De La Cerda v. Effective Funding

Filed 10/11/06 De La Cerda v. Effective Funding CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from an order of the Superior Court of San Diego County, Jay M. Bloom, Judge. Affirmed.

On defendant's appeal from an order denying a motion to strike under Code of Civil Procedure^[1] section 425.16 (the anti-SLAPP statute), we affirm. Defendant is the assignee of a money judgment. By way of a declaratory relief action plaintiff is attempting to set aside the judgment defendant obtained from other co-defendants and

prevent further execution on the judgment. Such a responsive action by plaintiff does not "arise from" protected conduct within the meaning of the anti-SLAPP statute. Moreover as the trial court found, defendant's acquisition of the judgment and its efforts to enforce it are not activity protected by section 425.16. Hence the claims against defendant are not subject to a motion to strike.

FACTUAL AND PROCEDURAL BACKGROUND

A. 1987-1995

Between 1987 and 1994 plaintiff Zarita De La Cerda had a romantic relationship with defendant Carlos Valenzuela. In late 1993 and early 1994 Carlos Valenzuela's mother, Guadalupe Valenzuela, gave the couple a total of $21,700.

In the summer of 1994 De La Cerda and Carlos Valenzuela broke up. Shortly thereafter De La Cerda met another man, became engaged to him and eventually married him. After leaving Carlos Valenzuela, De La Cerda moved to Florida, San Francisco and eventually back to San Diego.

In August 1994 Guadalupe Valenzuela filed a complaint against De La Cerda, alleging that De La Cerda had unlawfully retained the $21,700. Carlos Valenzuela executed a declaration which alleged that he had repeatedly tried to serve De La Cerda and he did not know De La Cerda's whereabouts. On the basis of her son's declaration, Guadalupe Valenzuela obtained an order permitting her to serve De La Cerda by publication. In July 1995 Guadalupe Valenzuela obtained a default judgment against De La Cerda.

B. 2004-2005

In 2004 Guadalupe Valenzuela assigned her judgment to defendant and appellant Effective Funding, Inc. (Effective Funding). Effective Funding obtained a writ of execution and in January 2005 levied on De La Cerda's bank account.

In March 2005 De La Cerda filed a complaint against the Valenzuelas and Effective Funding. She alleged the judgment Guadalupe Valenzuela had obtained was invalid because at the time service was obtained by publication the Valenzuelas in fact knew where she was located. As against Effective Funding, De La Cerda sought a judgment setting aside the judgment Effective Funding had obtained from Guadalupe Valenzuela and returning the funds Effective Funding had obtained by way of its levy on De La Cerda's bank account.

Effective Funding moved to strike De La Cerda' s complaint. Effective Funding argued that its collection efforts were petitioning activity within the meaning of section 425.16 and that De La Cerda's complaint had no merit. The Valenzuelas did not respond to De La Cerda's complaint and De La Cerda took their defaults.

The trial court denied Effective Funding's motion. The trial court found section 425.16 did not apply to an assignee's attempts to enforce a money judgment and that in any event De La Cerda's complaint appeared to have the minimal level of merit required to withstand a motion to strike.

Effective Funding filed a timely notice of appeal. DISCUSSION

I

"Section 425.16 provides, inter alia, that 'A cause of action against a person 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 shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.' (§ 425.16, subd. (b)(1).) 'As used in this section, "act in furtherance of a person's right of petition or free speech under the United States or California Constitution in connection with a public issue' includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law . . . .' (Id., subd. (e).) . . .

"Section 425.16 posits . . . a two-step process for determining whether an action is a SLAPP. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. (§ 425.16, subd. (b)(1).) 'A defendant meets this burden by demonstrating that the act underlying the plaintiff's cause fits one of the categories spelled out in section 425.16, subdivision (e)' [citation]. If the court finds that such a showing has been made, it must then determine whether the plaintiff has demonstrated a probability of prevailing on the claim. (§ 425.16, subd. (b)(1); see generally Equilon [Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67 (Equilon)].)

"As we previously have observed, in order to establish the requisite probability of prevailing (§ 425.16, subd. (b)(1)), the plaintiff need only have '"stated and substantiated a legally sufficient claim."' [Citations.] 'Put another way, the plaintiff 'must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited."' [Citations.]

"Only a cause of action that satisfies both prongs of the anti-SLAPP statute (i.e., that arises from protected speech or petitioning and lacks even minimal merit) is a SLAPP, subject to being stricken under the statute." (Navellier v. Sletten (2002) 29 Cal.4th 82, 87-89.)

"We independently review a trial court's ruling on a SLAPP motion under a de novo standard of review. [Citation.] Moreover, whether section 425.16 applies to a particular complaint, presents a legal question subject to the same de novo review standard on appeal. [Citation.]" (Blackburn v. Brady (2004) 116 Cal.App.4th 670, 676.)

