Opinion
B309287
03-15-2022
KATHERINE BLACK GARCIA et al., Plaintiffs, Cross-Defendants, and Respondents, v. THOMAS D. WILLIAMSON et al., Defendants, Cross-Complainants, and Appellants.
Knez Law Group, Fred J. Knez and Matthew J. Knez for Defendants, Cross-Complainants, and Appellants. Strook & Strook & Lavan, John R. Loftus and Christine E. Ellice for Plaintiffs, Cross-Defendants, and Respondents.
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County No. 19TRCV00504, Daniel Juarez, Judge. Reversed and remanded with directions.
Knez Law Group, Fred J. Knez and Matthew J. Knez for Defendants, Cross-Complainants, and Appellants.
Strook & Strook & Lavan, John R. Loftus and Christine E. Ellice for Plaintiffs, Cross-Defendants, and Respondents.
FEUER, J.
Thomas D. Williamson and Sue Shreeve appeal from an order granting the special motion to strike (Code Civ. Proc., § 425.16; anti-SLAPP statute) filed by cross-defendants Katherine Black Garcia and Christopher, Henry, and Laura Black (collectively, the Black parties). After Thomas and Suearranged for the sale of real property owned by corporate entities held by four family trusts without notice to the Black parties, three of the Black parties (Katherine, Christopher, and Henry; collectively, the Black plaintiffs), in their capacity as co-trustees of one of the four trusts, sued Thomas and Sue for breach of fiduciary duty. Thomas and Sue cross-complained against the Black parties, alleging causes of action for intentional interference with prospective economic advantage and declaratory relief. The Black parties filed a special motion to strike the cross-complaint, which the trial court granted.
"SLAPP is an acronym for 'strategic lawsuits against public participation.'" (City of Montebello v. Vasquez (2016) 1 Cal.5th 409, 413, fn 2.) All further undesignated statutory references are to the Code of Civil Procedure.
To avoid confusion, we refer to the litigants and others by their first names.
On appeal, Thomas and Sue contend their filing of a first amended cross-complaint after the Black parties filed their special motion to strike rendered the motion moot. Thomas and Sue also argue their declaratory relief causes of action do not arise from protected activity, and in any event, Thomas and Sue have shown a probability of success on the merits. We agree that portions of the declaratory relief causes of action do not arise from protected activity. We reverse.
FACTUAL AND PROCEDURAL BACKGROUND
The factual background is taken from the undisputed facts alleged in the first amended complaint and cross-complaint.
George Williamson, Sr., and his wife, Ruth Williamson, had six children: Thomas, Sue, Laura, Patricia Brunner, Anne Farrell, and George Williamson, Jr. Ruth and George, Sr., acquired a substantial portfolio of real estate, and in 2004 they created a trust for each of their children. Each trust was given an equal interest in entities formed to hold title to the properties acquired by Ruth and George, Sr., including Utah limited liability companies GEO Investments, LLC, Rolling Hills, LLC, Meadowbrook, LLC, and South Willow Mobile Home Park, LLC (the LLC's) and California S-corporation GBW Investments, Inc. (GBW) (collectively, the controlling entities).
As of January 1, 2018, the controlling entities were owned by four of the six Williamson sibling trusts (with each trust holding a 25 percent interest): the Thomas Williamson 101 Trust (Williamson trust), the Sue Shreeve 101 Trust (Shreeve trust), the Patricia Brunner 101 Trust (Brunner trust), and the Laura Black 101 Trust (Black trust). At that time, Thomas and Michael Brunner (Patricia's husband) were co-managers of the LLC's, and Thomas, Sue, and Michael Brunner were officers and directors of GBW.
The Black plaintiffs are co-trustees of the Black trust, whose primary beneficiary is Laura. Thomas and Sue are co-trustees of the Williamson and Shreeve trusts, with Thomas being the primary beneficiary of the Williamson trust and Sue being the primary beneficiary of the Shreeve trust. At the time of the events at issue in this appeal, Michael was trustee of the Brunner trust, whose primary beneficiary was his wife, Patricia.
