defendants, cross-complainants, and respondents
Michael Wayne Riedel and Cheryl Jean Riedel 1 (the Riedels)
pursuant to Code of Civil Procedure section 425.16, 2 California’s
anti-SLAPP statute.3 Because the challenged causes of action do
not fall within the scope of the anti-SLAPP statute, we affirm the
trial court’s order.
FACTUAL AND PROCEDURAL BACKGROUND
Factual Background
According to the FACC, the Riedels owned certain real
property in Los Angeles. At some point, they received a post card
from SJO indicating that it “had all the resources to make the
best offer in town. Cheryl contacted them to make an
appointment for a meeting.”
On or about July 27, 2018, an SJO agent went to the
Riedels’ property “to give them a bid on their property.” He
1
Because respondents share the same last name, for ease we
refer to them individually by their first names. No disrespect is
intended.
2
All further statutory references are to the Code of Civil
Procedure unless otherwise indicated.
3
SLAPP is an acronym for strategic lawsuit against public
participation. (Wilcox v. Superior Court (1994) 27 Cal.App.4th
809, 813, overruled in part on other grounds in Equilon
Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 68,
fn. 5.)
2
presented her with a contract for the sale and purchase of real
estate (the contract). The contract provides, in part, that it would
“become a binding contract when accepted by the [Riedels] and
signed by both” SJO and the Riedels. It further provides that
SJO would “place in escrow an earnest money deposit.” Finally,
the contract provides that time is of the essence.
Cheryl signed the contract, even though she was repeatedly
told that she was only signing a bid agreement. The SJO agent
assured her that the contract was not enforceable as “a binding
contractual agreement until the opening of the escrow.”
Later, SJO’s agent met with Michael, inducing him “into
signing all the documents with the terms that [SJO] preferred
without any question.”
SJO never provided escrow instructions to the Riedels, and
it never deposited any monies into escrow.
The Complaint
When the Riedels did not go through with the sale of their
property, SJO sued the Riedels for specific performance and filed
and recorded a lis pendens on the property.
The FACC
A year after filing their answer to the complaint, the
Riedels were granted leave to file a cross-complaint against SJO.
On November 25, 2020, they filed their FACC, the operative
pleading.
The FACC alleges nine causes of action: Intentional
misrepresentation, negligent misrepresentation, concealment,
financial elder abuse, conversion, intentional infliction of
emotional distress, negligent infliction of emotional distress,
unjust enrichment, and promissory estoppel. As is relevant to
the issues raised in this appeal, the first three causes of action
3
stem from the factual allegations set forth above, namely SJO
knew that Cheryl took the meeting with SJO so that the Riedels
only could receive a bid on their property. But its agent
defrauded the Riedels by misrepresenting that the document they
were signing was an unenforceable bid, not an agreement for
sale. They detrimentally relied upon this representation by
signing what turned out to be a contract to sell their property.
And, they have suffered damages as a result of SJO’s fraud,
including “harm and suffering,” “unnecessary legal fees, and they
have been deprived from their rights of marketing and selling
their property when [SJO] filed lis pendens against their
property since 2018, which caused tremendous hardship on
them.” The prayer for relief seeks, inter alia, compensatory
damages, general damages, and punitive damages.
SJO’s Motion to Strike
In response to the FACC, SJO filed an anti-SLAPP motion,
challenging the first three causes of action pled in the FACC:
intentional misrepresentation, negligent misrepresentation, and
concealment. It argued that the challenged causes of action fail
because they are based solely upon the filing and recordation of
the lis pendens, both of which fall squarely within the scope of
section 425.16. Moreover, because the fraud claims were based
solely upon privileged activity under Civil Code section 47,
subdivision (b), the Riedels could not show a probability of
prevailing on their claims.
The Riedels’ Opposition
The Riedels opposed the motion, contending that their
claims were not based upon the filing of the lis pendens. Rather,
“the true nature of [their] grievance lies in the intentional
misrepresentations and fraudulent actions by the representative
4
of SJO. The lis pendens [was] merely the vehicle from which the
fraud was exposed.” Their alleged “hardships and monetary loss
[were] due to the negligent misrepresentations by the
representative of SJO, and the willful concealment of key parts of
the [contractual] provisions at issue. If the representative of SJO
had not misled [the Riedels] and had upheld the contractual
specification agreed upon by all the parties, there would be no
fraud.”
Moreover, as demonstrated by the statements made in
Cheryl and Michael’s declarations, supporting the allegations set
forth in the FACC, there was ample evidence to demonstrate a
probability of prevailing on these three causes of action.
