Vinci Investment Co. v. Browning

Filed 6/26/07 Vinci Investment Co. v. Browning CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from an order of the Superior Court of Orange County, Gregory H. Lewis, Judge. Reversed.

Vivoli & Associates, Michael W. Vivoli and Jason P. Saccuzzo for Plaintiff and Appellant.

Dumbeck & Dumbeck, Jason D. Dumbeck and Curtis M. King for Defendants and Respondents.

* * *

Vinci Investment Co., Inc., a car dealership doing business as Honda Santa Ana (Honda), appeals the trial courts order striking its complaint for declaratory relief against two used automobile purchasers, Charles Browning and Bernadette Chapman.

Honda contends its suit against the purchasers amounted to a garden-variety action to determine the parties respective contractual rights and obligations, and whether Honda violated any consumer protection laws, rather than a strategic lawsuit against public participation (SLAPP) subject to strike under Code of Civil Procedure section 425.16.[1]

Honda acknowledges its declaratory judgment action followed on the heels of defendants notice of their intent to sue Honda under the Consumers Legal Remedies Act (CLRA) (Civ. Code,  1750 et seq.), and Honda concedes such notices are a protected activity within the meaning of section 425.16, which guards against intrusions on the rights of free speech and petition. But as our Supreme Court has observed: [T]he mere fact an action was filed after protected activity took place does not mean it arose from that activity. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 66 (Equilon).) Honda points out it did not seek to enjoin or otherwise preclude defendants contemplated CLRA action, which they remained free to pursue. We also observe Honda did not attack defendants CLRA notices or any other speech or petitioning activity by defendants, but instead sought adjudication of its own conduct under the pertinent contracts and laws. We therefore agree defendants failed to carry their burden to establish Hondas suit ran afoul of the anti-SLAPP law. Accordingly, we reverse.

I

FACTUAL AND PROCEDURAL BACKGROUND

Browning purchased a used 2003 Mitsubishi Montero from Honda on November 29, 2003, and Chapman bought a used 1999 Toyota Solara from the dealership on the same date. Dissatisfied with their buying experience, financing arrangements, and Hondas handling of subsequent repair claims, the pair retained counsel. In January 2005, their attorney filed a Demand for Rectification with the dealership pursuant to the CLRA, which requires such notice 30 days before a consumer may file suit. (Civ. Code,  1782.)

The demand accused Honda of a number of unfair and deceptive acts, including: luring purchasers to the dealers lot with deceptive pre-approved financing advertising; misleading consumers about the relationship between the dealer and its financing source, Santa Ana Federal Credit Union (SAFCU); failure to disclose the financing terms required purchasers to open an account at the credit union; failure to provide the purchasers with copies of their credit applications and truth-in-lending disclosures; failure to instruct purchasers where to send their monthly car payments; failure to register the vehicles and convey title to the purchasers promptly; sale of a rental vehicle without disclosure; sale of a grey market vehicle manufactured in Canada rather than the United States; sale of a lease vehicle without disclosing prior abuse and an unsafe condition; and assignment of loans under an illegal scheme with SAFCU directed at exploiting economically disadvantaged consumers. In addition to refunding the purchase price of Brownings vehicle and the purchase price and repair costs for Chapmans, the CLRA notice demanded attorneys fees incurred to date in the amount of $5,625.00.

By March 2005, Browing and Chapman had not filed their CLRA action. Honda nevertheless responded to their CLRA notice by filing a complaint against the two for declaratory judgment. Honda set out in its complaint its version of Brownings and Chapmans vehicle purchases. Recognizing its view of the circumstances of the purchase agreements likely differed from defendants, Honda noted [a]n actual dispute currently exists between the parties with regard to their respective rights and obligations under the [c]ontracts. Claiming a judicial declaration of those rights and responsibilities is required to protect [p]laintiff and [p]laintiffs rights, Honda requested declaratory relief, including a judicial declaration that: [] a. Plaintiff has complied with all terms and conditions of the [c]ontracts required of it; [] b. In connection with the execution of the [c]ontracts, [p]laintiff complied with all laws, regulations and/or ordinances applicable to the retail sale of new and used automobiles, including but not limited to Civil Code [s]ections 1770, et seq. . . . ; and, [] c. Plaintiff violated no laws in connection with its negotiation and execution of the [c]ontracts or any related credit applications.

