Hanssler v. Eskanos & Adler

Filed 8/28/07 Hanssler v. Eskanos & Adler CA4/3

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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, Geoffrey T. Glass, Judge. Reversed.

Eskanos & Adler, Barry Adler, Janet L. Brown and Kurtiss A. Jacobs for Defendant and Appellant.

Law Office of Scott W. Hanssler and Scott W. Hanssler for Plaintiffs and Respondents.

* * *

Defendant Eskanos & Adler, P.C. appeals from the denial of its motion to strike the complaint of plaintiffs Hayley Hanssler and Scott W. Hanssler under Code of Civil Procedure section 425.16 (anti-SLAPP motion; all further references are to this code unless otherwise stated). It contends the court erred when it concluded resolution of the underlying lawsuit mooted the motion. We agree. In addition, because the issue of whether defendant would be entitled to recover attorney fees should it prevail on the motion was not before the court, it should not have been a basis for denying the motion. We reverse the order.

FACTS AND PROCEDURAL HISTORY

After a default judgment was entered against Cindy Hanssler for a money judgment, defendant recorded an abstract of judgment in the Orange County recorders office. The abstract listed Cindys social security number and showed plaintiffs address as Cindys last known address.

Upon being sent notice of the abstract by the recorders office, plaintiffs sent a letter to defendant accusing it of failing to properly investigate Cindys address. They claimed recording of the abstract was slander of [their] title and credit and demanded a release [of] the judgment lien from [their] property. They also sought to have defendant contact credit agencies to explain [the] mistake. Finally, plaintiffs disclosed they planned to sue defendant but offered to settle the matter for $25,000. Contrary to plaintiffs claim here, however, the letter did not state that Cindy had no interest in the property[ and had] never resided there.

When defendant did not comply, plaintiffs filed an action for negligence, slander of title, quiet title, and exemplary damages seeking general and punitive damages. Defendant filed a general demurrer and anti-SLAPP motion.

In the demurrer, defendant asserted the abstract showed Cindy, not plaintiffs, as the debtor, and because the abstract was a general lien against Cindy, it did not attach to plaintiffs property. Alternatively, it argued recordation of the abstract was absolutely protected by the litigation privilege (Civ. Code,  47, subd. (b)).

In the anti-SLAPP motion defendant maintained that the recording of the abstract fell within First Amendment rights of free speech and petition and thus was protected activity within the meaning of the anti-SLAPP statute. It also argued plaintiffs could not show the probability of prevailing on their action because of the litigation privilege, or alternatively, because the abstract did not make any adverse claim against plaintiffs property. It noted it had no choice but to insert plaintiffs address on the abstract because the form requires the last known address of the debtor and the address where the debtor was served be set forth.

Much of the original hearing focused on the effect of Code of Civil Procedure section 697.410 (section 697.410). The section provides: If a recorded abstract of a money judgment or certified copy of a money judgment appears to create a judgment lien on real property of a person who is not the judgment debtor because the name of the property owner is the same as or similar to that of the judgment debtor, the erroneously identified property owner may deliver to the judgment creditor a written demand for a recordable document releasing the lien. The demand shall be accompanied by proof to the satisfaction of the judgment creditor that the property owner is not the judgment debtor . . . . ( 697.410, subd. (a).) Within 15 days of the demand, the judgment creditor must provide to the owner a document in recordable form releasing the lien on that property. ( 697.410, subd. (b).) If the judgment creditor fails to comply, the owners may file a motion to obtain an order releasing the lien. ( 697.410, subd. (c).)

The court observed that the abstract of judgment filed against Cindy did not attach to plaintiffs real property. As a result, it concluded, the abstract did not appear to create a judgment lien on plaintiffs property. Even assuming section 697.410 applied, plaintiffs remedy was to file a motion to release the lien, not a civil suit.

In response to plaintiffs claim defendant did not serve Cindy at their address, thus making the abstract incorrect, the court ordered the parties to file declarations and briefs as to where she was actually served. If the address was erroneous, the court noted, it was expecting [plaintiffs] to ask the court to change the abstract. The court sustained the demurrer with leave to amend, determining the quiet title action was actually a cause of action for violation of section 697.410, and allowing plaintiffs to properly plead it. It continued the hearing on the anti-SLAPP motion.

Before the continued hearing plaintiffs filed a declaration stating Cindy had never lived at their address and that the complaint had not been served there. However, they never amended the complaint or filed a motion to have the lien released. During that same period, Cindys debt was satisfied and the lien was released. Defendant also acknowledged it had inadvertently used plaintiffs address on the abstract.

