*1 Filed 4/14/25 Meritage Homes of California v. HBT of Winters Highlands CA3
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT
(Yolo)
---- MERITAGE HOMES OF CALIFORNIA, INC., C099898 Plaintiff and Respondent, (Super. Ct. No. CV20231612) v.
HBT OF WINTERS HIGHLANDS, LLC,
Defendant and Appellant. This appeal concerns a motion to strike claims from a civil complaint pursuant to Code of Civil Procedure section 425.16, widely known as the anti-SLAPP statute. The developer of a residential project in the City of Winters (the City) made sewer and storm drain improvements before contracting to sell multiple plots in the project to a home builder. Later, a document that amended the parties’ contract contained language Undesignated statutory references are to the Code of Civil Procedure. *2 regarding the developer’s entitlement to be reimbursed for costs associated with those sewer and storm drain improvements. When a dispute arose about the meaning of that reimbursement language, the developer wrote a letter to the City demanding its help. The City later exercised its authority to withhold building permits unless the builder complied with the reimbursement language. The builder, Meritage Homes of California, Inc. (Meritage), sued the developer, asserting two causes of action: breach of contract and breach of the implied covenant of good faith and fair dealing.
The developer, HBT of Winters Highlands, LLC (HBT), filed an anti-SLAPP motion, contending that multiple discrete claims in Meritage’s cause of action for breach of the implied covenant of good faith and fair dealing arose from activity protected by the anti-SLAPP law: HBT’s communications to the City urging it to act or not act.
Litigation of an anti-SLAPP motion involves a two-step process. First, the
moving defendant bears the burden of establishing that the challenged claims in a civil
complaint arise from protected activity the defendant engaged in. If the moving
defendant carries that burden, the second step requires the plaintiff (who opposes the anti-
SLAPP motion) to show the challenged claims have at least minimal merit. A trial court
should strike each claim for which a plaintiff cannot make the necessary showing at the
second step. (See
Bonni v. St. Joseph Health System
(2021)
Here, the trial court granted part of HBT’s anti-SLAPP motion, striking some of the claims in Meritage’s complaint. On appeal, HBT contends the trial court erred by not also striking Meritage’s allegation that HBT breached the implied covenant of good faith and fair dealing by “claiming that Meritage owes HBT $2,153,880.76 in reimbursements.” HBT contends this claim, like the others the trial court struck, is based on protected activity. We agree.
As for the second step of the anti-SLAPP analysis, we also agree with HBT that Meritage cannot show this claim has minimal merit. We reach this conclusion because *3 we decline to consider arguments Meritage raises for the first time on appeal. Accordingly, we will affirm in part and reverse in part the trial court’s order.
BACKGROUND
HBT is the developer of a planned residential community (the project) within the City’s boundaries. In the years leading up to the instant dispute, HBT and the City agreed that HBT was required to make sewer and storm drain improvements (improvements) in connection with the project. In October 2020, HBT sold numerous lots within the project to Meritage by a contract that was later amended multiple times, including in an August 2021 writing, a section which asserts: “Effect on Other Agreements. Nothing in this Assignment is intended to, or does, affect the status or enforceability of any other agreement entered into between [HBT] and City. [Meritage] acknowledges and agr[]ees that [HBT] has installed certain public improvements, including a sewer pump station, sewer force main and storm drain improvements, at its sole costs and expense, which improvements benefit the Assigned Property as well as other properties, and that [HBT] is entitled to be reimbursed by such benefited properties for their proportionate shares of such costs, as determined by the City Engineer.” (Boldface omitted.) We will hereinafter refer to this section of the August 2021 writing as “the reimbursement agreement.”
In 2022, the City agreed with HBT that it would collect the proportionate reimbursement funds from landowners (including Meritage) and pass them through to HBT.
In February 2023, the parties’ difference of opinion regarding the meaning and scope of the reimbursement agreement materialized when counsel for HBT wrote a letter to counsel for the City (1) asserting that Meritage was “disclaiming [its] obligations” under the reimbursement agreement and (2) “demand[ing] that the City . . . use best *4 efforts to collect Meritage’s allocated portion of the cost” of the improvements. HBT noted in the letter that it assumed such efforts by the City would include denying Meritage any further building permits.
