Yard v. Waring
Filed 6/14/13 Yard v. Waring CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
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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opinion has not been certified for publication or ordered published for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 THREE
DESTINY YARD,
Plaintiff, Cross-defendant and
Appellant,
v.
KEITH J. WARING,
Defendant, Cross-complainant and
Respondent.
G047316
(Super. Ct.
No. 30-2012-00548337)
O P I N I O
N
Appeal from an order of
the Superior Court
of
County, Gregory H. Lewis, Judge. Affirmed.
Law Offices of Lawrence
A. Strid and Lawrence A. Strid for Plaintiff, Cross-defendant, and Appellant.
Sands Lerner, Neil S.
Lerner and Arun Dayalan for Defendant, Cross-complainant, and Respondent.
The
trial court denied Destiny Yard’s motion to strike Keith J. Waring’s
cross-complaint as a strategic lawsuit against public participation
(SLAPP). (See Code Civ. Proc.,
§ 425.16.)
title="">[1] Because Waring’s claims do not arise from
protected activity, we affirm the court’s order.
FACTS
In
July 2010, Waring led an excursion aboard his seafaring vessel, the Perro
Grande. Yard was one of the invited
passengers. At some point, Yard fell off
the “flying bridge†and struck the railing of the vessel as she plummeted into
the sea. Yard suffered injuries and
incurred medical bills as a result of her injuries.
In
February 2012, Yard filed a complaint against Waring, alleging that Waring’s
negligence was the cause of her injuries.
To wit, Yard claims Waring “negligently and carelessly allowed his
passengers access to the flying bridge of the vessel while it was in open sea,
when he knew or should have known that it would be unreasonably dangerous†to
allow such access. Yard seeks general
damages in excess of $25,000, medical and incidental expenses, lost earnings,
interest, and costs of suit.
In
April 2012, Waring answered the complaint and filed a cross-complaint. Waring’s pleadings deny his own negligence
and instead allege that Yard’s negligence was the cause of her
consumed alcoholic beverages then traversed beyond a protective railing whereupon
she began dancing and/or practicing yoga).
Waring’s answer does not allege the existence of an enforceable general
release as an affirmative defense.
Waring’s
cross-complaint asserts causes of action for breach of implied-in-fact contract
and fraud/false promise against Yard.
Waring alleges that Yard contacted him in October 2010 for help in
paying her medical bills. Waring
notified his insurer, which agreed to pay Yard’s medical bills so long as Yard
signed a release of all Waring’s liability.
Yard promised to sign the release, but Yard subsequently refused to do
so even after medical bills had been paid.
Yard was unjustly enriched and Waring was harmed in excess of
$25,000. In sum, Waring wants his (or
his insurer’s) money back. Despite his
allegation of an “implied-in-fact†contract, Waring does not want to enforce
the prelitigation settlement agreement (i.e., Yard keeps the money she received
and her case is dismissed based on the general release).
In
response to the cross-complaint, Yard filed an anti-SLAPP motion. By declaration, Yard detailed her injuries
and stated her “total billed medical expenses to date are in excess of
$126,000.†Yard’s “health insurance
lapsed after the subject incident and most of the medical expenses were therefore
not covered.†After the incident, Yard
corresponded (mostly by e-mail) with adjusters at Chartis Marine Adjusters
(Chartis), the third party administrator for Waring’s insurer, as well as Neil
Lerner, an attorney retained by Chartis.
“Chartis and . . . Lerner advised [Yard] that Chartis would defer [her]
medical expenses if [she] were to sign a release of liability claims as against
. . . Waring. Although Chartis did
reimburse [Yard] for some of [her] medical expenses, there was never a final
agreement ever arrived at between [the parties] as to the maximum amount that
Chartis would pay.†Lerner sent Yard a
“proposed written release offering to pay a maximum of $45,749.78 . . . . [Yard] received this proposed release in July
of 2011, but [she] never agreed to be paid this amount as payment in full and
[she] therefore never signed the release, due to [her] concern that it would
not be sufficient to defray [her] current and future medical expenses.â€
about an agreement to pay medical bills in exchange for a release.
Waring
opposed the anti-SLAPP motion. In his
declaration, Waring claimed that Yard contacted him in October 2010 asking for
help with her medical bills arising from the incident. Waring contacted Chartis, which indicated “it
would assist . . . Yard, on [Waring’s] behalf, under the
terms of [Waring’s] insurance policy.â€
At no time during Yard’s discussions with Waring did Yard mention a
lawsuit or the threat of a lawsuit. Yard
did not threaten litigation until Waring received a demand letter from Yard’s
lawyer in December 2011.
