G053537 C/w G053627
Akerman, Joshua R. Mandell and Michael Weiss for Plaintiff and Appellant. Mazur & Mazur, Janice R. Mazur and William E. Mazur for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 30-2015-00800576) OPINION Appeal from orders of the Superior Court of Orange County, Ronald L. Bauer, Judge. Affirmed. Akerman, Joshua R. Mandell and Michael Weiss for Plaintiff and Appellant. Mazur & Mazur, Janice R. Mazur and William E. Mazur for Defendant and Respondent.
Appellant Nicosia Contracting International LLC sued a former employee, Harrison Rees, for defamation and interference with contractual relationship. The basis of the lawsuit was Rees' report to the Anaheim Fire Department that Nicosia had installed substandard parts in a building it had constructed in Anaheim.
Rees responded with an anti-SLAPP motion under Code of Civil Procedure section 425.16. The trial court granted the motion and denied Nicosia's subsequent motion for new trial. Nicosia has appealed from the order granting the anti-SLAPP motion.
"SLAPP" is an acronym for "strategic lawsuit against public participation," and refers to a lawsuit which both arises out of defendants' constitutionally protected expressive or petitioning activity and lacks a probability of success on the merits. (Code Civ. Proc., § 425.16; Baral v. Schnitt (2016) 1 Cal.5th 376, 384.)
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
After entering judgment for Rees on the anti-SLAPP motion, the court awarded him his attorney fees under section 425.16, subdivision (c)(1). Nicosia filed a separate notice of appeal from the fee award, and the two appeals have been consolidated for briefing, argument, and disposition.
We affirm both orders. Nicosia did not contest on appeal the trial court's finding that Rees' conduct in reporting the products to the Anaheim Fire Department was protected activity under section 425.16, subdivision (e). And Nicosia has no likelihood of prevailing on its claims for defamation and interference because Rees' statements to the fire department were privileged. The trial court correctly granted Rees' anti-SLAPP motion. The "new evidence" forming the basis of the new trial motion did not change the privileged nature of the statements attributed to Rees.
As for the award of attorney fees, Nicosia's sole argument on that score is that if the order granting the anti-SLAPP motion is reversed, the fee award must also be reversed. Since we are affirming the order granting the anti-SLAPP motion, we also affirm the fee award.
Rees requested judicial notice of a judgment from the Alameda County Superior Court, which he claims shows that the prehearing discovery Nicosia asked for in this case was unnecessary. Nicosia has not appealed from the trial court's order denying discovery in this case, and the Alameda judgment is irrelevant. The request for judicial notice is denied.
According to the complaint, Nicosia specializes in construction management and consulting. Rees is a former employee. Rees allegedly "filed a complaint" with the Anaheim Fire Department asserting that the weld tees Nicosia installed in a fueling station it built in Anaheim did not comply with the standards of the American National Standards Institute. Nicosia alleged that the complaint about the weld tees was false and that "[t]he City of Anaheim Fire Department . . . oversees and enforces compliance with ANSI standards in Anaheim's fueling stations." It sued Rees for defamation and interference with contractual relationship, i.e., the relationship Nicosia had with the company for which it built the fueling station.
"Weld tees" are pipe components that connect two lengths of pipe at right angles. They must meet certain standards to withstand the pressure of whatever is going through the pipe. A faulty weld tee is a potential safety hazard.
Rees filed an anti-SLAPP motion to dismiss the complaint. The court denied Nicosia's request to propound discovery for the opposition. The court granted the anti-SLAPP motion and entered judgment on February 23, 2016. Nicosia moved for a new trial on March 3, claiming to have received new information from a similar lawsuit it had filed against Rees in another county. The court denied the motion for new trial. Nicosia filed its notice of appeal from the judgment on May 13, 2016.
On May 25, after a hearing on attorney fees, the court entered an amended judgment awarding Rees $2,200 in costs and $44,000 in fees. Nicosia filed its notice of appeal from the amended judgment on June 6, 2016.
The California Legislature enacted the anti-SLAPP statute to counteract "a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances." (§ 425.16, subd. (a).) A court may order a cause of action "arising from any act" "in furtherance" of the "right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue" to be stricken by means of this special motion. (§ 425.16, subd. (b)(1).) We review the order granting or denying an anti-SLAPP motion de novo. (Flatley v. Mauro (2006) 39 Cal.4th 299, 325.)
We use a two-part test to evaluate an anti-SLAPP motion. First, we determine whether the complaint or cause of action is "one arising from protected activity." (Navellier v. Sletten (2002) 29 Cal.4th 82, 88.) As the Supreme Court has emphasized, "[T]he critical consideration is whether the cause of action is based on the defendant's protected free speech or petitioning activity." (Id. at p. 89.) If the defendant satisfies the first part of the test, the burden shifts to the plaintiff to demonstrate a probability of prevailing. (Id. at p. 88.) Although the plaintiff does not have to prove its case at this juncture, it must present a prima facie case that could sustain a judgment if its evidence is believed. (Id. at pp. 88-89.)
