ValueRock TN Prop. v. PK II Larwin Square ( 2019 )

Filed 6/28/19
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
VALUEROCK TN PROPERTIES, LLC,
et al.,
G056634
Plaintiffs and Respondents,
(Super. Ct. No. 30-2016-00878748)
v.
OPINION
PK II LARWIN SQUARE SC LP, et al.,
Defendants and Appellants.
Appeal from an order of the Superior Court of Orange County, Craig L.
Griffin, Judge. Affirmed.
Blackmar, Principe & Schmelter, Gerry C. Schmelter, Peter J. Attarian, Jr.,
and Timothy D. Principe for Defendants and Appellants.
O’Melveny & Myers, Marc F. Feinstein and Andrew J. Weisberg for
Plaintiffs and Respondents.
* * *
This is an appeal from an order denying a special motion to strike under the
anti-SLAPP (strategic lawsuit against public participation) statute. (See Code Civ. Proc.,
§ 425.16 (§ 425.16).) The case arises from a landlord’s repeated refusal to consent to the
proposed assignment of a ground lease for the anchor space in a shopping center. The
plaintiffs are the entities that wish to assign the leasehold interest and the entities that
agreed to take the assignment; the defendants are the landlord and its parent company.
In their original and first amended complaints, the plaintiffs alleged the
landlord unreasonably withheld consent to the plaintiffs’ lease assignment request. While
the litigation was pending, the plaintiffs made an amended lease assignment request,
which the landlord similarly rejected. In their second amended complaint, the plaintiffs
asserted the same five causes of action as before, but added allegations about the
landlord’s refusal to consent to their amended assignment request.
The landlord filed an anti-SLAPP motion to strike the second amended
complaint, contending the plaintiffs’ amended assignment request and the landlord’s
response to that request were settlement communications and statements made in
litigation, and therefore constituted protected activity. The trial court denied the motion,
finding the landlord’s rejection of the amended assignment request was not a settlement
communication or litigation-related conduct, but rather an ordinary business decision.
We agree and affirm the order denying the anti-SLAPP motion.
I.
FACTS
The following facts are taken from the pleadings, the declarations, and
other evidence submitted on the special motion to strike.
A. The Lease
Defendant PK II Larwin Square SC LP (Larwin) is the owner and landlord
of Larwin Square, a community shopping center located in Tustin. Defendant Kimco
2
Realty Corporation (Kimco) is a real estate investment trust that holds an indirect
minority interest in Larwin.
From 1978 until 2015, the anchor tenant for the Larwin Square shopping
center was a Vons supermarket. Vons entered into a 30-year ground lease for the space
in 1977 and later extended the lease term to 2021. The lease prohibited Vons from
transferring or assigning the lease without the landlord’s prior written consent, but further
provided the landlord’s “consent shall not be unreasonably withheld.”
B. The Assignment of the Lease to Haggen
In 2015, as part of the planned merger between Albertsons and Vons’
parent company, and per the divestiture terms imposed by the Federal Trade
Commission, many Vons stores — including the Larwin Square store — were sold to
Haggen, a small grocery chain in the Northwest.
In anticipation of the merger, Larwin approved the assignment of Vons’s
Larwin Square lease to Haggen Opco South. In May 2015, Haggen notified Larwin that
Vons was instead assigning the lease to a different Haggen entity, plaintiff Haggen
Property Holdings III, LLC (HPH III). Larwin did not object to the change. A few
months later, without Larwin’s knowledge or consent, HPH III “secretly” assigned the
lease to plaintiff Haggen Property South, LLC (Propco).
Haggen operated a supermarket in Larwin Square for just a few months,
from June to October 2015. The space has been vacant ever since, but Propco has
continued to pay rent and other expenses for the premises.
C. The First Request for Larwin’s Consent to an Assignment to ValueRock
In February 2016, Propco sold its interest in the ground lease to plaintiff
ValueRock Investment Partners, LLC (ValueRock IP), a commercial real estate
investment firm. ValueRock IP in turn assigned its rights in the lease to its affiliate,
plaintiff ValueRock TN Properties, LLC (ValueRock TN), a special purpose entity
created to acquire the lease.
