Ramos v. U.S. Bank National Assn.
Filed 4/17/13 Ramos v. U.S. Bank National Assn. CA1/4
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opinion has not been certified for publication or ordered published for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
FIRST
APPELLATE DISTRICT
DIVISION
FOUR
ANTHONY
RAMOS et al.,
Plaintiffs and Appellants,
v.
U.S. BANK
NATIONAL ASSOCIATION et al.,
Defendants and Respondents.
A131750
(Solano
County
Super. Ct.
No. FCS036466)
Plaintiffs
Anthony and Isabelle Ramos sued U.S. Bank National Association (the Bank), the
Endres Law Firm, and David Endres alleging that an
the Ramoses by the firm on behalf of the Bank was brought maliciously, without
probable cause. The Ramoses also alleged
that the Bank and the Endres firm violated the
& Prof. Code §§ 17200 et seq.) by engaging in a pattern and practice
of filing unfounded and malicious unlawful detainer actions in disregard of
tenants’ rights. Endres filed a special
Bank brought a special motion to strike the malicious prosecution cause of
action. The trial court granted both
motions and dismissed the action in its entirety. We affirm, except with respect to the order
striking the Ramoses’ cause of action for unfair business practices against the
Bank; this was error because the Bank did not file a motion to strike that
cause of action.
I.
Factual And
Procedural History
For
some years prior to 2009, the Ramoses resided at 1000
Kellogg Street in Suisun
City (the property) as
tenants. Eric Tabernero was the property
owner. In September 2009, the Bank
purchased the property at a trustee’s sale.
In mid-September, the Bank’s attorneys, the Endres Law Firm, by and
through David Endres (collectively, Endres), served on the Ramoses a “Notice to
Occupant(s) to Vacate Premises†demanding that the premises be vacated and
turned over to the new owner within 3, 60 or 90 days, depending upon the nature
of the tenancy. Two days later the
Ramoses called Endres and stated they were tenants of the former owner and were
in possession of the property pursuant to a lease. Endres did not receive a copy of the lease,
but assumed such a lease existed and therefore gave the Ramoses 90 days to
vacate. The Ramoses did not move out so
Endres, on behalf of the Bank, filed a complaint for unlawful detainer on December 18, 2009. The complaint sought possession of the
premises and the “reasonable value for the use and occupancy of the Propertyâ€
of $70 per day. The Ramoses, acting in
propria persona, filed an answer to the complaint, stating that they had lived
at the property for seven and one-half years and had rented the property since
2004; they requested the opportunity to continue to rent the property until
such time as they could purchase it.
Trial
on the unlawful detainer action was set for January 26, 2010.
Ramoses’ attorney, sent an e-mail to Endres stating that the Ramoses were
tenants holding under a bona fide lease set to expire in October 2010, that
their tenancy was protected under the Protecting Tenants at Foreclosure Act of
2009 (PTFA), and therefore it would be a waste of time and effort to go to
trial.
On
January 22, Trujillo sent a letter
to Endres, enclosing a copy of the Ramoses’ lease. Trujillo
asserted that the Ramoses were protected from eviction by the PTFA because the
lease was executed before the notice of default was recorded, the landlord is
not the “child, spouse, or parent of the tenants†and the lease was an
arm’s-length transaction at fair market value rent. Trujillo
requested that the unlawful detainer action be dismissed.
The
trial went forward as scheduled. During
the trial, Endres and the Bank learned that Tabernero, the lessor, was the
Ramoses’ son-in-law; they therefore argued that the lease was not “bona fideâ€
under the PTFA because of the familial relationship. Also during the trial the Ramoses introduced
into evidence a promissory note (the Note) and two leases. The two leases were dated October 2006 and
October 2008, were signed by Tabernero and the Ramoses, and prescribed a
monthly rental of $1,600. The 2008 lease
was for 24 months, ending October 1,
2010. The Note indicated
that in 2006, Tabernero borrowed $56,373.43 from the Ramoses. The Note stated that Tabernero agreed to pay
the principal sum “plus interest on the outstanding balance at 2% ($11,274.69)
equaling $67,648.12â€; that the loan period began on October 1, 2006 and ran for
66 months, through April 2012; and that the Note would be “repaid in equal
monthly payments of $1,600.00 per month (in lieu of legal tender) as a Pre-Paid
Lease Agreement by and between [Tabernero and the Ramoses].†(Underlining and boldface omitted.) The Note further specified that new lease
agreements “shall be assigned†for the periods of October 2006 to October 2008,
October 2008 to October 2010, and from October 2010 to April 2012. The Note also contained this recital, in
boldface: “Only and upon expiration of
lease agreements through April 2012, this Note will be considered Paid in Full
as agreed.†Although the 2006 lease
stated that the rent had been prepaid, the 2008 lease did not.
