Sahlolbei v. Montgomery

Filed 1/21/10 Sahlolbei v. Montgomery CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

APPEAL from the Superior Court of Riverside County. Harold W. Hopp, Judge. Affirmed in part; reversed in part.

Stutz Artiano Shinoff & Holtz, Jeffery A. Morris, Paul V. Carelli and Casey C. Shaw for Defendant and Appellant.

Fenton & Nelson, Harry J. Nelson and Dennis E. Lee for Plaintiff and Respondent.

Steven Montgomery (Montgomery) appeals the trial courts denial of his anti-SLAPP^[1]motion. (Code Civ. Proc., 425.16.)^[2] Montgomery makes three contentions. First, Montgomery asserts that the trial court erred by concluding that an anti-SLAPP motion cannot be used to strike a petition to compel arbitration. Second, Montgomery contends that the trial court erred by finding that Montgomerys speech was unprotected, prior to applying the two-prong anti-SLAPP test. Third, Montgomery argues that the trial court erred by finding that Montgomery did not satisfy the requirements for an anti-SLAPP motion. We affirm in part and reverse in part.

FACTUAL AND PROCEDURAL HISTORY

Montgomery was an elected board member for the Palo Verde Healthcare District (PVHD). Hossain Sahlolbei (Sahlolbei) was a surgeon at Palo Verde Hospital, which was within PVHD. In December 2004 or January 2005, Montgomery and Sahlolbei entered into a confidential settlement agreement, which included a non-disparagement clause.^[3] The non-disparagement clause provided:

Dr. Sahlolbei agrees never to disparage or interfere with, or cause others to disparage or interfere with, the business of any of the defendants named in the within lawsuit, or any member of the Medical Staff at Palo Verde Hospital. In the event that an individual member of the Medical Staff disparages or interferes with Dr. Sahlolbei, Dr. Sahlolbeis agreement not to disparage or interfere with that individual member shall be deemed null and void. As a condition for Dr. Sahlolbeis promises set forth herein, defendants (including its agents, representatives, and employees) agree never to disparage or interfere with, or cause others to disparage or interfere with the business of Dr. Sahlolbei. Nothing in this Settlement Agreement shall preclude Dr. Sahlolbei or any member of the Medical Staff at Palo Verde Hospital from expressing his or her opinion from the purposes of rendering patient care.

On March 26, 2008, in superior court, Sahlolbei filed a combined complaint for breach of contract and petition to compel arbitration against Montgomery. In the combined complaint and petition, Sahlolbei alleged that Montgomery told a journalist that Sahlolbei was often verbally abusive toward nurses and other staff at the hospital, which has made it difficult for people to work with him; and . . . Dr. Sahlolbeis departure from Blythe would do much to solve [Palo Verde Hospitals] problems. Sahlolbei alleged that the foregoing statements constituted disparagement and interference with Sahlolbei, in violation of the non-disparagement clause.

The confidential settlement agreement also included a clause preventing the parties from initiating any claims based upon events that occurred prior to the signing of the settlement agreement, i.e., a release clause. In the complaint, Sahlolbei further alleged that, in 2007, Montgomery wrote to the Chairman of the PVHD Board of Directors (the Board), I think it necessary to submit a Request For Corrective Action to the medical staff demanding the immediate Summary Suspension of . . . Sahlolbei for bringing and brandishing a gun at the hospital. In his complaint, Sahlolbei alleged that the gun brandishing incident occurred in 2004, prior to the signing of the settlement agreement. Consequently, Sahlolbei asserted that Montgomery (1) violated the clause that released the parties from claims based on prior incidents, and (2) interfered with Sahlolbei.

The settlement agreement contained an arbitration clause, which provided that any alleged violation of the settlement agreement triggered the right to binding arbitration. Sahlolbeis trial counsel wrote letters to Montgomery demanding they arbitrate the disputes, but Montgomery refused to submit to arbitration.

On May 23, 2008, Montgomery filed the anti-SLAPP motion ( 425.16), requesting that the trial court strike Sahlolbeis complaint and petition. Montgomery asserted that the anti-SLAPP motion should be granted because his comments about Sahlolbei were made in connection with official hospital proceedings. Montgomery argued that, as an elected Board member, his statements were protected from lawsuits, pursuant to the official proceedings exception, because the statements concerned Sahlolbeis performance as a surgeon at Palo Verde Hospital.

The trial court gave several reasons for denying Montgomerys anti-SLAPP motion. First, the trial court found no authority applying the anti-SLAPP statute to a petition to compel arbitration. Second, the trial court found that Montgomery had effectively waived his right to invoke the anti-SLAPP statute by agreeing to the non-disparagement clause. Third, the trial court found that Sahlolbei had proven that he would likely prevail on his petition to compel arbitration.

DISCUSSION

A. ERRORS

Before we address Montgomerys contentions, we discuss the trial courts reasons for its ruling. We analyze the trial courts ruling prior to discussing Montgomerys contentions, because the trial courts stated reasons are more complex than they may appear, and it is important to our discussion of Montgomerys contentions to have a full understanding of the trial courts reasons for denying the anti-SLAPP motion.

