Court Opinion

ID: 2807923
Source: CourtListenerOpinion
Date Created: 2015-06-12 19:03:22.824939+00
Date Added: 2024-06-11T11:30:06.307649
License: Public Domain

Filed 6/12/15 Downtown Sunnyvale Residential v. Wells Fargo Bank CA6
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                      SIXTH APPELLATE DISTRICT

DOWNTOWN SUNNYVALE                                                   H039332
RESIDENTIAL, LLC et al.,                                            (Santa Clara County
                                                                     Super. Ct. No. 1-11-CV213485)
         Plaintiffs, Cross-defendants, and
         Appellants,                                                ORDER MODIFYING OPINION
                                                                    AND DENYING PETITION FOR
         v.                                                         REHEARING, NO CHANGE IN
                                                                    JUDGMENT
WELLS FARGO BANK, N.A.,

         Defendant, Cross-complainant and
         Appellant.

BY THE COURT:
         It is ordered the opinion filed herein on May 19, 2015, be modified as follows:
         On page 32, first line, after the paragraph ending with, “There is no evidence
Wells Fargo restrained or chilled bidding,” add the following paragraph:
         “Downtown Sunnyvale relies on language in Baron v. Colonial Mortgage Service
Co. (1980) 111 Cal.App.3d 316, 323-324, where the appellate court concluded that a
beneficiary must use due diligence to ensure all reasonable efforts are made to secure the
best possible or most reasonable price during a nonjudicial foreclosure sale. Therefore,
Downtown Sunnyvale argues that Wells Fargo was obliged to notify former bidders of
the upcoming trustee’s sale. However, even if we were to accept this claim as true,
Downtown Sunnyvale still fails to demonstrate it was prejudiced by Wells Fargo’s
alleged inaction.”
       On page 32, the first full paragraph, first sentence starting with, “More
importantly, whether the bank’s failure…” is modified to read:
       “Whether the bank’s failure to personally notify bidders from the receiver’s sale
about the trustee’s sale contributed to the absence of bidders at the trustee’s sale is purely
speculative.”
       On page 35, first line, after the sentence, “At all times, there was only one action
brought, and Wells Fargo did not seek to appropriate assets before exhausting the security
first,” add a footnote that reads:
       “In a petition for rehearing, Downtown Sunnyvale asserts that this court glossed
over the determinative issue of who had managerial authority over the borrowers. In part,
Downtown Sunnyvale claims that if RREEF did not have managerial authority over the
borrowers, then Wells Fargo effectively appropriated assets before the security in
violation of section 726 when it accepted RREEF’s settlement. However, this argument
was not raised in Downtown Sunnyvale’s opening brief. The only claim regarding
section 726 brought by Downtown Sunnyvale was that the receiver’s sale violated the
security first principle. No argument was made about the managerial authority issue,
except in Downtown Sunnyvale’s reply brief. Points raised for the first time in a reply
brief will ordinarily not be considered. (Garcia v. McCutchen (1997) 16 Cal.4th 469,
482, fn. 10.) Furthermore, it does not appear that Downtown Sunnyvale argued these
points below to the trial court, because there is no mention of the managerial authority
issue’s potential impact on Downtown Sunnyvale’s section 726 claim in its opposition to
the anti-SLAPP motion below. As a rule, “[p]oints not raised in the trial court will not be
considered on appeal.” (Hepner v. Franchise Tax Bd. (1997) 52 Cal.App.4th 1475,
1486.) Therefore, we decline to express an opinion on the merits of Downtown
Sunnyvale’s arguments on this point.”

                                              2
       On page 37, first full paragraph, after the sentence, “Additionally, it does not
appear that SHP and Pau’s offer of $185 million would have covered the full amount of
the indebtedness owed, which Wells Fargo estimated at $189,418,440,” add the following
footnote:
       “In its August 2011 letter to SHP and Pau, Wells Fargo wrote that it had updated
the lender balance to reflect changes since August 5, 2011. It then clarified that if the
amount of the balance, $189,418,440, was received by the bank, it would consider the
loan repaid. Attached to this letter were two spreadsheets, one reflecting a loan balance
of $189,418,440 and another reflecting a loan balance of $182,512,815. Since Wells
Fargo’s letter only referenced the $189,418,440 sum, we presume that the amount of the
balance remaining at that time was $189,418,440, not $182,512,815.”

       There is no change in judgment. The petition for rehearing is denied.

Dated: __________________________
                                                               Rushing, P.J.

                     Elia, J.

                                              3
Filed 5/19/15 Downtown Sunnyvale Residential v. Wells Fargo Bank CA6 (unmodified version)
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                      SIXTH APPELLATE DISTRICT

DOWNTOWN SUNNYVALE                                                   H039332
RESIDENTIAL, LLC et al.,                                            (Santa Clara County
                                                                     Super. Ct. No. 1-11-CV213485)
         Plaintiffs, Cross-defendants, and
         Appellants,

         v.

WELLS FARGO BANK, N.A.,

         Defendant, Cross-complainant and
         Appellant.

         In 2007, construction began on the Sunnyvale Town Center Project (Project), a
large mixed-use redevelopment project located in Sunnyvale, California. The project was
financed in part by a construction loan provided by Wells Fargo Bank.1 Two years later,
the borrowers defaulted on the loan. The bank filed a complaint for judicial foreclosure
and sought appointment of a receiver. The subsequent proceedings related to the Project,
including the bank’s nonjudicial foreclosure sale and the trial court’s discharge of the
court-appointed receiver, became mired in litigation, resulting in several unpublished
appellate opinions from this court.

