Villanueva v. Cyprexx Services CA4/1 ( 2013 )

Filed 4/26/13 Villanueva v. Cyprexx Services CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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 This opinion has not been certified for publication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.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
JUN VILLANUEVA et al., D060860
Plaintiffs and Appellants,
v. (Super. Ct. No. 37-2011-00086445-
CU-WE-CTL)
CYPREXX SERVICES, LLC et al.,
Defendants and Respondents.
APPEAL from judgments of the Superior Court of San Diego County, Randa
Trapp, Judge. Affirmed.
Plaintiffs and appellants Jun Villanueva and Sharon Balverde sued defendants and
respondents Cyprexx Services, LLC (Cyprexx) and attorney Tyneia Merritt after Cyprexx
auctioned Villanueva's personal belongings following the nonjudicial foreclosure sale of
his residence. The trial court sustained without leave to amend the demurrer of Cyprexx
and granted defendant Merritt's special motion to strike the complaint as a strategic
lawsuit against public participation (Code Civ. Proc.,1 § 425.16, commonly known as the
anti-SLAPP statute). Plaintiffs appeal from the ensuing judgments in defendants' favor.
They contend their complaint states causes of action for wrongful eviction, conversion,
violation of the Servicemembers Civil Relief Act (SCRA) (50 U.S.C. Appen. § 501, et
seq.), replevin or claim and delivery, and unjust enrichment, and the trial court should
have granted them leave to amend. They further contend the court erred in granting
Merritt's anti-SLAPP motion because Merritt did not engage in protected speech, and
they demonstrated a likelihood of prevailing on their SCRA cause of action. They argue
the court should have granted them leave to amend to state a malicious prosecution cause
of action against Merritt. We affirm the judgments.
FACTUAL AND PROCEDURAL BACKGROUND
The background facts are taken from plaintiffs' verified complaint and its attached
exhibits; we accept as true the properly pleaded material factual allegations together with
facts that may properly be judicially noticed. (Crowley v. Katleman (1994) 8 Cal.4th
666, 672; Debrunner v. Deutsche Bank National Trust Co. (2012) 204 Cal.App.4th 433,
435.)
In February 2007, Villanueva purchased a house at 626 Arroyo Seco Drive in San
Diego (the Arroyo property), executing a note and deed of trust naming Plaza Home
Mortgage, Inc. as the lender. Villanueva was in the military, had completed two tours of
duty in Iraq, and at the time of the complaint's filing, was deployed on active duty.
1 All statutory references are to the Code of Civil Procedure unless otherwise
indicated.
2
Balverde was authorized to store her personal possessions at the Arroyo property while
Villanueva was away.
In July 2008, GMAC Mortgage, LLC (GMAC) acquired title to the property in a
trustee's sale. In October 2008, Merritt, on behalf of GMAC, filed an unlawful detainer
action (the first unlawful detainer action) against Villanueva and Does 1-100. Substitute
service of the summons and complaint was effected on Balverde. That same month,
Merritt executed a declaration of nonmilitary status, declaring under oath that none of the
defendants in the action were in the military. In November 2008, a default judgment was
entered against Villanueva and Balverde. GMAC did not execute on the judgment, and
in January 2009, GMAC filed a notice of rescission of the trustee's deed upon sale. The
notice states that the July 2008 foreclosure sale was conducted in error due to a failure to
communicate conditions that would have warranted its cancellation.
In May 2009, Deutsche Bank National Trust Company (Deutsche Bank) acquired
title to the Arroyo property in a trustee's sale, and that month Merritt served a notice to
quit under section 1161a, subdivision (b)(3) on Villanueva "and all others in possession"
(capitalization omitted) residing at the Arroyo property. The notice stated that the Arroyo
property was purchased at a nonjudicial foreclosure sale, and demanded that Villanueva
deliver possession or be subject to eviction proceedings. Service was effected by posting
the notice to quit in a conspicuous place on the Arroyo property.
In July 2009, Merritt filed a verified second unlawful detainer action on behalf of
Deutsche Bank, naming Balverde and Does 1-100. Deutsche Bank alleged it had
purchased the Arroyo property at a trustee's sale in April 2009, and that Balverde
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remained in possession of the premises, but failed to surrender possession within the
period set forth in the notice to quit.
In September 2009, Merritt filed a request for entry of default against Balverde,
and also executed another affidavit of nonmilitary status stating under oath that no
defendant was in the military.
In November 2009, Merritt filed a writ of possession of the Arroyo property on
behalf of Deutsche Bank. The writ states that judgment was entered on October 13,
2009. The writ of possession issued on November 5, 2009. Balverde eventually received
a notice to vacate from Merritt. At some point, Deutsche Bank retained Coldwell Bank
to sell the property, and Cyprexx was retained to reclaim the personal property and
dispose of it.
On December 5, 2009, Balverde wrote to Merritt, provided her copies of
Villanueva's deployment documents, and advised her that Villanueva was stationed in
Okinawa but unreachable as he was on a special assignment in Thailand. Balverde also
retained an attorney, who several days later contacted a Coldwell Bank representative,
Steve Freisen, to inform him that Villanueva was deployed overseas with the military and
wanted time to remove his personal possessions from the foreclosed Arroyo property.
Balverde's attorney asked Coldwell Bank to refrain from entering and removing
Villanueva's belongings until his return to the United States in February 2010.
In November 2009, the levying officer executed the writ of possession of the
Arroyo property. Balverde's attorney contacted Cyprexx to advise them of Villanueva's
military status. Balverde checked with Friesen, who told her she would have more time
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to remove the personal property, and she consequently waited for a further response.
Defendants, however, removed or had removed all of plaintiffs' personal property stored
at the Arroyo property and had it sold at a public auction. In February 2010, Balverde
spoke with Friesen again to ask about the status of her request, but was told that the
property had been auctioned off, sold or otherwise discarded. Balverde confirmed with
Cyprexx that all of her and Villanueva's personal property had been sold.
In February 2011, plaintiffs filed a verified complaint against defendants Cyprexx,
Merritt, and the other entities,2 setting forth causes of action for wrongful eviction,
replevin, conversion, unjust enrichment and violation of the SCRA.
Merritt filed a special motion to strike the complaint under section 425.16. She
argued all of the complaint's allegations arose out of the exercise of her right and duty to
petition the court on her clients' behalf, and the statute protected even her misstatement in
the declaration of nonmilitary status. She further argued none of the causes of action
stated a claim because there were no allegations she had engaged in any of the injurious
conduct, namely, seizing control and selling any of the personal property. Finally,
Merritt argued that none of the causes of action were legally sufficient in that she had
nothing to do with the trustee's sale; Villanueva had no right, title or interest in the
Arroyo property at the time of Balverde's eviction; Merritt's actions were not wrongful;
2 Plaintiffs also named Plaza Mortgage (Plaza), GMAC, Deutsche Bank, and
Coldwell Bank. Plaintiffs allege Plaza had funded Villanueva's purchase money loan;
GMAC acquired title to Villanueva's property in the first trustee's sale; Deutsche Bank
acquired title to Villanueva's property in the second trustee's sale; and Coldwell Bank was
the real estate brokerage company of record after the sales that "maintained custody,
dominion and control over" Villanueva's personal property.
