Opinion
G056768
09-25-2019
CARLOS SIFUENTES et al., Plaintiffs and Appellants, v. SUBROGATION DIVISION, INC., et al., Defendants and Respondents.
Law Offices of Mark B. Plummer and Mark B. Plummer for Plaintiffs and Appellants. Law Offices of Stephen M. McNamara and Stephen M. McNamara for Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2018-00977223) OPINION Appeal from an order of the Superior Court of Orange County, Linda S. Marks, Judge. Reversed and remanded. Request for judicial notice. Denied. Law Offices of Mark B. Plummer and Mark B. Plummer for Plaintiffs and Appellants. Law Offices of Stephen M. McNamara and Stephen M. McNamara for Defendants and Respondents.
* * *
This is an appeal from an order granting an anti-SLAPP motion to strike. The anti-SLAPP statute provides a procedural remedy for defendants to summarily dispose of meritless claims brought to chill the valid exercise of their constitutional rights of free speech and petition. (Code Civ. Proc., § 425.16 (§ 425.16).) If the defendant demonstrates the challenged claim arises from protected activity, and if the plaintiff cannot demonstrate a probability of prevailing on the claim, the claim must be stricken. (Id. at subd. (b)(1).) Speech or petitioning activity that is illegal as a matter of law, such as extortion, does not constitute protected activity under the anti-SLAPP statute. (Flatley v. Mauro (2006) 39 Cal.4th 299, 311 (Flatley).)
In this case, plaintiffs sought damages for an attempted extortion, but the trial court granted defendants' anti-SLAPP motion, finding the complaint arises from protected activity and plaintiffs did not establish a likelihood of prevailing on the merits. Relying on Flatley, plaintiffs contend the court should have denied the motion because defendants' threats qualify as extortion as a matter of law and thus are not protected activity.
After a de novo review of the record, we conclude the nature and extent of defendants' threats are disputed, the uncontroverted evidence does not conclusively establish defendants committed extortion as a matter of law, and therefore defendants met their burden of establishing the complaint arises from protected petitioning activity under the anti-SLAPP statute. After accepting as true the evidence favorable to plaintiffs, however, we further conclude plaintiffs met their minimal burden of demonstrating a probability of prevailing. We therefore reverse the trial court's order granting defendants' special motion to strike and remand the matter for further proceedings.
I.
FACTS
The following facts are taken from the pleadings, the declarations, and other evidence submitted on the special motion to strike.
Plaintiff Erika Sifuentes was driving a 2012 Toyota Camry owned by her father, plaintiff Carlos Sifuentes, when she hit an unoccupied parked Audi A8 while backing out of a parking spot. Erika left a note with her information for the Audi's owner and left the scene. The record discloses no evidence that Erika reported the accident either to the police or to the Department of Motor Vehicles (DMV).
Because the plaintiffs share the same surname, we refer to them by their first names. We mean no disrespect.
The Audi's owner later contacted Erika and requested her insurance information. Erika provided the information on her father Carlos's automobile insurance policy with Mercury. The Audi's owner submitted a claim to Mercury, but Mercury denied the claim because Carlos had not added Erika to his policy after she got her license.
The Audi's owner submitted a claim to her own insurer, defendant Crestbrook Insurance Company (Crestbrook). Crestbrook reportedly paid $1,367.82 to repair the Audi and assigned its subrogation rights against Erika and Carlos to defendant Subrogation Division, Inc. (SDI).
The parties dispute what happened next. According to Carlos, an SDI claims representative, defendant Robert Griffin, called him and threatened to report Erika to law enforcement for the crime of driving without insurance, which would result in a license suspension, and for the crime of hit and run, if Carlos did not immediately pay SDI $1,300. When Carlos questioned the repair cost, Griffin allegedly replied it would cost Carlos $1,300 if he wanted his daughter to avoid criminal prosecution.