         1
         Wachovia issued the loan as the administrative agent for itself and Bank of
America, N.A. Wells Fargo Bank, N.A. is the successor by merger to Wachovia. For
clarity, when we discuss the administrative agent, we will refer to “Wells Fargo.”
       The appeal before us concerns Wells Fargo’s alleged impairment of the trustee’s
sale where the Project was eventually sold. Several entities representing minority
shareholders of the borrowers filed a complaint against Wells Fargo, claiming it had
engaged in bid-chilling and had harmed their equitable right to redemption by increasing
the amount of debt owed. Wells Fargo moved to strike the complaint under the anti-
SLAPP statute (Code Civ. Proc., § 425.16).2 The trial court granted and denied the
motion in part. It struck the first four causes of action and left intact the fifth cause of
action for breach of contract. Downtown Sunnyvale has appealed the court’s grant of the
anti-SLAPP motion on the first four causes of action.3 Wells Fargo has appealed the
court’s denial of its anti-SLAPP motion on the remaining cause of action.
       Contrary to Downtown Sunnyvale’s arguments, we conclude that all of its causes
of action arise from protected activity under the anti-SLAPP statute, and it has not
demonstrated a probability of prevailing on any of its claims. For the reasons set forth
below, we reverse and remand the trial court’s order. On remand, the trial court is
directed to enter a new order granting Wells Fargo’s anti-SLAPP motion in its entirety.
                       FACTUAL AND PROCEDURAL BACKGROUND
       The Project and Development
       A detailed summary of the facts regarding the development of the Project is
contained in our prior opinions and need not be repeated again. (See Downtown
Sunnyvale Residential, LLC et al. v. Wachovia Bank National Association (Nov. 14,

       2
          “SLAPP” stands for “ ‘strategic lawsuit against public participation.’ ” (Jarrow
Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 732, fn. 1.) Further unspecified
statutory references are to the Code of Civil Procedure.
        3
          As explained in further detail below, there are multiple parties comprising the
appellants in this appeal. For the sake of clarity, we will refer to the appellants as
“Downtown Sunnyvale” when addressing their arguments on appeal. However, we will
refer to the various entities in their individual capacity when necessary.

                                               2
2013, H037419) [nonpub. opn.] [2013 Cal.App. unpub. LEXIS 7457] (Downtown
Sunnyvale I); Downtown Sunnyvale Residential, LLC v. Wells Fargo Bank, N.A. (Jan. 20,
2015, H038572, H039024) [nonpub. opn.] [2015 Cal.App. unpub. LEXIS 357]
(Downtown Sunnyvale II).) However, we briefly review the facts relevant to the issues
raised in this current appeal.
       Downtown Sunnyvale Mixed Use (DSMU) was the master developer of the
Project and held legal title to the real property. In 2007, DSMU was formed as a joint
venture between RREEF and SHP San Jose, LLC (SHP).4 Downtown Sunnyvale
Residential, LLC (DSR) is a wholly-owned subsidiary of DSMU. Together, DSMU and
DSR secured a $108.8 million loan from Wells Fargo by a deed of trust dated August 29,
2007.5 Pursuant to an agreement with DSMU, Peter Pau was the development manager
for the project.
       In 2009, the borrowers defaulted on the loan and Wells Fargo began judicial
foreclosure proceedings. The bank also sought and obtained appointment of a receiver,
L. Gerald Hunt (Hunt), as provided for in the deed of trust securing its loan.
       The Attempted Receiver’s Sale and the First Anti-SLAPP Motion
       On October 12, 2010, Hunt obtained an order from the court allowing him to sell
the Project free and clear of liens and encumbrances. He also contracted with a broker,
Eastdil Secured, to assist in the marketing process. More than 165 potential buyers
signed confidentiality agreements and were provided with an offering memorandum that

       4
          SHP owns a 5 percent interest in DSMU. RREEF owns the remaining 95 percent
interest in DSMU. RREEF is comprised of RREEF America REIT III Corp. MM, a
Maryland corporation, and RREEF America REIT III Corp., MM TRS, a Maryland
Corporation. We collectively refer to these entities as “RREEF.”
        5
          We collectively refer to DSMU and its subsidiary DSR as “the Borrowers” and
refer to each entity in its individual capacity when necessary.

                                             3
contained due diligence materials. In April 2011, Hunt preliminarily accepted an offer
made by Starwood Capital Group Global I, LLC (Starwood).
       The following month, Downtown Sunnyvale filed an answer to Wells Fargo’s
complaint for judicial foreclosure and appointment of a receiver. Downtown Sunnyvale
also filed a cross-complaint seeking to stop the receiver’s sale, arguing the procedure
violated section 726. The complaint alleged causes of action for declaratory relief,
cancellation of instruments, fraudulent concealment, misrepresentation, interference with
contract, and conspiracy.
       On June 15, 2011, the trial court issued an order clarifying that the receiver’s sale
was premature, pending a final judgment or foreclosure decree. The court also denied
Hunt’s motion to confirm the sale of the property to Starwood.
       On August 11, 2011, Wells Fargo moved to strike Downtown Sunnyvale’s claims
against the bank under the anti-SLAPP statute. The trial court granted the anti-SLAPP
motion, and Downtown Sunnyvale appealed. This anti-SLAPP motion was the subject of
our unpublished decision in Downtown Sunnyvale I. (Downtown Sunnyvale I, supra,
H037419.) On appeal, we affirmed the trial court’s decision, concluding the gravamen of
Downtown Sunnyvale’s claims against Wells Fargo arose out of communications related
to protected judicial proceedings and were therefore subject to the provisions of the anti-
SLAPP statute. (Ibid.) We further concluded that Downtown Sunnyvale had not
demonstrated a probability of prevailing on the merits of its claims. (Ibid.)
       The Trustee’s Sale and the Second Anti-SLAPP Motion
       With the receiver’s sale stalled, Wells Fargo noticed a trustee sale of the Project
through a nonjudicial foreclosure. The notice of sale was recorded with the county
recorder, and was published in several newspapers. On August 17, 2011, Wells Fargo,
the sole bidder at the trustee’s sale, purchased the Project with a credit bid of the original
loan amount.

