California Court of Appeal Jan 5, 2023 No. E078064Unpublished
Filed 1/5/23 CBGM v. Guralnick CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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
FOURTH APPELLATE DISTRICT
DIVISION TWO
CBGM, LLC,
Plaintiff and Respondent, E078064
v. (Super.Ct.No. CVPS2000676)
WAYNE GURALNICK et al., OPINION
Defendants and Appellants.
APPEAL from the Superior Court of Riverside County. Chad W. Firetag, Judge.
Reversed with directions.
Klinedinst and Dan Lawton for Defendants and Appellants.
No appearance for Plaintiff and Respondent.
1
Respondent CBGM, LLC, the owner of the La Quinta, California Trilogy Golf
Course, alleged counsel for and the acting president of the Trilogy at La Quinta
Maintenance Association, Inc. Board of Directors (HOA Board) committed fraud,
negligent misrepresentation, and slander of title during negotiations over how the
homeowners association and the golf course owners would divide the costs of repairing
and maintaining a landscaped area on the periphery of the golf course.
The golf course owners alleged the representatives of the HOA Board made false
promises concerning their control over the project and its costs that were not
would be below $221,000, and maintenance costs wouldn’t be included in the
rehabilitation project agreement as a line item expense. They said the HOA Board would
limit construction to two holes at a time and ensure proper dust control measures to
protect the golf course during construction. Finally, they promised the restated CCRs
would not be recorded without including the rehabilitation project agreement. According
to CBGM, they signed the CCRs on February 9, 2017 based on these representations.
On February 14, 2017, the HOA Board presented the ballot measure to its
homeowners for approval. Homeowners received a cover letter explaining the issues, a
ballot, voting instructions, a map of the property, and answers to “frequently asked
questions.” The letter asked homeowners to review the ballot materials and indicate their
approval or disapproval of the rehabilitation project for the perimeter area’s landscaping,
whose major terms it summarized as “[a]ccept[ing] an easement over the Perimeter
Landscape Areas from the Golf Course Owner,” entering an agreement with a landscape
contractor to install and rehabilitate the perimeter area landscaping and irrigation system,
and splitting evenly the cost of the rehabilitation project and the maintenance costs with
the golf course owner. The ballot materials included information about the amount
homeowners would have to pay on an individual basis to cover rehabilitation and
9
maintenance costs, indicated they expected maintenance to cost about $221,000 per year,
and said the golf course would provide water for irrigation.
The homeowners approved the ballot measure on March 23, 2017, and Guralnick
subsequently recorded the restated CCRs.
CBGM wasn’t happy with how the HOA proceeded under the new CCRs. They
complained the HOA and Guralnick “steamed forward” with construction plans,
excluded CBGM from meetings with a landscape architect, and made decisions on their
own damaging CBGM’s ability to run the golf course profitably. CBGM claimed they
had been shut out of control of their property and had been fooled into paying for costly
changes made by the HOA acting alone. As the dispute continued, CBGM came to
believe they were losing hundreds of thousands of dollars in golf dues, greens fees, cart
fees, events, food and beverage sales, and merchandise sales while work went on in the
perimeter area.
According to CBGM, Guralnick and Turner began sending homeowners
newsletters slandering CBGM “citing the inaccurate and admittedly defective Restated
CC&Rs, denying any blame or culpability and instead, demanding that [CBGM] cover
for their budgetary mistakes.”
CBGM claimed to have suffered millions of dollars in damages caused by
closures, construction delays, and damaged goodwill. They said these injuries resulted
from Guralnick and Turner fraudulently inducing them into signing the restated CCRs.
10
In June 2020, the HOA initiated an arbitration proceeding against CBGM. Six
months later, CBGM filed this lawsuit, asserting causes of action for fraud, negligent
misrepresentation, and slander of title against Turner, Guralnick and his law firm.
Guralnick and his firm filed an anti-SLAPP motion.
On October 18, 2021, the trial judge issued a tentative ruling denying the motion
because Guralnick hadn’t carried his initial burden of proving CBGM’s claim arose from
protected activity. The judge acknowledged his statements affected numerous
homeowners and therefore “may be a topic of a wide public concern.” However, he
concluded Guralnick and his law firm “have not demonstrated that the subject matter of
their negotiations and discussions with CBGM, regarding the responsibilities and
maintenance of the golf course and Perimeter Area, was a topic of an ongoing debate by
the homeowners of the Trilogy community to show that statements made during these
negotiations and discussions concerned an issue of public interest. The judge heard oral
argument the following day, but adopted his tentative ruling as a final ruling.