5
Merritt had no legal obligation to return possession of the premises to Balverde or store
Villanueva's possessions on the Arroyo property; plaintiffs never made a proper request
for surrender of the personal property, which was not particularly described in the
verified complaint; the SCRA did not apply to plaintiffs or provide their requested
remedy; and the complaint's allegations negated any possible causation. Finally, Merritt
argued that as a result of the litigation privilege of Civil Code section 47, subdivision
(b)(2), plaintiffs could not establish a probability of prevailing on the merits. Merritt
asked for an award of attorney fees and costs.
Merritt filed a declaration in support of her anti-SLAPP motion in which she
averred that before filing the first unlawful detainer complaint on GMAC's behalf and up
to November 18, 2008, when the judgment was entered for possession, she had never
received any notice or communication from plaintiffs that Villanueva was a service
member or on active duty.3
Thereafter, Cyprexx separately demurred to the verified complaint on grounds that
as to all causes of action, the complaint failed to state facts sufficient to constitute a cause
of action; the wrongful eviction cause of action was barred by the one-year statute of
limitations; and Balverde lacked standing to assert a claim for violation of the SCRA.
In opposition to Merritt's anti-SLAPP motion, plaintiffs argued section 425.16 did
not apply to speech and petitioning that was illegal as a matter of law, and the statute did
3 Merritt also demurred to all of the causes of action and moved to strike all or
portions of plaintiffs' verified complaint. Those matters were ruled moot after the trial
court granted Merritt's anti-SLAPP motion.
6
not preempt the SCRA. They further argued they demonstrated a probability of
prevailing on the merits on all of their causes of action based on a declaration filed by
Merritt in opposition to Balverde's motion to vacate the underlying judgment in the
second unlawful detainer action. In that declaration, Merritt averred that she did not
name Villanueva in that action because when she filed it, she was "informed and
believed, and continue[d] to believe, that Balverde was the only occupant of the [Arroyo
property], and that Balverde was the only person who claimed a right to possess the
Premises." Merritt stated that her belief was based on information she had obtained in
October 2008 in the first unlawful detainer action, when Balverde filed a prejudgment
claim of right to possession of the Arroyo property (§ 1174.25) by virtue of an alleged
oral rental agreement between Villanueva and GMAC, which, according to Merritt, was
inconsistent with any claim of possessory right on Villanueva's part.
Plaintiffs also opposed Cyprexx's demurrer. They asked for leave to file a first
amended complaint; argued they had standing under the SCRA; and asserted that but for
Cyprexx's "wrongful conduct," they would not have been damaged.
Following argument on the matter, the trial court granted Merritt's anti-SLAPP
motion and sustained Cyprexx's demurrer without leave to amend. As to Merritt, it ruled
all of the causes of action arose from Merritt's representation of clients in the unlawful
detainer actions, and thus Merritt had met her initial burden to show the action was based
on protected speech and petitioning activity. It further ruled plaintiffs did not show the
gravamen of their complaint arose from Merritt's allegedly illegal activity; the evidence
showed Merritt did not know Villanueva was in the military when she executed the
7
declaration of nonmilitary status in the first unlawful detainer action, Villanueva was not
a party or indispensable party to the second unlawful detainer action, and there was no
evidence Balverde was in the military at the time. Its ruling detailed why plaintiffs had
not demonstrated a probability of prevailing on the merits on any of their causes of
action.
As to Cyprexx, the court ruled the causes of action failed in that plaintiffs had not
alleged Cyprexx (a) had any involvement in the foreclosure sale; (b) had possession of
plaintiffs' personal property at the time the action was commenced; (c) did any wrongful
act; or (d) unjustly received or wrongfully retained any benefit at plaintiffs' expense. As
for the SCRA cause of action, it ruled the SCRA did not apply to any challenge to the
foreclosure sale, and to the extent plaintiffs challenged the default judgment in the
unlawful detainer action, the SCRA did not provide for a private right of action. The
court denied plaintiffs leave to amend, stating they had not informed the court how the
complaint could be amended to state any cause of action against Cyprexx.
The court thereafter entered judgments in favor of Merritt and Cyprexx. Plaintiffs
appeal from those judgments.
DISCUSSION
I. Cyprexx's Demurrer
A. Standard of Review
In reviewing an order sustaining a demurrer, "our standard of review is clear:
' "We treat the demurrer as admitting all material facts properly pleaded, but not
contentions, deductions or conclusions of fact or law. [Citation.] We also consider
8
matters which may be judicially noticed." [Citation.] Further, we give the complaint a
reasonable interpretation, reading it as a whole and its parts in their context. [Citation.]
When a demurrer is sustained, we determine whether the complaint states facts sufficient
to constitute a cause of action. [Citation.] And when it is sustained without leave to
amend, we decide whether there is a reasonable possibility that the defect can be cured by
amendment: if it can be, the trial court has abused its discretion and we reverse; if not,
there has been no abuse of discretion and we affirm. [Citations.] The burden of proving
such reasonable possibility is squarely on the plaintiff.' " (Zelig v. County of Los
Angeles (2002) 27 Cal.4th 1112, 1126; see Coffman Specialties, Inc. v. Department of
Transportation (2009) 176 Cal.App.4th 1135, 1144.) A showing that an amendment
would cure the defect may be made for the first time to the reviewing court. (San Diego
City Firefighters, Local 145, v. Board of Administration etc. (2012) 206 Cal.App.4th 594,
606.)
The judgment of dismissal will be affirmed if proper on any grounds stated in the
demurrer, whether or not the court acted on that ground. (San Diego City Firefighters,
Local 145, v. Board of Administration etc., supra, 206 Cal.App.4th at p. 605.)
B. Conversion Cause of Action
Plaintiffs contend the complaint states a cause of action for conversion. In part,
they argue it was sufficient to plead that Cyprexx disposed of their property; that it is not
necessary for a conversion action that they plead and prove Cyprexx's actions were
"wrongful." They maintain alternatively that the complaint alleges conversion through
multiple wrongful acts, namely, that Cyprexx violated the SCRA when it removed and
9
sold Villanueva's personal property without a valid court order, and did not comply with
Civil Code section 1988 in disposing of the property.
We reject plaintiffs' first contention. It is settled that " ' "[c]onversion is the
wrongful exercise of dominion over the property of another." ' " (Plummer v.
Day/Eisenberg, LLP (2010) 184 Cal.App.4th 38, 45; see also Hernandez v. Lopez (2009)
180 Cal.App.4th 932, 939; Burlesci v. Petersen (1998) 68 Cal.App.4th 1062, 1065;
Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 451-452.) The foundation
for a conversion claim " 'rests upon the unwarranted interference by defendant with the
dominion over the property of the plaintiff from which injury to the latter results.' "
(Burlesci v. Petersen, at p. 1066.)
