Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism
6 Cal. App. 5th 1207
| Cal. Ct. App. | 2016Background
- NHV and VMG (plaintiffs) served as asset managers under a Management Agreement to evict a defaulting sublessee and were to advance costs of an unlawful detainer action in exchange for an option/assignment interest in the ground lease.
- VMG/ NHV paid large sums (claimed > $700,000) for the unlawful detainer litigation and asset-management expenses; Cerullo and Artz (defendants) later signed a settlement with the sublessee without plaintiffs’ knowledge, ending the litigation.
- Plaintiffs filed successive complaints (initial, first, second) alleging breach of contract and related claims referencing the settlement; a third amended complaint added quantum meruit and promissory estoppel claims and was filed in June 2015.
- Within 60 days of the third amended complaint, defendants filed an anti‑SLAPP motion arguing the claims arise from protected petitioning (the settlement). The trial court denied the motion as untimely. Plaintiffs proceeded on the merits of the new claims in opposition to the anti‑SLAPP motion.
- The Court of Appeal held: anti‑SLAPP motions must be filed within 60 days of service of the first complaint that pleads a claim subject to section 425.16, unless the trial court permits a later filing; an amended complaint reopens the 60‑day window only for newly pleaded causes of action or new allegations that make prior claims subject to anti‑SLAPP relief.
- Applying the rule, the denial was affirmed: anti‑SLAPP motion was untimely as to breach of contract and breach of the implied covenant (claims present in earlier complaints) but timely as to the newly pleaded quantum meruit and promissory estoppel claims; plaintiffs showed a prima facie probability of success on those new claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of anti‑SLAPP motion when filed after amended complaint | Anti‑SLAPP period should be measured from the complaint that first pleads the relevant claims; plaintiffs argued defendants waited too long and engaged in litigation instead | Defendants argued filing within 60 days of the 3rd amended complaint was timely and that any amended complaint restarts the 60‑day clock | A defendant must file within 60 days of service of the first complaint that pleads a claim within §425.16(b)(1), unless court permits a later filing; an amendment reopens the window only for new claims or new allegations that newly implicate §425.16 |
| Applicability of anti‑SLAPP to settlement of an unlawful detainer | Plaintiffs did not dispute settlement was protected activity but argued defendants failed to show plaintiffs lacked minimal merit on the new claims | Defendants argued settlement is protected petitioning and all causes arise from that protected act, so claims should be struck | Settlement is protected activity; but timeliness governs which claims could be attacked. For timely targets (new claims), plaintiff bore burden and met it on quantum meruit and promissory estoppel |
| Quantum meruit: statute of limitations and pleading consistency | Plaintiffs argued quantum meruit related back to earlier complaints and thus was timely; inconsistent pleading permitted in the alternative | Defendants argued the cause accrued at settlement and was time‑barred and also inconsistent with express contract recovery | Quantum meruit related back to earlier pleadings (same facts/instrumentality) so timely; pleading inconsistent causes is permitted at this stage (though recovery on both cannot be had) |
| Promissory estoppel: statute of limitations and prima facie evidence | Plaintiffs argued promissory estoppel related back and that declaration showed promises, reliance, and damages | Defendants argued the claim was time‑barred, inconsistent with contract, and unsupported by admissible evidence | Promissory estoppel related back and was timely; plaintiffs’ declaration sufficed for prima facie showing of promise, reliance, and injustice to avoid enforcement of the promise |
Key Cases Cited
- Baral v. Schnitt, 1 Cal.5th 376 (explains anti‑SLAPP two‑step framework and summary‑judgment‑like review)
- Varian Medical Systems, Inc. v. Delfino, 35 Cal.4th 180 (legislative purpose of anti‑SLAPP to deter SLAPP suits and end them early)
- Lam v. Ngo, 91 Cal.App.4th 832 (an amended complaint can be subject to an anti‑SLAPP motion)
- Hewlett‑Packard Co. v. Oracle Corp., 239 Cal.App.4th 1174 (amendment reopens anti‑SLAPP window only for new causes or new allegations that newly invoke protection)
- Yu v. Signet Bank/Virginia, 103 Cal.App.4th 298 (discusses timing of anti‑SLAPP motions to amended complaints)
- Smeltzley v. Nicholson Mfg. Co., 18 Cal.3d 932 (relation‑back doctrine: amended claims based on same facts relate back despite new legal theories)