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Sandra Cross v. Stephen Cooper et al

July 11, 2011

SANDRA CROSS, PLAINTIFF AND RESPONDENT,
v.
STEPHEN COOPER ET AL., DEFENDANTS AND APPELLANTS.



(Santa Clara County Super. Ct. No. CV104910) Trial Judge: The Honorable

The opinion of the court was delivered by: Rushing, P.J.

CERTIFIED FOR PUBLICATION

I. STATEMENT OF THE CASE

Sandra Cross (Cross) leased a house to Stephen and Laura Cooper. As the lease was about to expire, Cross put the house up for sale and entered a contract of sale with prospective buyers. After the prospective buyers backed out, Cross sued the Coopers for interfering with the sale and causing it to fail. In her complaint, Cross asserted several claims based, in part, on allegations that the Coopers disclosed, or threatened to disclose, information that a registered sex offender lived nearby. In response to the lawsuit, the Coopers filed an anti-SLAPP motion under Code of Civil Procedure section 425.16 to strike those claims.*fn1 The trial court denied the motion, and the Coopers now appeal from that order. (§ 425.16, subd. (i).)*fn2

We conclude that the trial court erred in denying the motion and remand the matter for further proceedings.

II. THE PLEADINGS AND THE ANTI-SLAPP MOTION

A. The Complaint

In her complaint, Cross asserted causes of action for breach of a residential lease agreement, breach of the implied covenant of good faith in the lease agreement, inducing prospective buyers to breach their purchase contract with Cross, intentional interference with that purchase contract, and intentional and negligent interference with prospective economic relations.

In support of these claims, Cross alleged that the Coopers leased a house from her from September 5, 2006, to August 31, 2007. Under the lease, Cross was permitted to show the house to prospective buyers. On June 26, 2007, Cross told the Coopers she was selling the house. On July 5, the Coopers told Cross not to put a "For Sale" sign up or show the house to prospective buyers. Cross alleged that the Coopers threatened to remove any sign, if she erected one; and they threatened to make negative comments about the property, including the location of a convicted sex offender who lived nearby, if she showed the property and did not agree to waive the rent for August 2007.

Cross further alleged that in August 2007 she had a contract with a prospective buyer, and the Coopers knew about it. Cross declined to waive the Coopers' August rent, and, in retaliation, the Coopers informed the buyer's agent that a sex offender lived close by. The proposed sale did not go through.

B. The Anti-SLAPP Motion

In their motion, the Coopers sought dismissal of all causes of action except the claim that they breached the lease agreement. In a declaration, Stephen Cooper (Cooper), a real estate agent, stated that while leasing Cross's house, they learned that a registered sex offender lived across the street. In June 2007, after seeing police officers "raid[]" the offender's house, Cooper expressed concern about it to Cross. Cross explained that it was just a home inspection. Later in June, Cross said she was selling the house but did not intend to disclose that the offender lived nearby because she thought it would make the house unsellable. In August, Cooper spoke to a prospective buyer's agent, who informed him that the buyer might have children. Because of the risk to children posed by a registered offender living nearby, Cooper "discussed" Megan's Law and the duty of a real property seller to disclose information about real property and then told the agent that "a registered offender lived immediately across the street."*fn3 Cooper declared that he did not offer that information for the purpose of interfering with Cross's contract with the prospective buyer.

In support of their motion, the Coopers argued, in essence, that except for breach of the lease agreement, Cross's claims were based on disclosing, or threatening to disclose, the location of the offender; that disclosure or the threat to disclose constituted an act in furtherance of his First Amendment right of free speech because it concerned a matter of public interest; and Cross could not show a probability of success on her claims.

In opposition to the motion, Cross submitted a copy of the lease agreement, under which the tenancy expired on August 31, 2007; the Coopers were required to make the house available for Cross to show prospective buyers on 24 hours' notice; and Cross was authorized to place a "For Sale" sign on the premises. Cross also submitted a copy of a purchase agreement between her and Wayne and Sulina Chan, which included a statutorily required disclosure about Megan's Law and California State's Megan's Law Web site (ML Web site) where they could find specific information about registered sex offenders.