Griffin denies ever threatening to report Erika to law enforcement for criminal prosecution or for committing a hit and run. According to Griffin, he sent Carlos a letter explaining the basis for SDI's reimbursement demand and requesting payment of $1,367.82, but Carlos did not respond. Three weeks later, Griffin sent Carlos a follow-up letter, again requesting payment of $1,367.82. Carlos called Griffin, disputed the amount of damage, and asked for supporting evidence. That same day, Griffin sent Carlos a letter enclosing some pictures of the car and claimed he would forward an estimate so they could discuss settlement. A few days later, Griffin offered Carlos a reduction in the amount owed if Carlos agreed to pay a lump sum, or interest free payments for the entire amount. According to Griffin, he also told Carlos if they could not reach an agreement, he "would have to 'send it to the state for license suspension.'"
The next week, Carlos's attorney, Mark Plummer, called Griffin. According to Plummer, Griffin refused to provide any proof of the repair cost and insisted Carlos would have to pay $1,300 if he wanted to avoid a suspension of their driver's licenses and a criminal prosecution of his daughter for committing a hit and run. Griffin denies making those statements.
That same day, Griffin e-mailed Plummer: "I would rather come to a settlement than to send this to the state. . . . We can settle this claim with monthly payments as low as $50 per month, without interest, or a lump payment of $1094.26." Griffin attached a redacted estimate. Plummer did not respond.
A week later, Griffin sent Plummer a follow-up e-mail advising he had "printed a suspension warning letter on the 15th, but didn't mail it because [Plummer] contacted [Griffin]." Attached to the e-mail was a draft suspension warning letter from Griffin to Carlos and a proposed promissory note. The draft suspension letter restated the amount due, threatened to "request that the State of California suspend [Carlos's] drivers license and vehicle registration privileges" if Carlos did not respond, and threatened "possible legal action in a court of competent jurisdiction." Griffin's e-mail ended: "Without response to the payment plan, or a payment for a lump sum settlement, I will need to send this to the state. Let me know how your client would like to proceed."
The next month, after their discussions fell through, Griffin sent a letter to the DMV in which he asked the DMV to "review . . . the enclosed file and suspen[d] the drivers license of Carlos Sifuentes." His letter asserted: "Carlos Sifuentes caused an accident involving property insured by Nationwide Private Client, for whom I adjust subrogation claims. Carlos Sifuentes had no insurance coverage at the time of the accident and has not answered our request for compensation for the damages to our insured's car." Enclosed with the letter was a completed "Report of Traffic Accident" SR-1 form about the accident, in which Griffin identified the "reporting party" as Erika, but which Griffin signed himself under penalty of perjury. Defendants never filed a lawsuit against Plaintiffs to recover the amount allegedly due.
Seven months after Griffin sent the letter to the DMV, Carlos and Erika (collectively, Plaintiffs) filed a complaint against SDI, Griffin, and Crestbrook (collectively, Defendants), alleging a single cause of action for attempted extortion. Defendants filed an anti-SLAPP special motion to strike the complaint, asserting it arises from their right to petition. Plaintiffs opposed the motion, arguing Defendants' conduct was illegal as a matter of law and thus not protected activity under the anti-SLAPP statute.
Their original complaint named Nationwide Insurance as a defendant. The first amended complaint changed the insurer defendant to Crestbrook, but otherwise asserted the same claim.
The trial court granted Defendants' anti-SLAPP motion, finding Defendants successfully demonstrated the complaint arises from protected activity that is not "'illegal as a matter of law.'" The court further found Plaintiffs did not establish a likelihood of prevailing on the merits of their attempted extortion cause of action because Plaintiffs never paid any money to Defendants, and because Defendants never threatened to accuse Plaintiffs of conduct constituting a crime. Plaintiffs timely appealed the court's order.
II.
DISCUSSION
A. The Anti-SLAPP Statute Generally and Our Standard of Review
The Legislature enacted the anti-SLAPP statute in 1992 to address "what are commonly known as SLAPP suits (strategic lawsuits against public participation)—litigation of a harassing nature, brought to challenge the exercise of protected free speech [or petition] rights." (Fahlen v. Sutter Central Valley Hospitals (2014) 58 Cal.4th 655, 665, fn. 3.) The statute authorizes a special motion to strike meritless claims early in the litigation if the claims "aris[e] from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue." (§ 425.16, subd. (b)(1).)
