Filed 2/15/23 Boster Associates v. Dynamic Finance CA2/2

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

BOSTER ASSOCIATES 

LIMITED,

Plaintiff and Respondent,

v.

DYNAMIC FINANCE 

CORPORATION et al.,

Defendants and 

Appellants.

 B313729

 (Los Angeles County

 Super. Ct. No. BC488552)

APPEAL from orders of the Superior Court of Los Angeles 

County, Richard L. Fruin, Jr., Judge. Affirmed.

Frandzel Robins Bloom & Csato, Thomas M. Robins III, 

Michael Gerard Fletcher, Brett L. McClure and Bruce D. Poltrock 

for Defendants and Appellants.

Mayer Brown, John Nadolenco, Michael F. Kerr, Andrew 

Demko and C. Mitchell Hendy for Plaintiff and Respondent.
2

This consolidated appeal concerns the trial court’s denial of 

four special motions to strike filed pursuant to Code of Civil 

Procedure section 425.16.1 The motions were filed by appellants 

Dynamic Finance Corporation (DFC), Angela Chen Sabella, 

Beresford Properties, LLC (Beresford) and Cambridge Financial 

of California, LLC (Cambridge) (collectively appellants), who are 

defendants in this action brought by respondent Boster 

Associates Limited (Boster or respondent) on Boster’s claims of 

breach of contract, conversion, and interference with prospective 

economic advantage, among others.

Appellants’ special motions to strike involve references in 

Boster’s allegations to appellants’ involvement in bankruptcy 

proceedings and, in the case of Beresford, involvement in a 

Riverside county tax sale. Because these proceedings were 

incidental to Boster’s allegations, we find that the trial court 

properly denied the special motions to strike.

BACKGROUND2

The initial loan and participation agreement

In early July 2000, DFC made an $18 million real property 

investment in Riverside County, California, by lending $18 

million to Rancho California Country Club (RCCC). The loan was 

secured by parcels of real property in Riverside County, near

Temecula.

1 All further statutory references are to the Code of Civil 

Procedure unless otherwise noted. A special motion to strike 

under section 425.16 is also referred to as an anti-SLAPP motion.

2 As this matter comes to us at the pleading stage, all 

claimed facts set forth herein should be considered unproven 

allegations.
3

Approximately two weeks later, on July 19, 2000, DFC and 

Boster entered into the participation agreement (PA) pursuant to 

which Boster purchased a 99 percent interest in the $18 million 

RCCC loan.3 Boster paid $15,416,728.48 for its participation 

interest. DFC’s obligation to pay Boster its 99 percent share 

included any “proceeds of the collateral.” The PA allowed DFC to 

cross-collateralize other assets as security for the repayment plus 

interest of the RCCC loan. The PA mandated that “whenever 

Lender receives . . . any payment of principal of, interest accrued 

on . . . or other fees with respect to, the Loan (whether voluntary, 

involuntary, by application of set-off or counterclaim, as proceeds 

of the collateral or otherwise), Lender shall . . . pay Participant 

3 Boster and DFC were two of many companies owned or 

controlled by Chen Din-Hwa (Chen) during his lifetime. Chen’s 

two daughters are Vivien Chen (Vivien) and Sabella. (Boster 

Associates Ltd. v. Dynamic Finance Corp. (Sept. 11, 2015, 

B252609, B254451) [nonpub. opn.].) As the trial court pointed 

out in its written decision, the original complaint alleged that in 

December 2003 Chen made a gift of certain assets supposedly of 

equal value to his daughters, with Sabella owning indirectly DFC 

and Vivien owning indirectly Boster. Chen retained ownership 

and control of Boster until November 2008, when a conservator 

was appointed to administer Chen’s affairs. Sabella is DFC’s 

principal. In 1985, Chen appointed Sabella president of DFC. 

Beginning near the end of 2003, when Chen designated Sabella to 

receive his United States assets, Sabella became the controlling 

person of DFC with control of the trust that is the indirect 100 

percent owner of DFC. Thus, appellants DFC and Sabella assert 

that at the time of the initial loan and PA in this matter, Chen 

owned and controlled both Boster and DFC.
4

Share of such payment to Participant . . . .”4 The PA specified: 

“Lender will not, without the consent of Participant, agree to . . . 

release or subordinate all or any substantial portion of the 

collateral for any of the Loan . . . except in accordance with the 

terms of the Loan Agreement or the Loan Documents.”

The PA also required DFC to “furnish an accounting to 

[Boster] as promptly as practicable following [Boster’s] request 

therefor.”

DFC paid Boster approximately $5.9 million in 

December 2001 under the PA, but made no further payments 

under the PA. Boster’s allegations describe numerous 

transactions in which DFC and its alleged coconspirators 

participated, involving the parcels of land that secured the RCCC 

loan. Boster alleges that these transactions eliminated the 

collateral securing the RCCC loan and that, despite receiving 

proceeds from these transactions, DFC failed to share such 

proceeds with Boster, as required under the PA.

The disputed transactions are set forth in detail below.

North Plaza

In June 2000, as plans for the RCCC investment were 

underway, DFC obtained a deed of trust to real property owned 

by North Plaza LLC (North Plaza). Boster alleges that North 

Plaza is under common management and/or ownership with 

RCCC. The North Plaza deed of trust provided a portion of the 

security for the RCCC loan from its inception. The North Plaza 

deed of trust was recorded in January 2001 in Riverside County.

4 DFC was defined as the “Lender” and Boster was defined 

as the “Participant.”
5

In November 2002, DFC recorded a release of the North 

Plaza deed of trust. Boster alleges that Sabella and DFC did not 

inform Boster of this release, in violation of the PA agreement, 

and to which Boster did not agree.

In January 2004, DFC recorded a “correction” of the 

release, effectively reinstating the North Plaza deed of trust as 

security for the RCCC loan but only as to a smaller portion of the 

parcel (parcel 14). Boster asserts that this action negatively 

affected its loan priority. Boster also alleges that DFC increased 

its separate loans to North Plaza, thereby diluting Boster’s 

security in the North Plaza deed. In November 2003, Sabella’s 

mother purchased a 99 percent interest in DFC’s senior, separate 

loans to North Plaza.5

In January 2004, the North Plaza project went into 

involuntary bankruptcy. DFC filed two proofs of claim in the 

North Plaza bankruptcy. One proof of claim solely evidenced the 

cross-collateralized portion of the RCCC loan secured by the 

junior North Plaza deed of trust on parcel 14 (claim 15). At the 

same time, DFC filed a separate proof of claim evidencing its 

direct, senior lien in the North Plaza bankruptcy for an amount 

that had grown to nearly $12.6 million (Claim 16).

In May 2005, pursuant to an order of the bankruptcy court, 

DFC received $10.5 million from the sale of the North Plaza 

property. The payment constituted a partial payment on DFC’s 

senior lien, which did not involve Boster. DFC received no money 

5 The proceeds of the purchase were wired to Rostack 

Investments, Inc., another company owned by Chen that was 

participating in DFC’s direct loan to North Plaza. Sabella’s 

mother purchased 100 percent of Rostack’s 99 percent interest in 

DFC’s senior North Plaza loan.
6

from the North Plaza bankruptcy estate for its junior lien on the 

North Plaza deed of trust for the lien on parcel 14 for the RCCC 

loan.

The proceeds from the $10.5 million payment were paid to 

Sabella’s mother, with a small portion returned to DFC to reflect 

its 1 percent interest in the direct loans to North Plaza.6

Vail Lake entities

When Boster entered into the PA, part of the collateral 

securing the RCCC loan included a deed of trust on property 

owned by Vail Lake Rancho California (VLRC). Boster alleges 

that VLRC is affiliated by common management or ownership 

with RCCC.

On June 30, 2000, VLRC executed a deed of trust for the 

benefit of DFC on certain real property to provide security for the 

RCCC note. Boster alleges that over the following 14 years, DFC, 

working in conjunction with Beresford and Cambridge, conducted 

a series of transactions without Boster’s consent that ultimately 

eliminated the entire security interest.

First, Boster alleges that appellants deprioritized the 

VLRC/RCCC security interest by making later loans to various 

related entities (collectively the Vail Lake entities). In 

September 2002, DFC and Sabella released the deed of trust on 

the VLRC property. Boster was not informed of the reconveyance 

and was not provided with proceeds of the collateral DFC and 

6 Appellants point out that the $10.5 million payment was 

made in 2005, at which time 99 percent was promptly directed to 

Mrs. Chen. The ultimate settlement with the bankruptcy trustee 

was six years later, in April 2011, pursuant to which it was 

confirmed that the 2005 payment would not be wholly or partially 

revoked by the bankruptcy court.
7

Sabella received from such release. DFC then loaned a total of 

$22 million to other Vail Lake entities—namely, Vail Lake USA 

(VLUSA) and Vail Lake Village and Resort (VLVR). DFC 

allegedly intended for these loans, which were recorded on 

July 23, 2002, to be senior to the RCCC Vail Lake loan involving 

Boster. DFC and Sabella never informed Boster of these actions, 

which were to Boster’s detriment. After recording these senior 

liens on property owned by VLUSA and VLVR, on November 27, 

2002, DFC recorded deeds of trust securing the RCCC Vail Lake 

loan on the VLUSA and VLVR properties. “DFC deliberately 

chose to subordinate the deed of trust securing the RCCC Note in 

which Boster had a 99% interest to the deed of trust for the $17 

million VLUSA Note in which Boster had no interest by recording 

the former more than two months after the latter.” Boster 

alleges that Sabella made other loans to VLUSA in 2002, which 

were recorded with priority over the lien securing the RCCC note.

After recording many liens on the VLUSA and VLVR 

properties, which diminished the priority of the lien securing the 

RCCC loan, in 2010, DFC, Sabella, and an entity known as 

Prudent Financial (Prudent) entered into an agreement with 

Cambridge for the purchase and sale of loans (APSL).7 Pursuant 

to this transaction, DFC (through Prudent) and Sabella sold their 

own loans secured by the Vail Lake properties to Cambridge, who

7 Boster alleges that Prudent’s participation in the APSL 

was merely nominal. Boster alleges that Prudent was selling 

loans and related security interests that were previously held by 

DFC but transferred to Prudent—and when payment was made 

for those loans and security interest, the payment went to DFC, 

not Prudent. Sabella admits that Prudent was “an affiliate of 

DFC to which certain DFC loans had been assigned.”
8

did not buy the RCCC loan, which was not included in the 

transaction. As a result, Sabella and DFC received 

approximately $36 million. Boster alleges that through this 

transaction, having previously subordinated the RCCC lien in 

violation of the PA, DFC and Sabella were able to sell their own 

security interests to Cambridge to Boster’s detriment.