Michael had power of attorney over Patricia, who allegedly suffers from Alzheimer's disease, and was the sole trustee of the Brunner trust.
B. The Complaint
On June 6, 2019 the Black plaintiffs filed a complaint in their capacity as co-trustees of the Black trust against Thomas, Sue, and Michael. The operative first amended complaint alleged causes of action against defendants for breach of fiduciary duty, concealment, conspiracy to breach fiduciary duty, and fraud. Katherine, Christopher, and Henry alleged that without prior notice to the Black parties, on June 12, 2018 Thomas, Sue, and Michael arranged the sale of three mobile home parks located in Utah that were owned by the LLC's. On the morning of the closing, Thomas sent Laura a text message informing her of the sale. Laura's attorney contacted the escrow company and requested it stop distribution of the sales proceeds to allow Laura to seek a temporary restraining order to prevent the sale. The escrow company's owner indicated the funds would be frozen, but the funds were distributed the same day.
In the days following the sale, Thomas refused to disclose the details of the sale to the Black parties, but he assured Laura the sale had been structured to allow the Black trust to conduct an exchange under Internal Revenue Code section 1031 (1031 exchange) to minimize the trust's tax liability. The Black plaintiffs alleged that due to the lack of advance notice, a 1031 exchange could not be effectuated prior to the sale of the mobile home parks, resulting in over $7 million in tax liability.
"Through a 1031 exchange, a taxpayer can defer taxes on gains from the sale of a property by using those gains to purchase a second property. (26 U.S.C. § 1031.)" (CADC/RADC Venture 2011-1 LLC v. Bradley (2015) 235 Cal.App.4th 775, 780.)
On June 14, 2018 the Black plaintiffs filed an ex parte application in the Los Angeles Superior Court for an order appointing a receiver and for a preliminary injunction. The court granted a temporary restraining order, and on July 26, 2018 it appointed a receiver to assume management of the controlling entities, thereby removing Thomas from his positions as manager of the LLC's and officer and director of GBW. During the court proceedings, the Black parties learned Thomas, Sue, and Michael had also arranged for the sale of three apartment complexes located in Torrance, California, which were owned by GBW. Thomas, Sue, and Michael approved an offer of $27 million for the apartment complexes without giving notice to the Black parties. Although Laura learned of the plan to sell the apartment complexes before the sale closed, she was not able to effectuate a 1031 exchange due to the late notice.
The Black plaintiffs alleged Thomas, Sue, and Michael, as managers, officers, and directors of the controlling entities, owed a fiduciary duty to the Black plaintiffs and the Black trust. In its prayer for relief, the first amended complaint sought as damages the amount of the tax liability incurred by the Black trust as a result of the sales of the mobile home parks and the apartment complexes.
C. The Cross-complaint
On December 2, 2019 Thomas and Sue filed a cross-complaint against the Black plaintiffs as co-trustees of the Black trust and against Laura individually, alleging a cause of action for intentional interference with prospective economic advantage and two causes of action for declaratory relief. Thomas and Sue brought their action both as individuals and as co-trustees of the Williamson and Shreeve trusts.
The cross-complaint alleged multiple lawsuits filed by members of the Williamson family against other family members. According to the cross-complaint, Thomas sued his sister, Anne Farrell, and her husband in a Utah court in February 2012. The Farrells in turn filed a counterclaim against members of the Williamson family. Thomas and Sue alleged the Utah court made findings in favor of Thomas, which "along with the preexisting hatred for Thomas," caused the Farrells and their attorney, Jake Loftus, to pursue claims against Thomas and Sue "no matter the basis or the cost." (Capitalization omitted.) After Ruth's death, the Farrells and Laura filed a lawsuit against Thomas and Sue in a Utah court claiming elder abuse against Ruth.
