Balla v. Hall

Citation59 Cal.App.5th 652,273 Cal.Rptr.3d 695
Decision Date06 January 2021
Docket NumberD074804
CourtCalifornia Court of Appeals Court of Appeals
Parties Joseph BALLA, Plaintiff and Respondent, v. Brian HALL, Defendant and Appellant. Lesa Heebner et al., Plaintiffs and Respondents, v. Brian Hall, Defendant and Appellant.

Law Offices of David C. Beavans and John T. Sylvester, San Diego, for Defendant and Appellant.

Niddrie Addams Fuller Singh, David A. Niddrie, San Diego; Schwartz Semerdjian Cauley & Moot, Dick A. Semerdjian and Alison K. Adelman, San Diego; and Keith H. Rutman for Plaintiffs and Respondents.

DATO, J.

Defendant Edward Siegel was an unsuccessful candidate for the Solana Beach City Council in 2016. During and after the City Council campaign, Siegel's campaign manager, defendant Brian Hall, sent a letter to the editor, distributed e-mails to local government and media, and posted Facebook messages about City Council members Lesa Heebner and Mike Nichols, and their relationship with local developer Joseph Balla (with Heebner and Nichols collectively, plaintiffs). Primarily using a fictional persona he created, "Andrew Jones," Hall asserted or implied that Heebner and Nichols lobbied for the North County Transit District (NCTD) to select Balla for a Solana Beach train station project in exchange for Balla giving them design work on the project and directing a charitable donation to a nature conservancy they supported. Siegel and Hall also ran a campaign advertisement implying that Heebner endorsed Siegel in the City Council race using a favorable quote from a 2007 Certificate of Appreciation signed by Heebner and given to Siegel by the City for his volunteer work.

Plaintiffs sued for defamation based on the publications, and Heebner claimed false light invasion of privacy based on the advertisement. Hall filed special motions to strike pursuant to Code of Civil Procedure section 425.16, the anti-SLAPP (strategic lawsuit against public participation) statute.1 Siegel agreed not to file anti-SLAPP motions in exchange for relief from default; when he tried to file notices of joinder to Hall's motions, the trial court rejected them. The court permitted plaintiffs to conduct discovery on actual malice, and then denied the anti-SLAPP motions.

Hall appeals, contending the trial court erred by denying his motions, denying Siegel's joinder, and permitting discovery. In essence, his position is that his publications were political opinions about a conflict of interest and not actionable. We disagree. Although political speech is appropriately accorded wide latitude, especially in election campaigns, calculated or reckless falsehoods can still amount to defamation even in that context. The record reflects that at the time of the publications, Hall knew or at least consciously disregarded the fact that Heebner and Nichols had no role in the NCTD selection process and the NCTD had no agreement with Balla. An agreement was not authorized until months later, and even then it was only an agreement to conduct further negotiations. Plaintiffs also suggested other ways in which the publications were knowingly or recklessly false. We reach a different conclusion as to the false light claim, as Heebner did not show the advertisement was defamatory per se or introduce evidence of special damages. Finally, we affirm the joinder and discovery rulings.

FACTUAL AND PROCEDURAL BACKGROUND
A. Parties and the NCTD

Heebner owned a residential kitchen design business until 2007, and served on City Council from 2004 to 2016. She was later appointed to fill a vacancy in 2018. Nichols is a landscape architect who was a member of the City Council from 2006 to 2018. Each used Gerri Retman, a common friend, as a campaign manager.

Balla owns Strategic Assets Group, Inc. and works in real estate finance and development. He also managed property for George and Betty Harbaugh. The Harbaughs had a family trust, with their estate plan providing for a charitable trust, the George and Betty Harbaugh Charitable Foundation (Foundation). Betty died in 2008. In 2011, the estate plan was amended to make Balla successor trustee after George's death. After George died in 2012, Balla became trustee and director of the Foundation.

Siegel is a psychiatrist and musician who ran for City Council in the November 2016 election. Hall is a real estate broker who served as his campaign manager. Hall created "fake people" Andrew Jones and his wife Lillian Rearden as pseudonyms. He set up e-mail addresses for both (using "Jones Consulting" in at least one e-mail signature for Jones), as well as a Facebook page for Jones with a stock photograph.

NCTD plans and operates public transportation in northern San Diego County, and owns the Solana Beach Transit Station (train station) and surrounding land. The NCTD Board of Directors (NCTD Board) has nine seats, representing various local governments in the region. Nichols held the Solana Beach seat on the NCTD Board in 2016, with Heebner as alternate. Jewel Edson held the seat in 2017, with Nichols as alternate.