                                              4
       On November 18, 2011, Downtown Sunnyvale filed a complaint seeking
cancellation of the trustee’s sale, which Wells Fargo moved to strike. The court granted
Wells Fargo’s motion with leave to amend.
       Downtown Sunnyvale filed an amended complaint on April 23, 2012. Wells
Fargo filed another motion to strike arguing the principles of res judicata precluded
retrying any of the issues, which the court denied. Wells Fargo subsequently filed a
second motion to strike under the anti-SLAPP statute, which Downtown Sunnyvale
opposed.
       On December 31, 2012, the trial court granted the motion to strike in part and
denied it in part. The court struck four out of the five claims in the complaint, leaving
only the claim for breach of the deed of trust. The trial court concluded the other claims
arose from protected activity, namely, Wells Fargo’s pursuit of judicial and nonjudicial
foreclosure remedies. Downtown Sunnyvale appealed from the trial court’s partial grant
of the anti-SLAPP motion, and Wells Fargo appealed from the trial court’s partial denial
of the anti-SLAPP motion. This second anti-SLAPP motion is the subject of this present
appeal.
       The Receiver’s Discharge
       On November 11, 2011, Hunt filed notice of his final account and requested
approval of his fees, exoneration of bonds, and discharge of all claims against him and
the receivership estate. Downtown Sunnyvale objected to his discharge. Overruling
Downtown Sunnyvale’s objections, the trial court discharged Hunt. Downtown
Sunnyvale appealed, which resulted in the second unpublished opinion from this court,
Downtown Sunnyvale II, supra, H038572, H039024. We affirmed the court’s discharge
of the receiver in Downtown Sunnyvale II.

                                             5
                                        DISCUSSION
       Wells Fargo and Downtown Sunnyvale appeal from the trial court’s partial grant
and denial of the special motion to strike Downtown Sunnyvale’s complaint seeking to
cancel the trustee’s sale. Downtown Sunnyvale argues that none of its causes of action
arise out of protected activity, and even if they did, it sufficiently demonstrated a
probability of prevailing on the merits of all its claims. Wells Fargo argues the trial court
erred in denying its anti-SLAPP motion as to Downtown Sunnyvale’s fifth cause of
action for breach of contract.
   1. Preclusive Effect of Downtown Sunnyvale I
       First, we address Wells Fargo’s argument that our decision in Downtown
Sunnyvale I, the appeal following the first anti-SLAPP motion, has preclusive effects on
this current appeal based on two separate but related doctrines: the doctrine of issue
preclusion, or res judicata, and the doctrine of the law of the case.
       “The applicable principle that bars relitigation is issue preclusion, also known as
collateral estoppel. [¶] Issue preclusion prevents ‘relitigation of issues argued and decided
in prior proceedings.’ [Citation.] The threshold requirements for issue preclusion are:
(1) the issue is identical to that decided in the former proceeding, (2) the issue was
actually litigated in the former proceeding, (3) the issue was necessarily decided in the
former proceeding, (4) the decision in the former proceeding is final and on the merits,
and (5) preclusion is sought against a person who was party or in privity with a party to
the former proceeding. [Citation.] When those requirements are met, the propriety of
preclusion depends upon whether application will further the public policies of
‘preservation of the integrity of the judicial system, promotion of judicial economy, and
protection of litigants from harassment by vexatious litigation.’ ” (Castillo v. City of Los
Angeles (2001) 92 Cal.App.4th 477, 481.)

                                              6
       “ ‘ “The law of the case doctrine states that when, in deciding an appeal, an
appellate court ‘states in its opinion a principle or rule of law necessary to the decision,
that principle or rule becomes the law of the case and must be adhered to throughout its
subsequent progress, both in the lower court and upon subsequent appeal.’ ” [Citation.]’
[Citation.] The law of the case may apply even where the appeal is from a decision short
of a full trial, including a judgment on a demurrer, a nonsuit order or denial of an anti-
SLAPP motion.” (Hotels Nevada, LLC v. L.A. Pacific Center, Inc. (2012) 203
Cal.App.4th 336, 356.)
       One primary difference between the doctrines of res judicata and law of the case is
that law of the case applies only if the current action arises out of the same case as the
earlier ruling. Our decision in Downtown Sunnyvale I followed after Wells Fargo filed its
initial complaint for judicial foreclosure and appointment of a receiver. Downtown
Sunnyvale subsequently filed a cross-complaint, which Wells Fargo moved to strike
under the anti-SLAPP statute. The trial court granted the special motion to strike, and
Downtown Sunnyvale appealed. We later affirmed the trial court’s decision. This
present appeal followed after the Project was sold at the trustee’s sale. Below, these two
cases were consolidated by the trial court. Therefore, they are one in the same, and prior
decisions in the first case will be binding so long as the other elements of the doctrine of
law of the case are met. Identical issues decided in Downtown Sunnyvale I would also
have the same preclusive effect under the doctrine of collateral estoppel.
       In order to determine whether any of the claims raised in this appeal were finally
decided in Downtown Sunnyvale I, we must go through a step-by-step process. Duplicate
claims raised in Downtown Sunnyvale I that are re-raised here would be bound by our
prior decision. On the other hand, issues that were not decided in Downtown Sunnyvale I
would not be bound by law of the case or collateral estoppel, as they would not have been
finally decided on the merits.

                                              7
       With this in mind, we proceed to examine the arguments presented by the parties
here, distinguishing those issues that have already been decided in the prior appeal.
   2. Overview of the Anti-SLAPP Statute and Standard of Review
       The anti-SLAPP statute provides a “procedural remedy to dispose of lawsuits that
are brought to chill the valid exercise of constitutional rights.” (Rusheen v. Cohen (2006)
37 Cal.4th 1048, 1055-1056.) Consequently, “the anti-SLAPP statute is to be construed
broadly.” (Padres L.P. v. Henderson (2003) 114 Cal.App.4th 495, 508.)
       In evaluating an anti-SLAPP motion, the trial court must engage in a two-step
process. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67
(Equilon).) It first determines “whether the defendant has made a threshold showing that
the challenged cause of action is one arising from protected activity.” (Navellier v.
Sletten (2002) 29 Cal.4th 82, 88 (Navellier).) A defendant meets this burden by
demonstrating the plaintiff’s action is premised on statements or conduct taken “ ‘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,’ as
defined in the [anti-SLAPP] statute. (§ 425.16, subd. (b)(1).)” (Equilon, supra, at p. 67.)
If the defendant makes the requisite showing, the burden shifts to the plaintiff to
demonstrate a probability of prevailing on the claim. (Ibid.) “Only a cause of action that
satisfies both prongs of the anti-SLAPP statute--i.e., that arises from protected speech or
petitioning and lacks even minimal merit--is a SLAPP, subject to being stricken under the
statute.” (Navellier, supra, at p. 89.)
       We review the trial court’s ruling on an anti-SLAPP motion de novo. (Flatley v.
Mauro (2006) 39 Cal.4th 299, 325.) In so doing, we consider “the pleadings, and
supporting and opposing affidavits stating the facts upon which the liability or defense is
based.” (§ 425.16, subd. (b)(2).) We do not make credibility determinations or compare
the weight of the evidence presented below. Instead, we accept the opposing party’s