In their first cause of action for intentional interference with prospective economic advantage, Thomas and Sue alleged that in early 2018 Thomas engaged a real estate broker who located a buyer for the three mobile home parks who offered to pay $60 million for the parks, a sum substantially greater than the $29 million appraisal value. Thomas took steps to conduct a 1031 exchange, including arranging for a facilitator in Utah and identifying multiple properties for the exchange. Thomas, Sue, and Michael approved the sale in their capacity as trustees of the Williamson, Shreeve, and Brunner trusts. Thomas "was concerned about notifying Laura of the sale because in recent years, she had joined forces with the Farrells and Loftus in their efforts to harass Thomas, Sue and [Michael] and interfere in the efforts of Thomas and [Michael] to manage the properties." (Capitalization omitted.) Further, "Thomas was concerned that if he gave advance notice to Laura," she would take steps "to frustrate the sale which in turn could expose Thomas to claims of breach of fiduciary duty to Sue and [Michael]." (Capitalization omitted.) Thomas and Sue alleged that Laura could not have stopped the sale even if she objected to it, because Thomas, Sue, and Michael through their respective trusts held 75 percent of the ownership interest in the LLC's that held title to the mobile home parks.
On the morning of June 12, 2018 Thomas sent Laura a text message informing her of the sale and requesting that she contact him so he could explain the details of the sale and the opportunity for a 1031 exchange. Loftus then contacted the escrow company in an attempt to freeze distribution of the sale proceeds. Thomas and Sue were concerned the interference by Loftus would place the sale at risk or freeze distribution of the proceeds, forcing them "to forego a 1031 [e]xchange and suffer[] the payment of taxes due to Loftus['s] interference on behalf of Laura and the Farrells." (Capitalization omitted.) Thomas and Sue alleged the Black parties thereby interfered with their prospective economic advantage by causing Thomas and Sue to forego the "probable future economic benefit of a 1031 [e]xchange" in connection with the sale of the mobile home parks.
As to their second cause of action for declaratory relief, Thomas and Sue alleged they had an actual controversy with the Black parties concerning Thomas's and Sue's duties and obligations as managers of the LLC's, and whether they violated their fiduciary duties in failing to structure the sale of the mobile home parks through a 1031 exchange to minimize tax liability to the Black trust and Laura individually. Thomas and Sue alleged they had no duty to structure the sale of the mobile home parks to enable the Black parties to effectuate a 1031 exchange. Further, the Black parties and Loftus intentionally interfered with Thomas's efforts to consummate a 1031 exchange, and this conduct "bars any claim against [Thomas and Sue] regarding the sale of the mobile home parks." In addition, the court-appointed receiver requested to distribute $2.5 million to the four family trusts, but the Black trust and Laura opposed the distribution "on [the] ground that they contend they have civil claims against" Thomas and Sue for failing to structure the sale of the mobile home parks through a 1031 exchange. Moreover, the Black parties had no right under Utah or California law to demand distribution of funds from the sale of the mobile home parks in any form other than money.
As part of their second cause of action, Thomas and Sue alleged the Black trust, Laura, and Anne sued Thomas individually and as a trustee of the Williamson trust and the LLC's, and as a result have taken positions adverse to the Williamson, Shreeve, and Brunner trusts' beneficiaries and property. Further, "given the adversarial nature of the relationship between the parties and because of the multiple lawsuits brought by Laura and the Farrells in California, [Thomas and Sue] owed no duty whatsoever to [the Black parties]." (Capitalization omitted.)
With respect to their third cause of action for declaratory relief, Thomas and Sue alleged that as directors and/or shareholders of GBW they owed no duty to the Black parties to structure the sale of the apartment complexes to enable the Black parties to avoid tax consequences by effectuating a 1031 exchange. Further, the court-appointed receiver gave the Black parties an opportunity to conduct a 1031 exchange with their portion of the sale proceeds, but the Black parties declined. Thus, the Black parties' inclusion of causes of action in their first amended complaint related to the sale of the apartment complexes was "malicious, wrongful, fraudulent and without any merit whatsoever."
