PG Inn, Inc.
v.Gatward
Filed 1/13/14 PG
Inn, Inc. v.Gatward CA2/6
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115.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
SIX
PG INN, INC.,
Plaintiff and Respondent,
v.
CHRIS GATWARD et al.,
Defendants and Appellants.
2d
Civil No. B248589
(Super.
Ct. No. 56-2012-00428313-
CU-DF-VTA)
(
Chris
Gatward (Gatward) and M3 Environmental
Consulting, LLC (M3) appeal an order denying a special motion to strike PG
Inn, Inc.'s (PG Inn) complaint for libel pursuant to the anti-"SLAPP" (
participation) statute. (Code Civ.
Proc., § 425.16, subd. ( b)(1).)
exercise of protected speech and that PG Inn established a probability of prevailing on the merits. We affirm.
FACTUAL AND
PROCEDURAL BACKGROUND
Gatward
is the principal of M3. In 2009, M3
performed airborne mold spore testing in the basement of the Pacific Grove Inn
(the Inn)
pursuant to a contract with the Inn's former manager, Jolie Quest Hotels. PG Inn subsequently purchased the Inn.
In
2012, PG Inn filed a complaint against Gatward and M3 for "Libel -
Defamation Per Se." PG Inn alleges that, in March
2012, Gatward maliciously published false statements on Yelp.com and TripAdvisor.com,
stating that there was a severe mold problem in PG Inn's basement that was never
remediated.
In the
2012 postings, Gatward wrote, "Although I have not stayed here, this
review is more about the hotel management company (Jolie Quest) than the local
staff. [¶] We were asked to perform mold testing at the
inn in 2009 and found a severe problem, largely in the basement
area . . . . We were
asked back several times to test for mold spores as the management (Jolie Quest)
tried to perform their own remediation, to no good effect. [¶] To
make matters worse they did not pay for our services, and do not [return] calls
or e‑mails. The local manager is
new and while seems nice, has been unable to help. [¶] So
as far as we know, the mold problem still exists, and the company are dead beats."
Gatward
and M3 filed an anti-SLAPP motion, asserting that PG Inn's complaint arose from
constitutionally protected activity because it was brought in response to M3's
efforts to obtain a small claims judgment for unpaid fees and in response to Gatward's
expression of opinions on an issue of public concern, failure to remediate
mold. (§ 425.16, subd. (b)(1) &
(e)(2), (3).) Gatward and M3 also argued that PG Inn could not establish a
probability of prevailing on the merits because Gatward's statements were
either opinion or were substantially true.
In
support of the motion to strike, Gatward presented copies of M3's November 2009
contract with Jolie Quest Hotels to perform mold and asbestos testing at the
Inn; M3's November 2009 letter reporting its initial findings and
recommendations; M3's January 2010 letter reporting
the results of follow‑up testing; and an April 2012 small claims judgment
and complaint against Jolie Quest Hotels for about $2,000 in unpaid fees. It is undisputed that M3 obtained this
judgment by default and that it was not satisfied.
M3's
November 2009 letter after initial testing reported high airborne mold spore
concentrations in the basement of the Inn's main building as compared to outdoor air samples. M3's visual inspection disclosed various
areas of water damage and visible mold.
M3 concluded, "Analytical results of the bioaerosol sampling as
well as the visual inspection conducted during this evaluation do suggest a
significant airborne mold spore concentration is present in [the] basement of
the Main Building, the basement of the Back House, and water intrusion around
the bathtub wall in Room 14 of the Back House." M3 recommended six remedial actions involving
cleaning, removal, and further inspection.
It recommended that any mold discovered on wood in wall cavities be
sanded, cleaned and dried and that work be performed by an experienced mold
remediation contractor and followed by further testing.
M3's January
2010 letter after follow-up testing reported that there were no longer any
indoor spore concentrations in the basement above outdoor levels. It described these findings as typical of a "well-maintained
building." This letter was written
two years before Gatward's Internet postings.
