Rivera v. Value Home Loan CA2/8 ( 2013 )

Filed 9/12/13 Rivera v. Value Home Loan CA2/8
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
ROBERTO A. RIVERA et al., B245890
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. YC063260)
v.
VALUE HOME LOAN, INC. et al.,
Defendants and Respondents.
APPEAL from orders of the Superior Court of Los Angeles County.
Cary H. Nishimoto, Judge. Affirmed in part, dismissed in part.
Law Offices of George A. Saba, and George A. Saba for Plaintiffs and Appellants,
Roberto A. Rivera and Maria E. Rivera.
John Clark Brown, Jr. for Defendants and Respondents, Value Home Loan, Inc.,
Neil D. Gitnick, and John Clark Brown, Jr.
_______________________________
1
The trial court granted a special motion to strike a “cross cross-complaint”
pursuant to Code of Civil Procedure section 425.16 (§ 425.16), commonly known as the
anti-Strategic Lawsuit Against Public Participation statute or anti-SLAPP statute.
The court thereafter granted a motion for sanctions against the attorney who caused the
cross cross-complaint to be filed. We affirm the order granting the anti-SLAPP motion.
We dismiss the appeal to the extent it seeks to challenge the order imposing sanctions
against counsel.
FACTS
Background and the Original Complaint
In 2005, Roberto and Maria Rivera entered into a home equity line of credit with
Value Home Loan, Inc. (Value), secured by a deed of trust against real property located
on 133rd Street in Gardena, and junior to a note and first deed of trust held by Bank of
America. Value thereafter recorded a notice of default and subsequently initiated non-
judicial foreclosure proceedings. Value claims it obtained title to the 133rd Street
property in August 2010 at a trust deed foreclosure sale.
In September 2010, the Riveras (represented by attorney George Saba) filed a
complaint against Value seeking to undo the foreclosure sale based on claims that the
lender failed to comply with statutes governing such sales. The complaint alleged causes
of action to quiet title to real property, declaratory and injunctive relief, violations of the
Unfair Competition Law (Bus. & Prof., § 17200), and fraud.
In November 2010, Value obtained an unlawful detainer judgment against the
Riveras. In December 2010, the clerk of the Los Angeles Superior Court issued a writ of
possession of real property in favor of Value. In March 2011, the Sheriff’s Department
evicted the Riveras, and placed Value in possession of the 133rd Street property, and
delivered a receipt for possession of real property to Value. The receipt for possession
included this language: “In the event evicted individuals reenter the property in violation
2
of Penal Code § 419, present this document to the responding local law enforcement
agency.”
In summary, the Riveras were evicted pursuant to a writ of possession in Value’s
unlawful detainer action after the Riveras had filed their “wrongful foreclosure” action
against Value, and while the wrongful foreclosure action was still pending.
According to evidence later presented by the Riveras, Value sold the 133rd Street
property to Value Holdings LLC in May 2011.
Value’s Cross-Complaint
In May 2012, the trial court granted Value leave to file a cross-complaint for
trespass. Value’s cross-complaint alleged it obtained title to the 133rd Street property by
way of the trust deed foreclosure sale in August 2010, and obtained an unlawful detainer
judgment against the Riveras in November 2010. Value alleged the Sheriff’s Department
evicted the Riveras in March 2011 pursuant to a writ of possession issued in the unlawful
detainer action. Later, at some point between March 2011 and November 2011, the
Riveras re-entered the 133rd Street property without Value’s knowledge or consent.
The Riveras remained in the property until March 2012, when the City of Gardena Police
Department returned the property to Value. Value sought damages of “not less than
$1,800 per month” (possibly reflecting fair rental value) for the time the Riveras occupied
the property.1
The Cross Cross-Complaint and the Anti-SLAPP Motion
In July 2012, the Riveras (by attorney Saba) filed a motion for leave to file a
“cross cross-complaint;” in August 2012, the trial court granted the Riveras’ motion.2
1
As noted above, the Riveras later presented evidence demonstrating that Value’s
cross-complaint was potentially problematic, at least in part, in that Value no longer
owned the 133rd Street property after May 2011. In short, Value’s cross-complaint was
seeking trespass damages (i.e., fair rental value) for a period of time – May 2011 through
March 2012 – when it may not have owned the property.