B. Events Prior to the Publications

After Balla became successor trustee of the Harbaugh family trust, he began the process of transferring assets to the Foundation as provided for in the estate planning documents. In 2013, the Foundation committed a $1.15 million donation to San Elijo Lagoon Conservancy to secure certain land in Solana Beach. The land was renamed "Harbaugh Seaside Trails," and dedicated for public use as open space and trails.2

Between late 2014 and mid-2015, the NCTD commenced a Request for Proposal (RFP) to develop the land around the train station. At Step One, the NCTD Source Selection Committee (the Selection Committee) evaluates proposals. At Step Two, the Selection Committee holds discussions with and ranks short-listed proposers. At Step Three, the Committee negotiates with the highest ranked proposer, but can bring in additional proposers. It then makes a recommendation to the NCTD Board. At Step Four, the NCTD Board can authorize its executive director to enter an Exclusive Negotiating Agreement (ENA), which provides a developer exclusive rights to negotiate a Development Agreement. A developer "has no rights" to the site until the parties execute a Development Agreement and the NCTD Board and Federal Transit Administration approve it. The City would also have to approve any proposed development. The RFP states no NCTD officer or agent shall participate in contract selection if they have an interest in the selected firm.

Four proposals were submitted. Of relevance here, Balla worked with John DeWald, the principal of RhodesMoore, LLC, on a proposal called "Cedros Market." One of the other proposals was from Michael Dieden at Creative Housing Associates and was called "The Cove." In October 2016 the Selection Committee issued its final report. It ranked RhodesMoore first and Creative Housing Associates second. Hall e-mailed Siegel on October 25, indicating he and Dieden "met several times via the Solana Beach Chamber"; they "discussed working together with the sales of the development" and, in his "opinion, and many others, he was the most qualified."

Meanwhile, at a meeting of the San Diego County Democratic Party Central Committee in August 2016, Heebner spoke in support of City Council candidates Jewel Edson and Judy Hegenaur; she also said Siegel was "not electable." Hall, who was at the meeting, sent Siegel multiple text messages that evening. He reported that Heebner "badmouthed" Siegel and stated, "We need a Lisa [sic ] retaliation. I had to walk outside and she bashed you for 10 mins. They then endorsed Jewel and Judy." In late October, Heebner sent an e-mail to community members and a letter to voters. In both, she stated she did "not believe [Siegel] ha[d] the temperament or judgment to hold this office." In the e-mail she also offered her opinion that he was "not a serious candidate."

C. Challenged Publications and Surrounding Communications
1. First Publication: October 27, 2016 Letter to the Editor

Hall and Siegel wrote a letter to the editor for The Coast News, a local newspaper.3 Siegel was the listed author. The letter ran on October 27, 2016, identified Siegel as a candidate for City Council, and stated in part:

"Rumors have surfaced that Lesa Heebner resigned from the Solana Beach City Council to take the design jobs for the redevelopment project from her ‘friend’ developer. Rumors have also surfaced that (Mike) Nichols will not seek re-election to do the landscaping. I and many others find it particularly odd that a less qualified person, with little experience, and no contractor's license beat-out a very well-respected developer who was going to transform the train tracks into ‘The Cove.’ This was a backdoor deal, many people know this, and it is not right.... [¶] ... [¶] Solana Beach deserves better than shady business on the train tracks."4
2. Second Publication: October 28, 2016 E-mail

On October 28, Hall/Jones sent an e-mail to the NCTD Board with a link to Siegel's letter to the editor, stating:

"It is especially troubling to see Mike Nichols, a member of the [NCTD Board], capable of having a vote in the Solana Beach Train Station Redevelopment Project. This is only troubling since many residents of Solana Beach believe Nichols and Councilmember Lesa Heebner have a financial interest in the proposal that was accepted. NCTD has been widely criticized by local Solana Beach residents for picking an unqualified candidate, who does not have a contractor's license or experience, over a well-respected developer. This was a back door deal."

Hall also sent developer Dieden an e-mail with a link to the letter. The next day, Matthew Tucker, NCTD's executive director, responded to Hall/Jones. He stated that "no action has been taken by the Board to consider or approve a developer for this project" and indicated they would respond formally the following week.

3. Third Publication: October 29, 2016 "All Roads" E-mail

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