When evaluating a special motion to strike, the trial court must 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. . . . 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." (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) "Only a cause of action that satisfies both prongs of the anti-SLAPP statute—i.e., that arises from protected speech or petitioning and lacks even minimal merit—is a SLAPP, subject to being stricken under the statute." (Navellier v. Sletten (2002) 29 Cal.4th 82, 89.)
We review a trial court's order denying an anti-SLAPP motion de novo. (Flatley, supra, 39 Cal.4th at p. 325.) The statute requires us to "consider the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based." (§ 425.16, subd. (b)(2).) We therefore consider not only Plaintiffs' complaint, but also the declarations and exhibits filed in support of and in opposition to the anti-SLAPP motion. We do not weigh the evidence. Instead, we accept as true the evidence favorable to the plaintiffs and evaluate the defendants' evidence only to determine if it has defeated the plaintiffs' evidence as a matter of law. (Flatley, supra, at p. 326.)
"Once defendants show that the cause of action arises from protected activity, the plaintiff must demonstrate a probability of prevailing on the claim. [Citation.] [¶] In making the showing, 'a plaintiff . . . must set forth evidence that would be admissible at trial. [Citation.] Precisely because the statute (1) permits early intervention in lawsuits alleging unmeritorious causes of action that implicate free speech concerns, and (2) limits opportunity to conduct discovery, the plaintiff's burden of establishing a probability of prevailing is not high: . . . we accept as true all evidence favorable to the plaintiff and assess the defendant's evidence only to determine if it defeats the plaintiff's submission as a matter of law.'" (Greene v. Bank of America (2013) 216 Cal.App.4th 454, 457-458 (Greene).) B. The Flatley Exception
In step one of the anti-SLAPP analysis, we first decide whether the defendant made a threshold showing the complaint arises from Defendants' protected activity. (§ 425.16, subd. (b)(1).) The anti-SLAPP statute defines protected activity to include any statement made in a judicial proceeding or in connection with an issue under consideration by a judicial body. (Id. at subd. (e)(1), (2).) Protected activity thus includes not only the filing of lawsuits, but also settlement demands made in anticipation of civil litigation. (Crossroads Investors, L.P. v. Federal National Mortgage Assn. (2017) 13 Cal.App.5th 757, 782-783; Rohde v. Wolf (2007) 154 Cal.App.4th 28, 35-36.) Accordingly, a prelitigation demand letter ordinarily constitutes protected activity. (Malin v. Singer (2013) 217 Cal.App.4th 1283, 1293 (Malin).)
Communications constituting criminal extortion as a matter of law, however, are not protected under the anti-SLAPP law. (Flatley, supra, 39 Cal.4th at p. 333.) As our high court explained in Flatley, the anti-SLAPP statute is intended "to prevent the chilling of 'the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances' by the 'abuse of the judicial process.' [Citation.] As a necessary corollary to this statement, because not all speech or petition activity is constitutionally protected, not all speech or petition activity is protected by section 425.16." (Id. at p. 313, italics added.) Thus, "section 425.16 cannot be invoked by a defendant whose assertedly protected activity is illegal as a matter of law and, for that reason, not protected by constitutional guarantees of free speech and petition. A contrary rule would be inconsistent with the purpose of the anti-SLAPP statute as revealed by its language." (Id. at p. 317.)
After Flatley, courts have applied the Flatley exception in a variety of circumstances. (See, e.g., Stenehjem v. Sareen (2014) 226 Cal.App.4th 1405, 1420, 1423 [threats to expose former employer to federal authorities for alleged violations of the False Claims Act unless employer negotiated a settlement of employee's defamation and wrongful termination claims]; Mendoza v. Hamzeh (2013) 215 Cal.App.4th 799, 806 (Mendoza) [employer's threat to report former employee to enforcement agencies and otherwise expose alleged crimes unless employee paid "'damages exceeding $75,000'"]; Cohen v. Brown (2009) 173 Cal.App.4th 302, 317-319 (Cohen) [threats to report attorney to the state bar unless attorney immediately signed off on a settlement check]; Novartis Vaccines & Diagnostics, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2006) 143 Cal.App.4th 1284, 1296-1297 [statements in furtherance of conspiracy to commit acts of vandalism and harassment, including criminal acts].)
