Young v. Schultz
| Decision Date | 30 March 2023 |
| Docket Number | A165581 |
| Parties | JACALYN A. YOUNG et al., Plaintiffs and Appellants, v. RONALD J. SCHULTZ, Defendant and Respondent. |
| Court | California Court of Appeals |
NOT TO BE PUBLISHED
(Sonoma County Super. Ct. No. SCV-269601)
Jacalyn Young joined the board of her homeowner's association and became its president during a tumultuous time. Several association members - including Ronald Schultz - questioned whether Young was qualified to lead the association through the crisis, and they sought more information about her and the board's oversight of association finances. Frustrated by Young's failure to promptly address these concerns Schultz performed a public records search; he learned that Young and two friends - Diane Lynn and Mary Anne Burwell - (collectively, plaintiffs) appeared to be running several "internet churches" without parishioners out of Young's home. He suspected plaintiffs were engaged in "possible fraud and/or money laundering" and that under the circumstances, it was "risky and foolish" to allow Young to manage the association's finances. He wrote plaintiffs, threatening to release information about their affiliation with the religious organizations unless Young resigned from the board, and he intimated governmental authorities would "want to talk" with plaintiffs "once the word is out."
Young did not resign. Instead, plaintiffs filed a lawsuit against Schultz for extortion and other claims. The trial court granted Schultz's special motion to strike (Code Civ Proc., § 425.16; undesignated statutory references are to this code). First, the court concluded plaintiffs' claims arose out of protected activity and Schultz's conduct did not come within the narrow statutory exception for conduct that is illegal as a matter of law. Second, it determined plaintiffs failed to establish a probability of prevailing on their claims. We affirm.
Young is the president of The Temple of Life, Inc. (church), a selfdescribed "human charitable foundation" to which she has donated over $1.4 million. Lynn is the church's chief financial officer; until her death Burwell was its secretary.[1] The church and two other charitable organizations - The Temple of Metaphysical Science and the Temple of Freedom - are registered for service of process at Young's residence in the Woodlands, a residential community in Santa Rosa comprised of 27 townhomes. Young and Lynn live near each other in the Woodlands, and they are members of the Woodlands Owners Association (HOA). Schultz and his wife live in the Woodlands; they too are HOA members.
In March 2021, the HOA was in disarray. The president of its board of directors unexpectedly resigned shortly after the board hired a new property manager to manage HOA finances. Then Young joined the board; two weeks later, she became its president. On April 12 - the first day of her presidency - the board fired the property manager. The board started to manage HOA finances itself, and it decided homeowners would begin using a web-based service (the company) to pay monthly dues. The board notified homeowners of these developments; it assured them HOA funds were "safe" despite acknowledging the board did not know how much HOA money was in the former property manager's possession.
In mid-April 2021, Schultz sent two emails to the board requesting information about the company and suggesting the HOA was negligent for failing to provide homeowners with the company's terms of service. Around that same time, Schultz's wife emailed the board a list of questions about the HOA's accounting procedures - such as who paid the bills and generated monthly financial reports - and noted that as a former board treasurer, she was "very concerned" about these issues. The next day, Schultz's wife sent another email to the board criticizing Young's failure to respond to her questions. Eventually, Young promised to answer the questions at an upcoming board meeting.
On the evening of April 19, 2021, Schultz emailed Young. He accused the board of failing to understand internet security principles and neglecting to implement internal accounting controls. Schultz also demanded information on Young's background and her qualifications to serve as board president. He asked,
Two days later - on April 21, 2021 - Schultz emailed a letter to Young. The email's subject line was "For the Good of All, I Urge You Resign From the Board." The letter stated:
The letter continued: The email attached a three-page document - labeled "RAW DATA" - containing information Schultz had gathered and stating Young and Lynn were operating churches out of their homes that "appear to generate substantial tax-free income from unknown sources with no parishioners."
That same day, Schultz hand-delivered similar letters - also accompanied by "RAW DATA" - to Lynn and Burwell "in the hopes" they would urge Young to resign from the board. In his letter to Lynn, Schultz stated he was "sorry" about her sister's "passing . . . she appeared to be a fine person."
The next day, Young emailed the HOA. In her email - which attached the letters - she complained Schultz wanted her to resign so She suggested Schultz was "getting close to blackmail," and she urged homeowners to read "his ultimatum" and decide for themselves. Young stated she did "not care who is on the board, as long as the conditions improve here at the Woodlands." She also described her professional background, acknowledged serving as a board member for "a church foundation," and insisted she had "nothing to hide." She stated the activities of her "human charitable foundation" were "conducted with the utmost of integrity and by government rules." Finally, she noted Schultz had promised not to expose her "human charitable work" if she resigned, but she questioned how one could expose "public information."
Two days later - and in response to questions from homeowners - Young sent another email to the HOA. She provided additional detail regarding her work history, clarified her involvement with the church, and noted the board had put "processes, procedures, and safeguards in place so that owners can be assured their money is safe, . . . and that all the outstanding Woodlands bills are paid." She noted the board had placed information on certain HOA expenditures on the company's website to provide "more transparency into the finances than by any other prior Board," and she promised to explain the safeguards at the next board meeting. She also asserted the company's website was secure. At a May 2021 meeting, the board described the property management transitions, provided an overview of HOA finances, and explained the company's security features.
This litigation followed. In October 2021, plaintiffs filed a complaint against Schultz alleging claims for libel intentional infliction of emotional distress, "Menace (Extortion)," and conspiracy. The complaint acknowledged the HOA was in a state of turmoil when Young became president, and that Schultz wrote the letters after the board announced it would investigate "how the HOA found itself in such poor financial and structural condition." According to the complaint, Schultz wrote the letters "to threaten and coerce Young into immediately resigning" from the board, so that he "could presumably install himself or someone sympathetic to his views in the office." ...
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