Plaintiffs point to the foregoing authorities, which state the elements in the
disjunctive, i.e., that a conversion can occur by proving a "wrongful act or disposition of
property rights." (E.g., Plummer v. Day/Eisenberg, LLP, supra, 184 Cal.App.4th at p. 45,
italics added.) They argue there need not be a wrongful act if there was a mere
disposition of property rights. This argument is unavailing, however, because the gist of
the tort is wrongful dominion by the defendant (Hernandez v. Lopez, supra, 180
Cal.App.4th at p. 939) and the cited authorities use the term "wrongful" to qualify both
the act and the disposition of the property rights. If the disposition is not wrongful in
some manner—if the person or entity did not do something wrong—the action would not
constitute a tort. Plaintiffs miss the mark when they argue neither good or bad faith are at
issue in a conversion action. (See Newhart v. Pierce (1967) 254 Cal.App.2d 783, 793.)
Good and bad faith, as well as knowledge, ignorance or mistake, go to a party's intent or
10
motives, which are no defense to a claim for conversion (see Poggi v. Scott (1914) 167
Cal. 372, 3754); those matters are not pertinent to whether the defendant's interference
with dominion over property is unwarranted.
Plaintiffs' second argument—that they specifically alleged violations of law—is
also misplaced. To state a cause of action for conversion, a plaintiff need only allege his
or her " ' "ownership or right to possession of the property at the time of the conversion;
the defendant's conversion by a wrongful act or disposition of property rights; and
damages." ' " (Shopoff & Cavallo LLP v. Hyon (2008) 167 Cal.App.4th 1489, 1507.) As
against a general or special demurrer, "if plaintiff's ownership of the property is properly
alleged and there is an averment that the defendant converted the same, a cause of action
[for conversion] is sufficiently stated . . . ." (Baird v. Olsheski (1929) 102 Cal.App. 452,
454.) Further, "no particular form of words is essential in averring a conversion,
provided the fact of the conversion is sufficiently stated, and it is unnecessary to set forth
in what way or by what means the conversion was accomplished [citations], or to allege
that the property was wrongfully or unlawfully converted, since the allegation that it was
converted, which is a conclusion of fact [citations], implies a wrongful act [citations]."
(Baird v. Olsheski, at p. 454, citing Hutchings v. Castle (1874) 48 Cal. 152; see also
Taylor v. S & M Lamp Co. (1961) 190 Cal.App.2d 700, 704 [complaint stated a cause of
4 "The foundation for the action of conversion rests neither in the knowledge nor the
intent of the defendant. It rests upon the unwarranted interference by defendant with the
dominion over the property of the plaintiff from which injury to the latter results.
Therefore, neither good nor bad faith, neither care nor negligence, neither knowledge nor
ignorance, are of the gist of the action." (Poggi v. Scott, supra, 167 Cal. at p. 375.)
11
action for conversion where plaintiff alleged it owned a business, notified the defendant
of his ownership of the business, defendant surreptitiously caused plaintiff's locks to be
removed and equipment and other property to be removed, defendant refused to account
for the items, and plaintiff alleged specific items of damage caused by the removal];
MacDonald v. Kingsley (1957) 149 Cal.App.2d 376 [complaint stated a cause of action
for conversion where it alleged ownership and possession of the property converted, the
forcible and unlawful taking thereof by the defendants, and the value of said property].)
In Taylor v. S & M Lamp Co., the court stated, "The failure of the complaint to use such
terms as 'fraud,' 'to defraud creditors,' 'unlawfully,' or 'wrongfully' does not render the
pleading defective where, as here, such conduct and intent is implied from the ultimate
facts alleged." (Taylor v. S & M Lamp Co., at p. 705.)
A demurrer is properly sustained, however, where the allegations of the complaint,
or attached judicially noticeable documents, negate a cause of action as a matter of law.
(See e.g., Shopoff & Cavallo LLP v. Hyon, supra, 167 Cal.App.4th at pp. 1507-1508;
McKenney v. Purepac Pharmaceutical Co. (2008) 167 Cal.App.4th 72, 78-79 [general
demurrer will lie where the complaint has included allegations that clearly disclose some
defense or bar to recovery]; Flores v. Kmart Corp. (2012) 202 Cal.App.4th 1316, 1324
[demurrer based on an affirmative defense will be sustained where the face of the
complaint discloses that the action is necessarily barred by the defense].) In Shopoff, for
example, a complaint failed as a matter of law to state a claim for conversion against a
trustee of allegedly converted settlement recovery proceeds who had filed an interpleader
action, which avoided the risk of liability to the person entitled to those proceeds.
12
(Shopoff, at p. 1508.) As a matter of law, the trustee did not exercise dominion over the
funds sufficient to convert them to his own use. (Ibid.)
Here, plaintiffs' complaint places responsibility on the foreclosing entity, Deutsche
Bank (also referred to as the "landlord"), for the wrongful seizure and sale of plaintiffs'
personal property.5 According to plaintiffs, their property was sold at a public auction.
They allege that Cyprexx was merely a subcontractor of Deutsche Bank, and that
Cyprexx was retained to reclaim the personal property and conduct the sale. Plaintiffs
provide no authority for the proposition that under such circumstances, the third party
agent for the landlord is vicariously responsible or liable for the landlord's conversion.
We conclude plaintiffs cannot establish that by arranging to sell the property at a public
auction at the direction of Deutsche Bank, Cyprexx exercised dominion over the funds or
converted them to Cyprexx's own use so as to state a cause of action against Cyprexx for
conversion.
C. Wrongful Eviction
"[A] person in peaceable possession of real property may recover, in an action
sounding in tort, damages for injuries to his person and goods caused by the forcible
entry of one who is, or claims to be, the lawful owner or possessor . . . ." (Daluiso v.
5 Plaintiffs allege: "The Landlord in the [second unlawful detainer action]
maintains that Defendants had a reasonable belief that . . . Balverde was the hold over
tenant in the [section] 1161 action after foreclosure. However, it refused to return the
Personal Property to this Plaintiff. The Landlord did not have a reasonable belief that . . .
Balverde was the tenant. Further, pursuant to [section] 1174[, subdivision] (f), the
Landlord failed to give notice to ANYONE that the Personal Property was deemed
abandoned and would be sold. Thus, the Landlord is liable for the damages that stemmed
from its wrongful levy, seizure and sale." (Italics added, some capitalization omitted.)
13
Boone (1969) 71 Cal.2d 484, 486.) The essential elements of a tort claim for wrongful
entry or eviction are (1) the plaintiff's peaceable possession, and (2) the defendant's
forcible entry. (Spinks v. Equity Residential Briarwood Apartments (2009) 171
Cal.App.4th 1004, 1040.) The defendant's title or right of possession is no defense to
such action. (Daluiso v. Boone, at p. 486.)
Plaintiffs contend the complaint adequately alleges both elements of a wrongful
eviction cause of action. They argue their allegations that Villanueva resided at the
Arroyo property and stored his possessions there was sufficient to establish his peaceable
possession; that the fact he lost title to his home through a nonjudicial foreclosure is
immaterial. They further argue they made an adequate allegation of Cyprexx's claim of
lawful possession by alleging Cyprexx had been retained to reclaim and had seized
plaintiffs' personal property from the Arroyo property.
