Central Metal v. Center Bank CA2/5

Filed 1/8/16 Central Metal v. Center Bank CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 FIVE
CENTRAL METAL et. al., B258844
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC532269)
v.
ORDER MODIFYING OPINION
CENTER BANK, [NO CHANGE IN JUDGMENT]
Defendant and Respondent.
The opinion filed on December 16, 2015, is modified as follows: On page 1, line
5, “Bradley S. Pauly” is deleted and “Bradley S. Pauley” is inserted in its place.
No change in judgment.
________________________________________________________________________
BAKER, J. TURNER, P.J. KRIEGLER, J.
Filed 12/16/15 Central Metal v. Center Bank CA2/5 (unmodified version)
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 FIVE
CENTRAL METAL et. al., B258844
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC532269)
v.
CENTER BANK,
Defendant and Respondent.
APPEAL from an order of the Superior Court of Los Angeles County, Debre Katz
Weintraub, Judge. Affirmed.
Daniel E. Park Law Corporation, Daniel E. Park and Christopher C. Cianci, for
Plaintiffs and Appellants.
Horvitz & Levy, Jeremy B. Rosen and Bradley S. Pauly; Buchalter Nemer, Jeffery
S. Wruble and Jack R. Scharringhausen, for Defendant and Respondent.
Plaintiffs Central Metal, Inc. and Jong Byun (together referred to as Central Metal)
defaulted on loans they obtained from Center Bank. Center Bank successfully sought
court appointment of a “rents, issues and profits” receiver based on Central Metal’s
default, and Central Metal filed for bankruptcy in an effort to forestall the receivership
action. Roughly four years later, Central Metal sued Center Bank for losses suffered as
the result of the bank’s receivership action and the subsequent bankruptcy. The bank
responded by filing an anti-SLAPP motion, which the trial court granted as to all but one
cause of action in Central Metal’s complaint. We are asked to decide (1) whether Central
Metal’s causes of action against Center Bank arise from the bank’s protected litigation
activity and (2) whether Central Metal established a probability of prevailing on its
causes of action notwithstanding the applicable statutes of limitation.
BACKGROUND
Central Metal is a family-owned corporation based in Huntington Park. It has
been in the scrap metal business since 1993. The Bank1 is the primary financial
institution that Central Metal used since the company’s inception.
In 2006 and 2007, Central Metal obtained a series of commercial loans from the
Bank totaling $16.7 million.2 The loans were secured by deeds of trust on Central
Metal’s real property and personal property liens against the company’s assets. Three of
the loans, in the total principal sum of $15,000,000, had terms of five years each. The
other three loans, amounting to $2,000,000 in principal, were set to mature four to six
months after funding.
1
Center Bank and Nara Bank merged in 2011. The merged bank continued
operations under the name BBCN Bank. We refer to Center Bank and its successor-in-
interest, the defendant and respondent herein, as “the Bank.”
2
Plaintiff Jong Byun and his wife were co-borrowers with Central Metal on two of
these loans, representing $14 million in borrowed funds.
2
Central Metal experienced cash flow problems in late 2008 due to a sharp decline
in scrap metal prices. The Bank agreed to extend the maturity dates on the three smaller
loans to May 2009. Central Metal, however, failed to pay off those loans as agreed and
also stopped making payments on the other three larger loans. The Bank issued Notices
of Default & Acceleration in June 2009, which stated that the Bank would sue to enforce
the loan agreements unless Central Metal immediately cured its defaults.
Not long thereafter, in July 2009, Central Metal and the Bank entered into
Deferment Agreements. With respect to the three loans totaling $15 million that had not
yet matured, the parties agreed to defer all payments due between May and August 2009,
with normal payments to resume in September. In addition, the parties executed a
Change in Terms Agreement which extended the maturity dates of the three smaller loans
to September 1, 2009. According to Central Metal’s complaint, “Although the loan
payments were to be deferred, [the] Bank indicated to Plaintiffs that everything was
fine.”
Central Metal failed to make the payments required by the parties’ Deferment
Agreements. The Bank reacted by recording a Notice of Default on the real property
securing one of the three larger loans.