                                             8
evidence as true and evaluate the moving party’s evidence only to determine if it has
defeated the opposing party’s evidence as a matter of law. (Soukup v. Law Offices of
Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3.) The court “should grant the motion if,
as a matter of law, the defendant’s evidence supporting the motion defeats the plaintiff’s
attempt to establish evidentiary support for the claim.” (Wilson v. Parker, Covert &
Chidester (2002) 28 Cal.4th 811, 821.)
       “A defendant who files a special motion to strike bears the initial burden of
demonstrating that the challenged cause of action arises from protected activity.”
(Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133
Cal.App.4th 658, 669.) This requirement is not always easily met. (Equilon, supra, 29
Cal.4th at p. 66.) “A claim does not arise from constitutionally protected activity simply
because it is triggered by such activity or is filed after it occurs.” (World Financial
Group, Inc. v. HBW Ins. & Financial Services, Inc. (2009) 172 Cal.App.4th 1561, 1568.)
In deciding whether a cause of action “arises from” protected activity, “the critical point
is whether the plaintiff’s cause of action itself was based on an act in furtherance of the
defendant’s right of petition or free speech.” (City of Cotati v. Cashman (2002) 29
Cal.4th 69, 78.) An “act underlying the plaintiff’s cause of action must itself have been
an act in furtherance of the right of petition or free speech.” (Ibid.) Courts must look to
“the act underlying the cause of action, not the gist of the cause of action.” (Wallace v.
McCubbin (2011) 196 Cal.App.4th 1169, 1190.)
       Under the “ ‘principal thrust or gravamen’ test,” even if a cause of action is based
on allegations of both protected and unprotected activity, the anti-SLAPP statute may still
apply. (Club Members for an Honest Election v. Sierra Club (2008) 45 Cal.4th 309,
319.) So long as the allegations of protected activity are not “only incidental to a cause
of action based essentially on nonprotected activity,” a cause of action is subject to
section 425.16. (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 188.)

                                              9
       A moving defendant satisfies his or her burden by showing that the conduct or
statement forming the basis of the plaintiff’s claim falls within one of the four categories
of protected activity set forth under section 425.16, subdivision (e). (Equilon, supra, 29
Cal.4th at p. 66.) That provision states: “As used in this section, ‘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: (1) any written or oral statement or writing
made before a legislative, executive, or judicial proceeding, or any other official
proceeding authorized by law, (2) any written or oral statement or writing made in
connection with an issue under consideration or review by a legislative, executive, or
judicial body, or any other official proceeding authorized by law, (3) any written or oral
statement or writing made in a place open to the public or a public forum in connection
with an issue of public interest, or (4) any other conduct in furtherance of the exercise of
the constitutional right of petition or the constitutional right of free speech in connection
with a public issue or an issue of public interest.” (§ 425.16, subd. (e).)
       By legislative mandate, the phrase “in connection with” is read broadly and the
California Supreme Court has held “that ‘[j]ust as communications preparatory to or in
anticipation of the bringing of an action or other official proceeding are within the
protection of the litigation privilege . . . such statements are equally entitled to the
benefits of section 425.16.’ ” (Briggs v. Eden Council for Hope & Opportunity (1999) 19
Cal.4th 1106, 1115.) Furthermore, the negotiation and execution of settlement
agreements relating to litigation are made “ ‘in connection’ ” with judicial proceedings
and thus fall within the ambit of section 425.16. (Navellier, supra, 29 Cal.4th at p. 90.)
   3. Protected Activity under the Anti-SLAPP Law
       First, the parties disagree on whether the amended complaint seeking to cancel the
trustee’s sale arises from protected activity as set forth under the anti-SLAPP statute.

                                               10
Wells Fargo argues the complaint arises from its activities in connection with a judicial
proceeding, namely, the judicial foreclosure. We agree.
       First Cause of Action: Set Aside of the Trustee’s Sale
       Downtown Sunnyvale’s cause of action to set aside the trustee’s sale alleges the
sale was improper and must be set aside because: (1) Wells Fargo chilled bidding and
failed to conduct a commercially reasonable sale by funding and participating in the
development of the property during the course of the receivership and by paying off
junior liens that would have been extinguished by a nonjudicial foreclosure sale, (2)
Wells Fargo chilled bidding by failing to record a new notice of default before
proceeding with the trustee’s sale, which would have put the buyers who had expressed
interest during the receiver sale process on notice that the Project would be sold at a
public auction as required by law, (3) Wells Fargo chilled bidding by failing to cancel or
rescind its prior contract with Starwood that was elicited during the receiver sale process,
(4) Wells Fargo failed to proceed in a commercially reasonable manner because it did not
correct the public record and inform potential bidders that the mode of sale had
substantially changed, (5) Wells Fargo secretly carried on negotiations with Apple that
resulted in a signing of a lease, which would have influenced bidder participation at the
trustee’s sale, (6) Wells Fargo interfered with the borrower’s equity of redemption by
piling on two years worth of improvement and development costs, (7) Wells Fargo
interfered with the borrower’s equity of redemption by violating section 726, and (8)
Wells Fargo released the borrowers of the secured debt without any conditions precedent.
       Based on the foregoing, it is clear that this cause of action alleges liability arising
from a number of purportedly improper acts. When a complaint “presents a mixed cause
of action that involves protected and nonprotected activities . . . the question presented is
‘whether the gravamen of the cause of action targets protected activity. [Citation.] If
liability is not based on protected activity, the cause of action does not target the

