RGC Gaslamp v. Ehmcke Sheet Metal Co.

Filed 10/23/20
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
RGC GASLAMP, LLC, D075615
Plaintiff and Appellant,
v. (Super. Ct. No. 37-2018-00036303-
CU-OR-CTL)
EHMCKE SHEET METAL CO., INC.,
Defendant and Appellant.
RGC GASLAMP, LLC, D076594
Plaintiff and Appellant,
v.
EHMCKE SHEET METAL CO., INC.,
Defendant and Respondent.
APPEALS from orders of the Superior Court of San Diego County,
Gregory W. Pollack, Judge. Affirmed.
CGS3, Gregory S. Markow, Sean Michael Gaffney and Jamie Altman
Buggy for Plaintiff and Appellant in Nos. D07615 and D076594.
Solomon Ward Seidenwurm & Smith, Thomas Landers and Leah
Suzanne Strickland for Defendant and Appellant and for Defendant and
Respondent.
Subcontractor Ehmcke Sheet Metal Company (Ehmcke) recorded a
mechanic’s lien to recoup payment due for sheet metal fabrication and
installation work done on a luxury hotel project in downtown San Diego.
Project owner RGC Gaslamp, LLC (RGC) secured a bond to release the lien.
Thereafter Ehmcke filed three successive mechanic’s liens, each identical to
the first, prompting RGC to sue it for quiet title, slander of title, and
declaratory and injunctive relief. The trial court granted Ehmke’s special
motion to strike under the anti-SLAPP statute. (Code Civ. Proc., § 425.16.)
RGC appeals that ruling and the subsequent ruling on attorney’s fees.1
The trial court found that Ehmcke met its moving burden because the
filing of even an invalid lien is protected petitioning activity. Thereafter, the
court found that RGC failed to make a prima facie showing that its sole
remaining cause of action for slander of title could withstand application of
the litigation privilege. RGC appeals both findings, arguing that the
duplicative filing of mechanic’s liens after the posting of a bond is not
protected activity. Relying heavily on A.F. Brown Electrical Contractor, Inc.
v. Rhino Electric Supply, Inc. (2006) 137 Cal. App. 4th 1118 (A.F. Brown), RGC
claims Ehmcke could not have filed duplicative liens in good faith while
seriously contemplating litigation.
As we explain, RGC erroneously imports substantive requirements of
the litigation privilege into the first step of the anti-SLAPP inquiry. At prong
one of the anti-SLAPP inquiry, a defendant need only show a prima facie case
that the activity underlying plaintiff’s action is protected, not that its acts
1 The parties stipulated to consolidate the appeals from the order
granting the anti-SLAPP motion (D075615) and the subsequent order on fees
and costs (D076594). We rejected the stipulation at that time but on our own
motion now consolidate the appeals for purposes of decision. (See Hong Sang
Market, Inc. v. Peng (2018) 20 Cal. App. 5th 474, 481, fn. 1.)
2
were ultimately lawful. Moreover, even if the good faith and serious
contemplation criteria in A.F. Brown applied here, Ehmcke met that moving
burden once its erroneously excluded reply declarations are considered. With
the burden shifted on prong two, RGC failed to make a prima facie showing
that the litigation privilege did not bar its slander-of-title cause of action.
The anti-SLAPP motion was thus properly granted, and we likewise affirm
the subsequent attorney’s fees and costs award.
FACTUAL AND PROCEDURAL BACKGROUND2
RGC is the developer and owner of the Pendry Hotel in downtown San
Diego. Ehmcke performed sheet metal installation and fabrication for the
project and alleged it was not paid after completing its subcontracting work
in April 2017. In September 2017, Ehmcke filed and recorded a mechanic’s
lien (first lien) for $257,978 against the property. The following month, RGC
secured and recorded a bond from Liberty Mutual for $322,473 to release the
first lien. In December, Ehmcke filed a second mechanic’s lien identical to
the first lien.
A few months passed. On April 10, 2018, Ehmcke filed and recorded a
series of documents in which it withdrew the first and second liens and filed a
2 We grant the parties’ joint request to augment the record with RGC’s
notice designating the record on appeal, Ehmcke’s notice of cross-appeal, and
Ehmcke’s notice designating the record on appeal. (Cal. Rules of Court, rule
8.155(a)(1)(A) [permitting augmentation with “[a]ny document filed or lodged
in the case in superior court”]; further rule references are to the California
Rules of Court.) Although RGC’s designation of the record on appeal is
missing a file stamp, we take judicial notice of the fact that it was filed from
the notation in the Register of Actions. We take judicial notice of that
Register of Actions itself pursuant to sections 452, subdivision (d) and 459,
subdivision (a) of the Evidence Code. Although that document is properly
included in a prepared appendix (rules 8.124(b)(1)(A), 8.122(b)(1)(F)), it was
neither filed nor lodged in superior court to permit augmentation (rule
8.155(a)(1)(A)).
3
third identical mechanic’s lien for the same work.3 RGC once again obtained
a bond from Liberty Mutual to release the third lien, recording the
instrument in June. Then on July 5, 2018, Ehmcke withdrew the third lien
and filed a fourth lien on the project that was duplicative of the first, second,
and third liens.
RGC initiated this action on July 19, filing a verified complaint for
quiet title, slander of title, and declaratory and injunctive relief. Attached as
exhibits were copies of the four recorded mechanic’s liens, withdrawals of the
first, second, and third liens, and surety bonds for the first and third liens.
Ehmcke responded by filing a special motion to strike pursuant to the anti-
SLAPP statute, Code of Civil Procedure section 425.16, subdivision (b),
contending the claims all arose from protected petitioning activity. It further
argued that the quiet title and declaratory relief claims were mooted by its
release of all four liens, while the remaining slander of title claim was barred
by the litigation privilege.
Attached to its anti-SLAPP motion was a declaration by Ehmcke Vice
President, Billy Taylor. Taylor stated that Ehmcke had not been paid for
sheet metal installation and fabrication work at the Pendry Hotel.
Subsequently, it recorded four mechanic’s liens, all since released. RGC’s
lawsuit challenged the fourth lien, recorded on July 5, 2018. According to
Taylor, “Before Ehmcke retained Solomon Ward as counsel it was not
properly advised of the legal and statutory scheme regulating mechanic’s lien
law in California.” But after retaining the firm, Ehmcke promptly released
the fourth mechanic’s lien. As of August 28, 2018, there had been no
3 RGC averred that Ehmcke’s release of the first lien “was without legal
effect,” as it had already been released upon recording of the release bond.
4
mechanic’s liens recorded against the property, and Taylor asserted that
“Ehmcke does not intend to record any additional mechanic’s liens.”
RGC opposed the anti-SLAPP motion, arguing that the filing of
duplicative mechanic’s liens was neither protected petitioning activity nor
covered by the litigation privilege. As it does on appeal, RGC relied primarily
on A.F. Brown, supra, 137 Cal. App. 4th 1118, asserting that although the first
lien was likely privileged, subsequent identical liens were not. RGC claimed
that Ehmcke could not and did not file the second, third, and fourth
mechanic’s liens in good faith or while a lawsuit was under serious
consideration. Describing the statutory scheme as protecting both
contractors and owners, RGC maintained that the reasons for treating a first
mechanic’s lien as privileged did not extend to subsequent duplicative liens.
