Mann v. Quality Old Time Service, Inc.

• Decision Date: 30 June 2004
• Docket Number: No. D042893.,D042893.
• Citation: 120 Cal.App.4th 90,15 Cal.Rptr.3d 215
• Court: California Court of Appeals Court of Appeals
• Parties: Richard MANN, Jr., et al., Plaintiffs and Respondents, v. QUALITY OLD TIME SERVICE, INC., et al., Defendants and Appellants.

15 Cal.Rptr.3d 215

120 Cal.App.4th 90

Richard MANN, Jr., et al., Plaintiffs and Respondents, v. QUALITY OLD TIME SERVICE, INC., et al., Defendants and Appellants.

No. D042893.

Court of Appeal, Fourth District, Division 1.

June 30, 2004.

Ross, Dixon & Bell, James John Dalessio, Daniel J. Cross and Lindsay J. Reese, San Diego, for Defendants and Appellants.

Goodman & Richter and Linda LaVonne Goodman, for Plaintiffs and Respondents.

McINTYRE, J.

In this case we hold that where a defendant has shown that a substantial part of a cause of action constitutes speech or petitioning activity protected by the anti-SLAPP (strategic lawsuit against public participation) statute (Code Civ. Proc., § 425.16), thereby requiring the plaintiff to show a probability of prevailing on the cause of action to avoid dismissal, the plaintiff need only show a probability of prevailing on any part of its claim. Once the plaintiff makes this showing, the court need not determine whether the plaintiff can substantiate all theories presented within the single cause of action. (All undesignated statutory references are to the Code of Civil Procedure.)

We further conclude that subdivision (c) of section 425.17, excluding certain claims from the anti-SLAPP statute, does not apply where the portion of the cause of action possibly implicating section 425.17 is not protected by the anti-SLAPP statute.

FACTUAL AND PROCEDURAL BACKGROUND

Water Systems Support Inc. and its president, Richard Mann, Jr. (together, WSSI) sued Quality Old Time Service, Inc. (Quality), Kent Radford and Robert Caslava (collectively, defendants) and another individual under various theories of liability. WSSI's complaint alleges in part the following.

WSSI is in the business of maintaining industrial water systems. Pursuant to an oral agreement, WSSI hired Caslava and Radford as independent contractors to service some of its customers after they agreed to keep WSSI's customer information and work guidelines confidential. Caslava entered into a written contract with WSSI, but Radford refused to sign the contract, although he verbally agreed to abide by the same terms and conditions required of Caslava. These representations were false and defendants had no intention of honoring the terms of their written and oral agreements.

Defendants worked for WSSI for about three years, thereby acquiring confidential client, pricing and servicing information, and then terminated their contract with WSSI to form a competing company. Defendants solicited WSSI's customers by using its confidential information and making fraudulent and disparaging statements about WSSI, including that it used illegal and carcinogenic chemicals in its cleaning process. Defendants serviced WSSI's customers, claiming they still worked for WSSI, and then replaced WSSI's service stickers with their own stickers to mislead these customers.

Defendants engaged in numerous acts of harassment, including reporting WSSI to the National Response Center and the National Terrorist Hotline falsely claiming that WSSI was "pouring illegal carcinogenic chemicals into public drainage systems throughout Southern California." These agencies then "flash faxed" this information to various regulatory and law enforcement agencies, causing WSSI to be investigated. WSSI also began receiving large volumes of unsolicited facsimiles, telephone calls, e-mails, magazine subscriptions, junk mail and pornography, all initiated by defendants.

The foregoing allegations form the factual basis underlying WSSI's 13 causes of action, including, in relevant part, claims for interference with contractual relationship; intentional interference with prospective economic advantage; defamation; and trade libel. Defendants filed a special motion to strike these causes of action, arguing these claims were subject to section 425.16 because (1) their calls to the National Response Center and the National Terrorist Hotline were in furtherance of their constitutional right to petition the government (§ 425.16, subd. (e)(2)) and (2) the statements were made in connection with a "public issue." (§ 425.16, subd. (e)(4).)

In support of their motion, defendants submitted Caslava's declaration, which states: (A) he called the Environmental Protection Agency (EPA) to inform it that he believed WSSI had improperly disposed of water laced with D-Trol, a disinfectant, into storm drains and culverts and directly onto soil and paved surfaces; (B) the EPA suggested that he direct concerns he had regarding WSSI's transportation of D-Trol to the California Highway Patrol Hazardous Materials division (CHP HazMat); and (C) he followed this suggestion and during the next several weeks he received numerous telephone calls regarding his concerns from the EPA, the Water Quality Control Board and other public agencies.

