Goldfarb v. Allan

Filed 7/24/07 Goldfarb v. Allan CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from an order of the Superior Court of San Diego County, Ronald S. Prager, Judge. Affirmed.

The plaintiffs and defendants in this case are all owners of small parcels of undeveloped land in an area within the City of San Diego known as East Elliott. The plaintiffs allege the defendants breached the terms of a covenant under which the property owners agreed that for a specified period of time they would negotiate collectively with any potential developer rather than attempt to pursue development opportunities separately. The plaintiffs further allege the defendants' breaches entitled them to liquidated damages under the terms of the covenant. In response to the complaint the defendants filed anti-SLAPP motions. (See Code Civ. Proc.,^[1]  425.10.) The defendants argued their efforts to separately develop their parcels were protected activity within the meaning of the anti-SLAPP statute and that plaintiffs' claims failed as a matter of law. The trial court denied the defendants' motion. We affirm the trial court's order.

The defendants' development activities are not protected by the anti-SLAPP statute. Moreover, the record shows that the plaintiffs have established a prima facie case of breach of contract and that none of the defenses asserted by the defendants defeat the plaintiffs' claim as a matter of law. Hence, the defendants were not entitled to an order striking the plaintiffs' complaint.

FACTUAL BACKGROUND

1. East Elliott

The tract of land which is the subject of this appeal has been a source of dispute and difficulty for the owners of the land as well as for the City of San Diego for a number of years. As we pointed out in our opinion in Calprop Corp. v. City of San Diego (2000) 77 Cal.App.4th 582 (Calprop), in which we rejected a claim the city failed to process a

prior effort to develop the parties' land, the tract of land is "an undeveloped portion of the City of San Diego formerly part of a naval reservation known as Camp Elliott and now known as the East Elliott community. It is a large tract bounded by State Route 52 and Mission Trails Regional Park on the south, the City of Santee on the east and Miramar Marine Air Station on the north and west.

"In 1964, after litigation with the city with respect to the appropriate parcelization of the land, the federal government offered land in East Elliott for sale to the public. More than 100 parcels offered by the government were in fact purchased by a number of individuals." (Calprop, supra, 77 Cal.App.4th at pp. 586-587.)

In summarizing the difficulties the property owners and city faced with respect to East Elliott, we stated: "The plaintiffs own property, the development of which is constrained by many circumstances outside their control and outside the control of the city. In particular we note the property was effectively subdivided by the federal government and marketed in relatively small parcels at a time when no one seriously considered immediate development in East Elliott. This circumstance has made it difficult both for the plaintiffs and the city to agree upon a comprehensive plan for the area which protects both the individual rights of the plaintiffs and the legitimate regulatory interests of the city. That is to say, if the land in East Elliott were held in larger parcels, the ability of the city to preserve substantial economic value for individual property owners without damaging the unique environment in the area would have been far simpler." (Id. at p. 601.)

2. East Elliott Property Owners Association

In 1986, in order to overcome the difficulty posed by the fact that East Elliott was effectively subdivided into small parcels before any comprehensive and practical land use plan was adopted for the area, East Elliott property owners formed the East Elliott Property Owners Association (the EEPOA). In addition to forming the EEPOA, the property owners also entered into a covenant running with the land by which they obligated themselves to jointly develop and market their parcels. In pertinent part the covenant states: "The parties to these covenants are owners of fractional parts of an unimproved area of approximately 3000 acres located within the City of San Diego, and referred to as the East Elliott Planning Area. This vacant land was originally sold to those parties and others as early as 1962 in parcels designated by the federal government, which bear little or no practical or functional relationship to the topography or geography of the land, remains at this date unimproved and unmarketable.

"There does not now exist an accepted operational plan or specific plan for land use in the area, or portion thereof.