This narrow exception excluding illegal conduct from the definition of protected activity is known as the Flatley exception. Importantly, the Flatley exception only applies if "the defendant concedes the illegality of its conduct or the illegality is conclusively shown by the evidence." (Flatley, supra, 39 Cal.4th at p. 316, italics added.) In other words, "[t]he defendant must concede the point, or the evidence conclusively demonstrate it, for a claim of illegality to defeat an anti-SLAPP motion at the first step." (City of Montebello v. Vasquez (2016) 1 Cal.5th 409, 424.)
If the defendant does not concede the illegality of his or her conduct, the plaintiff must produce "uncontroverted evidence that [the defendant's] activities . . . were unlawful as a matter of law" to prevail in step one of the analysis; merely alleging illegal conduct is "insufficient." (Dwight R. v. Christy B. (2013) 212 Cal.App.4th 697, 712.) If "a factual dispute exists about the legitimacy of the defendant's conduct, it cannot be resolved within the first step but must be raised by the plaintiff in connection with the plaintiff's burden to show a probability of prevailing on the merits." (Flatley, supra, 39 Cal.4th at p. 316.) C. Step One: Defendants Engaged in Protected Activity
We begin our analysis by determining whether Defendants made a threshold showing the complaint arises from Defendants' protected activity. Defendants argue their demands for payment implicated their right of petition because they were attempting "to resolve the claim in anticipation of formally pursuing rights under California's Financial Responsibility Law." However, we fail to see how Defendants had any "rights" against Plaintiffs under the Financial Responsibility Law (Veh. Code, §§ 16000 et seq.), which does not give a third party any rights against a driver who is not in compliance with the Financial Responsibility Law, but rather gives the DMV the ability to suspend the offending party's driving privilege in certain instances. (See, e.g., Veh. Code, §§ 16004, 16070.) Nevertheless, we conclude Defendants made a threshold showing the complaint arises from protected activity. Settlement demands in anticipation of litigation involve the right of petition (see § 425.16, subd. (e)(1), (2); Malin, supra, 217 Cal.App.4th at p. 1293), and Griffin's draft suspension warning letter to Carlos threatened "possible legal action in a court of competent jurisdiction."
Whether Defendants contemplated and seriously considered litigation in good faith is a separate issue that we address in Section II.D, infra.
Citing Flatley, Plaintiffs assert Defendants' conduct is not protected activity under the anti-SLAPP statute because Defendants committed extortion as a matter of law. As noted above, however, the Flatley exception only applies if "either the defendant concedes the illegality of its conduct or the illegality is conclusively shown by the evidence." (Flatley, supra, 39 Cal.4th at p. 316.) Here, Defendants do not concede the illegality of their conduct, and the parties dispute what exactly Griffin said to Carlos and his attorney during their various telephone calls. The applicability of the Flatley exception thus hinges on whether the uncontroverted evidence — i.e., Griffin's undisputed written e-mails and letters — conclusively shows Defendants engaged in illegal conduct.
That undisputed evidence reveals Griffin repeatedly threatened to ask the DMV to suspend Plaintiffs' driver's licenses if Carlos did not pay SDI $1,300. Although Griffin's written communications do not cite a legal basis for requesting a license suspension, Defendants concede they based these threats on California's Financial Responsibility Law (Veh. Code, §§ 16000 et seq.). Specifically, Vehicle Code section 16070 requires the DMV to "suspend the [driving] privilege of the driver or owner" of a vehicle involved in an accident resulting in property damage exceeding $1,000 if the driver fails to provide evidence of financial responsibility (e.g., car insurance) at the time of the accident. (Veh. Code, § 16070, subd. (a); see id. at §§ 16000, subd. (a), 16021, subd. (b).) And Vehicle Code section 16004 requires the DMV to "suspend the driving privilege of any person who fails, refuses, or neglects" to report to the DMV an accident resulting in property damage exceeding $1,000 within 10 days of the accident. (Veh. Code, § 16004, subd. (a); see id. at § 16000, subd. (a).)