We conclude, however, plaintiffs cannot establish the essential elements of
wrongful eviction against Cyprexx. Plaintiffs allege that Cyprexx was the entity that
seized their personal property. Specifically, they allege "Cyprexx is the entity retained
by Defendants as sub contractors [sic] for reclaiming the Personal Property and to
conduct a sale and/or other disposition of the Personal Property." They do not allege that
Cyprexx dispossessed them from the Arroyo property, and indeed, the complaint
specifically alleges that Deutsche Bank was the entity that obtained the writ of possession
evicting Balverde from the premises. By statute, a forcible entry occurs when any person
"[w]ho, after entering peaceably upon real property, turns out by force, threats, or
14
menacing conduct, the party in possession." (§ 1159, subd. (2).) Even assuming a
forcible entry occurred, plaintiffs' allegations demonstrate it was not done by Cyprexx.
We observe further that plaintiffs' complaint indicates the sheriff served Balverde
with the writ of possession of the Arroyo property (Judicial Council form EJ-130,
attached as exhibit 9 of plaintiffs' complaint) on November 10, 2009, that Balverde was
removed from the Arroyo property on November 30, 2009, and that the sheriff returned
the writ on December 1, 2009. Plaintiffs allege the writ of possession "was used to
remove and sell or otherwise dispose of ALL of plaintiffs Villanueva's and Balverde's
Personal Property." Though exhibit 9 contains only the first side of the two-sided
Judicial Council form, we take judicial notice that the reverse of the form includes a
statement that any personal property remaining on the real property after the landlord is
in possession will be disposed of under section 1174 unless the tenant pays the reasonable
cost of storage and takes possession of the personal property not later than 15 days after
the landlord takes possession of the real property. (§ 715.010, subd. (b)(3).) As of
December 5, 2009, when Balverde wrote Merritt and informed her that she had
Villanueva's general power of attorney, Balverde had notice of her rights to reclaim the
personal property remaining on the Arroyo property, but did not timely exercise those
rights on her own behalf or on Villanueva's behalf as his legal representative.
D. Replevin/Claim and Delivery
An action for replevin or its statutory successor, claim and delivery, is intended to
obtain recovery of specific personal property. (Stockton Morris Plan Co. v. Mariposa
County (1950) 99 Cal.App.2d 210, 215; Simms v. NPCK Enterprises, Inc. (2003) 109
15
Cal.App.4th 233, 241.) In order to obtain a judgment on a replevin action, "it must be
shown that possession was in the defendant at the time of the beginning of the action or
that he had the power to make delivery of the personal property . . . ." (Stockton Morris,
at p. 215.)
In support of this cause of action, plaintiffs allege that defendants "have
wrongfully and intentionally seized, destroyed and or sold said personal property" and
that the "wrongful and unlawful possession of the property occurred in December[ ]
2009." As Cyprexx points out, plaintiffs' introductory allegations are that at the time of
the filing of the complaint, the personal property at issue had already been sold at public
auction. These allegations defeat the replevin cause of action as a matter of law, as they
demonstrate Cyprexx did not have the power to deliver the personal property at the time
of the complaint's filing.
E. Unjust Enrichment
" ' "[T]here is no cause of action in California for unjust enrichment." ' " (Levine
v. Blue Shield of California (2010) 189 Cal.App.4th 1117, 1138, quoting Durell v. Sharp
Healthcare (2010) 183 Cal.App.4th 1350, 1370, and see Melchior v. New Line
Productions, Inc. (2003) 106 Cal.App.4th 779, 793; McKell v. Washington Mutual, Inc.
(2006) 142 Cal.App.4th 1457, 1490 ["unjust enrichment is a basis for obtaining
restitution based on quasi-contract or imposition of a constructive trust"].) "Unjust
16
enrichment is synonymous with restitution." (Durell, at p. 1370.6) Thus, plaintiffs' mere
allegation that defendants have been unjustly enriched by their "wrongful acts and
omissions" does not state a cause of action. (Levine, at p. 1138.)
On review of an order sustaining the demurrer, we nevertheless may assess
whether plaintiffs' allegations state a cause of action that may give rise to a right to
restitution. (McBride v. Boughton (2004) 123 Cal.App.4th 379, 387-388.) "There are
several potential bases for a cause of action seeking restitution. . . . [R]estitution may be
awarded where the defendant obtained a benefit from the plaintiff by fraud, duress,
conversion, or similar conduct. In such cases, the plaintiff may choose not to sue in tort,
but instead to seek restitution on a quasi-contract theory . . . . [Citations.] In such cases,
where appropriate, the law will imply a contract (or rather, a quasi-contract), without
regard to the parties' intent, in order to avoid unjust enrichment." (McBride, at p. 388, fn.
omitted.) Because we have not found allegations sufficient to demonstrate that Cyprexx
committed some wrongdoing in which it obtained a benefit from plaintiffs, there is no
basis to allow plaintiffs' unjust enrichment claim to stand.
6 " 'Under the law of restitution, "[a]n individual is required to make restitution if he
or she is unjustly enriched at the expense of another. [Citations.] A person is enriched if
the person receives a benefit at another's expense. [Citation.]" [Citation.] However,
"[t]he fact that one person benefits another is not, by itself, sufficient to require
restitution. The person receiving the benefit is required to make restitution only if the
circumstances are such that, as between the two individuals, it is unjust for the person to
retain it." ' " (Durell v. Sharp Healthcare, supra, 183 Cal.App.4th at p. 1370.)
17
F. Violation of the SCRA
"The SCRA applies to any judicial proceeding in state court, except criminal
proceedings. [Citation.] The purposes of the SCRA are '(1) to provide for, strengthen,
and expedite the national defense through protection extended . . . to servicemembers of
the United States to enable such persons to devote their entire energy to the defense needs
of the Nation; and [¶] (2) to provide for the temporary suspension of judicial . . .
proceedings . . . that may adversely affect the civil rights of servicemembers during their
military service.' [Citation.] '[T]he SCRA must be construed to prevent any
disadvantage to a servicemember litigant resulting from his or her military service' and
'must be "liberally construed to protect those who have been obliged to drop their own
affairs to take up the burdens of the nation." ' " (In re A.R. (2009) 170 Cal.App.4th 733,
740-741.)
Under the SCRA, no default judgment may be taken against persons in the
military service unless the plaintiff meets specified procedural requirements.
Specifically, before entry of a default judgment, the plaintiff must file a declaration
stating whether or not the defendant is in military service, or if plaintiff is unable to
determine whether the defendant is in military service, stating so. (50 U.S.C. Appen.
§ 521(b)(1).) One who makes or uses such an affidavit, knowing it to be false, "shall be
fined as provided in title 18, United States Code, or imprisoned for not more than one
year, or both." (50 U.S.C. Appen. § 521(c).)