3
In May 2016, Propco asked for Larwin’s approval of the assignment to
ValueRock. During a preliminary telephone conversation between representatives for
Larwin and Propco, Larwin expressed concern that according to its records, HPH III was
actually the tenant, Larwin had no record of any transfer to Propco, and the lease required
the tenant to request landlord consent before making any assignment. Larwin then sent
Propco the May 2015 lease assignment from Vons to HPH III, noted that was
“inconsistent” with Propco’s claim to be assignee of the lease, and explained the
inconsistency was “causing our legal team [to] question if we are dealing with the Tenant
here.” Despite those concerns, Larwin requested additional information to evaluate the
request for consent, such as ValueRock TN’s financials, experience, and plans for the
premises.
Propco complied in part. It provided general information about ValueRock
and its leadership team, but it refused to provide detailed financial information on
ValueRock TN because Kimco (Larwin’s parent), like ValueRock TN, was also a real
estate investor and developer. As for ValueRock’s plans for the premises, Propco replied
that while nothing in the ground lease required the space to be used as a grocery store,
ValueRock’s conduct to date showed it was committed to bringing a grocery store to the
shopping center.
In June 2016, ValueRock TN sent Larwin a letter demanding consent to the
proposed assignment and threatened to sue Larwin for interference with prospective
economic advantage. In response, Larwin once again asked for information to help it
evaluate the proposed assignment, including the intended use of the premises and
financial information on the prospective assignee and any proposed guarantors. After
securing a nondisclosure agreement, ValueRock TN sent Larwin its organizational chart
and current balance sheet, but it still refused to disclose any concrete plans or intentions
for the premises, claiming that “[w]hile a grocery store operator would be the most likely
subtenant,” it planned to “market the premises to a broad base of prospective retailers.”
4
In July 2016, Larwin denied consent to the proposed assignment, citing,
among other factors, ValueRock TN’s refusal to agree to use the premises as a
supermarket, its failure to provide sufficient financial information for Larwin to evaluate
its future viability and ability to perform the lease obligations, and the Haggen tenant’s
default on the lease. A few weeks later, ValueRock TN asked Larwin to reconsider, and
the parties exchanged further communications about the terms of a potential assignment.
In September 2016, Larwin stated it would consent to an assignment on
three conditions: (1) ValueRock TN must prove it or its guarantor has a tangible net
worth of at least $10 million; (2) Propco and ValueRock TN must agree the space would
be used only as a grocery store and any change in use would require Larwin’s consent;
and (3) any further assignments or subleases would require Larwin’s consent.
ValueRock TN responded explaining why it believed those conditions were
“unreasonable and therefore invalid.”
D. The Original and First Amended Complaints
In October 2016, ValueRock TN, ValueRock IP, and Propco filed a
complaint and then a first amended complaint against Larwin and Kimco (collectively,
Defendants), alleging Defendants had unreasonably withheld consent to the lease
assignment. The first amended complaint asserted five causes of action: declaratory
relief concerning the parties’ rights and obligations under the ground lease, breach of
contract (the ground lease), breach of the implied covenant of good faith and fair dealing,
intentional interference with contract (the ValueRock-Propco purchase agreement), and
intentional interference with prospective economic advantage.
In the months that followed, the parties attempted to mediate the dispute,
but those efforts were unsuccessful.
E. The Amended Request for Larwin’s Consent to an Assignment to ValueRock
In March 2018, while the litigation was pending, ValueRock TN,
ValueRock IP, Propco, and HPH III (collectively, Plaintiffs) again requested Defendants’
5
consent to an assignment of the lease, proposing different terms than before. The terms
of their amended request included: (1) a ValueRock entity with a tangible net worth of at
least $6 million would guarantee ValueRock TN’s lease obligations and provide a
certified balance sheet upon request; (2) upon assignment of the lease, ValueRock TN
would start a 90-day marketing campaign targeting supermarket or grocery store tenants
for the premises, but would not guarantee the subtenant would be a grocery store; and (3)
to address Larwin’s argument the assignment from HPH III to Propco was ineffective,
Propco and HPH III would transfer all their rights in the lease to ValueRock TN.
In the letter communicating this proposal, Plaintiffs unequivocally stated
the amended request was “not intended in any way to validate Larwin’s previous,
unreasonable bases for withholding consent,” but instead was “made purely in the interest
of securing agreement on the assignment to ValueRock.” Plaintiffs further specified the
letter was “not a settlement communication and is not intended to release any claims for
damages arising from Larwin and Kimco’s past refusal to consent to assignment of the
Ground Lease.”