2
The record contains a copy of a “cross cross-complaint” with a file stamp date of
June 2012. Apparently, that pleading is a nullity; the parties agree that the “cross cross-
3
The cross cross-complaint named Value, its president Neil Gitnick, and its attorney of
record in the wrongful foreclosure action, John Clark Brown, Jr. (hereafter, collectively
Value) and alleged causes of action for breach of oral agreement, breach of the covenant
of good faith and fair dealing, fraud, and intentional infliction of emotional distress.
All of the causes of action were based on the following allegations: In November
and December 2011, the Riveras had re-entered the 133rd Street property “based on . . .
instructions given to [them] by the holder of the first mortgage” that it, and not Value,
was “the legitimate owner” of the 133rd Street property, and Value knew that the Riveras
had re-entered the property. During this same time frame, Value (acting by and through
its president, Gitnick, and its attorney Brown) and the Riveras were engaged in settlement
negotiations to resolve the Riveras’ wrongful foreclosure action. (This was before Value
filed its cross-complaint for trespass.) During the course of the negotiations, Value and
the Riveras “entered into several oral agreements.” Value orally promised not to evict
the Riveras, and the Riveras promised to hold off on the deposition of Value’s “person
most knowledgeable,” pending a conclusion of settlement discussions and a mediation
scheduled for February 2012.3 The mediation “continued through out [sic] the month of
February 2012.” Value breached the parties’ oral contract not to evict “when on March
1, 2012, [it] summoned, authorized and ordered the Gardena Police Department to evict
the Riveras.”
Value filed an anti-SLAPP motion to strike the Riveras’ cross cross-complaint.
Value’s motion argued that all of the causes of action alleged in the Riveras’ cross cross-
complaint were based upon communications made in the course of the parties’ settlement
complaint” filed in August 2012 is the operative pleading. The Code of Civil Procedure
does not allow a “cross cross-complaint.” (Code Civ. Proc., § 422.10 [“The pleadings
allowed in civil actions are complaints, demurrers, answers, and cross-complaints”].)
3
As noted above, the Riveras later presented evidence that Value did not own the
133rd Street property in late 2011 when it promised not to evict the Riveras until after
mediation. In other words, the Riveras’ cross cross-complaint alleged that Value made a
promise to refrain from undertaking an action (eviction) which, by evidence later offered
by the Riveras, Value had no lawful authority to undertake in any event.
4
negotiations in the Riveras’ wrongful foreclosure action against Value. Value argued that
all of the communications between the parties had been “in connection” with litigation
activity that was protected by the anti-SLAPP statute. Value argued the Riveras could
not prevail on any claim based upon the communications during settlement negotiations
because (1) the communications were privileged under Civil Code section 47, subdivision
(b), and (2) evidence of settlement negotiations is not admissible in court under Evidence
Code section 1152. Value further argued that the Riveras could not prevail on their
claims because the allegations of the cross cross-complaint were “demonstrably false.”
On November 2, 2012, the trial court granted Value’s anti-SLAPP motion, and
awarded attorney fees to Value in the amount of $2,770.
On November 8, 2012, Value filed a motion for monetary sanctions pursuant to
Code of Civil Procedure section 128.7 against attorney Saba. The motion argued that
Saba filed a frivolous cross cross-complaint. On December 7, 2012, the trial court
granted Value’s motion for sanctions, and imposed sanctions in the amount of $2,590.
On January 3, 2013, the court signed and entered a formal order clarifying the imposition
of sanctions in the amount of $2,590 against attorney Saba.
On December 17, 2012, the Riveras filed a notice of appeal from the trial court’s
order of November 2, 2012, granting Value’s anti-SLAPP motion, and awarding attorney
fees in the amount of $2,770.
DISCUSSION
I. The Anti-SLAPP Motion
The Riveras contend the trial court erred in granting Value’s motion to strike their
cross cross-complaint pursuant to the anti-SLAPP statute. We disagree.