M3 wrote that "spore concentrations found in the indoor areas were
lower than outdoor" concentrations in all cases, "with similar
relative concentrations of mold species dominating the samples." In a section labeled "Observations,"
M3 noted a "clogged" sink in a maintenance area and "[v]isible
water damage and suspect mold" still on the ceiling of a "refrigerator
room" and also along the base of the wallboard in a closet under a stairway,
not previously noted. But in its "conclusions,"
M3 reported, "Analytical results of the bioaerosol sampling as well as the
visual inspection conducted during this evaluation do not suggest a significant
airborne mold spore concentration is still present in [the] basement of the Main Building."
The 2010 recommendations omitted five of
the six original substantive recommended actions. M3 continued to recommend sanding, cleaning,
and drying of the refrigerator room ceiling, and added recommendations to
unclog and clean the sink and to remove the "mold impacted wallboard walls
along the base of the stairway closet" in order to inspect the interior
wall cavity "for possible mold growth."
In
support of the motion to strike, Gatward declared that as of January 2010, "[he
and M3] understood that PG [Inn] had not retained an experienced mold
remediation contractor but, instead, attempted to do the work themselves";
that after issuing the January 2010 report, "[he and M3] were never called
back to the premises of PG Inn"; that, as far as he knew, no further
testing was ever done; and that "PG Inn has yet to pay and has not
satisfied the judgment of $2,136.52." The contract, small claims complaint, and
judgment attached to his declaration show that Jolie Quest Hotels, not PG Inn, was the party responsible
for payment for M3's services. Gatward
also submitted copies of three TripAdvisor.com posts from 2010, 2011, and 2012
describing the basement as dark, smelly, or dank (April 16, 2010: "Room #1 is in the
basement! It is very dark and it was
also smelly . . . ."; June 27, 2011: "Room a little
dank/stuffy"; and April 17, 2012: "[W]hen you
don't have a reservation that [sic] sticks
you in the dungeon below").
PG Inn opposed the special motion
and submitted copies of M3's 2010 report and Gatward's 2012 postings on
Yelp.com and TripAdviser.com, quoted above. PG Inn also submitted the declaration of a shareholder of PG Inn, Gary Peterson, who oversaw
the Inn's
remediation efforts between M3's 2009 and 2010 inspections. Peterson described his experience with mold
remediation and declared that there was no mold problem at the Inn after M3's final report. He also declared that Yelp and TripAdvisor
took down Gatward's postings "immediately" after PG Inn contacted
them, "but the economic damages had already begun to take effect";
and "[s]ince the reviews were posted, the Pacific Grove Inn suffered a
dramatic loss in guest stays, which has translated into a loss of revenue and
loss of value of the building itself.
The
trial court denied Gatward and M3's motion to strike, ruling that they had not
shown that Gatward's statements fell under the protection of section 425.16 and
that PG Inn demonstrated a probability of prevailing. The court reasoned that the ability of a
management company to pay its bills is not a matter of public concern, the
existence of any mold problems at the Inn would concern a small number of people, and that PG Inn demonstrated it could prove
the statements were false.
DISCUSSION
Gatward
and M3 contend that PG Inn's complaint arose from protected activity because Gatward's
statements were made in a public forum concerning a public issue and because
they were made in connection with an issue under consideration by a court in
his small claims collection action. They
also contend that PG Inn did not establish a probability of prevailing because the
statements were not provably false and it did not offer evidence of pecuniary
damage.
We
review an order granting or denying a motion to strike under section 425.16 de
novo. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820.) Section 425.16, subdivision (b)(1)
provides: "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." Protected
activities include statements "made in connection with an issue under
consideration or review by a . . . judicial body" (
in a . . . public forum in connection with an issue of public
interest" (id., subd. (e)(3)).