Honda acknowledged it had received defendants CLRA demand, which Honda attached as an exhibit to the complaint. In seeking declaratory relief establishing it had neither breached its contracts with defendants nor violated any laws, Honda urged this judicial declaration should be made forthwith, and without allowing [defendants] to incur attorney fees through their current counsel, which [defendants] will doubtless try to use as a sword against [p]laintiff pursuant to various consumer protection statutes, which the current attorney for [defendants] routinely seeks to exploit for financial gain to the detriment of legitimate businesses like [p]laintiffs.

Honda complained defendants attorney has previously initiated litigation against [p]laintiff pursuant to various consumer laws, and has exhibited a practice of dumping hours into such cases, only to later claim the hours as reasonable and necessary to the pursuit of statutory claims involving disputes over relatively modest principal sums. Honda also complained defendants attorney had used the prior litigation to locate and solicit clients among Hondas customers who were perfectly happy with their purchases until an attorney contacted them and promised substantial returns . . . . Honda did not seek to disqualify defendants counsel, but instead hoped, [t]hrough this action, . . . to prevent such abuses from occurring in connection with its current dispute with [defendants].

Defendants moved to strike Hondas complaint under section 425.16 and, in the alternative, demurred. Defendants argued Hondas declaratory relief claim was filed in response to the[ir] CLRA demand letter and would eliminate important incentives and protections afforded to defendants by the CLRA. The trial court agreed Hondas complaint fell within the anti-SLAPP statute, struck the complaint, and overruled the demurrer as moot. Honda now appeals the order striking its complaint.

II

DISCUSSION

Honda contends the trial court erred in granting defendants strike motion because its declaratory relief action did not undermine defendants rights of free speech or petition, and therefore fell outside the purpose of section 425.16s strike authorization. (See  425.16, subd. (a) [The Legislature finds and declares that there has been a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances].) Reviewing the trial courts order de novo (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 999), we conclude defendants failed to carry their initial burden under the anti-SLAPP statute.

To prevail on an anti-SLAPP motion, the movant must first make a threshold showing that the challenged cause of action arises from an act in furtherance of the right of petition or free speech in connection with a public issue. (Integrated Healthcare Holdings, Inc. v. Fitzgibbons (2006) 140 Cal.App.4th 515, 522.) [T]he arising from requirement is not always easily met. (Equilon, supra, 29 Cal.4th at p. 66.) The moving defendant must show plaintiffs claim aris[es] from ( 425.16, subd. (b)(1)) speech or petitioning activity by the defendant that falls within one of four categories protected in section 425.16.

Those categories are: (1) statements made before a legislative, executive, or judicial proceeding, or any other official proceeding; (2) statements made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding; (3) statements made in a place open to the public or a public forum in connection with an issue of public interest; or (4) any other conduct in furtherance of the constitutional right of petition or free speech in connection with an issue of public interest. ( 425.16, subd. (e).)

If the moving defendant carries his or her initial burden, the trial court must then determine whether the plaintiff has demonstrated a probability of prevailing on the claim. (Navellier v. Sletten (2002) 29 Cal.4th 82, 88 (Navellier), citing  425.16, subd. (b)(1).)

For a cause of action to arise from protected activity, the defendants act underlying the plaintiffs cause of action must itself have been an act in furtherance of the right of petition or free speech. (City of Cotati, supra, 29 Cal.4th at p. 78.) The nature or form of the plaintiffs action is not what is important but rather that it is against a person who has exercised certain rights. (Equilon, supra, 29 Cal.4th at p. 60.) [T]he critical point is whether the plaintiffs cause of action itself was based on an act in furtherance of the defendants right of petition or free speech. (City of Cotati, supra, 29 Cal.4th at p. 78.) Although a cause of action arguably may have been triggered by protected activity, that does not necessarily mean that it is one arising from such [activity]. (Ibid., italics added.) [I]t is the principal thrust or gravamen of the plaintiffs cause of action that determines whether the anti-SLAPP statute applies . . . . (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 188, citations omitted.) In sum, the salient inquiry is whether the defendants activity animating the plaintiffs complaint constitutes protected speech or petitioning. (Navellier, supra, 29 Cal.4th at p. 92.)

There is no dispute the anti-SLAPP statute protects statutorily required pre-lawsuit notices. (Equilon, supra, 29 Cal.4th at p. 67.) Just as communications preparatory to or in anticipation of the bringing of an action or other official proceeding are within the protection of the litigation privilege of Civil Code section 47, subdivision (b), . . . such statements are equally entitled to the benefits of section 425.16. (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1115.) Thus, defendants service of the CLRA notices was protected activity.

