Filed 8/16/21 Perera v. Title Experts CA2/7

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

ROSEMARY PERERA et al.,

Plaintiffs and Respondents,

v.

TITLE EXPERTS,

Defendant and Appellant.

 B304116

(Los Angeles County

Super. Ct. No. 19STCV26666)

APPEAL from an order of the Superior Court of Los 

Angeles County, Teresa A. Beaudet, Judge. Affirmed.

Berman Berman Berman Schneider & Lowary, Stephanie 

Berman Schneider and Howard Smith for Defendant and 

Appellant.

Boren, Osher & Luftman, Jeremy J. Osher and Aaron M. 

Gladstein for Plaintiffs and Respondents.

_______________________
2

Title Experts appeals from an order denying its special 

motion to strike (Code Civ. Proc., § 425.16; anti-SLAPP statute)

1

the complaint filed by Rosemary Perera (Rosemary), Ramesh 

Perera, Gihan Perera, and GRR Capital, LLC (collectively, the 

Perera plaintiffs). Title Experts contends the trial court erred in 

denying its motion because the Perera plaintiffs’ cause of action 

for rescission of the parties’ prior settlement agreement arose out 

of protected statements made during the mediation or related to 

the settlement agreement. Because the rescission claim is based 

on Title Experts’ breach of the settlement agreement, not Title 

Experts’ statements, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. Prior Lawsuit and Compromise Agreement

On August 9, 2016 the Perera plaintiffs filed an action 

(Perera v. Conaway (Super. Ct. L.A. County, 2016, 

No. BC627323)) against James Conaway and Lorraine Conaway, 

St. Louis Redevelopment Company and its owner Giro 

Katsimbrakis (collectively, SLRC), Title Experts, and others 

asserting claims arising from the defendants’ allegedly 

fraudulent real estate investment scheme. The Perera plaintiffs

alleged the Conaways, as Rosemary’s financial advisors,

recommended Rosemary invest with SLRC in distressed 

properties located in St. Louis, Missouri that would be 

rehabilitated to create a cash flow for the investors. Based on the 

1 “SLAPP is an acronym for ‘strategic lawsuit against public 

participation.’” (City of Montebello v. Vasquez (2016) 1 Cal.5th 

409, 413, fn. 2.) All further undesignated statutory references 

are to the Code of Civil Procedure.
3

representations made by the Conaways and SLRC, the Perera 

plaintiffs invested more than $600,000 to purchase the distressed 

properties. Title Experts was selected as the escrow company to 

open and administer the escrow, during the pendency of which 

the properties were to be rehabilitated and deeded to the Perera 

plaintiffs. Once the transaction closed, SLRC was to arrange for 

a property management company to place tenants in the

properties. However, SLRC and the other defendants instructed 

Title Experts to close the escrow prematurely, and the properties 

were never rehabilitated or rented out. 

On February 21, 2018 the parties participated in a 

mediation with Retired Judge Richard A. Stone. As a result of 

the mediation, the parties executed a compromise agreement and 

mutual release (compromise agreement) in which SLRC agreed to

purchase back 10 of the properties for $800,000 in exchange for 

the Perera plaintiffs dismissing the action and releasing the 

defendants from all known and unknown claims. The Perera 

plaintiffs agreed to deposit into the escrow all documents 

reasonably required to transfer title of the properties to SLRC 

and to provide access to the properties to appraisers as necessary. 

The compromise agreement also provided that Title Experts 

would open and administer the escrow, which would close within 

120 days. 

On March 1, 2018 the Perera plaintiffs filed a notice of 

settlement. However, the Perera plaintiffs subsequently filed a 

declaration stating the defendants had defaulted on their 

obligations under the compromise agreement. The parties later 
4

reached a stipulation to stay the action, which the court entered 

on February 19, 2020.2

B. This Action

On July 30, 2019 the Perera plaintiffs filed this action 

against Title Experts, the Conaways, SLRC, and others alleging 

two causes of action for rescission of the compromise agreement 

based on fraud and deceit (first cause of action) and failure of 

consideration (second cause of action).

