Filed 10/16/23 Aguila v. Pico Rivera First Mortgage Investors CA6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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

SECOND APPELLATE DISTRICT

DIVISION SIX

HENRY AGUILA,

 Plaintiff and Appellant,

v.

PICO RIVERA FIRST 

MORTGAGE INVESTORS, LP

et al.,

 Defendants and Respondents.

2d Civ. No. B323391

(Super. Ct. No. 22CV00464)

(Santa Barbara County)

This is an appeal from the grant of a special motion to 

strike pursuant to Code of Civil Procedure section 425.161 (antiSLAPP [strategic lawsuit against public participation] motion).

An underlying action arose from a foreclosure by defendant 

Pico Rivera First Mortgage Investors, LP (First Mortgage) on 

property owned by plaintiff Henry Aguila. That action ended 

with a settlement. In the instant action, Aguila’s complaint

1 All statutory references are to the Code of Civil Procedure 

unless otherwise indicated.
2

alleges defendants First Mortgage, and others, breached a release 

and covenant not to sue in the settlement agreement by making a 

motion in a bankruptcy proceeding. The bankruptcy proceeding 

is not related to the causes of action settled by agreement in the 

underlying lawsuit. Moreover, the damages alleged in the 

complaint arose from the claimed loss of a 50-year lease that 

Aguila granted to himself years after he lost the property to First 

Mortgage’s foreclosure. First Mortgage responded to the 

complaint with an anti-SLAPP motion. The trial court granted 

the motion. Aguila’s appeal, like his complaint, is an exercise in 

delusional thinking. We affirm.

FACTS

Thee Aguila, Inc. (TAI) owned real property in Pico Rivera, 

California (the Pico Rivera property). Aguila is the sole owner of 

TAI. The Pico Rivera property had been leased for use as a 

nightclub and restaurant. In 2015, the Drug Enforcement 

Agency seized the liquor license because the tenant was using the 

Pico Rivera property to launder money for a Mexican drug cartel. 

The business’s conditional use permit (CUP) was revoked and the 

business was shut down. The Department of Alcoholic Beverage 

Control refused to issue a new liquor license until the city issued 

a new CUP. Aguila began work to obtain a new CUP.

Loan and Foreclosure

In July 2015, TAI obtained a loan of $5.7 million from First 

Mortgage. The loan was secured by a trust deed that 

encumbered the Pico Rivera property. Aguila personally 

guaranteed the loan in writing.

Guinevere Malley is an attorney who represented TAI and 

Aguila from time to time on various matters. In May 2017,

Aguila, as president of TAI, executed a note for $2 million made 
3

payable to Malley. The note was secured by a trust deed (Malley

trust deed) that also encumbered the Pico Rivera property. The 

Malley trust deed was made returnable to TAI, not Malley, after 

it was recorded. Aguila claimed that the note was to compensate 

Malley for past legal services and legal services to be rendered in 

the future. At the time the note and Malley trust deed were 

made, Malley was in bankruptcy proceedings under Chapter 13 of 

the Bankruptcy Code. (11 U.S.C. § 1301 et seq.)

TAI failed to make payments on the First Mortgage loan, 

and First Mortgage began foreclosure proceedings in August 

2017. Aguila obtained a new liquor license on December 4, 2017.

On December 6, 2017, a non-judicial foreclosure sale was 

conducted, and First Mortgage became the Pico Rivera property’s

owner. Aguila attended the sale, but did not mention Malley’s 

bankruptcy, although he was aware of the bankruptcy at the 

time.

Underlying Litigation

In October 2018, First Mortgage filed an action against 

Aguila for breach of his personal guarantee of the loan. Aguila, a 

former attorney, answered and filed a cross-complaint against 

First Mortgage, its principal Carl Lindros, and numerous others. 

The cross-complaint was based on an alleged oral contract 

between First Mortgage and Aguila to allow Aguila a reasonable 

time period to fulfill his financial obligations, arrange for the sale 

of the Pico Rivera property, and keep the net proceeds. Malley 

represented TAI in portions of the underlying litigation.

Aguila Claims First Mortgage’s Foreclosure is Void

In February 2020, the parties settled the lawsuit, but 

Aguila initially refused to enter into a formal settlement 

agreement. As the parties were attempting to finalize the 
4

agreement, Aguila suggested that First Mortgage’s foreclosure on 

the Pico Rivera property may have been invalid. Aguila posited 

that the foreclosure violated the automatic stay in Malley’s 

bankruptcy because the foreclosure extinguished the Malley trust 

deed. The Malley trust deed had not been listed on any schedule 

in her bankruptcy, no accounts receivable were listed, and First 

Mortgage had no notice of Malley’s bankruptcy.