Our
analysis involves two steps: First, we
decide whether Gatward and M3 have made a threshold showing that PG Inn's complaint arises from
protected activity. (§ 425.16,
subd. (b)(1).) If so, we consider whether
PG Inn has
not demonstrated a probability of prevailing on its claim. "Only a cause of action that satisfies
. . . is a SLAPP, subject to being stricken under the statute." (Navellier
v. Sletten (2002) 29 Cal.4th 82, 89.)
Gatward's
statement, "To make matters worse they did not pay for our services,"
was arguably made in connection with issues under review by the court in his
small claims case. But PG Inn's complaint did not arise
from that statement. The statement is
included in a copy of the postings attached to its complaint, but PG Inn alleged no false statements
about nonpayment. Where allegations
about protected conduct are merely incidental to unprotected conduct, the first
prong is not met. (Peregrine Funding Inc. v. Sheppard Mullin Richter &
294, 308.)
PG Inn alleged that Gatward
falsely stated that "there was a severe mold problem in [the] Inn's basement and also stated
that the problem was never remediated." Gatward offered no evidence that mold
remediation was an issue under review in the small claims case and his small
claims complaint suggests it was not. It
was an action to collect fees for a testing contract. The contract shows that M3 was not retained
to conduct remediation. Whether or not
remediation occurred would have been irrelevant to M3's collection claim, even
if it had been litigated rather than resolved by default. We therefore must consider whether Gatward's
statements about mold are protected as statements in a public forum about an
issue of public interest.
Web sites
accessible to the public are public forums. (Barrett
v. Rosenthal (2006) 40 Cal.4th 33, 41, fn. 4 [Yahoo message board].) But defamatory statements are not transformed
into issues of public interest merely because they are posted on a Web site. (Du Charme
v. International Brotherhood of Electrical Workers (2003) 110 Cal.App.4th 107,
114 [statement on labor union Web site that union manager was fired for
financial mismanagement was in a public forum but not connected to an issue of
public interest, notwithstanding widespread viewing by union members and a
pending governmental investigation into mismanagement of union finances].) Statements about private disputes are not
protected by the anti-SLAPP statute. (
1122, 1132 [publications in trade newsletter accusing a token collector of
theft did not involve an issue of public interest and were not protected];
Exchange, Inc. (2003) 110 Cal.App.4th 26, 34 [telemarketing pitch "was
about Investor Data's services, not
about investment scams in general" and was not protected];
International, Inc. (2003) 107 Cal.App.4th 595, 600-601 [advertising claims
for breast enlarging herbal supplements did not concern the general topic of
herbal supplements of interest to public and were not protected].)
But
statements may be connected to an issue of public interest if they concern a
person or entity in the public eye, a topic of widespread public interest, or
conduct that could directly affect a large number of people beyond the direct
participants. (Rivero v. American Federation of State, County and Municipal Employees,
AFL-CIO (2003) 105 Cal.App.4th 913, 924 [flyers criticizing custodial staff
supervisor did not concern an issue of public interest].) PG Inn is not an entity in the public eye.
It owned one bed and breakfast property.
The statements did not involve a topic of widespread public interest. They were narrowly focused comments on the Inn's business practices, of
interest only to its customers and potential customers, a limited portion of
the public. They did not involve conduct
that could affect large numbers of people.
"[I]n
cases where the issue is not of interest to the public at large, but rather to
a limited, but definable portion of the public . . . , the constitutionally
protected activity must, at a minimum, occur in the context of an ongoing controversy,
dispute or discussion" to be protected.
(Du Charme v. International
Brotherhood of Electrical Workers, Local 45, supra, 110 Cal.App.4th 107, 119;
id. at p. 118 [statement was of
interest to members of the union but "unconnected to any discussion,
debate or controversy," and was not protected].) Gatward offered no evidence of an ongoing
discussion about mold or health concerns, his comments were not made in the
context of any ongoing discussion about those issues, and his comments were
narrowly focused on the Inn without reference to any broader concerns. He wrote, "We were asked to perform mold
testing at the [I]nn . . . and found a severe
problem . . . . [A]s
far as we know, the mold problem still exists . . . ."
