Developments of Interest

New Cases of Interest - October 4, 2016

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10/04/2016

Baral v. Schnitt (2016) 1 Cal.5th 376.  This is a SLAPP case that reached the Supreme Court.  The Court found that the SLAPP statute can reach individual claims within pleaded counts, requiring a probability of prevailing on any claim for relief based on allegations of protected activity, even if mixed with assertions of unprotected activity.  The Court disapproved in that regard Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90.  Allegations of protected activity can therefore be excised from mixed causes of action in a complaint under the SLAPP statute.

City of Montebello v. Vasquez (2016) 1 Cal.5th 409.  The city had sued three former city council members and a former city administrator alleging that they voted on a waste hauling contract in which they had a financial interest.  The defendants filed a SLAPP motion.  The Court held that the case did not come within the SLAPP exemption for public enforcement actions and that the council members' votes in favor of the contract issue did constitute protected activity under CCP § 425.16.  The city's claim depended upon the vote that was made and subsequent receipt of campaign contributions by the city council members.  The SLAPP motion should have been granted.

Nam v. Regents of the University of California (2016) 1 Cal.App.5th 1176.  Another SLAPP case.  A public employee made claims for sexual harassment and retaliation.  These claims were not subject to SLAPP dismissal because the alleged wrongdoing did not arise out of a disciplinary process which would be protected conduct as an official proceeding.  Instead the cause of action related to unwanted sexual advances and retaliatory conduct.  The Court was not required to ignore the employer's alleged motive as set forth in the pleadings.

Yhudai v. IMPAC Funding Corp. (2016) 1 Cal.App.5th 1252.  This is one of the actions that arose out of the real estate recession and again deals with the assignment of a deed of trust as part of package assignment made more than two years after the investment trust that received the assignment had closed when the nominee of the lender recorded an assignment of the deed of trust.  The borrower alleged that the assignment was void because it occurred after the trust closing date.  The Court however disagreed observing that under New York law, the governing law in this situation, unauthorized acts of the trustees may subsequently be approved and ratified by the trust beneficiaries.  The post-closing assignment was voidable and not void and the borrower had the burden to prove that the assignment was wrongful but had insufficiently alleged an invalid assignment.  He also had not alleged facts sufficient to establish that the assignment was void because it was made after the trust closing date.

John Doe 2 v. Superior Court (2016) 1 Cal.App. 1300.  Another SLAPP case.  This one involved the author of anonymous emails regarding common ownership of companies and a defamation action brought by one of the companies.  The company requested special discovery which the trial court granted under CCP § 452.16(g) regarding the identity of the anonymous emails.  The Court of Appeal granted mandate relief, holding that the emails were not actionable as libel on their face because the language alleging "bad business practices" was too vague to be an accusation of specific wrongdoing and the emails were instead constitutionally protected opinions.  Absent a prima facie showing of libel, the author's identity was not subject to special discovery.

Cruz v. City of Culver City (2016) 2 Cal.App.5th 239.  Plaintiff filed a complaint seeking declaratory relief concerning a violation of the Brown Act by a city and its council members.  The city brought a SLAPP motion.  The SLAPP motion was granted by the trial court which was affirmed by the Court of Appeal.  The Court held that the public interest exception to the SLAPP provisions did not defeat the motion because Plaintiff sought personal relief in the form of a halt to action taken by the council.  The city satisfied the first prong of the SLAPP statute demonstrating that the statements made were forms of protected activity under the United States Constitution and the First Amendment.  The Court also found that Plaintiff was unlikely to prevail on the merits.

Coles v. Glaser (2016) 2 Cal.App.5th 384.  This was an action brought by the plaintiffs for breach of a settlement agreement in a prior lawsuit.  The settlement agreement called for payments to the plaintiffs by a debtor which had also been guaranteed by the defendants.  After the settlement and some payments by the debtor, the debtor then filed for bankruptcy and the bankruptcy trustee recovered the paid settlement payments as a preference.  The plaintiffs then brought action against the guarantors and the guarantors sought credit for the amount paid by the original debtor even though they had been reclaimed by the bankruptcy trustee as a preference.  The Court held that the guarantors were obligated for the full amount and that they were not entitled to have the debt extinguished or reduced because of a pre-bankruptcy payment to a creditor that was later determined to be a preference.

Greco v. Greco (2016) 2 Cal.App.5th 810.  Another SLAPP case.  The case involved multiple causes of action, and among them the Court found that the claims for elder abuse, breach of fiduciary duty and conversion did not arise from protected activity and did not involve a public issue or an issue of public interest because it was a private dispute involving a family trust and estate.  The cause of action for constructive fraud however did arise from protected activity concerning statements that were made relating to litigation and the probability of prevailing on that claim needed to be determined on remand.

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