"These existing conditions which require any prospective developer to negotiate with the numerous owners of small parcels and to undertake and assume the risk of obtaining an acceptable general plan for land use, in addition to the conventional obligations and risk of land development, have continuously in the past, and do now, prevent the parties to these covenants from obtaining realistic or fair market value for the sale of their properties.

"The parties to these covenants agree that a practical, direct, efficient, and economical way to alleviate the existing conditions and create a realistic value for their property is for them to associate with each other for the common objective of establishing and obtaining the City of San Diego's approval of a general plan and specific plan or plans for portions thereof and upon such approval to obtain through their association and with united representation a purchaser or purchaser[s] for their respective parcels to be sold as a unit to a land developer or developers and to distribute the proceeds of such sale among the members solely on an acreage basis."

Toward the end of preparing a general plan for East Elliott and selling their parcels as a single unit, the covenant authorized the association "to act on behalf of each party to these covenants as the exclusive agent and representative to do all acts necessary and reasonable in the discretion of the association to prepare, create, engineer, and establish a general plan for the use of land in the East Elliott Planning Area" and to act as "their respective attorney in fact to . . . appoint the exclusive broker and representative, to list, advertise, offer for sale, negotiate and contract for the sale of their respective properties, together with all other properties held by the parties hereto as a unit and agree on approval by the association of the terms of sale on a per acre price for all land owned by members of the association."

In addition to these substantive provisions, the covenant also contained a liquidated damages clause which provided that in the event of breach, any defaulting party would be liable in the amount of $50,000 multiplied by the number of acres held by such party. Initially, the covenant expired on October 30, 1993, but by amendments agreed to by a majority of the association, the term of the covenant was extended to October 30, 2003. In October 2003 the members voted not to extend the covenant beyond October 30, 2003.

The covenant was initially executed by the owners of 1,000 acres of East Elliott land.

3. EEOPA Dissidents

Between 1986 and 2003 the EEOPA was unsuccessful in either obtaining a practical general plan for East Elliott or marketing all the parcels as a unit. Before the covenant expired, two groups of landowners attempted to make alternate development plans for their respective parcels.

In 2001 the owner of 12 acres of land subject to the covenant, Hi-Lo Investments, Ltd. (Hi-Lo), entered into an option agreement with a developer, Pardee Homes (Pardee). The agreement required that Hi-Lo establish the covenant no longer governed the 12 acres of land. Hi-Lo attempted to meet this contingency by bringing a declaratory relief action in which it alleged the extensions of the covenant were not properly agreed to by a sufficient majority of the association. By way of an October 2004 statement of decision, the trial court found the extensions were valid, the option agreement violated the terms of the covenant and the association was entitled to $600,000 in liquidated damages.

In late 2002, while the Hi-Lo declaratory relief action was pending, another member of the association and an owner of land subject to the covenant, defendant and appellant Robert M. Allan, commenced an effort to develop another group of East Elliott parcels. Allan, whose family trust owned 48 acres of land subject to the covenant, formed a development company, Southwest Development, LLC (Southwest). In December 2002 Allan, on behalf of Southwest, submitted to the City of San Diego a "Preliminary Review Questionnaire" (PRQ) by which Southwest asked the city to provide it with information from various city departments about conditions it would have to meet in order to gain approval of its proposed Mission Trails Vista (MTV) development. In addition, Allan transferred the 48 acres his family trust owned to Southwest and, commencing in March 2003, obtained agreements from the owners of 146 additional acres for the sale of their land to Southwest. The sales to Southwest were contingent upon approval by the city of the MTV development and Southwest's acquisition of a certain number of parcels.

4. Horton Letter of Intent

In May 2003, while the Hi-Lo litigation was pending and while Allan and Southwest were pursuing the MTV development, EEOPA in fact received a development proposal. The proposal came in the form of a letter of intent from Horton-Continental (Horton), a national developer. Horton proposed purchasing all the parcels subject to the EEOPA covenant based on an appraised value at a future date. However, later in 2003 Horton terminated its proposal.