                                              11
protected activity and is therefore not subject to the SLAPP statute. [Citations.]’ (Haight
Ashbury Free Clinics, Inc. v. Happening House Ventures (2010) 184 Cal.App.4th 1539,
1550.) Stated differently, the question is whether the protected activity is merely an
incidental part of the cause of action.” (City of Colton v. Singletary (2012) 206
Cal.App.4th 751, 767.) This “reflect[s] the fundamental concept that a ‘plaintiff cannot
frustrate the purpose of the SLAPP statute through a pleading tactic of combining
allegations of protected and nonprotected activity under the label of “one cause of
action.” ’ ” (Comstock v. Aber (2012) 212 Cal.App.4th 931, 946.)
       Therefore, the determinative issue is whether any of these alleged acts are
nonincidental, protected activity under the anti-SLAPP statute thereby transforming this
first claim into a mixed cause of action.
       Downtown Sunnyvale maintains that none of the conduct alleged in the complaint
fall within the purview of the anti-SLAPP statute, because a trustee’s sale is not entitled
to protection under section 425.16. Downtown Sunnyvale relies on Garretson v. Post
(2007) 156 Cal.App.4th 1508 (Garretson), but we find this reliance misplaced.
       We discussed the applicability of Garretson in Downtown Sunnyvale I. We
explained that Garretson involved the beneficiary of a deed of trust who initiated
nonjudicial foreclosure proceedings against the plaintiff and was subsequently sued for,
among other things, wrongful foreclosure. The Garretson court held the defendant
beneficiary could not claim the protections of section 425.16 for her alleged wrongdoing
because “ ‘nonjudicial foreclosure is a private, contractual proceeding, rather than an
official governmental proceeding or action.’ ” (Garretson, supra, 156 Cal.App.4th at p.
1518, italics removed.) Here, unlike Garretson, Wells Fargo first brought an action for
judicial foreclosure and, as part of a contemplated settlement of that official
governmental proceeding, agreed to instead proceed by way of nonjudicial foreclosure.

                                             12
Communications and acts related to the judicial foreclosure would necessarily be
protected speech and petitioning activity under the anti-SLAPP statute.
       Downtown Sunnyvale also relies on Blackburn v. Brady (2004) 116 Cal.App.4th
670 (Blackburn), which we find inapposite. The plaintiff in Blackburn sued the
defendant for partition, accounting, and fraud. The defendant moved to strike the
complaint under the anti-SLAPP statute, alleging the complaint arose out of written or
oral statements made during a sheriff’s auction that resulted in the property’s sale. (Id. at
p. 676.) The defendant claimed the sheriff’s auction was an official proceeding under the
law and was therefore protected activity under section 425.16, subdivision (e)(1). The
trial court denied the anti-SLAPP motion, and the appellate court affirmed, concluding
that “[t]he ministerial event of a sheriff’s sale or auction simply does not concern an issue
under review or determine some disputed matter as contemplated under the anti-SLAPP
law. Rather, as already noted, it consists merely of offers and the acceptance of the
highest bid made according to certain requirements without any determination based on
the exercise of one’s free speech or petition rights. As such, it concerns a business
dealing or transaction . . . , and not the exercise of protected activity under section
425.16.” (Blackburn, supra, at p. 677.)
       The flaw in Downtown Sunnyvale’s argument is that unlike Blackburn, its
complaint does not merely assert, as the basis for liability, errors with the bank’s actions
that relate solely to the private, nongovernmental transactions comprising the trustee’s
sale.6 The complaint also targets protected speech. For example, the complaint alleges

       6
         If it had, we may have agreed with Downtown Sunnyvale that this cause of
action did not “arise” out of the bank’s protected petitioning activity. The fact that Wells
Fargo’s act of filing the complaint for judicial foreclosure initiated the litigation
culminating in the trustee’s sale would be of no moment. “That a cause of action
arguably may have been triggered by protected activity does not entail that it is one
arising from such.” (City of Cotati v. Cashman, supra, 29 Cal.4th at p. 78.)

                                              13
liability based on Wells Fargo’s improper inflation of the debt through funding
developments and improvements to the Project during the course of the court-appointed
receivership. The complaint also alleges Wells Fargo is liable because it failed to cancel
the contract with Starwood after the receiver’s sale fell apart, and because it released the
borrower’s debt prior to the trustee’s sale.
       We concluded in Downtown Sunnyvale I that the settlement agreements with
RREEF were related to the ongoing judicial foreclosure litigation, and were, therefore,
clearly made “in connection” with a judicial proceeding. (Downtown Sunnyvale I, supra,
at pp. *20-21.) We additionally determined that Wells Fargo’s negotiation and execution
of the settlement agreement, the receiver’s motion for authorization to market and sell the
property, and Wells Fargo’s allegedly fraudulent concealment and misrepresentations
regarding the sale were all connected to or made in anticipation to a judicial proceeding.
(Id. at pp. *24-25.) We are bound by our prior determination that these acts are protected
activity pursuant to the anti-SLAPP statute.
       Furthermore, the complaint alleges Wells Fargo incurred the sanctions of section
726 when it ignored two Wozab warnings and continued to pursue its “invalid course of
conduct” by selling the Project. The Wozab letter written on behalf of SHP and Pau
allege that Wells Fargo improperly sought appointment of a receiver with powers beyond
that of a rents and profits receiver and improperly sought to sell the property through a
receiver’s sale. The appointment of the receiver and the receiver’s sale were part of the
negotiations and settlement related to the original complaint for judicial foreclosure filed
by Wells Fargo. Although the matter was ultimately resolved through a nonjudicial
foreclosure sale, the statements and agreements relating to that process were still made in
connection with a judicial proceeding. (See Downtown Sunnyvale I, supra, at p. *14.)
Again, we conclusively decided this exact issue in Downtown Sunnyvale I and therefore

