Court Opinion

ID: 9391934
Source: CourtListenerOpinion
Date Created: 2023-05-03 18:03:37.843841+00
Date Added: 2024-06-11T17:18:34.433722
License: Public Domain

Filed 5/3/23 Brar v. Sourdough & Co. CA3
                                           NOT TO BE PUBLISHED
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 This opinion has not been certified for publication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
                                      THIRD APPELLATE DISTRICT
                                                     (Sacramento)
                                                            ----

    GURPREET BRAR et al.,                                                                      C095424

                    Plaintiffs, Cross-defendants and                                  (Super. Ct. No.
    Respondents,                                                                34202100304530CUBTGDS)

           v.

    SOURDOUGH & CO., INC.,

                    Defendant, Cross-complainant and
    Appellant.

         This case arises out of purported licensing agreements to operate sandwich shops
under the trademark “Sourdough & Co.” The trial court granted a motion under Code of
Civil Procedure section 425.16 filed by plaintiffs and cross-defendants Gurpreet Brar,
Harman Brar, Amanpreet Toor, Sukhdev Singh, and Arvinbrar, Inc. (the licensees) to
strike a cause of action for fraud and deceit in a cross-complaint filed by Sourdough &
Co, Inc. (Sourdough).1 “Familiarly known as the anti-SLAPP statute, [section 425.16]

1    Undesignated statutory references are to the Code of Civil Procedure.

                                                             1
allows defendants to seek early dismissal of unmeritorious claims arising from protected
speech and petitioning activities.” (Bonni v. St. Joseph Health System (2021) 11 Cal.5th
995, 1004.)
       On appeal, Sourdough argues the trial court erred in granting the licensees’ anti-
SLAPP motion because: (1) its claim for fraud and deceit is covered by the commercial
speech exemption to the anti-SLAPP statute; (2) the fraud and deceit claim does not arise
out of protected activity; and (3) it showed a probability of success on this claim.
       We will affirm.
                                   I. BACKGROUND
       The complaint filed by the licensees alleges the following:
       In November 2018, Sukhdev Singh entered into a purported licensing agreement
with Sourdough to use certain trademarks and trade secret recipes for the operation of a
fast-casual sandwich shop. In March 2019, Singh, Amanpreet Toor, Gurpreet Brar, and
Harman Brar entered into another purported licensing agreement with Sourdough for the
operation of additional sandwich shops. These individuals subsequently assigned their
rights under these agreements to Arvinbrar, Inc. Arvinbrar paid approximately five
percent of gross sales to Sourdough.
       In June 2020, the licensees notified Sourdough that they were rescinding the
agreements and considered them unenforceable. In July 2021, the licensees filed the
underlying action alleging numerous causes of action against Sourdough. As relevant to
this appeal, the licensees alleged Sourdough violated the Franchise Investment Law
(Corp. Code, § 31000 et seq.) by selling unregistered franchises. The licensees alleged
that though the agreements were not called franchise agreements, the transactions met the
elements of a franchise under Corporations Code section 31005, and Sourdough had not
provided required disclosures.

                                              2
       Sourdough filed a cross-complaint against the licensees that alleged causes of
action for breach of contract and for fraud and deceit. The second cause of action for
fraud and deceit is the focus of this appeal. It alleges:
       “13. At the time each [licensee] executed their respective license agreement(s)
they represented to [Sourdough] (as Licensor) that they were aware that the license
agreement was not a franchise, was not intended to be a franchise, and that Licensor may
subsequently seek to obtain franchise rights in the future (see section 2.2).
       “14. At the same time, [licensees] further represented to [Sourdough] that they
understood and agreed that ‘Licensor shall have no responsibility, and shall not undertake
to direct Licensee’s business operations and marketing plans’ and that ‘Licensor does not
claim to have any valuable or proven successful business operations or methods of doing
business, nor does Licensor offer Licensee any guidance, dictates, or recommendations
regarding same.’ They further represented that they were ‘solely responsible to
determine [their] own successful business methods and marketing plan, if any,’ and
acknowledged that ‘the fees paid pursuant to [the license agreements] are consideration
solely for Licensor’s valuable intellectual property and the goodwill which Licensor’s
Marks, recipes, preparation methods, and trade dress have become known for.’
       “15. At the same time, the [licensees] represented to [Sourdough] that they
intended nothing in the agreements to be subject to any franchise or similar law, rule, or
regulation, to which it would not otherwise be subject, of the state where the Restaurants
are located or of the State of California. They further represented and warranted the
following:
       “Licensee represents and warrants that he/she/it has been represented by a licensed
California attorney of its choice (__[e.g., MICHAEL BARETT]___) with respect to the
negotiation and drafting of this Agreement and under guidance of said counsel has made
its own determination that this Agreement complies with all applicable provisions of
California law, including without limitation Corporations Code §§ 31000, et seq.

