Reported / Citable
Background
The Clapkins and the Levins are cousins and shareholders in JosLevin Realty Corp. of L.A. (JLR), a closely held family-run real estate corporation. After the death of one of the family patriarchs, the cousins fell into a years-long dispute over control of JLR, the management of its industrial real estate, and the distribution of profits. By the time of this appeal, the families had filed at least nine separate actions against each other, including wrongful termination, shareholder derivative, dissolution, and trust-related actions.
One of those actions was a contractual dispute in which the Clapkins filed a cross-complaint against the Levins. The cross-complaint pleaded four causes of action arising from the parties’ underlying corporate dispute, including breach of fiduciary duty and related claims. The cross-complaint mentioned the Levins’ conduct in some of the parallel litigation as background, but the alleged wrongs were grounded in the underlying business and trust dispute, not in the act of filing or pursuing other lawsuits.
The Levins moved to strike the cross-complaint under Code of Civil Procedure section 425.16, the anti-SLAPP statute. The trial court denied the motion. The Clapkins later moved for attorneys’ fees under section 425.16, subdivision (c), and the trial court denied that motion as well. Both sides appealed.
The Court’s Holding
The Second District Court of Appeal, Division Seven, affirmed the order denying the anti-SLAPP motion and dismissed the Clapkins’ appeal from the order denying attorneys’ fees. On the anti-SLAPP issue, the court applied the familiar two-step inquiry: whether the challenged claims arise from protected activity, and if so, whether the plaintiff has shown a probability of prevailing. The court did not reach the second step because the Levins failed to satisfy the first.
Although the cross-complaint referenced the Levins’ conduct in other lawsuits, the actual claims arose from their alleged misconduct in the management of the family corporation: locking out shareholders, unilaterally firing employees, restricting access to corporate records, and improperly disputing the right to vote trust shares. These wrongs predated and were independent of any litigation activity. References to other lawsuits served as context, not as the basis for liability. Under settled California Supreme Court anti-SLAPP jurisprudence, a claim does not arise from protected activity merely because protected activity is discussed in the complaint.
On the appealability of the fee order, the court reaffirmed Doe v. Luster, holding that an order denying attorneys’ fees following an anti-SLAPP ruling is not separately appealable under Code of Civil Procedure section 425.16, subdivision (i), or section 904.1, subdivision (a)(13). The court declined to follow Baharian-Mehr v. Smith and Gumarang v. Braemer on Raymond, which had treated the fee order as appealable when accompanied by an appeal from the underlying anti-SLAPP ruling. The plain language of the statute permits an immediate appeal only from the order granting or denying the special motion to strike itself.
Key Takeaways
- An anti-SLAPP motion fails at the first step when the challenged claims arise from underlying business or fiduciary disputes, even if the complaint mentions protected litigation activity.
- References to other lawsuits as context do not transform an underlying claim into one arising from protected activity for anti-SLAPP purposes.
- An order denying a successful anti-SLAPP opponent’s request for attorney fees is not immediately appealable under Code of Civil Procedure section 425.16, subdivision (i), or section 904.1, subdivision (a)(13).
- The Court of Appeal will not deviate from the plain text of the statute even when consolidated review of related orders would be more efficient.
- Family business disputes that spawn parallel litigation should be carefully pleaded to keep the focus on the underlying corporate or trust conduct.
Why It Matters
This decision is a useful guide for litigators handling complex family business disputes that often spawn multiple parallel actions. The opinion confirms that mentioning other lawsuits in a complaint is not a fatal anti-SLAPP risk, so long as the actual wrongdoing alleged is the underlying business or fiduciary breach. Anti-SLAPP movants should not assume that any reference to litigation activity converts the case into a SLAPP.
The fee-order ruling is also significant. The court has staked out a clear position on a developing split among the Courts of Appeal about the appealability of attorney fee orders entered after anti-SLAPP rulings. Practitioners in the Second Appellate District, and litigants in cases that may be transferred there, should plan to challenge fee orders by writ or as part of the appeal from a final judgment, not by separate immediate appeal.