In 2012 and 2013, the Vail Lake entities and other related 

entities entered into chapter 11 bankruptcy proceedings in the 

United States Bankruptcy Court for the Southern District of 

California (Vail Lake bankruptcy). Cambridge, Beresford, and a 

related entity known as XD Conejo Notes, LLC (XD Conejo) each 

filed proofs of claim against VLRC, VLUSA, and VLVR in the 

Vail Lake bankruptcy.8

In July 2014, Cambridge, Beresford and XD Conejo entered 

into a settlement agreement with the debtors of the Vail Lake 

bankruptcy, including VLRC, VLUSA, and VLVR, in which 

Cambridge, Beresford and XD Conejo agreed to release their 

claims in the Vail Lake bankruptcy in exchange for the debtors’ 

agreement to sell the underlying real estate parcels to 

Cambridge, Beresford and XD Conejo. On the same day, 

Cambridge, Beresford and XD Conejo executed an agreement and 

escrow instructions with Rancho California Water District 

(RCWD) to sell the property to RCWD. Under that agreement, 

8 Boster alleges that Ian Robertson and Kenneth Kai Chang 

were the managing members of Cambridge, Beresford, and XD 

Conejo. Specifically, both Robertson and Chang are principals of 

Cambridge. Chang is a managing member of Beresford, and 

Robertson was a managing member of XD Conejo. Boster also 

alleges that Sabella and Chang have known each other since at 

least 2000.
9

Cambridge, Beresford and XD Conejo sold the Vail Lake parcels 

to RCWD for $49,770,000. Pursuant to the APSL, DCF and 

Sabella received approximately $36 million of the money from the 

sale of the property to RCWD. Boster was never informed of the 

APSL, the sale of the DFC/Sabella loans to Cambridge, or the 

Vail Lake bankruptcy. DFC never shared any of the proceeds it 

received with Boster. Boster alleges that DFC and Sabella 

orchestrated Cambridge’s purchase of the DFC/Sabella loans as 

part of a scheme to release the Vail Lake deeds of trust that 

cross-collateralized Boster’s interest and to personally profit from 

the sale of the underlying securing properties to RCWD. Boster’s 

interest in the Vail Lake properties was entirely extinguished by 

this series of events, and Boster received nothing.

Walker Basin

The original RCCC note, executed in 2000 and in which 

Boster took a 99 percent interest, was expressly secured by a 

deed of trust on the land that RCCC intended to develop with 

that loan, known as the Walker Basin deed of trust.

In approximately 2012, the property tax on the real estate 

parcels encumbered by the Walker Basin deed of trust became 

delinquent. In February 2012, DFC received notice from the

Riverside County Assessor’s Office that the Walker Basin parcels 

would be sold at a March 20, 2012 county tax sale. Sabella and 

DFC informed Cambridge and Beresford of the tax sale. Neither 

DFC nor Sabella informed Boster about the tax sale, or took any 

action to protect the collateral.

On March 20, 2012, the Walker Basin parcels were sold in 

a Riverside county tax sale. The winning bidder was Beresford, 

which purchased the parcels for approximately $3,371,000. The 
10

tax sale had the effect of extinguishing the Walker Basin deed of 

trust.

In March 2013, DFC submitted a claim to Riverside County 

for its excess proceeds on the Walker Basin tax sale. DFC never 

informed Boster of its application to Riverside County for excess 

proceeds, nor did it share in any proceeds recovered from such 

application, or any profits or interest from Beresford’s possession 

and potential development of the property. Boster alleges that 

Sabella orchestrated Beresford’s purchase of the Walker Basin 

parcels as part of a scheme to extinguish Boster’s interest in the 

RCCC note and that Sabella oversaw the transaction knowing 

that it constituted a breach of DFC’s obligations to Boster under 

the PA. 

Boster requests for information

Boster sent letters inquiring about the RCCC loan and 

collateral in 2009 and 2012. DFC never answered the letters and 

never informed Boster of the events described above that 

eradicated Boster’s interest in the PA.

PROCEDURAL HISTORY

Pleadings

In July 2012, Boster filed a complaint against DFC for 

breach of contract, alleging that DFC breached the PA by failing 

to provide an accounting, as required under the PA, and failing to 

pay Boster monies owed to Boster under the agreement, 

including, without limitation, any consideration received by DFC 

for its assignment and release of the North Plaza deed of trust.

DFC answered and filed a cross-complaint against Boster 

and Vivien. Vivien brought a successful motion to quash service 

of summons (Boster Associates Ltd. v. Dynamic Finance Corp., 
11

supra, B252609, B254451), and Boster brought a successful antiSLAPP motion striking the claims against it.

The first amended supplemental complaint (FASC) against 

DFC was filed in 2018 and asserted causes of action for breach of 

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

conversion, and fraudulent concealment. The FASC added 

allegations concerning the Vail Lake entities.

Following extensive discovery disputes, Boster received a 

production of documents that allowed it to learn for the first time 

that the Walker Basin deed of trust had been released. Boster 

also asserts that through this document production it learned 

more details regarding Cambridge’s and Beresford’s involvement 

in the loss of the collateral securing Boster’s loan.

By stipulation, Boster filed the operative second amended 

supplemental complaint (SASC) on January 25, 2021. The SASC 

added three new defendants: Sabella, Beresford, and Cambridge, 

and alleged six new causes of action for interference with 

prospective economic advantage, interference with contractual 

relations, civil conspiracy, aiding and abetting, and equitable 

mortgage against all four defendants.

Anti-SLAPP motions

In response to the SASC, the four appellants separately 

filed the four anti-SLAPP motions that are the subject of this 

appeal.

Boster filed a motion to strike DFC’s anti-SLAPP motion as 

untimely, asserting that DFC’s anti-SLAPP sought to strike 

allegations that were present in both the original complaint and 

the FASC. Boster did not contend that the portion of DFC’s 

motion directed to the newly pled eighth cause of action was 
12

untimely, and it addressed DFC’s motion to strike portions of the 

eighth cause of action in its opposition.

Appellants’ motions asserted that some of Boster’s 

allegations arose from protected activity under the first prong of 

section 425.16. The four appellants challenged allegations 

surrounding different events. Only DFC and Sabella challenged 

allegations surrounding the North Plaza bankruptcy. All four 

appellants challenged allegations surrounding the Vail Lake 

bankruptcies. Only Beresford challenged the allegations 

surrounding the Walker Basin tax sale.

DFC’s anti-SLAPP motion

DFC’s anti-SLAPP motion sought to strike the references in 

the SASC to actions surrounding the North Plaza and Vail Lake 

entity bankruptcies, as follows:

“MOTION TO STRIKE NO. 1:

“¶ 5a, p. 2:9-16 (italicized portion only):

“Unbeknownst to Boster, starting in or 

around approximately 2002, Defendants 

colluded and conspired to release, 

extinguish, and subordinate the collateral 

securing the RCCC Note—including the 

Walker Basin Deed of Trust and other 

deeds of trust that DFC crosscollateralized as security—through a 

series of byzantine transactions: a. The 

North Plaza Bankruptcy. In 2000, 

DFC cross-collateralized a deed of trust 

known as the North Plaza Deed of Trust 

as security for the RCCC Note, and 

partially released it in 2002. When the 

underlying debtor entered bankruptcy 

proceedings in 2004, DFC filed creditor 
13

claims in 2005, ultimately receiving $10.5 

million in settlement in 2010.

“MOTION TO STRIKE NO. 2:

“¶ 32, p. 9:7-8:

“On or about January 27, 2005, DFC filed 

Claims in the North Plaza bankruptcy in 

a total amount exceeding $30 million.

“MOTION TO STRIKE NO. 3:

“¶ 33, p. 9:9-12:

“On May 3, 2005, and pursuant to an 

order of the bankruptcy court, North 

Plaza paid DFC $10,500,000, subject to 

subsequent disgorgement by DFC, that 

is, DFC might be required by the 

bankruptcy court to repay all or part of 

the $10,500,000 into North Plaza’s 

bankruptcy estate.

“MOTION TO STRIKE NO. 4:

“¶ 35, p. 9:15-17:

“In 2010, DFC and the Trustee entered 

into settlement negotiations regarding 

outstanding disputes between DFC and 

the Trustee. In October, 2010, DFC and 

the Trustee reached a settlement subject 

to bankruptcy court approval.

“MOTION TO STRIKE NO. 5:

“¶ 36, p. 9:18-23, and Exhibit E:

“On December 30, 2010, DFC moved the 

bankruptcy court for its approval of the 

settlement and submitted in support 

thereof a declaration by its counsel 

Michael Gerard Fletcher attaching a copy 
14

of the final execution version of the 

settlement agreement. A copy of 

Mr. Fletcher’s declaration, including the 

settlement agreement attached thereto, 

is attached hereto as Exhibit E. The 

settlement agreement between DFC and 

the Trustee was approved by the 

bankruptcy court and became effective on 

April 1, 2011.

“MOTION TO STRIKE NO. 6:

“¶ 37, p. 9:24-28:

“Under the settlement, DFC was allowed 

to retain the $10,500,000 previously 

received from North Plaza such that 

those funds were no longer subject to 

total or partial disgorgement by DFC. 

DFC also received a general release of 

claims and other consideration for the 

settlement. In return, DFC, inter alia, 

assigned to the Trustee all of its interest 

under the North Plaza Deed of Trust. 

DFC did not pay any of this $10.5 million 

settlement to Boster.

“MOTION TO STRIKE NO. 7:

“¶ 38, p. 10:1-5:

“Boster did not consent to DFC’s 

assignment of DFC’s interests under the 

North Plaza Deed of Trust to the Trustee 

nor did DFC seek such consent or even 

inform Boster that it was intending to 

assign away collateral for the RCCC 

Note. This assignment of DFC’s interests 

constituted a substantial release of the 

collateral for the RCCC Note and violated 
15

Section 5(c)(4) of the Participation 

Agreement.

“MOTION TO STRIKE NO. 8:

“¶ 39, p. 10:6-11:

“The consideration DFC received for the 

assignment of the North Plaza Deed of 

Trust was ‘proceeds of collateral’ within 

the meaning of Section 4(a) of the 

Participation Agreement. DFC therefore 

owed Boster under Section 4(a) of the 

Participation Agreement Boster’s 

Participant Share (99%) of the 

consideration received by DFC for the 

assignment of the North Plaza Deed of 

Trust. However, DFC did not pay Boster 

any part of the consideration DFC 

received for its assignment of the North 

Plaza Deed of Trust.

“MOTION TO STRIKE NO. 9:

“¶ 52, p. 14:13-22 (allegation as to the release of 

the amended VLUSA TD):

“DFC executed a Substitution of Trustee 

and Full Reconveyance of Deed of Trust 

dated as of August 4, 2014, the effect of 

which was to release the security for the 

RCCC Note provided by the VLUSA Deed 

of Trust and the Amended VLUSA Deed 

of Trust. This Substitution of Trustee and 

Full Reconveyance of Deed of Trust was

recorded on August 25, 2014 in the 

Riverside County, California official 

records as instrument No. 2014-322092. 

DFC did not notify Boster about this 

release of its security and Boster did not 
16

consent thereto. This release of security 

was a substantial release of the collateral 

for the RCCC Note and violated Section 

5(c)(4) of the Participation Agreement. 

DFC did not pay Boster any part of the 

consideration DFC received for releasing 

the VLUSA Deed of Trust and the 

Amended VLUSA Deed of Trust.

