Four Star General Properties v. Blue
Water Sunset
Filed 9/17/12 Four Star
General Properties v. Blue Water Sunset CA2/8
NOT TO BE PUBLISHED IN THE
OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits
courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
FOUR STAR GENERAL
PROPERTIES, LLC,
Plaintiff and Appellant,
v.
BLUE WATER SUNSET,
LLC, et al.,
Defendants and Respondents.
B235357
(Los Angeles
County
Super. Ct.
No. BC 456649)
APPEAL
from an order of the Superior Court
of
County, David L. Minning, Judge. Affirmed.
Law
Office of Gary Kurtz and Gary Kurtz for Plaintiff and Appellant.
Law
Offices of Yana Henriks, Yana
Henriks; and Randy H. McMurray for Defendants and Respondents.
* * * * * *
Four Star General Properties, LLC
(Four Star) appeals from the trial court’s order granting the special
complaint ‑‑ pursuant to Code of Civil Procedure section 425.16,
Water Sunset, LLC (Blue Water) and Yana Henriks, who is the manager of Blue Water. We affirm the trial court’s order granting
Blue Water’s and Henriks’s anti-SLAPP motion to strike.
facts and procedural history
Underlying Action -- “The Dissolution Action†(Case No. BC316696)
a.
The
Complaint and Lis Pendens
Water filed a complaint against Philip Markowitz and a group of limited
liability companies (LLC’s) as nominal defendants ‑‑ First View,
LLC, Rail Prop, LLC (Rail Prop), and Markowitz Investment Group, LLC. The complaint alleged that Blue Water was a
50 percent member of these LLC’s and that Markowitz was the other 50 percent
member of the LLC’s. Markowitz was the
sole manager of the LLC’s. The complaint
further alleged that Markowitz was the sole member and manager of another LLC ‑‑
Four Star. Markowitz was alleged to be
the alter ego of Four Star.
In
the underlying complaint, Blue Water asserted causes of action for, among other
things, judicial dissolution of the LLC’s, fraud,
breach of fiduciary duty and imposition of constructive trust, breach of
contract, appointment of a receiver for Rail Prop, accounting, and
declaratory relief. The gist of the
complaint was that Markowitz had mismanaged the LLC’s and had in some cases
misappropriated assets from them. As to
Rail Prop specifically, the complaint alleged that Markowitz caused certain
parcels of real property titled to Rail Prop to be transferred to Four Star,
though he inserted handwritten language on the deeds indicating that the
transfer affected only the manner in which title was held, that Rail Prop and
Four Star were “the same,†and that no transfer of ownership took place. Blue Water sought to impose a constructive
trust on these properties titled to Four Star.
The
trial court appointed a receiver and issued a receivership order in April 2005,
and in October 2005, the court amended that order to include in the
receivership estate the parcels of real property that Markowitz had purportedly
transferred from Rail Prop to Four Star.
The court held that the evidence showed Markowitz was operating the
properties as parking lot facilities and was receiving rental income from them
that he was failing and refusing to turn over to the receiver. The evidence also showed that Markowitz
caused the properties to be conveyed from Rail Prop to Four Star, that he
controlled both LLC’s, and that the deeds in issue “effect[ed] only the manner
in which title [was] held and [did] not transfer any property from the grantor
to the grantee.†The court ordered the
receiver to take possession of and manage the properties and collect income
from the properties.
In
March 2005, Blue Water filed and recorded a lis pendens stating that its
lawsuit against the LLC’s alleged a real property claim affecting, among other
properties, the parcels in issue that Markowitz had transferred from Rail Prop
to Four Star and had been operating as a parking lot.
b.