5. Expiration of Covenant

In 2003 members of the EEOPA were involved in a number of disputes with respect to extension of the covenant beyond its October 2003 expiration, the Horton proposal and the conduct of the board of directors. Allan, as well as other property owners who sold their parcels to Southwest, actively participated in these disputes.

In early October 2003 members of the EEOPA voted not to extend the covenant and it expired according to its terms on October 30, 2003.

PROCEDURAL HISTORY

In July 2005 Stephen Goldfarb, president of the EEOPA, filed a class action on his own behalf and on behalf of the other nonselling members of the EEOPA against Allan. Goldfarb alleged Allan and members of a purported defendant class of property owners who sold their parcels to Southwest breached the covenant and in fact interfered with the EEOPA's ability to consummate the Horton transaction. Goldfarb later amended his complaint and deleted the interference claim.

The trial court certified the plaintiff class of nonselling members, but declined to certify the defendant class of sellers. Goldfarb then amended the complaint and added as individual defendants the sellers to Southwest. In response Allan and the sellers, among other motions, moved to strike the complaint under section 425.16. The trial court denied the motion. Goldfarb and the defendant sellers filed a timely notice of appeal.

DISCUSSION

I

The principles which govern the anti-SLAPP statute and our review of orders granting and denying motions to strike are now fairly well-established. "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

With respect to the first prong of the anti-SLAPP statute, we do not believe Allan and the defendants have met their burden of proof. Goldfarb's claims are contractual in nature and public interest in the activities of the EEOPA and eventual development of East Elliott are entirely incidental to those claims.

As we have indicated, the anti-SLAPP statute applies only to causes of action "arising from" protected activity. ( 425.16 subd. (b)(1).) This limitation requires that we look not at the circumstances surrounding the plaintiff's claim, but rather at the activity of the defendant which is alleged to have given the plaintiff a cause of action. (See City of Cotati v. Cashman (2002) 29 Cal.4th 69, 76-79; ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1001-1004.) In City of Cotati v. Cashman a city filed a declaratory relief action in which it sought a judgment upholding the constitutionality of its mobilehome rent stabilization ordinance. It named as defendants mobilehome park owners who recently challenged the validity of the ordinance in a federal district court action. The mobilehome park owners brought a motion to strike under the anti-SLAPP statute and the trial court granted the motion. In finding the trial court erred, the Supreme Court rejected the defendants' contention that if the city's declaratory relief action was prompted by their federal district court action, it arose out of the defendants' use of the federal courts. The court stated: "[T]he 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 of 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) . . . .' [Citations.]" (City of Cotati v. Cashman, supra, 29 Cal.4th at p. 78.)

"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.' [Citation.]" (City of Cotati v. Cashman, supra, 29 Cal.4th at p. 79.) Importantly, "the 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.]" (Id. at pp. 76-77.)

In analyzing the city's declaratory relief action, the court found it was not based on any protected activity, but rather on the existence of a dispute between the parties as to constitutionality of the ordinance. "[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. Accordingly, City's action was not subject to a special motion to strike." (City of Cotati v. Cashman, supra, 29 Cal.4th at p. 80, fn. omitted.)

In ComputerXpress, Inc. v. Jackson the court applied this principle in the context of a computer retailer's fraud claims against a group of defendants. The computer retailer entered into a merger agreement with the defendants and later allegedly discovered the defendants were not as profitable as they represented themselves to be. In addition to misrepresenting their profitability, the defendants successfully prevented the plaintiff from entering into a large sales contract with a third party and engaged in an Internet campaign disparaging the plaintiff, its officers and its products. The plaintiff brought a complaint in which it alleged fraud, negligent misrepresentation, negligence, and interference with contractual relations. These causes of action were based on the defendants' alleged misstatements and the interference with the sales contract. The plaintiffs also alleged claims for trade libel, interference with prospective economic advantage, abuse of process, conspiracy and for injunctive relief. This second group of claims was based on the defendants' Internet campaign and the complaint the defendants allegedly filed with the SEC.