Thomas and Sue sought judicial declarations that they had no duty to structure the sales of the mobile home parks and apartment complexes to allow the Black parties to conduct 1031 exchanges; the LLC's had no duty to make a distribution of the sale proceeds in any form other than money; Thomas and Sue owed no duty to the Black parties "over and above what duties they owed to the [Williamson, Shreeve, and Brunner trusts]"; and "given the adversarial relationship of the parties," Thomas and Sue owed no duties to Laura or the Black trust.
D. The Black Parties' Special Motion To Strike
On January 7, 2020 the Black parties filed a special motion to strike the cross-complaint under section 425.16. The Black parties argued that because all the causes of action in the cross-complaint were based on the pre-litigation conduct of Loftus and the filing of the Black plaintiffs' complaint, the causes of action arose from protected activity in furtherance of the Black parties' right of petition. The Black parties asserted as to the declaratory relief causes of action, "the facts and legal issues on which [Thomas and Sue] seek a judicial declaration overlap entirely with the allegations" in the first amended complaint, and thus, the causes of action arise from the litigation. Further, Thomas and Sue could not establish a probability of prevailing on their claims because their claims were barred by judicial estoppel; the Black parties did not commit a wrongful act of interference; the Black parties' conduct did not cause economic harm to Thomas and Sue because Thomas and Sue voluntarily abandoned the 1031 exchange; the Black parties were immune from liability because Loftus, acting on behalf of Laura and the Black trust, was not a "'stranger'" to the economic relationship; and Thomas and Sue improperly sought to use the declaratory relief mechanism to counter the allegations in the first amended complaint and redress past wrongs. The Black parties requested attorneys' fees and costs incurred in bringing their motion.
On January 15, 2020, while the Black parties' special motion to strike the cross-complaint was pending, Thomas and Sue filed a first amended cross-complaint. The first amended cross-complaint alleged a single cause of action for declaratory relief relating to both the sales of the mobile home parks and the apartment complexes; it included the identical allegations and prayers for relief sought in the cross-complaint's two causes of action for declaratory relief. The first amended cross-complaint did not allege a cause of action for intentional interference with prospective economic advantage.
On February 11, 2020 Thomas and Sue filed an opposition to the special motion to strike, arguing it had been rendered moot by the filing of the first amended cross-complaint, by which Thomas and Sue withdrew their cause of action for intentional interference with prospective economic advantage. Thomas and Sue also argued the declaratory relief cause of action alleged in the first amended cross-complaint did not arise out of protected activity because it concerned Thomas's and Sue's rights and duties in the underlying sales of real property by the controlling entities, including whether they had a duty to make arrangements for a 1031 exchange to minimize tax liability. Thomas and Sue also asserted in a conclusory manner they were likely to prevail on the merits of their declaratory relief cause of action and the Black parties' defenses would fail.
After allowing supplemental briefing on the effect of the filing of the first amended cross-complaint, on October 27, 2020 the trial court held a hearing on the motion and took the matter under submission. In its written ruling the trial court granted the Black parties' special motion to strike the cross-complaint. The court found the filing of the first amended cross-complaint did not moot the special motion to strike, reasoning that Thomas and Sue could not avoid a ruling on the anti-SLAPP motion by amending the challenged cross-complaint in response to the motion.
The court found the three causes of action in the cross-complaint arose from protected activity. The cause of action for intentional inference with prospective economic advantage involved the alleged pre-litigation conduct of Loftus attempting to freeze distribution of the proceeds from the sale of the mobile home parks pending efforts to obtain a restraining order. Regarding the causes of action for declaratory relief, the court found, "[T]he alleged conduct involves [Thomas's and Sue's] actions in the sales, and specifically whether those actions were wrongful breaches of fiduciary duties and fraud. . . . This request for relief is sought in direct response to [the Black plaintiffs'] underlying [first amended complaint]. The act of filing litigation is a protected activity. [Citation.] Therefore, [the Black parties] meet their burden on the first prong relating to the declaratory relief claims." The court further found Thomas and Sue had not carried their burden to show a probability of success on the merits of their claims.
Thomas and Sue timely appealed.