Aguila claimed in a declaration that on June 1, 2020, years 

after the foreclosure sale, he entered into a lease with TAI giving 

him the right to possession of the Pico Rivera property for 50 

years.

Motion for Retroactive Relief

In October 2020, First Mortgage filed a motion in 

bankruptcy court for retroactive annulment of the bankruptcy 

stay. The annulment would retroactively validate the foreclosure 

of the First Mortgage trust deed encumbering the Pico Rivera 

property. The motion was based on First Mortgage’s lack of 

notice of Malley’s bankruptcy. First Mortgage had sent notice of 

the foreclosure to Malley as the junior lienholder, but she did not 

advise First Mortgage of the bankruptcy or raise an objection to 

the foreclosure. In addition, there was no evidence of any 

consideration given for the note. Aguila claimed that the note 

was for attorney fees owed but the bankruptcy schedules 

reflected no such receivables. It was unclear whether Malley 

even knew the note and Malley trust deed existed at the time the 

trust deed was recorded.

Settlement Agreement

In November 2020, while First Mortgage’s bankruptcy 

court motion was pending, the parties executed a formal 

settlement agreement regarding the underlying action. Under
5

the agreement, a judgment would be entered against Aguila in 

the amount of $3,867,113.84. The complaint and cross-complaint 

would be dismissed.

The settlement agreement also contained mutual releases 

and covenants not to sue as follows:

“General Release of Known and Unknown Claims. [¶] . . .

With the exception of the obligations imposed under this 

Agreement, [First Mortgage], Mortgage Co. of Santa Barbara, 

Inc., . . . and Henry Aquila, [TAI], . . . individually and 

collectively, for themselves and their respective officers, 

. . . hereby mutually release each other, individually and 

collectively, and each other's respective officers, . . . attorneys, 

. . . , from any and all claims, causes of action, rights, obligations, 

debts, liabilities, accounts, liens, damages, losses and expenses of 

any kind and nature whatsoever, whether known or unknown [¶] 

. . . [¶] 

“Covenant Not to Sue. [¶] The Mortgage Parties and the 

Aguila Parties, individually and collectively, for themselves and 

their respective officers, . . . attorneys, . . . agree that they will 

not make, assert or maintain against the other or the other’s 

respective officers, . . . attorneys, . . . any claim, demand, action, 

suit or proceeding arising out of or in connection with the matters 

respectively released herein.” (Italics added.)

Motion for Retroactive Relief Resumed

After the parties executed the settlement agreement, First 

Mortgage resumed its motion to retroactively annul the stay in 

Malley’s bankruptcy. Aguila, TAI, and Malley did not object. 

The bankruptcy court granted the motion, finding that Malley’s

bankruptcy petition was part of a scheme to hinder, delay, or 
6

defraud creditors. The court ruled that First Mortgage’s 

foreclosure did not violate the automatic stay. 

In December 2020, TAI moved for reconsideration. In 

support of TAI’s motion, Malley declared that she was aware of 

the execution of the note and Malley trust deed at around the 

time Aguila created them but had not received any payments 

under the note.

The bankruptcy court denied TAI’s motion on the ground 

that TAI lacked standing because it had no interest in the 

bankruptcy estate that would benefit if the annulment order 

were reversed. The court also found that even if TAI had 

standing, it failed to show that the court erred in granting First 

Mortgage’s annulment motion. TAI also failed to show that First 

Mortgage had notice of Malley’s bankruptcy. Finally, the court 

found that Aguila’s testimony was not credible.

TAI appealed the denial of its motion for reconsideration to 

the bankruptcy panel of the Ninth Circuit Court of Appeals. The 

Ninth Circuit concluded TAI had no standing because, among 

other reasons, TAI is a nonparty to the bankruptcy that sought to 

use the debtor’s automatic stay as a shield against the foreclosure 

of the Pico Rivera property.