Because the mechanic’s lien laws (Civ. Code, § 8200 et seq.) make no
provision for repeat liens after an owner posts a release bond, RGC suggested
that permitting such duplicative liens would render statutory bond
protections afforded to owners under Civil Code section 8424 illusory.4
In conjunction with its opposition, RGC submitted a declaration by
attorney Gregory Markow authenticating the various recorded documents
attached as exhibits to the complaint. Markow also authenticated a demand
letter sent to Ehmcke’s president on July 16, 2018. In it, Markow told
Ehmcke that the fourth lien was untimely filed (§ 8414) and therefore
invalid. Warning that Ehmcke’s failure to release the lien might damage
RGC in excess of $2 million, the demand letter stated that RGC would pursue
its legal remedies if Ehmcke did not release the lien by July 20.
4 Further statutory references are to the Civil Code unless otherwise
specified.
5
Ehmcke responded that RGC had conflated the two prongs of the anti-
SLAPP inquiry by using the litigation privilege to define the scope of
protected activity. According to Ehmcke, anti-SLAPP protection was not
negated by its filing of a statutorily invalid mechanic’s lien. Nor could RGC
show its claims had minimal merit when the recording of even an invalid
mechanic’s lien was covered by the litigation privilege. Ehmcke contested
RGC’s assertion that it had acted in bad faith, submitting three new
declarations with its reply.5
Both parties filed evidentiary objections. RGC objected to the reply
evidence in its entirety. The court struck all three reply declarations, citing
the general rule that new evidence may not be submitted by an anti-SLAPP
movant on reply. (See Jay v. Mahaffey (2013) 218 Cal. App. 4th 1522, 1537
(Jay).)
At the hearing, the trial court gave its tentative ruling. Ehmcke had to
show that RGC’s action arose from its protected activity, and the filing of a
mechanic’s lien met that burden. The burden then shifted to RGC to
establish a probability of prevailing on the merits. RGC could not do so
because although what Ehmcke did was wrong, the filing of the fourth
mechanic’s lien remained protected by the litigation privilege (§ 47, subd. (b)).
Following lengthy argument by both sides, the court confirmed its tentative,
while expressing discomfort with the possibility that an owner like RGC
would have no judicial remedy when faced with duplicative liens. As the
court explained in its minute order, “The recording of a mechanic’s lien
satisfies Ehmcke’s prong I ‘arising out of’ anti-SLAPP burden and is an act
absolutely privileged pursuant to Civil Code § 47(b), thereby also precluding
5 To avoid repetition, the reply declarations are described in the
discussion.
6
RGC from satisfying its prong II ‘likelihood of success on the merits’ burden.”
Although the fourth lien may have been untimely, improper, or statutorily
unauthorized, the litigation privilege “is absolute and applies irrespective of
Ehmcke’s evil motives or the total lack of merit of the recorded lien.”
Having prevailed on its anti-SLAPP motion, Ehmcke sought an award
of attorney’s fees and costs. (Code Civ. Proc., § 425.16, subd. (c).) The court
granted the request, awarding Ehmcke $30,000 in attorney’s fees and $1,062
in costs.
DISCUSSION
RGC challenges the anti-SLAPP ruling, arguing the filing of repetitive
mechanic’s liens is protected by neither the anti-SLAPP statute nor the
litigation privilege. To the extent we are inclined to reverse the trial court’s
anti-SLAPP ruling, Ehmcke cross-appeals the evidentiary ruling striking all
three declarations submitted on reply. As we explain, the anti-SLAPP
motion was properly granted. The filing of a mechanic’s lien constitutes
protected activity, even if the lien was invalid or otherwise improper.
Although we disagree with A.F. Brown’s suggestion that an anti-SLAPP
moving party must establish that a mechanic’s lien must be filed in good faith
and in serious contemplation of litigation, those requirements too are met if
the erroneously excluded reply declarations submitted by Ehmcke are
considered. Next, RGC fails to demonstrate a likelihood of overcoming the
litigation privilege on the merits as to its sole remaining claim for slander of
7
title. The anti-SLAPP motion was properly granted, as was the subsequent
request for fees and costs.6
1. Legal Principles
This case addresses the applicability of statutory anti-SLAPP
protections to an improperly filed duplicative mechanic’s lien. To understand
the issues in the appeals and cross-appeal, we provide some background
concerning both statutory schemes.
a. Mechanic’s Liens
California’s constitution enshrines a right to record a mechanic’s lien:
“Mechanics, persons furnishing materials, artisans, and laborers of every
class, shall have a lien upon the property upon which they have bestowed
labor or furnished material for the value of such labor done and material
furnished; and the Legislature shall provide, by law, for the speedy and
efficient enforcement of such liens.” (Cal. Const., art. XIV, § 3.) A mechanic’s
lien gives a contractor, supplier, or laborer a security interest in real property
to secure the right to payment for work performed or materials delivered.
6 Ehmcke seeks judicial notice of its release of the fourth mechanic’s lien
recorded on July 20, 2018 (exhibit 1), the fourth lien it recorded on July 5,
2018 (exhibit 2), and pleadings connected to separate litigation among RGC,
the general contractor, and various subcontractors (RGC Gaslamp, LLC v.
Davis/Reed Construction, Inc., et al. (Super. Ct. San Diego County, 2018,
No. 37-2018-00036555-CU-BC-CTL) [Exhibits 3−5]). The request is denied.
Exhibits 1 and 2 were presented to the trial court and are in our record,
rendering judicial notice unnecessary. (See Davis v. Southern California
Edison Co. (2015) 236 Cal. App. 4th 619, 632, fn. 11.) Exhibits 3 through 5
were not before the trial court, and we follow the usual rule that appellate
courts consider only matters that were part of the record at the time the trial
court ruled. (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal. 4th
434, 444, fn. 3.) Judicial notice of exhibits 3 through 5 is moreover
unnecessary for our decision on the appeals and cross-appeal. (See San
Diegans for Open Government v. City of San Diego (2015) 242 Cal. App. 4th
416, 432, fn. 6.)
8
(Crosno Construction, Inc. v. Travelers Cas. & Surety Co. of Am. (2020) 47
Cal. App. 5th 940, 950 (Crosno).) Civil Code sections 8000 to 9566 set forth a
comprehensive statutory scheme to resolve payment disputes in public and
private construction projects. Mechanic’s liens, filed by Ehmcke here, are
available only in private works of improvement. (See Crosno, at p. 950.)
The statutory scheme reflects a balancing of interests between property
owners and claimants. The primary goal of the statutes is to protect a
laborer or material supplier who improves an owner’s property by assuring
payment for the value of work done. (See T.O. IX, LLC v. Superior Court
(2008) 165 Cal. App. 4th 140, 146 (T.O.).) At the same time, the statutory
scheme reflects a recognition that the recording of a mechanic’s lien
encumbers the affected real property. Thus, in providing security and a swift
remedy, mechanic’s lien laws protect both lien claimants and property
owners. (Ibid.)
As a subcontractor on a private construction project, Ehmcke had a
right to record a mechanic’s lien. (§ 8400.) As a first step, it had to send
preliminary notice to RGC, the project owner. (§§ 8410, 8402.) If RGC
believed Ehmcke had no right to claim a lien, it could “immediately file suit
to enjoin [Ehmcke] from asserting [its] lien.” (Connolly Development, Inc. v.