1. FACTS

The facts relevant to our analysis of the trial courts ruling are as follows: Sahlolbei filed a document entitled Complaint for: 1. Breach of Contract; 2. Petition to Compel Arbitration. Within the Complaint, under the heading First Cause of Action, Sahlolbei alleged that Montgomery breached the settlement agreement by disparaging Sahlolbei and by refusing to arbitrate the dispute. Beneath the heading Second Cause of Action, Sahlolbei alleged that Montgomery failed to comply with the arbitration clause of the settlement agreement. In other words, although the document was entitled Complaint, it was, in substance, both a complaint for breach of contract and a petition to compel arbitration. (Buxbom v. Smith (1944) 23 Cal.2d 535, 542 [The subject matter of an action and the issues involved are determinable from the facts alleged rather than from the title of the pleading or the character of damage recovery suggested in connection with the prayer for relief.].)

In response, Montgomery filed an anti-SLAPP motion to the complaint and the petition to compel arbitration.

2. ANALYSIS

A hearing on an anti-SLAPP motion is conducted in two steps: (1) the defendant demonstrates that the act underlying the plaintiffs cause of action arises from protected activity, i.e., defendants rights of petition or free speech; and then, if defendant meets his burden, (2) the plaintiff demonstrates a probability of prevailing on his cause of action. (Navellier v. Sletten (2002) 29 Cal.4th 82, 88 (Navellier).)

The trial courts first reason for denying Montgomerys anti-SLAPP motion was that the anti-SLAPP motion did not apply to the petition to compel arbitration. Accordingly, the trial courts first stated reason explains, to an extent, the trial courts basis for denying the anti-SLAPP motion as it pertained to the petition to compel arbitration.

The trial courts second reason for denying the anti-SLAPP motion was that it found Montgomery had effectively waived his right to free speech concerning Sahlolbei by agreeing to the non-disparagement clause. Therefore, the trial courts second reason for denying the anti-SLAPP motion concerned Sahlolbeis complaint for breach of the non-disparagement clause. Specifically, the trial court addressed the second prong of the anti-SLAPP analysis, i.e., whether Sahlolbei was likely to prevail on the complaint for breach of contract; and we infer that the court concluded Sahlolbei was likely to prevail, due to Montgomerys waiver. (See Navellier, supra, 29 Cal.4th at p. 94 [contractual waiver of speech addressed under merits prong of anti-SLAPP analysis].)

The trial courts third reason for denying the anti-SLAPP motion is where the courts reasoning derails. The courts third reason for denying the anti-SLAPP motion was that Montgomerys speech was protected, because the statement related to an issue of public interest; however, the court found that the anti-SLAPP motion should be denied because Sahlolbei successfully proved that he was likely to prevail on the petition to compel arbitration.

The flaw in the trial courts reasoning is that, in stating its third reason, in the first step of the anti-SLAPP analysis, the trial court addressed Montgomerys speech, which concerned Sahlolbeis claim for breach of the non-disparagement clause. However, in the second step of the anti-SLAPP analysis, the trial court found that Sahlolbei was likely to prevail on the petition to compel arbitration. Consequently, the trial courts third reason for denying the anti-SLAPP motion is incomplete because the first step of the analysis concerns the complaint, while the second step of the analysis concerns the petition to compel arbitration.

Further, the trial court compounded this error by saying that the hearing on the anti-SLAPP motion only pertained to Sahlolbeis petition to compel arbitrationapparently excluding Sahlolbeis complaint, but at the same time continually discussing the complaint for breach of contract when delivering the reasons for its ruling.

On appeal, the parties do not rectify the confusion created at the trial court. Rather, Montgomery primarily focuses on the trial courts denial of the anti-SLAPP motion as it pertains to the complaint for breach of contract, while Sahlolbei primarily focuses on the trial courts denial of the anti-SLAPP motion as it pertains to the motion to compel arbitration. In sum, this case has been a tangle of mismatched documents and arguments. In an attempt to put order to the documents and reasoning, we will separately address the anti-SLAPP motion as it pertains to the motion to compel arbitration. Once that analysis is complete, we will analyze the anti-SLAPP motion as it pertains to the complaint for breach of contract.^[4]

B. STANDARD OF REVIEW

Despite the errors in the trial courts analysis, we proceed with discussing Montgomerys contentions, because the de novo standard of review is applied to a trial courts denial of an anti-SLAPP motion, and therefore the trial courts errors will not affect our analysis of the issues. (Century 21 Chamberlain & Associates v. Haberman (2009) 173 Cal.App.4th 1, 6 (Century 21).)

C. PETITION TO COMPEL ARBITRATION

Montgomery contends the trial court erred by concluding that an anti-SLAPP motion is not applicable to a petition to compel arbitration ( 1281.2). Montgomerys contention concerns the trial courts first reason for denying the anti-SLAPP motion. We disagree with the contention.