Instant Action

In March 2021, Aguila brought the instant action against 

First Mortgage, Mortgage Co. of Santa Barbara, Inc., and Andrew 

Fuller (hereafter collectively First Mortgage), in propria persona.2

2 Mortgage Co. of Santa Barbara, Inc. is the general 

partner of First Mortgage. Andrew Fuller is the president and 

chief executive officer of Mortgage Co. of Santa Barbara, and

executor of the estate of Carl Lindros, a principal in First 

Mortgage, who died in 2019.
7

The gravamen of the complaint is that First Mortgage breached

the covenant not to sue in the settlement agreement by its motion

for retroactive annulment of the bankruptcy stay in Malley’s 

bankruptcy. Aguila’s theory of liability is that the covenant not 

to sue in the settlement agreement covered officers and attorneys 

of the parties, and Malley was an officer and attorney of TAI. 

The complaint stated causes of action for breach of contract, 

breach of the covenant of good faith and fair dealing, interference 

with prospective economic advantage based on the termination of 

Aguila’s 50-year lease, and intentional infliction of emotional 

distress.

Anti-SLAPP Motion

First Mortgage responded to the complaint with an antiSLAPP motion. First Mortgage alleged that Aguila’s action arose 

from the exercise of his right to petition under the United States 

and California Constitutions. First Mortgage also alleged that 

Aguila cannot demonstrate that he has a reasonable probability 

of prevailing. Malley’s bankruptcy is unrelated to any cause of 

action encompassed by the settlement agreement.

Opposition

Aguila submitted an affidavit in opposition to the motion. 

Aguila declared in part: “In negotiating and executing the

Settlement Agreement, which included my stipulation to have a 

$3,867,113.84 judgment entered against me personally, it was

vitally important to me to have the release provisions of Section 2 

and the covenant not to sue provisions of Section 3 included

therein, as written, because, as a former attorney, I was mindful 

and knowledgeable that the purported 2017 non-judicial

foreclosure sale of the [Pico Rivera] Property by Defendant [First 

Mortgage] was void because it violated the automatic stay 
8

provisions of the Bankruptcy Code, which was automatically 

instituted when Ms. Malley filed for Chapter 13 bankruptcy in 

2015 and remained in place through the 2017 purported trustee’s 

sale and through the date of the execution of the Settlement 

Agreement. I was aware that the Settlement Agreement 

provisions, as written, would prohibit Defendants from

maintaining their motion for retroactive relief from bankruptcy 

stay that they had filed in the bankruptcy case of Ms. Malley on 

November 10, 2020 in order to attempt to retroactively validate 

the sale.” 

Malley also resubmitted an affidavit in opposition to the 

motion. She declared that: she was employed as legal counsel for 

TAI and had been an officer of TAI; TAI owed her a substantial 

amount of fees at the time of the foreclosure sale and still owes 

her a substantial amount of fees; she was aware of the note and

Malley trust deed “around the time they were undertaken”; TAI 

has not made any payments under the note and still owes her $2 

million; and her bankruptcy was filed in good faith to cure 

arrears in secured debt on a property in Downey, property 

distinct from the Pico Rivera property, which was subject to 

foreclosure.

Aguila submitted a supplemental affidavit in which he 

recounted his claim of an oral agreement with First Mortgage. 

According to Aguila, First Mortgage orally agreed to give him at 

least 12 months after First Mortgage obtained title to the Pico 

Rivera property by foreclosure to either cure the debt or find a 

buyer. Aguila attached a copy of his deposition given prior to the 

execution of the settlement agreement in which he claimed to be 

the present owner of the Pico Rivera property because the 
9

foreclosure sale is void due to the violation of the automatic stay 

in Malley’s bankruptcy.

Ruling

The trial court granted First Mortgage’s anti-SLAPP 

motion. In its statement of decision the court summarized 

Aguila’s plan: “Aguila apparently believed he could either (a) 

ultimately unwind the foreclosure sale because it had been 

conducted in violation of Malley’s bankruptcy stay, reacquire the 

[Pico Rivera] property, and operate it as a nightclub for the 50-

year lease term, or, alternatively (b) permit [First Mortgage] to 

obtain retroactive relief from the stay, thereby validating the 

nonjudicial foreclosure sale, and thereafter sue [First Mortgage]

for everything he believed he had lost in not being able to unwind 

the foreclosure sale and reacquire the [Pico Rivera] property.” 