In support of their cause of action alleging violations of the SCRA, plaintiffs
allege generally that the SCRA permits military servicemembers to defend their interests
18
in court hearings or default proceedings. They then allege: "Villanueva was unable to
protect his interests, as the Foreclosing Defendants signed under penalty of perjury that . .
. Villanueva was non-military, in direct violation of [the SCRA], which requires
notification of service members on active duty. [¶] . . . The Defendants failed to make a
minimal search to discover whether or not . . . Villanueva was deployed. Further, . . .
Balverde had sent documentation to Foreclosing Defendants, proving that not only was . .
. Villanueva in the military, but that . . . Balverde could not contact him. [¶] . . . With
utter disregard, the Defendants moved forward with the default judgment. Based on this
fraudulent misrepresentation to the court, . . . Villanueva was never afforded due process
or his opportunity to be heard and judgment was entered against him." (Some emphasis
and capitalization omitted.)
These allegations seek to impose liability on the "foreclosing defendants"
otherwise identified in the pleading as GMAC or Deutsche Bank, for the default
judgment. As pointed out above, Cyprexx was not a foreclosing defendant and there are
no allegations stating it entered or caused any judgment to be entered against Villanueva.
Further, the complaint specifically alleges that Merritt, on Deutsche Bank's behalf, signed
a false declaration of nonmilitary status, not Cyprexx. The complaint accordingly cannot
impose liability on Cyprexx for the filing of that declaration assertedly in violation of the
SCRA.
Nevertheless, on appeal plaintiffs argue the complaint states violations of the
SCRA against Cyprexx, specifically under title 50 United States Code Appendix sections
531 and 537. They argue Cyprexx violated title 50 United States Code Appendix section
19
537 by selling Villanueva's possessions without a court order, and violated title 50 United
States Code Appendix section 531 by removing and selling the personal property from
Villanueva's home.7
1. Title 50 United States Code Appendix Section 531
During a period of military service of a servicemember, title 50 United States
Code Appendix section 531(a)(1)(A) prohibits a landlord or another person with
paramount title from evicting a servicemember or the servicemember's dependents from a
premises that is occupied "primarily as a residence" and "for which the monthly rent does
not exceed $2,400." Title 50 United States Code Appendix section 531 (a)(1)(B)
prohibits a landlord or other person with paramount title from "subject[ing] such
premises to a distress during the period of military service."8 Neither of these
7 Plaintiffs rightly do not claim that the complaint alleges a violation of section 533
of the SCRA, which grants protections with respect to mortgages and trust deeds. The
plain terms of the statute make it clear that it applies only to mortgage loan obligations
that originated before military service began. (50 U.S.C. Appen. § 533(a); Williams v.
U.S. Bank Nat. Assoc. (C.D.Cal., Feb. 13, 2013, No. ED CV12-00748-JLQ) 2013 WL
571844; Coward v. JP Morgan Chase (E.D.Cal., June 15, 2012, No. 2:11-cv-00378-
GEB-DAD) 2012 WL 2263359.) Here, plaintiffs allege that Villanueva "was and is at
all times mentioned herein, in the military . . . and was at all relevant times, and still is,
deployed on active duty." (Italics added.) These allegations show that Villanueva's loan
obligation, which arose in February 2007, originated during his military service.
8 A distress "is the taking of another's personal property out of his possession either
for holding or for sale in order to obtain satisfaction of a past due rent claim." (Lesher v.
Louisville Gas & Electric Co. (W.D.Ky. 1943) 49 F.Supp. 88, 90.) One federal court
explained that "[a]lthough this monthly rent limitation on what premises are covered
appears in [title 50 United States Code Appendix section] 531(a)(1)(A) (the eviction
provision), the limitation covers [title 50 United States Code Appendix section]
531(a)(1)(B) (the distress provision) as well because that provision prevents 'subject[ing]
such premises to a distress,' thereby incorporating the limitations specified previously in
20
prohibitions apply to disposition of personal property following a nonjudicial foreclosure
sale. And, in view of the SCRA's use of the terms " 'landlord, rent, eviction, and distress,
courts have construed the substantially similar predecessor statute to [title 50 United
States Code Appendix section] 531 as 'contemplat[ing] a landlord-tenant relationship.' "
(Jimenez v. Miami-Dade County, supra, 2013 WL 214673, at p. *3, citing Clinton Cotton
Mills v. United States (4th Cir.1947) 164 F.2d 173, 176 & Arkless v. Kilstein (E.D.Pa.
1944) 61 F.Supp. 886, 888 [the predecessor statute relates to disturbing the landlord-
tenant relationship because it uses the term agreed rent and because it refers to a
maximum monthly rent] & Lesher v. Louisville Gas & Electric Co., supra, 49 F.Supp. at
pp. 89-90 [utility company's disconnecting power to a residence did not violate the
predecessor statute because there was no landlord-tenant relationship between the
company and the bill payer].)
Here, plaintiffs have not alleged any landlord-tenant relationship with Cyprexx,
nor can they in view of their allegations that Cyprexx was merely a subcontractor
retained by Deutsche Bank to sell the personal property remaining on the Arroyo
property. Nor have they alleged the Arroyo property was premises "for which the
monthly rent does not exceed $2,400." Plaintiff cannot allege the circumstances
constitute a distress because Cyprexx's sale was not in "satisfaction of a past due rent
claim." Though courts must construe the SCRA liberally (In re A.R., supra, 170
Cal.App.4th at p. 741), we will not rewrite the statute to cover circumstances beyond the
the statute." (Jimenez v. Miami-Dade County (S.D.Fla., Jan. 18, 2013, No. 11-23131-
Civ.) 2013 WL 214673, at p. *3.)
21
plain meaning of its provisions to make it more just or fair. (Thornton v. California
Unemployment Ins. Appeals Bd. (2012) 204 Cal.App.4th 1403, 1419.)
2. Title 50 United States Code Appendix Section 537
Title 50 United States Code Appendix section 537, entitled "Enforcement of
storage liens," provides, in pertinent part: "(a) Liens [¶] (1) Limitation on foreclosure or
enforcement [¶] A person holding a lien on the property or effects of a servicemember
may not, during any period of military service of the servicemember and for 90 days
thereafter, foreclose or enforce any lien on such property or effects without a court order
granted before foreclosure or enforcement." A lien under this provision is defined as
including "a lien for storage, repair, or cleaning of the property or effects of a
servicemember or a lien on such property or effects for any other reason." (50 U.S.C.
Appen. § 537(a)(2).) The reference to liens in title 50 United States Code Appendix
section 537 encompasses only liens for storage, repair or cleaning, or other liens similar
in nature; it does not encompass other specific types of liens governed by different
sections of the SCRA, such as liens for an installment contract, motor leases, mortgages,
or tax liens. (Whigham v. Chase Auto Fin. Corp. (E.D.Va. 2011) 826 F.Supp.2d 914,
917-920.)
