43 Cal.App.5th 358
Cal. Ct. App.2019Background
- Sylvia Tang and Alan Wong divorced under a settlement agreement (effective Dec. 31, 2011) that shifted Wong’s 48.5% Asian Square interest to Tang and included broad indemnity clauses requiring the warrantor to indemnify the other for undisclosed liabilities and related attorney fees.
- Wong died in June 2013; Tang died in August 2013; probate proceedings effected transfer of Wong’s shares so the Tang Estate controlled a 59.5% interest in Asian Square.
- Asian Square sued the Wong Estate in 2014 to recover a $5 million payoff of a UCB loan; the Wong Estate defended and incurred litigation costs; the trial court initially sustained a demurrer to Asian Square’s complaint but that ruling was later reversed on appeal.
- The Wong Estate sued the Tang Estate (2017) for breach of contract, express contractual indemnity, and equitable indemnity, seeking indemnification for defense costs under the marital settlement agreement.
- The Tang Estate moved to strike under the anti‑SLAPP statute, arguing the Wong Estate’s claims arise from the Tang Estate’s protected petitioning activity (instigating/funding the Asian Square litigation); the trial court denied the motion and the Court of Appeal affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wong’s indemnity claims "arise from" Tang Estate’s protected petitioning activity (anti‑SLAPP first prong) | Wong: claims are breach-of-contract/indemnity claims based on Tang’s refusal to honor indemnity obligations — not based on the other litigation | Tang: Wong’s claims are premised on Tang’s instigation/funding of Asian Square litigation (protected activity), so anti‑SLAPP applies | Held: Claims do not arise from protected activity; they allege breach of contractual indemnity, not that the litigation itself is the wrongful act, so anti‑SLAPP fails |
| Whether a defendant’s decision not to fund litigation (despite an indemnity obligation) is itself protected activity that triggers anti‑SLAPP | Wong: the core wrong is the contractual breach, not the decision to litigate or not fund; collateral litigation references don’t make the claim an anti‑SLAPP target | Tang: analogizes to cases where indemnity claims were held to arise from litigation activity (e.g., Lennar Homes); argues "but for" causation (no litigation, no indemnity claim) | Held: Court rejects broad "but for" rule; permitting anti‑SLAPP whenever expenses stem from litigation would swallow first-prong limits; decision not to fund does not make the core injury protected activity |
Key Cases Cited
- Park v. Board of Trustees of California State University, 2 Cal.5th 1057 (2017) (clarifies two-step anti‑SLAPP test and requires the claim to arise from protected activity, focusing on elements of the challenged claim)
- Navellier v. Sletten, 29 Cal.4th 82 (2002) (anti‑SLAPP can apply where the challenged claim alleges that litigation activity itself breached a contractual obligation)
- Lennar Homes of California, Inc. v. Stephens, 232 Cal.App.4th 673 (2014) (held indemnity claim arose from co‑defendants’ federal litigation activity; Court of Appeal relied on facts distinguishable from Park)
- Oasis West Realty, LLC v. Goldman, 51 Cal.4th 811 (2011) (sets out breach of contract elements relevant to anti‑SLAPP analysis)
- Old Republic Construction Program Group v. The Boccardo Law Firm, Inc., 230 Cal.App.4th 859 (2014) (explains claim arises from protected conduct only if at least one wrongful act falls within section 425.16’s definition)