Robert
A. Milana, the director of Marine Liability for Chartis, also submitted a
declaration in opposition to the anti-SLAPP motion. Chartis representatives met with Yard and
Yard’s mother in October 2010, and discussed Yard’s injuries and
treatment. Chartis, on behalf of Waring, agreed to pay Yard’s medical bills
(up to approximately $50,000) in exchange for her signing a release of all
claims. Milana explained to Yard that
the insurance policy did not cover her injuries because her intoxication and
reckless behavior was the cause of the incident, but that Chartis was willing
to pay in exchange for a release. Yard
never mentioned the possibility of filing a lawsuit until Yard’s lawyer sent a
demand letter in December 2011.
Milana
attached an e-mail string to his declaration, in which Milana wrote to Yard on
March 31, 2011, “If you want to schedule something you can. Believe we have an agreement with surgeons/hospital
for reduced amount — hopefully in the $30,000 range. Labs and misc[ellaneous] will be a few
thousand. You will need some [physical
therapy] for a few months which we will pay.
You will need some recovery time so we want you to have funds to pay bills. [Another Chartis agent] promised more than
the medical limit which we will do. We
need to place a cap on the amount. I
believe all of the above can be accomplished for $50,000. We will pay the big bills direct and you can
pay small ones out of balance and keep balance for other expenses. You will need to execute a release which we
will send. I wanted you to begin to
schedule what you need to do with Dr. Kim.
Thanks.†Yard responded two hours
later: “Oh my I have tears of joy right
now! Thank you so very much I can’t
believe I’m getting my life back. I will
call today, and will sign release as soon as I receive it.†Yard reaffirmed during follow-up phone calls
that she would sign the release.
As
part of her reply brief, Yard submitted a supplemental declaration in which she
denied the existence of any “firm agreement†or the presentation of any waiver
in which the sum of $50,000 was offered.
Yard denied the occurrence of a conversation in which the cause of the
incident or the applicability of insurance coverage were discussed. No one from Chartis ever took a statement
from Yard as to her version of the facts.
As her medical bills accumulated and she was presented with the release,
Yard consulted with an attorney because of her concerns that all her bills
would not be paid and concerns about the consequences of signing the
release. Yard attached an e-mail string
(ranging from May 2011 to July 2011) in which she was presented with a copy of
the proposed release by Chartis’s attorney (Lerner) and Yard expressed concerns
about the terms of the release.
The
court denied the motion. “The
cross-complaint was not based on protected activity that [section] 425.16
covers.â€
DISCUSSION
“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
States Constitution or the California Constitution in connection with a
public issue shall be subject to a special motion to strike . . . .†(§ 425.16, subd. (b)(1).) Our review of the court’s order denying the
motion is de novo, and entails an independent review of the entire record. (Ross
v. Kish (2006) 145 Cal.App.4th 188, 197; § 425.16, subd. (b)(2)
[“court shall consider the pleadings, and supporting and opposing
affidavitsâ€].)
The
anti-SLAPP statute “requires the court to engage in a two-step process. First, the court decides whether the [moving
party] has made a threshold showing that the challenged cause of action is one
arising from protected activity. . . .
[Citation.] If the court finds
such a showing has been made, it then determines whether the [responding party]
has demonstrated a probability of prevailing on the claim.†(Equilon
Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) We reach only the first step in this case
because Yard did not make a threshold showing that the causes of action in the
cross-complaint arose from protected
activity.
As
used in the anti-SLAPP statute, “‘act in furtherance of a person’s right of
petition or free speech . . . in connection with a public issue’ 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, (2) any
written or oral statement or writing made in connection with an issue under
consideration or review by a legislative, executive, or
proceeding authorized by law, (3) any written or oral statement or writing made
in a place open to the public or a public forum in connection with an issue of
public interest, or (4) any other conduct in furtherance of the exercise of the
constitutional right of petition or the constitutional right of free speech in
connection with a public issue or on an issue of public interest.†(§ 425.16, subd. (e), italics added.)
Yard
contends the cross-complaint arose out of Yard filing her complaint for damages
against Waring (§ 425.16, subd. (e)(1)) and Yard’s prior statements made
in connection with this lawsuit (id.,
subd. (e)(2)), namely, her alleged promises (or statements of intent) to sign a
release. As stated in Yard’s brief, “the
pre-suit communications between [Yard] and [Waring’s] insurance carrier and
attorney constituted settlement negotiations of a pending bodily injury claim,
which if finalized would have resulted in a release of claims and a waiver of
the filing of any lawsuit by [Yard] against [Waring]. As such, by the very definition of the
subject matter being negotiated between the parties, there was a good faith and
serious consideration of imminent litigation.â€
The
gravamen of Waring’s cross-complaint is that Waring suffered damages and Yard
was unjustly enriched as a result of Waring’s insurer paying Yard’s medical
bills
reliance on Yard’s unfulfilled promise or statement of intent to sign a
document releasing her claims against Waring.