Causes of
Action Against Four Star and Its Demurrer
In
2007, Blue Water amended its complaint to add Four Star as a defendant,
alleging breach of fiduciary duty and
fraudulent conveyance claims against it (which were, at that point, the 12th
and 13th causes of action). The claims
were based on Markowitz’s transfer of title from Rail Prop to Four Star. The trial court sustained the demurrer of
Four Star to the 12th and 13th causes of action without leave to amend, on the
ground that they were derivative claims, and Blue Water had not satisfied the
pleading requirements of Corporations Code section 800 for asserting derivative
claims. Moreover, the court held the
causes of action were time-barred, and the pleading failed to comply with the
requirements of the Uniform Fraudulent Transfer Act (Civ. Code, § 3439 et seq.). Because the 12th and 13th causes of action
were the only ones alleged against Four Star, the court ordered judgment for
Four Star.
Four
Star submitted a proposed order sustaining the demurrer and a judgment, and the
trial court signed and filed that document on October 15, 2007.
The order stated that all claims regarding Four Star’s property “as set
forth in the attached deeds of properties owned by Four Star†were
terminated. The attached deeds were
those in which Markowitz had transferred title for the parking lot property
from Rail Prop to Four Star. Blue Water
appealed the judgment in favor of Four Star, and Division Two of this court
affirmed the judgment in a nonpublished opinion on the ground that the causes
of action against Four Star were improperly pled derivative claims. (Blue Water
Sunset, LLC v. First View, LLC (Dec. 9,
2008, B204012).)
c.
Markowitz’s
and Four Star’s Attempts to Remove
the Properties from the Receivership Estate
Markowitz
tried multiple times to remove the properties that he had transferred to Four
Star from the receivership estate, both before and after the court’s ruling
sustaining Four Star’s demurrer. All
were unsuccessful. On December 7, 2006, Four Star and
Markowitz moved to terminate the receivership or limit it with respect to the
properties. The court denied the
motion. They renewed the motion in
November 2007, after the court had sustained Four Star’s demurrer, and the
court denied the renewed motion. They
again renewed the motion on August 28,
2008, and again the court denied it. Finally, after this court had affirmed the
judgment in favor of Four Star, it again moved to have the properties excluded
from the receivership estate. The trial
court denied the motion on March 11,
2009.
title="">[3] The court’s ruling stated:
“The
existence or non-existence of a claim by Blue Water against Four Star has
nothing to do with the court’s inclusion of its property in the Receivership
Estate. Indeed, Four Star was not a
Defendant when its property was included in the Estate. The court’s October 2005 order was based
on a conclusion that Rail Prop owned the property in question. This conclusion was based in part on evidence
that Markowitz operated the existing Receivership property and Four Star’s
property as a parking lot and was misappropriating Estate income, and in part
on the fact that Markowitz avoided paying transfer tax by contending that the
deeds from Rail Prop to Four Star did not effect a transfer of ownership. In effect, Markowitz was held to his word and
the property was considered by the court as belonging to Rail Prop.
“Whether
Blue Water has a viable claim against Four Star for damages based on the deeds
as a fiduciary breach and a fraudulent conveyance is a related but not
determinative issue. The appellate court
held that Blue Water had no such claim based on procedural defects. This ruling has no impact on the court’s
conclusion that the property belongs to Rail Prop.†(Fn. omitted.)
Similarly,
at the hearing on this latest renewed motion, the court stated: “[T]he Court of Appeal’s affirmance does not
address the issue on which the receivership included this property, and that is
because the court sitting next door in 2005 determined that the property that
was transferred from Rail Prop to Four Star is, in fact, owned by Rail Prop,
and that therefore is properly the subject of the receivership estate. That was the determination in 2005. [¶]
That determination is not affected in the slightest by the Court of
Appeal’s affirmance of judgment in Four Star’s favor on the sustaining of the
demurrer without leave for failure to properly plead a derivative claim ‑‑
there are actually two derivative claims ‑‑ based on facts
concerning that transfer.â€
Blue
Water filed its fifth amended complaint on April 14, 2009, in which it
alleged a constructive trust over the properties deeded from Rail Prop to Four
Star. Four Star was not named as a
defendant. Four Star moved to strike all
allegations concerning it from the fifth amended complaint on the ground that
Blue Water was collaterally stopped from seeking any relief against Four Star
and its properties because of the October 2007 judgment in favor of Four
Star. The court denied this motion.