In her declaration, Cross stated that long before leasing to the Coopers, she lived in the house and knew that the offender lived nearby. She did not consider him a threat because his last known offense was in 1979, he had been living in the area since 1993, and he had had the same job for 14 years. After leasing her house, she remained in the area for a while and stayed in contact with her neighbors. At no time was she ever aware of any neighborhood controversy about the offender.

Cross further declared that in June 2007, she informed the Coopers that she was putting her house up for sale. Toward the end of June, she advised the Coopers that she wanted to have it sold by September 1 "for the school year." In a series of e-mails between July 5 and 12, copies of which Cross attached to her declaration, Cooper initially informed Cross that the house would not be available to show until after they vacated the property on August 31 and told her not to put up a "For Sale" sign. In his next e-mail, Cooper said, among other things, that if Cross provided 48 hours' notice, he would maintain the house in show condition and allow her access on Tuesdays from 3:00 p.m. to 5:00 p.m. "in exchange for August rent free and confirmation of our $2,500 deposit being returned on August 31 after a walk through." In another e-mail a few hours later, Cooper reiterated that he would cooperate with efforts to show the house on Tuesdays but "cannot and will not guarantee our cooperation on any other day or time and I make no promises that I will not give my opinion, which is my right, to buyers regarding your price, the sherrif's [sic] raid on the sexual predators next door three weeks ago or anything else I feel I have an opinion [sic]." A few days later, Cooper sent two e-mails in which he promised "complete cooperation on Tuesday afternoons 3:00-5:00 pm to show the property to as many buyers as you wish with full access to the property."

In her declaration, Cross stated that she believed Cooper had made a "threat, designed to cause me fear, that prospective buyers would be told about the location of specific registered sex offenders" unless she provided the Coopers with free rent for a month or increased their property rights.

Cross also submitted the declaration of Mark Thomason, her real estate agent. He stated that he tried to, but did not, post a "For Sale" sign on the property because someone there threatened to remove it if he did. After learning that the Coopers would not allow a sign or entry to show the house, Thomason spoke to Cooper, who eventually allowed a sign. Thomason then received calls from prospective buyers. However, Cooper remained adamant that no one enter the house. As a result, opportunities to show the house diminished.*fn4 Thomason said on many occasions he was denied access to the house despite giving proper notice. Sometimes Cooper agreed to allow access but then changed his mind or the time of access, and as a result Thomason lost the chance to show the house. During this time, Cooper informed Thomason that he had "information" he could share that would prevent a sale. According to Thomason, Cooper engaged in "tactics" that were not conducive to showing or selling the property, such as limiting the day or times that the house could be shown. Nevertheless, on August 2, 2007, Cross entered a contract of sale with Wayne and Sulina Chan. The contract contained numerous provisions advising the Chans to investigate property conditions. One provision entitled "Megan's Law" directed the Chans to the California registered sex offender database--i.e., the ML Web site. In a separate disclosure form, Cross listed various things about the neighborhood, including the fact that "the police [had] visited the house across the street in the last few months."

Shortly after the contract was signed, Michael Majchrowicz, the Chans' real estate agent, told Thomason that Cooper had informed him that a registered sex offender lived across the street but had asked Majchrowicz to say that he learned the information from an anonymous person. In response, Thomason referred Majchrowicz to the Megan's Law disclosure in the Chans' contract of sale. Thereafter, the Chans refused to sign a disclosure statement about the offender and declined to buy the property.

Cross also submitted declarations from six current or former residents of the area, some of whom had children. All stated that they knew about the registered offender but felt he neither posed a risk nor made the area less desirable or valuable. None considered his presence to be a topic of controversy or discussion in the area.