As stated in his brief, “Waring believes he will prevail on Yard’s
complaint; he bears no liability for her injuries. However, since he has already paid Yard’s
medical bills, she has been unjustly enriched; she got the benefit of their
bargain and he got nothing in return.â€
Waring claims he could have filed his action to recover the medical bill
expenditures before Yard’s complaint was filed, based simply on Yard’s failure
to follow through on her alleged promise to sign the release.
Our
analysis begins with Navellier v. Sletten
(2002) 29 Cal.4th 82 (Navellier).) In Navellier,
disputes arose regarding the management of an investment fund. (Id.
at p. 85.) The original organizers of
the fund sued an independent trustee of the fund in federal court. (Ibid.) A settlement agreement was reached with regard
to one of the claims, and the independent trustee signed a release of his
claims in connection with the execution of the settlement agreement. (Id.
at p. 86.) The original organizers filed
an amended complaint reflecting the partial settlement of their claims; the
independent trustee responded by filing counterclaims against the original
organizers. (Ibid.) Relying on the
release, the original organizers successfully moved for summary judgment on
several of the counterclaims. (
The
original organizers subsequently sued the independent trustee in state court
for fraud (“in misrepresenting his intention to be bound by the Releaseâ€) and
breach of contract (“by filing counterclaims in the federal actionâ€). (Navellier,
supra, 29 Cal.4th at p.
87.) Relying on the plain language of
section 425.16, our Supreme Court held that the state court action arose from
protected activity. The independent
trustee’s “negotiation and execution of the Release . . . involved
‘statement[s] or writing[s] made in connection with an issue under
consideration or review by a . . . judicial body’ [citation], i.e., the federal
district court, and his arguments respecting the Release’s validity were
‘statement[s] or writing[s] made before a . . . judicial proceeding’
[citation], i.e., the federal action.†(
court indisputably is a ‘statement or writing made before a . . . judicial proceeding’ [citation].†(Ibid.)
Obviously,
step one of the anti-SLAPP analysis would be satisfied if the facts in this
case mirrored those in Navellier. (See, e.g., Mundy v. Lenc (2012) 203 Cal.App.4th 1401, 1408-1409
[cross-complaint for breach of contract based on protected activity, i.e.,
plaintiff filing complaint despite signing general release in prior
action].) But there are several factual
differences in the instant case: (1)
there was no pending litigation (or even an explicit mention or threat of
litigation) at the time Yard allegedly promised to execute a release of claims
in early 2011; (2) the release was never actually signed by Yard; and (3) the
basis for Waring’s damages is the expenditure of funds by Chartis to pay Yard’s
medical bills (not breach of contract damages based on the filing of the complaint
by Yard). Waring argues these
differences matter. Yard’s actions and
omissions could not have arisen from protected activity because there was no
judicial proceeding pending or under consideration by Yard during the relevant
time period (late 2010, early 2011).
Yard counters that the prospect of litigation was the implicit basis for
the attempted negotiation of a release of claims by Chartis. Yard also attempts to blur the distinction
between her statements to Chartis in late 2010/early 2011 and her conduct later
in 2011 (June and beyond) after she had reviewed the proposed release and
consulted an attorney.
Waring
has the better of the argument. It is
clear that not every case involving the enforcement of a settlement agreement
satisfies step one of the anti-SLAPP analysis.
(See Applied Business Software,
Inc. v. Pacific Mortgage Exchange, Inc. (2008) 164 Cal.App.4th 1108,
1117-1118 [rejecting extension of Navellier
to cover any case in which breach of settlement agreement is alleged].) An alleged breach of covenants in a
settlement agreement to perform certain acts (i.e., to pay money, return
copyrighted materials, and provide a certification that all such materials had
been returned) (id. at p. 1112) “is
not protected activity because it cannot be said that the alleged breaching
activity was undertaken by defendant in furtherance of defendant’s right of
petition or free speech†(id. at p.