March 7, 2011, Four Star filed its first
amended complaint (FAC) against Blue Water and Henriks in the instant
action. The instant action was assigned
to a different judicial officer than the one handling the dissolution
action. A notice of related cases was
filed and denied.
The
FAC alleges causes of action for quiet title/injunctive relief and slander of
title. Four Star alleges that it is
being unjustly denied possession of its properties, despite prevailing on
demurrer and obtaining a judgment in its favor in the underlying dissolution
action. Four Star seeks an injunction
prohibiting Blue Water and Henriks from “interfering in any manner with Four
Star taking possession in the Subject Properties,†“ordering the Receiver for
the Subject Properties to take any and all necessary and proper actions to effectuate
the injunctive relief ordered,â€
declaring that “the Subject Properties belong to [Four Star] only free of any
liens, interest or rights thereto arising from or relating to†the dissolution
action, and declaring that Four Star “is entitled to possession as of
December 9, 2009[,] when the judgment against [sic] Four Star became final.â€
The cause of action for slander of title alleges that Blue Water and
Henriks refused to remove the lis pendens from the subject properties once
judgment in favor of Four Star became final in the dissolution action. Four Star seeks damages for their failure to
remove the lis pendens and the creation of a cloud of title.
Star’s Attempt to “Correct†the Judgment in the Underlying Dissolution Action
After
filing the FAC in the instant action, on March 14, 2011, Four Star filed
an ex parte application in the dissolution action for an order nunc pro tunc
that would correct a “clerical error†in the judgment. At this point, the dissolution action had
been assigned to a new judicial officer.
the judgment to “make it conform to the judicial decision actually made.†Four Star argued that there was no lawsuit
pending against it regarding the subject properties, nor was any such lawsuit
possible given the res judicata effect of the final judgment in the dissolution
action, which terminated all claims against Four Star regarding the properties.
Four
Star informed the court that, in January 2011, it had applied for a writ
of possession with the County Records Center ‑‑ Archives Post
Judgment Department, based on the judgment.
The department denied the application for a writ of possession on the
ground that the judgment failed to order that Four Star “take possession of the
properties.†Four Star thus requested
that the court enter an order nunc pro tunc “to correct the technical omission
in the Judgment and add the following words:
‘Possession of the subject properties to Four Star General Properties,
LLC is ordered forthwith.’†The newly
assigned judicial officer granted the ex parte application and filed the
“corrected†order and judgment containing Four Star’s requested language on
March 14, 2011.
On
April 14, 2011, Blue Water filed a motion to vacate the court’s order
granting Four Star’s ex parte application for an
concealed from the court that the subject properties belonged to the
receivership estate, and that Four Star had tried and failed several times to
have the properties removed from the receivership. The court granted Blue Water’s motion to
vacate its previous nunc pro tunc order, thereby invalidating the “correctedâ€
judgment stating Four Star was to take possession of the properties.
Four
Star made one more attempt to gain possession of the subject properties by
filing a motion for modification of the judgment, or in the alternative, an
application for an order directing the clerk to issue a writ of
possession. The trial court denied this
motion, stating: “[A]lthough Four Star
contends that the requested modification is necessary to effectuate the ‘will
of the court,’ the Court’s prior rulings clearly indicate that the subject
properties were deliberately included in the receivership estate.â€
Water’s and Henriks’s Anti-SLAPP Motion in the Instant Action
the same time that Four Star sought to “correct†the judgment, on April 8,
2011, Blue Water and Henriks filed their anti-SLAPP motion in the instant
action. The court granted the anti-SLAPP
motion on the ground that Four Star’s claims were based on protected activity ‑‑
Blue Water’s and Henriks’s recording of a lis pendens ‑‑ and
moreover, Four Star failed to demonstrate a reasonable probability of success
on the merits. Four Star’s timely appeal
from the order granting the anti-SLAPP motion ensued.
standard of review
“‘Review of
an order granting or denying a motion to strike under section 425.16 is de
novo. [Citation.] We consider “the pleadings, and supporting
and opposing affidavits . . . upon which the liability or
defense is based.†(§ 425.16, subd.