As to the first group of causes of action, those based on the misrepresentations and the interference with the sales contract, the court found no protected activity was alleged and hence the anti-SLAPP statute had no application. (ComputerXpress, Inc. v. Jackson, supra, 93 Cal.App.4th at pp. 1001-1003.) As to the second group, the torts based on the internet statements and SEC complaint, the court found the statute applied. (Id. at pp. 1008-1009.) Importantly, as in City of Cotati v. Cashman, the court rejected the defendants' contention that because the first set of fraud claims were made after the protected conduct alleged in the second set of claims occurred and were part of one overall conspiracy, they too were protected by the anti-SLAPP statute. (ComputerXpress, Inc. v. Jackson, supra, 93 Cal.App.4th at pp. 1001-1002.) " '[T]he act underlying the plaintiff's cause' or 'the act which forms the basis for the plaintiff's cause of action' must itself have been an act in furtherance of the right of petition or free speech." (Id. at p. 1003.)

As Goldfarb points out, his claims against Allan and the other sellers are based on Allan's preparation of a development plan for Southwest, Allan's submission of the Southwest plan to the city for preliminary review, and the defendants' transfer of their property to Southwest. That conduct, which is the gravamen of Goldfarb's claim the defendants violated the covenant, is not in any manner activity which is protected by the anti-SLAPP statute. (See A. F. Brown Electrical Contractor, Inc. v. Rhino Electrical Supply, Inc. (2006) 137 Cal.App.4th 1118, 1129-1130; 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; ComputerXpress, Inc. v. Jackson, supra, 93 Cal.App.4th at pp. 1001-1003.) Allan's preparation of a development plan for his parcels and the other parcels which Southwest planned to acquire and the actual transfer of parcels to Southwest was commercial activity and outside the scope of the anti-SLAPP statute. (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.)

The same is true of Allan's submission of Southwest's request for a preliminary review of the development. As the trial court noted, the request for a preliminary review merely sought information from city departments as to what requirements the development would have to meet. Thus, rather than a request for any city action, the request for a preliminary review was more akin to an inquiry as to the requirements for buying city-owned property or bidding on a city contract. Importantly, Allan did not ask the city to commence any proceeding or make any administrative or adjudicatory decision. This kind of resort to the ministerial services of the government is not petitioning activity protected by the anti-SLAPP statute. (A. F. Brown Electrical Contractor, Inc. v. Rhino Electrical Supply, Inc., supra, 137 Cal.App.4th at pp. 1129-1130; 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.) Although the information Southwest received in response to the request would no doubt have an impact on any development plan Southwest eventually submitted to the city for approval, as case authority has pointed out, section 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." (Paul v. Friedman (2002) 95 Cal.App.4th 853, 866.)

Admittedly, Allan's activities and the sellers' activities with respect to the Horton letter of intent, extension of the covenant and the internal governance of the EEOPA are protected both by the anti-SLAPP statute and the absolute privilege provided by Civil Code section 47.^[2] (See Damon v. Ocean Hills Journalism Club (2000) 85 Cal.App.4th 468, 479.) Within the relatively large community of East Elliott property owners, the defendants' statements about the Horton letter of intent, extension of the covenant, and the incumbent board of the EEOPA, were matters of public interest within the meaning of the anti-SLAPP statute. (Ibid.) However, these statements are not the circumstances

which give rise to Goldfarb's claims against Allan and the other defendants. Proof of these statements would not prove an obligation under the covenant existed or that Allan and the other defendants breached any such obligation. While these activities may be marginally relevant in rebutting any contention on the part of Allan and the other defendants to the effect their transactions with Southwest were not part of any competing development and hence did not violate the covenant, these activities are not the facts upon which Goldfarb's breach of contract causes of action arise. That is to say, in order to make out a prima facie case Goldfarb will not be required to prove the occurrence of these protected activities. Because those are not matters which Goldfarb is required to prove in order to prevail on his claims, it cannot be said his claims arise from them. (See City of Cotati v. Cashman, supra, 29 Cal.4th at p. 80; ComputerXpress, Inc. v. Jackson, supra, 93 Cal.App.4th at pp. 1001-1002.)^[3]

II

Even if Goldfarb's claims arose from protected activity within the meaning of section 425.16, no relief would be available under section 425.16 because in response to the motion Goldfarb established a probability he would prevail on his claims.

