Filed 6/22/20 Bad Monkey, LLC v. Perez 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

BAD MONKEY, LLC,

Plaintiff and Respondent,

v.

SHAWN R. PEREZ,

Defendant and Appellant.

G058231

(Super. Ct. No. 30-2019-01064408)

O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, Richard Y. Lee, Judge. Affirmed.

Law Office of Stephen Laskero and Stephen Laskero; and Shawn R. Perez for Defendant and Appellant.

Worthington Law and Brian P. Worthington for Plaintiff and Respondent.

* * *

Defendant Windward Sailing Inc. (Windward) agreed to maintain and charter a boat owned by Plaintiff Bad Monkey, LLC (Bad Monkey) in exchange for the majority of the charter fees. Windward chartered the boat to an individual who grounded it, causing it damage. When an independent inspection revealed the damage was more extensive than originally reported, Bad Monkey submitted a claim to its insurer, National Specialty Insurance Company (National).

Windward’s counsel, defendant Shawn R. Perez, wrote a letter informing Bad Monkey that Windward was terminating their business relationship. Windward forwarded Perez’s letter to National and also told a National representative that Bad Monkey’s insurance claim was not worth the amount being claimed. Bad Monkey then filed a lawsuit against Windward and Perez. Windward also filed a lien on Bad Monkey’s boat for unrelated fees, as Perez had advised in his letter.

Bad Monkey’s lawsuit included a claim against Perez for intentional interference with Bad Monkey’s contractual relationship with National. Perez filed a special motion to strike under the anti-SLAPP statute (Code Civ. Proc., § 425.16), arguing his communications to National underlying the claim were protected as petitioning activity because they were prelitigation settlement discussions about the fees Bad Monkey owed Windward, which Perez claims led Windward to file its lien against Bad Monkey’s boat.

The trial court denied the motion, finding Perez had not met his first step burden to show Bad Monkey’s claim was based on protected activity. Because Perez fails to show how the acts he challenges were connected to the lien he depends on as an official proceeding, we conclude he has not carried his first step burden and affirm the court’s denial of the motion.

I

FACTS AND PROCEDURAL HISTORY

The following factual summary includes the allegations of Bad Monkey’s complaint and the declarations submitted on Perez’s anti-SLAPP motion.

A. Boat Grounding Incident

In 2005, Bad Monkey entered a contract for Windward to dock, maintain, service, and charter Bad Monkey’s boat, in exchange for allowing Windward to collect a majority of the charter fees. In 2018, Windward chartered the boat to an individual who grounded it on a reef or rock under the waterline (the grounding incident).

Windward informed Bad Monkey about the grounding incident and that it planned to repair the boat damage without filing a claim under Bad Monkey’s insurance policy. Bad Monkey, however, ordered a third party inspection of the boat that revealed damage more extensive than initially understood, resulting in Bad Monkey submitting a claim to National.

Perez, Windward’s attorney, wrote a letter to Bad Monkey terminating Windward’s contract to charter Bad Monkey’s boat. In his letter, Perez directed Bad Monkey to remove the boat from Windward’s dock and claimed Bad Monkey owed a balance for past boat fees unrelated to the grounding incident. Perez offered to waive the fees if Bad Monkey would remove the boat, but also warned “Windward [would] have no alternative but to lien the vessel” for the fees if the boat was not removed.

Perez’s letter also recounted his understanding about the five-and-a-half months of dealings between Windward and Bad Monkey concerning the grounding incident. In his summary, Perez referred to a third party who previously reported to Windward the delamination damage on the boat appeared to be three to four years older than the grounding incident.

After Perez sent his letter to Bad Monkey, Winward forwarded it to National. Additionally, Perez communicated to National that Bad Monkey’s insurance claim was not worth the amount Bad Monkey claimed. Two months after Perez’s letter, Windward also filed a lien against Bad Monkey’s boat for the unrelated fees noted above.

B. The Instant Lawsuit and anti-SLAPP Motion

Bad Monkey filed the lawsuit in this case alleging fraud and contract claims against Windward for the grounding incident and nondisclosure of the delamination boat damage claimed in Perez’s letter. Bad Monkey also sued Perez for intentional interference with contractual relations, alleging Windward forwarded Perez’s letter to National and Perez, who had “repeatedly [been] in contact” with National, “falsely told [National]” the damage to Bad Monkey’s boat was worth “far less” than the amount Bad Monkey claimed.