                                               14
follow our prior decision, which held that these acts are protected speech and petitioning
activity.
       Similarly, Wells Fargo’s communications with the court-appointed receiver, which
form the basis of the allegation that Wells Fargo improperly inflated the debt by funding
and participating in the receiver’s development of the Project, are also statements made in
connection with an issue under consideration by a court in a judicial proceeding. (See
Fremont Reorganizing Corp. v. Faigin (2011) 198 Cal.App.4th 1153 [statements to
court-appointed liquidator in pending liquidation proceeding were made in connection
with an issue under consideration by a court in a judicial proceeding under § 425.16,
subd. (e)].)
       Downtown Sunnyvale’s argument that many appellate cases hold that lawsuits
centered on private business relationships are not subject to the anti-SLAPP statute is
without merit. The cases cited to in support of this proposition, such as Wang v. Wal-
Mart Real Estate Business Trust (2007) 153 Cal.App.4th 790 (Wang) and Graffiti
Protective Coatings, Inc. v. City of Pico Rivera (2010) 181 Cal.App.4th 1207 (Graffiti),
are not dispositive. In Wang, the court determined that although the underlying litigation
involved requests to governmental authorities for land use planning items, these requests
were merely incidental to the overall gravamen of the complaint, which challenged the
“manner in which the parties privately dealt with one another, on both contractual and
tort theories.” (Wang, supra, at p. 809.) Similarly, in Graffiti, the appellate court
concluded that although the protected speech at issue “may be of evidentiary value in
establishing that [the defendant] violated the law, liability is not based on the [protected]
communications themselves.” (Graffiti, supra, at p. 1224.)
       The principles applied in Wang and Graffiti are the same employed by us here.
Wang and Graffiti merely reiterate that in order for a cause of action to be subject to a
special motion to strike, it must be established that the gravamen of the complaint targets

                                             15
protected speech and petitioning activity that are not merely incidental to the complaint.
In this particular case, the protected speech and activity at issue, including the
negotiations and settlement agreements regarding the judicial foreclosure action and the
communications with the receiver, are not simply a collateral matter. These acts formed
the basis of liability.
       Lastly, we reject Downtown Sunnyvale’s argument that the complaint only targets
Wells Fargo’s inactions, not actions, and inaction is not protected activity under the anti-
SLAPP statute. Much of the protected speech and petitioning activity alleged in the
complaint are acts, not just a failure to act, including Wells Fargo’s decision to release
the Borrower’s debt prior to the trustee’s sale, the trustee’s sale itself, the negotiations
related to the judicial foreclosure, and Wells Fargo’s communications with the receiver
regarding the development and improvement of the Project.7
       Simply put, Downtown Sunnyvale’s attempt to focus only on the allegations in its
complaint that target unprotected speech and petitioning activity is unavailing. The first
cause of action alleges liability based on both protected and unprotected speech under
section 425.16. (See Salma v. Capon (2008) 161 Cal.App.4th 1275, 1287.) Therefore, it
is a mixed cause of action and must be stricken unless Downtown Sunnyvale can
demonstrate a probability of prevailing on the merits.
       Second, Third and Fourth Causes of Action
       Downtown Sunnyvale’s second cause of action for cancellation of the trustee’s
deed, third cause of action for slander of title, and fourth cause of action for an
accounting are all derived from the same activity alleged in its first cause of action to set
aside the trustee’s sale. Since we conclude the first cause of action arises, at least in part,

       7
        Additionally, it is “well established that the constitutional right of free speech
includes the right not to speak.” (Kronemyer v. Internet Movie Database Inc. (2007) 150
Cal.App.4th 941, 947.)

                                              16
from protected petitioning activity, the same conclusion applies to these causes of action.
Accordingly, they too must be stricken unless Downtown Sunnyvale can demonstrate a
probability of prevailing on the merits. (City of Colton v. Singletary, supra, 206
Cal.App.4th at p. 768.)
       Fifth Cause of Action: Breach of Contract
       The final cause of action in the amended complaint is for breach of contract.
Unlike the first four causes of action, the trial court concluded this cause of action did not
arise from protected activity.
       The principal allegations in this cause of action are that Wells Fargo breached the
deed of trust by (1) artificially inflating the debt by causing unauthorized development
and improvement charges, (2) precluding competitive bidding at the foreclosure sale by
failing to record a notice of default following the court’s order stopping the receiver’s
sale, (3) obstructing and rejecting Downtown Sunnyvale’s attempt at reinstatement or
redemption.
       We find the trial court erred by concluding this cause of action did not arise from
protected activity. Like Downtown Sunnyvale’s first four causes of action, this fifth
cause of action for breach of contract alleges liability based in part on protected speech
and petitioning activity under the anti-SLAPP law. In fact, this cause of action
incorporated by reference all of the prior allegations in the complaint, including the
protected activity described in the previous section of our opinion.
       Additionally, even if we were to consider this claim separately, Downtown
Sunnyvale alleges Wells Fargo breached the deed of trust by authorizing the receiver’s
expenditure on developments and improvements and adding these amounts to the secured
debt. This theory of liability is based on from the bank’s communications to the receiver
arising from judicial proceedings, the court-ordered receivership. (See infra.) “For
purposes of anti-SLAPP analysis . . . an alleged act is incidental to a claim, and incidental