Superior Court (1976) 17 Cal. 3d 803, 822 (Connolly).) “By the use of a
temporary restraining order if necessary (see Code Civ. Proc., § 527), the
plaintiff could secure a hearing before the lien was imposed.” (Connolly,
at p. 822.) There is no indication here that RGC sought such injunctive relief.
The next step after preliminary notice is for a claimant to record a
claim of lien. Ehmcke had to record a lien within 90 days of completing its
work on the project, or within 30 days of RGC’s notice of completion,
9
whichever date arose sooner. (§ 8414.)7 A copy of the recorded mechanic’s
lien must be served on the owner. (§ 8416.) At this stage as well, after
recordation of a lien but before foreclosure proceedings commence, the owner
may seek declaratory or injunctive relief challenging the validity of the lien.
(Connolly, supra, 17 Cal.3d at pp. 822−823.)8 Errors in the lien’s written
demand generally do not invalidate the claim unless a court finds intent to
defraud, or that the property was later purchased by an innocent third party,
and the lien was so deficient it did not prompt further inquiry. (§ 8422.)
7 RGC alleged in its complaint that Ehmcke completed work on the
project in April 2017. RGC recorded its notice of completion in January 2018
and filed an amended notice of completion in early February. At the outer
end, any mechanic’s lien had to have been filed by March 8, 2018, or 30 days
after the amended notice of completion. Although the first and second liens
met this cutoff, the third and fourth liens did not—a point raised by RGC in
opposing the anti-SLAPP motion to claim “the third and fourth liens were not
authorized by law and therefore not covered by the litigation privilege.”
8 Writing for the majority in Connolly, Justice Tobriner explained that
although the recording of a mechanic’s lien or a stop notice effected a taking,
California’s statutory scheme placed adequate safeguards to comply with due
process. (Connolly, supra, 17 Cal.3d at pp. 827−828.) It was in this context
that Connolly indicates owners faced with an unjustified claim of lien could
seek a mandatory injunction or declaratory relief. (Id. at pp. 822−823.) Post-
Connolly, an additional procedural safeguard was created in Lambert v.
Superior Court (1991) 228 Cal. App. 3d 383 (Lambert) to address the context
after foreclosure proceedings commence. An owner may file a motion in the
pending foreclosure action itself to remove a mechanic’s lien, asking the court
to weigh its “probable validity.” (Id. at p. 388; see generally Cal Sierra
Construction, Inc. v. Comerica Bank (2012) 206 Cal. App. 4th 841, 849−850
[discussing Connolly and Lambert].) Pursuant to section 8490, subdivisions
(b) and (c), a court order or judgment releasing property from a claim of lien
or declaring that no lien exists “is equivalent to cancellation of the claim of
lien and its removal from the record”; the lien is released once a certified copy
of the court order or judgment is recorded.
10
Claimants enforce their mechanic’s liens through foreclosure, and must
commence a foreclosure suit within 90 days after recording the lien. (§ 8460,
subd. (a).) If a claimant does not timely commence foreclosure proceedings,
an owner may file a petition to release the property from the lien. (§ 8480,
subd. (a).) Likewise, if foreclosure proceedings are timely commenced, an
owner who challenges the validity of the lien may file a motion to remove a
mechanic’s lien in the pending foreclosure action itself. (Lambert, supra,
228 Cal.App.3d at pp. 386−387.)
The recording of a mechanic’s lien “may severely hamper [the owner’s]
ability to sell or encumber that property.” (Connolly, supra, 17 Cal.3d at
p. 812.) “If there were no provisions for releasing the lien, a claimant could
file a questionable claim of lien and either cloud the owner's title for the
years necessary to litigate the claim or force the owner to pay the claim even
though it is disputed. Therefore, when any contractor or subcontractor, the
property owner, or any other person who has an interest in the property
disputes the correctness or validity of any claim of lien, the property may be
released from the lien by recording a bond in the appropriate sum.” (9 Miller
& Starr, Cal. Real Estate (4th ed. 2020) § 32:66.) “The purpose of the release
bond procedure is to provide a means by which, before a final determination
of the lien claimant's rights and without prejudice to those rights, the
property may be freed of the lien, so that it may be sold, developed, or used as
security for a loan.” (Hutnick v. U.S. Fidelity & Guaranty Co. (1988)
47 Cal. 3d 456, 462 (Hutnick).)
Pursuant to section 8424, an owner faced with a mechanic’s lien may
record a release bond amounting to 125 percent of the lien claim. “On
recordation of the bond, the real property is released from the claim of lien
and from any action to enforce the lien.” (§ 8424, subd. (c).) Where a
11
claimant records multiple liens against a property, and the aggregate sum of
those lien claims exceed the contractor’s underlying claim, an owner only
needs to record a single release bond to cover the underlying claim. (T.O.,
supra, 165 Cal.App.4th at p. 148 [an owner could release nine duplicative
liens by requesting a court order requiring it to post a single release bond to
cover paving contractor’s $79,831 claim].)
Once a release bond is recorded, it becomes the lien claimant’s sole
recourse for collecting sums due. (9 Miller & Starr, Cal. Real Estate, supra,
§ 32:66.) “The recording of the release bond does not extinguish the lien;
rather, the bond is substituted for the land as the object to which the lien
attaches.” (Hutnick, supra, 47 Cal.3d at p. 463; see T.O., supra, 165
Cal.App.4th at p. 145.) A claimant must commence an action on the bond
within six months of receiving notice of the bond. (§ 8424, subd. (d).)
b. Anti-SLAPP Statute (Code Civ. Proc, § 425.16)
“Enacted by the Legislature in 1992, the anti-SLAPP statute is
designed to protect defendants from meritless lawsuits that might chill the
exercise of their rights to speak and petition on matters of public concern.”
(Wilson v. Cable News Network, Inc. (2019) 7 Cal. 5th 871, 883–884 (Wilson);
Code Civ. Proc., § 425.16, subd. (a).) To achieve this goal, the statute
authorizes defendants to file a special motion to strike claims “arising from
any act of that person in furtherance of the person’s right of petition or free
speech under the United States . . . or California Constitution in connection
with a public issue, unless the court determines that the plaintiff has
established that there is a probability that the plaintiff will prevail on the
claim.” (Code Civ. Proc., § 425.16, subd. (b)(1).) Through this summary-
judgment-like procedure, the anti-SLAPP statute aims to eliminate meritless
or retaliatory litigation at an early stage of proceedings. (Flatley v. Mauro
(2006) 39 Cal. 4th 299, 312 (Flatley).)
12
We use a two-step process to resolve an anti-SLAPP motion. In the
first step, the moving defendant bears the burden to establish that the
challenged claim arises from the defendant’s protected activity. (Wilson,
supra, 7 Cal.5th at p. 884; Baral v. Schnitt (2016) 1 Cal. 5th 376, 396 (Baral).)
If the defendant carries its threshold burden, the burden then shifts to the
plaintiff to demonstrate that its claims have minimal merit. (Wilson, at
p. 884.) “The court, without resolving evidentiary conflicts, must determine
whether the plaintiff’s showing, if accepted by the trier of fact, would be
sufficient to sustain a favorable judgment.” (Baral, at p. 396.) If a plaintiff
does not make that showing, a court will strike the claim. (Ibid.; Wilson, at
p. 884.) A defendant that prevails on an anti-SLAPP motion to strike is
generally entitled to recover attorney’s fees and costs. (Code Civ. Proc.,
§ 425.16, subd. (c)(1).)