The anti-SLAPP statute is designed to protect citizens in the exercise of their First Amendment constitutional rights of free speech and petition. It is Californias response to the problems created by meritless lawsuits brought to harass those who have exercised these rights. [Citation.] (Century 21, supra, 173 Cal.App.4th at p. 6.) Specifically, an anti-SLAPP motion is applicable to causes of action that result from a defendants (1) oral or written statements made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; (2) any written or oral statement made in connection with an issue under consideration or review by a governmental body, or any other official proceeding authorized by law; (3) any written or oral statement made in a public place or in a public forum connected to an issue of public interest; or (4) any other conduct in furtherance of the exercise of the constitutional rights of petition or of free speech in connection with a public issue or topic of public interest. ( 425.16, subds. (b)(1) & (e).)

In the anti-SLAPP context, the critical point is whether the plaintiffs cause of action itself was based on an act in furtherance of the defendants right of petition or free speech. [Citations.] A defendant meets this burden by demonstrating that the act underlying the plaintiffs cause fits one of the [four] categories set forth ante. (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78.)

A petition to compel arbitration is, in form, a law and motion proceeding; however, in substance, it is a suit in equity seeking specific performance of a contract that contains an arbitration clause. (Wagner Const. Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th 19, 29; Cal. Rules of Court, rule 3.1103(a)(2).) Therefore, Sahlolbeis cause of action is the demand for arbitration. [A] demand [for] commencing private, contractual arbitration does not fit[] any of the four anti-SLAPP categories.^[[5]] [Citations.] (Century 21, supra,173 Cal.App.4th at pp. 7-8.)

As explained by the reviewing court in Century 21, [a]rbitration does not fall into the first two categories of protected activity. These protect statements made in a judicial proceeding, or any other official proceeding authorized by law [citation] or in connection with an issue under consideration or review by a . . . judicial body, or any other official proceeding authorized by law. [Citation.] [] Arbitration is not a judicial proceedingit is an alternative thereto. (Century 21, supra, 173 Cal.App.4th at p. 8.) [A]rbitration agreements . . . represent an agreement to avoid the judicial forum altogether. [Citation.] (Ibid.)

Further, arbitration is not an official proceeding authorized by law, subject to anti-SLAPP protection. In the anti-SLAPP context, when a governmental entity is not a party, courts have limited the term official proceeding to (1) quasi-judicial proceedings that are part of a comprehensive statutory licensing scheme . . . [citation], and (2) proceedings established by statute to address a particular type of dispute [citations]. (Century 21, supra, 173 Cal.App.4th at p. 9.) The dispute at issue in this case is not related to a license, and private arbitration is not required by statute. (Ibid.) In sum, we agree with the reasoning of the Century 21 court, and conclude that arbitration does not fall within the first two categories of protected activities.

Further, arbitration does not fall within the final two categories of protected activities, which protect statements made in . . . a public forum in connection with an issue of public interest [citation] and conduct . . . in connection with a public issue or an issue of public interest. [Citation.] (Century 21, supra, 173 Cal.App.4th at p. 9.) Sahlolbeis demand to arbitrate his dispute with Montgomery is neither a public issue nor an issue of public interest. Sahlolbeis breach of contract claim concerns a confidential settlement agreement, i.e., a private contract, not a public issue. Accordingly, we conclude that the anti-SLAPP statute ( 425.16) is not applicable to Sahlolbeis petition to arbitrate, because the petition is not based upon an act that furthers Montgomerys rights of petition or free speech. Therefore, the trial court did not err.

Montgomery contends the trial court erred because the anti-SLAPP statute states that an anti-SLAPP motion may be filed against a petition. ( 425.16, subd. (h).) We agree that an anti-SLAPP motion may be filed against a petition; however, the petition should be based upon an act that furthers Montgomerys rights of petition or free speech. Montgomery does not explain how the petition to compel arbitration is related to his rights of petition or free speech. Rather, he appears to be asserting that an anti-SLAPP motion is valid against any petition, whether or not the petition bears upon a defendants rights of petition or free speech. Due to Montgomerys failure to explain how arbitration affects his rights of petition or free speech, we find Montgomerys argument unpersuasive.

In a secondary argument, Montgomery contends the trial court need not have, and should not have, decided (a) whether an anti-SLAPP motion could be brought against a petition for arbitration or (b) whether the arbitration provision in the . . . contract was enforceable, especially absent a motion to compel arbitration . . . . The rule regarding petitions to compel arbitration versus motions to compel arbitration is as follows: If a lawsuit is not pending, then a party must file a petition rather than a motion to compel arbitration ( 1290); however, if a lawsuit isalready pending, then a party may seek to compel arbitration by either petition or motion. (Mercury Ins. Group v. Superior Court (1998) 19 Cal.4th 332, 349.) Accordingly, we do not find Montgomerys argument persuasive, because Sahlolbei filed a petition to compel arbitration, and motions to compel arbitration are essentially the same as petitions to compel arbitration.