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       “16. The foregoing representations were false, and the [licensees] have taken
positions in this lawsuit in direct contravention of their representations and warranties, all
to the damage and detriment of [Sourdough], subject to proof at trial.
       “17. [Sourdough] reasonably relied on the foregoing representations and
warranties made by the [licensees], and would not have entered into the license
agreements in the absence of such representations and warranties.”
       “18. [Sourdough] is entitled to recover both monetary and injunctive relief against
each [licensee], subject to proof at trial.” (Underscoring omitted.)
       The licensees responded to the cross-complaint with a motion to strike the cause
of action for fraud and deceit under the anti-SLAPP statute.
       The trial court granted the motion. The court rejected Sourdough’s assertion that
its cause of action for fraud and deceit was exempt from the anti-SLAPP statute under the
commercial speech exemption. Additionally, the court agreed with the licensees’
assertion that this cause of action arose from protected activity because the element of
resulting damage necessary to establish the cause of action relied solely on the filing of
the licensees’ complaint. The trial court found Sourdough did not “substantively
counter” this argument nor did it “indicate that it can establish all of the elements of its
claim of fraud without relying on [the licensees]’ protected activity of filing the
Complaint.” The trial court found Sourdough had not established a probability it would
prevail on its claims, because its damages derived from the licensees filing of their
complaint and that filing was protected by the litigation privilege of Civil Code section
47.
       Sourdough filed a timely notice of appeal.
       No party filed a respondent’s brief. Where no respondent’s brief has been filed,
we may decide the appeal on the record, the opening brief, and any oral argument by the
appellant. (Cal. Rules of Court, rule 8.220(a)(2), (c).) Sourdough “still bears the
‘affirmative burden to show error whether or not the respondent’s brief has been filed,’

                                              4
and we ‘examine the record and reverse only if prejudicial error is found.’ ” (Smith v.
Smith (2012) 208 Cal.App.4th 1074, 1078.)
                                      II. DISCUSSION
A.     Statutory Background
       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 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.” (§ 425.16, subd. (b)(1).)
       “Anti-SLAPP motions are evaluated through a two-step process. Initially, the
moving defendant bears the burden of establishing that the challenged allegations or
claims ‘aris[e] from’ protected activity in which the defendant has engaged. [Citations.]
If the defendant carries its burden, the plaintiff must then demonstrate its claims have at
least ‘minimal merit.’ ” (Park v. Board of Trustees of California State University (2017)
2 Cal.5th 1057, 1061 (Park).) Whether the commercial speech exemption applies is a
first-step determination. (Demetriades v. Yelp, Inc. (2014) 228 Cal.App.4th 294, 308.)
       Our Supreme Court has described the “ ‘second step as a “summary-judgment-like
procedure.” [Citation.] The court does not weigh evidence or resolve conflicting factual
claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim
and made a prima facie factual showing sufficient to sustain a favorable judgment.’ ”
(Monster Energy Co. v. Schechter (2019) 7 Cal.5th 781, 788.) “[A] plaintiff seeking to
demonstrate the merit of the claim ‘may not rely solely on its complaint, even if verified;
instead, its proof must be made upon competent admissible evidence.’ ” (Ibid.)
       “The grant or denial of an anti-SLAPP motion is reviewed de novo.” (Monster
Energy Co. v. Schechter, supra, 7 Cal.5th at p. 788.)