II

The first question we consider here is whether De La Cerda's causes of action against Effective Funding "arise out of an act" by Effective Funding.

"[T]he mere fact an action was filed after protected activity took place does not mean it arose from that activity. The anti-SLAPP statute cannot be read to mean that 'any claim asserted in an action which arguably was filed in retaliation for the exercise of speech or petition rights falls under section 425.16, whether or not the claim is based on conduct in exercise of those rights.' [Citations.] . . .

"To construe 'arising from' in section 425.16, subdivision (b)(1) as meaning 'in response to,' . . . would in effect render all cross-actions potential SLAPP's. We presume the Legislature did not intend such an absurd result. [Citation.] Absurdity aside, to suggest that all cross-actions arise from the causes of action in response to which they are pled would contravene the statutory scheme governing cross-complaints. [Citations.] The Legislature expressly has provided that a cross-action may 'arise[] out of the same transaction, occurrence, or series of transactions or occurrences as the cause of action which the plaintiff alleges' [citations], rather than out of that cause of action itself." (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 76-77.)

Moreover, "[j]ust as a cross-complaint often 'arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause of action which the plaintiff alleges' [citation], so may a responsive but independent lawsuit arise from the same transaction or occurrence alleged in a preceding lawsuit, without necessarily arising from that earlier lawsuit itself. [Citation.]" (City of Cotati v. Cashman, supra, 29 Cal.4th at pp. 77-78.)

"[A] claim filed in response to, or in retaliation for, threatened or actual litigation is not subject to the anti-SLAPP statute simply because it may be viewed as an oppressive litigation tactic. [Citation.] That a cause of action may have been triggered by protected activity does not entail that it is one arising from such. . . ."

"In short, the statutory phrase, 'cause of action . . . arising from' means simply that the defendant's act underlying the plaintiff's cause of action must itself have been an act in furtherance of the right of petition or free speech. [Citation.] In the anti-SLAPP context, the critical point is whether the plaintiff's cause of action itself was based on an act in furtherance of the defendant's right to petition or free speech. [Citations.] 'A defendant meets this burden by demonstrating that the act underlying the plaintiff's cause fits one of the categories spelled out in section 425.16, subdivision (e) . . . .'" (City of Cotati v. Cashman, supra, 29 Cal.4th at p. 78.)

In City of Cotati v. Cashman a municipality brought a declaratory relief action in which it attempted to establish its mobile home rent stabilization ordinances was constitutional. The ordinance had been challenged in a pending federal court action and the municipality conceded its state declaratory relief action was an attempt to have the constitutional question resolved in a more favorable forum and to convince the federal court to abstain. The court found the declaratory relief action, although an obvious attempt to undermine the defendant's federal litigation, was not subject to an anti-SLAPP motion. "[T]he actual controversy giving rise to both actions (the fundamental basis of each request for declaratory relief) was the same underlying controversy respecting City's ordinance. City's cause of action therefore was not one arising from Owners' federal suit." (29 Cal.4th at p. 80, fn. omitted.)

Here De La Cerda's declaratory relief action is based entirely on her allegation she was not properly served with Guadalupe Valenzuela's complaint. Although De La Cerda's complaint was no doubt prompted by Effective Funding's collection efforts, her complaint is not based on those efforts in the sense required by the court in City of Cotati v. Cashman. Rather, De La Cerda's complaint is based on the alleged absence of proper service of Guadalupe Valenzuela's initial complaint. Thus De La Cerda's complaint did not arise from Effective Funding's activities and therefore Effective Funding could not bring a motion to strike under the anti-SLAPP statute. (29 Cal.4th at p. 78.)

III

Even if De La Cerda's declaratory relief action arose from Effective Funding's effort to enforce the Valenzuela judgment, that effort was not in furtherance of Effective Funding's petitioning or free speech rights within the meaning of section 425.16 subdivisions (b)(1) and (e).

We recognize we are required to interpret the anti-SLAPP statute broadly in order to fully protect the petitioning and free speech rights of defendants. (See Equilon, supra, 29 Cal.4th at p. 61.) Nonetheless, recently cases have limited the statute's application to petitioning activity to conduct by which a defendant has sought consideration or review by a judicial or administrative body. (See e.g. Blackburn v. Brady, supra, 116 Cal.App.4th at pp. 676-677; Kajima Engineering & Construction, Inc. v. City of Los Angeles (2002) 95 Cal.App.4th 921, 928-932.) Where the conduct which gave rise to the complaint was a commercial litigant's employment of a governmental agency's ministerial powers, a motion to strike under section 425.16 is not available. (Blackburn v. Brady, supra, 116 Cal.App.4th at pp. 676-677; Kajima Engineering & Construction, Inc. v. City of Los Angeles, supra, 95 Cal.App.4th at pp. 928-932.) In Blackburn v. Brady the defendant was alleged to have fraudulently participated in a sheriff's sale in an effort to prevent the plaintiff from fully recovering on an earlier judgment. The defendant's anti-SLAPP motion was denied and on appeal we affirmed. We stated: "[S]ection 425.16 'does not accord anti-SLAPP protection to suits arising from any act having any connection, however remote, with an official proceeding. The statements or writings in question must occur in connection with "an issue under consideration or review" in the proceeding.' [Citations.]