I. Protected Activity
The activity alleged in the complaint is Rees' reporting the purportedly faulty weld tees to the Anaheim Fire Department. Nicosia further alleged that the fire department oversees and enforces compliance with the standards for weld tees, to insure they are not safety hazards.
A report to the fire department regarding an issue under the fire department's aegis, like a report to any government agency charged with enforcement of laws or regulations, is protected activity. It qualifies under section 425.16, subdivision (e)(2), as a statement under consideration or review in an official proceeding. "In the analogous context of the privilege under Civil Code section 47 for a statement in an official proceeding, the California Supreme Court has observed that the term 'official proceeding' 'has been interpreted broadly to protect communications to or from governmental officials which may precede the initiation of formal proceedings.' [Citation.] Thus, '"communication to an official administrative agency . . . designed to prompt action by that agency"' is '"as much a part of the 'official proceeding' as a communication made after the proceedings had commenced."' [Citations.]" (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1009 [complaint to Securities and Exchange Commission (SEC) protected "official proceeding" communication]; see Comstock v. Aber (2012) 212 Cal.App.4th 931, 941-942 [filing police report protected activity]; Fontani v. Wells Fargo Investments, LLC (2005) 129 Cal.App.4th 719, 728-730, disapproved on other grounds Kibler v. Northern Inyo County Local Hospital Dist. (2006) 39 Cal.4th 192 (Kibler) [complaint to National Association of Securities Dealers (NASD) protected "official proceeding" activity; NASD has authority to regulate broker conduct].)
A great deal of ink has been spilled in this case over whether Rees admitted or denied that he made the report to the Anaheim Fire Department. For this appeal, it does not matter whether he admitted making the report. The important question is whether he made the report. If he did not make the report, the entire basis for Nicosia's complaint collapses. He did nothing to disparage Nicosia's weld tees or interfere with its business. If he did make the report, it is, as the discussion above indicates, protected activity, and Rees has met the first prong of the anti-SLAPP analysis.
Nicosia did not argue in the trial court and does not argue on appeal that Rees's conduct fell outside one of the categories of protected activity set forth in section 425.16, subdivision (e). Instead, Nicosia argues Rees' activity was commercial speech, and thus the provisions of section 425.17, subdivision (c), apply.
Section 425.17, subdivision (c), provides, in pertinent part, "Section 425.16 [the anti-SLAPP statute] does not apply to any cause of action brought against a person primarily engaged in the business of selling or leasing goods or services, including, but not limited to, insurance, securities, or financial instruments, arising from any statement or conduct by that person if both of the following conditions exist: [¶] (1) The statement or conduct consists of representations of fact about that person's or a business competitor's business operations, goods, or services, that is made for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person's goods or services, or the statement or conduct was made in the course of delivering the person's goods or services. [¶] (2) The intended audience is an actual or potential buyer or customer, or a person likely to repeat the statement to, or otherwise influence, an actual or potential buyer or customer . . . ."
This section was added to the Code of Civil Procedure after the enactment of the anti-SLAPP statute to remove false advertising claims from anti-SLAPP protection. The new section was "'designed to permit them to proceed without having to undergo scrutiny under the anti-SLAPP statute. Proponents of the legislation argued that corporations were improperly using the anti-SLAPP statute to burden plaintiffs who were pursuing unfair competition or false advertising claims' and were being encouraged to use anti-SLAPP motions as a '"litigation weapon to slow down and perhaps even get out of [unfair competition] litigation."' [Citation.]" (JAMS v. Superior Court (2016) 1 Cal.App.5th 984, 994.)
The trial court correctly ruled that section 425.17, subdivision (c), did not apply. For this exception to apply, the conditions set forth in both subdivision (c)(1) and subdivision (c)(2) must be met. The offending statement alleged in Nicosia's complaint about its own goods or services (installation of the weld tees) was not made for the purpose of obtaining approval for, promoting, or securing the sales of Rees' goods or services. It was made to prompt a fire department investigation. Nor was it made to an actual or potential customer or a person likely to repeat the statement to, or otherwise influence, an actual or potential customer. The statement was made to the Anaheim Fire Department, and Nicosia did not allege that the fire department was likely to repeat the statement about defective weld tees to anyone. On the contrary, Nicosia later took the position that the fire department concluded there was nothing wrong with the weld tees.
The court sustained Rees' objections to the Nicosia evidence regarding the fire department's conclusions.
Nicosia presented no argument or authority on appeal that Rees's conduct in making a report to the Anaheim Fire Department was not protected activity under section 425.16, subdivision (e), so any issue it might have had on this score was waived, (see Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 685) and the first prong of SLAPP protection was satisfied.