Trial Court Order
After summarizing the parties’ arguments, the allegations
of the FACC, and relevant law, the trial court found “that the
fraud causes of action do not arise from the recording of the
lis pendens. Rather they arise from SJO’s purported
misrepresentations and fraudulent actions, and thus do not fall
under any of the categories under CCP §425.16(e). Further, [the
Riedels] have alleged other damages.”
Because SJO did not meet its burden of establishing that
the Riedels’ claims fell within the scope of the anti-SLAPP
statute, the trial court declined to address whether they
demonstrated a probability of prevailing on their claims.
Appeal
SJO’s timely appeal ensued.
DISCUSSION
I. Standard of review
“We review the trial court’s rulings on a SLAPP motion
independently under a de novo standard of review. [Citation.]”
5
(Kajima Engineering & Construction, Inc. v. City of Los Angeles
(2002) 95 Cal.App.4th 921, 929.)
II. The anti-SLAPP statute
“A SLAPP is a civil lawsuit that is aimed at preventing
citizens from exercising their political rights or punishing those
who have done so.” (Simpson Strong-Tie Co., Inc. v. Gore (2010)
49 Cal.4th 12, 21.) “In 1992, out of concern over a ‘disturbing
increase’ in these types of lawsuits, the Legislature enacted
section 425.16, the anti-SLAPP statute.” (Ibid.; see § 425.16,
subd. (a).) Section 425.16, subdivision (b)(1), 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.” An act “in furtherance of” the right to
petition includes “any written or oral statement or writing made
before a . . . judicial proceeding”; “any written or oral statement
or writing made in connection with an issue under consideration
or review by a . . . judicial body . . . ”; and any “conduct in
furtherance of the exercise of the constitutional right of
petition . . . .” (§ 425.16, subd. (e)(1), (2), (4).) The anti-SLAPP
statute applies to cross-complaints as well as to complaints.
(§ 425.16, subd. (h); Jarrow Formulas, Inc. v. LaMarche (2003) 31
Cal.4th 728, 735, fn. 2.)
The statute “posits . . . a two-step process for determining
whether an action is a SLAPP.” (Navellier v. Sletten (2002) 29
Cal.4th 82, 88.) First, the defendant bringing the special motion
to strike must make a prima facie showing that the anti-SLAPP
6
statute applies to the claims that are the subject of that motion.
(Wilcox v. Superior Court, supra, 27 Cal.App.4th at p. 819.) In
other words, the moving defendant must make a threshold
showing that the challenged causes of action arise from protected
activity, that is, by demonstrating that the acts underlying the
plaintiff’s complaint fit one of the categories spelled out in section
425.16, subdivision (e). (Navellier v. Sletten, supra, at p. 88.) “To
determine whether defendant has met its burden we must look at
the ‘gravamen of the lawsuit.’” (Rivera v. First DataBank, Inc.
(2010) 187 Cal.App.4th 709, 715.) “[I]t is the principal thrust or
gravamen of the plaintiff’s cause of action that determines
whether the anti-SLAPP statute applies [citation], and when the
allegations referring to arguably protected activity are only
incidental to a cause of action based essentially on nonprotected
activity, collateral allusions to protected activity should not
subject the cause of action to the anti-SLAPP statute.” (Martinez
v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 188.)
Only once a moving defendant has met its burden will the
motion be granted (and the claims stricken) unless the court
determines that the plaintiff has established a probability of
prevailing on the claim. (DuPont Merck Pharmaceutical Co. v.
Superior Court (2000) 78 Cal.App.4th 562, 567–568.)
In order to establish a probability of prevailing, a plaintiff
must substantiate each element of the alleged cause of action
through competent, admissible evidence. (DuPont Merck
Pharmaceutical Co. v. Superior Court, supra, 78 Cal.App.4th at
p. 568; see also Navellier v. Sletten, supra, 29 Cal.4th at pp. 88–
89 [reiterating that “‘the plaintiff “must demonstrate that the
complaint is both legally sufficient and supported by a sufficient
prima facie showing of facts to sustain a favorable judgment if
7
the evidence submitted by the plaintiff is credited”’”].) “This
requirement has been interpreted to mean that (1) when the trial
court examines the plaintiff’s affidavits filed in support of the
plaintiff’s second step burden, the court must consider whether
the plaintiff has presented sufficient evidence to establish a
prima facie case on his causes of action, and (2) when the trial
court considers the defendant’s opposing affidavits, the court
cannot weigh them against the plaintiff’s affidavits, but must
only decide whether the defendant’s affidavits, as a matter of law,
defeat the plaintiff’s supporting evidence.” (Schroeder v. Irvine
City Council (2002) 97 Cal.App.4th 174, 184.) Only if the plaintiff
fails to meet this burden should the motion be granted. (Mattel,
Inc. v. Luce, Forward, Hamilton & Scripps (2002) 99 Cal.App.4th
1179, 1188–1189.)