In June 2023, the City issued a notice of default to Meritage, citing in part Meritage’s representations to HBT and the City that it had no intention of paying the reimbursement costs contemplated by the reimbursement agreement. The City explained it would withhold issuance of any building permits or certificates of occupancy to which Meritage would have otherwise been entitled unless Meritage cured the default by (1) remitting to the City Meritage’s proportionate share of the total costs of the improvements for residential units for which Meritage had already received building permits and (2) affirming that it would pay its proportionate share of the total costs of the improvements for future residential units that it built. Following this notice of default, the City refused to issue further building permits or certificates of occupancy to Meritage unless it paid $2,153,880.76 to HBT.
In August 2023, Meritage sued HBT, asserting two causes of action—breach of contract and breach of the implied covenant of good faith and fair dealing. Paragraph 17 of the complaint states in relevant part: “Citing the Reimbursement Agreement, HBT demanded that Meritage pay $2,153,880.76 for HBT’s work . . . . HBT also demanded that and/or urged/encouraged/convinced the City to take action to try and force Meritage to pay such amounts, culminating in the City sending Meritage a letter pursuant to which the City claims that Meritage is in default of the” August 2021 writing.
Incorporating paragraph 17, the complaint later alleged that HBT breached the implied covenant of good faith and fair dealing by engaging in at least seven discrete acts, which are numbered: (1) intentionally misrepresenting the terms of the written In the trial court, Meritage conceded the reimbursement agreement is “inartful and ambiguous.”
contract between Meritage and HBT and the terms of the August 2021 writing to the City; (2) entering into the reimbursement agreement in the full knowledge that its terms were contrary to the written contract between Meritage and HBT; (3) demanding, urging, or causing the City to issue the notice of default; (4) failing to cure the City’s misunderstanding “that Meritage is a reimbursor, when in fact Meritage is not a reimbursor”; “(5) claiming that Meritage owes HBT $2,153,880.76 in reimbursements ”; (6) refusing Meritage’s tender and request for defense, indemnity, and to be held harmless; and (7) claiming an interpretation of the August 2021 writing that is inconsistent with the terms and conditions of the contract between Meritage and HBT as well as the contemporaneous communications of Meritage and HBT to the City attorney who drafted the provision in question. (Italics added.)
HBT filed an anti-SLAPP motion asking the trial court to strike claims 1 through 5 and 7 of Meritage’s cause of action for breach of the implied covenant of good faith and fair dealing, arguing that these claims arose from activity protected by the anti-SLAPP law: HBT’s communications to the City urging it to act or not act based on Meritage’s failure to provide reimbursement. Regarding the second step of anti-SLAPP analysis, HBT argued the “litigation privilege” barred Meritage from being able to show those claims had any merit. In support of its motion, HBT provided a declaration of the president of its parent corporation, who represented that “[a]t no time did HBT petition anyone other than the City about this matter.”
In its opposition, Meritage argued that HBT’s motion failed at the first step of the anti-SLAPP analysis because it improperly grouped Meritage’s claims together, even though some of the claims were “facially outside” the anti-SLAPP statute. Regarding the second step, Meritage argued its claims had factual merit, but offered no response to HBT’s argument the claims were barred by the litigation privilege.
In an October 2023 order, the trial court granted in part HBT’s anti-SLAPP motion, ruling at the first step that HBT demonstrated claims 1, 2, 3, and 7 were based on *6 protected activities, and, at the second step, Meritage failed to establish that the litigation privilege did not apply. Accordingly, the court struck from the complaint claims 1 through 3 and 7, and language in paragraph 17 of the complaint quoted above (“HBT also demanded that and/or urged/encouraged/convinced the City to take action . . . .”).
HBT timely appealed in November 2023, solely as to the trial court’s ruling related to claim 5. Their opening brief was filed in April 2024, and this case became fully briefed on November 20, 2024.
DISCUSSION
Claim 5 of Meritage’s complaint states that HBT breached the implied covenant of good faith and fair dealing by “claiming that Meritage owes HBT $2,153,880.76 in reimbursements.” HBT contends that this claim is based on protected activity and that the trial court erred by failing to strike it along with the other claims. We agree.
I Legal Background “The anti-SLAPP statute is ‘designed to protect defendants from meritless lawsuits that might chill the exercise of their rights to speak and petition on matters of public concern. [Citations.] To that end, the statute authorizes a special motion to strike a claim “arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue.” (§ 425.16, subd. (b)(1).)’ ” ( Bonni , supra , 11 Cal.5th at pp. 1008- 1009.)