“MOTION TO STRIKE NO. 10:

“¶ 53, p. 14:23–p. 15:1 (allegation as to the 

release of the amended VLUSA TD):

“The consideration DFC received for the 

release of the VLUSA Deed of Trust and 

the Amended VLUSA Deed of Trust was 

‘proceeds of collateral’ within the 

meaning of Section 4(a) of the 

Participation Agreement. DFC therefore 

owed Boster under Section 4(a) of the 

Participation Agreement Boster’s 

Participant Share (99%) of the 

consideration received by DFC for the 

release of the VLUSA Deed of Trust and 

the Amended VLUSA Deed of Trust. 

However, DFC did not pay Boster any 

part of the consideration it received for 

the release of the VLUSA Deed of Trust 

and the Amended VLUSA Deed of Trust.

“MOTION TO STRIKE NO. 11:

“¶ 55, p. 15:5-9 (allegation as to the release of 

the amended VLUSA TD):

“Given her position, Sabella almost 

certainly orchestrated these transactions 

as part of a scheme to subordinate 

Boster’s liens on the VLUSA and 
17

Amended VLUSA Deeds of Trust to the 

liens securing the DFC/Sabella Loans, in 

which Boster had no participation 

interest. Sabella oversaw and approved 

these transactions knowing, as DFC’s 

manager, that they constituted breaches 

of DFC’s obligations under the 

Participation Agreement with Boster.

“MOTION TO STRIKE NO. 12:

“¶ 64, p. 16[:]25–p. 17:5 (allegation as to the 

release of the amended VLVR Deed TD):

“DFC executed a Substitution of Trustee 

and Full Reconveyance of Deed of Trust, 

dated as of August 4, 2014, the effect of 

which was to release the security for the 

RCCC Note provided by the VLVR Deed 

of Trust and the Amended VLVR Deed of 

Trust. This Substitution of Trustee and 

Full Reconveyance of Deed of Trust was 

recorded on August 25, 2014 in the 

Riverside County, California official 

records as instrument No. 2014-322093[.]

DFC did not inform Boster about this 

release of its security and Boster did not 

consent thereto. This release of security 

was a substantial release of the collateral 

for the RCCC Note and violated Section 

5(c)(4) of the Participation Agreement. 

DFC did not pay Boster any part of the 

consideration it received for releasing the 

VLVR Deed of Trust and the Amended

VLVR Deed of Trust.
18

“MOTION TO STRIKE NO. 13:

“¶ 65, 17:6-15 (allegation as to the release of 

the amended VLVR TD):

“The consideration DFC received for the 

release of the VLVR Deed of Trust and 

the Amended VLVR Deed of Trust was 

‘proceeds of collateral’ within the 

meaning of Section 4(a) of the 

Participation Agreement. DFC therefore 

owed Boster under Section 4(a) of the 

Participation Agreement Boster’s 

Participant Share (99%) of the 

consideration received by DFC for the 

release of the VLVR Deed of Trust and 

the Amended VLVR Deed of Trust. 

However, DFC did not pay Boster any 

part of the consideration DFC received 

for its release of the VLVR Deed of Trust 

and the Amended VLVR Deed of Trust. 

Boster is informed and believes that DFC 

and/or its affiliates later received 

substantial compensation for the $5 

million VLVR Note and the $17 million 

VLUSA Note in the form of amounts 

received from Cambridge Financial and 

possibly others. Boster did not share in 

this compensation.

“MOTION TO STRIKE NO. 14:

“¶ 66, 17:16-20 (allegation as to the release of 

the amended VLVR TD):

“Given her position, Sabella almost 

certainly orchestrated these transactions 

as part of a scheme to subordinate 

Boster’s liens on the VLVR and Amended 
19

VLVR Deeds of Trust to the liens 

securing the DFC/Sabella Loans, in 

which Boster had no participation 

interest. Sabella oversaw and approved 

these transactions knowing, as DFC’s 

manager, that they constituted breaches 

of DFC’s obligations under the 

Participation Agreement with Boster.

“MOTION TO STRIKE NO. 15:

“¶ 95, p. 23:20-21 (insofar as the paragraphs 

that are subject to Motion Nos. 1-14 are incorporated 

into this paragraph):

“95. Boster incorporates by reference the 

allegations of paragraphs 1 through 94, 

inclusive as set forth in full at this point.

“MOTION TO STRIKE NO. 16:

“A. ¶ 101, e. p. 24:28:

“e. releasing the security for the RCCC 

Note provided by the VLUSA Deed of 

Trust and the Amended VLUSA Deed of 

Trust; 

“B. ¶ 101, g. p. 25:4:

“g. releasing the security for the RCCC 

Note provided by the VLVR Deed of Trust 

and the Amended VLVR Deed of Trust;

“MOTION TO STRIKE NO. 17:

“A. ¶ 102, a. (2). p. 25:16:

“(2) the assignment of the North Plaza 

Deed of Trust,

“B. ¶ 102, a. (4). p. 25:17-18:
20

“(4) the release of the VLUSA Deed of 

Trust and the Amended VLUSA Deed of 

Trust, and

“C. ¶ 102, a. (5). p. 25:18-19:

“(5) the release of the VLVR Deed of 

Trust and the Amended VLVR Deed of 

Trust.

“D. ¶ 102, b. p. 25:20-21:

“failing to pay to Boster any part of the 

$10.5 million consideration received by 

DFC for its assignment and release of the 

North Plaza Deed of Trust;

“MOTION TO STRIKE NO. 18:

“¶ 105, p. 26:13-14 (insofar as the paragraphs 

subject to Motions Nos. 1-17 are incorporated into 

this paragraph):

“Boster incorporates by reference the 

allegations of paragraphs 1 through 104, 

inclusive, as though set forth in full at 

this point.

“MOTION TO STRIKE NO. 19:

“¶ 108, p. 26:21-22 (insofar as the paragraphs 

that are subject to Motion Nos. 1-18 are incorporated 

into this paragraph):

“Boster incorporates by reference the 

allegations of paragraphs 1 through 107, 

inclusive, as though set forth in full at 

this point.

“MOTION TO STRIKE NO. 20:

“A. ¶ 111, c. p. 27:13-14:
21

“assigning DFC’s interest under the 

North Plaza Deed of Trust to a third 

party;

“B. ¶ 111, g. p. 27:21-22:

“releasing the security for the RCCC 

provided by . . . the Amended VLUSA 

Deed of Trust.

“C. ¶ 111, h. p. 27:24:

“releasing the security for the RCCC 

provided by . . . the Amended VLVR Deed 

of Trust

“MOTION TO STRIKE NO. 21:

“¶ 113, p. 27-28–p. 28:1 (insofar as the 

paragraphs that are subject to Motion Nos. 1-20 are 

incorporated into this paragraph):

“Boster incorporates by reference the 

allegations of paragraphs 1 through 112, 

inclusive, as though set forth in full at 

this point.

“MOTION TO STRIKE NO. 22:

“¶ 146, p. 33:3-4 (insofar as the paragraphs 

that are subject to Motion Nos. 1-20 are incorporated 

into this paragraph)[:]

“Boster incorporates by reference the 

allegations of paragraphs 1 through 145, 

inclusive, as though set forth in full at 

this point.

“MOTION TO STRIKE NO. 23:

“A. ¶ 149 (introduction), p 32-20-22 [sic]:

“DFC, Sabella, Beresford and Cambridge 

each committed wrongful acts pursuant 
22

to that agreement and design by causing 

and pursuing the release, 

extinguishment, and subordination of the 

security for the RCCC Note to Boster’s 

detriment. Specifically:

“B. ¶ 149, a. p. 33:25:

“By . . . assigning the North Plaza Deed 

of Trust to a third party,

“C. ¶ 149, a. p. 33:26:

“By . . . releasing . . . the Amended 

VLUSA Deed of Trust,

“D. ¶ 149, a. p. 33:27:

“By . . . releasing . . . the Amended VLVR 

Deed of Trust.” (Fn. omitted.) 

Sabella’s anti-SLAPP motion

Sabella’s anti-SLAPP motion sought to strike identical 

allegations as DCF’s motion, but added a motion to strike No. 24 

seeking to strike the allegation in Boster’s ninth cause of action 

for aiding and abetting in paragraph 152, which stated, “Boster 

incorporates by reference the allegations of paragraphs 1 through 

151, inclusive, as though set forth in full at this point.” 

Cambridge’s anti-SLAPP motion

Cambridge sought to strike the following allegations, which 

somewhat overlapped with the allegations that DFC and Sabella 

sought to strike:

“MOTION TO STRIKE NO. 1:

“¶ 5, p. 2:9-p. 3:3 (italicized portion only)

“5. Unbeknownst to Boster, starting in or 

around approximately 2002, Defendants 

colluded and conspired to release, 

extinguish, and subordinate the collateral 
23

securing the RCCC Note—including the 

Walker Basin Deed of Trust and other 

deeds of trust that DFC cross 

collateralized as security—through a 

series of byzantine transactions:

“* * *

“c. The Vail Lake Bankruptcy. 

In 2010, Sabella and DFC, through a 

DFC sister company named Prudent 

Finance, LLC (‘Prudent’), sold the 

DFC/Sabella Loans to Cambridge. When 

the corporations that held title to the real 

estate parcels securing those loans—

which also secured Boster’s interest by 

virtue of DFC’s cross-collateralization—

went into bankruptcy in 2012, Cambridge 

filed and eventually settled its creditor 

claims against the corporations. Under 

the 2014 settlement agreement, 

Cambridge was able to purchase certain 

real estate parcels previously owned by 

debtors, and quickly sold those parcels to 

a local water district for $49.6 million.

“MOTION TO STRIKE NO. 2:

“¶ 46, p. 13:4-6:

“46. Boster is informed and believes that 

DFC, Sabella and/or their affiliates later 

received substantial compensation from 

Cambridge and possibly others for the 

sale to those entities of the DFC/Sabella 

Loans. Boster did not share in any of this 

compensation.

“MOTION TO STRIKE NO. 3:

“¶ 54, p. 15:2-4:
24

“54. Boster is informed and believes that 

DFC and/or its affiliates later received 

substantial compensation for the $17 

million VLUSA Note, in the form of 

amounts received from Cambridge 

Financial and possibly others. Boster did 

not share in this compensation.

“MOTION TO STRIKE NO. 4:

“¶ 65, p. 17:12-15:

“74. Boster is informed and believes that 

DFC and/or its affiliates later received 

substantial compensation for the $5 

million VLVR Note, in the form of 

amounts received from Cambridge 

Financial and possibly others. Boster did 

not share in this compensation.

“MOTION TO STRIKE NO. 5:

“¶ 74, p. 19:26-28 (italicized portion only):

“74. Cambridge, Beresford, and related 

entity XD Conejo Notes, LLC (‘XD 

Conejo’), a California limited liability 

company, each filed Proofs of Claim 

against VLRC, VLUSA, and VLVR in the 

Vail Lake Bankruptcy.