The trial court concluded that Aguila failed to show a 

reasonable probability of prevailing. In making the settlement 

agreement, the parties did not mutually intend the release and 

covenant not to sue clauses to encompass the motion in Malley’s 

bankruptcy. The evidence shows only Aguila’s unilateral 

undisclosed intention. In addition, the court concluded that

Aguila cannot show damages because he has no standing to 

challenge the bankruptcy court’s order approving the 

foreclosure.3

DISCUSSION

I. Anti-SLAPP Motion

Section 425.16, subdivision (b)(1), the anti-SLAPP statute, 

provides: “A cause of action against a person 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 

3 Aguila was declared a vexatious litigant on July 5, 2023.
10

California Constitution in connection with a public issue shall be 

subject to a special motion to strike, unless the court determines 

that the plaintiff has established that there is a probability that 

the plaintiff will prevail on the claim.”

To resolve an anti-SLAPP motion, the trial court engages in 

a two-step inquiry. First, the court decides whether the 

defendant has made a threshold showing that the challenged 

cause of action arises from a protected activity. (City of Santa

Monica v. Stewart (2005) 126 Cal.App.4th 43, 71.) The moving 

party has the burden of showing that the challenged cause of 

action arises from a protected activity. (Ibid.) Second, if the 

moving party has carried that burden, the court must decide 

whether the opposing party has demonstrated a probability of 

prevailing on the challenged cause of action. (Ibid.) In reviewing 

the opposing party’s evidence, the court does not weigh it; 

instead, the court determines whether the opposing party has 

made a prima facia showing of facts necessary to establish its 

claim. (Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 

659, 673.) “The trial court’s ruling on both issues are reviewed de 

novo.” (City of Santa Monica, at p. 71.)

II. Protected Activity

Section 425.16, subdivision (e), provides that a protected 

activity includes “any written or oral statement or writing made 

before a . . . judicial proceeding, or any other official proceeding 

authorized by law.” First Mortgage’s motion in bankruptcy court 

qualifies as a protected activity. (See Rusheen v. Cohen (2006) 37 

Cal.4th 1048, 1056 [conduct such as filing, funding, and

prosecution of a civil action is litigation activity protected for 

purpose of anti-SLAPP motion].)
11

III. Probability of Prevailing

(a) Contract Cause of Action

The release and covenant not to sue clauses in the 

settlement agreement are very similar to standard clauses of 

their type. The question here is whether they encompass First 

Mortgage’s motion in Malley’s bankruptcy case. The answer is 

no.

Aguila relies on the broad language of the release in the 

settlement agreement covering claims “of any kind and nature 

whatsoever, whether known or unknown.” But the broad 

language in a settlement agreement is not by itself determinative 

of its scope.

A settlement agreement may be explained by reference to 

the circumstances under which it was made, and the matter to 

which it relates. (Olson v. Doe (2022) 12 Cal.5th 669, 682.) 

However broad the terms of the agreement may be, it extends 

only to those things concerning which it appears the parties 

intended to contract. (Ibid. [clause in which parties agreed not to 

disparage each other interpreted not to apply to lawsuit brought 

by one of the parties against the other].)

Here the settlement agreement was made to settle a 

number of cases relating to an alleged oral agreement to allow 

TAI at least 12 months after First Mortgage’s foreclosure on the 

Pico Rivera property to either cure the debt or find a buyer. The 

settlement had nothing to do with Malley’s bankruptcy. Malley 

declared she filed for bankruptcy to cure arrears in debts secured

by her property in Downey. The matters to which the settlement 

relates are the cases being settled therein. It would be absurd to 

interpret the settlement agreement as encompassing an 
12

unrelated bankruptcy proceeding concerning a property in 

Downey.

Moreover, Aguila’s interpretation of the settlement 

agreement is based on deception. Aguila manufactured a note 

and trust deed in favor of Malley. Nowhere is that asset reflected 

in Malley’s bankruptcy filings. Although Aguila attended the 

foreclosure sale and Malley had notice, neither advised First 

Mortgage of Malley’s bankruptcy prior to the foreclosure. The 

only reasonable conclusion is that Aguila intentionally created 

the circumstance that allowed him to claim the foreclosure –

although conducted by First Mortgage in good faith – was void. 

Aguila then, by his own admission, entered into the settlement 

agreement with the undisclosed intention of holding First 

Mortgage liable if it attempted to remedy the problem that 

Aguila himself maliciously created.

Aguila now wants us to interpret the settlement agreement 

in ways that assist his bad faith. We decline to do so. According 

to Aguila, the settlement agreement leaves First Mortgage either 

with a void deed or liable to Aguila for breach of the settlement 

agreement. No reasonable person in First Mortgage’s position 

would intend to enter into such an agreement. In light of all the 

circumstances, Aguila’s interpretation of the settlement 

agreement is quite simply bizarre. 