                                             17
to any unprotected activity on which the claim is based, only if the act is not alleged to be
the basis for liability.” (Wallace v. McCubbin, supra, 196 Cal.App.4th at p. 1183.) In
essence, Downtown Sunnyvale claims that Wells Fargo breached the contract when it
engaged in protected activity. These allegations are not merely incidental.
       We recognize that we must distinguish between speech and petitioning activity
that provides evidence of liability and liability that is based on protected speech and
petitioning activity. (Graffiti, supra, 181 Cal.App.4th at pp. 1214-1215.) For example,
“[p]relitigation communications . . . may provide evidentiary support for the complaint
without being a basis of liability. An anti-SLAPP motion should be granted if liability is
based on speech or petitioning activity itself.” (Id. at p. 1215.) Here, it is apparent that
Downtown Sunnyvale’s claim of liability is based, at least in part, on Wells Fargo’s
protected speech. These acts do not provide only evidence of liability.
       Additionally, we acknowledge and agree with Downtown Sunnyvale’s claim that
“the sequence in which actions are filed is not determinative of whether a lawsuit is a
prohibited suit. The mere fact that a lawsuit was filed after the defendant engaged in
protected activity does not establish the complaint arose from protected activity under a
statute because a cause of action may be triggered by protected activity without arising
from it.” (Optional Capital, Inc. v. DAS Corp. (2014) 222 Cal.App.4th 1388, 1399.)
Downtown Sunnyvale’s complaint was not only triggered by the protected activity; the
principal gravamen of its complaint targets protected speech under the anti-SLAPP law.
       For the foregoing reasons, this claim is subject to a special motion to strike. The
trial court erred in concluding otherwise.8

       8
         Since we conclude that all five causes of action arise from protected activity--
communication in connection with a judicial proceeding--we need not address Wells
Fargo’s alternative argument that the causes of action are subject to the anti-SLAPP
statute because they are conduct in connection with an issue of public interest.

                                              18
   4. Commercial Speech Exemption
       Downtown Sunnyvale, joined by the California Anti-SLAPP Project and
Consumer Attorneys of California9 as amici curiae, maintains that its amended complaint
meets the required elements of the commercial speech exemption and is therefore not
subject to the anti-SLAPP law even if the complaint arises from protected activity. We
find the commercial speech exception inapplicable.10
       Amici Curiae’s Request for Judicial Notice
       First, we address amici curiae California Anti-SLAPP Project’s request for judicial
notice. Amici curiae seek to introduce some of the legislative history behind section
425.17, which codifies the exemptions to the anti-SLAPP law, a screenshot of Wells
Fargo’s Web site stating the bank earned proceeds from sales of foreclosed properties,
and several pages from Wells Fargo’s financial reports that state its proceeds from sales
of foreclosed properties. Wells Fargo opposes this motion.
       Evidence Code section 452, subdivision (c) provides that judicial notice may be
taken of “[o]fficial acts of the legislative, executive, and judicial departments of the
United States and of any state of the United States.” Our decision is based, in part, on the
legislative history of the commercial speech exemption. Therefore, we grant judicial
notice of the legislative history of section 425.17.11

       9
          Consumer Attorneys of California, Privacy Rights Clearinghouse, Consumer
Federation of California, and the Santa Clara County Trial Lawyers Association have
filed a joint amici curiae brief.
        10
           In its reply brief, Wells Fargo insists that since Downtown Sunnyvale did not
raise the commercial speech exemption argument in its first complaint filed about the
allegedly improper receiver sale, it cannot raise this argument here on appeal. However,
even if Downtown Sunnyvale was precluded from raising this argument on appeal, we
find the exemption inapplicable for the reasons set forth below.
        11
           Wells Fargo opposes amici curiae’s request for judicial notice of the legislative
history of section 425.17, arguing that it is irrelevant to our analysis since the wording of
the statute is clear. However, when interpreting a statute we may disregard “even plain
(continued)
                                              19
       However, we deny amici curiae’s request for judicial notice of the documents
pertaining to Wells Fargo’s business operations. Evidence Code section 452, subdivision
(h) states in pertinent part that judicial notice may be taken of “[f]acts and propositions
that are not reasonably subject to dispute and are capable of immediate and accurate
determination by resort to sources of reasonably indisputable accuracy.” However,
“[r]eviewing courts generally do not take judicial notice of evidence not presented to the
trial court. Rather, normally ‘when reviewing the correctness of a trial court’s judgment,
an appellate court will consider only matters which were part of the record at the time the
judgment was entered.’ ” (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14
Cal.4th 434, 444, fn. 3.) This prevents any unfairness that may follow from one party
seeking to raise an issue or argument that was not first argued at the trial court level.
(People v. Hamilton (1986) 191 Cal.App.3d Supp. 13, 22.) The materials amici curiae
seek to introduce were not part of the record before the trial court, and there does not
appear to be an exceptional circumstance that would encourage us to deviate from this
general rule.
       Overview of the Commercial Speech Exemption
       The Legislature enacted section 425.17, which sets forth certain statutory
exemptions to the anti-SLAPP statute, in response to the “disturbing abuse of Section
425.16, the California Anti-SLAPP Law.” (§ 425.17, subd. (a).)
       One of the exemptions set forth in section 425.17 is for commercial speech. This
exemption provides that “[s]ection 425.16 does not apply to any cause of action brought

language which leads to absurd results or contravenes clear evidence of a contrary
legislative intent.” (Ornelas v. Randolph (1993) 4 Cal.4th 1095, 1105.) Amici curiae
claim that the legislative intent behind the commercial speech exemption requires us to
interpret the exemption to apply to the type of speech and conduct at issue here.
Therefore, we find the legislative history of the exemption relevant to both our discussion
and decision.

                                              20
against a person primarily engaged in the business of selling or leasing goods or services,
including, but not limited to, insurance, securities, or financial instruments, 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, or the
statement or conduct arose out of or within the context of a regulatory approval process,
proceeding, or investigation, except where the statement or conduct was made by a
telephone corporation in the course of a proceeding before the California Public Utilities
Commission and is the subject of a lawsuit brought by a competitor, notwithstanding that
the conduct or statement concerns an important public issue.” (§ 425.17, subd. (c).)
       Our Supreme Court has interpreted section 425.17, subdivision (c) “to exempt
from the anti-SLAPP law a cause of action arising from commercial speech when (1) the
cause of action is against a person primarily engaged in the business of selling or leasing
goods or services; (2) the cause of action arises from a statement or conduct by that
person consisting of representations of fact about that person’s or a business competitor’s
business operations, goods, or services; (3) the statement or conduct was made either 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 in the course of delivering
the person’s goods or services; and (4) the intended audience for the statement or conduct
meets the definition set forth in section 425.17[, subdivision] (c)(2).” (Simpson Strong-
Tie Co., Inc. v. Gore (2010) 49 Cal.4th 12, 30 (Simpson).)