“MOTION TO STRIKE NO. 6:

“¶ 76, 20:7-12 and Exhibit G (italicized portion 

only):

“76. On July 8, 2014, Cambridge,

Beresford, and XD Conejo entered into a 

settlement agreement with the debtors of 

the Vail Lake Bankruptcy, including 

VLRC, VLUSA and VLVR, wherein 

Cambridge, Beresford, and XD Conejo 
25

agreed to release their claims in the Vail 

Lake Bankruptcy. In exchange, the 

debtors agreed to sell, through a 

bankruptcy sale, the underlying real 

estate parcels securing the DFC/Sabella 

Loans (the ‘Vail Lake Parcels’) to 

Cambridge, Beresford, and XD Conejo. 

The settlement agreement is attached 

hereto as Exhibit G.

“MOTION TO STRIKE NO. 7:

“¶ 77, p. 20:13-17 (italicized portion only):

“77. On the same day, July 8, 2014, 

Cambridge, Beresford, and XD Conejo 

executed an Agreement and Escrow 

Instructions with the Rancho California 

Water District (‘RCWD’), a California 

local independent special district. Under 

that agreement, Cambridge, Beresford, 

and XD Conejo sold the Vail Lake Parcels 

and related claims in the Vail Lake 

Bankruptcy to RCWD 17 for 

$49,770,000.00 USD.

“MOTION TO STRIKE NO. 8:

“¶ 78, p. 20:18-24:

“78. Pursuant to the APSL [i.e., the 

Agreement for Purchase and Sale of 

Loans alleged at ¶¶ 67-72 SASC Exh. F], 

Cambridge made two payments to 

DFC/Sabella as follows: DFC received 

$28.88 million on August 26, 2014—as 

noted above it was DFC not Prudent who 

received the payment for the interests 

purportedly transferred by DFC to 

Prudent; Sabella received $7.4704 million 
26

on October 26, 2014. This totaled to 

$36.3504 million.

“MOTION TO STRIKE NO. 9:

“¶ 95, p. 23:20-21 (to the extent same 

incorporates by reference the paragraphs subject to 

Motion Nos. 1-8 and to the extent same is 

incorporated by reference in subsequent paragraphs):

“95. Boster incorporates by reference the 

allegations of paragraphs 1 through 94, 

inclusive, as though set forth in full at 

this point.

“MOTION TO STRIKE NO. 10:

“¶ 105, p. 26:13-14 (to the extent same 

incorporates by reference the paragraphs subject to 

Motion Nos. 1-8 and to the extent same is 

incorporated by reference in subsequent paragraphs):

“105. Boster incorporates by reference the 

allegations of paragraphs 1 through 104, 

inclusive, as though set forth in full at 

this point. 

“MOTION TO STRIKE NO. 11:

“¶ 108, p. 26:21-22 (to the extent same 

incorporates by reference the paragraphs subject to 

Motion Nos. 1-8 and to the extent same is 

incorporated by reference in subsequent paragraphs):

“108. Boster incorporates by reference the 

allegations of paragraphs 1 through 107, 

inclusive, as though set forth in full at 

this point. 

“MOTION TO STRIKE NO. 12:

“¶ 113, p. 27:28-p. 28:1 (to the extent same 

incorporates by reference the paragraphs subject to 
27

Motion Nos. 1-8 and to the extent same is 

incorporated by reference in subsequent paragraphs):

“113. Boster incorporates by reference the 

allegations of paragraphs 1 through 112, 

inclusive, as though set forth in full at 

this point.

“MOTION TO STRIKE NO. 13:

“¶ 120, p. 29:10-11 (to the extent same 

incorporates by reference the paragraphs subject to

Motion Nos. 1-8 and to the extent same is 

incorporated by reference in subsequent paragraphs):

“120. Boster incorporates by reference the 

allegations of paragraphs 1 through 119, 

inclusive, as though set forth in full at 

this point.

“MOTION TO STRIKE NO. 14:

“¶ 124, p. 29:26-p. 30:1 (italicized portion only):

“124. By purchasing the DFC/Sabella 

Loans pursuant to the Cambridge 

Agreement [i.e., presumably the APSL], 

pursuing creditor claims against VLUSA, 

VLRC, and VLVR in the Vail Lake 

Bankruptcy, settling those claims in the 

Vail Lake Bankruptcy, and selling the 

underlying Vail Lake Parcels to RCWD, 

Cambridge intentionally acted to disrupt 

Boster’s economic relationship with DFC.

“MOTION TO STRIKE NO. 15:

“¶ 129, p. 30:19-20 (to the extent same 

incorporates by reference the paragraphs subject to 

Motion Nos. 1-14 and to the extent same is 

incorporated by reference in subsequent paragraphs):
28

“129. Boster incorporates by reference the 

allegations of paragraphs 1 through 128, 

inclusive, as though set forth in full at 

this point. 

“MOTION TO STRIKE NO. 16:

“¶ 133, p. 31:6-9 (italicized portion only):

“133. By purchasing the DFC/Sabella 

Loans pursuant to the Cambridge 

Agreement, pursuing creditor claims 

against VLUSA, VLRC, and VLVR in the 

Vail Lake Bankruptcy, settling those 

claims in the Vail Lake Bankruptcy, and 

selling the underlying Vail Lake Parcels 

to RCWD, Cambridge negligently acted to 

disrupt Boster’s economic relationship 

with DFC. 

“MOTION TO STRIKE NO. 17:

“¶ 137, p. 31:23-24 (to the extent same 

incorporates by reference the paragraphs subject to

Motion Nos. 1-23 and to the extent same is 

incorporated by reference in subsequent paragraphs):

“137. Boster incorporates by reference the 

allegations of paragraphs 1 through 136, 

inclusive, as though set forth in full at 

this point.

“MOTION TO STRIKE NO. 18:

“¶ 141, p. 32:8-12 (italicized portion only):

“141. By purchasing the DFC/Sabella 

Loans pursuant to the Cambridge 

Agreement, pursuing creditor claims 

against VLUSA, VLRC, and VLVR in the 

Vail Lake Bankruptcy, settling those 

claims in the Vail Lake Bankruptcy, and 
29

selling the underlying Vail Lake Parcels 

to RCWD, Cambridge intentionally acted 

with a design to induce DFC’s breach of 

the Participation Agreement and the 

disruption of DFC’s and Boster’s 

contractual relationship.

“MOTION TO STRIKE NO. 19:

“¶ 146, p. 33:3-4 (to the extent same 

incorporates by reference the paragraphs subject to 

Motion Nos. 1-29 and to the extent same is 

incorporated by reference in subsequent paragraphs):

“146. Boster incorporates by reference the 

allegations of paragraphs 1 through 145, 

inclusive, as though set forth in full at 

this point.

“MOTION TO STRIKE NO. 20:

“¶ 147, p. 33:5-14 (insofar as same references 

Cambridge and the matters stricken under Motion 

Nos. 1-19):

“147. As a group, DFC, Beresford, and 

Cambridge agreed to a common plan 

and/or design devised by Sabella to 

deprive Boster of its rights under the 

Participation Agreement. Specifically, 

DFC, Sabella, Beresford and Cambridge 

colluded and conspired to recover 

proceeds of the collateral securing 

Boster’s interest in the Participation 

Agreement without notifying Boster, 

obtaining its consent, or sharing the 

eventual payments it received—totaling 

at least in the tens of millions of dollars—

with Boster. In short, DFC, Sabella, 

Beresford and Cambridge conspired and 
30

colluded to pursue a major real estate 

development project in the Vail 

Lake/Walker Basin area in Temecula, 

California that was substantially and 

significantly funded by Boster’s 99% 

participation in the RCCC Note, all the 

while preventing Boster from receiving 

any of the returns on its investment to 

which it was entitled under the 

Participation Agreement.

“MOTION TO STRIKE NO. 21:

“¶ 148, p 33:15-19 [sic] (insofar as same 

references Cambridge and the matters stricken under 

Motions Nos. 1-19):

“148. Thus, DFC, Sabella, Beresford and 

Cambridge agreed to a common plan 

and/or design to intentionally and/or 

negligently interfere with Boster’s 

prospective economic advantage, 

intentionally interfere with Boster and 

DFC’s contractual relations, and/or to 

fraudulently conceal DFC’s release, 

extinguishment, or subordination of the 

security for the RCCC Note.

“MOTION TO STRIKE NO. 22:

“¶ 149c, p. 33:20-22 and p. 34:11-17 (italicized 

portion only):

“149c. By purchasing the DFC/Sabella 

Loans pursuant to the Cambridge 

Agreement, pursuing creditor claims 

against VLUSA, VLRC, and VLVR in the 

Vail Lake Bankruptcy, settling those 

claims in the Vail Lake Bankruptcy, and 

selling the underlying Vail Lake Parcels 
31

to RCWD, Cambridge intentionally 

and/or negligently interfered with 

Boster’s prospective economic advantage 

and intentionally interfered with Boster 

and DFC’s contractual relations, and 

therefore committed wrongful acts 

pursuant to the agreement and design 

described above.

“MOTION TO STRIKE NO. 23:

“¶ 152, p. 35:6-7 (to the extent same 

incorporates by reference the paragraphs subject to 

Motion Nos. 1-22 and to the extent same is 

incorporated by reference in subsequent paragraphs):

“152. Boster incorporates by reference the 

allegations of paragraphs 1 through 151, 

inclusive, as though set forth in full at 

this point.

“MOTION TO STRIKE NO. 24:

“¶ 156, p. 35:21-24 (insofar as same is based on 

allegations subject to Motions Nos. 1-22):

“156. As alleged herein, Cambridge 

intentionally and/or negligently 

interfered with Boster’s prospective 

economic advantage and intentionally 

interfered with Boster and DFC’s 

contractual relations. Beresford and 

Sabella each knew of these wrongful and 

tortious acts by Cambridge, and 

substantially assisted and/or encouraged 

them.
32

“MOTION TO STRIKE NO. 25:

“A. ¶ 157a, p. 35:25-p. 36:3 (italicized portion 

only and insofar as same is based on allegations 

subject to Motions Nos. 1-24):

“a. Sabella orchestrated, and aided and 

abetted: (1) DFC’s breach of the covenant 

of good faith and fair dealing, (2) DFC’s 

conversion, (3) DFC’s fraudulent 

concealment, (4) Beresford and 

Cambridge’s intentional interference with 

prospective economic advantage, (5) 

Beresford and Cambridge’s negligent 

interference with prospective economic 

advantage, and (6) Beresford and 

Cambridge’s intentional interference with 

contractual relations.

“B. ¶ 157b, p. 36:4-8 (italicized portion only and 

insofar as same is based on allegations subject to 

Motions Nos. 1-24):

“b. Beresford aided and abetted: (1) 

DFC’s breach of the covenant of good 

faith and fair dealing, (2) DFC’s 

conversion, (3) DFC’s fraudulent 

concealment, (4) Sabella and Cambridge’s 

intentional interference with prospective 

economic advantage, (5) Sabella and

Cambridge’s negligent interference with 

prospective economic advantage, and (6) 

Sabella and Cambridge’s intentional 

interference with contractual relations.