Here, Cyprexx's involvement was limited to the sale of plaintiffs' personal
possessions. There is no allegation that Cyprexx held a storage lien or any other type of
lien contemplated by title 50 United States Code Appendix section 537, and the
complaint, as we have stated, makes clear that Cyprexx was not responsible for the
foreclosure sale. Under these circumstances, plaintiffs cannot state a cause of action
22
against Cyprexx for a violation of section 537 of the SCRA. (Accord, United States v.
B.C. Enterprises, Inc. (E.D.Va 2009) 667 F.Supp.2d 650, 657-659 [general manager of
corporation who supervised and directed the sale of servicemembers' vehicles at auction
pursuant to storage liens was as a matter of law not a "person holding a lien on the
property or effects of a servicemember" within the meaning of the SCRA because the lien
was held by the corporation, not by the general manager].)
II. Merritt's Anti-SLAPP Motion
Plaintiffs contend the trial court erred by granting Merritt's anti-SLAPP motion.
They argue Merritt did not meet her burden to show their complaint arose from any free
speech or petition rights, and even if she had, they established a probability of prevailing
on the merits of their cause of action for violations of the SCRA. As we will explain, we
disagree.
A. Standard of Review
Section 425.16 provides a procedural remedy to dispose of lawsuits that are
brought to chill or punish a party's valid exercise of constitutional rights to free speech
and to petition the government for redress of grievances. (Personal Court Reporters, Inc.
v . Rand (2012) 205 Cal.App.4th 182, 188.)
An evaluation of an anti-SLAPP motion involves two steps. "[T]he trial court first
determines whether the defendant has made a threshold showing that the challenged
cause of action arises from protected activity. [Citation.] Under . . . section 425.16 '[a]
cause of action against a person arising from any act of that person in furtherance of
23
the person's right of petition or free speech . . . shall be subject to a special motion to
strike . . . .' [Citation.] 'A cause of action "arising from" defendant's litigation activity
may appropriately be the subject of a section 425.16 motion to strike.' [Citation.] 'Any
act' includes communicative conduct such as the filing, funding, and prosecution of a
civil action. [Citation.] This includes qualifying acts committed by attorneys in
representing clients in litigation. [Citations.]
"If the court finds the defendant has made the threshold showing, it determines
then whether the plaintiff has demonstrated a probability of prevailing on the claim.
[Citation.] 'In order to establish a probability of prevailing on the claim . . . , a plaintiff
responding to an anti-SLAPP motion must " 'state[ ] and substantiate[ ] a legally
sufficient claim.' " [Citations.] Put another way, the plaintiff "must demonstrate that the
complaint is both legally sufficient and supported by a sufficient prima facie showing of
facts to sustain a favorable judgment if the evidence submitted by the plaintiff is
credited." ' " (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055-1056 (Rusheen).)
We review de novo the trial court's order granting Merritt's special motion to
strike. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 819.) A reviewing
court will " 'independently review the record to determine whether the asserted causes of
action arise from the defendant's free speech or petitioning activity, and, if so, whether
the plaintiff has shown a probability of prevailing. [Citations.] We consider "the
pleadings, and supporting and opposing affidavits stating the facts upon which the
liability or defense is based." [Citations.] We do not reweigh the evidence, but accept as
true all evidence favorable to the plaintiff and evaluate the defendant's evidence only to
24
determine if it has defeated the evidence submitted by the plaintiff as a matter of law.
[Citations.] If the trial court's decision denying an anti-SLAPP motion is correct on any
theory applicable to the case, we may affirm the order regardless of the correctness of the
grounds on which the lower court reached its conclusion.' " (Personal Court Reporters,
Inc. v. Rand, supra, 205 Cal.App.4th at pp. 188-189.)
B. Merritt's Threshold Burden
Plaintiffs contend Merritt cannot meet her initial burden to show the causes of
action against her arise from protected activity. They maintain their allegations show she
engaged in illegal conduct that is unprotected by the anti-SLAPP law, that is, naming
only Balverde as a defendant in the second unlawful detainer action and not Villanueva,
who was assertedly an indispensible party; attesting that the true names and capacities
of the Doe defendants were unknown; and knowingly filing a false declaration of
nonmilitary status (50 U.S.C. Appen. § 521(c)) in connection with the second unlawful
detainer action, which also violated the Rules of Professional Conduct, rule 5-200,
requiring candor before the court.
Merritt responds that plaintiffs' allegations all relate to her prosecution of the
unlawful detainer litigation, and thus all of the causes of action arise from written or oral
statements "made before a . . . judicial proceeding," or "made in connection with an issue
under consideration or review by a . . . judicial body," and the conduct on which her
liability is based falls within "any other conduct in furtherance of the exercise of the
constitutional right of petition . . . ." (§ 425.16, subd. (e)(1), (2) & (4).)
25
Merritt is correct. " 'The prosecution of an unlawful detainer action indisputably is
protected activity within the meaning of section 425.16.' " (Feldman v. 1100 Park Lane
Associates (2008) 160 Cal.App.4th 1467, 1479; see also Rusheen, supra, 37 Cal.4th at p.
1056 [" 'A cause of action "arising from" defendant's litigation activity may appropriately
be the subject of a section 425.16 motion to strike' "]; Dowling v. Zimmerman (2001) 85
Cal.App.4th 1400, 1418-1420 [anti-SLAPP statute protected attorney's pro bono
representation of clients sued in unlawful detainer action that gave rise to plaintiff's later
claims against attorney for defamation, misrepresentation, and intentional and negligent
infliction of emotional distress].) Plaintiffs seek to impose liability on Merritt solely for
her filing of pleadings, including notices of default, in connection with the unlawful
detainer proceedings.
Merritt further maintains that under Rusheen, supra, 37 Cal.4th 1048 and Pollack
v. University of Southern California (2003) 112 Cal.App.4th 1416 even the filing of an
erroneous declaration of nonmilitary status is within the core protection of the anti-
SLAPP statute. Plaintiffs, on the other hand, argue the anti-SLAPP does not apply under
Flatley v. Mauro (2006) 39 Cal.4th 299 (Flatley) and Lefebvre v. Lefebvre (2011) 199
Cal.App.4th 696, because Merritt's conduct was illegal.
In Flatley, the California Supreme Court confirmed that unlawful or criminal
activities do not qualify for protection under the anti-SLAPP law as protected speech or
petitioning activities. (Flatley, supra, 39 Cal.4th at pp. 317, 330 [attorney's conduct
constituted criminal extortion]; Dwight R. v. Christy B. (2013) 212 Cal.App.4th 697,
711.) The court explained, however, that the illegality must appear "as a matter of law."
26
(Flatley, at p. 320.) That is, only where the defendant "concedes, or the evidence
conclusively establishes, that the assertedly protected speech or petition activity was
illegal as a matter of law" is he or she precluded from using the anti-SLAPP law to strike
the action. (Ibid.) "[W]hen the defendant's assertedly protected activity may or may not
be unlawful, the defendant may invoke the anti-SLAPP statute unless the activity is
unlawful as a matter of law." (Dwight R., at p. 711.)9 In Lefebvre v. Lefebvre, supra,
199 Cal.App.4th 696, the appellate court held a defendant failed to show that false police
reports were not protected by the anti-SLAPP law, but in that case, the trial court found
that the record " 'conclusively' established" the defendants' statements to police were
illegal under Penal Code section 148.5. (Lefebvre, at p. 701; see also Comstock v. Aber
(2012) 212 Cal.App.4th 931, 951-952 & fn. 13 [summarizing the "unusual, if not unique"
facts in Lefebvre].)