The anti-SLAPP statute is intended to address a concern with meritless lawsuits
filed to “chill” the valid exercise of the constitutional rights, including the rights of free
speech and to petition for the redress of grievances. (§ 425.16, subd. (a).) To this end,
the anti-SLAPP statute authorizes a special procedure for striking such a cause of action
at the earlier stages of litigation. The special striking procedure entails two steps: a court
5
first determines whether the cause of action arises from “protected activity” within the
meaning of the statute, and, second, the court determines whether there is a probability
that the plaintiff will prevail on the cause of action.
A cause of action presents a claim arising from so-called “protected activity” when
it arises from “any act [of the defendant] in furtherance of [his or her] right of petition or
free speech under the United States Constitution or California Constitution in connection
with a public issue . . . .” ( § 425.16, subd. (b)(1); see, e.g., Martinez v. Metabolife
Internat., Inc. (2003) 113 Cal.App.4th 181, 188 [it is the gravamen of the plaintiff’s cause
of action that determines whether the anti-SLAPP statute applies in the first instance].)
Such acts are defined in the anti-SLAPP statute to include “any written or oral
statement . . . made in connection with an issue under consideration or review by
a . . . judicial body. . . .” (§ 425.16, subd. (e)(2).)
When a moving defendant makes the required first-step showing that a challenged
cause of action arises from protected activity, the court moves onto the second step of the
anti-SLAPP statute’s special striking procedure. In this step, the court must determine
whether the plaintiff has demonstrated a “probability” that he or she will prevail on his or
her claim. (§ 425.16, subd. (b)(1); see e.g., Oasis West Realty, LLC v. Goldman (2011)
51 Cal.4th 811, 820.)
We review an order granting an anti-SLAPP motion under the de novo standard of
review, meaning we undertake the same two-step evaluation procedure as did the trial
court. (Mendoza v. ADP Screening & Selection Services, Inc. (2010) 182 Cal.App.4th
1644, 1651-1652.)
A. Protected Activity
The Riveras first contend the trial court’s order granting Value’s motion to strike
their cross cross-complaint pursuant to the anti-SLAPP statue must be reversed because
their cross cross-complaint does not arise from “protected activity” within the meaning of
the statue.
6
The Riveras argue that the settlement negotiations upon which their cross cross-
complaint is based were not “protected activity” within the meaning of the anti-SLAPP
statute. In the words of their opening brief filed on appeal: “[The Riveras] respectfully
suggest that the negotiations between [them] and [Value] were not conducted in
contemplation of litigation, but rather was an attempt to reach a new contract. [Value]’s
promise not to re-evict [the Riveras] during mediation was an independent agreement that
was entered into solely to allow the parties to concentrate on resolving the underlying
action at the mediation. [Value]’s promise not to evict [the Riveras] during mediation
had no bearing on settling the underlying action.” By their use of the language “no
bearing on settling the underlying action,” the Riveras apparently mean that Value’s
alleged promise not to re-evict them was not a term that would be included in a
negotiated final settlement. The Riveras offer no case authority in support of their
suggestion that settlement negotiations are not a protected activity within the meaning of
the anti-SLAPP statute.
We are not persuaded. Settlement negotiations are well recognized as a protected
activity within the meaning of the anti-SLAPP statute. (See Seltzer v. Barnes (2010) 182
Cal.App.4th 953, 963-964.)
B. Probability of Prevailing
Next, the Riveras contend the trial court’s order granting Value’s motion to strike
their cross cross-complaint was erroneous because there is a probability they will prevail.
The Riveras argue the court erred in finding the litigation privilege (Civ. Code, § 47,
subd. (b)) applied to the claims in their cross cross-complaint, precluding them from
prevailing on those claims. We disagree and find the trial court appropriately ruled there
is no probability the Riveras will prevail.4
1. Analysis Under Civil Code Section 47, Subdivision (b)
4
We are at a loss to understand why the concurrence makes so much of the fact that
we address the litigation privilege given that it was the primary issue raised in the briefs
of both parties.