“C. ¶ 157c, p. 36:9-13 (insofar as same is based 

on allegations subject to Motions Nos. 1-24):

“c. Cambridge aided and abetted: (1) 

DFC’s breach of the covenant of good 
33

faith and fair dealing, (2) DFC’s 

conversion, (3) DFC’s fraudulent 

concealment, (4) Beresford and Sabella’s 

intentional interference with prospective 

economic advantage, (5) Beresford and 

Sabella’s negligent interference with 

prospective economic advantage, and (6) 

Beresford and Sabella’s intentional 

interference with contractual relations.”

Beresford’s anti-SLAPP motion

Beresford challenged similar allegations relating to 

Beresford’s participation in the Vail Lake bankruptcy, and added 

challenges to the allegations surrounding Beresford’s 

participation in the Walker Basin tax sale.9

9 Beresford asserts that in suing Beresford regarding events 

surrounding the Vail Lake bankruptcies, Boster has sued the 

wrong entity. Beresford claims that a different entity, nonparty 

Beresford Development, LLC, was the entity involved in the 

purchase of the Vail Lake liens and the sale to RCWD. In its 

motion to strike, Beresford argued that it had standing to bring 

the motion, even though it was not the “Beresford” party that 

participated in the Vail Lake bankruptcies. Under the second 

prong of the anti-SLAPP test, Beresford argued that it was not 

the entity that committed the allegedly wrongful act of 

participating in the bankruptcy. In response, Boster asserts that 

it will propound discovery regarding the Beresford entities, and, 

if the facts warrant it, will in due course request that the 

pleadings be corrected according to proof. Boster notes that the 

SASC asserts that the entities involved with the Vail Lake 

properties were “developer and defendant Beresford Properties, 

LLC . . . and its affiliate Beresford Development, LLC, both 

California Corporations.” Boster asserts that this possible 
34

The following are the allegations Beresford sought to strike 

that did not overlap with Cambridge’s:10

“MOTION TO STRIKE NO. 5:

“¶ 83, p. 21:19-24:

“83. Upon information and belief, the 

property tax owned on the real estate 

parcels encumbered by the Walker Basin 

Deed of Trust (the ‘Walker Basin 

Parcels’) became delinquent in 

approximately 2012. In or around 

February 2012, DFC received notice from 

the Riverside County Assessor’s Office 

that the Walker Basin Parcels would be 

sold at a March 20, 2012 county tax sale 

due to their tax delinquent status. 

Individuals acting on behalf of Sabella 

and DFC informed Beresford and 

Cambridge of the upcoming tax sale.

“MOTION TO STRIKE NO. 6:

“¶ 85, 21:27-p. 28:2:

“85. On March 20, 2012, the Walker 

Basin Parcels were sold at the County of 

Riverside, Office of the Treasurer-Tax 

Collector’s Sale of Tax Defaulted 

Property. The winning bidder on the 

Walker Basin Parcels was Beresford—

which, upon information and belief, 

pleading error does not justify granting an anti-SLAPP motion. 

We agree and decline to discuss this point further.

10 Beresford concedes that there were typographical errors in 

its motion where it sought to strike italicized portions of a 

paragraph where there were no italics.
35

purchased the Walker Basin Parcels for 

approximately $3,371,000 USD.

“MOTION TO STRIKE NO. 7:

“¶ 86, p. 22:3-67 (italicized portion only) [sic]:

“86. A May 8, 2000 appraisal of the same 

Walker Basin Parcels prepared for DFC 

valued the Walker Basin Parcels at 

$19,600,000 USD. Thus, the purchase 

price Beresford was able to obtain for the 

Walker Basin Parcels at the March 20, 

2012 tax sale represented a significant 

discount on the value of the property.

“MOTION TO STRIKE NO. 8:

“¶ 87, p. 22:7-8:

“87. The tax sale had the effect of 

extinguishing the Walker Basin Deed of 

Trust—i.e., Boster’s lien on the Walker 

Basin Parcels.

“MOTION TO STRIKE NO. 9:

“¶ 89, p. 22:12-16 (italicized portion only) [sic]:

“89. Upon information and belief, 

Cambridge and Beresford knew at least 

as early as 2015 that the 2012 tax sale 

had the effect of extinguishing the 

Walker Basin Deed of Trust. Further, 

Boster believes and therefore alleges that 

Cambridge and Beresford knew at the 

time of the tax sale that the sale would 

extinguish the Walker Basin Deed of 

Trust and with it, Boster’s lien on the 

Walker Basin Parcels.
36

“MOTION TO STRIKE NO. 10:

“¶ 90, p. 22: 17-23 (italicized portion only) [sic]:

“90. Upon information and belief, 

Beresford is still the current owner of the 

Walker Basin Parcels. In or around 2016, 

Beresford submitted a project proposal to 

the Riverside County Planning 

Department General Plan Advisory 

Committee to develop the Walker Basin 

Parcels, requesting, among other things, 

that the area be redesigned from ‘Open 

Space’ to ‘Community Development,’ and 

that the land use designation for at least 

some of the Walker Basin Parcels be 

changed from ‘Recreation’ to ‘Commercial 

[]Retail.’ Upon information and belief, 

Beresford continues to pursue this 

development project on the Walker Basin 

Parcels. [¶] . . . [¶]

“MOTION TO STRIKE NO.16:

“¶ 125, p. 30:2-6:

“125. By pursuing creditor claims against 

VLUSA, VLRC, and VLVR in the Vail 

Lake Bankruptcy, settling those claims in 

the Vail Lake Bankruptcy, selling the 

underlying Vail Lake Parcels to RCWD, 

and purchasing the Walker Basin Parcels 

at the March 20, 2012 Riverside County 

tax sale, Beresford intentionally acted to 

disrupt Boster’s economic relationship 

with DFC. 

“MOTION TO STRIKE NO.17:

“¶ 125, p. 30:2-6:
37

“125. By pursuing creditor claims against 

VLUSA, VLRC, and VLVR in the Vail 

Lake Bankruptcy, settling those claims in 

the Vail Lake Bankruptcy, selling the 

underlying Vail Lake Parcels to RCWD, 

and purchasing the Walker Basin Parcels 

at the March 20, 2012 Riverside County 

tax sale, Beresford intentionally acted to 

disrupt Boster’s economic relationship 

with DFC. [Sic.] [¶] . . . [¶]

“MOTION TO STRIKE NO. 19:

“¶ 127, P. 30:9-12 (italicized portion only) [sic]:

“127. As a proximate result of Sabella, 

Cambridge and Beresford’s actions 

described above, Boster suffered damages 

in an amount subject to proof at trial, 

insofar as the security for its interest in 

the Participation Agreement was 

released, extinguished or subordinated, 

and it never received payment stemming 

from these proceeds of collateral.

[¶] . . . [¶]

“MOTION TO STRIKE NO. 21:

“¶ 134, p 31:10-13 [sic]:

“134. By pursuing creditor claims against 

VLUSA, VLRC, and VLVR in the Vail 

Lake Bankruptcy, settling those claims in 

the Vail Lake Bankruptcy, selling the 

underlying Vail Lake Parcels to RCWD, 

and purchasing the Walker Basin Parcels 

at the March 20, 2012 Riverside County 

tax sale, Beresford negligently acted to 

disrupt Boster’s economic relationship 

with DFC.
38

“MOTION TO STRIKE NO. 22:

“¶ 134. p 31:10-13 [sic]:

“134. By pursuing creditor claims against 

VLUSA, VLRC, and VLVR in the Vail 

Lake Bankruptcy, settling those claims in 

the Vail Lake Bankruptcy, selling the 

underlying Vail Lake Parcels to RCWD, 

and purchasing the Walker Basin Parcels 

at the March 20, 2012 Riverside County 

tax sale, Beresford negligently acted to 

disrupt Boster’s economic relationship 

with DFC. [¶] . . . [¶]

“MOTION TO STRIKE NO. 24:

“¶ 142, P. 32:13-17 [sic]:

“142. By pursuing creditor claims against 

VLUSA, VLRC, and VLVR in the Vail 

Lake Bankruptcy, settling those claims in 

the Vail Lake Bankruptcy, selling the 

underlying Vail Lake Parcels to RCWD, 

and purchasing the Walker Basin Parcels 

at the March 20, 2012 Riverside County 

tax sale, Beresford intentionally acted 

with a design to induce DFC’s breach of 

the Participation Agreement and the 

disruption of DFC’s and Boster’s 

contractual relationship. 

“MOTION TO STRIKE NO. 25:

“¶ 142, P. 32:13-17 [sic]:

“142. By pursuing creditor claims against 

VLUSA, VLRC, and VLVR in the Vail 

Lake Bankruptcy, settling those claims in 

the Vail Lake Bankruptcy, selling the 

underlying Vail Lake Parcels to RCWD, 
39

and purchasing the Walker Basin Parcels 

at the March 20, 2012 Riverside County 

tax sale, Beresford intentionally acted 

with a design to induce DFC’s breach of 

the Participation Agreement and the 

disruption of DFC’s and Boster’s 

contractual relationship. [¶] . . . [¶]

“MOTION TO STRIKE NO. 29:

“¶ 149, p 33:20-p. 34:24 [sic]:

“149. DFC, Sabella, Beresford and 

Cambridge each committed wrongful acts 

pursuant to that agreement and design 

by causing and pursuing the release, 

extinguishment, and subordination of the 

security for the RCCC Note to Boster’s 

detriment. Specifically:

“a. By allowing the Walker Basin 

Deed of Trust to be extinguished and 

released in a March 2012 tax sale, 

partially releasing and subordinating the 

North Plaza Deed of Trust, assigning the 

North Plaza Deed of Trust to a third 

party, releasing the VLRC Deed of Trust, 

releasing the VLUSA Deed of Trust and 

the Amended VLUSA Deed of Trust, and 

releasing the VLVR Deed of Trust and 

the Amended VLVR Deed of Trust—all 

without once notifying Boster or 

obtaining its consent—DFC breached the 

Participation Agreement, breached the 

covenant of good faith and fair dealing, 

converted Boster’s interest in the 

Participation Agreement, and 

fraudulently concealed these actions and 

their effects from Boster. Therefore, DFC 
40

committed wrongful acts pursuant to the 

agreement and design described above.

“b. By orchestrating each of the 

other Defendants’ roles in the APSL 

transaction and the Walker Basin Tax 

Sale, and by using the security for the 

RCCC Note provided by the VLUSA Deed 

of Trust, VLRC Deed of Trust, and VLVR 

Deed of Trust to provide security for the 

Sabella Loans in which Boster had no 

participation, Sabella intentionally 

and/or negligently interfered with 

Boster’s prospective economic advantage 

and intentionally interfered with Boster 

and DFC’s contractual relations, and 

therefore committed wrongful acts 

pursuant to the agreement and design 

described above. 

“c. By purchasing the DFC/Sabella 

Loans pursuant to the Cambridge 

Agreement, pursuing creditor claims 

against VLUSA, VLRC, and VLVR in the 

Vail Lake Bankruptcy, settling those 

claims in the Vail Lake Bankruptcy, and 

selling the underlying Vail Lake Parcels 

to RCWD, Cambridge intentionally 

and/or negligently interfered with 

Boster’s prospective economic advantage 

and intentionally interfered with Boster 

and DFC’s contractual relations, and 

therefore committed wrongful acts 

pursuant to the agreement and design 

described above.