II. Probability of Prevailing
Nicosia cannot prevail on its complaint for the same reason that Rees' report to the fire department is protected activity. The report is absolutely privileged under Civil Code section 47, subdivision (b), as a report to a government agency. As the court stated in Williams v. Taylor (1982) 129 Cal.App.3d 745, "In our view, a communication concerning possible wrongdoing, made to an official governmental agency such as a local police department, and which communication is designed to prompt action by that entity, is as much a part of an 'official proceeding' as a communication made after an official investigation has commenced. [Citation.] After all, '[the] policy underlying the privilege is to assure utmost freedom of communication between citizens and public authorities whose responsibility it is to investigate and remedy wrongdoing.' [Citation.] In order for such investigation to be effective, 'there must be an open channel of communication by which citizens can call his attention to suspected wrongdoing. That channel would quickly close if its use subjected the user to a risk of liability for libel. A qualified privilege is inadequate under the circumstances . . . . [Para.] The importance of providing to citizens free and open access to governmental agencies for the reporting of suspected illegal activity outweighs the occasional harm that might befall a defamed individual. Thus the absolute privilege is essential.' [Citation.] And, since the privilege provided by section 47, subdivision 2, is absolute, it cannot be defeated by a showing of malice. [Citation.]" (Id. at pp. 753-754; see Hagberg v. California Federal Bank (2004) 32 Cal.4th 350, 361-363 ["privilege applies to complaints to governmental agencies requesting that the agency investigate or remedy wrongdoing"; Kibler, supra, 39 Cal.4th at pp. 202-203; Fremont Comp. Ins. Co v. Superior Court (1996) 44 Cal.App.4th 867, 875 [privilege applies to agencies regulating businesses].)
The privilege of Civil Code section 47 was not raised below, and, after Rees raised it in his respondent's brief, we requested supplemental briefing on this issue. We may consider an issue raised for the first time on appeal "'when [it] involves purely a legal question which rests on an uncontroverted record which could not have been altered by the presentation of additional evidence.' [Citation.]" (Noe v. Superior Court (2015) 237 Cal.App.4th 316, 335.)
Just as the police department is in charge of investigating criminal activity and the SEC oversees compliance with securities law, the Anaheim Fire Department is, according to Nicosia, in charge of enforcing standards relating to weld tees, to make sure they are safe. A report to the fire department regarding potentially unsafe weld tees is therefore absolutely privileged.
It is also well settled that a plaintiff cannot get around privilege or other defenses applicable to a defamation cause of action by calling it something other than defamation. (See Silberg v. Anderson (1990) 50 Cal.3d 205, 215-216.) Nicosia has alleged that the report to the Anaheim Fire Department caused a disruption in its relationship with the company for which Nicosia built the fueling station. Since the report was privileged, it cannot serve as the basis of any cause of action - regardless of the label - except malicious prosecution. (See Rosenthal v. Irell & Manella (1982) 135 Cal.App.3d 121, 127 [privilege applied to communications alleged to have induced breach of contract].)
III. Motion for New Trial
After the anti-SLAPP motion was denied, Nicosia made a motion for new trial under section 657. The basis of the motion was newly discovered evidence "material for the party making the application, which he could not, with reasonable diligence, have discovered and produced at trial." (§ 657.)
An order denying a motion for new trial is not separately appealable. The order may, however, be reviewed upon an appeal from the judgment. (Litvinuk v. Litvinuk (1945) 27 Cal.2d 38, 42.) In this case, the new evidence Nicosia offered was documents purporting to show Rees' efforts "to force the Anaheim fire department to review [Nicosia's] weld tees on false information. The new evidence includes [sic] statement of Rees describing the weld tees as a bomb about to explode and discouraging third-party review by questioning who will take responsibility for such an explosion."
As stated above, a report to the Anaheim Fire Department is absolutely privileged under Civil Code section 47. Evidence that Rees actually made those statements does not change their privileged nature. The motion for new trial was correctly denied.
Nicosia also maintains that Rees made the same accusations to Cal/OSHA. Statements made to Cal/OSHA are not included in the complaint, and, in any event, a report to Cal/OSHA would also be privileged. Cal/OSHA is responsible for workplace safety. (See Lab. Code, §§ 6307, 6308; Cortex v. Abich (2011) 51 Cal.4th 285, 292.) --------
IV. Attorney Fees
Nicosia filed a separate appeal from the trial court's award of attorney fees under section 425.16, subdivision (c)(1). Its sole contention with respect to these fees is that the award must be reversed if the order granting the anti-SLAPP motion is reversed. As we are affirming the order granting the motion, we affirm the award of the fees as well.
The order granting respondent's anti-SLAPP motion is affirmed. The order denying appellant's motion for new trial is affirmed. The order awarding attorney fees is affirmed. Respondent's request for judicial notice is denied. Respondent is to recover his costs on appeal.
BEDSWORTH, ACTING P. J. WE CONCUR: MOORE, J. ARONSON, J.