On October 19, 2009, the Bank sent Central Metal a Notice of Default &
Acceleration Letter, stating that the borrowers were in default on all of their loans and the
Bank had accelerated the amounts due, such that the loans were immediately due and
payable. The letter specified the principal, interest, and late fees due on each of the six
loans, and stated that “[u]nless the accelerated balance is paid off immediately, the Bank
will not stop to pursue legal remedies” and “we will continue to take such legal steps
despite any occasional payments you may make until the balance is paid off.”
In response to the notices of default, Central Metal again sought to modify the
loans’ payment terms, proposing six months of interest-only payments followed by a
return to regularly scheduled principal and interest payments. The Bank suggested
Central Metal hire an independent consultant to verify the company’s cash-flow
3
projections in support of its loan modification proposal. Central Metal agreed and
retained Focus Management (Focus), the consulting firm specifically recommended by
the Bank.3 Soon after Central Metal retained Focus, Focus informed the Bank of
concerns Focus harbored concerning Central Metal’s financial practices. More
specifically, Focus told the Bank that there was $17 million in cash that Focus could not
account for, and that Jong Byun had offered a cash bribe to Focus.
The Bank rejected Central Metal’s proposed loan modification by letter dated
November 16, 2009, based on its assessment that Central Metal’s past and projected sales
figures did not support the proposed repayment plan. The letter included notice that the
Bank would pursue its legal remedies, including seeking a receivership.
On January 6, 2010, the Bank sued Central Metal for failure to perform its
obligations under the loan documents. The Bank requested the appointment of a receiver
with respect to the real property securing the loans. The court appointed Robert Riiska, a
principal of Focus, as receiver.
Central Metal responded to the Bank’s lawsuit by filing a Chapter 11 bankruptcy
petition. In that petition, the company stated that its inability to meet its debt obligations
was the result of a marked drop in demand for steel coupled with an increase in the cost
of scrap metal and the limited functionality of equipment it had newly acquired. Central
Metal sought to sell “some or substantially all of its assets, locate a financial partner, or
pursue a plan of reorganization.” The Bank moved for appointment of a bankruptcy
examiner to investigate the diversion of funds and inventory from Central Metal.
However, before the motion was heard, the Bank sold its interest in the loans to a third
party.
Nearly four years later, on January 3, 2014, Central Metal sued the Bank. Central
Metal’s First Amended Complaint (the complaint) alleges causes of action for fraud,
negligence, negligent misrepresentation, intentional and negligent interference with
3
As we explain, post, Central Metal’s complaint alleges that the Bank foisted Focus
on Central Metal as part of a plan to collude with Focus and seize Central Metal’s assets.
4
prospective economic advantage, unfair business practices, breach of contract, breach of
the implied covenant of good faith and fair dealing, breach of fiduciary duty, civil
conspiracy, and negligent and intentional infliction of emotional distress. The complaint
alleges that, in the fall of 2009, the Bank was in dire financial straits and needed to raise
large sums of money in order to avoid being seized by the Federal Deposit Insurance
Corporation. The complaint further alleges that the Bank engaged in a scheme to seize
the assets of Central Metal by verbally assuring Central Metal that its loan obligations
would be restructured and payments deferred; “insist[ing] and requir[ing]” that Central
Metal retain Focus; and conspiring with Focus to create inaccurate and misleading
reports, which the Bank then used “to take possession of Plaintiffs’ business.” According
to the complaint, the Bank carried out the alleged scheme by filing the receivership
action, which in turn left Central Metal “no choice” but to file for bankruptcy protection.
The complaint states that Central Metal’s credit was damaged “[b]ecause of the
bankruptcy proceedings” such that it could not obtain loans sufficient to sustain the
operation of the business. It consequently lost the trust of its customers, and its
reputation in the scrap metal industry was tarnished.
The Bank filed a special motion to strike the complaint pursuant to Code of Civil
Procedure section 425.16,4 the anti-SLAPP statute. The Bank’s anti-SLAPP motion
contended the receivership action it filed against Central Metal qualifies as statutorily
protected activity. The Bank also argued Central Metal could not establish a reasonable
probability of prevailing on its causes of action because the lawsuit’s causes of action are
time-barred.