“d. By pursuing creditor claims 

against VLUSA, VLRC, and VLVR in the 
41

Vail Lake Bankruptcy, settling those 

claims in the Vail Lake Bankruptcy, 

selling the underlying Vail Lake Parcels 

to RCWD, and purchasing the Walker 

Basin Parcels at the March 20, 2012 

Riverside County tax sale, Beresford 

intentionally and/or negligently 

interfered with Boster’s prospective 

economic advantage and intentionally 

interfered with Boster and DFC’s 

contractual relations, and therefore 

committed wrongful acts pursuant to the 

agreement and design described above.

“MOTION TO STRIKE NO. 30:

“¶ 149, p 33:20-p. 34:24 [sic]:

“149. DFC, Sabella, Beresford and 

Cambridge each committed wrongful acts 

pursuant to that agreement and design 

by causing and pursuing the release, 

extinguishment, and subordination of the 

security for the RCCC Note to Boster's 

detriment. Specifically:

“a. By allowing the Walker Basin 

Deed of Trust to be extinguished and 

released in a March 2012 tax sale, 

partially releasing and subordinating the 

North Plaza Deed of Trust, assigning the 

North Plaza Deed of Trust to a third 

party, releasing the VLRC Deed of Trust, 

releasing the VLUSA Deed of Trust and 

the Amended VLUSA Deed of Trust, and 

releasing the VLVR Deed of Trust and 

the Amended VLVR Deed of Trust—all 

without once notifying Boster or 

obtaining its consent—DFC breached the 
42

Participation Agreement, breached the 

covenant of good faith and fair dealing, 

converted Boster’s interest in the 

Participation Agreement, and 

fraudulently concealed these actions and 

their effects from Boster. Therefore, DFC 

committed wrongful acts pursuant to the 

agreement and design described above.

“b. By orchestrating each of the 

other Defendants' roles in the APSL 

transaction and the Walker Basin Tax 

Sale, and by using the security for the 

RCCC Note provided by the VLUSA Deed 

of Trust, VLRC Deed of Trust, and VLVR 

Deed of Trust to provide security for the 

Sabella Loans in which Boster had no 

participation, Sabella intentionally 

and/or negligently interfered with 

Boster’s prospective economic advantage 

and intentionally interfered with Boster 

and DFC’s contractual relations, and 

therefore committed wrongful acts 

pursuant to the agreement and design 

described above.

“c. By purchasing the DFC/Sabella 

Loans pursuant to the Cambridge 

Agreement, pursuing creditor claims 

against VLUSA, VLRC, and VLVR in the 

Vail Lake Bankruptcy, settling those 

claims in the Vail Lake Bankruptcy, and 

selling the underlying Vail Lake Parcels 

to RCWD, Cambridge intentionally 

and/or negligently interfered with 

Boster’s prospective economic advantage 

and intentionally interfered with Boster 

and DFC’s contractual relations, and 
43

therefore committed wrongful acts 

pursuant to the agreement and design 

described above.

“d. By pursuing creditor claims 

against VLUSA, VLRC, and VLVR in the 

Vail Lake Bankruptcy, settling those 

claims in the Vail Lake Bankruptcy, 

selling the underlying Vail Lake Parcels 

to RCWD, and purchasing the Walker 

Basin Parcels at the March 20, 2012 

Riverside County tax sale, Beresford 

intentionally and/or negligently 

interfered with Boster’s prospective 

economic advantage and intentionally 

interfered with Boster and DFC’s 

contractual relations, and therefore 

committed wrongful acts pursuant to the 

agreement and design described above. 

[Sic.] [¶] . . . [¶]

“MOTION TO STRIKE NO. 32:

“¶ 155, p. 35:17-20 (to the extent based on 

actions by Beresford in the Vail Lake Bankruptcy):

“• 155. As alleged herein, Beresford 

intentionally and/or negligently interfered with 

Boster’s prospective economic advantage and 

intentionally interfered with Boster and DFC’s 

contractual relations. Sabella and Cambridge each 

knew of these wrongful and tortious acts by 

Beresford, and substantially assisted and/or 

encouraged them.

“MOTION TO STRIKE NO. 33:

“¶ 155, p. 35:17-20 (to the extent based on 

actions by Beresford in the Vail Lake Bankruptcy):
44

“•155. As alleged herein, Beresford 

intentionally and/or negligently interfered with 

Boster’s prospective economic advantage and 

intentionally interfered with Boster and DFC’s 

contractual relations. Sabella and Cambridge each 

knew of these wrongful and tortious acts by 

Beresford, and substantially assisted and/or 

encouraged them. [Sic.] [¶] . . . [¶]

“MOTION TO STRIKE NO. 36:

“¶ 160, p. 36:21-22:

“160. Boster incorporates by reference the 

allegations of paragraphs 1 through 159, 

inclusive, as though set forth in full at 

this point.

“MOTION TO STRIKE NO. 37:

“¶ 163, p. 37:1-5:

“163. Thus, the RCCC Note, in 

conjunction with the Participation 

Agreement, indicate an intention on the 

part of Boster, DFC, and RCCC to make 

the underlying Walker Basin Parcels 

security for RCCC’s debt under the RCCC 

Note and security for DFC’s obligations 

under the Participation Agreement, 

creating an equitable lien upon the 

Walker Basin Parcels in Boster’s favor.

“MOTION TO STRIKE NO. 38:

“¶ 164, p. 37:6-15:

“164. In contravention of that intent, 

DFC, Sabella, Beresford and the 

principals of Cambridge agreed and 

conspired to allow the Walker Basin 

Parcels to be sold at the March 20, 2012 
45

Riverside County tax sale due to their 

delinquent tax status so that Beresford 

could purchase the Parcels at a 

significant discount relative to their 

market value. Despite having actual 

knowledge of Boster’s interest in the 

Walker Basin Parcels immediately prior 

to the tax sale, DFC never told Boster 

about the sale and in fact, knowingly 

allowed Boster’s legal lien on the Parcels 

to be extinguished at the tax sale. Nor 

did DFC ever inform Boster about the tax 

sale after it had occurred—despite DFC’s 

attempts to collect the excess proceeds of 

the sale from Riverside County after 

Boster sent its second demand letter 

regarding the Participation 

Agreement and after the original 

complaint in this action was filed.

“MOTION TO STRIKE NO. 39:

“¶ 165, p. -37:16-22 [sic]:

“165. In the years since Boster’s legal lien 

on the Walker Basin Parcels was 

extinguished at the tax sale, Beresford 

has continued its efforts to build a major 

residential development at the site, 

applying for and receiving from the 

County of Riverside approval to develop 

multiple single-family lots on the 

approximately 70 acres of land that 

comprise the Walker Basin Parcels. 

Beresford, and upon information and 

belief, its business partners DFC, 

Sabella, and Cambridge, stand to 

substantially profit from the development 
46

of the Walker Basin Parcels upon 

completion of the project.”

Boster opposed the motions. 

Trial court decision

The trial court heard argument on the motions over the 

span of four days. All four motions were denied in their entirety.

As to DFC’s anti-SLAPP motion, the trial court denied it as 

untimely. The court found that the allegations that DFC sought 

to strike were contained in previous iterations of the complaint, 

and counsel chose not to file an anti-SLAPP motion.

The court further found that appellants’ motions were 

procedurally flawed. While the court agreed that Baral v. Schnitt 

(2016) 1 Cal.5th 376 (Baral) allows a party to move to strike 

parts of a count, it found that the Baral court also held that 

seeking to strike piecemeal allegations is only appropriate if such 

allegations “amount to a ‘cause of action’ in the sense that it is 

alleged to justify a remedy.” (Id. at p. 395.) The trial court found 

that the description in Baral did not fit the allegations 

defendants sought to strike in their motions. The court found 

that the motions set forth an improper “‘line item veto’” that was 

confusing and ambiguous.

The court found that the motions also failed substantively 

under the first prong of the anti-SLAPP analysis.11 Appellants 

argued that they met the first prong of the anti-SLAPP analysis 

because respondent’s allegations referred to matters that were 

before the bankruptcy court. However, the court found that 

respondent persuasively countered that argument by asserting 

11 The court applied a similar analysis as to each of the four 

motions to strike.
47

that the bankruptcies “were merely ‘steps’ or ‘devices’” through 

which appellants “sought to accomplish an improper purpose.” 

Further, respondent was not complaining about appellants’ right 

to petition or engage in free speech, but the outcome of those 

proceedings. For example, “that DFC allocated a multimillion 

dollar payout in a particular way (North Plaza) and released 

Boster’s security without Boster’s knowledge (Vail Lake).”

Because appellants’ motions failed on the first prong of the 

anti-SLAPP analysis, the court found it need not reach the 

second prong. However, as to DFC’s and Sabella’s motions, the 

court noted that if it were to reach the second prong of the 

analysis, it would find that respondent set forth a prima facie 

case sufficient to survive the second prong analysis.

Appeals and consolidation

On June 30, 2021, appellants filed four separate notices of 

appeal. On March 14, 2002, this court ordered the appeals 

consolidated.

DISCUSSION

I. Applicable law and standard of review

A. General law

Section 425.16 was enacted “to provide for the early 

dismissal of unmeritorious claims filed to interfere with the valid 

exercise of the constitutional rights of freedom of speech and 

petition for the redress of grievances.” (Club Members for an 

Honest Election v. Sierra Club (2008) 45 Cal.4th 309, 315.) 

Subdivision (b)(1) of section 425.16 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 California Constitution in 
48

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.”

Determining whether section 425.16 bars a given cause of 

action requires a two-step analysis. (Navellier v. Sletten (2002) 

29 Cal.4th 82, 88 (Navellier).) First, the court must decide 

whether the party moving to strike a cause of action has made a 

threshold showing that the cause of action “aris[es] from any 

act . . . in furtherance of the [moving party’s] right of petition or 

free speech.” (§ 425.16, subd. (b)(1); see Navellier, supra, at 

p. 88.) “‘A cause of action “arising from” [a] defendant’s litigation 

activity may appropriately be the subject of a section 425.16 

motion to strike.’ [Citations.] ‘Any act’ includes communicative 

conduct such as the filing, funding, and prosecution of a civil 

action.” (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056.)

In determining whether the moving party has met its 

burden of establishing that the challenged allegations arise from 

protected activity, the court 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 v. 

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

1061 (Park).) A claim may be stricken under section 425.16 “‘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 is asserted.’” (Bonni v. St. Joseph 

Health System (2021) 11 Cal.5th 995, 1014 (Bonni).) “‘Allegations 

of protected activity that merely provide context, without 

supporting a claim for recovery, cannot be stricken under the 

anti-SLAPP statute.’” (Id. at p. 1012, quoting Baral, supra, 1 
49

Cal.5th at p. 394.) “‘If the core injury-producing conduct upon 

which the plaintiff’s claim is premised does not rest on protected 

speech or petitioning activity, collateral or incidental allusions to 

protected activity will not trigger application of the anti-SLAPP 

statute.’” (Area 51 Productions, Inc. v. City of Alameda (2018) 20 

Cal.App.5th 581, 594 (Area 51).) Thus, “[i]t is insufficient for 

protected activity to be ‘a step leading to some different act for 

which liability is asserted’ . . . .” (Wong v. Wong (2019) 43 

Cal.App.5th 358, 365 (Wong).)