For example, Griffin admits he told Carlos during one telephone call that if they could not reach an agreement on payment, Griffin "would have to 'send it to the state for license suspension.'" Griffin also sent an e-mail to Plummer stating, "I would rather come to a settlement than to send this to the state. . . . We can settle this claim with monthly payments as low as $50 per month, without interest, or a lump payment of $1094.26." Griffin then sent another e-mail to Plummer warning, "Without response to the payment plan, or a payment for a lump sum settlement, I will need to send this to the state," and he enclosed a draft letter to Carlos threatening to "request that the State of California suspend [Carlos's] drivers license and vehicle registration privileges" if Carlos did not respond.
We must determine whether those threats to report Plaintiff to the DMV constitute extortion as a matter of law so as to trigger the Flatley exception. The Penal Code defines extortion to include "the obtaining of property or other consideration from another, with his or her consent, . . . induced by a wrongful use of force or fear." (Pen. Code, § 518, subd. (a).) Fear, for purposes of extortion, may be induced by threatening to (1) "do an unlawful injury to the person or property of the individual threatened or of a third person," (2) "accuse the individual threatened, or a relative of his or her, or a member of his or her family, of a crime," (3) "expose, or . . . impute to him, her, or them a deformity, disgrace, or crime," (4) "expose a secret affecting him, her, or them," or (5) "report his, her, or their immigration status or suspected immigration status." (Id. at § 519.) "Only threats that fall within one of these [five] categories of section 519 [constitute] extortion." (People v. Umana (2006) 138 Cal.App.4th 625, 639 (Umana); see Malin, supra, 217 Cal.App.4th at p. 1299.)
With extortion, "it is the coupling of the threat of that action with the demand for money that constitutes the illegality." (Cohen, supra, 173 Cal.App.4th at p. 318.) "The threat to report a crime may constitute extortion even if the victim did in fact commit a crime. The threat to report a crime may in and of itself be legal. But when the threat to report a crime is coupled with a demand for money, the threat becomes illegal, regardless of whether the victim in fact owed the money demanded." (Mendoza, supra, 215 Cal.App.4th at p. 805.) Courts have thus described extortion "as a paradoxical crime in that it criminalizes the making of threats that, in and of themselves, may not be illegal." (Flatley, supra, 39 Cal.4th at p. 326.) "[I]t is immaterial to the crime of extortion that the purpose of the threat is to collect money justly due the extortionist." (Cohen, supra, 173 Cal.App.4th at p. 318.) "'The law does not contemplate the use of criminal process as a means of collecting a debt.'" (Flatley, at p. 326.)
Importantly, "the threat made by an extortionist does not have to succeed in producing an exchange of money in order to constitute extortion." (Cohen, supra, 173 Cal.App.4th at p. 318; see Flatley, supra, 39 Cal.4th at pp. 311, 330 [demand letter was criminal extortion even though victim never paid the money demanded].) For example, if a person makes a written threat with the intent to extort property or other consideration from another, that conduct "is punishable in the same manner as if such property or other consideration were actually obtained by means of such threat." (Pen. Code, § 523, subd. (a).) Indeed, the mere attempt to extort property or other consideration by means of threat is punishable by up to one year in jail, a fine of up to $10,000, or both. (Id. at § 524; see Umana, supra, 138 Cal.App.4th at pp. 638-639 ["[t]he elements of attempted extortion are '(1) a specific intent to commit extortion and (2) a direct ineffectual act done towards its commission'"].) Even a "vaguely worded" threat under section 519 can constitute extortion. (Malin, supra, 217 Cal.App.4th at p. 1295.) "'"No precise or particular form of words is necessary in order to constitute a threat under the circumstances. Threats can be made by innuendo . . . ."'" (People v. Bollaert (2016) 248 Cal.App.4th 699, 725 (Bollaert).)