7
The Riveras argue the litigation privilege historically has been applied to provide
absolute immunity from tort liability for “communications with ‘some relation’ to
judicial proceedings.” (Rubin v. Green (1993) 4 Cal.4th 1187, 1193.) However, they
recognize that the litigation privilege does not always preclude liability on a breach of
contract claim. (Wentland v. Wass (2005) 126 Cal.App.4th 1484, 1492 (Wentland).)
They argue the determination of whether the litigation privilege applies to an action for
breach of contract “turns on whether its application furthers the policies underlying the
privilege.” (Ibid.)
In Wentland, the Court of Appeal determined that when the parties to an action
reach a final agreement to settle, the litigation privilege afforded under Civil Code section
47, subdivision (b), does not preclude a subsequent cause of action alleging a breach of
the settlement agreement. This rule is based on common sense –– if the litigation
privilege applied to preclude a breach of contract claim based on an alleged breach of a
settlement agreement, it would frustrate the very purpose of the parties’ settlement
agreement. (See Wentland, supra, 126 Cal.App.4th at pp. 1491-1492, citing and
discussing Navellier v. Sletten (2003) 106 Cal.App.4th 763, 774-775.)
The Riveras argue Wentland’s reasoning should apply when parties in a pending
action enter into an unrelated side agreement in the course of, and prior to, negotiating a
final settlement agreement. The Riveras argue that, if the parties to an action make such
a preliminary agreement during settlement negotiations (here, the agreement not to re-
evict in exchange for delaying a deposition) before they reach a final settlement
agreement, a party may pursue a cause of action for breach of an oral agreement.5
Before addressing the Riveras’ argument as to the contract-based causes of action,
we take a moment to find the litigation privilege precludes liability on their causes of
action for fraud and intentional infliction of emotional distress. Tort causes of action
arising from litigation are barred by the litigation privilege with the exception of post-
5
Value does not discuss nor even acknowledge Wentland in its respondent’s brief
on appeal.
8
action claims for malicious prosecution. (See Silberg v. Anderson (1990) 50 Cal.3d 205,
215.) This result ensues even under Wentland, which acknowledges the long-standing
rule that the litigation privilege applies to preclude tort causes of action arising from
litigation.
This leaves one issue to resolve: In light of the litigation privilege, is there a
probability that the Riveras can prevail on their cause of action for breach of an oral side
agreement made during an attempt to settle litigation?6 The Riveras argue they should be
permitted to sue for damages caused by an alleged breach of an oral contract, which was
entered into for the purpose of “allow[ing] the parties to concentrate on resolving the
underlying action.” Basically, the Riveras would extend the Wentland rule –– that a party
may sue for breach of a final settlement agreement without implicating the litigation
privilege –– to approve lawsuits on every incidental promise made during settlement
negotiations, prior to reaching a final settlement agreement. The Riveras have offered an
interesting argument, but we are not persuaded that their cause of action survives in light
of the litigation privilege.
As noted above, Wentland teaches that the determination of whether the litigation
privilege applies to preclude an action for breach of contract turns on whether applying
the privilege “furthers the policies underlying the privilege.” (Wentland, supra, 126
Cal.App.4th at p. 1492.) The purposes of the litigation privilege are to: ensure access to
the courts free of the fear of being subject to derivative actions, promote complete and
truthful testimony, encourage zealous advocacy, give finality to judgments, and avoid
unending litigation. (Ibid.)
In our view, applying the litigation privilege to preclude the Riveras’ cross cross-
complaint furthers these policies. “[T]he public policy of this state is not served by
6
The following discussion applies equally to the Riveras related cause of action for
a contract-based breach of the covenant of good faith and fair dealing.