The Black parties later filed a motion for attorneys' fees, which the trial court granted in part. The ruling on the attorneys' fees motion is not challenged in this appeal.
DISCUSSION
A. Special Motions To Strike
A cause of action arising from an act in furtherance of a defendant's constitutional right of petition or free speech in connection with a public issue is subject to a special motion to strike unless the plaintiff demonstrates a probability of prevailing on the claim. (§ 425.16, subd. (b)(1); see Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1009 (Bonni); Baral v. Schnitt (2016) 1 Cal.5th 376, 381 (Baral).) An "'act in furtherance of a person's right of petition or free speech under the United States or California Constitution in connection with a public issue'" includes, in relevant part, "any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law." (§ 425.16, subd. (e)(1).)
"Litigation of an anti-SLAPP motion involves a two-step process. First, '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.' [Citation.] Second, for each claim that does arise from protected activity, the plaintiff must show the claim has 'at least "minimal merit."' [Citation.] If the plaintiff cannot make this showing, the court will strike the claim." (Bonni, supra, 11 Cal.5th at p. 1009; Baral, supra, 1 Cal.5th at p. 381.)
"We determine de novo whether any of the acts from which challenged claims arise are protected under these provisions." (Bonni, supra, 11 Cal.5th at p. 1009; accord, Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1067 (Park).) "We exercise independent judgment in determining whether, based on our own review of the record, the challenged claims arise from protected activity. [Citations.] In addition to the pleadings, we may consider affidavits concerning the facts upon which liability is based. [Citations.] We do not, however, weigh the evidence, but accept the plaintiff's submissions as true and consider only whether any contrary evidence from the defendant establishes its entitlement to prevail as a matter of law." (Park, at p. 1067.)
B. The Trial Court Did Not Err in Ruling on the Special Motion To Strike the Cross-complaint
Thomas and Sue contend their filing of the first amended cross-complaint rendered moot the Black parties' special motion to strike the cross-complaint. It did not. A plaintiff or cross- complainant may not avoid an anti-SLAPP challenge to his or her pleading by amending the challenged complaint or cross-complaint before the motion to strike is heard. (Salma v. Capon (2008) 161 Cal.App.4th 1275, 1294 [trial court did not err in granting special motion to strike original cross-complaint where cross-complainant filed amended cross-complaint after motion was filed but before trial court ruled on motion]; Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049, 1055 [same].)
Thomas and Sue's reliance on JKC3H8 v. Colton (2013) 221 Cal.App.4th 468 and Dickinson v. Cosby (2017) 17 Cal.App.5th 655 is misplaced. In Colton, the plaintiffs filed an amended complaint removing all allegations of protected activity before the defendants filed their special motion to strike the original complaint. (Colton, at p. 479.) In Dickinson, the Court of Appeal concluded a plaintiff may amend the complaint to add an additional defendant while another defendant's special motion to strike is pending. (Dickinson, at p. 679.)
C. The Trial Court Erred in Striking Thomas and Sue's Causes of Action for Declaratory Relief in Their Entirety
Thomas and Sue present no argument on appeal that their first cause of action for intentional interference with prospective economic advantage does not arise from the Black parties' protected activity or that they have shown a probability of success on the merits, thereby forfeiting any challenge to the trial court's grant of the motion as to that claim. (Swain v. LaserAway Medical Group, Inc. (2020) 57 Cal.App.5th 59, 72 ["'"'Issues not raised in an appellant's brief are [forfeited] or abandoned.'"'"]; Golden Door Properties, LLC v. County of San Diego (2020) 50 Cal.App.5th 467, 555 [same].)