In response, Perez filed an anti-SLAPP motion to strike Bad Monkey’s allegations against him (collectively the contract interference allegations). Perez argued the allegations were based on protected activity under the anti-SLAPP statute because as Windward’s lawyer he informed Bad Monkey that Windward was terminating its contract with Bad Monkey and therefore Bad Monkey must remove its boat from Windward’s dock, and he also sought to enter settlement negotiations for the unrelated fees owed to Windward. As noted, the trial court denied the motion, finding Perez had not satisfied his burden to show Bad Monkey based its contract interference allegations on protected activity.

 

II

DISCUSSION

A. Standard of Review and anti–SLAPP Principles

An anti-SLAPP motion denial is reviewed de novo. (Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 884-885 (Wilson).) “A court evaluates an anti-SLAPP motion in two steps. ‘Initially, the moving defendant bears the burden of establishing that the challenged allegations or claims “aris[e] from” protected activity in which the defendant has engaged. If the defendant carries its burden, the plaintiff must then demonstrate its claims have at least “minimal merit.”’ [Citation.]” (Id. at p. 884.) “In deciding whether the initial ‘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.’” (Navellier v. Sletten (2002) 29 Cal.4th 82, 89.)

“The defendant’s first-step burden is to identify the activity each challenged claim rests on and demonstrate that that activity is protected by the anti-SLAPP statute. A ‘claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted.’ (Park [v. Board of Trustees of California State University (2017)] 2 Cal.5th [1057,] 1060.) To determine whether a claim arises from protected activity, courts must ‘consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability.’ (Id. at p. 1063.)” (Wilson, supra, 7 Cal.5th at p. 884.)

“Courts then must evaluate whether the defendant has shown any of these actions fall within one or more of the four categories of ‘“act[s]”’ protected by the anti-SLAPP statute.” (Wilson, supra, 7 Cal.5th at p. 884.) Pertinent to Perez’s position in this case, two of the categories cover: “(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, [and] (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.” (§ 425.16, subds. (e)(1), (2).)

“[T]he terms of subdivision (e)(2) make clear that ‘it is insufficient to assert that the acts alleged were “in connection with” an official proceeding.’ (Paul v. Friedman (2002) 95 Cal.App.4th 853, 867 [(Paul)].) Instead, “[t]here must be a connection with an issue under review in that proceeding.” (Ibid.; see also McConnell v. Innovative Artists Talent & Literary Agency, Inc. (2009) 175 Cal.App.4th 169, 177 [same]; Blackburn v. Brady (2004) 116 Cal.App.4th 670, 677 [same].)” (Rand Resources, LLC v. City of Carson (2019) 6 Cal.5th 610, 620 (Rand).)

B. Perez Has Not Carried His First Step Burden Under Section 425.16, subdivision (e)(2)

Perez claims Bad Monkey based its contract interference allegations on his communications directing Bad Monkey to remove its boat from Windward’s dock and to settle Windward’s claim Bad Monkey owed Windward unpaid fees. Perez contends his acts are protected under two categories of the anti-SLAPP statute: section 425.16, subdivisions (e)(1) and (2).

At the outset, it is clear Perez cannot show acts falling within the first category because none of the challenged activities were “made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law.” (§ 425.16, subds. (e)(1), italics added; see A.F. Brown Electrical Contractor, Inc. v. Rhino Electric Supply, Inc. (2006) 137 Cal.App.4th 1118 (A.F. Brown) [subdivision not implicated where “there was no ‘official proceeding’ in progress or requested].) Perez therefore can only carry his first step burden by demonstrating the acts underlying Bad Monkey’s contract interference allegations were “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.” (§ 425.16, subd. (e)(2), italics added.)

The California Supreme Court’s recent decision in Rand clarified section 425.16, subdivision (e)(2)’s scope in the anti-SLAPP statute and guides our analysis. (Rand, supra, 6 Cal.5th at p. 619.) In Rand, a plaintiff-developer had an exclusive agency contract with the City of Carson to negotiate the construction of a football stadium with the National Football League. (Id. at p. 617.) The plaintiffs there brought a lawsuit against city-related defendants and a rival developer, alleging breach of contract, fraud, and economic interference (id. at p. 619), based on allegations of hidden dealings between the city-related defendants and the rival developer and the city council’s decision to not renew the plaintiff-developer’s contract. (Id. at pp. 617-618.) The defendants filed anti-SLAPP motions to strike all but the plaintiffs’ breach of contract claim, which the trial court granted. (Ibid.)

The appellate court overturned the trial court’s decision, concluding “the causes of action at issue did not arise from conduct in furtherance of defendants’ constitutional rights of free speech in connection with a public issue, as defined by [the anti-SLAPP statute].” (Rand, supra, 6 Cal.5th at p. 619.) The California Supreme Court affirmed the appellate court’s opinion on all claims except two. (Id. at pp. 619, 630-631.)