Applying those principles here, we conclude Defendants' threats to report Plaintiffs to the DMV for driving without insurance and for not submitting a timely accident report do not constitute extortion as a matter of law. Although the undisputed evidence conclusively shows Defendants threatened to report Plaintiffs to the DMV unless Carlos paid $1,300, only threats that fall within one of the five categories enumerated in Penal Code section 519 constitute extortion. (Umana, supra, 138 Cal.App.4th at p. 639.) Thus, for the Flatley exception to apply here, the evidence must conclusively show Defendants threatened to (1) "do an unlawful injury to the person or property of [Carlos] or of a third person," (2) "accuse [Carlos] . . . or a member of his . . . family, of a crime," (3) "expose, or to impute to him . . . or them a deformity, disgrace, or crime," (4) "expose a secret affecting him . . . or them," or (5) "report his . . . or their immigration status or suspected immigration status." (See Pen. Code, § 519.)
The first and fifth categories for threats to do injury and threats to report someone's immigration status are patently inapplicable here. The same is true for the third category's reference to threats "expos[ing] . . . a deformity."
The second and third categories for threatening to expose or accuse the victim of a crime are also inapplicable. Although the extortionist need not threaten his or her victim with a "specific crime," his or her threats must "'put the intended victim of the extortion in fear of being accused of some crime.'" (Flatley, supra, 39 Cal.4th at p. 327.) Defendants' threats to report Plaintiffs to the DMV did not meet this threshold. Although drivers have a statutory obligation "at all times [to] be able to establish financial responsibility" (Veh. Code, § 16020, subd. (a)), driving without evidence of financial responsibility is not a crime, at least under the circumstances presented here. (Cf. id. at §§ 16025 [failure to provide evidence of financial responsibility to other drivers "involved in the accident [who are] present at the scene" is an infraction], 16028 & 16029 [failure to provide evidence of financial responsibility to a peace officer or traffic collision investigator upon request is an infraction]; see also Pen. Code, § 16 [defining crimes to include infractions].) Thus, the undisputed evidence does not establish Defendants threatened to accuse Plaintiffs of a crime.
Plaintiffs argue having their licenses suspended would be a "disgrace" under Penal Code section 519, subd. (3) because Carlos would have to explain his inability to drive to his customers, neighbors, and boss, and because the suspension would negatively impact his business. Plaintiffs misread the statute. The question is not whether the defendant's threatened action, if carried out, would "disgrace" the victim, but whether the defendant threatened to expose a fact that would disgrace the victim. (See Pen. Code, § 519, subd. (3).) There is no conclusive evidence Defendants made such a threat.
Plaintiffs also argue Defendants committed extortion by threatening to expose a "secret" to the DMV — namely, that Erika got in an accident while driving without insurance and did not timely submit an accident report to the DMV. (Pen. Code, § 519, subd. (4).) Plaintiffs presumably did not want the DMV to know those facts if it would result in the suspension of one or both of their licenses. Even so, the act of driving without insurance or the fact Erika was involved in an unreported car accident do not constitute a "secret" as that term is used in Penal Code section 519, subd. (4). Cases involving the "secret" prong typically involve highly sensitive, personal, and embarrassing matters affecting the victim's reputation, such as threats to disclose or display nude photographs of the victim. (See, e.g., Bollaert, supra, 248 Cal.App.4th at pp. 726-727; People v. Peniston (1966) 242 Cal.App.2d 719, 722.) The fact Erika got in an accident while driving without insurance has no bearing on her reputation and is hardly on par with those examples. We also struggle to see how the accident could qualify as a "secret" when Erika had a statutory duty to report any accident involving over $1,000 in property damage to the DMV. (See Veh. Code, § 16000, subd. (a); see Cross v. Cooper (2011) 197 Cal.App.4th 357, 387-388 [fact that sex offender lived in neighborhood was not a "secret" under Penal Code § 519, subd. (4), particularly where landlord had duty to disclose that information to potential buyers and renters].)