2. Prong One: Does RGC’s Claim Arise Out of Protected Activity?
We review de novo whether RGC’s claims arise from protected activity.
(Wilson, supra, 7 Cal.5th at p. 884.) At this first step of the anti-SLAPP
inquiry, Ehmcke “must make two related showings.” (Id. at p. 887.)
“Comparing its statements and conduct against the statute, it must
demonstrate activity qualifying for protection. (See [Code Civ. Proc.,]
§ 425.16, subd. (e).) And comparing that protected activity against the
complaint, it must also demonstrate that the activity supplies one or more
elements of a plaintiff’s claims.” (Wilson, at p. 887.) Here, only the first step
is at issue—RGC does not dispute that its action arises out of the filing of the
fourth successive mechanic’s lien after proper bonding. Instead, it disputes
whether such activity qualifies for protection in the first instance.
Among other types of communications, the anti-SLAPP statute protects
“any written or oral statement or writing made before a legislative, executive,
13
or judicial proceeding” (Code Civ. Proc., § 425.16, subd. (e)(1)) or “in
connection with an issue under consideration or review” in such proceedings
(id., subd. (e)(2)). Statements made in preparation for litigation or in
anticipation of bringing an action fall within these categories. (Flatley,
supra, 39 Cal.4th at p. 322, fn. 11, citing Briggs v. Eden Council for Hope and
Opportunity (1999) 19 Cal. 4th 1106, 1115 (Briggs).) If a statement falls into
one of these categories, a defendant does not separately need to show that his
or her statement was made in connection with a “public issue.” (Briggs, at
p. 1123.)
a. As a prerequisite to a foreclosure action, recordation of the fourth
mechanic’s lien was protected despite its invalidity.
At the first prong, courts consider whether a defendant has made a
prima facie showing that activity underlying a plaintiff’s causes of action is
statutorily protected, “not whether it has shown its acts are ultimately
lawful.” (Wilson, supra, 7 Cal.5th at pp. 887−888.) Any claimed illegitimacy
of the defendant’s acts is an issue that must be raised and supported by the
plaintiff in discharging its burden on prong two. (Id. at p. 888, citing
Navellier v. Sletten (2002) 29 Cal. 4th 82, 94 (Navellier).) “To conclude
otherwise would effectively shift to the defendant a [merits] burden
statutorily assigned to the plaintiff.” (Wilson, at p. 888; quoting Code Civ.
Proc., § 425.16, subd. (b)(1).)
It is here that RGC’s argument falters. RGC asserts that although the
filing of a single mechanic’s lien is protected activity, the filing of duplicative
liens after proper bonding is not. But a defendant does not have to establish
that its conduct was ultimately lawful or constitutionally protected at prong
one. (Navellier, supra, 29 Cal.4th at p. 94; Wilson, supra, 7 Cal.5th at
pp. 887−888.) RGC’s quiet title, slander of title, and declaratory relief causes
of action all challenged Ehmcke’s filing of the fourth mechanic’s lien. The
14
filing of a mechanic’s lien is a necessary prerequisite to bringing a foreclosure
action. (§ 8460.) As such, it is a protected prelitigation statement
preparatory to filing a judicial proceeding. (Briggs, supra, 19 Cal.4th at
p. 1115 [anti-SLAPP statute protects prelitigation statements “ ‘preparatory
to or in anticipation of the bringing of an action or other official
proceeding’ ”].)
Birkner v. Lam (2007) 156 Cal. App. 4th 275 (Birkner) is instructive.
Tenants sued their former landlord for wrongful eviction, alleging the
landlord violated a San Francisco rent ordinance in serving and refusing to
rescind a notice to terminate their tenancy. (Id. at pp. 278−279.) The trial
court denied the landlord’s special motion to strike, concluding his conduct
was not in furtherance of a protected right to petition. (Id. at p. 280.) The
Court of Appeal disagreed, explaining that the landlord’s service of lease
termination was statutorily protected as a legal prerequisite for bringing an
unlawful detainer action. (Id. at pp. 281−282.) As such, both the service of
and refusal to rescind the termination notice constituted communications
preparatory to or in anticipation of legal action, protected under Code of Civil
Procedure section 425.16, subdivision (e). (Birkner, at pp. 283−284.)
RGC argues that the mechanic’s lien framework does not envision
duplicative mechanic’s liens. But the analysis does not change merely
because it alleges Ehmcke’s conduct was unlawful. For example, in Yu v.
Signet Bank/Virginia (2002) 103 Cal. App. 4th 298, debtors challenged a
bank’s practice of filing collection actions in distant judicial forums to prevent
debtors’ participation. This abusive practice was itself within the ambit of
prong one of the anti-SLAPP statute because it rested on the bank’s protected
act of filing a complaint. As the court explained, “[t]his conclusion does not
imply that the distant forum abuse alleged by the Yus was a valid exercise of
15
Banks’ constitutional rights. The lawfulness of the defendant's petitioning
activity is generally not at issue in the ‘arising from’ prong of the anti-SLAPP
inquiry; that question is ordinarily addressed in the second, ‘minimal merit’
prong of the inquiry relative to the plaintiff's probability of success on the
merits.” (Id. at p. 317, fn. omitted.)9
b. No additional showing of good faith or serious contemplation of
litigation was required where the prelitigation communication
involved the filing of a mechanic’s lien.
Urging a different result, RGC relies on A.F. Brown, supra, 137
Cal. App. 4th 1118, which considered whether a supplier’s issuance of stop
payment notices qualified as protected activity.10 Concluding it did not, the
court explained that the filing of a stop notice, like the filing of a mechanic’s
lien, “is protected under the anti-SLAPP statute only if done when a lawsuit
related to that act was contemplated in good faith and given serious
9 An exception applies to illegal conduct, which is not protected under
prong one. (Flatley, supra, 39 Cal.4th at p. 320.) Either a defense concession
of illegality or conclusive proof is required for this exception to apply. (City of
Montebello v. Vasquez (2016) 1 Cal. 5th 409, 424.) Moreover, this exception
requires criminal conduct, not a mere violation of court rules or statutes.
(G.R. v. Intelligator (2010) 185 Cal. App. 4th 606, 616; Mendoza v. ADP
Screening & Selection Services, Inc. (2010) 182 Cal. App. 4th 1644, 1654.)
Even if the filing of duplicative mechanic’s liens is statutorily unauthorized,
it is not criminal and does not fit the illegality exception.
10 In public works projects like that at issue in A.F. Brown, stop notices
and payment bonds afford the sole remedies. (Crosno, supra, 47 Cal.App.5th
at p. 950.) “A stop payment notice notifies a project owner . . . to withhold
funds due to the direct contractor sufficient to satisfy the amount of the stop
notice claim, plus reasonable litigation costs.” (Ibid.) Although this case
pertains to a private construction project, the statutes governing remedies in
public and private works cover the same subject matter and are construed
together. (Ibid.) In private works projects, a subcontractor’s filing of a stop
payment notice is a prerequisite for an action to enforce payment of the claim
stated in the stop payment notice. (§§ 8550−8560.)
16
consideration.” (A.F. Brown, at pp. 1128−1129.) The supplier’s declarations
made a preliminary showing that it filed the stop notices in good faith belief
of a legally viable claim. (Id. at p. 1128.) Nevertheless, the declarations
failed to demonstrate that the stop notices were filed when litigation was
under serious consideration. (Ibid.) At best, the supplier averred that it
would pursue all available legal remedies, and a threat of potential legal
action did not demonstrate that a lawsuit was under serious consideration.