Judgment
was entered in favor of the Ramoses, the court stating: “Court finds that the [Ramoses] are protected
under the Protecting Tenants at Foreclosure Act. Under the Act, [the Bank] takes the subject
property subject to the lease dated October
1, 2008. Lease expires October 1, 2010. [Ramoses] are ordered to pay rent in the
amount of $1,600.00 per month to [the Bank]. [¶] Rental payments shall be
made to [the Bank] in care of [its] attorney of record, the Endres Law
Firm.†The Ramoses were awarded costs of
suit in the sum of $450.
The
day after trial, Trujillo sent a
letter to Endres enclosing a proposed judgment and memorandum of costs. The letter goes on to state: “The judgment indicates that the monthly rent
should be made payable to plaintiff in care of the Endres Law Firm. Please advise if the monthly payments should
be made elsewhere. [¶] My clients are prepared to make their rental
payment for the month of February. It
would seem appropriate to discount from the rent the costs awarded to
defendants, which total $450.00. Please
advise if you have any objection. If
not, the rent for February will be $1,150.00.â€
A paralegal in the Endres firm called Trujillo
and informed her that the Bank would accept the February rent but would seek
back rent from the date of foreclosure, because the Ramoses had been living on
the property rent free since October 2009.
On January 29, Trujillo sent
another letter to Endres stating that the paralegal had informed her that
Endres requested that the $450 in costs not be deducted from the rent for
record-keeping purposes, and therefore the Ramoses “will submit $1,600 for rent
for the month of February†to Endres.
With respect to the issue of back rent Trujillo
stated: “Unfortunately for your client
[the Bank’s attorney] expressly waived damages at trial. Furthermore, he failed to raise the issue of
back-rent at trial.â€
Endres
considered and researched the question of whether the issue of back rent had
been waived at trial and concluded it had not.
Specifically, Endres concluded (1) the waiver of “damages†was based on
the theory that the Ramoses tortiously held over their tenancy following the
foreclosure, and (2) no claim for back rent was made because the Bank took the
position that the Ramoses’ lease was not bona fide. Accordingly, the amount of past due rent had
not been an issue. On February 5,
Endres, on behalf of the Bank, served on the Ramoses a three-day notice to pay
or quit, seeking payment of rent for the months of October 2009 through January
2010.
On
February 10, Trujillo sent a letter
to Endres asserting that the back rent issue was barred by res judicata because
it had not been raised in the unlawful detainer trial. Trujillo
expressed her dismay that Endres had chosen to “disregard the court’s judgmentâ€
and noted that the Ramoses had made a “timely rental payment for the month of
February.†The letter included a warning
that any action filed would be without legal basis and would lead to a motion
for sanctions. Endres responded in a
letter to Trujillo, explaining why
the firm had concluded that the back rent issue was not before the court in the
unlawful detainer action. In essence,
Endres stated that the first action had been brought pursuant to a notice to
vacate under the statutes which govern unlawful detainer proceedings that occur
as a result of a nonjudicial foreclosure; in such instances, there is no
landlord-tenant relationship and therefore no landlord-tenant issues can be
litigated. Endres further explained that
the Bank’s waiver of damages was a conditional one—the Bank had agreed to waive
damages only if the court awarded to it possession of the property, which it
did not. Further, the damages sought
related to those arising from a hold-over tenancy, as contrasted with the
current demand for past rent that arose out of the preexisting lease.