Generally, claims arising from actions that were taken as 

part of, or related to, a bankruptcy proceeding may be stricken 

under the anti-SLAPP statute. (Crossroads Investors, L.P. v. 

Federal National Mortgage Assn. (2017) 13 Cal.App.5th 757, 765-

766 (Crossroads).) In Crossroads, the parties agreed that the 

plaintiffs’ claims arose from the defendant’s acts of failing to 

provide timely and accurate accounting requested through the 

bankruptcy proceeding; refusals to accept the plaintiff’s tenders 

of the amount required to cure the default, where the tenders 

were also made in connection with an issue under consideration 

by the bankruptcy court; and statements made as part of an 

effort to settle the bankruptcy action. (Id. at pp. 777-785.) Thus, 

where actions taken as a part of a bankruptcy proceeding supply 

the elements of a plaintiff’s claim, the claim arises from protected 

activity and is subject to being stricken under the anti-SLAPP 

provision. (Id. at p. 781; see Cheveldave v. Tri Palms Unified 

Owners Assn. (2018) 27 Cal.App.5th 1202, 1208-1214 [complaint 

was based on protected activity where the act complained of was 

the act of entering into a settlement agreement].)

If the court finds that a defendant has made the requisite 

threshold showing that the claim is based on protected activity, 
50

the burden then shifts to the plaintiff to demonstrate a 

“probability that the plaintiff will prevail on the claim.” 

(§ 425.16, subd. (b)(1); see Navellier, supra, 29 Cal.4th at p. 88.) 

In order to demonstrate a probability of prevailing, a party 

opposing a special motion to strike under section 425.16 “‘“must 

demonstrate that the complaint is both legally sufficient and 

supported by a sufficient prima facie showing of facts to sustain a 

favorable judgment if the evidence submitted by the plaintiff is 

credited.”’” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 

Cal.4th 728, 741.)

A trial court’s order denying a motion under section 425.16 

is reviewed de novo. (Park, supra, 2 Cal.5th at p. 1067.)

B. Law regarding mixed allegations

It is the moving party’s burden to establish that the 

challenged allegations or claims arise from protected activity in 

which the defendant has engaged. (Bonni, supra, 11 Cal.5th at 

p. 1009.) Where a complaint alleges both protected and 

unprotected conduct, the moving defendant must “identify the 

acts alleged in the complaint that it asserts are protected and 

what claims for relief are predicated on them.” (Id. at p. 1010.) 

The court should then “examine whether those acts are protected 

and supply the basis for any claims.” (Ibid.)

Where allegations surrounding court proceedings are 

alleged as part of a larger plan to deprive a plaintiff of assets, 

they are not properly stricken under the anti-SLAPP statute. 

(Gaynor v. Bulen (2018) 19 Cal.App.5th 864, 869-870 (Gaynor).) 

In Gaynor, the plaintiffs, who were beneficiaries of a trust, 

alleged breach of fiduciary duty against a de facto trustee, 

claiming that the defendant took actions that would wrongfully 

benefit the senior beneficiaries of the trust to the detriment of 
51

junior beneficiaries. (Id. at p. 879.) The plaintiffs alleged some 

wrongful acts that were clearly not protected under section 

425.16, such as “unfair and self-serving income-distribution

decisions, . . . improper transfer of . . . property . . . , [and] 

plan[ning] to alter the Trust provisions in a manner that would 

benefit only the senior beneficiaries.” (Gaynor, at p. 879.) 

However, the defendant sought to strike paragraphs of the 

petition alleging that the trustees wasted assets on probate 

litigation. (Ibid.) The Gaynor court denied the defendant’s 

special motion to strike, finding that “the allegation that Trust 

assets were improperly used on the probate litigation was not a 

separate legal claim, but merely reflected the manner in which 

the Cotrustees and [defendant] implemented their alleged 

wrongful plan to alter the trustee succession rules to favor their 

own interests.” (Ibid.)

Thus, appellants’ burden is to show that Boster’s 

allegations concerning the bankruptcies (and tax sale) form the 

elements of the claims against them. (Crossroads, supra, 13 

Cal.App.5th at p. 781.) Where such allegations merely form part 

of a larger plan to deprive the plaintiff of assets, they are not 

subject to being stricken under section 425.16. (Gaynor, supra, 

19 Cal.App.5th at pp. 879-880.)

We note, as Boster points out, that appellants make no 

effort to show that Boster’s allegations form the elements of the 

causes of action alleged against them. Appellants have not set 

forth the elements of the individual causes of action, nor 

attempted to explain how the allegations concerning the 

bankruptcies form the essential elements of these claims. For 

this reason alone, appellants have failed to meet their burden 

under the first prong of section 425.16. However, as set forth 
52

below, we find that Boster’s claims do not arise from appellants’

actions in the bankruptcy proceedings, but instead, those 

allegations merely provide context for the greater scheme alleged. 

In the greater scheme alleged, Boster contends that appellants 

engaged in transactions both prior to and following the 

bankruptcies and tax sale, which were designed to evade Boster’s 

claims as a creditor of DFC with a financial interest in the 

underlying properties.

II. Scope of review

DFC does not challenge the trial court’s decision that DFC 

could not specially move to strike allegations from the causes of 

action that were previously pled against DFC. Generally, an 

anti-SLAPP motion must be brought within 60 days of service of 

the complaint. (§ 425.16, subd. (f).) Because Boster asserted 

most of its claims against DFC in previous iterations of the 

complaint, DFC’s special motion to strike is untimely as to those 

claims. However, DFC argues that its motion timely attacked the 

claims incorporated into the newly pled eighth cause of action for 

civil conspiracy. A defendant may “attack newly pled legal 

claims, whether or not based on existing allegations of protected 

activity.” (Starview Property, LLC v. Lee (2019) 41 Cal.App.5th 

203, 212.) While Boster does not contest that DFC’s motion to

strike is timely as to the eighth cause of action, Boster argues 

that DFC cannot specially move to strike the allegations from the 

previously pleaded causes of action. Boster contends that we 

should consider DFC’s arguments only as they pertain to the new 

factual allegations underpinning the eighth cause of action.

DFC points out that the eighth cause of action for civil 

conspiracy—a new cause of action alleged against all four 

appellants—contains a catch-all allegation stating, “Boster 
53

incorporates by reference the allegations of paragraphs 1 through 

145, inclusive, as though set forth in full at this point.” Thus, 

DFC argues, the previously pled allegations were pled anew with 

this new cause of action added in the most recent iteration of the 

complaint. DFC argues that its motion was timely as to this 

cause of action, thus all of the allegations previously pled, and 

incorporated into this new cause of action, must be considered.

We find that we need not address the trial court’s decision 

regarding timeliness as to DFC concerning the eighth cause of 

action because appellants’ motions fail at the first prong of the 

anti-SLAPP analysis.

We therefore address all the contested allegations. We 

organize the analysis, as appellants have done, by the triggering 

event.12

12 Appellants point out that the trial court also held that their 

motions were procedurally improper, as they challenged only 

“bits and pieces of various allegations” in the SASC. The court 

expressed confusion as to what exactly the appellants were 

seeking to strike, noting that the motions were “nonsensical and 

impossible to rule upon.” Appellants argue that the trial court 

erred in denying the four motions on procedural grounds. While 

Baral, supra, 1 Cal.5th at page 395 permits a defendant to strike 

allegations of protected conduct within a certain cause of action, 

those allegations of protected activity must be “asserted as 

grounds for relief.” As set forth below in detail, the portions of 

the SASC that appellants sought to strike did not form the basis 

for any claim for relief, nor have appellants argued that they did. 

Therefore the court’s dismissal of the motions as improper “lineitem veto[s]” was not in error in the context of this case. 

However, we decline address the procedural issue further, and 

instead affirm the trial court based on appellants’ failure to show 
54

III. The bankruptcies

A. North Plaza allegations

The North Plaza allegations concern DFC and Sabella. The 

SASC alleges that, years before the North Plaza involuntary 

bankruptcy, DFC recorded a partial release of the North Plaza 

deed of trust which negated Boster’s security interest, without 

informing Boster or sharing any proceeds of collateral obtained 

from the release. Subsequently, DFC recorded a correction of the 

partial release of the North Plaza deed of trust with respect to 

only a portion of this property—again without Boster’s knowledge 

or consent. In addition, before the bankruptcy proceedings 

began, DFC and Sabella increased their direct loans to North 

Plaza that formed the basis for their claim 16 in the bankruptcy 

proceedings and took priority over Boster’s interest.

Thus, Boster’s claims against DFC and Sabella regarding 

the North Plaza deed of trust arise from appellants’ actions to 

subordinate and deprioritize Boster’s interest in the underlying 

property—in essence, their actions to avoid repaying Boster’s 

investment. After DFC and Sabella allegedly began this scheme 

to ensure that Boster did not recoup on its investment, North 

Plaza was forced into involuntary bankruptcy. DFC filed claims 

and received $10.5 million pursuant to a settlement with the 

bankruptcy trustee. In return, DFC assigned to the trustee all of 

its interest under the North Plaza deed of trust. DFC did not pay 

any of the $10.5 million settlement to Boster.

Pursuant to these allegations, DFC’s participation in the 

North Plaza bankruptcy itself is not the wrong complained of. 

that the alleged protected activity at issue gave rise to any of 

Boster’s claims for relief. (Ibid.)
55

Boster does not fault DFC for filing claims in the bankruptcy, nor 

for settling with the bankruptcy trustee. Instead, Boster’s claims 

against DFC for breach of contract, breach of the covenant of 

good faith and fair dealing, conversion, fraudulent concealment, 

civil conspiracy, and equitable mortgage are based on appellants’ 

acts of allegedly derogating Boster’s interest in the collateral at 

issue, not informing Boster of the deprioritization of its collateral, 

and not paying Boster any portion of the proceeds appellants 

ultimately received. Thus, the allegations concerning the North 

Plaza bankruptcy are not properly stricken under section 425.16. 

(Bonni, supra, 11 Cal.5th at p. 1014 [allegations may be stricken 

“‘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 is asserted’”].)