Aguila’s reliance on Belasco v. Wells (2015) 234 Cal.App.4th 

409 (Belasco) is misplaced. There plaintiff purchased a newly 

constructed home directly from the builder. Thereafter plaintiff 

complained of construction defects. In 2006, the parties entered 

into a written settlement agreement in which plaintiff agreed to 

release all known and unknown construction defects in the home 

in exchange for $25,000. In 2012, plaintiff brought an action 
13

against the builder alleging defects in the home’s roof. The trial 

court granted the builder summary judgment based on the 2006 

settlement agreement which contained the release of known and 

unknown claims. In affirming the judgment, the Court of Appeal 

rejected the plaintiff’s contention that the 2006 settlement

agreement does not include a defective roof because that defect 

was not specifically mentioned in the agreement. The court held 

that waivers of unknown claims are enforceable. (Id. at p. 423.)

In Belasco, supra, 234 Cal.App.4th 409, the settlement 

agreement released claims for unknown construction defects in a 

particular house. Plaintiff’s claim was for an unknown 

construction defect in that particular house. Belasco is easily 

distinguishable. The defendant in Belasco did not claim 

construction defects in a particular house also encompassed a 

motion in an unrelated bankruptcy. Nor were there any facts in 

Belasco showing that the release in the settlement agreement 

was the product of deception and bad faith.

Aguila claims that in determining that he failed to show a 

probability of prevailing, the trial court improperly weighed the 

evidence. But the evidence leads to only one reasonable 

conclusion: Aguila has no possibility of prevailing; there is no 

need to weigh the evidence.

Moreover, Aguila’s entire claim for damages is based on the 

theory that he has standing to assert the automatic stay in 

Malley’s bankruptcy. Both the bankruptcy court and the Ninth 

Circuit bankruptcy panel concluded that Aguila had no such 

standing. Aguila claims without citation to authority that he 

could succeed in a quiet title action in superior court. The claim 

is pure fantasy. Quite apart from the problem of res judicata, no 

superior court would conclude Aguila has standing in the face of 
14

the bankruptcy court and the Ninth Circuit bankruptcy panel’s 

determination. 

(b) Remaining Causes of Action

Aguila’s cause of action against First Mortgage for breach 

of the covenant of good faith and fair dealing demonstrates that 

irony is not dead. Although there is no evidence of bad faith on 

the part of First Mortgage, there is overwhelming evidence of bad 

faith on Aguila’s part. In any event, a cause of action for breach 

of the covenant of good faith and fair dealing requires a showing 

of breach of contract. (Habitat Trust for Wildlife, Inc. v. City of 

Rancho Cucamonga (2009) 175 Cal.App.4th 1306, 1344.) Here 

there was no breach of contract.

Aguila’s cause of action for loss of prospective economic 

advantage is based on the 50-year lease he granted to himself

long after First Mortgage foreclosed on the Pico Rivera property. 

Aguila can derive from the lease no economic advantage because 

the bankruptcy court retroactively approved the foreclosure. The 

bankruptcy court and the Ninth Circuit bankruptcy panel ruled

that Aguila has no standing to challenge the approval. Aguila’s 

assertion that he could prevail in a superior court action to quiet 

title in spite of the bankruptcy court’s and the Ninth Circuit

bankruptcy panel’s rulings is baseless.

Finally, Aguila’s cause of action for intentional infliction of 

emotional distress is also based on the loss of his 50-year lease. 

The cause of action requires a showing that the defendant’s 

conduct was so outrageous as to exceed all bounds of decency. 

(Potter v. Firestone Tire & Rubber Co. (1993) 6 Cal.4th 965, 1001.) 

Aguila has failed to show First Mortgage did anything wrong.
15

DISPOSITION

The judgment is affirmed. Costs are awarded to 

respondents.

NOT TO BE PUBLISHED.

GILBERT, P. J.

We concur:

YEGAN, J.

CODY, J.
Colleen K. Sterne, Judge

Superior Court County of Santa Barbara

______________________________

The Tym Firm and Ronald D. Tym for Plaintiff and 

Appellant.

Law Office of Eric A. Woosley and Eric A. Woosley for 

Defendants and Respondents Pico Rivera First Mortgage 

Investors, LP and Mortgage Co. of Santa Barbara, Inc.

Reicker, Pfau, Pyle & Mcroy and Robert B. Forouzandeh for 

Defendant and Respondent Andrew Fuller.