In response, Defendants insisted Plaintiffs’ amended request was
“necessarily a settlement communication,” and stated they could not “appropriately
consider a new request when the old one is still pending and in dispute.”
F. The Second Amended Complaint
In April 2018, the parties stipulated Plaintiffs could file a second amended
complaint. The second amended complaint alleged the same five causes of action as the
first amended complaint, but it added HPH III as a plaintiff and added allegations about
Larwin’s denial of Plaintiffs’ amended request for consent. In other words, while the
original and first amended complaints were based on Larwin’s denial of Plaintiffs’
original assignment request in 2016, Plaintiffs based the second amended complaint on
Larwin’s denial of both the original request in 2016 and the amended request in 2018.
6
G. The Special Motion to Strike
In response, Defendants filed an anti-SLAPP special motion to strike the
second amended complaint, asserting the new allegations were based on settlement
1
communications and statements made in litigation, which were acts encompassing their
right of petition and thus constituted protected activity. Plaintiffs opposed the motion,
asserting the amended request and Defendants’ response were simply business
communications about the ground lease.
The trial court denied Defendants’ motion, explaining Defendants had not
shown the allegations arose from an act in furtherance of their right of petition or free
speech. The court acknowledged settlement communications and other statements made
in litigation are protected activity under the anti-SLAPP statute, but it concluded the new
2
allegations were based on Defendants’ decisions, not settlement communications. It
explained it must strike a claim under the anti-SLAPP statute “if the speech 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,” but “the new allegations in the [second amended
complaint] point to speech as evidence of a decision which is an additional basis for
alleged liability, rather than speech as a basis for liability itself.” The court also ruled
Defendants’ motion was not frivolous and denied the parties’ respective requests for fees.
Defendants timely appealed the court’s order.
1
Defendants “declined to produce the parties’ previous and subsequent settlement
proposals in support of [their] motion” “[t]o preserve the confidentiality of the parties’
settlement discussions,” but offered to provide copies of the settlement communications
for the trial court’s review if the court wished to confirm the amended request was indeed
a settlement communication.
2
At the hearing on the motion, Defendants asked to make an offer of proof that the
amended request was in fact part of ongoing settlement negotiations, but the trial court
declined the invitation. The court noted that a court reporter was present and private
settlement discussions should not be put on the record. It also reasoned it did not matter
if settlement discussions were the catalyst for the amended request because the settlement
discussions were not the gravamen of the new allegations.
7
II.
DISCUSSION
Defendants contend the second amended complaint arises from protected
activity under the anti-SLAPP statute because their refusal to consent to the amended
assignment request was a settlement communication directly related to the central issue
being litigated and because the second amended complaint purports to hold them liable
for a position taken in litigation. None of these contentions have merit.
A. The Anti-SLAPP Statute Generally
In 1992, the Legislature enacted section 425.16 to address “what are
commonly known as SLAPP suits (strategic lawsuits against public participation)—
litigation of a harassing nature, brought to challenge the exercise of protected free speech
rights.” (Fahlen v. Sutter Central Valley Hospitals (2014) 58 Cal. 4th 655, 665, fn. 3.)
The statute authorizes a special motion to strike meritless claims early in the litigation if
the claims “aris[e] from any act of that person in furtherance of the person’s right of
petition or free speech under the United States or California Constitution in connection
with a public issue.” (§ 425.16, subd. (b)(1).)
When a party files a special motion to strike, the trial court must engage in
a two-step process. “First, the court decides whether the defendant has made a threshold
showing that the challenged cause of action is one arising from protected activity. . . . If
the court finds such a showing has been made, it then determines whether the plaintiff has
demonstrated a probability of prevailing on the claim.” (Equilon Enterprises v.
Consumer Cause, Inc. (2002) 29 Cal. 4th 53, 67.) “Only a cause of action that satisfies
both prongs of the anti-SLAPP statute—i.e., that arises from protected speech or
petitioning and lacks even minimal merit—is a SLAPP, subject to being stricken under
the statute.” (Navellier v. Sletten (2002) 29 Cal. 4th 82, 89.)
We review a trial court’s order denying an anti-SLAPP motion de novo.