In its analysis of section 425.16, subdivision (e)(2), the Rand court declared that a communication’s general connection to an official proceeding does not trigger anti-SLAPP protection, explaining that a moving defendant must show an act has a more specific connection with an “‘issue under review in [the claimed official proceeding].’” (Rand, supra, 6 Cal.5th at p. 620, quoting Paul, supra, 95 Cal.App.4th at p. 867.)

In applying this principle, the Rand court analyzed each of the claims challenged by the defendants’ anti-SLAPP motions by first identifying the alleged acts which satisfied the elements for each claim. (Rand, supra, 6 Cal.5th at pp. 622 [second and fourth claims], id. at p. 626 [third claim], id. at pp.628-629 [fifth and sixth claims].) Then, as pertinent to Perez’s position here, the Rand court analyzed how those acts were connected to the issue under review in the official proceeding there: the city council’s vote on whether to extend the plaintiff-developer’s exclusive agency contract. (Id. at p. 623 [no connection for second and fourth claims], id. at pp.626-627 [on third claim, allegedly fraudulent promise was not sufficiently connected because there was no “immediately pending” official proceeding when the promise was made], id. at p. 629 [on fifth and sixth claims, alleged acts were sufficiently connected to city council’s official proceeding].)

Applying Rand’s analysis to this case shows Perez failed to carry his first step burden to demonstrate a sufficient “‘connection’” between the acts underlying Bad Monkey’s contract interference allegations and an official proceeding under section 425.16, subdivision (e)(2). (Rand, supra, 6 Cal.5th at p. 620.) Here, “[t]he elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.)

The above elements show that Bad Monkey, in paragraphs 29 and 56 through 58 of its complaint, based Perez’s liability on his communications to National about Bad Monkey’s insurance claim. Specifically, the paragraphs allege Perez intentionally gave National false information that Bad Monkey’s boat damage from the grounding incident was “much less than what it truly [was],” so National would not pursue a subrogation claim against Windward. Perez’s alleged false information was “designed to induce [National] to breach [Bad Monkey’s insurance policy] by paying Bad Monkey insurance benefits in an amount far less than what it [was] actually entitled to.” Finally, National allegedly accepted Perez’s false information and, as a result, prolonged its investigation of the boat damage arising from the grounding incident and therefore caused Bad Monkey damages “in the form of [a] delay of [insurance benefit] payment . . . because of [National’s] delayed investigation.”

Perez does not explain how a sufficient “‘connection’” exists between his alleged communications to National and Windward’s boat lien for Bad Monkey’s failure to pay fees unrelated to Bad Monkey’s insurance claim. (Rand, supra, 6 Cal.5th at p. 620) The lien is the only possible official proceeding that could support Perez’s anti-SLAPP motion. In his briefing, Perez simply states Windward asserted its boat lien “in accordance with California Harbors and Navigation Code section 500, et seq. and the Federal Maritime Lien Act (46 U.S.C. §31341, et seq.),” but nowhere discusses any substantive issues implicated by those authorities or how the lien specifically was connected to Bad Monkey’s insurance claim for damage to its boat.

Perez’s failure to discuss substantive issues implicated by the boat lien demonstrates he has not shown a sufficient connection between an official proceeding—i.e., the lien—and his alleged communications with National. (McConnell v. Innovative Artists Talent & Literary Agency, Inc., supra, 175 Cal.App.4th at p. 177, fn. 3 [“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, supra, 95 Cal.App.4th] at p. 866.) Statements that ‘ha[ve] nothing to do with the claims under consideration’ in the litigation do not meet that standard”].) Accordingly, even if we assume Windward’s boat lien qualifies as the predicate official proceeding needed for anti-SLAPP protection, Perez has failed to carry his burden to demonstrate the alleged acts are protected under the anti-SLAPP statute. (Wilson, supra, 7 Cal.5th at p. 884.)

C. Perez’s Litigation Privilege and Other Contentions Lack Merit

Perez also contends he is entitled to anti-SLAPP protection because his “conduct falls within the litigation privilege.” Though anti-SLAPP protection and the litigation privilege under Civil Code section 47, subdivision (b), have been treated as coextensive in the past (A.F. Brown, supra, 137 Cal.App.4th at pp. 1125-1126) and undoubtedly serve similar purposes (Kenne v. Stennis (2014) 230 Cal.App.4th 953, 965-966), they are not “identical in every respect.” (Flatley v. Mauro (2006) 39 Cal. 4th 299, 323.) Accordingly, the argument fails as a matter of logic and, in any event, Perez fails to explain why or how the litigation privilege applies. Furthermore, even if we treated the two doctrines as coextensive in this case, Perez has failed to show a “functional connection” between his challenged acts and any litigation that would activate the privilege (Rothman v. Jackson (1996) 49 Cal.App.4th 1134, 1145-1146).