On
February 29, the Ramoses sent Endres a check for $1,600 and a handwritten note
indicating the check was for payment of the March 2010 rent. On March 2, Endres returned the check to the
Ramoses and included a letter stating that Endres would not accept March rent
until the three-day notice was cured and past due rent of $6,400 was paid.
Endres
thereafter filed a second unlawful detainer action on behalf of the Bank,
seeking termination of the lease, past due rent in the amount of $6,400, and
damages. Trujillo,
on behalf of the Ramoses, filed a demurrer to the action, arguing that the Bank
was aware of the PTFA defense prior to the first unlawful detainer trial, and
therefore “could have addressed any unpaid rent at the time of trial.†The Ramoses characterized the original
complaint as seeking “possession and reasonable rent†from October 2009 to the
date of trial; therefore, they argued, “[t]he issues of rent, possession and
the PTFA were put squarely before the court at the first trial,†and the second
unlawful detainer seeking possession due to nonpayment of past due rent was
barred.
The
court rejected the Ramoses’ argument.
Citing authority which precludes recovery of rent unless the unlawful
detainer is based on default in the payment of rent, the court concluded that
the Bank “was unable to seek rent in the first action as the action was not
based upon a failure to pay rent.†The
second action, therefore, was not barred by res judicata.
On
April 29, the Ramoses filed their answer to the complaint. In it, they claimed, for the first time, that
no rent was due because, pursuant to the Note and lease, rent had been prepaid
for 66 months and therefore had been paid through January 2010. The Ramoses alleged: “[The Bank] is retaliating against [the
Ramoses] for exercising its [sic]
right. It [sic] offered to pay rent and this was declined.†The Ramoses further alleged that the fair
rental value of the premises alleged in the complaint was excessive because
“[t]he rate wasn’t estimated until the court issued a ruling. The court didn’t make a retroactive order.â€
Endres
considered the Ramoses’ claim of prepaid rent and concluded there were these
factual inconsistencies: (1) the Note
made no reference to the prepayment of rent;
equals $105,600, but the loan to Tabernero, including interest was for
$67,648.12; (3) the Ramoses tendered rent to Endres for February and March
2010, which would have been included in the prepayment under the “supposed
terms of the promissory noteâ€; (4) at no time prior to the filing of their
answer to the second unlawful detainer complaint did the Ramoses mention
prepayment of rent; (5) in their demurrer the Ramoses made no mention of the
prepayment of rent and in fact “made a distinction between the
rent.â€
The
court held a trial management conference on June 24. According to Endres, by that date the firm
had “not yet completed [its] investigation of the Ramoses[’] claim of
prepayment, which included the retention of any experts to authenticate the
note and subpoenaing the necessary witnesses for deposition/trial
testimony.†Endres, however, had
conducted no discovery prior to the June 24 conference. Endres requested that the trial be continued
and that discovery be reopened “regarding the validity and substance of that
note.â€
The Ramoses’ attorney opposed the
motion, arguing that the promissory note had been introduced into evidence
during the first trial so the Bank had been aware of it since January 26, that
the prepayment of rent was raised in the Ramoses’ answer, which was filed at
the end of April, and therefore that the Bank had had “plenty of time†and a
continuance would be prejudicial to the Ramoses. The Bank responded by pointing out that,
whatever the purpose was for introducing the promissory note into evidence at
the first trial, it was clear that the court had “left open the question of
whether rent was due.†The judge then
asked whether there had already been a finding that the lease was “bona fide.†Specifically, the court stated: “Hasn’t this issue about a bona fide lease or
tenancy already been adjudicated? I am
not saying that the amount of rent is still not an open issue. But what I am saying is that the bona fide
nature of the transaction, given the fact that both the lease and the
promissory note were in evidence at the last hearing, establish that the
transaction was bona fide, and what the issue is, is how much rent was paid to
the former landlord.†The Bank’s lawyer
responded, “Right.
[¶] . . . [¶] I am not disputing that.†The attorney explained that the issue to be
litigated was whether all the rent had been paid in advance, or whether the
promissory note showed only that there was a loan that would be paid down in
lieu of rent.
The
court denied Endres’s motion for a continuance.