3 The complaint alleged 

defendants failed to perform their obligations under the 

compromise agreement and misrepresented why they could not 

comply with its terms. The complaint alleged as to Title Experts 

that the compromise agreement required the company to open 

escrow, but it failed to do so, forcing the Perera plaintiffs to 

“open[] escrow themselves.” Further, Title Experts and the other 

defendants “falsely represented that under Missouri law, escrow 

could not be opened with the [compromise] [a]greement and could 

2 On October 18, 2018 the trial court dismissed the 

complaint, but it inadvertently did not dismiss the operative first 

amended complaint. The court gave the Perera plaintiffs until 

August 12, 2019 to show cause why the case should not be 

dismissed. It appears the parties negotiated the stay to avoid 

dismissal of the action. On our own motion we augment the 

record to include the June 26, 2019 Order re: Plaintiffs’ Motion to 

Set Aside Dismissal and February 19, 2020 Minute Order. (Cal. 

Rules of Court, rule 8.155(a)(1)(A).)

3 The Perera plaintiffs assert they attempted to have Judge 

Stone reinstate Perera I based on the failure of defendants to 

comply with the compromise agreement, but Judge Stone issued 

a tentative order stating he did not have the power to reinstate 

the litigation. As a result, the Perera plaintiffs filed this action. 
5

not perform unless and until separate sales contracts were 

executed for each of the Properties utilizing a special contract 

form . . . per Missouri Law.” In addition, defendants delayed 

performance under the compromise agreement by making 

“countless false promises” to make it seem like they “intended to 

imminently comply with their obligations under the Compromise 

Agreement.” Further, almost a year after escrow was supposed 

to close, counsel for SLRC sent an email to the Perera plaintiffs 

stating SLRC “‘cannot take title to the properties which are the 

subject of the case.’” SLRC suggested a “‘surrogate’” entity 

(owned by Katsimbrakis) take title and pay the money owed to 

the Perera plaintiffs in “tranches.”4

In support of the first cause of action for rescission of the 

compromise agreement for fraud, the Perera plaintiffs alleged,

“[Defendants] made the representations to [plaintiffs] that 

induced [plaintiffs] to enter into the Compromise Agreement.” In 

addition, defendants made misrepresentations about their

performance following the execution of the agreement. In 

support of the second cause of action for rescission based on 

failure of consideration, the Perera plaintiffs incorporated the 

previous allegations of the complaint and further alleged that

defendants “have failed to comply with any of their obligations 

under the Compromise Agreement,” thereby creating “a material 

failure in the consideration exchanged under this Compromise 

Agreement.” 

4 Merriam-Webster dictionary defines a “tranche” as “a 

division or portion of a pool or whole.” (Merriam-Webster’s 

Online Dict. (2021) <https://www.merriam-webster.com/

dictionary/tranche [as of August 12, 2021].)
6

C. Title Experts’ Special Motion To Strike

On October 11, 2019 Title Experts filed its special motion to 

strike the entire complaint pursuant to section 425.16 or in the 

alternative to strike the first and second causes of action. Title 

Experts argued both causes of action were based on conduct 

constituting petitioning activity, including statements made 

during the mediation and “representations regarding the 

settlement or in breach of the Compromise Agreement.” Title 

Experts also argued the Perera plaintiffs would be unable to 

establish probability of success on the merits because statements 

made at the mediation or about the settlement were protected by 

the litigation privilege, and the Perera plaintiffs failed to comply 

with their obligations under the compromise agreement. In 

support of its motion Title Experts submitted declarations from 

its owner and attorney. 

In response to the motion, the Perera plaintiffs dismissed 

their first cause of action without prejudice. They opposed the 

motion as to their second cause of action, arguing the claim did 

not arise out of protected speech or petitioning activity because 

the “principal thrust of Plaintiffs’ rescission claim for failure of 

consideration is Defendants’ post-settlement inaction and/or 

failure to perform the obligations imposed on them by the 

Compromise Agreement.” In support of their opposition, the 

Perera plaintiffs submitted declarations from Ramesh Perera and 

two of the Perera plaintiffs’ attorneys. 

In its reply brief, Title Experts argued the Perera plaintiffs’

second cause of action should be dismissed because it was based 

on the same allegations incorporated into the dismissed first 

cause of action. Further, the Perera plaintiffs could not 

effectively amend their complaint by dismissing their first cause 
7

of action once defendants had made a prima facie showing under 

section 425.16.

