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Lennar Homes of California, Inc. v. Stephens

California Court of Appeals, Fourth District, Second Division

December 18, 2014

LENNAR HOMES OF CALIFORNIA, INC., Plaintiff and Appellant,
v.
STELLA STEPHENS et al., Defendants and Respondents.

APPEAL from the Superior Court of Riverside County. No. RIC1206473 Daniel A. Ottolia, Judge.

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COUNSEL

Jones Day, Richard S. Ruben, Darren K. Cottriel, and Nathaniel P. Garrett, for Plaintiff and Appellant.

McCune Wright, Richard D. McCune, David C. Wright, and Jae (Eddie) K. Kim, for Defendants and Respondents.

OPINION

HOLLENHORST J.

Defendants and respondents Stella Stephens, Timothy Young, and Melissa Young purchased homes from plaintiff and appellant Lennar Homes of California, Inc. (Lennar). The agreements between Lennar and Stephens and between Lennar and the Youngs contain identical indemnity clauses. In this lawsuit, Lennar attempts to enforce those indemnity clauses, seeking to recover attorney fees and costs incurred in defending a class action lawsuit, brought initially by Stephens, and later joined by Timothy Young—but not Melissa Young—in the United States District Court for the Central District of California.

Lennar appeals the trial court’s order granting defendants’ special motion to strike the complaint as a strategic lawsuit against public participation (anti-SLAPP motion) pursuant to Code of Civil Procedure section 425.16 (the anti-SLAPP statute).[1] Lennar challenges the trial court’s ruling that the indemnity clause at issue is unenforceable under California law, precluding Lennar from demonstrating a probability of success on the merits. Lennar also disagrees with the trial court’s finding that Lennar’s claim against Melissa Young arises from activity protected under the anti-SLAPP statute. We affirm.[2]

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I. FACTS AND PROCEDURAL BACKGROUND

Lennar describes itself in its complaint as a corporation “engaged in the business of building quality new homes in residential communities in various parts of California.” Stephens purchased a home from Lennar on June 25, 2005. The Youngs, who are a married couple, purchased a home from Lennar on July 22, 2006. The “Homebuyer Disclosure Statement” for both transactions contains the following indemnity clause: “Wherever in this Disclosure Buyer has been informed regarding disclosure items, Buyer represents that Buyer will not make any claims against Builder for nondisclosure of disclosure items or for alleged improper disclosure of such items. Buyer shall indemnify, protect, defend and hold harmless Builder from any costs, expenses (including, without limitation, attorneys’ fees and costs), liabilities, actions, demands and damages arising out of claims made by Buyer for nondisclosure or incomplete disclosure of the general disclosure items and items separately disclosed to Buyer in writing, or damages or harm to Buyer arising from such items.”

Stephens was the named plaintiff in a class action lawsuit filed against Lennar on September 3, 2009, in the United States District Court, Central District of California, which was later consolidated with seven related cases. Timothy Young—but not Melissa Young—was named along with Stephens as a plaintiff in the first amended complaint, filed December 21, 2009. Their second amended complaint, filed December 2, 2011, alleges fraudulent nondisclosure and misrepresentation under a variety of legal theories.[3] On March 26, 2012, the district court dismissed the second amended complaint without leave to amend. As of the time of briefing in the present appeal, the appeal of the district court’s dismissal of the second amended complaint remained pending in the Ninth Circuit Court of Appeals.

Lennar’s complaint in the present case was filed on May 1, 2012. Lennar asserts a single cause of action against each of the defendants for express contractual indemnity, seeking to recover attorney’s fees and costs expended defending the allegations brought in federal court by Stephens and the Youngs, as well as the attorney’s fees and costs of the present action, pursuant to the indemnity clause.

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Defendants filed their anti-SLAPP motion on June 8, 2012. They concurrently filed a demurrer to the complaint.[4] The anti-SLAPP motion was heard by the trial court on July 6, 2012. After taking the matter under submission, the trial court issued a written order on August 6, 2012. The trial court ruled defendants had met their burden under the first prong of the anti-SLAPP analysis to show Lennar’s cause of action was based on protected activity, and that Lennar could not meet its burden under the second prong to show a probability of success on the merits because the indemnity clause is unenforceable. On that basis, the trial court granted defendant’s anti-SLAPP motion, rendering the demurrer moot.

