Alpha & Omega Dev., LP v. Whillock Contracting, Inc.

• Decision Date: 15 February 2012
• Docket Number: No. D058445.,D058445.
• Citation: 2011 Daily Journal D.A.R. 16130,11 Cal. Daily Op. Serv. 13552,200 Cal.App.4th 656,132 Cal.Rptr.3d 781
• Court: California Court of Appeals Court of Appeals
• Parties: ALPHA AND OMEGA DEVELOPMENT, LP, Plaintiff and Appellant, v. WHILLOCK CONTRACTING, INC., Defendant and Respondent.

200 Cal.App.4th 656

132 Cal.Rptr.3d 781

11 Cal. Daily Op. Serv. 13,552

2011 Daily Journal D.A.R. 16,130

ALPHA AND OMEGA DEVELOPMENT, LP, Plaintiff and Appellant,

v.WHILLOCK CONTRACTING, INC., Defendant and Respondent.

No. D058445.

Court of Appeal, Fourth District, Division 1, California.

Nov. 2, 2011.

Review Denied Feb. 15, 2012.

See Annot., Recording of instrument purporting to affect title as slander of title (1955) 39 A.L.R.2d 840;5 Miller & Starr, Cal. Real Estate (3d ed. 2001) §§ 11:46, 11:148; Greenwald & Asimov, Cal. Practice Guide: Real Property Transactions (The Rutter Group 2011) ¶ 5:141 (CAPROP Ch. 11-I); Cal. Jur. 3d, Slander of Title, § 7; 5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 648.

James C. Weaver for Plaintiff and Appellant.

Sandler, Lasry, Laube, Byer & Valdez, San Diego, and Edward I. Silverman for Defendant and Respondent.

BENKE, Acting P.J.

Alpha and Omega Development, LP (Alpha), appeals from an order of the trial court granting pursuant to Code of Civil Procedure ¹ section 425.16 the special motionto strike (e.g., anti-SLAPP motion ²) OF WHILLOCK CONTRACTing, inc. (whillock), tO a cause of action for slander of title concerning real property once owned by Alpha.

Alpha contends the trial court erred in granting Whillock's anti-SLAPP motion because Alpha met its burden of demonstrating a probability of prevailing on the merits, as required under the second prong of the anti-SLAPP statute. As we explain, we disagree and affirm the trial court's order.

OVERVIEW

Before addressing the main issue in this case, we first discuss what is not in issue in this appeal. The record shows Alpha's first amended complaint (FAC) against, among others, Whillock ³ asserted causes of action for slander of title and malicious prosecution. The trial court granted Whillock's anti-SLAPP motion as to both causes of action, but on appeal Whillock challenges only the trial court's order as it pertains to slander of title.

In addition, Alpha understandably ⁴ conceded in the trial court and again on appeal that Whillock satisfied its burden to show the slander of title cause of action arose from its furtherance of rights of petition or free speech within the meaning of section 425.16, subdivisions (b)(1) and (e). Thus, the parties agree the burden then shifted to Alpha to demonstrate a probability of prevailing on its slander of title claim. (See § 425.16, subd. (b); see also Price v. Operating Engineers Local Union No. 3 (2011) 195 Cal.App.4th 962, 970, 125 Cal.Rptr.3d 220.)

A. Underlying Action

Alpha's action against Whillock was based on the latter's unsuccessful action to foreclose a mechanics' lien that Whillock recorded on real property located at 1453 Fourth Avenue and at 1446 Fifth Avenue, San Diego (together, subject real property). Whillock filed its action against Alpha in 2007 in San Diego County Superior Court, case No. GIC880872 ( Whillock Contracting, Inc. v. Alpha and Omega Development, LLC (the underlying action)) after Alpha obtained title to the subject real property.

Whillock alleged in the underlying action that it was owed about $1.48 million in unpaid, construction-related services it had rendered in 2004 and 2005 in connection with the development of about 72 condominium units and seven retail spaces on the subject real property. Whillock further alleged that after Alpha acquired the subject real property, at the “special request” of Alpha it continued to supply all requested services, labor, materials and equipment on and to the subject real property, “including but not limited to demolition work, grading work, excavation work, supply of trailer rentals, supply of safety barricades and walkways, supply of temporary electrical power equipment, supply of temporary fencing, and supply of storage containers.”

Alpha filed a motion to expunge the lis pendens, which the trial court granted. At the same time, the trial court denied Alpha's motion for judgment on the pleadings in connection with Whillock's cause of action for foreclosure of mechanic's lien.