"The ministerial event of a sheriff's sale or auction simply does not concern an issue under review or determine some disputed matter as contemplated under the anti-SLAPP law. Rather . . . it consists merely of offers and the acceptance of the highest bid made according to certain requirements without any determination based on the exercise of one's free speech or petition rights. As such, it concerns a business dealing or transaction . . . and not the exercise of protected activity under section 425.16." (Blackburn v. Brady, supra, 116 Cal.App.4th at p. 677.)

In Kajima Engineering & Construction, Inc. v. City of Los Angeles a contractor sued a city for failure to pay amounts due on a construction contract. The city brought a cross-complaint alleging, among other claims, breach of contract, fraud and embezzlement. The contractor then brought an anti-SLAPP motion which the trial court denied. On appeal the contractor argued the city's cross-complaint interfered with the contractor's attempts to submit claims for payment to the city and those submissions were protected activities under section 425.16. In rejecting this argument the Court of Appeal stated: "The submission of contractual claims for payment in the regular course of business before the commencement of litigation simply is not an act in furtherance of the right of petition or free speech within the meaning of the anti-SLAPP statute. [Citations.]" (Kajima Engineering & Construction, Inc. v. City of Los Angeles, supra, 95 Cal.App.4th at p. 932.)

Effective Funding's application for and enforcement of a writ of execution are indistinguishable from the bidding and contracting claims discussed in Blackburn v. Brady and Kajima Engineering & Construction, Inc. v. City of Los Angeles. In attempting to enforce the money judgment it had obtained, Effective Funding was in no sense attempting to obtain any decision from the court or the sheriff. Thus its activities were not covered by the anti-SLAPP statute.

In determining that the anti-SLAPP statute does not apply when, for strictly commercial purposes a litigant employs the ministerial processes of a governmental agency, we do not mean to suggest that such litigants may be held liable in tort. In this regard it is important to recognize that the procedural protection provided by the anti-SLAPP suit is different from the substantive protection provided by the litigation privilege set forth in Civil Code section 47. (See Flatley v. Mauro (2006) 39 Cal.4th 299, 323-324.) "'[T]he litigation privilege is an entirely different type of statute than section 425.16. The former enshrines a substantive rule of law that grants absolute immunity from tort liability for communications made in relation to judicial proceedings [citation]; the latter is a procedural device for screening out meritless claims [citation].' [Citation.]" (Ibid.) Indeed, in finding that unlike the litigation privilege, the anti-SLAPP does not apply to unlawful statements made in connection with litigation, the court in Flately v. Mauro noted the two statutes do not serve the same purposes. (Ibid.) "The litigation privilege embodied in Civil Code section 47, subdivision (b) serves broad goals of guaranteeing access to the judicial process, promoting the zealous representation by counsel of their clients, and reinforcing the traditional function of the trial as the engine for the determination of truth. Applying the litigation privilege to some forms of unlawful litigation-related activity may advance those broad goals notwithstanding the 'occasional unfair result' in an individual case. [Citations.]

"Section 425.16 is not concerned with securing for litigants freedom of access to the judicial process. The purpose of section 425.16 is to protect the valid exercise of constitutional rights of free speech and petition from the abuse of the judicial process (§ 425.16, subd. (a)), by allowing a defendant to bring a motion to strike any action that arises from any activity by the defendant in furtherance of those rights. (§ 425.16, subd. (b)(1).) By necessary implication, the statute does not protect activity that, because it is illegal, is not in furtherance of constitutionally protected speech or petition rights." (Flatley v. Mauro, supra, 39 Cal.4th at p. 324.)

The same rationale applies here. While the litigation privilege may protect Effective Funding from liability in tort growing out of its enforcement of the judgment it obtained from Guadalupe Valenzuela, that substantive protection does not afford it the significant procedural advantages provided to defendants who have exercised the free expression and petitioning activity which are the subject of the anti-SLAPP statute.

In sum the trial court did not err in denying Effective Funding's motion. The declaratory relief action did not arise from activity which is protected by section 425.16.

Order affirmed.

BENKE, ACTING P. J.

WE CONCUR:

HUFFMAN, J.

HALLER, J.

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^[1] All further statutory references are to the Code of Civil Procedure unless otherwise specified.