On August 21, 2012, Lennar filed a “Motion to Request Ruling on or Clarification of Portions of Order Granting Defendants’ Special Anti-SLAPP Motion to Strike Complaint” (some capitalization omitted), focusing specifically on the trial court’s ruling with respect to Melissa Young. Defendants opposed Lennar’s motion, submitting among other things a declaration from Melissa Young regarding her role in the federal litigation, averring she had actively assisted and supported her husband, and the decision to pursue the federal litigation related to their joint purchase of a house “was a married couple’s decision.” In an order issued October 2, 2012, the trial court specified it found Melissa Young’s actions to be protected activity under the anti-SLAPP statute, and reaffirmed its previous decision to grant defendant’s anti-SLAPP motion with respect to all defendants.[5]

II. DISCUSSION

A. Overview of Anti-SLAPP Motions

Courts construe the anti-SLAPP statute broadly to protect the constitutional rights of petition and free speech. (§ 425.16, subd. (a); Kibler v. Northern Inyo County Local Hospital Dist. (2006) 39 Cal.4th 192, 199 [46 Cal.Rptr.3d 41, 138 P.3d 193] (Kibler).) In ruling on an anti-SLAPP motion, the trial court conducts a two-part analysis: the moving party bears the initial burden of establishing a prima facie case that the plaintiff's cause of action arose from the defendant’s actions in the furtherance of the rights of petition or free speech. (§ 425.16, subd. (b)(1); Equilon Enterprises v. Consumer Cause, Inc.

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(2002) 29 Cal.4th 53, 67 [124 Cal.Rptr.2d 507, 52 P.3d 685].) " '[I]t is the principal thrust or gravamen of the plaintiff’s cause of action that determines whether the anti-SLAPP statute applies....’” (Raining Data Corp. v. Barrenechea (2009) 175 Cal.App.4th 1363, 1369 [97 Cal.Rptr.3d 196], original italics.) “[T]he critical point is whether the plaintiff’s cause of action itself was based on an act in furtherance of the defendant’s right of petition or free speech.” (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78 [124 Cal.Rptr.2d 519, 52 P.3d 695], original italics (Cotati).) If the moving party meets its burden, the burden shifts to the plaintiff to establish a probability that he or she will prevail on the merits. (§ 425.16, subd. (b)(1); Flatley v. Mauro (2006) 39 Cal.4th 299, 314 [46 Cal.Rptr.3d 606, 139 P.3d 2] (Flatley).)

“‘Review of an order granting or denying a motion to strike under section 425.16 is de novo. [Citation.] We consider “the pleadings, and supporting and opposing affidavits... upon which the liability or defense is based.” [Citation.] However, we neither “weigh credibility [nor] compare the weight of the evidence. Rather, [we] accept as true the evidence favorable to the plaintiff [citation] and evaluate the defendant’s evidence only to determine if it has defeated that submitted by the plaintiff as a matter of law.”’” (Flatley, supra, 39 Cal.4th at pp. 325-326.)

B. Analysis

1. Lennar’s Cause of Action Arises From Protected Activity.

Lennar has not disputed on appeal that its cause of action as asserted against Stephens and Timothy Young arises from actions in furtherance of their rights of petition, namely, filing and litigating the federal class action. Lennar contends, however, that Melissa Young failed to satisfy the first prong of the anti-SLAPP analysis because, unlike her husband, she was not named as a plaintiff in the federal litigation. Additionally, Lennar emphasizes that defendants submitted no evidence with respect to any participation in the federal litigation as a nonparty except in response to Lennar’s motion seeking “clarification” of the trial court’s initial ruling. We agree with the trial court that Lennar’s cause of action as to Melissa Young arises out of activity protected under the anti-SLAPP statute.

“‘Filing a lawsuit is an act in furtherance of the constitutional right of petition, regardless of whether it has merit.’” (Trapp v. Naiman (2013) 218 Cal.App.4th 113, 120 [159 Cal.Rptr.3d 462] [Fourth Dist., Div. Two].) The protections of the anti-SLAPP statute extend, moreover, to “any act” in furtherance of a person’s right of petition. (§ 425.16, subd. (b)(1).) “‘Any act’ includes communicative conduct ...


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