36 Cal. App. 5th 1037
Cal. Ct. App. 5th2019Background
- Larwin (landlord) owns a shopping-center ground lease originally held by Vons; lease requires landlord consent for assignments and bars unreasonably withholding consent.
- After Vons’s sale, Haggen entities (HPH III, Propco) became assignees; Propco paid rent but vacant since 2015. Propco later sold to ValueRock entities (ValueRock IP and ValueRock TN).
- In 2016 Propco/ValueRock sought Larwin’s consent to assign the ground lease to ValueRock; Larwin requested financial and use information, ultimately denied consent citing insufficient assurances and tenant default.
- Plaintiffs sued in 2016 alleging Larwin unreasonably withheld consent (five causes of action). While that action was pending, Plaintiffs in 2018 submitted an amended assignment request with revised terms and expressly stated it was not a settlement offer and would not release past claims.
- Larwin denied the 2018 request and moved to strike the second amended complaint under the anti‑SLAPP statute, arguing the amended request and Larwin’s response were settlement or litigation communications protected by section 425.16. The trial court denied the motion; the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2018 amended assignment request and Larwin’s response are "protected activity" under the anti‑SLAPP statute | The amended request was a business proposal about lease assignment, not a settlement or litigation communication; claims arise from Larwin's refusal to consent | The amended request and Larwin’s rejection were settlement or litigation communications made in connection with the pending suit and thus protected under §425.16 | Held: Not protected. The gravamen of the complaint is Larwin’s decision to withhold consent (ordinary business conduct), not protected speech or petitioning activity. |
| Whether Plaintiffs’ second amended complaint "arises from" protected activity (step one nexus) | Plaintiffs contend claims are based on contractual breach and business decisions, not on litigation communications | Defendants contend the complaint was triggered by and seeks to punish positions taken in litigation/settlement negotiations, so anti‑SLAPP applies | Held: The complaint does not arise from protected activity; litigation-related communications are evidentiary or antecedent, not the basis for liability (citing Park). |
| Whether Plaintiffs’ express statement that the 2018 request was not a settlement communication affects analysis | Plaintiffs point to the unambiguous language disclaiming any settlement intent or release of past claims | Defendants argue substance over form—that the request functioned as a settlement overture regardless of label | Held: The explicit disclaimer and the fact the request did not release or resolve Plaintiffs’ damages claims undermined Defendants’ settlement‑communication argument. |
| Whether defendants are entitled to fees because the anti‑SLAPP motion or appeal was frivolous | Plaintiffs sought fees after prevailing on anti‑SLAPP, arguing the motion lacked merit | Defendants argued their motion and appeal were reasonable attempts to invoke §425.16 | Held: Motion and appeal were not frivolous; plaintiffs’ fee request denied. |
Key Cases Cited
- Park v. Board of Trustees of California State University, 2 Cal.5th 1057 (explains that a claim is subject to anti‑SLAPP only where the speech itself is the wrong complained of, not merely evidence)
- Crossroads Investors, L.P. v. Federal National Mortgage Assn., 13 Cal.App.5th 757 (settlement discussions connected to litigation can be protected activity)
- Bergstein v. Stroock & Stroock & Lavan LLP, 236 Cal.App.4th 793 (anti‑SLAPP requires the claim be based on petitioning activity, not merely triggered by it)
- City of Cotati v. Cashman, 29 Cal.4th 69 (triggering by protected activity does not make a claim arise from that activity)
- Equilon Enterprises v. Consumer Cause, Inc., 29 Cal.4th 53 (sets out anti‑SLAPP two‑step procedural framework)
- Flatley v. Mauro, 39 Cal.4th 299 (scope of appellate review and evidentiary approach on anti‑SLAPP motions)