(b)(2).) However, we neither “weigh
credibility [nor] compare the weight of the evidence. Rather, [we] accept as true the evidence
favorable to the plaintiff [citation] and evaluate the defendant’s evidence
only to determine if it has defeated that submitted by the plaintiff as a
matter of law.â€â€™â€ (Flatley v. Mauro
(2006) 39 Cal.4th 299, 325-326.)
discussion
The Trial Court Did Not Err in Granting the Anti-SLAPP Motion
Section
425.16 provides that “[a] cause of action against a person arising from any act
of that person in furtherance of the person’s right of petition or free speech
under the United
States Constitution or the California Constitution in connection with a
public issue shall be subject to a special motion to strike, unless the court
determines that the plaintiff has established that there is a probability that
the plaintiff will prevail on the claim.â€
(§ 425.16, subd. (b)(1).)
Thus, a court’s task in ruling on an anti-SLAPP motion to strike is 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 (“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 issueâ€). (Equilon Enterprises
v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) Second, if the defendant makes such a
showing, the court then determines whether the plaintiff has demonstrated a
probability of prevailing on the claim.
(Ibid.) Here, the trial court did not err because the
causes of action against Blue Water arose from protected activity, and Four
Star did not show a probability of prevailing on its claims.
a.
The Causes
of Action Against Blue Water Arose from Its Protected Activity
the critical point is whether the plaintiff’s cause of action itself was
based on an act in furtherance of the defendant’s right of petition or free
speech.’ [T]he ‘anti-SLAPP statute’s
definitional focus is not the form of the plaintiff’s cause of action but,
rather, the defendant’s activity that gives rise to his or her asserted
liability ‑‑ and whether that activity constitutes protected speech
or petitioning.’†(Martinez v.
Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 187.) The principal thrust or gravamen of
the plaintiff’s cause of action determines whether the anti-SLAPP statute
applies. (Id. at p. 188.)
Under the terms of the
statute, protected activity includes:
“(1) any written or oral statement or writing made before a legislative,
executive, or judicial proceeding, or any other official proceeding authorized
by law [and] (2) any written or oral statement or writing made in connection
with an issue under consideration or review by a legislative, executive, or
judicial body, or any other official proceeding authorized by
law . . . .â€
(§ 425.16, subd. (e).) “The
filing of a notice of lis pendens falls squarely within this definition.†(Manhattan Loft, LLC v. Mercury Liquors,
Inc. (2009) 173 Cal.App.4th 1040, 1050; see also Salma v. Capon (2008) 161 Cal.App.4th 1275, 1285 [“Capon’s filing of
the notice of lis pendens in superior court and the naming of Salma’s lenders
as defendants in his lawsuit were writings made in a judicial proceeding. They are squarely covered by section 425.16,
subdivision (e)(1).â€].)
The quiet title/injunctive
relief and slander of title causes of action against Blue Water and Henriks
arose from clearly protected activity. The lis pendens gives notice
that the dissolution action alleges a real property claim (constructive trust)
affecting the subject properties. The
trial court in the dissolution action made the subject properties part of the
receivership estate based on the evidence supporting a constructive trust. This happened before Blue Water even added
Four Star as a defendant, much less before the trial court dismissed Four Star
from the case. The gravamen of
Four Star’s FAC is that Blue Water and Henriks refused to remove the lis
pendens when Four Star obtained a judgment in its favor, and they opposed Four
Star’s attempts in the trial court to remove the subject properties from the
receivership estate. But Blue Water’s
and Henriks’s actions were statements or writings made before a judicial
proceeding or made in connection with an issue under consideration by a
judicial body. (§ 425.16, subd. (e)(1).) There is no question that their actions
constitute protected activity. (
Loft, LLC v. Mercury Liquors, Inc., supra, 173 Cal.App.4th at p. 1050.)