At the continued hearing, plaintiffs stated they had offered to dismiss the action in exchange for defendants payment of their filing fees. Defendant had declined, noting plaintiffs misunderstanding of the abstract and lack of compliance with section 697.410 was the reason for the lawsuit. At the hearing, defendant reiterated it wanted a ruling on the anti-SLAPP motion because it would be seeking its attorney fees.

The court denied the motion on the ground it was moot because the basis for the entire action was eliminated. It also ruled the SLAPP statute [did] not invalidate a specific statute granting a right such as [section] 697.410. Finally, it determined defendant was not entitled to attorney fees because the individual attorneys representing defendant worked for that law firm.

DISCUSSION

The court erred in denying the anti-SLAPP motion. Resolution of an anti-SLAPP motion requires the court to engage in a two-step process. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving defendants burden is to demonstrate that the act or acts of which the plaintiff complains were taken in furtherance of the [defendant]s right of petition or free speech under the United States or California Constitution in connection with a public issue, as defined in the statute. [Citation.] If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim. [Citation.] (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 733.) Whether section 425.16 applies and whether the plaintiff has shown a probability of prevailing are both reviewed independently on appeal. [Citations.] (ComputerXpress, Inv. v. Jackson (2001) 93 Cal.App.4th 993, 999.)

An act in furtherance of a persons right of . . . 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 . . . judicial proceeding . . . .

( 425.16, subd. (e).) To prevail on the motion, defendants must show the complaint arises from their exercise of free speech (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67), that is, the act underlying [plaintiffs] cause of action must itself have been an act in furtherance of the right of . . . free speech. (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78, italics omitted.)

Here, the act underlying the complaint was defendants filing of an abstract of judgment. This qualifies as protected activity under the anti-SLAPP statute. The anti-SLAPP protection for petitioning activities applies not only to the filing of lawsuits, but extends to conduct that relates to such litigation . . . .  [Citation.] Indeed, courts have adopted a fairly expansive view of what constitutes litigation-related activities within the scope of section 425.16. [Citation.] (Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th 1532, 1537.)

Because defendant satisfied the first prong of the test, the burden shifted to plaintiffs to show they could prevail on their complaint. They cannot.

The factual basis for the complaint rested entirely on the filing of the abstract showing plaintiffs address for the debtor. Plaintiffs characterize the abstract as placing a lien against their property, which is not owned by Cindy. This is a misstatement of the law.

The abstract was not a lien against plaintiffs property. It was a lien against any real property owned by Cindy. (Code Civ. Proc.,  697.340; Kinney v. Vallentyne (1975) 15 Cal.3d 475, 478-479; Grothe v. Cortlandt Corp. (1992) 11 Cal.App.4th 1313, 1320.) Thus, the abstract did not cloud or slander plaintiffs title. And even though defendant erred in showing that Cindy was served at plaintiffs address, it caused no compensable injury to plaintiffs.

Further, the abstract did not show plaintiffs as judgment debtors, and Cindys social security number was listed. The abstract clearly applied to Cindy, not plaintiffs. Moreover, assuming the conditions of section 697.410 were met, i.e., that the abstract appeared to create a lien against plaintiffs real property, their remedy under that section was to file a motion. ( 697.410, subd. (c).) There is no provision for filing a lawsuit. Therefore, contrary to the courts ruling, there is no issue as to whether section 697.410 trumps the anti-SLAPP statute. (Code Civ. Proc.,  425.16.)

Plaintiffs cannot and did not show they could prevail in their action. As a result, the court was required to grant the anti-SLAPP motion.

That the abstract was released, thus mooting the action, was not a proper basis for denying the motion. (See Pfeiffer Venice Properties v. Bernard (2002) 101 Cal.App.4th 211, 218 [court must rule on merits of motion even if case dismissed by court or the plaintiff].)

Moreover, the ruling defendant was not entitled to attorney fees as a basis for denying the motion was error. As defendant asserts, that issue was not before the trial court and should not have been decided without an opportunity for defendant to make its motion and be heard. Consequently, the merits of that issue are not before us, and in reversing we make no determination as to defendants entitlement to attorney fees.

DISPOSITION

The order is reversed. Appellant is entitled to costs on appeal.

RYLAARSDAM, J.

WE CONCUR:

SILLS, P. J.

FYBEL, J.

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