The trial court concluded Central Metal’s complaint arose out of petitioning
activity protected by the anti-SLAPP statute: “[T]he activity which forms the gravamen
of plaintiffs’ complaint is defendants filing the ex parte application for [appointment] of
receiver which in turn triggered plaintiffs’ bankruptcy filing that directly caused the harm
of which they now have set forth in their pleadings.” The court also determined that
4
Statutory references that follow are to the Code of Civil Procedure.
5
Central Metal could not establish a probability of prevailing on its causes of action,
except for the unfair competition claim, because the statute of limitations had expired.
The court therefore granted the Bank’s anti-SLAPP motion to strike all of the complaint’s
causes of action except the fifth cause of action that asserts the unfair competition claim.
Central Metal appeals the order granting the Bank’s anti-SLAPP motion.5
DISCUSSION
Central Metal argues the trial court should have denied the Bank’s anti-SLAPP
motion because the complaint6 did not arise from statutorily protected activity; in Central
Metal’s view, the Bank’s application to seek appointment of a receiver was merely a
triggering event for the filing of the complaint, not the activity from which liability
allegedly arises. Central Metal also argues that the applicable statutes of limitation are
not a bar to demonstrating a probability of success on the merits. We hold to the contrary
on both points and affirm the trial court’s order.
The anti-SLAPP statute “requires the court to engage in a two-step process.”
(Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) “First, the
defendant must make a prima facie showing that the plaintiff’s ‘cause of action . . .
aris[es] from’ an act by the defendant ‘in furtherance of the [defendant’s] right of
petition or free speech . . . in connection with a public issue.’” (Simpson Strong-Tie Co.,
Inc. v. Gore (2010) 49 Cal.4th 12, 21.) “If the court finds such a showing has been made,
it then determines whether the plaintiff has demonstrated a probability of prevailing on
the claim.” (Equilon Enterprises v. Consumer Cause, Inc., supra, at p. 67.) Where the
anti-SLAPP statute applies and the plaintiff fails to establish that he has a probability of
5
After the notice of appeal was filed, the trial court found the Bank was a prevailing
defendant under § 425.16, subd. (c)(1) and awarded $32,620.11 in attorney fees and
costs. Plaintiffs did not appeal this order. The court also ordered the action stayed
pending resolution of this appeal.
6
For purposes of the following discussion, our use of the term “complaint” is
limited to the causes of action stricken by the trial court.
6
prevailing, the claims subject to the anti-SLAPP statute “shall be stricken.” (Simpson
Strong-Tie Co., Inc. v. Gore, supra, at p. 21.)
“‘Whether section 425.16 applies and whether the plaintiff has shown a
probability of prevailing are both legal questions which [the court] review[s]
independently on appeal. [Citation.]’” (Seltzer v. Barnes (2010) 182 Cal.App.4th 953,
961), quoting Gallimore v. State Farm Fire & Casualty Ins. Co. (2002) 102 Cal.App.4th
1388, 1396.)
A. The complaint was subject to an anti-SLAPP motion because it sought to
impose liability for the Bank’s exercise of its right to petition
“A defendant who files a special motion to strike bears the initial burden of
demonstrating that the challenged cause of action arises from protected activity.”
(Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133
Cal.App.4th 658, 669 (Peregrine).) “‘In deciding whether the “arising from”
requirement is met, a court considers “the pleadings, and supporting and opposing
affidavits stating the facts upon which the liability or defense is based.” (§ 425.16, subd.
(b).)’ [Citation.]” (Id. at p. 670.) Here, based on the allegations of the complaint, we
conclude Central Metal’s causes of action arise from the Bank’s protected litigation
conduct in the receivership action and the ensuing bankruptcy proceeding.
“Our Supreme Court has recognized the anti-SLAPP statute should be broadly
construed [citation] and that a plaintiff cannot avoid operation of the anti-SLAPP statute
by attempting, through artifices of pleading, to characterize an action as a garden variety
tort or contract claim when in fact the claim is predicated on protected speech or
petitioning activity. (Navellier v. Sletten (2002) 29 Cal.4th 82, 90-92.) Accordingly, we
disregard the labeling of the claim [citation] and instead ‘examine the principal thrust or
gravamen of a plaintiff’s cause of action to determine whether the anti-SLAPP statute
applies’ and whether the trial court correctly ruled on the anti-SLAPP motion. [Citation.]