                                                5
B.     Commercial Speech Exemption
       Sourdough argues the trial court erred in granting the licensees’ anti-SLAPP
motion because its claims are exempt from the anti-SLAPP statute under the commercial
speech exemption set forth in section 425.17, subdivision (c). We disagree.
       Section 425.17, subdivision (c) provides, in relevant part, that the anti-SLAPP
statute, section 425.16, “does not apply to any cause of action brought against a person
primarily engaged in the business of selling or leasing goods or services, . . . arising from
any statement or conduct by that person if both of the following conditions exist:
       “(1) The statement or conduct consists of representations of fact about that
person’s or a business competitor’s business operations, goods, or services, that is made
for the purpose of obtaining approval for, promoting, or securing sales or leases of, or
commercial transactions in, the person’s goods or services, or the statement or conduct
was made in the course of delivering the person’s goods or services.
       “(2) The intended audience is an actual or potential buyer or customer, or a person
likely to repeat the statement to, or otherwise influence, an actual or potential buyer or
customer.”
       “[T]he language of section 425.17, subdivision (c) and subsequent case law
indicate that the provision exempts ‘only a subset of commercial speech’—specifically,
comparative advertising.” (FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7 Cal.5th 133,
147.) The exemption is construed narrowly. (JAMS, Inc. v. Superior Court (2016) 1
Cal.App.5th 984, 992.) “ ‘[T]he party seeking the benefit of the commercial speech
exemption[,] [has] the burden of proof on each element.’ [Citation.] ‘We review the
applicability of the commercial speech exemption independently.’ ” (Ibid.)
       Here, the trial court noted Sourdough appeared to argue it was a potential buyer or
customer of the licensees but did not elaborate on this argument or supply any legal
authority to support it. The trial court also found the alleged statements reflect the
licensees “ ‘understanding and intentions with respect to the subject trademark license

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agreement, not representations of fact about [their] products, services, or business
operations.’ ” The court also found the alleged misrepresentations were not made for the
purpose of securing sales of or commercial transactions in the licensees’ goods or
services but rather for the purpose of obtaining rights to Sourdough’s trademarks and
recipes.
       On appeal, Sourdough argues the representations alleged in its cross-complaint
pertain to speech about the licensees’ operation of restaurants under license from
Sourdough. Further, Sourdough argues the licensees made these representations to
secure the license agreements that would allow them to operate restaurants under
Sourdough’s brand. Sourdough still fails to adequately address how the intended
audience of these representations was a potential buyer or customer within the meaning
of the statute. We find no merit to Sourdough’s assertion that it can avail itself of section
425.17, subdivision (c).
C.     Arising from Protected Activity
       As set forth above, “[a]nti-SLAPP motions may only target claims ‘arising from
any act of [the defendant] in furtherance of the [defendant’s] right of petition or free
speech under the United States Constitution or the California Constitution in connection
with a public issue . . . .’ (§ 425.16, subd. (b).)” (Park, supra, 2 Cal.5th at p. 1062.)
Sourdough argues the trial court erred in granting the licensees’ motion because this first
step requirement was not met.
       “In deciding whether the initial ‘arising from’ requirement is met, a court
considers ‘the pleadings, and supporting and opposing affidavits stating the facts upon
which the liability or defense is based.’ ” (Navellier v. Sletten (2002) 29 Cal.4th 82, 89.)
       Under the anti-SLAPP statute, an “ ‘act in furtherance of a person’s right of
petition or free speech under the United States or California Constitution in connection
with a public issue’ includes . . . any written . . . statement or writing made before a . . .
judicial proceeding.” (§ 425.16, subd. (e)(1).) The filing of the licensees’ complaint was