After a hearing, on December 11, 2019 the trial court 

denied Title Experts’ motion. In its written ruling, the court 

found the motion to strike the first cause of action was moot

because the Perera plaintiffs properly dismissed the cause of 

action prior to the hearing on the motion. As to the second cause 

of action, the court concluded the cause of action did not arise 

from Title Experts’ exercise of its right of petition or free speech. 

The statements made during settlement negotiations were 

“merely incidental to the actual claim for failure to perform under 

the Compromise Agreement.” Further, the Perera plaintiffs were 

not seeking to hold Title Experts accountable for statements 

made during or after the compromise agreement was executed. 

Instead, “the claim [was] simply one for breach of contract based 

on Title Experts’ failure to perform under the Compromise 

Agreement.” 

Title Experts timely appealed.

DISCUSSION

A. Special Motions To Strike

A cause of action arising from an act in furtherance of a 

defendant’s constitutional right of petition or free speech in 

connection with a public issue is subject to a special motion to 

strike unless the plaintiff demonstrates a probability of 

prevailing on the claim. (§ 425.16, subd. (b)(1); see Park v. Board 

of Trustees of California State University (2017) 2 Cal.5th 1057, 

1067 (Park); Baral v. Schnitt (2016) 1 Cal.5th 376, 381 (Baral).) 

An “‘act in furtherance of a person’s right of petition or free 
8

speech under the United States or California Constitution in 

connection with a public issue’” includes, in relevant part, “any 

written or oral statement or writing made before a legislative, 

executive, or judicial proceeding, or any other official proceeding 

authorized by law” (§ 425.16, subd. (e)(1)) and “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 (id., 

subd. (e)(2)).

The analysis of a special motion to strike involves a twostep process. (Baral, supra, 1 Cal.5th at p. 381; Park, supra, 

2 Cal.5th at p. 1061.) “First, the defendant must establish that 

the challenged claim arises from activity protected by section 

425.16. [Citation.] If the defendant makes the required showing, 

the burden shifts to the plaintiff to demonstrate the merit of the 

claim by establishing a probability of success.” (Baral, at pp. 384-

385.) 

“A claim arises from protected activity when that activity 

underlies or forms the basis for the claim.” (Park, supra,

2 Cal.5th at p. 1062; accord, City of Cotati v. Cashman (2002) 

29 Cal.4th 69, 78.) “‘[T]he focus is on determining what ‘the 

defendant’s activity [is] that gives rise to his or her asserted 

liability—and whether that activity constitutes protected speech 

or petitioning.’ [Citation.] . . . [I]n ruling on an anti-SLAPP 

motion, courts should consider the elements of the challenged 

claim and what actions by the defendant supply those elements 

and consequently form the basis for liability.” (Park, at p. 1063.) 

“A claim may be struck only if the speech or petitioning 

activity itself is the wrong complained of, and not just evidence of 

liability or a step leading to some different act for which liability 
9

is asserted.” (Id. at p. 1060; accord, Wilson v. Cable News 

Network, Inc. (2019) 7 Cal.5th 871, 884-885.) 

We review de novo the grant or denial of a special motion to 

strike, “evaluating the context and content of the asserted 

activity.” (Wilson v. Cable News Network, Inc., supra, 7 Cal.5th

at pp. 884-885; accord, Park, supra, 2 Cal.5th at p. 1067.) “We 

exercise independent judgment in determining whether, based on 

our own review of the record, the challenged claims arise from 

protected activity. [Citations.] In addition to the pleadings, we 

may consider affidavits concerning the facts upon which liability 

is based. [Citations.] We do not, however, weigh the evidence, 

but accept the plaintiff’s submissions as true and consider only 

whether any contrary evidence from the defendant establishes its 

entitlement to prevail as a matter of law.” (Park, at p. 1067.)

B. Title Experts Failed To Establish That the Second Cause of 

Action Arose From Protected Activity

Title Experts contends the Perera plaintiffs’ second cause of 

action for rescission is based on alleged misrepresentations made

by Title Experts about the compromise agreement and breach of 

the agreement, which constitute protected activities in 

furtherance of Title Experts’ right to petition.