Because Endres was wary of an adverse result if the matter proceeded to
trial without completing the investigation, the firm decided to dismiss the
action and refile the complaint after discovery was completed.
The
Ramoses then filed a motion for attorney fees based upon an attorney fee clause
in the Tabernero-Ramos lease. The court
denied the motion on the ground that there was no contract between the Bank and
the Ramoses that provided for attorney fees; rather the PTFA provides only that
the immediate successor in interest on a foreclosed property take the property
subject to the rights of the tenant to occupy the premises for the remaining
term of the lease. The court denied the
motion on the alternative ground that there was no prevailing party, because the
action had been voluntarily dismissed.
Even
before the court issued its ruling on the attorney fees motion, the Ramoses
filed the instant action for damages and
injunctive relief against the Bank and Endres. In the “common allegations†(underlining and
capital lettering omitted) section of the complaint, the Ramoses alleged the
history of their tenancy and the facts relating to the foreclosure and the
filing of the first unlawful detainer action.
They further alleged: “[After]
trial in the First Action, the court found that [the Ramoses] had in fact
entered into a lease and that the lease was the result of a legitimate arms
length transaction and thus [the Ramoses] were entitled to the protections of
[the PTFA] and ordered the bank to honor the applicable lease. [¶] In disregard of the court’s order,
defendant [Bank] represented by [Endres] filed a second unlawful detainer
action…seeking possession of the subject property for non-payment of rent for
the months leading up to the trial in the First Action. However, as proven at trial in the First
Action, the applicable lease was legitimate and rent had been pre-paid for the
life of the lease.
[¶] . . . [¶] At the Trial Management
Conference in the Second Action, the court reminded [the Bank and Endres] that
the court in the First Action already deemed the lease legitimate and any
challenge thereto was collaterally estopped.
The [Bank and Endres] then dismissed the Second Action in open court.â€
On
information and belief, the Ramoses alleged that the Bank and Endres “have
engaged in a pattern and practice of filing malicious actions against tenants
in knowing violation of tenant’s rightâ€; that the Bank “has engaged in this
behavior to wrongfully gain possession of properties acquired after foreclosure
in order to sell the properties quickly on the open market and to avoid
fulfilling landlord responsibilitiesâ€; and that Endres “aided and abetted the
bank’s efforts in order to generate substantial attorney fees.â€
The
Ramoses pleaded two causes of action—malicious prosecution and unfair business
practices. The Ramoses alleged that “no
reasonable person†in the Bank’s circumstances and “no reasonable attorney†in
Endres’s circumstances would have believed there were reasonable grounds to
bring the second unlawful detainer action against the Ramoses, “in light of the
ruling on the First Action†and that both defendants acted with malice, fraud,
and oppression.
The
Bank and Endres each filed a special motion to strike the complaint, pursuant
to Code of Civ. Proc. § 425.16. The
Bank described its motion as requesting “an order striking [the
Ramoses’] . . . Malicious Prosecution Complaint,†but the motion
itself was silent with respect to the unfair business practices cause of
action.
The
Ramoses filed oppositions to each motion, which we need not describe at this
point except to note that, in support of the allegations of malice and of
unfair business practices, the Ramoses proffered the expert opinion of an
attorney in the Housing Practice of the East
Bay Community Law
Center. He averred that he had represented “several
tenants†in foreclosure-related evictions against Endres, and that, in his
experience, the Endres firm prosecutes cases without regard to—or in only superficial
compliance with—the local Oakland eviction control ordinance and engages in a
number of other bad faith actions to the detriment of the tenants. The attorney stated that, based upon his
experience and in his opinion, he “believe[s] the firm engages in unfair
competition practices by filing eviction cases with no legal or factual basis
and by proceeding in the use of bad faith and bad faith practices for the
purpose of obtaining eviction in situations where eviction is not legally
justified.â€
The
Bank and Endres filed memoranda in reply, and Endres filed objections to the
attorney-expert’s declaration. After a
hearing, the court granted both motions.
The court concluded that the Ramoses had failed to produce evidence that
would establish, prima facie, either the “probable cause†element or the
“malice†element of their malicious prosecution cause of action. The court also specifically ruled that the
housing attorney’s declaration lacked foundation and described practices that
“have nothing to do with the issues involved in our case.†The court granted the motions, striking the
action in its entirety.