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therefore a protected activity under the anti-SLAPP statute. (Navellier v. Sletten, supra,
29 Cal.4th at p. 90.) Sourdough’s cross-complaint expressly alleges the licensees “have
taken positions in this lawsuit in direct contravention of their representations and
warranties, all to the damage and detriment of [Sourdough].” Sourdough nonetheless
disputes that its cause of action for fraud and deceit arises from this protected activity.
       “A claim arises from protected activity when that activity underlies or forms the
basis for the claim.” (Park, supra, 2 Cal.5th at p. 1062.) “[C]ourts are to ‘consider the
elements of the challenged claim and what actions by the defendant supply those
elements and consequently form the basis for liability.’ ” (Bonni v. St. Joseph Health
System, supra, 11 Cal.5th at p. 1009.) “When a party pleads a cause of action that rests
on allegations of multiple acts, a court must analyze each action to determine whether it
is protected. [Citation.] Courts may consider the ‘gravamen’ of claims to determine
whether particular acts are elements, as opposed to incidental background, but not to
determine the essence of a mixed cause of action.” (Cordoba Corporation v. City of
Industry (2023) 87 Cal.App.5th 145, 151; see Bonni, supra, at p. 1010 [explaining a so-
called “ ‘mixed cause of action’ ” is one “that rests on allegations of multiple acts, some
of which constitute protected activity and some of which do not”].)
       Our dissenting colleague misreads Park and City of Cotati v. Cashman (2002) 29
Cal.4th 69 by failing to appreciate that the latter involved an action for declaratory relief
and “ ‘[t]he fundamental basis of declaratory relief is the existence of an actual, present
controversy over a proper subject.’ ” (Id. at p. 79, italics omitted.) Here, the cause of
action at issue is one for fraud and deceit. As such, the relevant inquiry is not whether
Sourdough “could demonstrate the existence of a bona fide controversy between the
parties supporting a claim for declaratory relief without” Brar’s lawsuit. (Park, supra, 2
Cal.5th at p. 1064.) Rather, we ask whether Sourdough could demonstrate the elements
of fraud and deceit without Brar’s lawsuit. Here, the pleadings and supporting
declarations demonstrate it cannot. “ ‘ “ ‘The elements of fraud, which give rise to the

                                              8
tort action for deceit, are (a) misrepresentation (false representation, concealment, or
nondisclosure); (b) knowledge of falsity (or “scienter”); (c) intent to defraud, i.e., to
induce reliance; (d) justifiable reliance; and (e) resulting damage.’ ” ’ ” (Golden Eagle
Land Investment, L.P. v. Rancho Santa Fe Assn. (2018) 19 Cal.App.5th 399, 428.)
Sourdough argues its fraud and deceit claim is “premised upon” and “targets”
misrepresentations made at the time the license agreements were entered into. While that
may be true, it only renders the fraud and deceit claim a mixed cause of action because
the cross-complaint alleges the complaint is the sole basis of resulting damages.
Sourdough never directly addresses the trial court’s concern that Sourdough did not
indicate it could establish all of the elements of its claim without relying on the protected
activity of the licensees’ filing of the complaint for the resulting damage element. Nor
has Sourdough improved upon its showing in this court. Paragraph 9 of the cross-
complaint, cited only by our dissenting colleague, alleges various breaches of the license
agreements, and not, as our dissenting colleague suggests, “a laundry list of damages
alleged to have been suffered by Sourdough arising from Brar’s fraud.” (Dis. opn. at
p. 2.) Sourdough has failed to demonstrate the trial court erred in concluding that the
cause of action for fraud and deceit rose out of protected activity, and we proceed to the
second step of the anti-SLAPP analysis. (Bonni v. St. Joseph Health System, supra, 11
Cal.5th at p. 1010.)
D.     Probability of Success
       Sourdough argues it showed the requisite probability of success on its fraud claim
to defeat the licensees’ motion at the second step of the anti-SLAPP analysis. We
disagree. The trial court found Sourdough had not established a probability it would
prevail on its claims because its damages derived from the licensees’ filing of their
complaint, and that filing was protected by the litigation privilege. (Navellier v. Sletten
(2003) 106 Cal.App.4th 763, 772.) Sourdough argues the harm that gives rise to its claim
for damages “also occurred prior to the commencement of the litigation. That is, as