“The anti-SLAPP statute identifies four categories of protected activity.
(§ 425.16, subd. (e)(1)-(4).) . . . Section 425.16, subdivision (e)(2) protects ‘any written
or oral statement or writing made in connection with an issue under consideration or
review by a legislative, executive, or judicial body, or any other official proceeding
authorized by law.’ ” (
Bonni
,
supra
,
“Litigation of an anti-SLAPP motion involves a two-step process. First, ‘the
moving defendant bears the burden of establishing that the challenged allegations or
claims “aris[e] from” protected activity in which the defendant has engaged.’ ” (
Bonni
,
supra
,
At the first step, courts should “ ‘consider the elements of the challenged claim
and what actions by the defendant supply those elements and consequently form the basis
for liability.’ [Citation.] The defendant’s burden is to identify what acts each challenged
claim rests on and to show how those acts are protected under a statutorily defined
category of protected activity.” (
Bonni
,
supra
,
Bonni
also explained that
Baral v. Schnitt
(2016)
encompasses multiple claims”—an “almost metaphysical” endeavor; while recognizing some courts that use the “gravamen test” label nevertheless engage in the proper inquiry].)
Substantively, the court in
Bonni
noted that under the anti-SLAPP statute “ ‘a
claim may be struck only if the speech or petitioning activity
itself
is the wrong
complained of, and not just evidence of liability or a step leading to some different act for
which liability is asserted.’ ” (
Bonni
,
supra
,
We review the trial court’s ruling de novo. (
Bonni
,
supra
,
II First-step Analysis HBT argues the trial court erred by ruling that claim 5 is not based on protected activity, because while the claim does not expressly identify the listener to whom HBT made its assertion that Meritage owed it over $2 million when considered with the other allegations in the complaint and the evidence presented in the parties’ pleadings, it is clear HBT made this assertion to the City. Meritage contends that claim 5 is not based on protected activity because (1) none of the authority cited in HBT’s opening brief holds *9 that allegations like claim 5 are subject to the anti-SLAPP statute, and (2) it arises out of a contract dispute. 4 We agree with HBT.
To establish a breach of the implied covenant of good faith and fair dealing, a
plaintiff must demonstrate that the defendant engaged in conduct that frustrated the
plaintiff’s right to receive the benefits of the parties’ agreement. (
Ojjeh v. Brown
(2019)
Here, paragraph 17 of the complaint alleges: “Citing the Reimbursement
Agreement, HBT demanded that Meritage pay $2,153,880.76 for HBT’s work . . . . HBT
also demanded that and/or urged/encouraged/convinced the City to take action to try and
force Meritage to pay such amounts, culminating in the City sending Meritage a letter
pursuant to which the City claims that Meritage is in default of the” August 2021 writing.
In claim 5, Meritage incorporates those allegations in paragraph 17 and contends HBT
“breached the implied covenant of good faith and fair dealing . . . by” “(5) claiming that
Meritage owes HBT $2,153,880.76 in reimbursements.” Given the context of paragraph
17,
5
it is clear that claim 5 concerns HBT’s
communication to the City
that Meritage
owed it $2,153,880.76 in reimbursements. The declaration HBT presented in support if
its anti-SLAPP motion bolsters this conclusion, as it indicates that HBT communicated
with no one other than the City about the parties’ dispute regarding the reimbursement
Meritage does not dispute that HBT’s communications to the City were “made in
connection with an issue under consideration or review by a legislative, executive, or
judicial body, or any other official proceeding authorized by law.” (Cf.
City of Costa
Mesa v. D’Alessio Investments, LLC
(2013)
which our Supreme Court emphasized that “ ‘[l]anguage . . . cannot be interpreted apart from context’ [citation], and what a particular statement or act is ‘about’ often cannot be discerned from words alone”).
agreement. Meritage points to nothing in the record that suggests that claim 5 concerns HBT’s communications to anyone other than the City.
Accordingly, HBT’s communication to the City, in and of itself, is a necessary element of claim 5. It is not merely evidence of a different act for which liability is asserted. Claim 5 arises from protected activity. ( Bonni , supra , 11 Cal.5th at pp. 1014, 1016.)
Meritage’s arguments on this issue are unpersuasive. It cites no authority for its
proposition that, to obtain anti-SLAPP relief, a party must demonstrate that case law has
previously identified “similar” protected activity. And contract disputes are not immune
from the anti-SLAPP statute. (See
Bonni
,
supra
,
Accordingly, HBT has carried its first-step burden of establishing that claim 5 arises from protected activity it engaged in.