Montgomery contends, beneath the same subheading as the secondary argument, that to the extent that the trial court found that Sahlolbei would prevail in compelling arbitration, it necessarily had to consider whether the non-disparagement clause was legal. So the anti-SLAPP statute applies. Due to Montgomerys reference to the trial courts finding, Montgomery appears to be addressing the trial courts third reason for denying the anti-SLAPP motion, i.e., that Sahlolbei proved he would prevail in compelling arbitration. However, Montgomerys conclusionSo the anti-SLAPP statute applies, appears to reference the trial courts first reason for denying the motion, i.e., the anti-SLAPP statute was not applicable to the petition to compel arbitration.

In other words, Montgomerys argument is unclear, but he appears to be asserting the following contention: The trial court found that Sahlolbei was likely to prevail on the petition to compel arbitration. By finding that Sahlolbei was likely to prevail, the trial court necessarily found that the entire contract was legal, because Sahlolbei would not be likely to prevail on the petition to compel arbitration if the entire contract was void for violating public policy.^[6] Therefore, the trial court necessarily found that the non-disparagement clause was legal. When the trial court found the non-disparagement clause to be legal, it preempted the arbitrators role of determining whether the non-disparagement clause was void for violating public policy.

To the extent that Montgomery was attempting to assert such an argument, we find the argument unpersuasive. Montgomery does not explain how the possible invalidity of the non-disparagement clause would affect the contract as a whole. In other words, if the non-disparagement clause was void for violating public policy, then that one clause may be invalid, but that does not necessarily invalidate the entire settlement agreement. (See Buckeye Check Cashing, Inc. v. Cardegna (2006) 546 U.S. 440, 444-445 [explaining severability of a contracts arbitration clause]; see also Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak St. (1983) 35 Cal.3d 312, 323 [same].) Accordingly, we are not persuaded that the trial courts finding that Sahlolbei would likely prevail on the petition to arbitrate equates with a finding that the non-disparagement clause was valid.

Further, to the extent we misinterpreted Montgomerys argument, we note that a firmly established rule of appellate review is that if a trial courts ruling is correct upon any theory of law applicable to the case, the judgment will be sustained regardless of the considerations that moved the lower court to its conclusion. [Citation.] (Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, (conc. & dis. opn. of Moreno, J.).) We have concluded ante that the trial courts first reason for denying the anti-SLAPP motion was correct, i.e., that the anti-SLAPP motion was not applicable to the petition to compel arbitration. Accordingly, because there was a proper legal basis for denying the anti-SLAPP motion, as it related to the petition to compel arbitration, the trial courts denial of the anti-SLAPP motion must be affirmed.

D. PROTECTED ACTIVITY

Montgomery contends that the trial court erred in its second reason for denying the anti-SLAPP motion. The courts second stated reason was that Montgomery waived his right to free speech concerning Sahlolbei when he signed the confidential settlement agreement, and therefore, could not invoke the anti-SLAPP statute. Montgomery contends that the trial court erred because (1) it based its ruling on reasons that were outside the ambit of the two prongs of the anti-SLAPP test; and (2) its ruling runs contrary to the legislative design. We disagree.

First, in regard to the trial court allegedly confusing the issues, Montgomerys argument is unpersuasive. As set forth ante, the hearing on an anti-SLAPP motion is conducted in two steps: (1) the defendant demonstrates that the act underlying the plaintiffs cause of action arises from protected activity, i.e., defendants rights of petition or free speech; and then, if defendant meets his burden, (2) the plaintiff demonstrates a probability of prevailing on his cause of action. (Navellier, supra, 29 Cal.4th at p. 88.)

The trial court stated its second reason for denying the anti-SLAPP motion as follows: Montgomery has agreed not to speak or has in effect waived the right to invoke the anti-SLAPP protection if [Montgomery] breaches the agreement.

In this second reason, the trial court appears to be addressing the anti-SLAPP motion in relation to the complaint, rather than the petition to compel arbitration, because the trial court was focused on the act of Montgomerys speech, rather than the act of arbitration. The trial courts finding that Montgomery had waived his right to free speech in regard to Sahlolbei equates with a finding that Sahlolbei was likely to prevail on his claim for breach of contract. Simply put, if Montgomery agreed not to disparage Sahlolbei, then a reasonable person could conclude that Montgomery waived his right to speak freely about Sahlolbei, and therefore, even if Montgomerys statements are protected, he could be found in breach of the settlement agreement.^[7] In sum, the trial court did not go beyond the bounds of the two-prong anti-SLAPP test, because its second reason for denying the anti-SLAPP motion was based upon the second prong of the anti-SLAPP analysisthe finding that Sahlolbei was likely to prevail on his complaint.

Second, in regard to the trial courts ruling contravening legislative design, we find Montgomerys argument unpersuasive. Montgomery asserts that the trial court violated the legislative design of the anti-SLAPP statute when it required him to prove that his speech was protected by the First Amendment, because the Legislature did not intend for a defendant to bear the burden of proving that his speech was protected by the First Amendment prior to prevailing on an anti-SLAPP claim.

We are somewhat confounded by Montgomerys argument, because, in its third stated reason, the trial court found that Montgomerys speech was protected. Therefore, it is unclear why Montgomery is arguing this issue. Nevertheless, the pertinent rule is as follows: When filing an anti-SLAPP motion, a defendant is required to make a prima facie showing that the act or acts which form the basis of the plaintiffs complaint were completed in furtherance of the defendants rights of petition or free speech. (Cohen v. Brown (2009) 173 Cal.App.4th 302, 315-316.)

