Sixth District Determined Cause Of Action Was Not Properly SLAPPed Because It Was Triggered By A Dispute That Arose In The Aftermath Of Previous Litigation, Not The Conduct In The Prior Litigation.
GBR Magic Sands MHP, LLC v. Pecoraro, Case No. H044936 (6th Dist., Sept. 26, 2019) (unpublished) involves a dispute among family members over a 20-acre parcel of land – originally owned by two brothers (Cyril and Louis) who shared a 50% undivided interest, and their parents who owned a 50% undivided interest.
In 1963, parents granted a 98-year lease of their interest to the two brothers. Cyril used his and his brother’s interest + the 98-year lease of parents’ interest to develop a mobile home park. When the parents died, their children (the 2 sons, and daughters Rita and Josephine) succeeded to fractional shares of the parents’ interest. Later, in 2007, the brothers’ interest was leased to GBR – an entity controlled by Cyril. In 2008, the 1963 lease was assigned to GBR. A 2010 partition action led to the entire 20-acre parcel’s fee interest becoming vested in Louis, Josephine, and Catherine (Rita’s daughter).
During the partition action litigation, Louis, Catherine and a trustee learned that Cyril had obtained the 1963 lease through undue influence – and Catherine and the trustee successfully filed an action to cancel the 1963 lease and quiet title to their interest in the parcel. The judgment in that case also provided that GBR had “no right, title or interest in the undivided fifty percent interest . . . previously subject to the 1963 Lease . . .”
Later, in 2017, GBR filed a cross-complaint in an existing action against it brought by Louis’ company. In its 4th cause of action, GBR sought declaratory relief with respect to possession and rent in light of the 1963 lease cancellation. GBR alleged that Catherine and the trustee were claiming a right to possess the 20-acre parcel and a right to a share of the rent paid to GBR by its mobile home tenants. However, GBR claimed it had a right to continue in possession of the 20-acre parcel pursuant to the 2007 lease. Catherine and the trustee successfully SLAPPed (Code Civ. Proc. section 425.16) GBR’s 4th cause of action. The parties then stipulated to $56,225 in attorney’s fees – which the trial court awarded to Catherine and the trustee.
GBR appealed the SLAPP determination and the subsequent attorneys’ fees award – claiming its 4th cause of action for declaratory relief did not stem from protected activity. Rather, it arose from a dispute that arose in the aftermath of the protected activity.
The Sixth District agreed – citing City of Cotati v. Cashman (2002) 29 Cal.4th 69. They determined GBR’s 4th cause of action stemmed from a dispute that arose from the outcome of the previous litigation and not the protected activity itself – concluding that Catherine and the trustee had failed to meet their burden of demonstrating that GBR’s 4th cause of action arose from the prior litigation activity rather than the underlying real property dispute.
With the Sixth District’s reversal of the SLAPP grant came reversal of the $56,225 attorneys’ fees award. POOF!
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