(Ibid.)
We believe A.F. Brown was incorrectly decided. The discussion began
with the since-undermined premise that activity protected under the anti-
SLAPP statute is “coextensive” with that covered by the litigation privilege.
(A.F. Brown, supra, 137 Cal.App.4th at p. 1124; § 47, subd. (b).) The court
then imported into the anti-SLAPP prong one inquiry the same requirements
required for the litigation privilege to apply—i.e., that prelitigation
statements “relate[] to litigation that is contemplated in good faith and under
serious consideration.” (Action Apartment Assn., Inc. v. City of Santa Monica
(2007) 41 Cal. 4th 1232, 1251 (Action Apartment).) Several other courts have
charted a similar course. (See, e.g., Neville v. Chudacoff (2008) 160
Cal. App. 4th 1255, 1268 (Neville); Bel Air Internet, LLC v. Morales (2018) 20
Cal. App. 5th 924, 940−941 (Bel Air); Bailey v. Brewer (2011) 197 Cal. App. 4th
781, 789 (Bailey); People ex rel. Fire Ins. Exchange v. Anapol (2012) 211
Cal. App. 4th 809, 824 (Anapol); Digerati Holdings, LLC v. Young Money
Entertainment, LLC (2011) 194 Cal. App. 4th 873, 887.)
As the Supreme Court made clear just months after A.F. Brown was
decided, although courts may use the litigation privilege “as an aid” in
determining whether a given communication arises out of protected activity,
the litigation privilege and anti-SLAPP statute serve different purposes and
17
are not necessarily coextensive. (Flatley, supra, 39 Cal.4th at pp. 322−323,
325; see also Third Laguna Hills Mutual v. Joslin (2020) 49 Cal. App. 5th 366,
375 [“The scope of protection from claims under the anti-SLAPP statute is
not always the same as the scope of protection for communications under the
litigation privilege.”]; Garretson v. Post (2007) 156 Cal. App. 4th 1508, 1519
[challenging A.F. Brown’s characterization of the litigation privilege and anti-
SLAPP statute as “coextensive,” explaining that “the scope of the litigation
privilege and the anti-SLAPP statutes significantly differ”].)
Only a few cases endeavor to explain why the substantive restrictions
to the litigation privilege should apply in prong one to determine whether
prelitigation communications qualify for anti-SLAPP protection. Neville,
supra, 160 Cal. App. 4th 1255 drew parallels between the anti-SLAPP statute,
which protects communications made “in connection with an issue under
consideration or review” (Code Civ. Proc., § 425.16, subd. (e)(2)), and the
litigation privilege, which requires a statement be “ ‘reasonably relevant’ ” to
pending or contemplated litigation. (Neville, at p. 1266.) Based on this
parallel, the court inferred that to arise out of protected activity in prong one
of the anti-SLAPP inquiry, a prelitigation communication must concern the
subject of the dispute and be made in anticipation of litigation contemplated
in good faith and under serious consideration. (Id. at p. 1268.) Apart from
Neville, other cases have taken a policy approach, importing the good faith
and serious contemplation requirements to “ensure[] that prelitigation
communications are actually connected to litigation” and further the anti-
SLAPP objective “of early dismissal of meritless lawsuits that arise from
protected petitioning activity.” (Bel Air, supra, 20 Cal.App.5th at p. 941; see
Anapol, supra, 211 Cal.App.4th at p. 824 [requiring that litigation be
18
seriously contemplated “guarantees that hollow threats of litigation are not
protected”].)
We sense a potential tension between this line of analysis and the
Supreme Court’s repeated warnings that prong one requires only a prima
facie showing of protected activity, not a showing that the defendant’s acts
were ultimately lawful or constitutionally protected. (Navellier, supra, 29
Cal.4th at p. 94; Wilson, supra, 7 Cal.5th at p. 888.) Thus, for example, the
anti-SLAPP statute does not “require a defendant to disprove allegations of
illicit motive” at this initial stage. (Wilson, at p. 887.) Requiring a moving
defendant to affirmatively show that its statements were made in good faith
while litigation was seriously contemplated would seem, at least in certain
contexts, to import a merits inquiry as to whether the statements ultimately
arose from protected petitioning activity. On the other hand, such criteria
may be helpful in evaluating prelitigation statements that do not intrinsically
anticipate litigation. (See, e.g., Rohde v. Wolf (2007) 154 Cal. App. 4th 28,
36‒37 [concluding voicemail messages were protected activity].)
We need not resolve this potential tension here. As Anapol explains,
defendants impliedly satisfy the good faith and serious contemplation of
litigation showing where “it is necessary to serve or record a document prior
to the commencement of litigation.” (Anapol, supra, 211 Cal.App.4th at
p. 824.) As examples, the Anapol court cited Birkner, supra, 156 Cal. App. 4th
275, 282, where service of a notice of termination was a prerequisite for an
unlawful detainer action; Feldman v. 1100 Park Lane Associates (2008) 160
Cal. App. 4th 1467, 1480 (Feldman), where service of a three-day notice to quit
was a “legally required prerequisite to the filing of the unlawful detainer
action”; and Salma v. Capon (2008) 161 Cal. App. 4th 1275, 1285, where
recording a notice of rescission was a necessary prerequisite for a rescission
19
action. Each of those cases found the moving party’s prong one burden met
by simple evidence of filing without any additional inquiry into the propriety
of the filing. Indeed, Birkner and Feldman further clarified that a movant is
not required at the first stage to demonstrate that its conduct was protected
by the litigation privilege. (Birkner, at p. 284 [whether landlord’s conduct
was protected by the litigation privilege was “irrelevant” to prong one
analysis]; Feldman, at p. 1480, fn. 5 [“Park Lane cross-defendants were not
required at the first stage to demonstrate that serving the notice to quit was
protected by the litigation privilege.”].)
Distinguishing each of these cases on the facts before it, the Anapol
court reached a different result because the submission of an insurance claim
was a necessary prerequisite for either litigation or contractual performance.
(Anapol, supra, 211 Cal.App.4th at p. 827.) As such, it could not be
determined “by the mere fact of submission of a claim,” that a claim had been
submitted in serious contemplation of litigation. (Ibid.) Similarly Bel Air
reasoned, “when a cause of action arises from conduct that is a ‘necessary
prerequisite’ to litigation, but will lead to litigation only if negotiations fail or
contractual commitments are not honored, future litigation is merely
theoretical rather than anticipated and the conduct is therefore not protected
prelitigation activity.” (Bel Air, supra, 20 Cal.App.5th at p. 941.) Thus, both
Anapol and Bel Air suggest that where litigation is merely a possible next
step, prelitigation statements do not so easily qualify for anti-SLAPP
protection.