III. The trial court properly denied SJO’s anti-SLAPP motion
We agree with the trial court that the Riedels’ claims
against SJO do not trigger the anti-SLAPP statute. They are
suing SJO for fraud stemming from misrepresentations made by
SJO’s agent at a meeting. According to the FACC and the
supporting evidence, SJO’s agent duped the Riedels into signing
a contract for the sale of their property when at all times they
believed they were merely signing an unenforceable bid from SJO
to purchase their property. The alleged wrongful acts are not
protected activity, and the causes of action alleged against SJO
do not arise out of protected activity. Thus, SJO’s alleged
wrongful conduct does not fall within the scope of the anti-SLAPP
statute.
Urging us to reverse, SJO argues that the Riedels’ claims
wrongfully arise out of SJO’s filing of a lis pendens against their
8
property.4 After all, the Riedels’ only damages are those arising
from the filing of the lis pendens. We are not convinced. “‘[T]he
mere fact that an action was filed after protected activity took
place does not mean the action arose from that activity for the
purposes of the anti-SLAPP statute. [Citation.] Moreover, that a
cause of action arguably may have been “triggered” by protected
activity does not entail that it is one arising from such.
[Citation.] In the anti-SLAPP context, the critical consideration
is whether the cause of action is based on the defendant’s
protected free speech or petitioning activity.’ [Citation.]”
(Episcopal Church Cases (2009) 45 Cal.4th 467, 477.)
Here, the Riedels’ claims against SJO are not based upon
SJO’s filing of the lis pendens. Rather, their claims are based
upon the wrongful conduct at the July 2018 meeting. The filing
4
SJO correctly argues that a claim based upon the filing of a
lis pendens falls squarely within the scope of the anti-SLAPP
statute. (Salma v. Capon (2008) 161 Cal.App.4th 1275, 1285; see
also Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056.) And in
their respondents’ brief, the Riedels agree that that portion of
their damages stemming from the filing of the lis pendens is
“problematic.” This concession seems to raise the question of
whether part of the fraud claims are barred by the anti-SLAPP
statute. But, SJO’s entire argument is set forth in a footnote in
the conclusion of its reply brief, wherein it asks us to review
Baral v. Schnitt (2016) 1 Cal.5th 376 “if the causes of action are
deemed to arise from both protected and unprotected activity.”
Because the issue is not sufficiently argued or briefed, we deem it
forfeited. (Benach v. County of Los Angeles (2007) 149
Cal.App.4th 836, 852; Reichardt v. Hoffman (1997) 52
Cal.App.4th 754, 764 [we do not consider arguments first raised
in a reply brief].)
9
of the lis pendens merely brought to light the fraud that had been
inflicted upon them. (Episcopal Church Cases, supra, 45 Cal.4th
at p. 478 [the fact that protected activity may “lurk in the
background” does not turn an unprotected dispute into a SLAPP
suit].)
SJO’s contention that the Riedels only allege damages
stemming from the filing of the lis pendens is simply wrong. As
set forth above, the FACC alleges harm and suffering 5 and seeks
compensatory, general, and punitive damages. The fact that the
Riedels may not be able to prove actionable damages6 is not
something we consider when conducting our analysis of “‘prong
one’” of the anti-SLAPP statute. (MMM Holdings, Inc. v. Reich
(2018) 21 Cal.App.5th 167, 178.) Damages are an element of a
fraud cause of action. (Alliance Mortgage Co. v. Rothwell (1995)
10 Cal.4th 1226, 1239, fn. 4 [elements of negligent
misrepresentation include damages]; Anderson v. Deloitte &
Touche (1997) 56 Cal.App.4th 1468, 1474 [elements of actual
fraud include damages].) Thus, in the context of an anti-SLAPP
motion, whether the Riedels suffered damages is only a
consideration if we need to conduct an analysis of “‘prong two.’”
(MMM Holdings, Inc. v. Reich, supra, at p. 178.)
Because we conclude that the Riedels’ fraud claims do not
fall within the scope of the anti-SLAPP statute, we need not
5
If the Riedels did not allege damages with sufficient
specificity, SJO could have filed a demurrer. (Lazar v. Superior
Court (1996) 12 Cal.4th 631, 638.)
6
We express no opinion on whether the Riedels are entitled
to damages.
10
determine whether they demonstrated a probability of prevailing
on the merits of their claims. (City of Cotati v. Cashman (2002)
29 Cal.4th 69, 80–81.)
DISPOSITION
The order is affirmed. The Riedels are entitled to attorney
fees and costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
_____________________, Acting P. J.
ASHMANN-GERST
We concur:
________________________, J.
CHAVEZ
________________________, J.
HOFFSTADT
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