The
Ramoses filed this appeal.
II.
Analysis
A. Standard of Review
Code
of Civil Procedure section 425.16 is commonly referred to as the anti-SLAPP
law.
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, 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).)
Under
the statute, the court makes a two-step determination: “First, the court decides whether the
defendant has made a threshold showing that the challenged cause of action is
one arising from protected activity. (§
425.16, subd. (b)(1).) . . . If the court finds that such a
showing has been made, it must then determine whether the plaintiff has
demonstrated a probability of prevailing on the claim. (§ 425.16, subd.
(b)(1) . . . .)†(Navellier
v. Sletten (2002) 29 Cal.4th 82, 88 (Navellier).)
The
standard of review on appeal from an order granting a special
section 425.16 is de novo. (
(2006) 39 Cal.4th 260, 269, fn. 3.)
Here,
the Ramoses do not challenge the trial court’s conclusion that the causes of
action arose from protected activity.
What is disputed is “whether [the Ramoses] have demonstrated a
probability of prevailing on the claim.â€
(Navellier, supra, 29 Cal.4th
at p. 88.)
“ ‘In
order to establish a probability of prevailing on the claim (§ 425.16,
subd. (b)(1)), a plaintiff responding to an anti-SLAPP motion must
“ ‘state[] and substantiate[] a legally sufficient claim.’ †[Citations.]
Put another way, the plaintiff “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.â€
[Citations.] In deciding the
question of potential merit, the trial court considers the pleadings and
evidentiary submission of both the plaintiff and the defendant ([Code Civ.
Proc.] § 425.16, subd. (b)(2)); though the court does not weigh the
credibility or comparative probative strength of competing evidence, it should
grant the motion if, as a matter of law, the defendant’s evidence supporting
the motion defeats the plaintiff’s attempt to establish evidentiary support for
the claim.’ [Citations.]†(Tuchscher
Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003)
106 Cal.App.4th 1219, 1235, italics omitted.)
B. Plaintiffs’
Burden of Proof in a Malicious Prosecution Action
In
order to determine whether the Ramoses have demonstrated a probability of
prevailing in this action, we apply settled law and principles governing a
malicious prosecution claim.
A
plaintiff in a malicious prosecution
underlying action (1) was commenced by or at the direction of the
defendant . . . and . . . was pursued to a legal
termination in plaintiff’s favor; (2) was brought without probable cause; and
(3) was initiated with malice.†(
(2004) 118 Cal.App.4th 204, 213.)
“[C]ourts have long recognized that the tort has the potential to impose
an undue ‘chilling effect’ on the ordinary citizen’s willingness
to . . . bring a civil dispute to court, and, as a consequence,
the tort has traditionally been regarded as a disfavored cause of action.†(Sheldon
Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 872 (
bring the challenged claim presents a question of law: “[T]he probable cause element calls on the
trial court to make an objective determination of the ‘reasonableness’ of the
defendant’s conduct, i.e., to determine whether, on the basis of the facts
known to the defendant, the institution of the prior action was legally
tenable.†(Id. at p. 878.)
Probable
cause to initiate or to prosecute a lawsuit is viewed leniently by the
courts. The lawsuit need only be
“legally tenable.†(Sheldon Appel, supra, 47 Cal.3d at p. 878.) “Only those actions that any reasonable
attorney would agree are totally and completely without merit may form the
basis for a malicious prosecution
(Zamos v. Stroud (2004) 32
Cal.4th 958, 970.)
A
finding of probable cause ends the matter.
“If the court determines that there was probable cause to institute the
prior action, the malicious prosecution
evidence that the prior suit was maliciously motivated.†(Sheldon
Appel, supra, 47 Cal.3d at p. 875.)
C. Discussion
1. The
Malicious Prosecution Cause of Action
Anticipating
the Bank’s and Endres’s contention that their voluntary dismissal of the unlawful
detainer action did not satisfy the first element of a malicious prosecution
action—a legal termination in their favor—the Ramoses’ opening argument seeks
to demonstrate that the dismissal did constitute such a favorable termination. We need not decide this question, however,
because we conclude that the Ramoses have not established they can prevail on
the second element, the lack of probable cause.