Guralnick and his law firm filed a timely notice of appeal.
II
ANALYSIS
“A SLAPP is a civil lawsuit that is aimed at preventing citizens from exercising
their political rights or punishing those who have done so. While SLAPP suits
masquerade as ordinary lawsuits such as defamation and interference with prospective
economic advantage, they are generally meritless suits brought primarily to chill the
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exercise of free speech or petition rights by the threat of severe economic sanctions
against the defendant, and not to vindicate a legally cognizable right.” (Colyear v. Rolling
Hills Community Assn. of Rancho Palos Verdes (2017) 9 Cal.App.5th 119, 129 (Colyear)
[cleaned up].)
The Legislature acted to protect such political activities by enacting an anti-
SLAPP statute, concluding “it is in the public interest to encourage continued
participation in matters of public significance, and . . . this participation should not be
chilled through abuse of the judicial process.” (§ 425.16, subd. (a).) To reduce the
financial harm of meritless SLAPP suits, the statute authorizes the filing of a special
motion to strike a cause of action “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.” (§ 425.16, subd. (b)(1).)
When a defendant seeks protection from a lawsuit by filing a motion to strike, the
courts undertake a two-step analysis to determine if striking the cause of action is
warranted. (Simpson Strong-Tie Co., Inc. v. Gore (2010) 49 Cal.4th 12, 21 (Simpson).)
First, we ask whether the defendant made a prima facie showing that the plaintiff’s cause
of action arises from an act by the defendant in furtherance of their right of petition or
free speech in connection with a public issue. (§ 425.16, subd. (b)(1).) If the answer to
that question is yes, the cause of action shall be stricken unless the plaintiff can establish
a probability that the plaintiff will prevail on the claim. (Simpson, at p. 21.) “Only a cause
of action that satisfies both prongs of the anti-SLAPP statute—i.e., that arises from
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protected speech or petitioning and lacks even minimal merit—is a SLAPP, subject to
being stricken under the statute.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 89.)
We review a trial judge’s decision on a special motion to strike de novo. (Flatley
v. Mauro (2006) 39 Cal.4th 299, 325.) We consider “the pleadings, and supporting and
opposing affidavits stating the facts upon which the liability or defense is based.”
(§ 425.16, subd. (b)(2).) We don’t weigh credibility or make decisions based on the
weight of the evidence, but “accept as true the evidence favorable to the plaintiff and
evaluate the defendant’s evidence only to determine if it has defeated that submitted by
the plaintiff as a matter of law.” (Soukup v. Law Offices of Herbert Hafif (2006) 39
Cal.4th 260, 269, fn. 3 [cleaned up].)
In this appeal, we’re called upon to determine whether Guralnick’s acts were
protected conduct. We evaluate whether Guralnick has demonstrated his statements fit
one of the four categories of conduct set forth in section 425.16, subdivision (e): “(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, 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 an issue of public interest.”
13
Guralnick concedes section 425.16, subdivisions (e)(1), (e)(2), and (e)(3) don’t
apply because the conduct CBGM complains of occurred in private negotiations over the
terms of the CCRs and not in a legislative, executive, or judicial proceeding, other
official proceeding authorized by law, or even in a public forum. Instead, he argues the
anti-SLAPP protections apply because CBGM’s causes of action arise from conduct in
furtherance of the right of free speech in connection with a public issue or issue of public
interest, protected under subdivision (e)(4).
“Section 425.16 does not define an issue of public interest. Nevertheless, the
statute requires the issue to include attributes that make it one of public, rather than
merely private, interest. A few guiding principles can be gleaned from decisional
authorities. For example, public interest is not mere curiosity. Further, the matter should
be something of concern to a substantial number of people. Accordingly, a matter of
concern to the speaker and a relatively small, specific audience is not a matter of public
interest. Additionally, there should be a degree of closeness between the challenged
statements and the asserted public interest. The assertion of a broad and amorphous
public interest that can be connected to the specific dispute is not sufficient. One cannot
focus on society’s general interest in the subject matter of the dispute instead of the
specific speech or conduct upon which the complaint is based. Cases that have found an
issue of public interest have done so where the subject statements either concerned a
person or entity in the public eye, conduct that could directly affect a large number of
14
people beyond the direct participants or a topic of widespread, public interest.” (Colyear,
supra, 9 Cal.App.5th at p. 131 [cleaned up].)