Optional Capital, Inc. v. DAS Corp. (2014) 222 Cal.App.4th 

1388 is instructive. In Optional Capital, the plaintiff (Optional) 

alleged a conspiracy among the defendants to take control of 

Optional and use their fiduciary positions to loot the company 

and manipulate its stock. (Id. at p. 1393.) Various legal 

proceedings commenced, and forfeiture proceedings led to the 

Swiss government freezing Optional’s funds held in a Credit 

Suisse Bank in Geneva, Switzerland. (Id. at p. 1394.) The 

defendants filed an anti-SLAPP motion arguing that Optional’s 

complaint for conversion and fraudulent conveyance arose from 

the settlement of litigation that resulted in the release of the 

funds from Credit Suisse Bank, and the settlement was protected 

activity within the meaning of section 425.16. (Optional Capital,

at p. 1396.) The trial court agreed, but the Optional Capital 

court reversed, finding that Optional’s claims did not arise from 

protected activity. (Id. at pp. 1398-1399.) The court explained: 
56

“Here, Optional’s complaint seeks to recover monies looted from it 

and wrongfully obtained by [defendants] from the Credit Suisse 

account. The only connection between the settlement in the . . . 

superior court litigation and Optional’s claims here is that the 

settlement was used as a device to permit [defendants] to 

persuade the Swiss government to release the funds, thereby 

depriving Optional of funds to satisfy its judgment.” (Id. at 

pp. 1400-1401.)

Similarly, here, Boster seeks to recover money owed to it 

through the PA, which, Boster claims, was wrongfully converted 

through the various transactions alleged. The North Plaza 

bankruptcy was a collateral event that occurred during the 

defendants’ scheme, which allowed DFC and Sabella to receive 

money on subsequent loans they made in derogation of Boster’s 

interest. However, DFC’s acts of filing claims in the bankruptcy 

and settling with the bankruptcy trustee, do not form the basis of 

any of Boster’s claims. Instead, DFC and Sabella’s allegedly 

wrongful acts, including making senior loans, receiving money 

without compensating Boster under the PA, and failing to inform 

Boster of the events that derogated its interest—all of which were 

allegedly in breach of the PA—form the basis of Boster’s claims.

O&C Creditors Group, LLC v. Stephens & Stephens XII, 

LLC (2019) 42 Cal.App.5th 546 (O&C Creditors) is 

distinguishable. O&C Creditors involved a settlement between 

certain lawyers and their insurance company in an insurance 

coverage dispute. The written settlement agreement “expressly 

determined the allocation of the settlement proceeds.” (Id. at 

p. 555.) The trial court granted an anti-SLAPP motion in 

subsequent litigation that targeted two causes of action: “a claim 

for breach of trust against [the insurance company for] failing to 
57

advise the bankruptcy court of the . . . settlement and ‘secretly 

disbursing’ the proceeds of the settlement” and a claim for 

interference with prospective business relations based on the 

same conduct. (Id. at p. 559.) Under these circumstances, the 

O&C Creditors court found that the challenged claims “‘rely on’ 

and arise from the allegedly wrongful acts of settling the case . . . 

and thereafter effectuating that settlement . . . in accordance 

with the protected agreement.” (Id. at p. 573.) The O&C 

Creditors court thus agreed that “the challenged [claims] are 

founded upon and would not exist in absence of the protected 

settlement activity; the [claims] thus ‘“arise from”’ and are 

‘“based on”’ the settlement agreement, making them subject to 

the provisions of the anti-SLAPP statute.” (Id. at p. 567.)13

Here, in contrast, Boster’s claims would exist in the 

absence of appellants’ actions in the bankruptcy proceedings. 

Boster’s allegations regarding appellants’ alleged wrongful 

13 We reject appellants’ argument that Boster’s prong 1 

arguments that the actions of appellants in the bankruptcies 

were wrongful is, in fact, a prong 2 argument going to the merits 

of Boster’s causes of action. In support of this argument, 

appellants cite O&C Creditors, supra, 42 Cal.App.5th at page 

574, which stated that “O&C Creditors’ argument—that crossdefendants agreed to an improper settlement—goes to the merits 

and, thus, is ‘“an issue which [it] must raise and support in the 

context of the discharge of [its] burden to provide a prima facie 

showing of the merits of [its] case.”’” As set forth above, unlike in 

O&C Creditors, Boster’s claims are not based on protected 

activity. Boster is not suing appellants for their act of settling 

with the bankruptcy trustee. Instead, Boster alleges appellants’ 

actions in the bankruptcy proceedings were part of a larger 

scheme to deprive Boster of security interests. Thus, we do not 

reach prong 2 of the test.
58

actions begin years prior to the bankruptcy, when appellants 

released the collateral for Boster’s loan, reinstated it years later 

as to only a small parcel of the property, and increased their 

separate loans in derogation of Boster’s interest. The actions 

appellants took in North Plaza’s involuntary bankruptcy are not, 

alone, the basis for Boster’s claims. They were merely steps that 

appellants took to carry out the larger scheme to deprive Boster 

of money to which it was allegedly entitled.

“‘[C]ollateral or incidental allusions to protected activity 

will not trigger application of the anti-SLAPP statute.’” (Area 51, 

supra, 20 Cal.App.5th at p. 594.) Appellants’ alleged activity in 

the bankruptcy proceedings were merely “‘step[s] leading to some 

different act for which liability is asserted.’” (Wong, supra, 43 

Cal.App.5th at p. 365.) As such, the anti-SLAPP motions brought 

concerning allegations surrounding the North Plaza bankruptcy

were properly denied under the first prong of the anti-SLAPP 

analysis.

B. Vail Lake allegations

Appellants also assert that Boster asserted claims that 

were “inextricably tied” to DFC’s actions in the Vail Lake 

bankruptcy. Again, appellants do not make any effort to assert 

which specific elements of which specific causes of action these 

bankruptcy-related actions formed. Instead, they argue generally 

that the August 2014 reconveyances of the VLUSA and VLVR 

liens were “part and parcel of DFC’s acquiescence in the 

treatment of these liens as part of the claims process that led the 

August 8, 2014, bankruptcy court order . . . approving the sale of 

the Vail Lake properties secured by the DFC/Sabella loans, free 

and clear of all liens, including the Boster-claimed VLUSA and 

VLVR Junior Liens.” Appellants generally allege that all actions 
59

supposedly causing injury to Boster occurred in the bankruptcy 

proceeding.

The allegations do not support appellants’ vague assertion 

that the causes of action at issue arise from acts that took place 

in the context of the Vail Lake bankruptcy proceeding. As with 

the North Plaza bankruptcy, the Vail Lake bankruptcy was 

merely incidental to Boster’s overall claims regarding appellants’ 

scheme to undermine Boster’s security interest in certain 

property. The SASC alleges that appellants accomplished this 

through a series of transactions, recordings, releases, and rerecordings—all without Boster’s knowledge or consent—that 

ultimately eliminated the security interest entirely. DFC and 

Sabella sold their own loans to Cambridge, which allowed DFC 

and Sabella to receive compensation for their loans prior to the 

Vail Lake bankruptcy. DFC and Sabella did not include the loan 

in which Boster had an interest and did not inform Boster that 

DFC was receiving compensation for its other Vail Lake-related 

loans. The loan sale placed Cambridge in a position to ultimately 

own the Vail Lake properties free and clear of Boster’s interest. 

This alleged series of transactions began well before the 2012 and 

2013 Vail Lake bankruptcies.

On the same day that they entered a settlement agreement 

with the Vail Lake bankruptcy debtors to receive the underlying 

real estate parcels in exchange for a release of their claims, 

Cambridge and Beresford entered an agreement to sell the land 

to RCWD. The timing of the sale, following immediately after 

their acquisition of the land, suggests that it was deliberately 

planned as part of the alleged larger scheme to eliminate Boster’s 

interest to the benefit of appellants. Following the sale, 
60

Cambridge channeled the proceeds to DFC and Sabella. Boster 

received nothing.

The allegations surrounding appellants’ actions in the Vail 

Lake bankruptcy do not form the basis of Boster’s claims against 

appellants. None of appellants’ actions in the bankruptcy 

proceedings “supply the elements” of any cause of action. (Bonni, 

supra, 11 Cal.5th at p. 1012.) Instead, the bankruptcy 

proceedings are “incidental background” that “merely provide 

context, without supporting a claim for recovery.” (Ibid.) Thus, 

they are not properly stricken under the anti-SLAPP statute. 

(Ibid.)

IV. The tax sale

Beresford seeks to strike the allegations concerning the 

Walker Basin tax sale. Beresford asserts that it has found no 

published case addressing whether a citizen’s participation in a 

county’s public sale of tax-defaulted real property is a protected 

activity under section 425.16. However, Beresford argues that 

participation in a tax sale should be considered protected activity. 

Beresford argues that bidding on a tax sale property is an act of 

free speech within the protection of the statute.

We find that we need not decide whether a tax sale 

constitutes protected activity because, even if it does, the 

allegations concerning Beresford’s participation in the tax sale in 

this matter do not supply the elements of any of Boster’s causes 

of action. Boster is not seeking to hold Beresford liable for its act 

of bidding at the tax sale. Instead, Beresford is alleged to have 

engaged in a course of conduct predating the tax sale that 

affected Boster’s interest in the Walker Basin property.

The RCCC note—in which Boster took a 99 percent interest 

under the PA—was expressly secured, in part, by the Walker 
61

Basin deed of trust. Although DFC received notice that the taxes 

were delinquent on the Walker Basin property and that the 

property would be sold at an upcoming county tax sale, DFC did 

not inform Boster nor make any effort to prevent the tax sale 

from occurring. Instead, DFC and Sabella informed Beresford 

and Cambridge of the upcoming tax sale, and Beresford 

purchased the property at a significant discount. It was not 

Beresford’s purchase of the property at the tax sale that formed 

the basis of Boster’s relevant causes of action, but the fact that 

through the acts of DFC, Sabella, and Beresford, Boster’s lien on 

the Walker Basin property was extinguished. Further, no 

recovery of funds stemming from the Walker Basin deed of trust, 

the tax sale, or DFC’s claim for excess proceeds, were ever shared 

with Boster. Through these collective actions, Boster alleges that 

DFC and Sabella orchestrated a scheme to deprive Boster of its 

interest in the RCCC note, with knowledge that such actions 

constituted a breach of DFC’s obligations under the PA.

As with the bankruptcies, Beresford’s participation in the 

tax sale does not form the basis of Boster’s claims against 

Beresford. Instead, Beresford is alleged to have engaged in a 

course of conduct predating the tax sale that affected Boster’s 

interest not only in the Walker Basin parcels but also in the Vail 

Lake properties. Together with DFC and Sabella, Beresford is 

alleged to have engaged in a comprehensive scheme to deprive 

Boster of its security interests in the various properties, including 

Walker Basin. Beresford is alleged to have known, before it bid, 

that the sale would result in the extinguishment of Boster’s 

security interest in the Walker Basin property. According to the 

allegations, the decade-long scheme would have progressed even 

if the tax sale had not occurred.
62

Appellants have failed to demonstrate error in the trial 

court’s determination that none of the causes of action raised in 

the four anti-SLAPP motions arise from protected activity. 

Because appellants have failed to meet their burden under the 

first prong of the anti-SLAPP analysis, we decline to address the 

second prong.

DISPOSITION

The orders denying the special motions to strike are 

affirmed. Respondent is awarded its costs of appeal.

________________________

CHAVEZ, J.

We concur:

________________________

LUI, P. J.

________________________

BENKE, J.*

* Retired Associate Justice of the Court of Appeal, Fourth 

Appellate District, assigned by the Chief Justice pursuant to 

article VI, section 6 of the California Constitution.