The
Ramoses’ contention that the second unlawful detainer action constituted
malicious prosecution is premised on the following assertions: the Ramoses prevailed in the first action, in
which they were found to be protected by the PTFA. The PTFA mandates that the successor-owner
assumes “such interest [in the property] subject to . . . the
rights of any bona fide tenantâ€; thus, if the former landlord could not evict
the Ramoses for nonpayment of rent, the Bank also cannot. “[A]ny reasonable attorney would have
reviewed the evidence presented at the first trial to determine for what months
rent was collectable. Here, the evidence
at the first trial established that the tenants had lent money to their former
landlord and in returned [sic]
obtained a pre-paid tenancy and no rent was due. . . . [¶] The first trial also established the
tenancy was bona fide. [¶] Taking those facts together, no reasonable
attorney would have issued a 3-day notice for [rent due for] the months leading
up to the first trial. . . .
Defendants undisputedly had not a single iota of evidence before or
after [they] filed the second unlawful detainer action tending to prove that
any money was due under [the Ramoses’]’ lease.â€
If
this were a correct and complete description of this case, the Ramoses’
argument might have merit. Instead, it
is a one-sided, inaccurate, and incomplete statement of the pertinent
facts. First and foremost, the Ramoses’
assertion that the evidence at the first trial “established†that the Ramoses
had lent money to their former landlord and in return obtained a prepaid
tenancy such that no rent was due, is, at best, an exaggeration and at worst a
misrepresentation. While it is true that
the Note—reflecting an agreement that a loan would be repaid by rental
forgiveness of $1,600 per month—was introduced into evidence at the first
trial, the terms of the Note were not addressed in the court’s ruling. Insofar as the record shows, the amount of
rent actually prepaid, if any, was
neither litigated nor “established†in the first trial. It was only the bona fides of the Ramoses’
tenancy, pursuant to the PTFA and the October 2008 lease, that were
adjudicated. As was pointed out by the
judge during the trial management conference for the second action, the amount
of rent due was still an “open issue.â€
The
Ramoses’ argument also ignores other facts which bear directly on the issue of
whether the Bank and Endres had probable cause to file the second unlawful
detainer action for nonpayment of rent.
For example, the fact that the Ramoses did not raise the issue of
prepayment of rent during the first action—even though they introduced into
evidence the Note with the prepaid lease provision—suggests that the Ramoses
themselves were uncertain about either the validity or the legal effect of the
Note. Consistent with that uncertainty,
the 2008 lease, upon which the court relied in finding a legal tenancy, did not
mention the prepayment of rent, in contrast to the 2006 lease. Additionally, the court ordered the Ramoses
to “pay rent†to the Bank, yet the Ramoses did not appeal that judgment, and,
in fact, tendered rent. It is therefore
disingenuous for the Ramoses now to contend that the evidence in the first
trial “established†that “no rent was due.â€
Finally, as was pointed out during the trial management conference, the
loan to the prior landlord was for $67,648.12 (including interest), while the
loan repayment terms were for 66 months of prepaid rent at $1,600 per month
totaling $105,600, an unexplained discrepancy.
Given
all of these facts we agree with the trial court’s cogent analysis of the
probable cause element: “While
plaintiffs have produced a written lease agreement in which they claim to have
prepaid rent, plaintiffs also twice [proffered rent to the Bank], for February
2010 and then for March 2010, both of which were periods of time in which the
written lease claims rent was prepaid.
In addition [the judgment] in the first action . . .
directed plaintiffs to pay monthly rent to [the Bank] in a manner which implied
the rental obligation may have applied from the time [the Bank] acquired the
subject property in September 2009 . . . and further implying a
finding that the rent was not in fact prepaid (at the least the judgment did
not resolve in plaintiffs’ favor the issue of prepayment of rent). Therefore, the second action . . .
seeking eviction for and/or payment of back rent from October 2009 through
February 2010, was brought with some probable cause and certainly would not be
one in which all reasonable attorneys would agree is totally and completely
without merit.â€
Because
the Ramoses have not demonstrated they can make even a prima facie showing that
there was no probable cause for the filing of the second unlawful detainer
action, the issue of whether the action was brought with malice is moot. (Sheldon
Appel, supra, 47 Cal.3d at p. 875.)