Our case is similar to Birkner, Salma, and Feldman and readily
distinguishable from Anapol and Bel Air. Recording a mechanic’s lien is a
necessary prerequisite to a foreclosure action. It is not a prerequisite for
contractual performance or anything else. As such, it is protected as conduct
20
preparatory to or in anticipation of litigation. (Briggs, supra, 19 Cal.4th at
p. 1115.) No additional showing was required for Ehmcke to satisfy its
moving burden. (Birkner, supra, 156 Cal.App.4th at p. 284 [first prong of “is
satisfied so long as the record does not show as a matter of law that
[defendant’s] conduct had ‘no “connection or logical relation” to an action and
[was] not made “to achieve the objects” of any litigation’ ”].) Questions as to
Ehmcke’s subjective intent in filing duplicative liens are more appropriately
addressed in the second prong, where RGC must establish the minimal merit
of its claims.11
In our view, A.F. Brown errs by requiring more. The electrical
subcontractor (A.F. Brown) sued its material supplier for libel and unfair
business practices based on the supplier’s issuance of stop notices to a school
district where work was performed. (A.F. Brown, supra, 137 Cal.App.4th at
p. 1125.) In declarations filed with its moving papers, the supplier suggested
that the stop notices and collection efforts were aimed at collecting amounts
due. Although the A.F. Brown court deemed this proffer insufficient to show
that “the acts were taken when litigation was under serious consideration”
(id. at p. 1128), such a showing was not required because a stop payment
notice (like a mechanic’s lien) is a necessary prerequisite for bringing an
11 We likewise distinguish Bailey, which concluded that threats to litigate
are not protected where the litigation being threatened is barred under res
judicata. (Bailey, supra, 197 Cal.App.4th at p. 793 [explaining that the right
to petition “is not implicated where a party has already exercised that right,
has lost on the merits, and is seeking to relitigate the same action”].) That
the statutes afford no means to file a mechanic’s lien after proper bonding
merely provides a defense to a foreclosure action and does not preclude the
foreclosure action itself. (See, e.g., DKN Holdings LLC v. Faerber (2015) 61
Cal. 4th 813, 824 [defining claim preclusion and issue preclusion].) To
construe Bailey in the expansive manner suggested by RGC would import a
merits inquiry into prong one of the anti-SLAPP analysis.
21
enforcement action. (See § 8550.) An inquiry into the supplier’s motives for
filing the stop notices wades into a merits inquiry appropriately reserved for
prong two.12
c. Assuming an additional showing was required, Ehmcke’s reply
declarations established that the fourth lien was filed in good
faith while seriously contemplating litigation.
Even if A.F. Brown were decided correctly, materials submitted by
Ehmcke in conjunction with its reply suggest it filed each mechanic’s lien in
good faith while seriously contemplating litigation. The trial court struck the
reply declarations in their entirety, citing Jay, supra, 218 Cal. App. 4th 1522,
1537 for the proposition that new evidence is generally not permitted on an
anti-SLAPP reply. Although we review that decision for abuse of discretion
(id. at p. 1536), Jay addresses the situation where the moving party attempts
to introduce “entirely new evidence.” (Id. at p. 1537.) Indeed, it specifically
recognizes an exception to the general rule where new evidence offered on
reply “was supplemental to evidence submitted in the moving papers [and]
not brand new.” (Ibid.; see also id. at p. 1538 [permitting new evidence on
reply to “fill[] gaps in the evidence created by the [plaintiff’s] opposition”].)
That is the scenario here, and striking the reply declarations amounted to an
abuse of discretion.
RGC alleged in its complaint that Ehmcke filed duplicative liens “for
the purpose of adversely affecting title” and “with actual malice.” Ehmcke
responded to these allegations in its moving papers, submitting a declaration
12 The A.F. Brown court may have reached this result because the
supplier relied on the litigation privilege to both meet its moving burden and
defeat any showing of minimal merit. (A.F. Brown, supra, 137 Cal.App.4th at
p. 1126.) A.F. Brown was also decided five months before Flatley, supra, 39
Cal. 4th 299, which clarified that the litigation privilege and protected anti-
SLAPP activity are not necessarily coextensive. (Id. at pp. 322−323, 325.)
22
by Vice President Billy Taylor stating that money was due for work
performed, leading Ehmcke to file successive liens because it “was not
properly advised”; after retaining counsel, Ehmcke released all the liens, and
it intended to file no more. Summarizing these factual allegations, Ehmcke
characterized the fourth lien as “improper” in its moving brief.
Relying on A.F. Brown, RGC countered in its opposition brief, “If, as
Ehmcke has declared, it was not properly advised regarding the mechanic’s
lien framework, then Ehmcke could not have had a lawsuit under ‘serious
consideration.’ ” It pointed to the fact that Ehmcke never filed suit to
foreclose on the second, third, or fourth liens to suggest it was never seriously
considering a lawsuit. As RGC went on to state, “Ehmcke’s bad faith desire
to cloud RGC’s title is further evidenced by its failure to record a release of
the fourth and last of the liens until 6 weeks after this lawsuit was filed, and
7 weeks after it had received a demand from RGC to release the lien.” In
support of the latter claim, RGC submitted a copy of its July 16 demand
letter calling the fourth lien untimely and requesting its prompt release by
July 20, 2018.
It is in this context that Taylor submitted a declaration on reply
clarifying why Ehmcke filed successive liens. This evidence did not
contradict his earlier statement of being misadvised; it instead offered
texture to rebut the claim that successive liens were filed in a bad faith desire
to cloud RGC’s title:
“All four mechanic’s liens were recorded while Ehmcke was
seriously considering litigation. In fact, Ehmcke typically
does not record mechanic's liens, and does so when there is
a problem on the job. Here, Ehmcke recorded the
mechanic's liens hoping, perhaps naively, that it could
avoid the time and expense of litigation to get paid for its
work on the Property through the recordings. Eventually,
Ehmcke was forced to sue to get paid.”
23
In addition, Ehmcke submitted declarations from attorneys Richard
McCarthy and Thomas Landers, who described what transpired after
Ehmcke received the demand letter. These filings suggested that Ehmcke
released the fourth lien on July 20 as RGC had requested, a day after this
lawsuit was filed. It filed an amended release a month later to correct a
minor clerical error in identifying the fourth lien.13
We believe these reply declarations were necessitated by questionable
argument in RGC’s opposition brief that was not reasonably anticipated at
the time Ehmcke filed its moving papers. We easily distinguish this case
from Jay, where the moving defendants waited until their reply to proffer any
evidence to meet their moving burden, failing even to address contentions
made in the complaint. (Jay, supra, 218 Cal.App.4th at p. 1537.) Although
the complaint alleged malice and an intent to cloud title, Taylor’s moving
brief responded to these allegations by suggesting Ehmcke was simply
misadvised. When RGC used this statement to suggest no lawsuit was ever
contemplated, Ehmcke was entitled to clarify any ambiguity. A misleading
characterization of when Ehmcke released the fourth lien likewise invited the
attorney declarations on reply.
Given the nature of RGC’s arguments, new evidence should have been
permitted on an anti-SLAPP reply. (See Jay, supra, 218 Cal.App.4th at
pp. 1537−1538.) It is true that RGC would have been entitled to respond to
any new evidence that was received. (Id. at p. 1538.) But any response in
13 The reply declarations further suggested that Ehmcke’s counsel had
asked RGC to voluntarily dismiss its action at least eight times after release
of the fourth lien, highlighting the deadline to file an anti-SLAPP motion.
RGC’s counsel did not agree to drop the suit until the evening of the motion
deadline. By that point, Ehmcke asserted it had expended substantial
attorney’s fees necessitated by RGC’s delayed response and opted to proceed
with the anti-SLAPP motion.
24
this context could not defeat the motion because it would merely create a
disputed factual issue and not bear on whether Ehmcke made a prima facie
showing of protected activity on prong one. (See, e.g., Feldman, supra, 160
Cal.App.4th at p. 1480, fn. 5 [“The first step of the anti-SLAPP analysis is
satisfied, provided that the record does not show as a matter of law that
[defendant’s] conduct had ‘no “connection or logical relation” to an action and
[was] not made “to achieve the objects” of any litigation.’ ”].)
