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Old Republic Construction Program Group v. The Boccardo Law Firm, Inc.

The Court of Appeal, Sixth Appellate District (Santa Clara), issued an opinion in Old Republic Construction Program Group v. The Boccardo Law Firm, Inc., (June 27, 2014, H037989) __ Cal.App.4th ___, analyzing the anti-SLAPP statute. The Court of Appeal stated that it was clarifying two principles not clearly articulated in case law: “(1) in determining whether a cause of action arises from conduct protected by the statute, the focus is on the wrongful, injurious conduct identified in the complaint, and whether that conduct comes within the statute’s description of protected conduct; and (2) unless the wrongful conduct is communicative in character, it is protected by the statute only if it was undertaken in connection with an issue of public importance.” (Slip opn., pp. 1-2, italics in original.)

The Court of Appeal analyzed whether the anti-SLAPP “statute applies to claims alleging that defendants wrongfully withdrew settlement funds derived from a now-defunct lawsuit, which they had deposited in their trust account pursuant to a stipulation requiring consent to any withdrawal.” (Slip opn., p. 1.) The Court of Appeal held that the anti-SLAPP statute does not apply "because the withdrawal of funds underlying the causes of action at issue was neither communicative nor related to an issue of public interest.” (Id. at p. 2.)

The appellate court determined that “whether causes of action arise from protected activity involves two subsidiary inquiries: (1) From what acts or omissions do these causes of action arise, for purposes of applying this statute; and (2) do those acts or omissions come within the statute’s definition of protected conduct?” (Slip opn., pp. 7-8.) The Court of Appeal determined that the written stipulation “involved statementmade in connection with an issue under consideration or review by a . . . judicial body as protected under Code of Civil Procedure section 425.16, subdivision (e)(2).” (Id. at p. 8, additional quotations and citations omitted.) “However, this only establishes that any cause of action arising from the stipulation would be protected by the statute.” (Ibid.) “The question whether a cause of action arises from specified conduct for purposes of the statute depends on the principal thrust or gravamen of the plaintiff’s cause of action.” (Ibid., additional quotations and citations omitted, italics in original.) The court explained that “[t]he concepts of ‘principal thrust’ and ‘gravamen’ . . . may be too indefinite and abstract to provide a clear rule with predictable results.” (Id. at p. 9.) Thus, the appellate court created “a more concrete test: a cause of action arises from protected conduct if the wrongful, injurious act(s) alleged by the plaintiff constitutes protected conduct.” (Ibid., italics in original.) Accordingly, “a cause of action can only be said to arise from protected conduct if it alleges at least one wrongful act—conduct allegedly breaching a duty and thereby injuring the plaintiff—that falls within the act’s definition of protected activity.” (Id. at pp. 10-11, italics in original.)

The three causes of action at issue in this case—breach of contract, negligence and declaratory relief—did not assert that there was anything wrongful about defendants’ having entered into the stipulation. The fraudulent inducement cause of action differs, however, because “the underlying wrongful conduct was defendants’ alleged entry into the stipulation without the intention to be bound by it, thereby inducing to do likewise and depriving it of control over the settlement funds.” (Slip opn., p. 11.) With respect to the remaining three claims, plaintiff’s “injury arose from defendants’ withdrawal of the funds that were the subject matter of the stipulation. That is the conduct by which defendants allegedly breached the contract between the parties, violated a duty of care, and injured [plaintiff]. It is that conduct from which these causes of action must be held to arise.” (Ibid.) Therefore, “[f]or purposes of the SLAPP statute, the stipulation must be viewed as incidental.” (Ibid.)

Further, the Court of Appeal concluded that the alleged wrongful conduct—the withdrawal of funds—constituting the gravamen of the remaining causes of action was not communicative nor connected with an issue of public interest. Although withdrawing funds from a bank account “involves some communication between the account holder and the bank, . . . such a communication serves merely as a means of effecting the transfer of funds out of the affected account. It is that transfer, not the communication by which it was effected, that lies at the heart of noncommunicative conduct had any connection to any issue of public concern or interest.” (Id. at p. 17.) Thus, it “falls outside of the protection of the statute.” (Ibid.)

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