Four
Star argues that the filing of the lis pendens was “incidental at best†to this
action, and that Blue Water and Henriks are essentially trying to “shrug off†a
final judgment in Four Star’s favor. We
are not persuaded by this argument.
Saying that they are trying to “shrug off†the final judgment is just
another way of saying that they opposed Four Star’s efforts to regain control
of the subject properties. Four Star has
been denied control of the subject properties because the court in the
dissolution action agreed with Blue Water and Henriks that the properties
should remain in the receivership, even in light of the dismissal of the causes
of action against Four Star. Four Star
attempted an end-run around that court’s multiple rulings to that effect by
filing the instant lawsuit. As we have
discussed, Blue Water’s opposition to Four Star in the underlying action is
protected activity.
b.
Four Star
Did Not Show a Probability of Prevailing on the Merits
of action were subject to the anti-SLAPP statute, the burden shifted to it to
show, through competent, admissible evidence, a probability of success on the
merits. (Manhattan Loft, LLC v. Mercury
Liquors, Inc., supra, 173
Cal.App.4th at p. 1050.) “The
burden on the plaintiff is similar to the standard used in determining motions
for nonsuit, directed verdict, or summary judgment.†(Kyle v. Carmon (1999) 71 Cal.App.4th
901, 907.) Four Star did not meet its
burden.
In the trial
court, to show a probability of prevailing on the merits, Four Star relied on
the “corrected†order and judgment stating that it was to take possession of
the subject properties. The court below
did not find the corrected order to be persuasive evidence of a probability of
success, noting that Blue Water’s motion to vacate the corrected order was
pending. The court in the dissolution
action did, of course, vacate that corrected order.
On
appeal, Four Star’s sole argument that it demonstrated a probability of success
is still the final judgment in its favor.
Given that Four Star tried to obtain and was denied a writ of possession
for the subject properties based on that same judgment, we are by no means
convinced that the judgment demonstrates a probability of success. Again, we refer to the court’s rulings in the
dissolution action that, regardless
of the procedural defects in the claims against Four Star, the subject
properties remain part of the receivership estate. Four Star has not proffered any evidence or
argument showing that these rulings are wrong and it should therefore prevail
on its quiet title claims in this action.
Moreover,
Four Star cannot establish at least one essential element of its slander of
title claim. Slander of title requires
“(1) a publication, (2) which is without privilege or justification, (3) which
is false, and (4) which causes direct and immediate pecuniary loss.†(Manhattan Loft, LLC v. Mercury Liquors, Inc., supra, 173 Cal.App.4th at p. 1051.) The lis pendens and any other statements by
Blue Water and Henriks in the dissolution action are not “without
privilege.†Section 47 of the Civil
Code, subdivision (b), provides that a publication made in the course of a
judicial proceeding is absolutely privileged.
This so-called
litigation privilege means that a publication or communication that has some
relation to a judicial proceeding
cannot be the basis of an action for abuse of process, slander of title, or
intentional interference with prospective business advantage. (Rusheen
v. Cohen (2006) 37 Cal.4th
1048, 1057; Woodcourt II Limited v. McDonald Co. (1981) 119 Cal.App.3d 245,
249-250.) A recorded lis pendens,
as long as “it identifies an action previously filed with a court of competent
jurisdiction which affects the title or right of possession of real property,â€
is such a privileged publication. (Civ.
Code, § 47, subd. (b)(4); Woodcourt II Limited v. McDonald Co., supra,
at pp. 249-250.) Blue Water’s actions, including the
filing of the lis pendens identifying the pending dissolution action, were thus
privileged publications made in the course of judicial proceedings and could
not be the basis for a slander of title action.
As a result Four Star could not show a probability of prevailing on the
merits.
DISPOSITION
The order is affirmed. Respondent to recover costs on appeal.
FLIER,
J.
WE CONCUR:
BIGELOW, P. J.
RUBIN, J.
unless otherwise stated.
lawsuit against public participation.