As such, “public interest” may extend beyond government matters to embrace
“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.” (Du Charme v. International
Brotherhood of Electrical Workers (2003) 110 Cal.App.4th 107, 115.) In such cases—
those of interest “to a limited, but definable portion of the public (a private group,
organization, or community)”— the protected activity must “occur in the context of an
ongoing controversy, dispute or discussion, such that it warrants protection by a statute
that embodies the public policy of encouraging participation in matters of public
significance.” (Du Charme, at p. 119.)
Guralnick appeals to these principles to argue his statements made during
negotiations with CBGM over the terms relating to landscaping in the perimeter of the
golf course should be treated as protected conduct because they concerned matters of
interest to the entire community over which there were active discussion and ultimately a
vote of homeowners. He is right that appellate courts have extended protections to
conduct that occurred in the context of disputes within a homeowners association. (E.g.,
Ruiz v. Harbor View Community Assn. (2005) 134 Cal.App.4th 1456, 1468 (Ruiz).)
In Ruiz, a homeowner sued his homeowners association alleging letters written by
the homeowners association’s counsel had defamed him. (Ruiz, supra, 134 Cal.App.4th at
pp. 1463-1465.) The letters addressed a dispute about the rejection of Ruiz’s architectural
15
plans for his home and Ruiz’s complaints the architectural committee was applying the
homeowners association guidelines arbitrarily. (Ibid.) The Court of Appeal concluded the
attorney’s letters fell within section 425.16 (e)(4) because they were written during an
ongoing dispute between Ruiz and the homeowners association over the denial of Ruiz’s
plans and the application of the association’s architectural guidelines, and the dispute was
of interest to the residents of 523 lots because they “would be affected by the outcome of
those disputes and would have a stake in [HOA] governance.” (Ruiz, at pp. 1467-1469.)
The court emphasized that the attorney’s letters “were part of the ongoing discussion over
those disputes and ‘contribute[d] to the public debate’ on the issues presented by those
disputes. ” (Id. at p. 1469.)
We see little difference between Ruiz and the facts of this case. If anything, the
case for concluding that Guralnick’s statements concerned matters of public interest is
stronger. The pleadings and affidavits submitted in relation to the anti-SLAPP motion
establish that the HOA Board was engaged in the long-term project of rehabilitating the
landscaping on the perimeter of the golf course and negotiating a cost sharing agreement
with the golf course to accomplish that end. The matter was important to all the
homeowners in the development—more than 1,200 families. And the issue of how to
resolve the problem, either by enforcing the old CCRs or renegotiating new CCRs, was a
matter placed for a vote by the homeowners, who in fact approved the agreement the
HOA Board and CBGM signed. Under these circumstances, we conclude Guralnick’s
statements in negotiating the terms of the agreement and convincing CBGM to sign it did
16
concern a matter of public interest that occurred in the context of an ongoing controversy,
dispute, or discussion. We therefore conclude the trial judge erred by holding Guralnick
did not establish his acts were protected conduct under section 425.16, subdivision (e)(4).
Though we don’t have the benefit of a respondent’s brief, the trial judge relied on
Talega Maintenance Corp. v. Standard Pacific Corp. (2014) 225 Cal.App.4th 722
(Talega) to support his holding that Guralnick’s statements were not protected. We find
Talega distinguishable. That case involved, among other things, a dispute between an
HOA and developers over representations the developer’s employees made about who
was responsible for repairing trails adjacent to the community, which were badly
damaged during heavy rains and flooding in 2005. (Id. at p. 725.) At the time, three
employees represented the developer, Talega Associates, on the homeowners association
board of directors, and they made up a majority of the board. (Id. at p. 726.) By 2005, the
title to the damaged property had transferred to the homeowners association, and the
developer board members represented that the association was responsible to pay for
repairs to the trails. (Ibid.) The homeowners association expended more than half a
million dollars based on that understanding. However, when rains again damaged the
trails in 2010, independent board members hired consultants to investigate, and they
discovered the developers had in fact been responsible for repairing damage to the trails
all along. (Id. pp. 726-727.) The homeowners association sued the developers and their
three employees for, relevant here, breach of fiduciary duty, fraud, constructive fraud,
17
and negligence, claiming the developer board members knew in 2005 the developers
were responsible for the cost of repairing the trails. (Ibid.)