In short, we question the rationale of A.F. Brown in light of subsequent
developments in anti-SLAPP case law, but even if it were correct, the
evidence submitted with Ehmcke’s moving and reply papers was sufficient to
meet its burden to show that RGC’s lawsuit arose out of protected petitioning
activity. All four liens were filed when Ehmcke was seriously contemplating
litigation, and Ehmcke ultimately did sue to recoup amounts due. Ehmcke
did not typically record mechanic’s liens and did so only when there were
problems. Its goal all along was “to get paid for its work on the Property
through the recordings,” which is the purpose of the mechanics lien
procedure. The attorney declarations likewise demonstrated that Ehmcke
released the fourth lien immediately after retaining counsel, the same day
requested in the demand letter, and a mere day after the complaint was filed.
These actions suggest that although Ehmcke was mistaken about its legal
rights at the outset, it recorded its fourth successive mechanic’s lien in good
faith, seriously contemplating litigation. This prima facie showing suffices to
meet the burden on prong one.
25
3. Prong Two: Did RGC Offer Sufficient Evidence to Establish the Merit
of its Claim?
The sole cause of action that remained at issue when the anti-SLAPP
motion was filed was for slander of title.14 Because Ehmcke had already
released the fourth lien and indicated that no additional liens would be filed,
RGC’s cause of action for quiet title was moot; there was no longer an “active
controversy” for declaratory relief; and injunctive relief was unnecessary.
(See Colyear v. Rolling Hills Community Assn. of Rancho Palos Verdes (2017)
9 Cal. App. 5th 119, 136 [quiet title claim was mooted by withdrawal of
homeowners’ association claim]; Code Civ. Proc., § 1060 [declaratory relief
requires an “actual controversy”]; Selby Realty Co. v. City of San
Buenaventura (1973) 10 Cal. 3d 110, 117 [“ ‘actual controversy’ . . . is one
which admits of definitive and conclusive relief by judgment . . . , as
distinguished from an advisory opinion upon a particular or hypothetical
state of facts”]; Donald v. Cafe Royale, Inc. (1990) 218 Cal. App. 3d 168, 184
[“Injunctive relief will be denied where, at the time of the order or judgment,
no reasonable probability exists of the recurrence of the past acts.”].) As a
general rule, “[t]he voluntary cessation of allegedly wrongful conduct destroys
the justiciability of a controversy and renders an action moot unless there is a
reasonable expectation the allegedly wrongful conduct will be repeated.”
(Center for Local Government Accountability v. City of San Diego (2016)
247 Cal. App. 4th 1146, 1157.) RGC did not establish any reasonable
expectation of recurrence here.
14 “The elements of a cause of action for slander of title are ‘(1) a
publication, (2) which is without privilege or justification, (3) which is false,
and (4) which causes direct and immediate pecuniary loss.’ ” (Alpha &
Omega Development, LP v. Whilcock Contracting, Inc. (2011) 200 Cal. App. 4th
656, 664 (Alpha & Omega).)
26
RGC admits its quiet title action was moot once Ehmcke released the
fourth lien but nevertheless maintains it was improper to dismiss it under
the anti-SLAPP statute because the action was not moot when filed. It
likewise argues without support that declaratory and injunctive relief was
the only way to prevent Ehmcke from filing of successive liens. These are
entirely new arguments. When Ehmcke argued mootness in its moving
papers below, RGC only responded that its cause of action for slander of title
had minimal merit. “It is axiomatic that arguments not asserted below are
waived and will not be considered for the first time on appeal.” (Ochoa v.
Pacific Gas & Electric Co. (1998) 61 Cal. App. 4th 1480, 1488, fn. 3.)15
That leaves RGC’s slander of title claim. As the responding party,
RGC had to make a prima facie showing that this cause of action had
minimal merit. (Wilson, supra, 7 Cal.5th at p. 884.) Its “second-step burden
is a limited one”—a trial court neither weighs the evidence nor resolves
evidentiary conflicts. (Id. at p. 891.) To overcome any asserted defenses,
RGC had to show that they were inapplicable as a matter of law or make a
prima facie showing of facts that, if accepted, would negate such defenses.
(Birkner, supra, 156 Cal.App.4th at p. 285.) The litigation privilege is one
such defense that may be considered at prong two. (Ibid.; Feldman, supra,
160 Cal.App.4th at p. 1485.) The trial court found Ehmcke’s filing of an
invalid mechanic’s lien was absolutely privileged such that RGC could not
15 Nor does RGC support its argument with citation to authority. (Rule
8.204(a)(1)(B).) Although an argument could be made based on the policy
articulated in Code of Civil Procedure section 425.16, subdivision (a) that the
anti-SLAPP statute is concerned only with lawsuits “brought” to chill the
valid exercise of constitutional rights, not for continued prosecution of moot
actions, such an argument is neither made or implied by RGC here, and we
do not reach it.
27
show its slander of title claim had minimal merit. We reach the same
conclusion.
Codified at section 47, subdivision (b), the litigation privilege applies to
communications made as part of a “judicial proceeding.” Its principal
purpose is to afford litigants and witnesses “utmost freedom of access to the
courts without fear of being harassed subsequently by derivative tort
actions.” (Silberg v. Anderson (1990) 50 Cal. 3d 205, 213.) The privilege is
absolute, providing a defense to all torts except malicious prosecution and
applying “to all publications, irrespective of their maliciousness.” (Id. at
pp. 212, 215−216.) In general, the privilege applies to “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 [has] some connection or logical relation to the action.” (Id. at
p. 212.) “The privilege ‘is not limited to statements made during a trial or
other proceedings, but may extend to steps taken prior thereto, or
afterwards.’ ” (Action Apartment, supra, 41 Cal.4th at p. 1241; quoting
Rusheen v. Cohen (2006) 37 Cal. 4th 1048, 1057.)
RGC could not show that the litigation privilege was categorically
inapplicable. The privilege extends to all manner of tort actions except
malicious prosecution, and our court has previously applied the privilege to
bar an owner’s analogous slander-of-title claim following a subcontractor’s
unsuccessful attempt to foreclose on a mechanic’s lien. (Alpha & Omega,
supra, 200 Cal.App.4th at p. 665 [finding the filing of a notice of lis pendens
protected by the litigation privilege].) In reaching this result, we rejected the
owner’s argument that the notice of lis pendens was not subject to the
litigation privilege because the underlying real property claim lacked
evidentiary merit. (Id. at p. 667.)
28
As explained more than a half-century ago by Justice Traynor, the
privilege applies to any publication that is either required or permitted by
law in the course of a judicial proceeding to achieve that party’s litigation
objective. (Albertson v. Raboff (1956) 46 Cal. 2d 375, 380−381.) “If the
publication has a reasonable relation to the action and is permitted by law,
the absolute privilege attaches.” (Ibid., partially abrogated on other grounds
by § 47, subd. (b)(4).)
Frank Pisano & Associates v. Taggart (1972) 29 Cal. App. 3d 1 (Frank
Pisano) is closely on point. Engineering contractors recorded a mechanic’s
lien and filed an action for foreclosure and breach of contract. (Id. at p. 10.)