In opposition to the motion, WSSI filed Mann's declaration, repeating the allegations of the complaint that defendants had made false reports about WSSI to the National Response Center and the National Terrorist Hotline. Mann denied knowing anything about defendants' reports to the EPA and CHP HazMat until the instant motion, and denied using illegal chemicals or pouring them into city or storm drains. He also stated that neither the EPA nor CHP HazMat ever contacted WSSI, and the sole investigation WSSI was involved in resulted from a complaint to the National Terrorist Hotline.

WSSI also filed a declaration from Paul Wingert, a WSSI client and referral source, stating that Caslava and Radford informed him that WSSI was using an illegal chemical and illegally dumping the sanitizing solution down storm drains. He further declared that Caslava and Radford never informed him that they had requested an investigation of these practices by the EPA or CHP HazMat, nor did they ask him to participate in any such investigation.

The trial court denied the motion to strike, finding that the challenged claims did not "arise from" an act in furtherance of defendants' right of petition or free speech. Defendants appeal from this order. (§§ 425.16, subd. (j), & 904.1, subd. (a)(13).)

DISCUSSION

I Anti-SLAPP Law

The purpose of the anti-SLAPP statute is to encourage participation in matters of public significance by allowing a court to promptly dismiss unmeritorious actions or claims that are brought to chill another's valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances. (§ 425.16, subd. (a).) Under section 425.16, the initial inquiry is whether the moving defendant has made a threshold showing that the challenged causes of action arise from protected activity, i.e., activity by defendants in furtherance of their constitutional right of petition or free speech. (§ 425.16, subd. (b)(1); Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67, 124 Cal.Rptr.2d 507, 52 P.3d 685 (Equilon).) These acts include: (1) written or oral statements made before a legislative, executive, or judicial proceeding; (2) written or oral statements made in connection with an issue under consideration or review by a legislative, executive, or judicial body; (3) written or oral statements made in a place open to the public or in a public forum in connection with an issue of public interest; or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or free speech in connection with a public issue or an issue of public interest. (§ 425.16, subd. (e).)

To determine whether a defendant has met its initial burden, we consider the pleadings and any supporting and opposing affidavits stating facts upon which the liability is based. (§ 425.16, subd. (b)(2); City of Cotati v. Cashman (2002) 29 Cal.4th 69, 79, 124 Cal.Rptr.2d 519, 52 P.3d 695 (Cotati).) "[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. [Citation.]" (Cotati, supra, 29 Cal.4th at p. 78, 124 Cal.Rptr.2d 519, 52 P.3d 695.) "[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." (Ibid.) The moving defendant has no obligation to demonstrate that the plaintiff's subjective intent was to chill the exercise of constitutional speech or petition rights, or that the action had the effect of chilling such rights. (Navellier v. Sletten (2002) 29 Cal.4th 82, 88-89, 124 Cal.Rptr.2d 530, 52 P.3d 703 (Navellier).) The "principal thrust or gravamen" of the claim determines whether section 425.16 applies. (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal. App.4th 181, 188, 6 Cal.Rptr.3d 494 (Martinez), italics omitted.)

Published appellate court cases have concluded that where a cause of action alleges both protected and unprotected activity, the cause of action will be subject to section 425.16 unless the protected conduct is "merely incidental" to the unprotected conduct (Scott v. Metabolife Internat., Inc. (2004) 115 Cal.App.4th 404, 419, 9 Cal.Rptr.3d 242 (Scott); Martinez, supra, 113 Cal.App.4th at p. 188, 6 Cal.Rptr.3d 494), although this issue is currently under review by the California Supreme Court. (Kids Against Pollution v. California Dental Association, review granted Sept. 17, 2003, S117156; Finke v. Walt Disney Co., review granted Nov. 12, 2003, S118936.) Pending the Supreme Court's review of the issue, however, we will follow the existing appellate precedent that the anti-SLAPP statute applies to a mixed cause of action. (Fox Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294, 308, 106 Cal.Rptr.2d 906 (Fox).)

If the challenged causes of action arise from protected activity, the court "must then determine whether the plaintiff has demonstrated a probability of prevailing on the claim. [Citations.]" (Navellier, supra, 29 Cal.4th at...