In determining whether the principal thrust of Hondas declaratory relief complaint arises from defendants filing of the notices or other protected activity, we look to the pleadings, and supporting and opposing affidavits stating the facts upon which the plaintiffs case rests. ( 425.16, subd. (b)(2); Navellier, supra, 29 Cal.4th at p. 89-90.) Even where a partys litigation-related activities constitute act[s] in furtherance of a persons right of petition or free speech, it does not follow that any claims associated with those activities are subject to the anti-SLAPP statute. (Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th 1532, 1537.)

Although the pleadings and the parties affidavits reference defendants CLRA prefiling notices, the gravamen of Hondas action stands out prominently in paragraph 31 of the complaint: An actual dispute currently exists between the parties with regard to their respective rights and obligations under the Contracts. In other words, the activity engaged in by the defendants that plaintiff seeks to have adjudicated is not the filing of intent-to-sue notices or other petitioning or speech, but instead simply their decision to buy a car. Entering a contract to buy a vehicle is not speech or petitioning activity protected by the anti-SLAPP statute.

Defendants chiefly rely on Equilon for a contrary conclusion. There, the plaintiff oil company attacked the defendants Proposition 65 intent-to-sue notices as defective, but Honda raises no issue concerning defendants CLRA notices here. The plaintiff in Equilon sought to enjoin the defendants right to file their pending Proposition 65 suit, but Honda does not seek a similar remedy against defendants potential action. To the contrary, Hondas request for declaratory judgment invites adjudication of the merits of any breach of contract or legal claim arising from the parties transaction, thereby exposing Honda to potential liability under the CLRA or other statutes if Honda loses.

Defendants contend Hondas declaratory judgment action burdens their right of petition under the CLRA, but they fail to explain how. (See, e.g., City of Cotati, supra, 29 Cal.4th at p. 78 [moving party must satisfy threshold showing].) As Honda points out, defendants remain free to file their CLRA claim; indeed, Honda has all but invited the claim as a cross-complaint. Defendants suggest Hondas request for the earliest possible trial date will prevent the respondents from incurring attorneys fees under the CLRA. But the defendants may continue to incur fees as they please. Whether Honda proves liable for them under consumer protection fee-shifting provisions, however, turns on the merits of the legal questions Honda seeks not to silence as in Equilon, but to have answered.

Defendants suggest Hondas reference to their CLRA notices in its complaint establishes at least a mix of protected and perhaps unprotected activity, warranting anti-SLAPP treatment to guard the former. (See Fox Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294, 308.) But as discussed, the gravamen of plaintiffs complaint does not concern the CLRA notices or any other speech or petitioning activity at all.

City of Cotati is instructive. There, owners of mobilehome parks brought a declaratory relief action against the city in federal court, seeking a judicial determination the citys rent control ordinance constituted an unconstitutional taking. In response, the city sued the park owners in state court, requesting a declaration the rent control ordinance was constitutional, valid, and enforceable. (Cotati, supra, 29 Cal.4th at p. 72.) The city concede[d] that its purpose in filing the state court action was to gain a more favorable forum in which to litigate the constitutionality of its mobilehome park rent stabilization ordinance, and that in filing the state court action it intended subsequently to seek to persuade the federal court to abstain from hearing [the mobilehome park owners] suit. (Id. at p. 73.)

Nevertheless, the Supreme Court rejected the argument that the filing of [the] state court action arose from [the mobilehome park owners] filing of their earlier federal action and, therefore, fell within the ambit of the anti-SLAPP statute. (Cotati, supra, 29 Cal.4th at pp. 73, 76-80.) The Supreme Court explained that although [i]t is indisputably true . . . [the c]itys action was filed shortly after [the mobilehome park owners] filed their claim in federal court, the mere fact an action was filed after protected activity took place does not mean it arose from that activity. (Id. at pp. 76-77.) Instead, because the fundamental basis for the citys request for relief was the underlying controversy respecting [the rental control] ordinance, the citys lawsuit therefore was not one arising from [the mobilehome park owners] federal suit and was not subject to a special motion to strike. (Id. at p. 80, italics added.) So it is here. The underlying controversy here concerns plaintiffs and defendants conduct in two automobile sales transactions, which is neither speech or petitioning activity protected by the anti-SLAPP statute

III

DISPOSITION

The trial courts order granting defendants anti-SLAPP motion is reversed. Honda is entitled to its costs on appeal.

ARONSON, J.

WE CONCUR:

OLEARY, ACTING P. J.

IKOLA, J.

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[1] All further statutory references are to this code unless noted otherwise.