Nothing in the record suggests that the trial court required Montgomery to make more than a prima facie showing that his speech and writing were protected, especially in light of the trial courts finding that Montgomery satisfied the burden of proof. Accordingly, we are not persuaded that the trial court contravened the legislative design of the statute.

E. ANTI-SLAPP TEST

Montgomery contends the trial court erred by concluding that he did not satisfy the two elements of the anti-SLAPP test. We agree in regard to the complaint, but we disagree in regard to the petition to compel arbitration.

1. PETITION TO COMPEL ARBITRATION

We begin our analysis with Sahlolbeis petition to compel arbitration. We concluded ante, that the trial court properly denied Montgomerys anti-SLAPP motion as it concerned the petition to compel arbitration because Montgomery failed to demonstrate that arbitration is a protected activity. Accordingly, because we have held that a proper basis existed for denying the anti-SLAPP motion as it related to the petition to compel arbitration, we will not further analyze the motion as it concerns the petition to compel arbitration.

2. BREACH OF CONTRACT

Next, we analyze the trial courts implied denial of the anti-SLAPP motion as it related to the complaint for breach of contract.^[8]

As a reminder, in the complaint, Sahlolbei alleged that Montgomery said to a journalist (a) Sahlolbei is often verbally abusive toward nurses and other staff at the hospital, which has made it difficult for people to work with him; and (b) Dr. Sahlolbeis departure from Blythe would do much to solve [Palo Verde Hospitals] problems. The foregoing comments were alleged to be a violation of the non-disparagement and non-interference clause. Sahlolbei further alleged that Montgomery breached the settlement agreement by writing to the chairman of the PVHD Board, suggesting that Sahlolbei be suspended for brandishing a firearm at the hospital. Specifically, Sahlolbei alleged that Montgomerys letter to the chairman violated the forbearance/release clause of the contract, as well as the non-interference clause.

We begin our analysis by determining whether Montgomery demonstrated that the act or acts of which [Sahlolbei] complains were taken in furtherance of [Montgomerys] right of petition or free speech under the United States or California Constitution. (Daimler, supra,142 Cal.App.4th at p. 350.)

The anti-SLAPP statute protects 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. (Code of Civ. Proc., 425.16, subd. (e)(2).) Health and Safety Code section 32106 authorizes meetings of hospital districts boards of directors. Our Supreme Court has concluded that hospital peer review proceedings constitute official proceedings authorized by law within the meaning of [Code of Civil Procedure,] section 425.16, subdivision (e)(2). (Kibler v. Northern InyoCountyLocal Hosp. (2006) 39 Cal.4th 192, 200.) Accordingly, because the Health and Safety Code authorizes the board meetings, and our Supreme Court has previously concluded that similar meetings qualify as official proceedings, we conclude that the PVHDs Board meetings qualify as official proceedings authorized by law.

Next, we address whether Montgomerys comments and letter were made in connection with the official proceedings. At the June 14, 2007, PVHD Board meeting, the chief operating officer (the COO) of Palo Verde Hospital said that Sahlolbei terminated his contract with the hospital. The COO explained that Sahlolbei had an exclusive contract with the hospital in exchange for providing on-call surgical coverage 24-hours per day, seven days per week. The COO then listed several options that the Board could take to provide surgical services to the community. Individuals at the meeting proceeded to debate the various options presented by the COO, including approving a new exclusive contract with Sahlolbei. During the discussion, one person commented that she had heard a rumor that Dr. Sahlolbei actually carried a gun into the hospital and wanted to know if that was true. A doctor at the meeting confirmed that the rumor was accurate. The Board unanimously voted to not consider an exclusive contract with Sahlolbei.

The day after the Board meeting, on June 15, 2007, Montgomery wrote a letter to the PVHD Board chairman. In the letter, Montgomery requested that Sahlolbei be suspended for brandishing a firearm at the hospital. Montgomery also expressed that he was appalled . . . that the Board would first learn of [the brandishing incident] at a public meeting. The contents of the letter were connected with an issue under consideration by the Board, i.e., how to provide surgical services to the community, because Montgomery was suggesting that Sahlolbei not be employed as a surgeon at the hospital, thereby eliminating Sahlolbei as a possible option for solving the communitys need for a surgeon. Further, the letter was directly related to a comment made at the PVHDs Boards meeting. Accordingly, we conclude that Montgomery met his burden of demonstrating that the letter was a protected writing pursuant to the anti-SLAPP statute. ( 425.16, subd. (e)(2).)

Next, we address Montgomerys verbal comments to the journalist. On May 31, 2007, Sahlolbei attended a PVHD Board meeting, but Montgomery did not attend. At the meeting, during the public comment period, several people expressed concern about the hospital possibly closing. During the public comment period, Sahlolbei stated that doctors work for perfection and nurses can cause deaths and the nurses at the hospital are not up to par. The hospitals chief nursing officer responded that the nurses at the hospital were competent, and that the medical staff should not use the nurses as scapegoats. Sahlolbei then said that doctors only want good nurses and [Sahlolbei] demanded that [hospital] administration give the doctors the tools they need so that they wont jeopardize patients.