9
permitting attorneys to sue one another for omissions or representations made as officers
of the court during the course of litigation. This policy is reflected in Civil Code section
47, subdivision (b), which recognizes a ‘privilege [ ] 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.’” (Pollock v. Superior Court (1991) 229 Cal.App.3d 26,
29-30 (Pollock), quoting Silberg v. Anderson (1990) 50 Cal.3d 205, 212.) As Pollock
explains: “Attorneys have a relatively swift mechanism for redressing careless, slick,
underhanded, or tacky conduct: court-imposed sanctions. Once imposed, sanctions may
be reviewed by an appellate court. They may not, however, be tried de novo under the
guise of a breach of contract or tort action.” (Pollock, at p. 30.) Allowing an
independent cause of action for every incidental broken promise made in the course of
settlement negotiations would not avoid unending litigation. Instead, the potential for
litigation would be endless. Allowing these type of actions would encourage the filing of
cases arising from cases. In our view, such a situation would not give access to the courts
without the fear of derivative actions.
The concurrence attempts to label the side agreement alleged here a “standstill
agreement.” The parties do not identify the promise made here as a “standstill
agreement,” nor do we. We believe that characterization is erroneous and gives too much
weight to the alleged promises made in this case. The cases discussing standstill
agreements generally involve agreements that halt the filing of a lawsuit or put a cause of
action on hold; they generally include covenants not to sue and to toll the statute of
limitations. (See. e.g., USA Waste of California, Inc. v. City of Irwindale (2010) 184
Cal.App.4th 53, 57; Transwestern Pipeline Co. v. Monsanto Co. (1996) 46 Cal.App.4th
502, 510.)
Here, there was no lawsuit to halt. The Riveras already filed a complaint and no
one promised to temporarily halt all or any cause of action in the pending action. Indeed,
the Riveras’ cross cross-complaint did not allege that any aspect of the lawsuit was to
10
temporarily stand still. It is important to remember there was no pending unlawful
detainer action to put on hold at the time of the settlement negotiations; that action was
separately filed and resolved well before the settlement negotiations in February 2012.
The Riveras lost that lawsuit and were evicted pursuant to a writ of possession in March
of 2010.
When considering the alleged promise by the Riveras was to postpone Value’s
deposition until after the settlement negotiations, the same result is reached. It did not
bring their action for wrongful foreclosure to a stop. The alleged promises here amount
to nothing more than mere courtesies exchanged by parties in settlement negotiations.
As a result, we term the alleged agreement what it was –– an incidental agreement not to
re-evict.7
Because we have determined that the litigation privilege precludes the Riveras’
cross cross-complaint, we do not address their argument that Evidence Code section 1152
would require exclusion of evidence needed to prove the claim alleged in their cross
cross-complaint.
2. The Substantive Merits
Assuming the oral agreements alleged by the Riveras were not barred by the
litigation privilege, the record supports a conclusion that the Riveras did not show a
reasonable probability of prevailing. The Riveras alleged that Value agreed not to evict
pending a mediation, and that the mediation continued “throughout February of 2012.”
The Riveras alleged they were evicted on March 1, 2012. There was no breach of the
promise not to evict, not given the framework of the promise as alleged.
In addition, the evidence in the record in the form of letters and e-mail exchanges
between Value’s counsel and the Riveras’ counsel do not show an enforceable agreement
7
Whether the Riveras suffered any damages beyond those already contemplated in
their wrongful foreclosure action is not an issue in this appeal.
11
not to evict as alleged in the Riveras’ cross cross-complaint. The communications show
discussions about the mediation and deposition and issues concerning title to the 133rd
Street property. Value’s counsel submitted a declaration in support of the anti-SLAPP
motion attesting that the letters and e-mails were “the only communications . . . regarding
settlement . . . .” The evidence presented in opposition to the anti-SLAPP motion did not
establish a prima facie showing that the Riveras would prevail on the merits at a trial.
II. Sanctions against Attorney Saba
Attorney Saba contends the trial court erred in imposing sanctions against him.
We dismiss this aspect of the appeal.
