Meritage Homes of California v. HBT of Winters Highlands CA3
C099898
Cal. Ct. App.Apr 14, 2025Background
- HBT, a developer, constructed sewer and storm drain improvements for a residential project and later entered into a contract (and amendments) to sell lots to homebuilder Meritage.
- The contract included a "reimbursement agreement" requiring Meritage to pay its share of the costs, as determined by the city.
- A dispute arose over the meaning of the reimbursement agreement; HBT wrote to the City of Winters urging enforcement of reimbursement from Meritage.
- The City withheld building permits from Meritage pending payment of $2,153,880.76 to HBT.
- Meritage sued HBT for breach of contract and breach of the implied covenant of good faith and fair dealing, citing several acts including HBT's communications with the City.
- HBT filed an anti-SLAPP motion to strike these claims as actions protected by free speech and petitioning rights; the trial court granted the motion in part, and HBT appealed as to certain claims not struck.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HBT’s claim that Meritage owes reimbursement is protected activity under anti-SLAPP | It's a contract dispute, not protected activity | The claim arises from protected communications with the City | Court agreed with HBT; claim arises from protected activity |
| Whether Meritage’s claim has minimal merit (second anti-SLAPP step) | Claim is meritorious; litigation privilege does not usually apply to contract actions | Litigation privilege bars the claim | Court declined to consider new appellate arguments; held Meritage did not meet burden |
| Whether the trial court properly denied anti-SLAPP relief for the “claiming reimbursement” allegation | Trial court correct; not all aspects are protected activity | Trial court erred; all claims based on communication with the City are protected | Court reversed trial court; claim 5 also protected |
| Whether the appeal should be dismissed or stayed due to pending arbitration | Appeal should be dismissed or stayed due to arbitration agreement | Procedural requirements for such requests not met | Court denied the requests to dismiss or stay the appeal |
Key Cases Cited
- Bonni v. St. Joseph Health System, 11 Cal.5th 995 (Cal. 2021) (explains two-step anti-SLAPP analysis and claim-by-claim approach)
- Baral v. Schnitt, 1 Cal.5th 376 (Cal. 2016) (sets the analytical framework for partial anti-SLAPP motions and claim-by-claim review)
- Park v. Bd. of Trustees of Calif. State Univ., 2 Cal.5th 1057 (Cal. 2017) (claim must arise from protected activity, not merely reference it)
- Ojjeh v. Brown, 43 Cal.App.5th 1027 (Cal. Ct. App. 2019) (defines breach of the implied covenant in contract law)
- Crossroads Investors, L.P. v. Federal Nat’l Mortgage Assn., 13 Cal.App.5th 757 (Cal. Ct. App. 2017) (scope and policy of California’s litigation privilege)