We assess the principal thrust by identifying ‘[t]he allegedly wrongful and injury-
7
producing conduct . . . that provides the foundation for the claim.’ (Martinez v.
Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 189.) If the core injury-producing
conduct upon which the plaintiff’s claim is premised does not rest on protected speech or
petitioning activity, collateral or incidental allusions to protected activity will not trigger
application of the anti-SLAPP statute. (Martinez v. Metabolife Internat., Inc.[, supra,] []
at p. 189.)” (Hylton v. Frank E. Rogozienski, Inc. (2009) 177 Cal.App.4th 1264, 1271-
1272.)
As we have previously observed: “Section 425.16 defines an ‘act of that person in
furtherance of the person’s right of petition or free speech . . . ’ as including statements or
writings made before a judicial proceeding or made in connection with an issue under
consideration or review by a judicial body. (§ 425.16, subd. (b)(1); see id. subd. (e).)
Thus, statements, writings and pleadings in connection with civil litigation are covered by
the anti-SLAPP statute, and that statute does not require any showing that the litigated
matter concerns a matter of public interest.” (Kenne v. Stennis (2014) 230 Cal.App.4th
953, 965.) Accordingly, the first prong of the anti-SLAPP analysis is satisfied when a
plaintiff alleges he or she sustained injury as a result of the defendant’s “statements,
writings and pleadings in connection with civil litigation.” (Ibid.)
The suit Central Metal filed against the Bank identifies the Bank’s application for
appointment of a receiver, and the resulting bankruptcy, as the source of the injury for
which redress is sought. Central Metal’s complaint alleges: “[The Bank] file[d] a civil
complaint against [Central Metal] on or about January 6, 2010. The following day, on or
about January 7, 2010, [the Bank] also used the Focus report to file an ex parte
application for appointment of a receiver to take possession, custody, and control of
Central Metal.” According to the complaint, the Bank’s receivership action, and in
particular, its ex parte application for the appointment of a receiver, compelled Central
Metal to file for Chapter 11 bankruptcy: “With such short notice of the ex parte hearing
seeking an involuntary receivership over Plaintiffs’ family business assets and operations,
8
Plaintiffs had no other option but to file for Chapter 11 bankruptcy in order to save their
18 year-old family business from being seized and sold.”
The complaint further alleges that Central Metal was harmed as a direct result of
the bankruptcy filing, which was precipitated by the Bank’s initiation of the receivership
action. The complaint also contends the Bank’s request for an examiner in the
bankruptcy action injured Central Metal because the company was compelled to hire an
independent consultant and forensic accountant at significant cost. Central Metal claims
as damages the loss of business opportunities and its customers’ good will as a result of
the bankruptcy action, as well as attorneys’ fees incurred in both the receivership and
bankruptcy proceedings.
The Bank’s actions in seeking legal redress to enforce its rights following Central
Metal’s loan defaults are therefore the basis for the suit’s claims against the Bank. This
qualifies as protected activity under the anti-SLAPP statute.
Central Metal, however, relies on several cases that hold “[a] claim does not arise
from constitutionally protected activity simply because it is triggered by such activity or
is filed after it occurs. [Citation.] Rather, the focus is on the substance of the lawsuit.”
(World Financial Group, Inc. v. HBW Ins. & Financial Services, Inc. (2009) 172
Cal.App.4th 1561, 1568; see also Baharian-Mehr v. Smith (2010) 189 Cal.App.4th 265,
272 [“If the mention of protected activity is ‘only incidental to a cause of action based
essentially on nonprotected activity,’ then the anti-SLAPP statute does not apply”];
Navellier v. Sletten, supra, 29 Cal.4th 82, 89 [“[T]hat a cause of action arguably may
have been ‘triggered’ by protected activity does not [mean] that it is one arising from
such”].) The facts at issue in Wang v. Wal-Mart Real Estate Business Trust (2007) 153
Cal.App.4th 790 (Wang) illustrate how the principle applies.