First, attorney Saba never filed a notice of appeal from the January 3, 2013 order
imposing sanctions against him. The only notice of appeal in the record is the Riveras’
notice of appeal from the order of November 2, 2012, granting Value’s anti-SLAPP
motion. The filing of a timely notice of appeal is a jurisdictional requirement for our
court to address an appeal. (Van Beurden Ins. Services, Inc. v. Customized Worldwide
Weather Ins. Agency, Inc. (1997) 15 Cal.4th 51, 56.) If there is no timely notice of
appeal filed, we must dismiss the appeal. (Cal. Rules of Court, rule 8.104(b).) Liberally
construing the notice of appeal on file cannot be indulged here. We cannot reasonably
construe the notice of appeal, expressly in the name of the Riveras, from the order of
November 2, 2012, to include an appeal by attorney Saba, from a sanctions order entered
in January 2013.
Second, an order imposing sanctions of less than $5,000 is not an independently
appealable order; such an order is reviewable on appeal after entry of final judgment in
the main action. (Code of Civ. Proc., § 904.1, subds. (a)(11), (a)(12), (b).) An
appealable order is a jurisdictional requirement in order for our court to address an
appeal. (Jennings v. Marralle (1994) 8 Cal.4th 121, 126.)
12
Finally, the order imposing sanctions against attorney Saba is not reviewable as
part of the order granting Value’s anti-SLAPP motion because the sanctions order was
separately entered, upon a separate motion, after the entry of the order granting the anti-
SLAPP motion. (Cf. Martin v. Inland Empire Utilities Agency (2011) 198 Cal.App.4th
611, 631-633; Melbostad v. Fisher (2008) 165 Cal.App.4th 987, 990-997; Doe v. Luster
(2006) 145 Cal.App.4th 139, 145-150.)
DISPOSITION
The trial court’s order of November 2, 2012, granting Value’s anti-SLAPP motion,
and awarding attorney fees in the amount of $2,770, is affirmed. Attorney George Saba’s
appeal is dismissed to the extent it seeks review of the trial court’s order of January 3,
2013, imposing sanctions in the amount of $2,590. The parties are to bear their own
costs on appeal.
BIGELOW, P. J.
I concur:
FLIER, J.
13
RUBIN, J. – Concurring:
I agree with the majority opinion that the anti-SLAPP motion was properly
granted and that the judgment should be affirmed. I also agree with the majority to the
dismissal of the appeal from the imposition of sanctions. I write separately only because
I do not believe the majority’s discussion of the litigation privilege is necessary to our
decision; nor do I believe it is a warranted extension of current law.
The majority correctly concludes that the first prong of the anti-SLAPP statute was
satisfied as the Riveras’ lawsuit was directed towards proceedings that had taken place
during litigation, and, thus, implicated protected activity. (See Jay v. Mahaffey (2013)
218 Cal.App.4th 1522.) I also agree that the Riveras did not satisfy their second prong
burden to show a probability of prevailing on their claim. This failure was simply one of
lack of evidentiary proof. The record reflects that the purported agreement between the
parties was that Value agreed not to evict the Riveras while the parties were attempting to
mediate the dispute. But the record also shows that mediation continued throughout
February 2012, and the Riveras were evicted on March 1, 2012. Thus, there was no
breach, and the second prong was not satisfied. The majority agrees with this. (Maj.
opn. ante, at pp. 12-13.) I would stop there.
Rather than relying on a straightforward evidentiary analysis, the majority rests its
opinion primarily on its conclusion that the litigation privilege (Civ. Code, § 47,
subd. (b)) bars the Riveras’ claim as a matter of law. The traditional formulation of the
litigation privilege is found in Silberg v. Anderson (1990) 50 Cal.3d 205, 212, in which
the Supreme Court for the first time stated that, although the privilege was originally
thought to be directed only to defamation, it applied “to all torts except malicious
prosecution.” The majority expands the privilege to now apply to breaches of partial or
interim settlement agreements. It does so without citing a single case in which an
1
appellate court has actually held that a breach of contract cause of action was barred by
the litigation privilege.
The case that occupies most of the majority’s attention on this subject is Wentland
v. Wass (2005) 126 Cal.App.4th 1484, 1492. The majority quotes the final six words of
the following passage from Wentland in support of its new rule that the litigation
privilege applies to breach of contract actions of the type involved in the present case:
“Our review of Laborde [v. Aronson (2001) 92 Cal.App.4th 459] and Pollock [v.