Gatward
argues that his comments were part of an ongoing discussion about the Inn's services and they were
connected to the general health risk of mold exposure, an issue of public
interest. We "examin[e]
. . . the specific nature of the speech rather than the generalities
that might be abstracted from it."
(Commonwealth Energy Corp. v.
Investor Data Exchange, Inc., supra, 110 Cal.App.4th 26, 34.) As the court observed in Consumer Justice Center v. Trimedica International, Inc., supra, 107
Cal.App.4th 595, 601, "Trimedica's speech is not about herbal supplements
in general. It is commercial speech
about the specific properties and efficacy of a particular product, Grobust. If we were to accept Trimedica's argument that
we should examine the nature of the speech in terms of generalities instead of
specifics, then nearly any claim could be sufficiently abstracted to fall
within the anti-SLAPP statute."
Gatward
points out that in Wong v. Jing (2010)
189 Cal.App.4th 1354, 1367, criticisms about a dentist posted on Yelp.com were
protected because they were made in connection with an ongoing discussion about
public health concerns. But in that
case, the statements included broad comments on health issues, "general
anesthetic harms a kid's nerve system" and "[t]he metallic filing,
called silver amalgams [sic], has a
small trace of mercury in it. The newer
composite filling . . . does not. In addition, it uses a newer technology to
embed fluoride to clean the teeth for you." (Id. at
p. 1361.) The defendant also demonstrated
an ongoing public discussion about the issue by submitting, "copies of
various Web site pages to show that the Internet is an important source of
public information about oral hygiene, dentists, and dentistry" and "Web
site pages concerning the use of silver amalgam to fill cavities and whether it
is safe because it contains mercury." (Id. at
p. 1362.) A medical journal article
and a "data sheet" used by the dentist also described the ongoing
public controversy about the use of silver amalgam fillings. Gatward and M3 developed no record of an
ongoing discussion or debate here.
Gatward's reliance on Bently
Reserve LP v. Papaliolios (2013) 218 Cal.App.4th 418, 425, in which criticisms
of apartment building managers posted on Yelp.com "undoubtedly ar[ose]
from protected activity," is misplaced because in that case the parties
agreed the first prong had been met and the court "'bypass[ed] the initial
inquiry.'"
Gatward
also relies on Cross v. Cooper (2011)
197 Cal.App.4th 357, 382, in which a tenant's statements to prospective
homebuyers that a registered sex offender lived nearby were protected although
there was no ongoing discussion or controversy in the neighborhood about the offender. But those statements were directly related to
a topic of widespread public interest.
The Cross court acknowledged
that the fact that a broad and amorphous public interest can be connected to a
specific dispute is not sufficient, but found the statements disseminated
information regarding registered sex offenders and so were directly related to
an issue that has been legislatively recognized as being of compelling and widespread
public concern. (
hold that preventing child sexual abuse and protecting children from sexual
predators are issues of widespread public interest. (Cross,
offender was not widespread and concerned only a narrow group of neighbors, the
statements would be protected under the Du Charme
rule because they were made in the context of an ongoing discussion. "[T]he continuous access to and
dissemination of information about the presence of a registered offender in the
area [on the Megan's Law internet registry] represents ongoing 'discussion,'
albeit a cyber discussion, between local authorities and local residents about
that particular offender." (
widespread public interest in mold exposure or establish that his statements
were made in the context of any ongoing controversy, dispute or discussion
about the issue. The fact that there may
be a broad and amorphous public interest in unremediated mold does not alone
meet the requirements of the statute.
Probability of Prevailing
statements were protected, he and M3 would not be entitled to relief under the
anti-SLAPP statute because PG Inn demonstrated a probability of prevailing on the merits. To satisfy the second prong, a plaintiff
responding to an anti-SLAPP motion "'"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."'"
