67 Cal.App.5th 1149
Cal. Ct. App.2021Background
- MCWE (cross-complainant) and NHOM (cross-defendant) have long-standing litigation over a ground lease and sublease for property in Newport Beach; MCWE alleged NHOM failed to maintain property improvements.
- After Quay Works sued MCWE, MCWE filed a cross-complaint against NHOM; NHOM answered and pleaded affirmative defenses 19–21 asserting a right of setoff (breach, assignment, fraud), incorporating many allegations from NHOM’s complaint.
- MCWE demurred to those defenses and filed a special motion to strike under Cal. Code Civ. Proc. § 425.16 (anti‑SLAPP), arguing the defenses arose from protected petitioning activity and were properly stricken.
- The trial court sustained the demurrer to the 20th defense but denied the anti‑SLAPP motion as to the 19th and 21st, concluding an anti‑SLAPP motion may not be directed at affirmative defenses.
- The Court of Appeal affirmed, holding (1) anti‑SLAPP motions target causes of action asserted by plaintiffs/cross‑complainants/petitioners and not affirmative defenses, and (2) setoff is a defensive plea, not a cause of action subject to anti‑SLAPP relief.
Issues
| Issue | MCWE's Argument | NHOM's Argument | Held |
|---|---|---|---|
| May an anti‑SLAPP motion under §425.16(b) be directed to an affirmative defense in an answer? | Anti‑SLAPP may target those defenses because they arise from protected petitioning activity. | No; §425.16 applies only to causes of action asserted by plaintiffs/cross‑complainants/petitioners, not answers. | No. Anti‑SLAPP motions cannot be directed to affirmative defenses. |
| Can an affirmative defense of setoff constitute a cause of action or claim for relief subject to anti‑SLAPP? | The defenses are disguised cross‑claims seeking relief and so may be struck. | Setoff is purely defensive, cannot seek affirmative relief, and is not a cause of action. | No. Setoff is defensive only; relief must be pursued by cross‑complaint. |
Key Cases Cited
- Baral v. Schnitt, 1 Cal.5th 376 (2016) (defines “cause of action” for anti‑SLAPP as allegations of protected activity asserted as grounds for relief)
- Monster Energy Co. v. Schechter, 7 Cal.5th 781 (2019) (standard of review for anti‑SLAPP rulings; de novo review)
- Construction Protective Services, Inc. v. TIG Specialty Ins. Co., 29 Cal.4th 189 (2002) (setoff under §431.70 is defensive only; cannot obtain affirmative relief via answer)
- City of Stockton v. Superior Court, 42 Cal.4th 730 (2007) (distinguishes defeating plaintiff’s recovery from claiming affirmative relief)
- Granberry v. Islay Investments, 9 Cal.4th 738 (1995) (explains equitable basis for setoff when cross‑demands exist)
- Stirling v. Brown, 18 Cal.App.5th 1144 (2018) (statutory interpretation principles applied to §425.16)