(Flatley v. Mauro (2006) 39 Cal. 4th 299, 325 (Flatley).) We “consider the pleadings, and
8
supporting and opposing affidavits stating the facts upon which the liability or defense is
based.” (§ 425.16, subd. (b)(2).) “‘However, we neither “weigh credibility [nor]
compare the weight of the evidence. Rather, [we] accept as true the evidence favorable
to the plaintiff[s].”‘“ (Flatley, supra, at p. 326.)
B. Principles Guiding Step One of the Anti-SLAPP Analysis
Under step one of the anti-SLAPP analysis, courts evaluate whether the
challenged claims “aris[e] from” protected activity. (§ 425.16, subd. (b)(1).) This
necessarily involves determining whether the claims involve conduct within the statutory
definition of protected activity (see id., subd. (e)), and if so, whether the challenged
claims “aris[e] from” that protected activity (see id., subd. (b)(1)).
Section 425.16, subdivision (e), sets forth four categories of protected
activity. Relevant here, subdivisions (e)(1) and (e)(2) define protected activity to include
any statement made in a judicial proceeding or in connection with an issue under
consideration by a judicial body. (§ 425.16, subd. (e)(1), (2).)
Protected activity thus includes the filing of lawsuits, and statements and
pleadings made in or in preparation for civil litigation. (Rohde v. Wolf (2007)
154 Cal. App. 4th 28, 35; Kolar v. Donahue, McIntosh & Hammerton (2006)
145 Cal. App. 4th 1532, 1537 (Kolar).) “Settlement discussions made in connection with
litigation are [also] protected activity under the anti-SLAPP statute.” (Crossroads
Investors, L.P. v. Federal National Mortgage Assn. (2017) 13 Cal.App.5th 757, 782
(Crossroads); see GeneThera, Inc. v. Troy & Gould Professional Corp. (2009)
171 Cal. App. 4th 901, 907-908 [settlement offer made to colitigant in underlying action
was protected activity and subject to motion to strike in subsequent litigation for alleged
intentional interference with contractual relations and negligence].)
Although litigation-related activities constitute protected activity, “it does
not follow that any claims associated with those activities are subject to the anti-SLAPP
statute. To qualify for anti-SLAPP protection, the moving party must [also] demonstrate
9
the claim ‘arises from’ those activities.” (Kolar, supra, 145 Cal.App.4th at p. 1537,
italics added.)
Our Supreme Court recently addressed what “nexus . . . a defendant [must]
show between a challenged claim and the defendant’s protected activity” to meet the
“arising from” requirement. (Park v. Board of Trustees of California State University
(2017) 2 Cal.5th 1057, 1060 (Park).) The Court explained: “a claim is not subject to a
motion to strike simply because it contests an action or decision that was arrived at
following speech or petitioning activity, or that was thereafter communicated by means
of speech or petitioning activity. Rather, 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.” (Ibid.) This requires
courts to “‘distinguish between (1) speech or petitioning activity that is mere evidence
related to liability and (2) liability that is based on speech or petitioning activity.’” (Id. at
p. 1065.) “‘[T]he mere fact that an action was filed after protected activity took place
does not mean the action arose from that activity for the purposes of the anti-SLAPP
statute.’” (Id. at p. 1063.) Courts must “respect the distinction between activities that
form the basis for a claim and those that merely lead to the liability-creating activity or
provide evidentiary support for the claim.” (Id. at p. 1064.) Courts must also
“distinguish between the challenged decisions and the speech that . . . thereafter expresses
them.” (Id. at p. 1067.)
Thus, for a defendant to meet the “arising from” burden, “it is not enough
to establish that the action was filed in response to or in retaliation for a party’s exercise
of the right to petition.” (Bergstein v. Stroock & Stroock & Lavan LLP (2015)
236 Cal. App. 4th 793, 804 (Bergstein).) Moreover, the fact a cause of action “may have
been triggered by protected activity” (City of Cotati v. Cashman (2002) 29 Cal. 4th 69, 78
(Cashman)), or the “fact that protected activity may lurk in the background –and may
10
explain why the rift between the parties arose in the first place” (Episcopal Church
Cases (2009) 45 Cal. 4th 467, 478), does not mean the alleged SLAPP arises from
protected activity.
Instead, “the claim must be based on the protected petitioning activity.”