                                               9
alleged in the Complaint, [it] would not have entered into the licensee agreements at all
had it not been for the alleged fraud and deceit.” Sourdough cites a declaration from its
Chief Executive Officer stating, “[h]ad I been aware that Cross-Defendant had not
consulted with counsel prior to signing his license agreements, I would not have entered
into them on behalf of the Company.” But this evidence goes to reliance: “Reliance
exists when the misrepresentation or nondisclosure was an immediate cause of the
plaintiff’s conduct which altered his or her legal relations, and when without such
misrepresentation or nondisclosure he or she would not, in all reasonable probability,
have entered into the contract or other transaction.” (Alliance Mortgage Co. v. Rothwell
(1995) 10 Cal.4th 1226, 1239.) “[U]nless the plaintiff merely seeks to rescind the
contract, it must suffer actual monetary loss to recover on a fraud claim.” (Id. at p. 1240.)
Sourdough does not seek recission and it cites no authority indicating its nonprivileged
evidence was sufficient to demonstrate resulting damage or otherwise obviate the need to
demonstrate resulting damage.
       Sourdough has failed to demonstrate any error in the court’s decision to strike its
cause of action for fraud and deceit.

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                                   III. DISPOSITION
       The order granting the anti-SLAPP motion is affirmed. Because no respondent
appeared in this appeal, no party shall recover costs. (Cal. Rules of Court, rule
8.278(a)(5).)

                                                           /S/

                                                 RENNER, J.

I concur:

/S/

MAURO, J.

                                            11
Hull, J. dissenting.
       The majority opinion holds that Sourdough & Co., Inc.’s (Sourdough) cross-
complaint, insofar as it alleges civil fraud against plaintiffs (Brar), is barred by
application of what is commonly known as the “anti-SLAPP” statute, Code of Civil
Procedure section 425.16. (Statutory section references that follow are to the Code of
Civil Procedure.)
       If I understand the majority opinion correctly, this is so because Sourdough’s
damages for fraud, an element of their cross-complaint, did not arise until Brar filed its
complaint against Sourdough alleging various causes of action arising out of the parties’
business transactions because only then was Sourdough “damaged.” And the Brar
complaint being a protected activity within the meaning of section 425.16, its filing
prevents Sourdough from pursuing its cross-complaint for fraud.
       It would appear the majority’s decision that Sourdough’s cross-complaint arose
from Brar’s protected activity in filing its complaint is grounded, without elaboration, on
the majority’s statement that, “Sourdough never directly addresses the trial court’s
concern that Sourdough did not indicate it could establish all of the elements of its claim
without relying on the protected activity of [Brar’s] filing of the complaint for the
resulting damage element. [Emphasis added.]” (Maj. opn. at pp. 8-9.) I confess I am not
sure what the phrase “for the resulting damage element” means but as noted above, it
apparently means that Sourdough’s damages only arose when, and were dependent upon,
Brar’s filing of its complaint.
       If my interpretation of the majority’s reasoning is correct, if it can be read to hold
that a fraud cause of action necessarily violates section 425.16 if it depends in any part on
the defrauding party’s filing a complaint evidencing its fraud, this holding is far too
broad. It is in the nature of a cross-complaint to allege and make reference to the cross-
defendant’s actions that evidence the alleged fraud even if, in appropriate circumstances