As Goldfarb points out, in establishing a probability of prevailing, he was only required to make a prima facie showing his claims have merit. (Daimler-Chrysler Motors Co. v. Lew Williams, Inc. (2006) 142 Cal.App.4th 344, 352; Tuchscher

Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219, 1237.) "'In deciding the question of potential merit, the trial court considers the pleadings and evidentiary submissions of both the plaintiff and the defendant ( 425.16, subd. (b)(2)); though the court does not weigh the credibility or comparative probative strength of competing evidence, it should grant the motion if, as a matter of law, the defendant's evidence supporting the motion defeats the plaintiff's attempt to establish evidentiary support for the claim.' [Citation.] Thus, a plaintiff's burden as to the second prong of the anti-SLAPP test is akin to that of a party opposing a motion for summary judgment. [Citation.]" (Yu v. Signet Bank/Virginia (2002) 103 Cal.App.4th 298, 317-318; accord Daimler-Chrysler Motors Company v. Lew Williams, Inc., supra, 142 Cal.App.4th at p. 352.)

The covenants, Southwest's development plans and the transfers to Southwest in conjunction with those development plans establish Goldfarb's prima facie case. A trier of fact could conclude, based on those facts, all the defendants breached their appointment of the EEOPA as the exclusive agent for development of their East Elliott parcels.

Contrary to their arguments on appeal, neither Allan nor any of the other defendants established a defense to Goldfarb's claims as a matter of law. For his part Allan argues he is a not party to the covenants because the property which he transferred to Southwest was held by a family trust. As Goldfarb points out, at the time of the conduct which gives rise to his claims, Allan was the sole trustee the family trust and the family trust was the sole owner of Southwest. Given these circumstances, Goldfarb could establish Allan's liability as an alter ego of the trust. (See VirtualMagic Asia, Inc. v. Fil-Cartoons, Inc. (2002) 99 Cal.App.4th 228, 244-245; see also Haskett v. Villas at Desert Falls (2001) 90 Cal.App.4th 864, 887.)

Allan and the other defendants also argue their sales to Southwest were subject to the covenant and hence did not breach it. As Goldfarb points out, however, the sales contracts themselves do not state they are subject to the covenants, and given the fact that at the time sales were made the continued validity of the covenants was being disputed in the Hi-Lo litigation, a trier of fact could conclude Southwest was in fact attempting to acquire rights which were not burdened by the covenant. Moreover, as we interpret Goldfarb's claims, the transfer itself is not a violation of the covenant; rather, Goldfarb's theory is that a transfer which is intended to assist a competing development violates the owner's appointment of the EEOPA as the exclusive development entity. Thus, Goldfarb could argue that in assisting a competing developer, even with transfers that were still legally subject to the covenant, the defendants were violating the terms of the covenant.

For much the same reason the fact that the sales contracts the defendants executed were subject to conditions did not immunize the defendants from liability. A trier of fact could determine the sales contract materially assisted a competing development without regard to whether the contracts were conditional and hence find the contracts violated the covenant.

Finally, we note Goldfarb disputes the defendants' contention he gave them permission to transfer their parcels to Southwest. According to Goldfarb, property owners have the right to sell their property to interested buyers, but only so long as the sales are not part of a competing development plan. Plainly, the defendants' contention on this issue will have to be resolved by a trier of fact.