In opposition to the motion, Cross claimed that the Cooper's threat to disclose and later disclosure about the offender's location was illegal and thus not constitutionally protected conduct. Specifically, she argued that the threat to disclose unless she waived rent constituted attempted extortion. Cross further argued that the actual disclosure was an unlawful use of that information. Cross also claimed that she made a prima facie showing that she was likely to succeed on the merits of her claims.

In reply, the Coopers asked the trial court to take judicial notice of "the terms and conditions page of the Attorney General [sic] website on Megan's Law" and a publication of the California Association of Realtors concerning Megan's Law.*fn5

The Coopers argued that Cross could not establish that disclosure or threatened disclosure of information was illegal as a matter of law and, therefore, outside constitutional protection. They also reiterated arguments that the disclosure involved an issue of public interest and that Cross had failed to show a probability of success on the merits of her claims.

C. The Trial Court's Ruling

In denying the motion, the court found that the cause of action for breach of the implied covenant of good faith contained allegations that, in essence, accused Cooper of attempting to extort one month's free rent from Cross by disclosing the location of the offender. Since attempted extortion is a crime (Pen. Code, § 524), the court concluded that the threat did not qualify for anti-SLAPP protection. Accordingly, the court declined to dismiss that cause of action.

Concerning the remaining causes of action, all of which were based on actual disclosure, the court, citing Du Charme v. International Broth. of Elec. Workers, Local 45 (2003) 110 Cal.App.4th 107 (Du Charme), concluded that because there was no evidence of any ongoing controversy, dispute, or discussion about the location of the offender, the disclosure did not involve "a matter of public interest" and, therefore, did not qualify for anti-SLAPP protection.

Given its findings, the court declined to rule on the Coopers' evidentiary objections or determine whether Cross had shown a probability of success on the merits of her claims.

III. ANTI-SLAPP MOTION PROCEDURE

Section 425.16 is called the anti-SLAPP statute because it allows a defendant to gain early dismissal of causes of action that are designed primarily to chill the exercise of First Amendment rights. (Siam v. Kizilbash (2005) 130 Cal.App.4th 1563, 1568; Simmons v. Allstate Ins. Co. (2001) 92 Cal.App.4th 1068, 1069-1070.) In pertinent part, the statute provides, "A cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike . . . ." (§ 425.16, subd. (b)(1).)

Acts "in furtherance of" these rights include "(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 judicial body, or any other official 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; (4) or 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 an issue of public interest." (§ 425.16, subd. (e).)

In ruling on an anti-SLAPP motion, the trial court engages in a two-step process. "First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving defendant's burden is to demonstrate that the act or acts of which the plaintiff complains were taken 'in furtherance of the [defendant]'s right of petition or free speech under the United States or California Constitution in connection with a public issue,' as defined in the statute. [Citation.] If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim." (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67 (Equilon); accord, Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 733.) "The plaintiff's showing of facts must consist of evidence that would be admissible at trial." (Hall v. Time Warner, Inc. (2007) 153 Cal.App.4th 1337, 1346 (Hall); Evans v. Unkow (1995) 38 Cal.App.4th 1490, 1496-1498.) Both the defendant moving party and the plaintiff must make a prima facie showing concerning their respective burdens. (Church of Scientology v. Wollersheim (1996) 42 Cal.App.4th 628, 646 (Wollersheim), disapproved on another point in Equilon, supra, 29 Cal.4th at p. 68, fn. 5.) Only where a defendant shows that a cause of action is based on protected conduct and the plaintiff fails to show a probability of success on that claim is it subject to dismissal. (Navellier v. Sletten (2002) 29 Cal.4th 82, 88-89 [cause of action must arise from protected speech or petitioning and lack even minimal merit].)

On appeal, we review the motion de novo and independently determine whether the parties have met their respective burdens. (Christian Research Institute v. Alnor (2007) 148 Cal.App.4th 71, 79; Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 103.) In evaluating the motion, we consider "the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based." (ยง 425.16, subd. (b)(2).) However, we do not weigh ...


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