1. Thomas and Sue seek declaratory relief for non-protected activity
"A claim arises from protected activity when that activity underlies or forms the basis for the claim." (Park, supra, 2 Cal.5th at p. 1062; accord, City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78 (Cotati).) "'[T]he mere fact that an action was filed after protected activity took place does not mean the action arose from that activity for the purposes of the anti-SLAPP statute.'" (Park, at p. 1063; accord Cotati, at pp. 76-77.) "Instead, the focus is on determining what 'the defendant's activity [is] that gives rise to his or her asserted liability-and whether that activity constitutes protected speech or petitioning.' [Citation.] . . . [I]n ruling on an anti-SLAPP motion, courts should consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability." (Park, at p. 1063, italics omitted; accord, Bonni, supra, 11 Cal.5th at p. 1009 ["The defendant's burden is to identify what acts each challenged claim rests on and to show how those acts are protected under a statutorily defined category of protected activity."].)
"The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, breach of fiduciary duty, and damages." (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820; accord, IIG Wireless, Inc. v. Yi (2018) 22 Cal.App.5th 630, 646.) Thomas and Sue seek a judicial declaration as to the scope of their fiduciary duties as managers, directors, and officers of the controlling entities and whether they breached their fiduciary duties by their conduct relating to the sales of the mobile home parks and apartment complexes. Specifically, Thomas and Sue allege they owed (1) no duty to the Black parties to structure the sales to allow for a 1031 exchange because 75 percent of the ownership interest in the controlling entities voted to distribute the proceeds; (2) no duty to make any form of distribution to members of the controlling entities other than money; (3) no duty to Laura and the Black trust beyond that owed to the Williamson, Shreeve, and Brunner trusts, to other members of the controlling entities, and to the other parties to the sales; and (4) no duty to Laura or the Black trust in light of the adversarial relationship between the parties.
The Black parties contend, as the trial court found, the conduct underlying the cross-complaint's declaratory relief causes of action arose from protected activity because the claims were made in direct response to the Black plaintiffs' filing of the complaint and first amended complaint, which were written or oral statements made before a judicial proceeding pursuant to section 425.16, subdivision (e)(1). Thomas and Sue acknowledge their allegations "may have some overlap" with those in the first amended complaint, but they argue their declaratory relief causes of action do not arise from protected activity because the conduct alleged to give rise to the controversy is the sale of real estate, not the litigation. Thomas and Sue are generally correct, but some of the allegations in the cross-complaint are based on protected activity.
"'"'[T]he basic act of filing litigation'"'" constitutes protected activity under the statute. (Navellier v. Sletten (2002) 29 Cal.4th 82, 90.) Further, "[i]t is well established that the protection of the anti-SLAPP statute extends to lawyers and law firms engaged in litigation-related activity. . . . '"Any act"' under section 425.16, subdivision (b)(1) 'includes communicative conduct such as the filing, funding, and prosecution of a civil action.'" (Optional Capital, Inc. v. Akin Gump Strauss, Hauer & Feld LLP (2017) 18 Cal.App.5th 95, 113; accord, Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056 ["'[a]ny act'" under the statute includes "qualifying acts committed by attorneys in representing clients in litigation"].)
When a party has pleaded a cause of action that "rests on allegations of multiple acts, some of which constitute protected activity and some of which do not," we must "analyze each claim for relief-each act or set of acts supplying a basis for relief, of which there may be several in a single pleaded cause of action- to determine whether the acts are protected and, if so, whether the claim they give rise to has the requisite degree of merit to survive the motion." (Bonni, supra, 11 Cal.5th at p. 1010; accord, Baral, supra, 1 Cal.5th at pp. 393-395.)
As discussed, the cross-complaint seeks a judicial declaration that Thomas and Sue owed no duty to the Black parties as a result of "the adversarial nature of the relationship between the parties and because of the multiple lawsuits" filed by members of the Williamson family against other family members in the Utah and California courts. Although this allegation is phrased in terms of an adversarial relationship between the parties, the cross-complaint supports this claim with allegations that Laura and the Farrells brought "multiple lawsuits" against Thomas and Sue; the pre-litigation conduct of the Black parties and Loftus interfered with Thomas's efforts to orchestrate a 1031 exchange and "bars any claim against [Thomas and Sue] regarding the sale of the mobile home parks"; Laura and the Black trust refused to allow distribution of the mobile home park sale proceeds so they could pursue civil claims against Thomas and Sue; and the Black parties' inclusion of claims in their first amended complaint relating to the sale of the apartment complexes was "malicious, wrongful, fraudulent and without any merit whatsoever" because the Black parties had declined the opportunity provided by the receiver to effectuate a 1031 exchange on the sale.