In Wang, the Wangs sold a portion of their land to Wal-Mart, with the
understanding that Wal-Mart would relocate a road needed to provide them with access
to their remaining adjoining property. In the development plans submitted to the City of
San Bernardino, Wal-Mart did not include a relocated access road. Rather, Wal-Mart
9
obtained a city resolution that vacated the road and replaced it with emergency access and
an alley, leaving the Wangs’ property landlocked. The Wangs sued Wal-Mart and the
city, among others, claiming that the defendants’ planning and development of the Wal-
Mart store wrongfully deprived their real property of street access. (Wang, supra, 153
Cal.App.4th at pp. 795-798.)
The defendants brought an anti-SLAPP motion, contending the allegations of the
complaint arose from protected petitioning activity. The trial court granted the motion,
ruling that all claims were based on the defendants’ governmental permitting activity
associated with the proposed development. (Wang, supra, 153 Cal.App.4th at
p. 807.) The Court of Appeal reversed, holding that the acts underlying the Wangs’
causes of action were “acts that Wal-Mart carried out in furtherance of its economic
interests in implementing the contractual agreement. . . . ” (Id. at p. 809.) The court
explained: “The requests to governmental authorities for approval of land use planning
items were made only in conjunction with the principal business transaction. The overall
thrust of the complaint challenges the manner in which the parties privately dealt with
one another, on both contractual and tort theories, and does not principally challenge the
collateral activity of pursuing governmental approvals.” (Ibid.) The court therefore
concluded that plaintiffs’ “causes of action raised only collateral or incidental facts with
respect to any” protected petitioning conduct. (Ibid.)
Central Metal argues Wang applies on the facts here because the complaint’s
causes of action arise from the Bank’s unlawful conduct in its business dealings with
them, not the Bank’s application for appointment of a receiver, which Central Metal
contends was only incidental or collateral to the allegedly improper business dealings.
We find Central Metal’s argument unconvincing; the circumstances here are different
from those at issue in Wang and the other cases cited by Central Metal.
The contract at issue in Wang contemplated that the Wangs’ remaining parcels
would retain street access, and the plaintiffs primarily sought to enforce the terms of their
contract with Wal-Mart. The fact that enforcement of those terms would preclude Wal-
10
Mart from obtaining governmental permits to eliminate access to the plaintiffs’ property
was merely incidental to the gist of the complaint. (Wang, supra, 153 Cal.App.4th at
p. 809.) The same cannot be said for the complaint in this case. The Bank’s alleged
scheme to take over Central Metal’s business was premised on the Bank’s ability to gain
control of the company by installing a receiver to manage its financial affairs. The
Bank’s “fraudulent and unlawful” business dealings that Central Metal complains
about—asserted oral promises to forego loan default proceedings and collusion with
Focus to create false financial reports—could only harm the company if the Bank
pursued its legal remedies of filing for receivership in order to execute on the pledged
collateral. Thus, far from being incidental to the gist of the complaint, the receivership
was the very method by which the Bank allegedly conspired with Focus to wrest control
of Central Metal from its owners.7 The receivership action is necessarily “the core injury-
producing conduct” as set forth in the complaint.8 (See, e.g., Hylton v. Frank E.
Rogozienski, Inc. supra, 177 Cal.App.4th at p. 1272.)
In addition, the complaint alleges that, notwithstanding the Bank’s written
warnings regarding Central Metal’s default and the Bank’s intent to pursue its legal
remedies, the Bank orally promised not to take legal action to enforce its rights under the
loan agreements. However, even if the Bank had made such promises, it could have
breached them only by taking legal action to enforce its rights, that is, by filing the
7
We note as well that, although the complaint alleges that the Bank conspired with
Focus to generate false reports of financial irregularities in order “to take possession of
Plaintiffs’ business,” it had no need to rely on such reports. Plaintiffs had defaulted on
their loans; it was that default that enabled the Bank to seek appointment of a receiver.
8
Like its reliance on Wang, Central Metal’s citation to Baharian-Mehr v. Smith,
surpa, 189 Cal.App.4th 265 is unavailing. In that case, one business partner sued
another, alleging causes of action relating to the defendant’s mismanagement and misuse
of corporate funds. Unlike the situation in Baharian-Mehr v. Smith, here Central Metal
alleged that the Bank’s litigation conduct directly caused the harm for which it seeks
redress in this lawsuit. The complaint’s causes of action thus were not incidental to, but
were “based on the defendant’s protected free speech or petitioning activity. [Citations.]”