Superior Court (1991) 229 Cal.App.3d 26], as well as other cases that have considered
the litigation privilege in the context of a breach of contract case, instructs that whether
the litigation privilege applies to an action for breach of contract turns on whether its
application furthers the policies underlying the privilege.” (Wentland, supra, at p. 1492;
see maj. opn. ante, at p. 10.)
Wentland, however, did not hold that the contract in question was barred by the
litigation privilege. The appellate court pointed out that the two cases, Laborde and
Pollock, which the Wentland court cited in the above passage applied the rule in
extremely narrow circumstances. First of all Laborde has been disapproved, albeit on
other grounds. (Musaelian v. Adams (2009) 45 Cal.4th 512, 520 [attorney who responds
in pro se to a filing abuse may not recover attorney fees as sanctions].) More
fundamentally, although the complaint in Laborde included a breach of contract cause of
action, the opinion contains no discussion of the applicability of the litigation privilege to
contract actions. The appellate court instead first held that summary judgment was
properly granted in favor of a psychologist who gave testimony unfavorable to the
plaintiff in a family law proceeding, a holding which, coincidentally, mirrors the
Supreme Court’s decision in Silberg v. Anderson, supra. The rest of the opinion deals
with sanctions against an attorney.
The second case discussed in Wentland, Pollock v. Superior Court, supra,
2
229 Cal.App.3d 26, also had its genesis in sanctions imposed on counsel. The parties
were two lawyers who had previously represented opposing clients in an underlying
lawsuit that had settled. In the new lawsuit, the plaintiff lawyer sought damages against
the defendant lawyer because the latter had failed to advise the court that the underlying
litigation had settled. For this omission, the original court imposed monetary sanctions
against the plaintiff which was the amount of damages plaintiff sought to recover in the
new lawsuit. Although there was a breach of contract cause of action, the court rested its
decision on the reality of what the plaintiff was trying to accomplish in its new lawsuit.
He was attacking the sanctions order. “If plaintiff has no quarrel with the sanctions
order, he should pay up and be done with it. If, as he has inconsistently alleged, the
sanctions order was ‘imposed wrongfully and ignorantly by the [Los Angeles] court’
because the defendants breached an agreement or acted tortiously, his remedy was to seek
reconsideration (Code Civ. Proc., § 1008) or to appeal. (Code Civ. Proc., § 904.1; see
I. J. Weinrot & Son, Inc. v. Jackson (1985) 40 Cal.3d 327, 331 [220 Cal.Rptr. 103, 708
P.2d 682].)” (Pollock, supra, 229 Cal.App.3d at p. 29.) The court described plaintiff’s
position as “hokum.” (Ibid.) “Simply put, the public policy of this state is not served by
permitting attorneys to sue one another for omissions or representations made as officers
of the court during the course of litigation. . . . [¶] Attorneys have a relatively swift
mechanism for redressing careless, slick, underhanded, or tacky conduct: court-imposed
sanctions. Once imposed, sanctions may be reviewed by an appellate court. They may
not, however, be tried de novo under the guise of a breach of contract or tort action.” (Id.
at pp. 29-30.) Pollock, I suggest, is better understood as holding that an agreement
between two lawyers to advise the court of a settlement does not rise to the level of an
enforceable contract.
Nothing in Pollock remotely resembles the facts of this case: there was no charge
of slick lawyering here, for sanctions nor misleading the court about a settlement.
Laborde and Pollock are the only cases discussed in Wentland that remotely deal
with the question of the application of the litigation privilege to contract causes of action.
3
They deal with actions founded on testimony given in court proceedings and with
sanctions against an attorney. They do not deal with agreements made between
contracting parties who happen to be involved in litigation. The agreement here has
nothing to do with who testified to what and it has nothing to do with sanctions against
opposing counsel. Rather, the agreement here is fairly similar to the agreement in
Wentland that the appellate court held was not barred by the litigation privilege. Both
cases involve the breach of a partial settlement agreement.