Here, plaintiffs' assertion of illegality does not meet Flatley's standard. Merritt
has not conceded, nor is the evidence conclusive, that her filing of either declaration of
nonmilitary service was false, illegal or a crime as a matter of law. (Flatley, supra, 39
Cal.4th at p. 320.) With respect to the first declaration of nonmilitary service, Merritt
averred in both her supporting and reply anti-SLAPP declarations that she was never
9 At least one appellate court has interpreted the requirement that conduct be
"illegal" to mean the activity must be "criminal, and not merely violative of a statute."
(Mendoza v. ADP Screening and Selection Services, Inc. (2010) 182 Cal.App.4th 1644,
1654.) The court reasoned in part that "a reading of Flatley[, supra, 39 Cal.4th 299] to
push any statutory violation outside the reach of the anti-SLAPP statute would greatly
weaken the constitutional interests which the statute is designed to protect." (Mendoza,
at p. 1654.)
27
notified by plaintiffs that Villanueva was a servicemember or on active duty, and she
believed neither he nor Balverde were servicemembers. Plaintiffs offered no contrary
evidence. According to Merritt, after she was advised by Balverde that Villanueva was a
servicemember, she cancelled execution of the writ of possession. Only Balverde, who
was not shown to be a servicemember, was named as a defendant in the second unlawful
detainer action. Indeed, the evidence submitted by plaintiffs in opposition to Merritt's
anti-SLAPP motion—Merritt's May 2011 declaration responding to Balverde's motion to
vacate the October 2009 judgment—confirms that Merritt only named Balverde in that
action because she believed Balverde was the sole occupant of the Arroyo property and
she was the only person who had claimed a right to possess it by filing a section 1174.25
prejudgment claim of right to possession. Merritt averred that though Balverde had
advised her she was Villanueva's attorney in fact under a military general power of
attorney and that she was therefore Villanueva's "legal representative" within the
meaning of the SCRA (50 U.S.C.A. Appen. § 519), Balverde had not asserted a
possessory interest, or any claims or defenses, on Villanueva's behalf. Plaintiffs provide
no legal authorities suggesting Villanueva should have been named and sued in that
action as a matter of law. Indeed, only a tenant in actual occupation of the premises, and
a subtenant if there is one, are necessary parties defendant in an unlawful detainer action.
(§ 1164; Cardenas v. Noren (1991) 235 Cal.App.3d 1344, 1350.)
Nor does the authority plaintiffs cite on appeal, Arrieta v. Mahon (1982) 31 Cal.3d
381, compel such a conclusion. Arrieta involved claims for declaratory and injunctive
relief challenging a Los Angeles County Marshal policy to evict all occupants of
28
premises after an unlawful detainer judgment, whether or not they were named in a writ
of execution. (Id. at p. 383.) The California Supreme court held that "the eviction of any
adults not named in the writ who claim a right to possession of the disputed premises that
arose before the unlawful detainer action was commenced, violated the rights of such
individuals to procedural due process under the Fourteenth Amendment of the United
States Constitution and article I, section 7, subdivision (a) of the California Constitution."
(Arrieta, at pp. 383-384.) Thereafter, the California legislature codified Arrieta to
provide a statutory procedure for an occupant not named in a judgment for possession to
present a claim of a right to possession. (See §§ 415.46, 1174.25, 1174.3, subd. (b);
George v. County of San Luis Obispo (2000) 78 Cal.App.4th 1048, 1054; Cardenas v.
Noren, supra, 235 Cal.App.3d at pp. 1348-1350 [purpose of claim of right to possession
is to put the landlord on notice, make the claimant a party, and to constitute a general
appearance for proceeding with the unlawful detainer action].) It was for Villanueva, or
Balverde on Villanueva's behalf, to present a claim of right to possession to a levying
officer if Villanueva sought to claim a right superior to Deutsche Bank's and have a court
determine the validity of that claim. (Cardenas, at pp. 1349-1350 [because appellant
could have invoked the statutory procedure under section 1174.3 before he was evicted,
he was not entitled to a writ of mandate compelling the sheriff to reinstate him as a
tenant].)
Rather, plaintiffs' allegations against Merritt stem from, and the gravamen of their
lawsuit is, Merritt's filing of fraudulent or perjured documents in connection with the
unlawful detainer proceedings. In Rusheen, the plaintiff sued an attorney, Cohen, for
29
abuse of process, alleging Cohen had submitted a perjurious declaration in connection
with an earlier default judgment that ultimately was ordered vacated by the Court of
Appeal. (Rusheen, supra, 37 Cal.4th at pp. 1053-1054.) In the superior court, Cohen
succeeded on his ensuing anti-SLAPP motion brought on grounds the abuse of process
claim was barred by the litigation privilege, but the Court of Appeal reversed, holding
that while the filing of the perjured declaration was absolutely privileged, the gravamen
of the action was " 'a conspiracy to enforce a judgment obtained through the use of
perjured declarations of service,' which 'culminated in the noncommunicative conduct of
enforcing the judgment.' " (Id. at p. 1059.)
The California Supreme Court took up the issue and disagreed with the appellate
court's conclusion. It observed that the Court of Appeal had not identified any alleged
wrongful conduct by Cohen other than simply filing perjured declarations and the
enforcement of a judgment was simply an extension of the judicial process: "the object of
any civil action for damages." (Rusheen, supra, 37 Cal.4th at p. 1062.) According to the
court, "On close analysis, the gravamen of the [plaintiff's abuse of process] action was
not the levying act, but the procurement of the judgment based on the use of allegedly
perjured declarations of service. Because these declarations were communications '(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' . . . , the litigation privilege applies to the
declarations and protects against torts arising from the privileged declarations. . . . [A]s
Cohen argues, since a party may not be liable for submitting false testimony or evidence
30
in the course of judicial proceedings which are used to obtain a judgment, the party
should likewise be immune from abuse of process claims for subsequent acts necessary to
enforce it. Otherwise, application of the litigation privilege would be [undermined].
Thus, where the gravamen of the complaint is a privileged communication (i.e., allegedly
perjured declarations of service) the privilege extends to necessarily related
noncommunicative acts (i.e., act of levying)." (Id. at pp. 1062-1063, italics added.)
Here, plaintiffs' claim of the asserted illegal nature of Merritt's filing of false
declarations does not warrant a conclusion that those actions fall outside of the anti-
SLAPP law. Hence, the burden shifted to plaintiffs to demonstrate a probability of
prevailing on the merits of their causes of action.