(Navellier v. Sletten., supra, 29 Cal.4th at p. 89.)
11
receivership action and pursuing its remedies as a bankruptcy creditor. For this reason,
too, the Bank’s protected conduct is at the heart of the complaint’s allegations and is not
merely incidental or collateral as Central Metal contends.
Finally, according to Central Metal’s own allegations, all of its alleged damages
stem from the receivership action and the ensuing bankruptcy proceedings. Thus, even
assuming for the sake of argument that the complaint’s allegations include some
unprotected conduct, the Bank’s protected litigation conduct is central to Central Metal’s
causes of action and not a mere triggering event, as Central Metal argues. (See
Peregrine, supra, 133 Cal.App.4th at p. 674 [“[E]stablishing a cause of action requires
proof of causation and damages in addition to liability. Where, as here, a cause of action
alleges the plaintiff was damaged by specific acts of the defendant that constitute
protected activity under the statute, it defeats the letter and spirit of section 425.16 to hold
it inapplicable because the liability element of the plaintiff’s claim may be proven
without reference to the protected activity”].)
The conduct Central Metal alleges caused it injury, that is, the acts upon which the
causes of action are necessarily based, are protected litigation activities. We therefore
hold the trial court correctly ruled that the Bank satisfied the first prong of the anti-
SLAPP analysis.
B. Central Metal failed to demonstrate a probability of prevailing on the
causes of action stricken by the trial court
Because the complaint is based on protected petitioning conduct, Central Metal
bears the burden to establish a probability of prevailing on the merits of the alleged
claims. (Code Civ. Proc., § 425.16, subd. (b)(1); Navellier v. Sletten, supra, 29 Cal.4th at
p. 95.) To establish a probability of prevailing, “‘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
12
credited.”’ [Citations.]” (Navellier v. Sletten, supra, at pp. 88-89.) “The prima facie
showing of merit must be made with evidence that is admissible at trial. [Citation.]
Unverified allegations in the pleadings or averments made on information and belief
cannot make the showing.” (Salma v. Capon (2008) 161 Cal.App.4th 1275, 1289.)
“[A] defendant may defeat a cause of action by showing the plaintiff cannot
establish an element of its cause of action or by showing there is a complete defense to
the cause of action. . . . ” (Peregrine, supra, 133 Cal.App.4th at p. 676.) Here, the trial
court properly granted the anti-SLAPP motion because Central Metal failed to
demonstrate its causes of action—other than the fifth cause of action—were brought
within the applicable statutes of limitation.
“‘Under the discovery rule, the statute of limitations begins to run when the
plaintiff suspects or should suspect that her injury was caused by wrongdoing, that
someone has done something wrong to her. . . . [T]he limitations period begins once the
plaintiff “‘“has notice or information of circumstances to put a reasonable person on
inquiry. . . . ”’” [Citation.] A plaintiff need not be aware of the specific “facts”
necessary to establish the claim; that is a process contemplated by pretrial discovery.
Once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, she
must decide whether to file suit or sit on her rights. So long as a suspicion exists, it is
clear that the plaintiff must go find the facts; she cannot wait for the facts to find her.’”
(Bergstein v. Stroock & Stroock & Lavan LLP (2015) 236 Cal.App.4th 793, 818, quoting
Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1110-1111.)
Central Metal argues it did not become aware of its causes of action until 2012,
after it sued Focus in Florida and undertook discovery in that action. Central Metal
contends “[i]t was only then that Plaintiffs discovered that the Bank never intended to
honor its promises to refrain from taking legal action on Plaintiffs’ technical defaults on
the Loans and to enter into a revised loan payment schedule. . . . ” Central Metal further
argues it did not know until it conducted discovery in the Florida litigation that Focus and
13
the Bank were allegedly colluding to induce Plaintiffs into accepting Focus as a
consultant as part of a scheme to take over Central Metal.