Thomas and Sue contend these allegations as to litigation are "nothing more than context to support the adversarial relationship." Under some circumstances, allegations of litigation among the parties would constitute mere evidence of an adversarial relationship among the parties (which Thomas and Sue contend negates their fiduciary duty to the Black parties), and thus not be subject to a special motion to strike. (See Park, supra, 2 Cal.5th at p. 1060 ["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".) But here, the allegations are not mere context or evidence of an adversarial relationship-the cross-complaint does not allege any conduct that created an adversarial relationship between the parties other than the litigation. It is the allegations of past and present litigation, as well as the pre-litigation conduct of Loftus in attempting to freeze distribution of the proceeds from the sale of the mobile home parks while he sought a restraining order, that Thomas and Sue contend negated any duty for Thomas and Sue to structure the sales to allow for the Black parties to execute a 1031 exchange. Thomas and Sue cannot avoid the anti-SLAPP statute by labelling the protected activity that forms the basis of the claim (the litigation) as non-protected activity (an adversarial relationship). Rather, under these circumstances the filing of the litigation is the activity that supplies the elements of the declaratory relief cause of action. (Park, at p. 1063.) The Black parties have therefore carried their burden to show this portion of both declaratory relief causes of action arises from protected activity, and the burden shifts to Thomas and Sue to show a probability of prevailing on the merits of their claims that they owed no fiduciary duty to the Black parties given the adversarial relationship.
The cross-complaint also alleges without further detail that the Farrells and Loftus had a "preexisting hatred" for Thomas. However, the Farrells and Loftus are not parties to this action.
We reject Thomas and Sue's argument that the declaratory relief causes of action cannot be subject to a special motion to strike because they do not seek damages. (See Lee v. Silveira (2016) 6 Cal.App.5th 527, 549 [reversing trial court's denial of special motion to strike plaintiffs' declaratory relief claim]; Lunada Biomedical v. Nunez (2014) 230 Cal.App.4th 459, 478 ["'"[A]n anti-SLAPP motion may lie against a complaint for declaratory relief . . . ."'"].)
However, the remainder of the cross-complaint's declaratory relief causes of action does not arise from petitioning activity. Thomas and Sue's claim they owed no duty to the Black parties to structure the sales to allow for a 1031 exchange because 75 percent of the ownership interest in the controlling entities voted to distribute the proceeds does not involve the litigation in Utah and California courts or the pre-litigation conduct of Loftus. Nor do Thomas and Sue's claims that they had no duty to make any form of distribution to members of the controlling entities other than money and owed no duty to Laura and the Black trust beyond that owed to the Williamson, Shreeve, and Brunner trusts, to other members of the controlling entities, and to the other parties to the sales. These claims arise from conduct related to the sales, not to the litigation.
The Black parties' argument that the claims for declaratory relief arose from protected activity because they respond to the allegations in the first amended complaint lacks merit. "That a cause of action arguably may have been triggered by protected activity does not entail that it is one arising from such." (Cotati, supra, 29 Cal.4th at p. 78.) The Supreme Court has cautioned against construing the "'arising from'" language in section 425.16, subdivision (b)(1), to mean "'in response to, '" because such a reading "would in effect render all cross-actions potential SLAPP's." (Cotati, at p. 77 [action for declaratory relief filed in state court to gain more favorable forum in which to litigate identical dispute over constitutionality of rent stabilization ordinance under consideration in federal court did not arise from protected activity]; see Kajima Engineering and Construction, Inc. v. City of Los Angeles (2002) 95 Cal.App.4th 921, 929 [rejecting argument cross-complaint for breach of reconstruction contract arose from protected activity because it was filed "in retaliation" for filing of complaint for non-payment for work under contract].) That a claim for relief seeks resolution of the same dispute as a prior-filed suit does not mean the claim arises from protected petitioning activity. (See Cotati, at p. 78.) Here, the remaining claims for relief seek a declaration of rights concerning the sales of the mobile home parks and apartment complexes and are based on allegations of the parties' conduct relating to those sales, not to any protected activity.