5 The Perera 

plaintiffs acknowledge their complaint contains allegations that 

Title Experts made misrepresentations about the settlement, but 

they contend the second cause of action arises from Title Experts’ 

failure to perform under the compromise agreement, which is not 

5 Title Experts does not challenge on appeal the Perera 

plaintiffs’ dismissal of their first cause of action. 
10

protected petitioning activity. The Perera plaintiffs have the 

better argument.

The second cause of action for rescission is based on Title 

Expert’s breach of contract (the compromise agreement). (See 

Wong v. Stoler (2015) 237 Cal.App.4th 1375, 1384 [“A party to a 

contract has two different remedies when it has been injured by a 

breach of contract or fraud and lacks the ability or desire to keep 

the contract alive. [Citation.] The party may disaffirm the 

contract, treating it as rescinded, and recover damages resulting 

from the rescission. [Citation.] Alternatively, the party may 

affirm the contract, treating it as repudiated, and recover 

damages for breach of contract or fraud.”]; Taliaferro v. Davis

(1963) 216 Cal.App.2d 398, 410-411 [when a failure of 

consideration is alleged, the plaintiff must plead that the 

defendant breached the contract for failing to perform a material 

promise, the performance of which has been exchanged for 

performance by the other party].) The elements of a breach of 

contract claim are (1) the existence of the contract; (2) the 

plaintiff’s performance of the contract or excuse for nonperformance; (3) the defendant’s breach of the contract; and 

(4) the resulting damage to the plaintiff. (Coles v. Glaser (2016) 

2 Cal.App.5th 384, 391; Kumaraperu v. Feldsted (2015) 

237 Cal.App.4th 60, 70.)

The complaint alleges as to the second cause of action, “The 

consideration for which [plaintiffs] bargained [in entering the 

compromise agreement] was: (1) the purchase by SLRC of the 

Properties; (2) payment of $800,000; and (3) release from any 

liability.” In exchange, the Perera plaintiffs agreed to release all

known and unknown claims and dismiss the pending action. The 

Perera plaintiffs performed their end of the bargain, but 
11

defendants “have failed to comply with any of their obligations 

under the Compromise Agreement.” 

These allegations make clear the alleged breach of contract 

was Title Experts’ failure to perform its obligations under the

compromise agreement, not any statements Title Experts may 

have made regarding its performance. (See ValueRock TN 

Properties, LLC v. PK II Larwin Square SC LP (2019)

36 Cal.App.5th 1037, 1049-1050 [affirming denial of anti-SLAPP 

motion where complaint referenced settlement discussions but 

the tenant’s claim arose out of the landlord’s decision not to 

consent to the assignment rather than landlord’s settlement 

communications or litigation-related conduct]; Department of 

Fair Employment & Housing v. 1105 Alta Loma Road 

Apartments, LLC (2007) 154 Cal.App.4th 1273, 1284-1285 

[affirming denial of anti-SLAPP motion because the act giving 

rise to liability was the “fail[ure] to accommodate [the tenant’s] 

disability,” and “[t]he letters, e-mail and filing of unlawful 

detainer actions constituted [ ] evidence of [the landlord’s] alleged 

disability discrimination”]; Gallimore v. State Farm Fire & 

Casualty Ins. Co. (2002) 102 Cal.App.4th 1388, 1399 [reversing 

order granting anti-SLAPP motion because the plaintiff did not 

seek relief from the defendant’s “communicative acts, but rather 

for its alleged mistreatment of policyholders and its related 

violations and evasions of statutory and regulatory mandates,” 

distinguishing between a party’s “allegedly wrongful acts with 

the evidence that plaintiff will need to prove such misconduct”].)

The Perera plaintiffs do not allege any communications by 

Title Experts during or after the settlement negotiations 

constituted a breach of the compromise agreement. Rather, Title 

Experts’ statements as to why its performance was not feasible
12

and its false promises that it intended to comply were “activities 

that . . . [led] to the liability-creating activity or provide 

evidentiary support for the claim,” and as such, are not subject to 

the anti-SLAPP statute. (Park, supra, 2 Cal.5th at p. 1064.) 