The record includes only page 1 of the SR-1 "Report of Traffic Accident" form that Griffin submitted to the DMV. Defendants ask us to take judicial notice of the second and third pages of the DMV's standard "Report of Traffic Accident" SR-1 form, which recite that the report will become public record subject to certain exceptions, and which Plaintiffs contend is relevant to the "secret" prong of Penal Code section 519. We deny their request as moot in light of our conclusion above that the "secret" prong is inapplicable.
Because the evidence does not conclusively establish Defendants threatened Plaintiffs in one of the methods enumerated in Penal Code section 519, the Flatley exception does not apply. Defendants therefore met their burden under step one of the anti-SLAPP analysis of establishing the claim arises from protected activity. D. Step Two: Plaintiffs' Probability of Prevailing
"Once defendants show that the cause of action arises from protected activity, the plaintiff must demonstrate a probability of prevailing on the claim. [Citation.] [¶] . . . '[T]he plaintiff's burden of establishing a probability of prevailing is not high: We do not weigh credibility, nor do we evaluate the weight of the evidence. Instead, we accept as true all evidence favorable to the plaintiff and assess the defendant's evidence only to determine if it defeats the plaintiff's submission as a matter of law. [Citation.] Only a cause of action that lacks "even minimal merit" constitutes a SLAPP. [Citation.]' [Citation.] 'Put another way, the plaintiff "must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited."'" (Greene, supra, 216 Cal.App.4th at pp. 457-458.)
Applying these standards here, we conclude Plaintiffs met their low burden of establishing a probability of prevailing on their claim for attempted extortion. According to the declaration Carlos submitted in opposing the anti-SLAPP motion, Griffin orally threatened to accuse Erika of a hit and run if Carlos did not pay $1,300. Although Griffin denies making this threat, we must accept Plaintiffs' evidence as true in performing step two of the anti-SLAPP analysis.
Defendants' threat to report Erika for committing a hit and run if Carlos did not pay the claim constitutes extortion because Defendants attempted to extract payment from Carlos by threatening to accuse his daughter of a crime. (Pen. Code, §§ 518, subd. (a), 519, subds. (2), (3).) Although Erika left a note for the Audi's owner, the Vehicle Code also required her to "notify the police department of the city wherein the collision occurred" "without unnecessary delay." (Veh. Code, § 20002, subd. (a)(2).) If Erika failed to do so, she could be charged with a misdemeanor. (Id. at subd. (c).) As our Supreme Court explained in Flatley, a threat to report a crime unless the victim pays is "extortionate whether or not the victim committed the crime or indiscretion upon which the threat is based and whether or not the person making the threat could have reported the victim to the authorities." (Flatley, supra, 39 Cal.4th at p. 327.) "'[T]he accusations need only be such as to put the intended victim of the extortion in fear of being accused of some crime.'" (Ibid.) Accepting as true the evidence favorable to Plaintiffs, Defendants' threats to report Erika for a hit and run did just that. The trial court therefore erred when it found Plaintiffs could not prevail on the merits because Defendants' alleged "threats were not accusing [Plaintiffs] . . . of a 'crime.'"
The trial court also erred when it found Plaintiffs could not prevail because they never paid money to Defendants. The lack of actual payment is immaterial. "[T]he threat made by an extortionist does not have to succeed in producing an exchange of money in order to constitute extortion." (Cohen, supra, 173 Cal.App.4th at p. 318.)
Defendants argue they cannot be found liable for attempted extortion because their threats are protected under the litigation privilege (Civ. Code, § 47, subd. (b)). We disagree.
"The litigation privilege . . . provides that a 'publication or broadcast' made as part of a 'judicial proceeding' is privileged. This privilege is absolute in nature, applying 'to all publications, irrespective of their maliciousness.' [Citation.] 'The usual formulation is that the privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that [has] some connection or logical relation to the action.' [Citation.]" (Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1241 (Action Apartment).)