The property owners filed a cross-complaint for damages, alleging
disparagement of title from the recording of an invalid lien. (Ibid.) When the
owners appealed the denial of relief on their cross-complaint, the contractors
argued that pursuant to the litigation privilege, “no liability can be
predicated upon its filing, even if it was not a valid claim of lien.” (Id. at
p. 13.) The court agreed. The disparagement of title action was based on the
filing of a mechanic’s lien, conduct that was absolutely privileged under
section 47, subdivision (b) because it “was permitted by law and it had a
reasonable relation to an action to foreclose the lien.” (Frank Pisano, at
p. 25.) “Any deficiencies in the lien procedure were a matter of defense to the
action and did not militate against the privilege.” (Ibid.)
RGC suggests Frank Pisano applies solely to the privileged filing of an
initial mechanic’s lien. But as the trial court explained, the case stands for
the proposition that “if it’s a privileged act to file a mechanic’s lien, that
privilege is not lost if it turns out that the mechanic’s lien was not something
that was ultimately valid or appropriate to do.” We agree with the trial court
that any deficiency in the lien “goes to the matter of defense to the
29
[foreclosure] action” but does not defeat the privilege. More generally, a
party cannot avoid the litigation privilege “simply by asserting that litigation
to which the statement is related is without merit, and therefore the
proponent of the litigation could not in good faith have believed it had a
legally viable claim. To adopt such an interpretation would virtually
eradicate the litigation privilege for all but the most clearly meritorious
claim.” (Feldman, supra, 160 Cal.App.4th at p. 1489.) Accordingly, RGC did
not show that the litigation privilege was inapplicable as a matter of law to
its slander-of-title claim.
Nor did RGC make a prima facie showing of facts that, if accepted,
would rebut the litigation privilege. Because the policy of promoting judicial
access is not advanced by shielding attempts to profit from hollow threats,
prelitigation communications are protected under the litigation privilege only
if they relate to litigation “contemplated in good faith and under serious
consideration.” (Action Apartment, supra, 41 Cal.4th at p. 1251.) To
overcome the litigation privilege on an anti-SLAPP motion, a responding
party may establish facts that would, if accepted, negate these prerequisites.
For example, in Olivares v. Pineda (2019) 40 Cal. App. 5th 343 (Olivares),
tenants suing their landlord’s attorneys met their prong-two burden by
showing that the challenged attorney communication did not precede an
unlawful detainer action and was instead followed by repeated requests to
settle short of litigation. (Id. at pp. 357−358.) A similar result was reached
in Dickinson v. Cosby (2017) 17 Cal. App. 5th 655, where attorneys sent a
demand letter to media outlets threatening litigation if they aired rape
allegations against their client. The evidence supported a prima facie
inference that the demand letter was intended as a bluff to silence the media,
and not sent in serious contemplation of litigation—the letter was sent only
30
to outlets that had not run the story, and the client had not sued any of the
multiple media outlets that already ran the story. (Id. at p. 684.)
RGC maintains that the filing of duplicative mechanic’s liens following
proper bonding, without statutory basis, demonstrates that Ehmcke did not
file the fourth lien in good faith and seriously contemplating litigation. It
relies on Vice President Taylor’s opening declaration admitting that Ehmcke
recorded the four liens because “it was not properly advised of the legal and
statutory scheme regarding mechanic’s lien law in California.” But admitting
to being misadvised does not imply a lack of good faith or serious
contemplation of litigation; indeed, the fact that Ehmcke modified its
behavior immediately after obtaining new counsel implies just the opposite.
While no foreclosure action was initiated in the three weeks between the
filing of the fourth successive lien and this action, there is no evidence
comparable to that in Olivares to suggest that Ehmcke filed the fourth lien
merely as a negotiating tactic or hollow threat. As established in Frank
Pisano, the recording of a mechanic’s lien is absolutely privileged, and does
not give rise to a slander of title action even if the claim of lien is invalid.
(Frank Pisano, supra, 29 Cal.App.3d at p. 25.) Because RGC failed to proffer
facts suggesting a deviation from this rule, the trial court did not err in
concluding the slander of title action was barred by the litigation privilege.16
To be sure, not every cause of action based on the recordation of an
invalid mechanic’s lien will be barred by the litigation privilege. Courts have
long recognized that upon service of preliminary notice or upon later
recordation of a mechanic’s lien, a project owner may seek declaratory and
injunctive relief challenging the validity of the lien. (Connolly, supra, 17
16 In light of our conclusion, we do not reach Ehmcke’s alternative
arguments that RGC failed to show a false publication or damages to
establish the minimal merit of its slander-of-title claim.
31
Cal.3d at pp. 822−823; see also 9 Miller & Starr, Cal. Real Estate, supra,
§ 32:37 [“An owner could probably also seek to remove any invalid lien by
filing an action to quiet title.”].) If Ehmcke had filed several duplicative liens
before the filing of a release bond, RGC could seek a court order requiring it
to post a single bond to release all duplicative liens. (T.O., supra, 165
Cal.App.4th at p. 148.) Or, if Ehmcke had tried to foreclose on an invalid
lien, RGC could have filed a motion in that action to release the lien.
(Lambert, supra, 228 Cal.App.3d at pp. 386−387; see Howard S. Wright
Construction Co. v. Superior Court (2003) 106 Cal. App. 4th 314, 318 [“A
motion to remove a mechanic's lien is recognized as a device that allows the
property owner to obtain speedy relief from an unjustified lien or a lien of an
unjustified amount without waiting for trial on the action to foreclose the
lien.”].) We have found no authority to suggest that these types of actions
would be barred by the litigation privilege, which generally precludes
derivative tort liability. (Feldman, supra, 160 Cal.App.4th at p. 1486.)
Affirming the anti-SLAPP ruling here does not, as RGC suggests,
render statutory bonding protections “illusory,” “unenforceable,” or
“meaningless.” Nor would it “nullify the statutory scheme.” There are
numerous avenues for a project owner burdened by invalid duplicative liens
to seek judicial relief. Indeed, Connolly expressly permits a project owner to
seek declaratory or injunctive relief to invalidate duplicative postbonding
liens. We in no way suggest that quiet title and declaratory relief actions are
in all instances barred. Rather, those claims were rendered moot here after
Ehmcke released the fourth mechanic’s lien. When Ehmcke filed its anti-
SLAPP motion, an actual controversy remained solely as to the slander of
title cause of action. Because this tort claim was barred by the litigation
32
privilege, RGC could not establish the minimal merit of its action at prong
two of the anti-SLAPP inquiry.
4. Fee and Cost Award
A defendant that prevails on an anti-SLAPP motion to strike is
generally entitled to recover attorney’s fees and costs. (Code Civ. Proc.,
§ 425.16, subd. (c)(1).) RGC asserts that it “does not challenge the amount of
fees and costs awarded, only the underlying determination that Ehmcke was
the prevailing party on the anti-SLAPP motion entitled to an award of fees
and costs.” Because we reject the underlying premise, we affirm the fee and
cost award.
DISPOSITION
The orders granting the anti-SLAPP motion and awarding Ehmcke fees
and costs are affirmed. Ehmcke is entitled to an award of appellate costs, as
well as attorney’s fees as the prevailing party in an anti-SLAPP appeal.
(Dowling v. Zimmerman (2001) 85 Cal. App. 4th 1400, 1426.)
DATO, J.
WE CONCUR:
HUFFMAN, Acting P. J.
HALLER, J.
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