2. The Unfair
Business Practices Cause of Action Against Endres
The
trial court did not separately state its rationale for granting Endres’s motion
to strike the unfair business practices cause of action. Presumably the court relied on one or both of
the grounds asserted in Endres’s motion, which were, (1) the claim is
barred by the litigation privilege, and (2) the Ramoses cannot prove that
the filing of the second unlawful detainer action constituted an unfair
business practice. We agree that the
cause of action is barred by the litigation privilege.
Communications
made in a judicial proceeding by the litigants or their counsel that have some
connection to the action or which are made to achieve the objectives of the
litigation, are absolutely privileged.
(Civil Code §47 (b); Adams v.
Superior Court (1992) 2 Cal.App.4th 521, 529.) Endres contends that all of its
communications were made in connection with a judicial proceeding on behalf of
its client, the Bank, to vindicate the Bank’s rights under the unlawful
detainer statutes, and, accordingly, its actions were privileged. The Ramoses, however, contend the privilege
does not apply when the plaintiff is suing only as a member of the public,
citing American Products Co., Inc. v. Law
Offices of Geller, Stewart & Foley, LLP (2005) 134 Cal.App.4th 1332 (
as parties to underlying frivolous actions, but as members of the public who
have been injured by defendants’ pattern and practice of trampling tenant rights.â€
APC,
Inc., however, is inapposite. The
general rule, as explained in APC, Inc.,
is that “the litigation privilege will extend to an unfair competition claim
against an attorney where the claim is founded on the attorney’s misconduct in
earlier litigation against the plaintiff. . . .†(134 Cal.App.4th at p. 1346.) That rule, however, does not apply where the
plaintiff was not a party to the earlier litigation. The court held that because the plaintiff
“[had not been] a party to any of the
litigation that underlies its unfair competition claim . . .
[it thus] appears [that the plaintiff] is simply a member of the public for
purposes of the [unfair business practices] cause of action, which therefore is
not foreclosed by the litigation privilege.†(Ibid.,
italics added.)
Here,
in contrast, the Ramoses were parties
to litigation that underlies their unfair business practices cause of
action. In support of that cause of
action, the Ramoses alleged that the Bank and Endres “have engaged in a pattern
and practice of filing unfounded and malicious unlawful detainer actions with
intentional disregard of tenant rights, including the right to enjoy the
protections of the [PTFA]â€; that “the pattern and practice offends established
public policy against malicious prosecutionâ€; and that the Ramoses “have been
injured by said practice . . . and therefore have standing to
bring this action pursuant to [Bus. & Prof. Code, § 17204].â€
Based
upon these allegations, we reach the ineluctable conclusion that the Ramoses
were parties to litigation that underlies their unfair competition claim and
therefore are not “simply [] member[s] of the public for purposes of the
[unfair business practices] cause of action.â€
(APC, Inc., supra, 134
Cal.App.4th at p. 1346.) Consequently,
the trial court properly dismissed the unfair business practices cause of
action against Endres.
3. The
Unfair Business Practices Cause of Action Against the Bank
The
Ramoses contend that the trial court erred in dismissing the unfair business practices
claim against the Bank because the Bank did not file a special motion to strike
with respect to the unfair business practices cause of action. We agree.
Although
the Bank’s notice of motion stated that it was moving to strike the “Malicious
Prosecution Complaint†(italics
added), nothing in its moving or reply papers even hinted at a challenge to the
unfair business practices cause of action.
Further, it is apparent the Ramoses relied upon the content of the
Bank’s papers because their opposition to the Bank’s motion contained no
mention of the unfair business practices cause of action while their opposition
to Endres’s motion to strike did contain argument supporting their unfair
business practices cause of action. The
court therefore did not have before it any motion to strike the unfair business
practices cause of action brought by the Bank.