III
Second-step Analysis
If Meritage cannot show that claim 5 has at least minimal merit, the claim must be
stricken. (
Bonni
,
supra
,
Compare
Beck v. Hamblen County
(6th Cir. 2020)
HBT contends (1) the litigation privilege prohibits use of HBT’s statements to the City regarding the reimbursement agreement and (2) Meritage’s underlying theory of the meaning of the August 2021 writing is incorrect. Meritage argues (1) the litigation privilege “usually does not apply to breach of contract claims” and “communications interpreting” contracts that are the bases of such claims and (2) claim 5 has merit because the reimbursement agreement is contrary to other agreements the parties made. Because we decline to consider Meritage’s forfeited argument regarding the litigation privilege, Meritage cannot show that claim 5 has minimal merit.
A. The Litigation Privilege
Found in Civil Code section 47, subdivision (b)(2), the litigation privilege applies
to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants
or other participants authorized by law; (3) to achieve the objects of the litigation; and
(4) that have some connection or logical relation to the action. In the anti-SLAPP
context, the litigation privilege presents a substantive defense a plaintiff must overcome
to demonstrate a probability of prevailing. Any doubt as to whether the privilege applies
is resolved in favor of applying it and the privilege extends to publications made outside
the courtroom. (
Crossroads Investors, L.P. v. Federal National Mortgage Assn
. (2017)
B. Analysis
In its anti-SLAPP motion, HBT argued that claim 5 was based on communications
with the City that were made in anticipation of litigation, including a formal Government
*12
Claims Act notice. (See
Bonni
,
supra
,
The speedy resolution of litigation implicating protected activity is a key purpose
of the anti-SLAPP statute. (See
Newport Harbor Ventures, LLC v. Morris Cerullo World
Evangelism
(2018)
699, 713-714 [“Considering an issue for the first time on appeal is often unfair to the trial court, unjust to the opposing party, and contrary to judicial economy because it encourages the embedding of reversible error through silence in the trial court”].) Meritage thereby forfeited any appellate argument on the litigation privilege. And we decline to consider those forfeited arguments now.
IV
Meritage’s Request for Dismissal or Stay of HBT’s Appeal We reject Meritage’s requests for dismissal or stay of the instant matter. A different panel of this court previously denied Meritage’s request to dismiss the matter and the request to stay the appeal appears in the respondent’s brief, which is not in conformance with the California Rules of Court and appellate practice.
A. Additional Background
In an April 2024 motion, Meritage argued for dismissal of this appeal (1) because HBT previously agreed to binding arbitration of disputes between the parties, thereby waiving its right to seek any remedies in court, and (2) because the appeal was moot “given that the subject matter of the appeal [was] pending in arbitration.” In that motion, Meritage represented that it first sought arbitration of the parties’ dispute after HBT filed notice that it was appealing the trial court’s anti-SLAPP order. A different panel of this court denied Meritage’s motion.
In its respondent’s brief, Meritage requests that we dismiss or stay the appeal for
reasons similar to those presented in its April 2024 motion. Meritage informs us that an
The parties had the opportunity to brief forfeiture, a rule always implicated when a
party raises an argument for the first time in the reviewing court. (See
People v. Alice
(2007)
B. Analysis
Though “a party may not file a written
motion
to reconsider that has procedural
significance if it does not satisfy the requirements of section . . . 1008,” nothing prevents
a party from “communicating the view to a court that it should reconsider a prior ruling
(although any such communication should never be ex parte).” (
Le Francois v. Goel
(2005)
Further, we decline to grant the request to stay the appeal. In
People v. Zarazua
(2009)
DISPOSITION
The trial court’s order granting in part HBT’s anti-SLAPP motion against Meritage is affirmed in part and reversed in part. The court shall vacate its prior order and issue a new order: (1) granting the anti-SLAPP motion as to claims 1 through 3, 5, and 7 of the cause of action for breach of the implied covenant of good faith and fair dealing; and (2) striking the language in paragraph 17 of the complaint identified in HBT’s notice of motion, as the trial court did in its original order. HBT is entitled to costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
/s/
BOULWARE EURIE, J. We concur:
/s/
EARL, P. J.
/s/
FEINBERG, J.