The privilege is not limited to statements made during a trial or other proceedings, but may extend to steps taken before litigation. (Action Apartment, supra, 41 Cal.4th at p. 1241.) Not all prelitigation conduct is subject to the privilege, however. "To be protected by the litigation privilege, a communication must be 'in furtherance of the objects of the litigation.' [Citation.] This is 'part of the requirement that the communication be connected with, or have some logical relation to, the action, i.e., that it not be extraneous to the action.' [Citation.] A prelitigation communication is privileged only when it relates to litigation that is contemplated in good faith and under serious consideration. [Citations.]" (Id. at p. 1251.)
Conversely, "'a threat to commence litigation will be insufficient to trigger application of the privilege if it is actually made as a means of inducing settlement of a claim, and not in good faith contemplation of a lawsuit." (Dickinson v. Cosby (2017) 17 Cal.App.5th 655, 682 (Dickinson).) In other words, "'a threat to file a lawsuit would be insufficient to activate the privilege if the threat is merely a negotiating tactic and not a serious proposal made in good faith contemplation of going to court.'" (Ibid.)
Whether litigation was contemplated in good faith and under serious consideration is a question of fact. (Action Apartment, supra, 41 Cal.4th at p. 1251.) "While not dispositive, whether a lawsuit was ultimately brought is relevant to the determination of whether one was contemplated in good faith at the time of the demand letter." (Dickinson, supra, 17 Cal.App.5th at p. 683 [collecting cases].)
Applying these principles here, we conclude the litigation privilege is inapplicable to Defendants' threats. Nowhere in Defendants' declarations in support of their anti-SLAPP motion do they assert they were seriously contemplating litigation against Plaintiffs in good faith. Further, the fact Defendants never actually filed a lawsuit against Plaintiffs to recover the amount allegedly due "give[s] rise to an inference that the [demands were] not sent in connection with litigation contemplated in good faith and under serious consideration. Instead, these facts suggest that the demand[s] [were] a bluff intended to frighten" Plaintiffs into paying SDI. (See Dickinson, supra, 17 Cal.App.5th at p. 684.)
Moreover, to the extent Defendants threatened to report Erika for criminal activity — i.e., committing a hit and run — those threats would not fall within the litigation privilege. Threats to report criminal activity are materially different than threats to pursue a civil lawsuit to recover money owed. Reporting Erika for a hit and run would not help Defendants recover that money, and therefore Defendants' threat has no "'connection or logical relation'" to and is not "'in furtherance of'" Defendants' pursuit of their subrogation rights; it thus does not fall within the litigation privilege. (See Action Apartment, supra, 41 Cal.4th at p. 1251.) Simply put, the threat of "pay me the money you owe or I'll sue you to recover that money" bears a logical relation to the pursuit of the money owed; the threat of "pay me the money you owe or I'll report you to the authorities for criminal prosecution" lacks that requisite logical relation, and in fact constitutes extortion. (See Pen. Code, §§ 518, subd. (a), 519, subd. (2).)
To summarize, we conclude Plaintiffs met their minimal burden under step two of the anti-SLAPP analysis of demonstrating a probability of prevailing on their claim for attempted extortion, and Defendants did not defeat Plaintiffs' evidence as a matter of law. The trial court therefore erred in granting Defendants' anti-SLAPP motion. E. Evidentiary Objections
Finally, Plaintiffs contend the trial court improperly sustained certain evidentiary objections to Carlos's and Plummer's declarations. The court's minute order, however, includes no evidentiary rulings on Defendants' anti-SLAPP motion; its only evidentiary rulings were on a motion to quash service of summons heard on the same day. Because the court's evidentiary rulings did not pertain to the appealed order, we do not consider them.
III.
DISPOSITION
The order granting Defendants' anti-SLAPP motion is reversed, and the matter is remanded for further proceedings. Plaintiffs shall recover their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
ARONSON, ACTING P. J. WE CONCUR: IKOLA, J. GOETHALS, J.