The developers filed an anti-SLAPP motion seeking to strike all those causes of
action, but the trial judge denied the motion after concluding the developers “have not
demonstrated that [their conduct] involved a matter of sufficient public interest.” (Talega,
supra, 225 Cal.App.4th at p. 727.) On appeal, the Court of Appeal, Fourth District,
Division Three, determined “[t]here is no indication in the record that there was any
controversy, dispute, or discussion surrounding the Developer Board Members’
representation that the HOA was liable to pay the repair costs. To the contrary, a
declaration submitted by an independent board member states, ‘I believed [the Developer
Board Members’] representations, as I had no reason to believe at the time that they were
not telling me the truth or acting in the best interest of the Association.’” (Id. at p. 734.)
The Court of Appeal concluded “the absence of any controversy, dispute, or discussion
. . . [about] the issue of who was to play for the repairs, which was of interest to only a
narrow sliver of society, [shows it] was not a public issue.” (Ibid.) The trial court here
found the facts analogous and followed Talega in concluding the Guralnick had failed to
demonstrate “the subject matter of their negotiations and discussions . . . regarding the
responsibilities of rehabilitation and maintenance of the golf course and the Perimeter
Area, was a topic of an ongoing debate by the homeowners.”
Talega is factually distinguishable from this case. As we discuss above, we
conclude the uncontested fact that the homeowners were preparing to vote on a ballot
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measure to approve the rehabilitation plan for the area surrounding the golf course
establishes that the subject matter of the negotiations did concern an ongoing matter of
discussion or controversy among the homeowners. And while it is true that the subject
matter of the allegedly fraudulent statements in Talega and this case are similar—both
concerned the extent to which a homeowners association (and therefore homeowners)
would be responsible for costs associated with repairing and maintaining common
areas—the fact that the HOA Board was actively trying to gain approval from the
homeowners for their proposal distinguishes this case. In Talega, the Court of Appeal
found it important that one of the independent board members admitted he had simply
accepted the developers’ representations without question. That dynamic isn’t present
here. The problems with the condition of the landscaping in the perimeter area was a
problem of longstanding, and Guralnick was negotiating a solution to the problem with
the golf course owners and then took the issue to the homeowners to get their approval
for the negotiated allocation of responsibility. We conclude that’s enough discussion of
an issue affecting enough people to warrant anti-SLAPP protection.
Our conclusion that Guralnick’s conduct was protected doesn’t mean he and his
law firm are entitled to have the complaint stricken. CBGM may still defeat the motion if
they can establish a probability they will prevail on their claims. (Simpson, supra, 49
Cal.4th at p. 21.) Since the trial judge did not decide that issue, and respondents have not
briefed the issue in this court, we conclude the better course is to remand for the trial
judge to make that determination in the first place.
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III
DISPOSITION
We reverse the trial judge’s order denying the anti-SLAPP motion and remand for
a determination whether CBGM has a probability of prevailing on the merits of their
claims. Appellants shall recover their costs of appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
SLOUGH J.
We concur:
McKINSTER Acting P. J.
FIELDS J.
20
AI Brief
AI-generated · verify before citing
Holding. The court held that statements made by the HOA's counsel during negotiations regarding a community-wide landscaping rehabilitation project and cost-sharing agreement constituted protected activity under the anti-SLAPP statute because they occurred in the context of an ongoing controversy and public interest. Consequently, the trial court erred in denying the anti-SLAPP motion, and the case was remanded for a determination on whether the plaintiff could establish a probability of prevailing on its claims.
Issues
Whether statements made during private negotiations regarding a homeowners association rehabilitation project qualify as protected activity under Code of Civil Procedure section 425.16, subdivision (e)(4).
Whether the trial court erred in concluding that the subject matter of the negotiations did not constitute a matter of public interest occurring in the context of an ongoing controversy.
Disposition. Reversed with directions.
Quotations verified verbatim against the opinion
“We conclude the pleadings and affidavits establish the rehabilitation project was the topic of ongoing discussions which concluded in a vote by homeowners, and that the challenged statements therefore qualify for anti-SLAPP protection.”