1118). Delois v. Barrett Block Partners (2009) 177 Cal.App.4th 940 is
also instructive. Delois featured a landlord-tenant dispute in which the parties
entered into a settlement agreement — prior to any litigation being
filed — in an attempt to amicably sever their relationship over the course
of four months. (Id. at pp. 944-945.) The
court concluded that “where, as here, no litigation is ever commenced —
although possibly contemplated by one side or another — but, rather, an
agreement entered into to resolve the parties’ disputes, a later suit alleging
breach of that agreement and related tortious conduct does not constitute the sort of activity encompassed by the SLAPP
statute’s first prong.†(
Waring’s
cross-complaint is based on recovering funds disbursed to Yard rather than
recovering damages for Yard’s protected activity (viz., the filing of the
complaint and pre-litigation demands).
This is not a case in which the parties actually finalized a settlement
agreement, whereupon Yard filed a complaint in contravention of a general
release and covenant not to sue.
Instead, Chartis paid Yard’s medical bills and Yard accepted the
payments without signing the general release.
By accepting the funds and not signing the release, Yard ate her cake
and had it too. The cross-complaint
seeks to undo the payment of funds by Chartis on alternative theories that the
transaction was either based on a fraudulent false promise by Yard or amounted
to an implied-in-fact contract for which Waring is entitled to restitution.
cited above in which it was held that attempts to enforce settlement agreements
were not based on protected activity.
Waring’s
cross-complaint was triggered by Yard’s complaint, but the filing of the
complaint by Yard was not a substantive basis for the cross-complaint. “[T]he mere fact that an action was filed
after protected activity took place does not mean the action arose from that
activity for the purposes of the anti-SLAPP statute. [Citation.]
Moreover, that a cause of action arguably may have been ‘triggered’ by
protected activity does not entail that it is one arising from such. [Citation.]
In the anti-SLAPP context, the critical consideration is whether the
cause of action is based on the
defendant’s protected free speech or petitioning activity.†(Navellier,
supra, 29 Cal.4th 82, 89.) Waring seeks monetary damages based on Yard’s
acceptance of funds to pay her medical bills without following through on her
alleged promise to sign the release (and, presumably, without offering to
return the money), a ground for relief not based on protected activity.
To
the extent the cross-complaint is based on statements by Yard (as opposed to
the acts of accepting and retaining the Chartis payments), Yard did not
establish that her statements about the general release were made in
anticipation of litigation. “Statements
made before an ‘official proceeding’ or in connection with an issue under
consideration or review by a . . . judicial body . . . as described in clauses
(1) and (2) of section 425.16, subdivision (e), are not limited to statements
made after the commencement of such a proceeding. Instead, statements made in anticipation of a
court action or other official proceeding may be entitled to protection under
the anti-SLAPP statute.†(
Entertainment, LLC (2011) 194 Cal.App.4th 873, 886-887.) But this rule applies only to statements made
when litigation is under serious consideration.
(Id. at p. 887.) Yard failed to make an adequate showing on
this point. Her attempt to do so is dependent
on confusing the timeline. Yard’s
promise to sign the release and receipt of the funds from Chartis preceded her
consultation of an attorney, refusal to sign the release, and ensuing demand
letter.
The
parties focus extensively on the litigation privilege in their briefs, with
Yard claiming the litigation privilege applies to any alleged statement that
she would sign the release agreement.
“‘The litigation privilege, codified at Civil Code section 47, subdivision
(b), provides that a “publication or broadcast†made as part of a “judicial
proceeding†is privileged.’†(
County v. City of Oakland (2009) 171 Cal.App.4th 741, 766.) Although the applicability of the litigation
privilege is not coextensive with an examination of whether an action is based
on protected activity, courts often consider whether the litigation privilege
applies to an alleged communication for help in determining whether a threshold
showing has been made under step one of the anti-SLAPP analysis. (Neville
v. Chudacoff (2008) 160 Cal.App.4th 1255, 1262-1263.) Yard argues that if her statements were
privileged then she has also established they were protected activity under the
anti-SLAPP law. But consideration of the
litigation privilege merely confuses the issue in this case. Yard is not being sued for her statements
action). (See Neville, at pp. 1258-1259.)
Yard is being sued for accepting Chartis’s money and not returning the
money when she decided she would not sign the release. As previously noted, we need not address the
merits under step two and therefore decline to explore the applicability of the
litigation privilege to the facts of this case.
DISPOSITION
The
order denying Yard’s anti-SLAPP motion is affirmed. Our December 13, 2012 stay order is lifted
upon issuance of the remittitur. Waring
shall recover costs incurred on appeal.
IKOLA,
J.
WE CONCUR:
RYLAARSDAM,
ACTING P. J.
BEDSWORTH, J.
All statutory
references are to the Code of Civil Procedure.
Yard attached a copy
of the unsigned general release to her declaration. The operative terms included payment of up to
$45,479.78 in medical bills, costs, and expenses to Yard in consideration for
her full release of all known and unknown claims against Waring.