The
Bank argues it was sufficient to describe the motion as one to strike the
“Malicious Prosecution Complaint†while conceding that it “did not offer any
specific argument as to [the Ramoses’] unfair business practices claim.†The Bank cites no authority for the
proposition that referring to a “complaint†in a notice of motion is sufficient
to put the opposing party on notice that it is challenging a cause of action
about which it says nothing whatsoever in the motion itself. The Bank does rely on Bacon v. Southern Cal. Edison Co. (1997) 53 Cal.App.4th 854 for the
proposition that where “the plaintiff had addressed [an] issue in his
opposition, plaintiff had sufficient notice†and an opportunity to respond
raised by the defendant in its moving papers.
The problem with this argument is that, unlike the plaintiff in
issue in their opposition to the Bank’s
motion.
The
Bank also argues the merits of the issue, and contends the Ramoses’ unfair
business practices claim fails “as a matter of law†on the same grounds as
those proffered in support of Endres’s motion to strike, and also because the
Ramoses’ “Opening Brief and Complaint contain no specific allegations or
evidence of unfair business practices by [the Bank].†The Bank appears to contend that despite the
trial court’s plain error in granting a motion that was never brought or
argued, it is the Ramoses’ burden on appeal to demonstrate they were “denied
the ability to assert any additional arguments before the trial court in
relation to their claim of unfair business practices as to [the Bank].†(Underlining original.) That is not the law. In Young
v. Tri-City Healthcare Dist. (2012) 210 Cal.App.4th 35, the respondent
made a similar argument. There, the
trial court mistakenly dismissed the plaintiff’s entire action although the
defendant had moved to strike only one cause of action. The trial court later corrected the dismissal
order and judgment, striking only the challenged cause of action. On appeal the defendant essentially argued
that the trial court’s dismissal of the entire action should nevertheless be
upheld because the issues raised in the challenged cause of action were
inextricably intertwined with the remaining causes of action, so “it should
make no difference which causes of action were dismissed, . . .
they were all invalid anyway.†(Id. at
p. 48.) The court rejected that
argument, noting that “there was never any entitlement to a final order
dismissing the entire action, because the District’s motion to strike was
expressly directed at only the fifth cause of action, and nothing more was ever
noticed to the parties or brought before the trial court.†(Ibid.)
Whether
or not the Ramoses’ unfair business practices cause of action against the Bank
is sustainable, fundamental due process entitles them to notice and an
opportunity to be heard prior to adjudication.
(Sole Energy Co. v. Hodges
(2005) 128 Cal.App.4th 199, 207 [“A basic rule of law and motion
practice is the notice of motion
‘shall state in the opening paragraph the nature of the
order being sought and the grounds for issuance of the order.’ â€].)
III.
Disposition
The order and
judgment granting Endres’s motion to strike the complaint is affirmed. The order granting the Bank’s motion to
strike the malicious prosecution cause of action is affirmed. The order striking the unfair business
practices cause of action against the Bank is reversed, and the matter is
remanded for proceedings consistent with this opinion. Endres shall recover its costs on
appeal. The Ramoses and the Bank shall
bear their own costs.
_________________________
Rivera,
J.
We concur:
_________________________
Ruvolo, P.J.
_________________________
Reardon, J.
procedural matters are in 2010.
name="_ftn2" title=""> [2] To the extent
relevant here, the PTFA provides that one who takes title to a foreclosed
property with a “federally related mortgage†does so subject to certain rights
of any bona fide tenant. Unless the purchaser, or a subsequent
purchaser, plans to occupy the property as a primary residence, the purchaser
must honor any right to occupancy under a bona fide lease entered into before
the notice of foreclosure, until the lease
terminates. (Protecting Tenants at
Foreclosure Act §
702(a)(1); (a)(2)(A).) To be considered
bona fide, a lease or tenancy must meet the following requirements:
or the child, spouse, or parent of the mortgagor under the contract is not the
tenant; (2) the lease or tenancy
was the result of an arms-length transaction; and (3) the lease or tenancy
requires the receipt of rent that is not substantially less than fair market
rent for the property. (
language of the PTFA
codified. The language of the public law
as enacted can be found in the statutes at large. (See
Pub.L. No. 111–22, 123 Stat. 1661).)