Next, we decline to entertain Perez’s arguments raised for the first time on reply—that he was contemplating potential litigation for Windward’s pursuit of insurance benefits and that Bad Monkey’s claim against him is moot because National paid Bad Monkey’s insurance claim. Points raised for the first time in an appellant’s reply brief will not be considered absent a showing of good cause. (High Sierra Rural Alliance v. County of Plumas (2018) 29 Cal.App.5th 102, 111-112, fn. 2.) Perez has not shown good cause why he could not present these arguments in his opening brief.

Perez’s reliance on certain cases are unavailing because none of his cited cases presented a real dispute about whether there was a sufficient “‘connection’” under section 415.16, subdivision (e)(2). (Rand, supra, 6 Cal.5th at p. 620.) For example, although Perez characterizes Contreras v. Dowling (2016) 5 Cal.App.5th 394 (Contreras) as “[o]ne of the most instructional cases,” its facts and reasoning show otherwise. Contreras involved claims against an attorney who wrote a responsive letter to opposing counsel after the attorney’s clients “had filed two unlawful detainer actions against [the plaintiff].” (Id. at p. 409.) On the first step of anti-SLAPP analysis, the Contreras court emphasized that, despite the plaintiff’s labeling, it was clear the acts attributed to the attorney were based upon his role as counsel in ongoing litigation. (Id. at pp. 409-414.) In other words, the claims against the attorney in Contreras and their direct “connection” to an official proceeding—i.e., litigation—was patently obvious, rendering the case inapt to this case.

Perez also relies on Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, Seltzer v. Barnes (2010) 182 Cal.App.4th 953, and Bergstein v. Stroock & Stroock & Lavan LLP (2015) 236 Cal.App.4th 793. Seltzer and Bergstein are also factually inapt because, as with Contreras, neither involved any material disconnect between challenged attorney acts and the official proceedings at issue in those cases—formal litigation in both. (Seltzer, supra, 182 Cal.App.4th at pp. 968-969 [distinguishing case from others, including those where “the challenged communications lacked any connection to ongoing litigation”]; Bergstein, supra, 182 Cal.App.4th at p. 811 [e.g., describing allegations of confidential information used to carry out a “‘litigation attack’”].)

The analysis in Neville touches on the “‘connection’” issue, but it does not support Perez’s position. In Neville, an attorney drafted a letter on behalf of his client who had employed Neville. (Neville, supra, 160 Cal.App.4th at pp. 1259-1260.) The attorney’s letter was sent to the employer’s customers informing them that Neville may have started a competing business and violated his contractual obligations to his former employer by contacting its customers. (Id. at pp. 1259-1260.)

The employer sued Neville, who filed a cross-complaint that eventually named the attorney as a defendant, based upon his letter. (Neville, supra, 160 Cal.App.4th at p. 1260.) The attorney filed an anti-SLAPP motion against Neville’s allegations that the attorney had made “‘false accusations, representations, statements and comments’” in his letter (id. at p. 1260.) The trial court granted the motion, finding the attorney’s letter was sufficiently related to the dispute between the employer and Neville. (Id at. pp. 1260-1261.)

The appellate court reviewed whether the attorney had met his first step burden to show the cross-complainant’s claim was based on protected activity under section 425.16, subdivision (e)(2). (Neville, supra, 160 Cal.App.4th at p. 1262.) The Neville court concluded the attorney’s letter was “‘in connection with’ the issues in [the employer’s] lawsuit against Neville.” (Id. at p. 1268.) The court explained “[the attorney’s letter about Neville] contained no statements of fact concerning Neville that were not based on or related to the allegations that formed the basis of [the employer’s] claims.” (Id. at p. 1268.)

Neville therefore is factually inapt here because the attorney’s prelitigation letter bore a direct connection to later litigation concerning the same issues that had been discussed in the letter. (Neville, supra, 160 Cal.App.4th at pp. 1267-1268.) In contrast, Perez’s communications to the insurance carrier about an insurance claim on the grounding incident were wholly unconnected to a boat lien on fees he himself describes as “wholly unrelated” to the incident. Neville does not support Perez’s position.

Thus, Perez has not shown a sufficient “‘connection’” between Bad Monkey’s contract interference allegations and the boat lien he claims as the official proceeding to justify anti-SLAPP protection. (Rand, supra, 6 Cal.5th at p. 620.)

III

DISPOSITION

The order denying Perez’s anti-SLAPP motion is affirmed. Bad Monkey shall recover its costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)

ARONSON, J.

WE CONCUR:

MOORE, ACTING P. J.

THOMPSON, J.