In a written declaration, Montgomery claimed that he was contacted by a Press Enterprise journalist [s]ometime around June 22, 2007. The journalist asked Montgomery to comment on the statements Sahlolbei made at the meeting. Specifically, the journalist asked Montgomery to comment on Sahlolbeis statement that the nursing staff at the hospital was subpar. In response to the journalists request, Montgomery said that Sahlolbeis comments about the nursing staff [are] an example of how he is abusive toward the staff and that it hurts the staff morale, and that his departure from Blythe would do much to solve the hospitals problems.

Montgomerys statements to the journalist were made in connection with the official proceedings, because they directly related to comments Sahlolbei made at the meeting. Further, Sahlolbeis comments regarding an allegedly subpar nursing staff could directly affect the communitys support for closing the hospital, which was the issue being discussed at the meeting. Consequently, we conclude that Montgomery has met his burden of demonstrating that his verbal comments were protected by the anti-SLAPP statute. ( 425.16, subd. (e)(2).)

3. PROBABILITY OF PREVAILING

We now move to the second prong of the anti-SLAPP analysis, which is determining whether Sahlolbei met his burden of showing that he was likely to prevail on the merits of the breach of contract action.

a) Evidence

We begin with descriptions of the evidence presented by Sahlolbei. In a written declaration, Sahlolbei claimed that in 2003 or 2004, the PVH Board, which included Montgomery, asserted various charges against [Sahlolbei] that were to be adjudicated in an administrative hearing. Sahlolbei declared that in or about January 2005, he entered into a Confidential Settlement Agreement and Mutual Release of Claims . . . which resolved the aforementioned lawsuit without the need for an administrative hearing. Sahlolbei declared that the settlement agreement contained a confidentiality clause, which prevented the contract from being included in the record. He further declared that the contract contained non-disparagement and non-interference clauses, as well as a clause limiting the statements that Montgomery was permitted to make concerning Sahlolbei.

Sahlolbei also presented:

(1) letters from his trial attorney to Montgomery advising Montgomery of the alleged breach of the non-disparagement clause, and of Sahlolbeis desire to arbitrate the dispute;

(2) a letter from PVHDs general counsel to Sahlolbeis trial attorney reflecting that PVHDs insurance would likely cover any breach that Montgomery committed while acting as a PVHD Board member;

(3) a letter from PVHDs general counsel to Sahlolbeis trial attorney requesting all further contact be addressed to the general counsel, rather than Montgomery;

(4) a letter from Sahlolbeis trial counsel to PVHDs general counsel cautioning the general counsel not to represent Montgomery, because no claim is being made against the [PVHD] Board, which was not a party to the agreement between Mr. Montgomery and Dr. Sahlolbei;

(5) a letter from a private law firm to Sahlolbeis trial attorney indicating that it has been retained to represent [PVHD] and . . . Montgomery;

(6) a letter from Sahlolbeis trial counsel to the private law firm advising that Sahlolbei was not demanding to arbitrate a dispute with the PVHD Boardhe only wanted to arbitrate a dispute with Montgomery;

(7) a letter from the private law firm to Sahlolbeis trial counsel informing Sahlolbeis counsel that the private firm would be meeting with the PVHD Board and Montgomery to discuss the possibility of arbitration;

(8) a letter from the private law firm to Sahlolbeis trial counsel indicating an intent to file an anti-SLAPP motion against Sahlolbeis complaint;

(9) a letter from Sahlolbeis trial counsel to the private law firm indicating an intent to compel arbitration;

(10) a letter from the private law firm to Sahlolbeis trial counsel confirming plans to file an anti-SLAPP motion;

(11) a declaration from David Brooks, M.D., attesting that, during the June 14, 2007, PVHD Board meeting, he did not confirm a rumor that Sahlolbei brandished a firearm at the hospital;

(12) a declaration by Kenneth Lucero, M.D., attesting that he never stated or suggested that a firearm was taken from Sahlolbei;

(13) a declaration by Leonel Rodriguez, M.D., attesting that, in 2004, he investigated whether Sahlolbei brought a gun to the hospital, and that he found no truth to the allegationa finding that was shared with the PVHD Board, including Montgomery.

b) Analysis

In deciding the likelihood of Sahlolbei prevailing on the complaint, we consider Sahlolbeis and Montgomerys pleadings and evidentiary submissions; however, we do not weigh the credibility or strength of contradictory evidence. Rather, we consider whether Sahlolbei has made a prima facie showing of facts based on competent admissible evidence that would, if proved, support a judgment in [Sahlolbeis] favor. In considering Montgomerys contradictory evidence, we only determine whether it defeats Sahlolbeis demonstration as a matter of law. (Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 105-106.) If Sahlolbei can show a probability of prevailing on any part of [his] claim, [then] the cause of action is not meritless and will not be subject to the anti-SLAPP procedure. (Id. at p. 106, italics omitted.)