                                               1
such as those we have here, those actions are memorialized or acknowledged in a cross-
defendant’s original and earlier filing of a complaint against the cross-complainant. If the
proper allegations of fraudulent conduct are made in the cross-complaint, but only
evidenced by the original complaint’s allegations, that cross-complaint does not cross
into the territory of the anti-SLAPP statute. Thus, if the proper allegations as to the
elements of civil fraud, including damages, are made without reference to the allegations
set forth in a lawsuit, that cross-complaint does not arise from protected activity, but
instead from actions underlying the elements of fraud that occurred separate from the
filing of the defrauding party’s lawsuit.
       Sourdough’s action for fraud stumbles somewhat here by alleging in paragraph 16
of the cross-complaint that Brar’s representations made at the time the parties to this
lawsuit entered into these agreements “were false, and [Cross-Defendants] have taken
positions in this lawsuit in direct contravention of their representations and
warranties . . . .”
       That is, the allegations of Sourdough’s cross-complaint appear to depend in part
for their truth on the positions Brar has set out in their complaint, the filing of which is
activity that is protected by section 426.16.
       This allegation, though, is not in and of itself the sole basis for Sourdough’s claim
of fraud. That is, Brar’s filing of the complaint, a protected activity, did not constitute the
fraud, but only provided evidence of its earlier fraudulent conduct when it entered into
the contracts – long before the filing of the complaint – with Sourdough.
       And there is more to the cross-complaint than paragraph 16. Paragraph 12 of the
cross-complaint incorporates by reference paragraphs 1 through 10 of the cross-
complaint. Among other things, those paragraphs include paragraph 9 which sets forth a
laundry list of damages alleged to have been suffered by Sourdough arising from Brar’s
fraud, damages which a fair reading of the cross-complaint must necessarily have come
into being before the filing of Brar’s complaint.

                                                2
       Moreover, in paragraphs 13 of the cross-complaint, Sourdough alleges, tellingly,
that, “[A]t the time [Brar] executed their respective license agreement(s)” Brar made
certain representations to Sourdough. Again in paragraph 14 Sourdough alleges that
Brar, at the time of the execution of the license agreements, made other representations
and in paragraph 15 Sourdough alleges that Brar, again at the time it entered into the
licensing agreements, made certain representations to Sourdough all of which, according
to paragraph 16 were false and, upon which Sourdough relied to its detriment according
to paragraph 17 of the complaint. All false representations made by Brar and relied on by
Sourdough occurred when the agreements were entered into according to the cross-
complaint’s allegations.
       Conceptually, a civil fraud occurs at the time the fraudulent conduct takes place
and is relied upon by the defrauded party. Here, that is, at the time the license agreement
was entered into which was an event far removed in time from the filing of Brar’s
complaint and was based upon actions that were factually distinct from that filing.
       Analytically then, this holding should not have much to do with resulting damages
but should instead talk about the extent to which the cross-complaint depended upon a
protected activity for its basis.
       In my view, the answer in this appeal lies with the holding in Park v. Board of
Trustees of California State University (2017) 2 Cal.5th 1057 (Park) and the discussion
and citations in Park to City of Cotati v. Cashman (2002) 29 Cal.4th 69 and Navellier v.
Sletten (2002) 29 Cal.4th 82. I quote the discussion in Park at length below.

       After beginning its analysis by observing that “a claim arises from protected
activity when that activity underlies or forms the basis for the claim. [Citations
omitted.]” (Park, supra, 2 Cal.5th at p. 1062.) Park continued:

       “Critically, ‘the defendant’s act underlying the plaintiff’s cause of action must
itself have been an act in furtherance of the right of petition or free speech.’ (City of

                                              3
Cotati,[ supra, 29 Cal.4th] at p. 78; accord, Equilon Enterprises[ v. Consumer Cause,
Inc., 29 Cal.4th 53, 66].) ‘[T]he mere fact that an action was filed after protected activity
took place does not mean the action arose from that activity for the purposes of the anti-
SLAPP statute.’ (Navellier v. Sletten, supra, 29 Cal.4th at p. 89; see City of Cotati, at
p. 78 [suit may be in ‘response to, or in retaliation for,’ protected activity without
necessarily arising from it].) Instead, the focus is on determining what ‘the defendant’s
activity [is] that gives rise to his or her asserted liability—and whether that activity
constitutes protected speech or petitioning.’ (Navellier, at p. 92, italics omitted.) ‘The
only means specified in section 425.16 by which a moving defendant can satisfy the
[“arising from”] requirement is to demonstrate that the defendant’s conduct by which
plaintiff claims to have been injured falls within one of the four categories described in
subdivision (e). . . .’ (Equilon Enterprises, at p. 66, italics added.) In short, in ruling on
an anti-SLAPP motion, courts should consider the elements of the challenged claim and
what actions by the defendant supply those elements and consequently form the basis for
liability.