C. Probability of Prevailing on the Merits
Plaintiffs maintain they met their burden under the second prong of the anti-
SLAPP law. Their briefing is directed solely to the cause of action under the SCRA; they
maintain they demonstrated a probability of prevailing on the merits on that cause of
action. Specifically, plaintiffs argue Merritt violated section 521 of the SCRA by signing
the declaration of nonmilitary status in the second unlawful detainer action, and that the
Civil Code section 47, subdivision (b) litigation privilege does not protect her behavior
because it was akin to the unethical, blatantly false, statements concerning issuance of a
bench warrant found to be possibly criminal and unprotected in Carney v. Rotkin,
Schmerin & McIntyre (1988) 206 Cal.App.3d 1513 (Carney), or the sending of a
erroneous prelitigation demand letter as in Nguyen v. Proton Technology Corp. (1999) 69
Cal.App.4th 140.
31
We are not persuaded. Plaintiff's SCRA cause of action against Merritt, which is
based on Merritt's filing of a Judicial Council form pleading declaration for purposes of
obtaining an unlawful detainer default judgment, is barred by the litigation privilege.
"For well over a century, communications with 'some relation' to judicial proceedings
have been absolutely immune from tort liability by the privilege codified as [Civil Code]
section 47[, subdivision (b)]." (Rubin v. Green (1993) 4 Cal.4th 1187, 1193.) To invoke
the privilege, the party claiming it must show that the communication at issue was "(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 [it has] some
connection or logical relation to the action." (Silberg v. Anderson (1990) 50 Cal.3d 205,
212.)
Plaintiffs' cited authority, Carney, relied on an "interest of justice" requirement set
forth in Kinnamon v. Straitman & Snyder (1977) 66 Cal.App.3d 893 (Carney, supra, 206
Cal.App.3d at p. 1522), that was expressly overruled by the California Supreme Court in
Silberg v. Anderson, supra, 50 Cal.3d at p. 219. Thus, Carney's holding is no longer
good law. (See Kashian v. Harriman (2001) 98 Cal.App.4th 892, 917-920 [explaining
Silberg's overruling of both Kinnamon and Carney].) We shall not follow Carney's
analysis, which assessed whether the law firm's statements to an elderly judgment debtor
were made "to serve the purpose of litigation . . . ." (Carney, at p. 1522.) And Nguyen v.
Proton Technology Corp., supra, 69 Cal.App.4th 140, does not support plaintiffs'
position. That case involved an employer's prelitigation demand letter accusing a former
employee of committing acts of unfair competition, and also erroneously
32
mischaracterizing the employee's criminal record (stating he was in prison for "repeatedly
and violently assaulting his wife" when in fact he was convicted of shooting a gun at an
unoccupied vehicle and vandalism and served in county jail). (Id. at pp. 143, 151.) The
Court of Appeal found the inclusion of references to the employee's criminal record in
the prelitigation communication tenuous or "substantially extraneous" to the threatened
litigation. (Id. at pp. 142, 151.)
Here, Merritt's alleged conduct was not only related to Deutsche Bank's action, but
it was an integral part of the litigation on Deutsche Bank's behalf. The assertedly
wrongful declarations were (1) filed in a judicial proceeding; (2) by litigants or their
attorneys; (3) to achieve the objects of the litigation; and (4) were logically related to the
action. The fact they are alleged to be perjured does not take them outside the litigation
privilege. (See Jacob B. v. County of Shasta (2007) 40 Cal.4th 948, 958-959
["Obviously, perjury is not permitted by law. But the cases are clear that the litigation
privilege extends to civil actions based on perjury. [¶] . . . [¶] . . . [D]eclarations of
service to obtain a default judgment are a category of publication permitted by law.
Hence, the litigation privilege protects all such declarations"].) "The purposes of [Civil
Code] section 47, subdivision (b), are to afford litigants and witnesses free access to the
courts without fear of being harassed subsequently by derivative tort actions, to
encourage open channels of communication and zealous advocacy, to promote complete
and truthful testimony, to give finality to judgments, and to avoid unending litigation.
[Citation.] To effectuate these purposes, the litigation privilege is absolute and applies
regardless of malice. [Citation.] Moreover, '[i]n furtherance of the public policy
33
purposes it is designed to serve, the privilege prescribed by [Civil Code] section 47[,
subdivision (b)(2)] has been given broad application.' " (Rusheen, supra, 37 Cal.4th at
pp. 1062-1063.) These policies dictate that Merritt's filings are absolutely privileged.
D. Leave to Amend
Plaintiffs ask this court, if we do not agree with their arguments under the anti-
SLAPP law, to grant them leave to amend their complaint to add a malicious prosecution
claim against Merritt. Citing Sheehan v. San Francisco 49ers, Ltd. (2009) 45 Cal.4th
992, they argue the "lack of a properly labeled claim does not defeat the claim, as
amendment must be permitted unless a complaint is 'incapable' of amendment under any
recognized theory." Sheehan, however, was decided after the trial court sustained a
demurrer; the case does not involve the anti-SLAPP statute. (Id. at p. 996.)
Plaintiffs' request for leave to amend is beyond the purview of the anti-SLAPP
statute. "[S]ection 425.16 provides no mechanism for granting anti-SLAPP motions with
leave to amend." (Martin v. Inland Empire Utilities Agency (2011) 198 Cal.App.4th 611,
629 [explaining that allowing a SLAPP plaintiff leave to amend the complaint once the
court finds the defendant's prima facie showing has been met would undermine the
statute by providing the pleader a ready escape from section 425.16's quick dismissal
remedy].) "Trial courts should either grant or deny such motions in toto, i.e., without
leave to amend, prior to ruling on any pending demurrers. A proper ruling on the anti-
SLAPP motion would, in most cases, obviate the need to rule on the demurrer at all or, at
the very least, in its entirety." (Martin, at p. 629.)
34
III. Merritt's Request for Sanctions
Merritt has moved for an award of $20,964 in sanctions against plaintiffs and their
attorneys for filing an objectively frivolous appeal and to deter them from "further
harassing Merritt and burdening the courts . . . ." Merritt argues we should infer plaintiffs
are "motivated by a desire to inflict financial and emotional pain on [her] as punishment
for her legal representation . . . ."
Though plaintiffs' appeal is without merit, we do not find it was frivolous,
vexatious, or "taken solely for delay." (§ 907; Cal. Rules of Court, rule 8.267(a)(1).)
"[A]ny definition [of a frivolous appeal] must be read so as to avoid a serious chilling
effect on the assertion of litigants' rights on appeal. Counsel and their clients have a right
to present issues that are arguably correct, even if it is extremely unlikely that they will
win on appeal. An appeal that is simply without merit is not by definition frivolous and
should not incur sanctions. Counsel should not be deterred from filing such appeals out
of a fear of reprisals." (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650.) Merritt
has not presented us with any significant indication that plaintiffs' appeal was taken in
bad faith or solely for purposes of delay, and it does not meet Flaherty's legal standard
for frivolousness. We decline to impose monetary sanctions for plaintiffs' pursuit of this
appeal.
35
DISPOSITION
The judgments are affirmed. The parties shall bear their own costs on appeal.
O'ROURKE, J.
WE CONCUR:
BENKE, Acting P. J.
HALLER, J.
36