A cause of action for damages for breach of contract is comprised of the following elements: (1) the contract, (2) plaintiffs performance or excuse for nonperformance, (3) defendants breach, and (4) the resulting damages to plaintiff. [Citation.] (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388.) We address each element in turn.

(1) Contract

A contract consists of the following elements (1) an offer; (2) acceptance of the offer; and (3) consideration. (Division of Labor Law Enforcement v. Transpacific Transportation Co. (1977) 69 Cal.App.3d 268, 275.)

In his declaration, Sahlolbei asserts that the PVH Board, under chairmanship of [Montgomery], asserted various charges against [Sahlolbei] that were to be adjudicated in an administrative hearing. Sahlolbei then declared, In or about January 2005, I entered into a contract denominated as Confidential Settlement Agreement and Mutual Release of Claims . . . which resolved the aforementioned lawsuit without the need for an administrative hearing. Sahlolbei describes the contract as containing a limitation on the statements that [Montgomery] was permitted to make concerning [Sahlolbei], and a non-disparagement and non-interference clause.

The evidence provided by Sahlolbei does not reflect that Montgomery, as an individual, was a party to the settlement agreement. Rather, the evidence reflects that the PVH Board brought charges against Sahlolbei and the PVH Board settled the suit with Sahlolbei. Further, Sahlolbei does not provide sufficient evidence that Montgomery was bound by the non-disparagement and non-interference clauses. In Sahlolbeis declaration he asserts that the contract contained non-disparagement and non-interference clauses; however, in regard to Montgomery he only contends that the settlement agreement contained a limitation on the statements that [Montgomery] was permitted to make concerning [Sahlolbei]. Accordingly, to the extent that Montgomery, as an individual, was a party to the settlement agreement, it is not clear that he agreed to be bound by the non-disparagement and non-interference clauses. In sum, Sahlolbei has not met his burden of demonstrating that a non-disparagement contract existed between himself and Montgomery.^[9]

4. SAHLOLBEIS PERFORMANCE

Sahlolbei does not discuss his compliance or non-compliance with the terms of the settlement agreement.

5. MONTGOMERYS BREACH

In his declaration, Sahlolbei writes that he was shocked when [he] learned in or about June 2007 that [Montgomery] had resurrected the gun charge. Sahlolbei does not explain exactly what Montgomery did to allegedly breach the settlement agreement. The other doctors declarations describe their own actions, such as investigating the gun allegation; however, they do not describe how Montgomery breached the settlement agreement. Accordingly, Sahlolbei has not met his burden of demonstrating that Montgomery breached the settlement agreement.

6. DAMAGES

In order to establish a rational basis for assessing damages, the language of the parties contract must be sufficiently definite for the court to determine the scope of the duty, as well as the limits of performance. (Ladas v. CaliforniaState Auto. Assn. (1993) 19 Cal.App.4th 761, 770.)

According to Sahlolbeis declaration, the settlement agreement contained a limitation on the statements that [Montgomery] was permitted to make concerning [Sahlolbei]. Additionally, Sahlolbei declared that the settlement agreement included a non-disparagement clause and a non-interference clause; however, it is not clear if those clauses are applicable to Montgomery. Accordingly, it is unclear exactly what limitation was placed on Montgomerys speech. Further, it is not clear if the terms disparagement and interference are meant to have their common meanings, or, for example, whether interference is limited to economic interference, or interference with contractual relationships. Consequently, we have no rational basis to determine if Sahlolbei is entitled to damages. Moreover, Sahlolbei provides no evidence that he suffered any damages. Accordingly, Sahlolbei has not met his burden of demonstrating that he was likely to prevail on the issue of damages.

7. CONCLUSION

In sum, Sahlolbei has not demonstrated: (1) that a contract existed between Sahlolbei and Montgomery, as an individual; (2) that Sahlolbei performed his contractual obligations; (3) that Montgomery breached the settlement agreement; and (4) that Sahlolbei suffered damages. Consequently, we conclude that Sahlolbei has not met his burden of showing that he was likely to prevail on his breach of contract claim.^[10] Therefore, the trial court erred by denying the anti-SLAPP motion as it pertained to the complaint for breach of contract because Montgomery met his burden; however, Sahlolbei did not.

DISPOSITION

The judgment denying the anti-SLAPP motion is affirmed as it pertains to the petition to compel arbitration. The judgment denying the anti-SLAPP motion is reversed as it pertains to the complaint for breach of contract. The parties are to bear their own costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

/s/ MILLER

J.

We concur:

/s/ RAMIREZ

P. J.

/s/ RICHLI

J.

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^[1] SLAPP is the acronym for a strategic lawsuit against public participation. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57.)

^[2] All further statutory references are to the Code of Civil Procedure unless otherwise indicated.

^[3] The settlement agreement is not included in the Appellants Appendix. The facts related to the settlement agreement are taken from Montgomerys Points and Authorities in Support of [the] Anti-SLAPP Motion as well as Sahlolbeis complaint.

