Salma v. Capon

74 Cal.Rptr.3d 873

161 Cal.App.4th 1275

David SALMA, Cross-complainant and Respondent, v. Daniel J. CAPON, Cross-defendant and Appellant.

No. Al 15057.

Court of Appeal, First District.

April 9, 2008.

Renee Glover Chantler, Marc C. Belloli, DLA Piper U.S. LLP, East Palo Alto, for Cross-defendant and Appellant.

Janet Brayer, Law Offices of Janet Brayer, San Francisco, for Cross-complainant and Respondent.

STEVENS, J.^*

David Salma filed a cross-complaint against Daniel J. Capon which alleged, among other things, causes of action for conversion and intentional interference with prospective economic advantage. Capon filed a special motion to strike these claims pursuant to the anti-SLAPP statute, Code of Civil Procedure section 425.16. Before the trial court ruled on Capon's motion, Salma filed an amended cross-complaint that revised the two claims. Capon filed a second motion to strike the amended claims. The court ultimately struck the conversion claim in the original cross-complaint pursuant to section 425.16 but did not strike the conversion claim in the amended cross-complaint or the intentional interference claims in either cross-complaint.

In this procedural circumstance, we consider whether a plaintiff or cross-complainant may avoid a pleadings challenge pursuant, to Code of Civil Procedure section 425.16 by amending the challenged complaint or cross-complaint before the motion to strike is heard. We conclude he may not, and therefore we reverse in part and order dismissal of both the conversion and intentional interference claims. We also conclude the trial court properly considered cross-complainant Salma's verified pleadings in assessing Salma's probability of prevailing on the merits.

Background

In the underlying complaint, Capon charges that, due to the duress of an impending trustee's sale and the deceit of the purchasers, he and his estranged wife sold their Hillsborough home in November 2003 to Monopoly Game, LLC (Monopoly) for far less than it was worth. Following this sale, Monopoly sold the home to Salma. Capon alleges the equity purchase agreement prepared by Monopoly violated several provisions of the Home Equity Sales Contracts Act, Civil Code section 1695 et seq., the deed Monopoly recorded was invalid, Salma was not a bona fide purchaser of the property, and the sales agreement is subject to rescission.

The property was first sold on November 14, 2003. Under the purchase agreement, Capon and his wife had the right to occupy the home until December 20. On December 6, shortly after his wife moved out, two men allegedly came to the property to remove her personal property and assaulted Capon. On December 9, Capon was expelled and excluded from the home pursuant to a domestic violence restraining order, which was obtained by his wife with the assistance of a Monopoly officer. Capon was not given an opportunity to remove his personal property from the home, and on December 18 Monopoly sold the home to Salma.

In a declaration submitted in support of his motion to strike, Capon avers that he was struggling with drug addiction at the time of the sale. In June 2004, he entered recovery and began to investigate the circumstances of the sale. He learned his wife had received only $1,000 in cash from the sale, and the original mortgage records and utility accounts were still in his name, and the recorded deed had been altered without his knowledge or consent. On these facts and without legal advice, Capon concluded he was still a legal owner of the home. After applying for and obtaining a residency permit from the Town of Hillsborough, Capon and his girlfriend moved into the home on August 17, 2004. In the following week, a police officer who knew about the December 2003 restraining order saw Capon on the property and placed him and his girlfriend under arrest.

Thereafter, Capon filed numerous complaints with the Hillsborough Police Department and the district attorney regarding the alleged fraudulent purchase of his home and retention of his personal property. He gathered public documents and contacted the title company involved in the sale in order to understand what happened. He also searched for an attorney.

In June 2005, Capon served and recorded a notice of rescission of the equity purchase agreement. In December, he filed his complaint and recorded a notice of lis pendens on the property. The complaint asserts numerous causes of action, including rescission of the sales agreement, breach of contract, and fraud. ›

Salma filed a cross-complaint on January 20, 2006. As to Capon, the cross-complaint asserted claims for declaratory relief, conversion (fourth cause of action), quiet title, trespass, and intentional interference with prospective economic advantage (seventh cause of action).¹ Capon then filed a special motion to strike the fourth and seventh causes of action in the cross-complaint (first motion to strike) on March 8. This motion was supported with a declaration and a request for judicial notice of the notices of rescission and lis pendens he had recorded.