The trial court properly applied the discovery rule to reject Central Metal’s
arguments. The court determined that the causes of action necessarily accrued no later
than January 6, 2010, the date the Bank sought and obtained the appointment of a
receiver over Central Metal, because “plaintiffs knew . . . when the receiver was
appointed . . . that defendants acted contrary to their alleged promise to establish a
schedule of payments to cure the default and to refrain from legal action.” The court also
reasoned that by that time, Central Metal knew or must have suspected “the Focus
Management Group had acted in direct conflict of its own clients’ interest by being
appointed receiver over plaintiffs’ business when plaintiff had hired Focus Management
Group to perform consulting services.” Thus, as the trial court correctly found, “as of
January [6], 2010, plaintiff had knowledge of all of the facts by which the causes of
action would begin to accrue.”
Indeed, at the hearing on the anti-SLAPP motion, Central Metal conceded that it
was aware in January 2010, when the Bank filed the receivership action and Focus was
appointed as a receiver, of at least some if not all of the conduct about which it now
complains: “Plaintiffs were well aware that Focus had engaged in some wrongdoing by
the January, February [2010], time frame . . . [¶] As [the] court . . . correctly notes, we
were aware by January [2010] that the Bank was proceeding to enforce the loan default.”
“I agree with the court . . . it was the filing of the ex parte application itself that created
the harm here. That triggered the harm that plaintiffs suffered and the fact that we
needed . . . relief from such harm.” A reasonable person aware of such facts would have
been, in the words of our Supreme Court in Sanchez v. South Hoover Hospital (1976) 18
Cal.3d 93, “on inquiry” at that time. (Id. at p. 101.)
Having determined that the statute of limitations on Central Metal’s claims
commenced to run no later than January of 2010, the trial court identified the limitations
period applicable to each of the complaint’s causes of action, as follows: fraud and
14
negligent misrepresentation, three years (Code Civ. Proc., § 338, subd. (d)); intentional
and negligent interference with prospective economic advantage, two years (Code Civ.
Proc., § 339, subd. (1)); professional negligence, two years (Code Civ. Proc., § 339, subd.
(1); Slavin v. Trout (1993) 18 Cal.App.4th 1536, 1539); breach of oral contract and
breach of the implied covenant of good faith and fair dealing, two years (Code Civ. Proc.,
§ 339, subd. (1)); and breach of fiduciary duty, three years “because . . . the alleged
breach was based on fraud” (Code Civ. Proc., § 338, subd. (d); Fuller v. First Franklin
Financial Corp. (2013) 216 Cal.App.4th 955, 963); and intentional and negligent
infliction of emotional distress, two years (Code Civ. Proc., § 335.1; Pugliese v. Superior
Court (2007) 146 Cal.App.4th 1444, 1450). Central Metal does not dispute that the trial
court correctly specified the statute of limitations applicable to each of the foregoing
claims.
The court therefore determined that all of the complaint’s causes of action were
time-barred except for the unfair business practices claim under the Unfair Competition
Law, Business and Professions Code section 17200 et seq. That determination was
correct; a three-year statute of limitations (the longest for the aforementioned claims) ran
in January 2013, long before the complaint was filed in January 2014. As to the unfair
competition claim, the trial court found it was subject to a four-year limitations period
(Bus. & Prof. Code, § 17208), and was therefore timely filed. The Bank does not appeal
from that portion of the order declining to strike the unfair competition cause of action.9
9
On appeal, the Bank contends that all of plaintiffs’ claims are barred by the
litigation privilege (Civ. Code, § 47, subd. (b)) and the Noerr-Pennington doctrine
(People ex rel. Gallegos v. Pacific Lumber Co. (2008) 158 Cal.App.4th 950, 964.) These
arguments were not presented to the trial court, and are consequently not properly before
us on this appeal. (Asbestos Claims Facility v. Berry & Berry (1990) 219 Cal.App.3d 9,
26 [“[I]t is fundamental that a reviewing court will ordinarily not consider claims made
for the first time on appeal which could have been but were not presented to the trial
court”].)
15
In sum, we hold the trial court did not err in ruling that the complaint was subject
to the anti-SLAPP law, and that Central Metal failed to make a prima facie showing of a
probability of prevailing on the merits on all but the fifth cause of action in the complaint.
DISPOSITION
The trial court’s order granting in part the Bank’s anti-SLAPP motion is affirmed.
The Bank is awarded its costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
BAKER, J.
We concur:
TURNER, P.J.
KRIEGLER, J.
16