WA Funding, Inc. v. Clarity Community Management, Inc.

(4) any other conduct in furtherance of the exercise of the constitutional right of petition or free speech, in connection with an issue of public interest.

(Code Civ. Proc., § 425.16, subd. (e).) Categories (a) and (b) are NOT limited to issues of public interest, while categories (c) and (d) ARE limited to issues of public interest. (Ibid.)

The anti-SLAPP is one of the few motions where the burden is on the party opposing the motion. First, the defendant must make a prima facie showing that plaintiff’s lawsuit arises from “an act in furtherance of a person’s right of petition or free speech under the United States or California Constitutions in connection with a public issue,” as defined in subdivision (e). Once defendants make such prima facie showing, the burden shifts to the plaintiff to establish a “probability” that it will prevail on whatever claims are asserted against the defendants. (See Code Civ.

Proc., § 425.16, subd. (b); Dixon v. Superior Court (1994) 30 Cal.App.4th 733, 744.) The plaintiff must show: (1) a legally sufficient claim (i.e., a claim which, if supported by facts, is sustainable as a matter of law); and (2) that the claim is supported by competent, admissible evidence within the declarant’s personal knowledge. (See DuPont Merck Pharmaceutical Co. v. Superior Court (2000) 78 Cal.App.4th 562, 568.)

The moving party only needs to make a prima facie showing that the cause of action arises from constitutionally protected free speech or petition activity. (Governor Gray Davis Committee v. American Taxpayers Alliance (2002) 102 Cal.App.4th 449, 458- 459.) Courts have noted that “the 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.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 89.) “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.” (Ibid, emphasis in original.)

If the moving party can meet the first prong, then the burden shifts to the opposing party to show a probability that he will prevail on the claims based on protected activity asserted against the moving party. (See Code Civ. Proc., 425.16, subd. (b).) The opposing party must produce evidence which would be admissible at trial. (Chavez v. Mendoza (2001) 94 Cal.App.4th 1083, 1087.) The probability of prevailing is established if the opposing party presents evidence which would result in a judgment for the opposing party, if believed by the trier of fact. (Thomas v. Quintero (2005) 126 Cal.App.4th 635, 637.) In considering this issue, the court looks at the pleadings and evidentiary submissions of the parties, without weighing the credibility or strength of competing evidence. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291.)

Here, the cross-complaint alleges that WA Funding (Regency) made communications to third parties involved in homeowner’s association (HOA) selection decisions that Clarity was operating illegally and had engaged in misconduct. These claims included (1) a communication to an HOA board that Clarity was operating an illegal security business and had stolen proprietary information, (2) a communication to that same HOA board regarding the existence and purported terms of a settlement agreement between Regency and Michalene Everett, (3) communications to other HOA boards and industry participants that Clarity’s security operations are illegal and that Clarity used stolen proprietary information, and (4) radio advertisements by Regency 18

stating it only partners with security companies with their own PPO license. (Crosscomplaint, ¶¶ 29, 33, 35.)

First Prong

Regency argues that the cross-complaint contains allegations arising from protected activity. Regency asserts that communications with HOA boards during an active bidding process are protected under the second category—statements made in connection with an issue being considered by a legislative, executive, or judicial body. Courts have found that certain communications to HOA boards may be protected under the third statutory category—statements or writings made in a place open to the public or a public forum in connection with an issue of public interest. (Damon v. Ocean Hills Journalism Club (2000) 85 Cal.App.4th 468, 474-475.) HOA boards are quasi-government entities similar to municipal governments. (Id. at p. 475.)

Clarity argues that Damon does not apply here because Damon involved speech concerning governance and management of the HOA. Clarity asserts here the speech involved business competitors seeking the same customers.

Damon evaluated whether the speech at issue was protected under the third category of protected speech. (Id. at pp. 474-475.) In Damon, the statements had been made at HOA board meetings and in a newsletter. (Id. at p. 474.) The court found these were both public forums because they were open to the public. (Ibid.) The court also found that the statements were of public interest because they were regarding how a large residential community would be governed. (Id. at p. 475.) Damon notes that the Legislature has mandated boards to hold open meetings and allow members to publicly speak at such meetings. (Ibid.)

However, this falls short of finding that communications made to an HOA board on an issue that board is considering constitute protected speech. (Id. at pp. 474-480.) Thus, to meet its initial burden, Regency should have addressed whether the statements are protected under the third category as the court in Damon did.

A public forum is “a place open to the public where information is freely exchanged.” (Id. at p. 475.) Nowhere is it asserted that statements at issue here were made in a public forum. Indeed, there is no discussion that any of the statements were made in any kind of public setting. It is only alleged by Clarity and argued by Regency that statements were made to various HOA boards.

In addition to occurring in a public forum, to be protected, the speech has to be regarding an issue of public interest. (Id. at pp. 478-479.) Public interest has been interpreted broadly to include not just “governmental matters, but also private conduct that impacts a broad segment of society and/or that affects a community in a manner similar to that of a governmental entity.” (Id. at p. 479.) Here, Regency has focused entirely on the activity being protected under the second category, which does not have a public interest requirement. As such, Regency has not addressed this.

Regency has not presented sufficient legal authority for finding that communications made to an HOA board about an issue that board is deciding are 19

protected activity under the second category—statements made in connection with an issue being considered by a legislative, executive, or judicial body. Regency has not presented any information that any of the statements were made in a public forum or on an issue of public interest. Thus, Regency has not met its initial burden of making a prima facie showing of protected activity.

As Regency did not meet its burden on the first prong, the burden has not shifted to Clarity for the second prong or to establish a commercial exemption. Thus, the court will not address these.

Attorney’s Fees

Code of Civil Procedure 425.16, subdivision (c) provides for an award of attorney’s fees where the court finds the special motion to strike is frivolous or solely intended to cause unnecessary delay. Here, the court is not inclined to make such a finding. As such, the court denies Clarity’s request for attorney’s fees.

Pursuant to California Rules of Court, rule 3.1312(a), and Code of Civil Procedure section 1019.5, subdivision (a), no further written order is necessary. The minute order adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.

Tentative Ruling

Issued By: KCK on 08/04/26. (Judge’s initials) (Date)

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