The Black parties have therefore not carried their burden to show the allegations supporting the cross-complaint's remaining claims for declaratory relief-asserting Thomas and Sue had no duty to the Black parties for reasons other than the adversarial relationship between them-arise from acts in furtherance of protected activity under the anti-SLAPP statute. Because the Black parties failed to make the required first-step showing as to the cross-complaint's first, second, and third prayers for relief on the declaratory relief causes of action, the special motion to strike those claims should have been denied.
2. Thomas and Sue have not demonstrated a probability of prevailing on their claims for declaratory relief based on allegations of protected activity
As to the cross-complaint's claims for relief based on allegations of protected activity (the adversarial relationship), Thomas and Sue bore the burden to make "a prima facie factual showing sufficient to sustain a favorable judgment" on the claim to defeat the Black parties' special motion to strike. (Monster Energy Co. v. Schechter (2019) 7 Cal.5th 781, 788; accord, Baral, supra, 1 Cal.5th at pp. 384-385.) "[A] plaintiff seeking to demonstrate the merit of the claim 'may not rely solely on its complaint, even if verified; instead, its proof must be made upon competent admissible evidence.'" (Monster Energy, at p. 788; see Lunada Biomedical v. Nunez, supra, 230 Cal.App.4th 459, 478 ["The plaintiff's showing of facts must consist of evidence that would be admissible at trial."].)
In their opening brief, Thomas and Sue argue they have shown a probability of success on their claims for declaratory relief because the claims are the proper subject of declaratory relief and an actual controversy exists between the parties relating to their rights and obligations. However, "'"the mere existence of a controversy is insufficient to overcome an anti-SLAPP motion against a claim for declaratory relief. [¶] To defeat an anti-SLAPP motion, the plaintiff must also make a prima facie evidentiary showing to sustain a judgment in the plaintiff's favor. [Citation.] In other words, for a declaratory relief action to survive an anti-SLAPP motion, the plaintiff must introduce substantial evidence that would support a judgment of relief made in the plaintiff's favor."'" (Lunada Biomedical v. Nunez, supra, 230 Cal.App.4th at pp. 478-479; accord, Newport Harbor Offices & Marina, LLC v. Morris Cerullo World Evangelism (2018) 23 Cal.App.5th 28, 50.)
Thomas and Sue presented no argument in their opening brief explaining why the evidentiary showing they made in opposition to the Black parties' special motion to strike was sufficient to sustain a judgment in their favor, thereby forfeiting any argument on the second prong of the anti-SLAPP statute. (Champir, LLC v. Fairbanks Ranch Assn. (2021) 66 Cal.App.5th 583, 591, fn. 3 ["We do not consider arguments raised for the first time in the reply brief without a showing of good cause . . . ."]; Altavion, Inc. v. Konica Minolta Systems Laboratory, Inc. (2014) 226 Cal.App.4th 26, 63, fn. 27 [argument made for the first time in reply brief is forfeited].) Accordingly, the motion to strike was properly granted as to those portions of the second and third causes of action seeking relief based on the Black parties' adversarial relationship with Thomas and Sue.
Thomas and Sue generally address the merits of their declaratory relief claims in their reply brief, but they still fail to cite any authority for the proposition the adversarial relationship between the parties relieved Thomas and Sue of any duty to the Black parties.
DISPOSITION
The order granting the special motion to strike under section 425.16 is reversed. The cause is remanded to the trial court with directions to enter a new order granting the Black parties' special motion to strike the cross-complaint's first cause of action and granting the motion in part as to the second and third causes of action for declaratory relief to the extent those causes of action are based on protected litigation activity consistent with this opinion. The parties are to bear their own costs on appeal.
We concur: PERLUSS, P. J., SEGAL, J.