Before the trial court could rule on Capon's special motion to strike, Salma filed a first amended cross-complaint that revised the fourth and seventh causes of action. Although Salma did not file any opposition to the special motion to strike, Capon nevertheless filed a "reply" brief on March 28. Then two days later, Salma filed a "sur-reply" brief to the motion without supporting evidence.

Capon's motion to strike was denied on the ground that he provided inadequate notice of the motion (April 4, 2006 Order). This ruling prompted Capon to file a motion "for correction of clerical errors" and renewal of his anti-SLAPP motion on April 26, in which he argued that the court had misread the statutory notice requirements.

On May 25, 2006, before the court ruled on his April 26 motion, Capon filed a special motion to strike the amended cros-scomplaint (second motion to strike), which he supported with another declaration. Salma opposed the motion without submitting supporting evidence.

Next, the trial court issued a second order (June 14, 2006 Order). It reversed its April 4, 2006 ruling that Capon had provided insufficient notice on the first motion to strike and agreed to reconsider that motion. The court also ruled the first motion to strike was not mooted by the filing of the amended cross-complaint. (See Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal. App.4th 1049, 1052, 18 Cal.Rptr.3d 882.)

On the merits of Capon's anti-SLAPP motion, the court concluded that most of the acts alleged in the Salma's conversion and intentional interference claims "do not appear to be protected speech," but that Capon's filing of a notice of lis pendens was protected speech. Salma was found to have not established a probability of success on the conversion claim in the original cross-complaint because it pled conversion of real property, which is not a recognized tort. However, the court concluded that Salma had established a probability of success as to his intentional interference with prospective economic advantage cause of action. The court's ruling stated, "[t]he gravamen of the claim is that the negative disclosure (caused by the alleged wrongful conduct of Capon) which Salma will have to make on this property when he sells it will depress the market value of the property. Evidence is presented by the Capon Declaration itself to support that claim. The Court may also consider the verified pleading. Second, the evidence presented so far and the applicable law demonstrate that a viable claim exists."

Although Capon's motion to strike the conversion claim from the original cross-complaint was granted, the court denied his motion to strike as to the intentional interference claim. It then declared Capon's second motion to strike moot and overruled a demurrer Capon had filed to three causes of action in the amended cross-complaint, which included the fourth and seventh causes of action. As part of its ruling on the demurrer, the court commented, "It should be noted that the fourth cause of action in the First Amended [Cross-]Complaint is for conversion of personal property (while the original complaint alleged conversion of real property) and thus this is a new cause of action not alleged in the original complaint."²

DISCUSSION

Capon maintains the trial court erred by refusing to strike the intentional interference claims (Count Seven) in either cross-complaint or the conversion claim (Count Four) in the amended cross-complaint.

I. Special Motions to Strike

Code of Civil Procedure section 425.16,³ the anti-SLAPP⁴ statute, provides in relevant part: "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).)

Under the statute, the party moving to strike a cause of action has the initial burden to show that the cause of action arises from an act in furtherance of the moving party's right of petition or free speech. (§ 425.16, subd. (b)(1); Equilon Enterprises v. Consumer Cause, Inc., supra, 29 Cal.4th at p. 67, 124 Cal.Rptr.2d 507, 52 P.3d 685.) Once that burden is met, the burden shifts to the opposing party to demonstrate the probability that it will prevail on the claim. (§ 425.16, subd. (b)(1); Equilon Enterprises, at p. 67, 124 Cal.Rptr.2d 507, 52 P.3d 685.) The appellate court independently reviews whether section 425.16 applies and whether the plaintiff has shown a probability of prevailing. (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 999, 113 Cal. Rptr.2d 625.)

II. Intentional Interference with Prospective...