^[4] We note, in his reply brief, Sahlolbei asserts that he only filed a complaint for the purpose of compelling arbitration . . . . In other words, it appears that Sahlolbei meant to file a petition to compel arbitration rather than a combined complaint and petition to compel arbitration. Sahlolbei asserts that his intent to only seek an order compelling arbitration is clear because in his prayer he sought an order compelling arbitration along with other remedies pertaining solely to Montgomerys refusal to arbitrate. Sahlolbeis argument ignores the rule that [t]he subject matter of an action and the issues involved are determinable from the facts alleged rather than from the title of the pleading or the character of damage recovery suggested in connection with the prayer for relief. [Citations.] (Buxbom v. Smith, supra, 23 Cal.2d at p. 542.)

In Sahlolbeis complaint, he alleged, under the heading Breach of Contract that he had been injured in his business and profession, in an amount to be determined according to proof. Due to Sahlolbeis allegation that he suffered damages as a result of Montgomerys breach and that the amount of damage would be supported by proof, it was reasonable to infer that Sahlolbei was initiating a lawsuit, as well as seeking to compel arbitration. Further, at no point has Sahlolbei attempted to dismiss his complaint, which would be expected if he only wanted to compel arbitration. Accordingly, we will take the cautious approach and address the anti-SLAPP motion as it pertains to both the motion to compel arbitration and the complaint for breach of contract.

^[5] We discuss only private contractual arbitration. Arbitration required by law may be subject to anti-SLAPP protection. [Citations]. (Century 21, supra, 173 Cal.App.4th at p. 12, fn. 3.)

^[6] Montgomery asserts that the agreement violates public policy because it restricts his speech as an elected official.

^[7] In Navellier, supra, 29 Cal.4th at page 92, our Supreme Court observed that a defendants conduct may be considered a breach of contract [but] may also come within constitutionally protected speech or petitioning. The high court then explained that a defendant who in fact has validly contracted not to speak or petition has in effect waived the right to the anti-SLAPP statutes protection in the event he or she later breaches that contract. (Id. at p. 94.) In other words, the issue of whether Montgomery waived his right to seek anti-SLAPP protection is analyzed under the merits prong of the anti-SLAPP analysis. The issue of Montgomerys anti-SLAPP waiver falls within the merits prong of the analysis, rather than the protected statements portion of the analysis, because it goes to the heart of the breach of contract claimit is Sahlolbei who bears the burden of showing that Montgomery validly waived his right to free speech concerning Sahlolbei. Consequently, when Sahlolbei demonstrates that he was likely to prevail on his breach of contract claim, due to Montgomery waiving his right to free speech, he was simultaneously proving that Montgomery effectively waived his right to anti-SLAPP protection. (See Navellier, at pp. 93-95; see also DaimlerChrysler Motors Co. v. Lew Williams, Inc. (2006) 142 Cal.App.4th 344, 350, 351-352 (Daimler).)

^[8] During oral argument, Sahlolbeis attorney urged this court not to address the complaint for breach of contract, because the alleged breach of contract is an arbitrable issue, and our opinion could be binding on the arbitration proceedings via principles of law of the case and/or collateral estoppel. Contrary to Sahlolbeis position, our determination regarding Sahlolbeis probability of prevailing does not equate with a finding on the merits of the breach of contract claim. (See Lam v. Ngo (2001) 91 Cal.App.4th 832, 843-844 [the granting of preliminary injunction does not preclude consideration of anti-SLAPP motion].) Accordingly, we disagree that our opinion, which is confined to the anti-SLAPP motion, will have a preclusive effect on the arbitration proceedings.

^[9] In a separate motion, Sahlolbei moves this court to take judicial notice of various PVHD documents for the purpose of proving that Montgomery left the PVHD Board in or before December 2008. The alleged breaches of the settlement agreement occurred in June 2007. It is unclear how Montgomerys December 2008 Board member status is relevant to this appeal. Accordingly, we deny Sahlolbeis request for judicial notice.

^[10] At oral argument, Sahlolbeis attorney asserted that this courts tentative opinion was internally inconsistent, because Discussion section D concluded that Sahlolbei was likely to prevail on his complaint, while Discussion section E concluded that Sahlolbei was not likely to prevail on his complaint. We disagree. In section D we analyzed Montgomerys contention that the trial court erred because it based its ruling on reasons that were outside the ambit of the two prongs of the anti-SLAPP test. We concluded the trial court did not err because its second reason for denying the anti-SLAPP motion was based upon the second prong of the anti-SLAPP analysisthe finding that Sahlolbei was likely to prevail on his complaint. In section E we analyzed Montgomerys contention that the trial court erred by concluding that he did not satisfy the two elements of the anti-SLAPP test. We concluded that the trial court erred because Sahlolbei did not demonstrate that he was likely to prevail on his claim for breach of contract. In sum, in section D we analyzed whether the trial court followed the proper procedure, and looked to the trial courts finding that Sahlolbei was likely to prevail; however, section E focuses upon this courts determination that Sahlolbei was not likely to prevail, which is why we conclude the trial court erred. Consequently, we conclude that the opinion is not internally inconsistent.