(Bergstein, supra, 236 Cal.App.4th at p. 804; see Graffiti Protective Coatings, Inc. v. City
of Pico Rivera (2010) 181 Cal. App. 4th 1207, 1215.) In evaluating whether that
requirement is met, courts consider “the principal thrust or gravamen of a plaintiff’s
cause of action” (Ramona Unified School Dist. v. Tsiknas (2005) 135 Cal. App. 4th 510,
519-520) and determine whether the acts underlying that cause of action were acts in
furtherance of the right of petition or free speech (Cashman, supra, 29 Cal.4th at p. 78).
C. Application
Applying those principles here, we conclude Plaintiffs’ claims against
Defendants are not based on any conduct in furtherance of Defendants’ right of petition
or free speech. Instead, the gravamen of Plaintiffs’ second amended complaint is
Defendants’ repeated refusal to consent to the proposed assignment to ValueRock TN.
As noted above, the ground lease prohibits the tenant from transferring or
assigning the lease without the landlord’s prior written consent, but further provides the
landlord’s “consent shall not be unreasonably withheld.” The principal thrust of the
second amended complaint is that Defendants unreasonably withheld consent to
Plaintiffs’ proposed assignment, first in 2016 when Defendants rejected the original
assignment request, and then again in 2018 when Defendants rejected the amended
assignment request, causing Plaintiffs to suffer damages. Defendants’ decision to
withhold consent may have been reasonable under the circumstances; we express no
opinion on that issue. We hold only that Plaintiffs’ claims are based on Defendants’
decision to withhold consent, not on Defendants’ litigation conduct or communications,
and therefore their claims are not subject to anti-SLAPP protection. Simply put, an
alleged breach of a contractual provision prohibiting a landlord from unreasonably
11
refusing to consent to a lease assignment is not protected activity under the anti-SLAPP
statute.
Defendants argue the second amended complaint purports to hold them
liable for their actions in the litigation, but they overstate the causal nexus between
Plaintiffs’ allegations in the second amended complaint and the parties’ litigation of the
first amended complaint. Defendants correctly note the amended request and
Defendants’ response to that request “relate directly to [the] central issue already in
dispute in the litigation,” but the second amended complaint does not purport to hold
Defendants liable for their conduct in the litigation. To be sure, Defendants withheld
consent to the amended assignment request during the litigation, which presumably
prompted the filing of the second amended complaint. But that is not to say the second
3
amended complaint was based on Defendants’ litigation conduct. (Bergstein, supra, 236
Cal.App.4th at p. 804 [“it is not enough to establish that the action was filed in response
to or in retaliation for a party’s exercise of the right to petition”].)
4
Relying on Crossroads, supra, 13 Cal.App.5th 757, which held that
“[s]ettlement discussions made in connection with litigation are protected activity under
3
The parties stipulated in the trial court that the second amended complaint “alleges
actions and decisions by Defendants occurring after the filing of the [first amended
complaint] concerning the parties’ dispute over the proposed assignment of the ground
lease at issue.” Citing this stipulation, Defendants contend Plaintiffs admit the second
amended complaint asserts claims against Defendants for their actions in the litigation.
We do not read the stipulation that way. To say the second amended complaint arises
from Defendants’ conduct after October 2016 as part of the parties’ ongoing dispute
about the proposed assignment is not the same as saying the second amended complaint
is based on Defendants’ litigation activity.
4
In Crossroads, Fannie Mae initiated nonjudicial foreclosure proceedings against
property owned by Crossroads, and Crossroads filed for bankruptcy protection.
12
the anti-SLAPP statute” (id. at p. 782), Defendants contend Plaintiffs’ amended request
was a partial settlement offer, and the second amended complaint thus arises from
protected activity: the parties’ settlement negotiations. We disagree.
Plaintiffs’ amended assignment request explicitly stated it was “not a
settlement communication,” and it specified that Larwin’s consent to the amended
request would not result in the release of Plaintiffs’ “claims for damages arising from
Larwin and Kimco’s past refusal to consent to assignment of the Ground Lease.” (Italics
added.) At no point in the amended request did Plaintiffs offer to dismiss their claims or
reduce the damages sought for Defendants’ refusal to consent to the original assignment
request in exchange for Defendants’ consent to the amended assignment request.