Alternatively, Title Experts’ alleged statements were “merely 

incidental” to the Perera plaintiffs’ second cause of action, 

likewise falling outside the ambit of the anti-SLAPP statute. 

(Baral, supra, 1 Cal.5th at p. 394 [“Assertions that are ‘merely 

incidental’ or ‘collateral’ are not subject to section 425.16. 

[Citations.] Allegations of protected activity that merely provide 

context, without supporting a claim for recovery, cannot be 

stricken under the anti-SLAPP statute.”]; see Aguilar v. 

Goldstein (2012) 207 Cal.App.4th 1152, 1160 [“‘If the mention of 

protected activity “is only incidental to a cause of action based 

essentially on nonprotected activity,” then the anti-SLAPP 

statute does not apply.’”].)

Title Experts’ position that the anti-SLAPP statute applies 

to any breach of a settlement agreement is contrary to the law. 

(See Old Republic Construction Program Group v. The Boccardo 

Law Firm, Inc. (2014) 230 Cal.App.4th 859, 869 (Old Republic) 

[although entry of stipulation for settlement was protected 

conduct under the anti-SLAPP statute, claims relating to breach 

of the stipulation did not arise from protected activity because 

the alleged wrongful conduct was not the stipulation, but the 

improper withdrawal of settlement funds]; Applied Business 

Software, Inc. v. Pacific Mortgage Exchange, Inc. (2008) 

164 Cal.App.4th 1108, 1118 [defendant’s alleged conduct that 

breached settlement agreement by continuing to use software 

and failing to return software copies was not conduct in 

furtherance of its right of petition or free speech]; cf. Navellier v. 
13

Sletten (2002) 29 Cal.4th 82, 90 [plaintiffs’ claims alleging 

repudiation of release in settlement agreement by filing 

counterclaims in federal action arose from protected petitioning 

activity].) 

As the Court of Appeal in Old Republic, supra, 

230 Cal.App.4th at page 870 explained, “If the protected status of 

an underlying agreement furnished sufficient ground to invoke 

the anti-SLAPP statute against a claim for breach of that 

agreement, it would follow that every suit to enforce a settlement 

agreement would be subject at the threshold to a SLAPP motion. 

Such a regime would significantly diminish the utility of such 

agreements, reduce the incentive for parties to enter into them, 

and thereby magnify the workload on courts, with attendant 

delay and expense for those who must resort to them. It follows 

that merely citing a settlement agreement as the basis for a duty 

allegedly breached by the defendant is not enough, by itself, to 

bring a cause of action for the breach within the statute.” 

Title Experts’ reliance on Mundy v. Lenc (2012) 

203 Cal.App.4th 1401 and GeneThera, Inc. v. Troy & Gould 

Professional Corp. (2009) 171 Cal.App.4th 901 is misplaced. In 

Mundy, the Court of Appeal concluded the plaintiff’s claim for 

breach of contract arose from protected activity because the 

alleged conduct that violated the parties’ settlement agreement

was the filing of a complaint, which “fits the definition of an act 

in furtherance of a person’s right of petition.” (Mundy, at 

p. 1408.) Similarly, in GeneThera the Court of Appeal concluded 

the plaintiff’s claims for interference with contractual relations 

and negligence arose from protected petitioning activity because 

they were based on the communication by defendants’ attorney of 

a settlement offer. (GeneThera, at pp. 905, 907-908.) As the 
14

GeneThera court reasoned, “An attorney’s communication with 

opposing counsel on behalf of a client regarding pending litigation 

directly implicates the right to petition and thus is subject to a 

special motion to strike.” (Id. at p. 908.) Here, the second cause 

of action is based on the failure of Title Experts to comply with its 

obligations under the compromise agreement, not the negotiation 

of the agreement or later communications by Title Experts.

6

DISPOSITION

The order is affirmed. The Perera plaintiffs are to recover 

their costs on appeal.

FEUER, J.

We concur:

PERLUSS, P. J.

SEGAL, J.

6 Because we affirm the trial court’s order denying the 

special motion to strike under the first prong of the anti-SLAPP 

analysis, we do not reach whether the Perera plaintiffs showed a 

probability of success on the merits.