Because they did not raise the issue in the trial court, we decline to discuss the defendants' contention that the liquidated damages clause in the covenants is an unenforceable penalty. (Richmond v. Dart Industries, Inc. (1987) 196 Cal.3d 869, 879.)

Order affirmed.

Respondents to recover their costs.^[4]

BENKE, J.

WE CONCUR:

McCONNELL, P. J.

HUFFMAN, J.

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

^[2] Civil Code section 47 provides:

"A privileged publication or broadcast is one made:

"(a) In the proper discharge of an official duty.

"(b) In any (1) legislative proceeding, (2) judicial proceeding, (3) in any other official proceeding authorized by law, or (4) in the initiation or course of any other proceeding authorized by law and reviewable pursuant to Chapter 2 (commencing with Section 1084) of Title 1 of Part 3 of the Code of Civil Procedure, except as follows:

"(1) An allegation or averment contained in any pleading or affidavit filed in an action for marital dissolution or legal separation made of or concerning a person by or against whom no affirmative relief is prayed in the action shall not be a privileged publication or broadcast as to the person making the allegation or averment within the meaning of this section unless the pleading is verified or affidavit sworn to, and is made without malice, by one having reasonable and probable cause for believing the truth of the allegation or averment and unless the allegation or averment is material and relevant to the issues in the action.

"(2) This subdivision does not make privileged any communication made in furtherance of an act of intentional destruction or alteration of physical evidence undertaken for the purpose of depriving a party to litigation of the use of that evidence, whether or not the content of the communication is the subject of a subsequent publication or broadcast which is privileged pursuant to this section. As used in this paragraph, "physical evidence" means evidence specified in Section 250 of the Evidence Code or evidence that is property of any type specified in Chapter 14 (commencing with Section 2031.010) of Title 4 of Part 4 of the Code of Civil Procedure.

"(3) This subdivision does not make privileged any communication made in a judicial proceeding knowingly concealing the existence of an insurance policy or policies.

"(4) A recorded lis pendens is not a privileged publication unless it identifies an action previously filed with a court of competent jurisdiction which affects the title or right of possession of real property, as authorized or required by law.

"(c) In a communication, without malice, to a person interested therein, (1) by one who is also interested, or (2) by one who stands in such a relation to the person interested as to afford a reasonable ground for supposing the motive for the communication to be innocent, or (3) who is requested by the person interested to give the information. This subdivision applies to and includes a communication concerning the job performance or qualifications of an applicant for employment, based upon credible evidence, made without malice, by a current or former employer of the applicant to, and upon request of, one whom the employer reasonably believes is a prospective employer of the applicant. This subdivision authorizes a current or former employer, or the employer's agent, to answer whether or not the employer would rehire a current or former employee. This subdivision shall not apply to a communication concerning the speech or activities of an applicant for employment if the speech or activities are constitutionally protected, or otherwise protected by Section 527.3 of the Code of Civil Procedure or any other provision of law.

"(d)(1) By a fair and true report in, or a communication to, a public journal, of (A) a judicial, (B) legislative, or (C) other public official proceeding, or (D) of anything said in the course thereof, or (E) of a verified charge or complaint made by any person to a public official, upon which complaint a warrant has been issued.

"(2) Nothing in paragraph (1) shall make privileged any communication to a public journal that does any of the following:

"(A) Violates Rule 5-120 of the State Bar Rules of Professional Conduct.

"(B) Breaches a court order.

"(C) Violates any requirement of confidentiality imposed by law.

"(e) By a fair and true report of (1) the proceedings of a public meeting, if the meeting was lawfully convened for a lawful purpose and open to the public, or (2) the publication of the matter complained of was for the public benefit."

^[3] Allan has requested that we take judicial notice of pleadings filed in Calprop. We have granted the request. (Evid. Code,  452, subd. (d).)

^[4] On remand the trial court is directed to award respondents the reasonable attorney fees they incurred on appeal. (See Lee v. Fick (2005) 135 Cal.App.4th 89, 98.)