In Wentland, the parties had earlier reached an agreement regarding one of several
partnerships involved in litigation. Later, a cross-complaint was filed that allegedly
contained statements that constituted a breach of the original agreement. The trial court
sustained a demurrer on the ground that a breach of the agreement was barred by the
litigation privilege. The Court of Appeal reversed, concluding that cross-complainants
could continue with the claim that the other party had breached its partial settlement
agreement.
The alleged agreement reached between the parties here may carry a little less
weight than the settlement in Wentland. This agreement could be called a standstill
agreement in which parties agree to put litigation aside for some period of time while
there is an effort to accomplish something that might benefit both sides, such as the
termination of litigation, mitigation of damages or otherwise narrow the litigation. The
majority does not approve of the use of term “standstill agreement” (maj. opn. ante, at
p. 11), preferring instead “side agreement.” Either way it is an agreement between the
parties. It does not purport to resolve the order of discovery, or the scheduling of a
motion. This is not the type of conduct that the court in Pollock described: careless,
slick, underhanded or tacky conduct by opposing counsel. I agree that the type of
conduct present in Pollock is handled properly and routinely by a sanctions motion. But
this is not such a case. The parties allegedly entered into a simple contract, with fairly
simple terms but bargained for consideration. Here, there was nothing the trial court
could do within the confines of the litigation to avoid damages for break of contract.
4
Although the majority suggests that this dissent would extend the Wentland rule
(maj. opn ante, at p. 9), it is the majority that has created a new rule of law that certain
partial settlement agreements are worthy of enforcement and others are not. The
determination of worthiness is made by the tool of the litigation privilege. I respectfully
disagree.
Consistent with Wentland’s holding that the litigation privilege was inapplicable is
Navellier v. Sletten (2003) 106 Cal.App.4th 763 (Navellier II), a case which the majority
cites but does not discuss. Navellier II followed an earlier Supreme Court opinion in the
same case (Navellier v. Sletten (2002) 29 Cal.4th 82 (Navellier I).) In Navellier II the
issue was whether the plaintiff had showed a probability of prevailing on the merits of its
breach of contract claim, which was based on the defendant having filed counter claims
against the plaintiff in alleged breach of a release of liability. The Navellier II court
assumed that the litigation privilege did not bar the plaintiff’s action for breach of a
contract not to sue, although it eventually found the claim failed for lack of damages.
(Id. at pp. 773-774.) Its analysis as to the nonapplicability of the litigation privilege was
twofold:
First, it relied on a series of Supreme Court cases that, according to Navellier II,
describe the litigation privilege “as one that precludes liability in tort, not liability for
breach of contract. (E.g., Rubin v. Green [1993] 4 Cal.4th 1187, 1193-1194; Kimmel v.
Goland [1990] 51 Cal.3d at p. 209; Silberg v. Anderson [1990] 50 Cal.3d at p. 212.)”
(Navallier II, supra, 106 Cal.App.4th at p. 773.)
Second, it found support in the following statement by the Supreme Court in
Navellier I, supra, 29 Cal.4th at page 94: “a defendant who in fact has validly contracted
not to speak or petition has in effect ‘waived’ the right to the anti-SLAPP statute's
protection in the event he or she later breaches that contract.” The Navellier II court
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reasoned that applying the litigation privilege to an agreement not to sue would frustrate
1
the very purpose of the contract. (Navellier II, supra, 106 Cal.App.4th at p. 774.)
In sum, this case does not require an analysis of the litigation privilege because
there are narrower grounds for deciding this appeal. (See Witkin, Cal. Procedure (5th ed.
2008) Appeal, § 342, p. 392.) To the extent the privilege is considered, I conclude it is
not applicable here.
RUBIN, J.
1
Several other cases have concluded that the litigation privilege does not apply to
breach of contract causes of action. (See Stacy & Witbeck, Inc. v. City and County of San
Francisco (1996) 47 Cal.App.4th 1, 6-8 [litigation privilege did not apply to False Claims
Act claim which contained contract elements]; ITT Telecom Products Corp. v. Dooley
(1989) 214 Cal.App.3d 307, 319-320 [privilege barred tort but not contract claims for
breach of confidentiality agreement during litigation].)
6