        “Thus, for example, in City of Cotati v. Cashman, supra, 29 Cal.4th 69, the
plaintiff city filed a state suit seeking a declaratory judgment that its rent control
ordinance was constitutional. The suit followed in time the defendant owners’ federal
suit seeking declaratory relief invalidating the same ordinance. In the state action, the
defendants filed an anti-SLAPP motion alleging the suit arose from their protected
activity of filing the federal suit. The motion, we explained, should have been denied
because the federal suit formed no part of the basis for the state claim. The city’s
potential entitlement to a declaratory judgment instead arose from the parties’ underlying
dispute over whether the ordinance was constitutional, a dispute that existed prior to and
independent of any declaratory relief action by the owners. (Id. at p. 80.)

                                               4
       “In contrast, in Navellier v. Sletten, supra, 29 Cal.4th 82, another case in which the
defendant’s protected activity was the prior filing of court claims, the prior claims were
an essential part of the activity allegedly giving rise to liability. The Navellier plaintiffs
sued for breach of contract and fraud, alleging the defendant had signed a release of
claims without any intent to be bound by it and then violated the release by filing
counterclaims in a pending action in contravention of the release’s terms. Unlike in City
of Cotati, the defendant was ‘being sued because of the affirmative counterclaims he filed
in federal court. In fact, but for the federal lawsuit and [the defendant’s] alleged actions
taken in connection with that litigation, plaintiffs’ present claims would have no basis.
This action therefore falls squarely within the ambit of the anti-SLAPP statute's “arising
from” prong.’ (Navellier, at p. 90.)

       “While in both cases it could be said that the claim challenged as a SLAPP was
filed because of protected activity, in that perhaps the City of Cotati plaintiff would not
have filed suit had the defendant not done so first, in only Navellier did the prior
protected activity supply elements of the challenged claim. The City of Cotati plaintiff
could demonstrate the existence of a bona fide controversy between the parties
supporting a claim for declaratory relief without the prior suit, although certainly the
prior suit might supply evidence of the parties’ disagreement. (Emphasis added.) In
contrast, specific elements of the Navellier plaintiffs’ claims depended upon the
defendant’s protected activity. The defendant’s filing of counterclaims constituted the
alleged breach of contract. (Navellier v. Sletten, supra, 29 Cal.4th at p. 87.) Likewise,
the defendant’s misrepresentation of his intent not to file counterclaims, a statement we
explained was protected activity made in connection with a pending judicial matter (see
§ 425.16, subd. (e)(1), (2)), supplied an essential element of the fraud claim (Navellier, at
pp. 89–90). Together, these cases reflect what we have described elsewhere, in a non-
SLAPP context, as ‘a careful distinction between a cause of action based squarely on a

                                               5
privileged communication, such as an action for defamation, and one based upon an
underlying course of conduct evidenced by the communication.’ (White v. Western Title
Ins. Co. (1985) 40 Cal.3d 870, 888.)” (Park, supra, 2 Cal.5th at pp. 1063-1064, emphasis
added.)

       Here, the above discussion in Park and, in particular, those portions of the
discussion that I have emphasized, leads me to the opinion that this SLAPP motion
should have been denied. Conforming what I have emphasized above to the parties we
have before us, Sourdough “could demonstrate the existence of a bona fide controversy”
here without Brar’s lawsuit even though the Brar lawsuit might provide evidence of
Brar’s alleged fraud. That result also follows if we make “a careful distinction between a
cause of action based squarely on a privileged communication, such as an action for
defamation, and one based upon an underlying course of conduct evidenced” in part, by
the allegations of the Brar lawsuit.

       I would reverse the trial court’s order granting the motion to strike the
 second cause of action of the cross-complaint.

                                                        /S/

                                                  HULL, Acting P. J.

                                              6