(Oasis West Realty, LLC v. Goldman,
the plaintiff. (Ibid.) We do not weigh
credibility or compare the weight of the evidence. (Ibid.) If the plaintiff can show a probability of
prevailing on any part of its claim, the entire cause of action stands. (Ibid.)
PG Inn alleged that Gatward
falsely stated that a severe mold problem in the Inn's basement was never
remediated. It offered proof that Gatward
wrote that M3 "found a severe problem," that "management (Jolie
Quest) tried to perform their own remediation, to no good effect," and
that "[a]s far as we know, the mold problem still exists . . . ." The statements contain assertions of fact,
notwithstanding the phrase "[a]s far as we know." Couching an assertion in the form of
conjecture does not render it inactionable, if a fact is implied. (Wilbanks
v. Wolk (2004) 121 Cal.App.4th 883, 902.)
And although some Internet rants have been found to be mere opinion, Gatward's
statements were not. He implied
knowledge of facts as an environmental expert with first-hand knowledge of
conditions at the Inn. (Bently Reserve LP v. Papaliolios, supra, 218 Cal.App.4th 418, 426; id. at p. 428 [tenant's post on Yelp contained provable
falsehoods and not mere opinions because he "went out of his way to win
credibility with his audience" by referring to his "first-hand
experience"].)
PG Inn's evidence supports a
finding that the gist of these statements was false and that Gatward and M3
knew or should have known they were false.
(Hughes v. Hughes (2004) 122
Cal.App.4th 931, 936.) M3's reports
support a finding that the "significant airborne mold spore concentration"
that M3 reported in 2009 was not present in 2010 when M3 reported that "[a]nalytical
results of the bioaerosol sampling as well as the visual inspection conducted
during this evaluation do not suggest a significant airborne mold spore
concentration is still present in [the] basement of the Main Building." The reports and Peterson's declaration provide
evidence that remediation efforts between 2009 and 2010 reduced airborne levels
of mold spores from levels up to hundreds of times higher than outdoor samples
to levels that were below outdoor samples consistent with a well-maintained
building. On November 18, 2009, M3 found 1,100,000 spores per cubic meter in a basement air sample
as compared to 1,800 outside. In 2010,
it found that "spore concentrations found in the indoor areas were lower
than outdoor" concentrations in all samples. Gatward points to evidence that mold remained
visible in 2010 in two places and that a sink was clogged. M3 noted these facts in 2010 and nevertheless
concluded that visual inspection and sampling "do not suggest a
significant airborne mold spore concentration is still present." We do not weigh the probative strength of
competing evidence. PG Inn's evidence is sufficient to
sustain a jury finding that the gist of Gatward's statements was untrue.
Gatward
and M3 contend that PG Inn has presented insufficient evidence of special damages to prevail
on a claim for trade libel. Even
assuming proof of damages is required and that Gatward did not forfeit the
contention when he did not raise it in the trial court, the declaration of
Peterson concerning lost revenues is sufficient to sustain PG Inn's burden at this stage. The plaintiff's burden to establish a
probability of prevailing on its claim must be compatible with the early stage
at which the motion is brought and the parties' limited opportunity to conduct
discovery. (Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 823,
disapproved on another ground in Equilon
Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 68, fn. 5.)
DISPOSITION
The
judgment is affirmed. Respondent shall
recover costs on appeal.
NOT
TO BE PUBLISHED.
GILBERT,
P.J.
We concur:
YEGAN,
J.
PERREN,
J.
>
Rebecca
Susan Riley, Judge
Superior Court County of Ventura
______________________________
Gordon & Rees, LLP, Peter
Schwartz, David L. Jones, Gary A. Collis for Defendants and Appellants.
Law Office of Megan DeZotell, Megan
DeZotell for Plaintiff and Respondent.
name="_ftn1" title="">[1] All statutory references are to the Code of Civil Procedure unless
otherwise stated.