Alpha subsequently defaulted on its loan, which was secured by a deed of trust on the subject real property. The deed of trust was foreclosed and ownership was acquired by the holder of the deed of trust, Schaeffer Construction, Inc. Pension Plan (Schaeffer). Eventually, Whillock, Schaeffer (an intervener in the underlying action) and Alpha settled and Whillock dismissed the underlying action with prejudice.

B. Current Action and Anti–SLAPP Motion

Alpha's complaint alleged Whillock “willfully, wrongfully, without justification[ ] and without privilege caused to be recorded a Lis Pendens against the [subject real property]” (italics added); that the recording of the lis pendens “directly impaired the vendibility and value of the [subject real property] on the open market while the real estate market in San Diego was rapidly declining”; and that as a result of the lis pendens, Alpha was damaged and was forced to hire attorneys to defend itself in the underlying action.

Whillock filed an anti-SLAPP motion pursuant to section 425.16. While that motion was pending, Alpha filed its FAC. Although more factually detailed than the original complaint, the FAC continued to assert causes of action for slander of title and malicious prosecution based on the same set of facts as the original complaint.

As relevant here, Whillock argued in its anti-SLAPP motion that Alpha's slander of title claim arose from protected speech or petitioning activity, inasmuch as that claim was based on Whillock's recording of the lis pendens in the underlying action. Whillock also argued that Alpha could not show a probability of prevailing on the merits of that claim because Whillock's recording of the lis pendens was protected by the litigation privilege as set forth in Civil Code section 47, subdivision (b)(4).

C. Trial Court's Order Granting the Anti–SLAPP Motion

The trial court granted Whillock's anti-SLAPP motion, ruling in part as follows:

“Defendants have established that plaintiff Alpha ... (‘plaintiff’) cannot make a prima facie showing that it will prevail on its claims because the filing of the lis pendens which is the subject of the slander of title claim was protected by the litigation privilege.... [¶] ... [¶]

“First, plaintiff has not and cannot show a probability of prevailing on its slander of title action because the lis pendens is protected by the litigation privilege.... In Feldman v. 1100 Park Lane Associates[ ] (2008) 160 Cal.App.4th 1467, 1485 , the [c]ourt held: ‘The litigation privilege, codified at Civil Code section 47, subdivision (b), provides that a “publication or broadcast” made as part of a “judicial proceeding” is privileged. This privilege is absolute in nature [and applies] “to all publications, irrespective of their maliciousness.” ( Silberg [ v. Anderson (1990) ] 50 Cal.3d 205, 216 [266 Cal.Rptr. 638, 786 P.2d 365] ) “The usual formulation is that the privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action.” ( Id. at p. 212 [266 Cal.Rptr. 638, 786 P.2d 365].) The privilege “is not limited to statements made during a trial or other proceedings, but may extend to steps taken prior thereto or afterwards.” ( Rusheen v. Cohen [ (2006) ] 37 Cal.4th 1048, 1057 [39 Cal.Rptr.3d 516, 128 P.3d 713] )’ [Citation.] [¶] ... [¶]

“The principal purpose of [Civil Code] section 47[, subdivision (b) ] is to afford litigants and witnesses [citation] the utmost freedom of access to the courts without fear of being harassed subsequently by derivative tort actions. [Citation.]

“Here, plaintiff's slander of title cause of action is based on the lis pendens filed by Whillock on February 27, 2007 with the San Diego County Recorder. [Citation.]

“The [underlying] litigation was a complaint for foreclosure of a mechanic's [l]ien filed on or about February 27, 2007 in San Diego Superior Court.... This privilege is absolute and applies to all publications irrespective of the maliciousness and on those grounds, defendants are not liable for slander of title.”

DISCUSSION

A. Anti–SLAPP Statute and Standard of Review

Section 425.16 is intended “to provide for the early dismissal of unmeritorious claims filed to interfere with the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.” ( Club Members for an Honest Election v. Sierra Club (2008) 45 Cal.4th 309, 315, 86 Cal.Rptr.3d 288, 196 P.3d 1094.) It authorizes the filing of a special motion that requires a court to strike claims brought “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 ... 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).)

As we alluded to ante,section 425.16 “ ‘requires that a court engage in a two-step process when determining whether a defendant's anti-SLAPP motion should be granted. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one “arising from” protected activity. [Citation.] If the court finds such a showing has been made, it then must consider whether the plaintiff has demonstrated a probability of prevailing on the claim.’ [Citation.]” ( Episcopal Church Cases (2009) 45 Cal.4th 467, 477, 87 Cal.Rptr.3d 275, 198 P.3d 66.)

“An appellate court reviews an order granting an anti-SLAPP motion under a de novo standard. [Citation.] In other words, we employ the same two-pronged procedure as the trial court in determining whether the anti-SLAPP motion was properly granted.” ( Mendoza v. ADP Screening & Selection...