Although acceptance of the amended request may have mooted Plaintiffs’ declaratory
5
relief claim on the original assignment request, it would not have resolved Plaintiffs’
remaining claims for breach of contract, breach of the implied covenant, intentional
interference with contract, or intentional interference with prospective economic
advantage, nor would it have eliminated Plaintiffs’ demand for damages on those claims.
Thus, Defendants’ response to Plaintiffs’ amended request was not a protected settlement
communication as Defendants contend. Even if we assume the parties’ earlier settlement
While the bankruptcy stay was in effect, Crossroads requested accountings from Fannie
Mae under Civil Code section 2924c to learn the amount required to reinstate or pay off
the defaulted loan, and it tendered performance both to reinstate and pay off the loan.
Fannie Mae did not respond to the requests for accountings and refused to accept the
tenders, and after obtaining relief from the stay, it sold the property. Crossroads sued
Fannie Mae for wrongful foreclosure and other claims, and Fannie Mae filed an anti-
SLAPP motion. The appellate court concluded Crossroads’s claims arose from Fannie
Mae’s constitutionally protected actions — namely, Crossroads’s efforts to settle the
bankruptcy action — and directed the trial court to grant Fannie Mae’s motion.
5
We are not entirely convinced Defendants’ acceptance of the 2018 amended assignment
request would have mooted the declaratory relief claim in Plaintiffs’ first amended
complaint because that claim sought a declaration Larwin had unreasonably withheld its
consent to the 2016 original assignment request, which presented different terms than the
2018 request.
13
communications or mediation efforts prompted the amended request, it does not follow
that the amended request or Defendants’ rejection of it constitutes protected speech.
(Cashman, supra, 29 Cal.4th at p. 78 [“That a cause of action arguably may have been
triggered by protected activity does not entail that it is one arising from such”].)
Defendants also contend Plaintiffs drafted their amended assignment
request to address defects in their claims that came to light during discovery, and thus
Defendants’ response was protected activity. The only example Defendants provide to
support this argument is that the amended assignment request proposed, among other
terms, that Propco and HPH III would transfer all their rights in the lease to ValueRock
TN “to address Larwin’s unfounded position that the assignment from HPH III to Propco
. . . was not effective.” Defendants cite this proposed term as evidence the amended
request aimed to address Defendants’ discovery responses, which stated Propco was not
an approved assignee of the lease. But Defendants first alerted Propco of this alleged
defect in the chain of assignments in mid-2016, months before Plaintiffs filed their
original complaint, when Defendants told Propco that their records showed HPH III was
the tenant, they had no record of any transfer to Propco, and the lease required the tenant
to request landlord consent before making any assignment. Moreover, even if statements
made in the litigation or Defendants’ discovery responses influenced or inspired the terms
of the amended request, that alone would not trigger the anti-SLAPP statute because
Plaintiffs’ claims are not based on those statements or responses.
In the end, the pending litigation does not alter Larwin’s existing
contractual obligation under the lease not to unreasonably withhold consent to a proposed
assignment, nor does it alter the parties’ business dispute about whether Defendants must
consent to the proposed assignment. Defendants are not insulated from liability merely
because they again refused consent to the lease assignment while the case was pending.
That is not what the Legislature designed the anti-SLAPP statute to accomplish.
14
We therefore conclude Defendants failed to make a threshold showing that
Plaintiffs’ claims arose from activity protected under the anti-SLAPP statute. Based on
this conclusion, we need not address Plaintiffs’ likelihood of prevailing under the second
prong of the anti-SLAPP analysis. (Gotterba v. Travolta (2014) 228 Cal. App. 4th 35, 43-
44 [court need not discuss second prong if defendant fails to establish lawsuit arises from
protected activity].) We thus express no view on the merits of Plaintiffs’ claims or of
Defendants’ defenses.
As for Plaintiffs’ request for attorney fees, Defendants’ anti-SLAPP motion
was not frivolous, nor was their appeal. We therefore deny Plaintiffs’ request for fees.
(See § 425.16, subd. (c)(1).)
III.
DISPOSITION
The order denying Defendants’ anti-SLAPP motion is affirmed. Plaintiffs
shall recover their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
ARONSON, J.
WE CONCUR:
BEDSWORTH, ACTING P. J.
GOETHALS, J.
15