                                             21
       Whether the commercial speech exemption codified in section 425.17, subdivision
(c) applies is subject to a de novo standard of review. (All One God Faith, Inc. v.
Organic & Sustainable Industry Standards, Inc. (2010) 183 Cal.App.4th 1186, 1211.) As
a matter of statutory construction, “ ‘[o]ur primary task . . . is to determine the
Legislature’s intent. [Citation.] Where possible, “we follow the Legislature’s intent, as
exhibited by the plain meaning of the actual words of the law . . . .” [Citation.]’
[Citation.] Generally, exceptions to a statute are construed narrowly to cover ‘only those
circumstances which are within the words and reason of the exception.’ [Citations.] ‘
“The literal meaning of the words of a statute may be disregarded to avoid absurd results
or to give effect to manifest purposes that, in the light of the statute’s legislative history,
appear from its provisions considered as a whole.” ’ ” (Id. at p. 1212.) “Plaintiffs have
the burden to demonstrate the anti-SLAPP motion is exempt under section 425.17.”
(Rivera v. First DataBank, Inc. (2010) 187 Cal.App.4th 709, 717.)
       Application of the Commercial Speech Exemption
       In this case, the acts alleged as the basis of Downtown Sunnyvale’s complaint,
such as the bank’s speech and conduct related to the funding of the court-appointed
receiver, the receiver’s actions leading up to the failed receiver’s sale and the subsequent
trustee’s sale, and Wells Fargo’s failure to inform potential bidders of the impending
trustee’s sale and its failure to notice a new default, are related to the bank’s business
operations as a secured lender. However, these acts are not the type of speech typically
subject to the commercial speech exemption, which courts have described as “aimed
squarely at false advertising claims.” (Demetriades v. Yelp, Inc. (2014) 228 Cal.App.4th
294, 309.) There is no false advertising alleged here.
       Undeterred, Downtown Sunnyvale insists the commercial speech exemption
applies, relying on Brill Media Co., LLC v. TCW Group, Inc. (2005) 132 Cal.App.4th 324
(Brill), disapproved of in Simpson, supra, 49 Cal.4th 12. The plaintiffs in Brill were

                                               22
comprised of several media companies that filed a complaint against a financial services
company, arguing the financial services company had incentive to cause a default on the
bonds issued by Brill. (Brill, supra, at p. 333.) The plaintiffs initiated the lawsuit after
the filing of an involuntary bankruptcy petition, an act that is typically considered
protected speech and petitioning activity under section 425.16. (Brill, supra, at p. 336;
Zamous v. Stroud (2004) 32 Cal.4th 958, 964-965.)
       Brill first determined that the defendant who filed the anti-SLAPP motion had the
burden as part of the first prong of the anti-SLAPP law (demonstrating that the complaint
arose out of protected activity), to also show that the complaint did not arise out of
exempted activity as provided under section 425.17. (Brill, supra, 132 Cal.App.4th at pp.
330-331.) It further concluded that the required elements of the commercial speech
exemption were met: (1) the defendants were primarily engaged in selling securities and
financial instruments, (2) the challenged statements were made by the defendants in the
course of delivering their goods and services, and (3) the statements were made to
potential buyers of the media company’s radio stations. (Id. at pp. 341-342.)
       Brill noted that an “additional point warrant[ed] emphasis”--namely, that “section
425.17 was intended to apply to commercial disputes” such as the one involving Brill.
(Brill, supra, 132 Cal.App.4th at p. 342.) In so concluding, the court examined the
legislative history of the exception and cited to the Senate Judiciary Committee report
prepared for then Senate Bill No. 515, which states “ ‘[Senate Bill No.] 515 would make
SLAPP motion[s] inapplicable to cases against a business where [the] cause of action
arises from the business’s commercial speech or activity.’ (Sen. Com. On Judiciary, Rep.
on Sen. Bill No. 515 (2003-2004 Reg. Sess.) as amended on May 1, 2003, p. 8; original
underscoring.)” (Brill, supra, at p. 342.) The appellate court thereafter concluded that
the defendants had failed to meet their burden under the first prong of the anti-SLAPP

                                              23
law to show the cause of action arose from protected speech and petitioning activity since
the commercial speech exemption applied. (Ibid.)
       First, we note that Brill’s preliminary conclusion that the burden of proof is on the
defendant bringing an anti-SLAPP motion to show that protected speech or conduct is not
exempted under section 425.17 was disapproved of by the Supreme Court in Simpson,
supra, 49 Cal.4th 12. Simpson held that the burden of proof falls to the party seeking the
benefit--the plaintiff. (Id. at p. 26.)
       Second, Brill did not interpret the commercial speech exemption as having a
content restriction. (Brill, supra, 132 Cal.App.4th at pp. 340-342.) Therefore, when
applying the commercial speech exemption to the facts before it, the Brill court did not
consider whether the speech or conduct at issue--the filing of the bankruptcy petition--
was a representation of fact about that person’s or a business competitor’s business
operations, goods, or services.
       In fact, given the settled interpretation of the commercial speech exemption, we
find it inapplicable. Downtown Sunnyvale does not meet its burden to demonstrate a
crucial element of the commercial speech exemption: that the speech or conduct at issue
consists of representations of fact concerning that person’s or a business competitor’s
business operations. (§ 425.17, subd. (c)(1).)
       Downtown Sunnyvale claims it met this requirement, because it alleges liability
based on “Wells [Fargo’s] conduct that effectively conveyed forceful representations of
fact about its secured lending operations and services.” However, its opening brief does
not identify specific acts or statements. Instead, Downtown Sunnyvale makes only vague
generalizations regarding the speech it contends must be exempted.12

       12
         For example, Downtown Sunnyvale alleges that Wells Fargo’s funding of the
receiver and failure to notify potential bidders of the trustee’s sale fall within the
commercial speech exemption.

                                             24
       It is true that the conduct alleged in the complaint deals with Wells Fargo’s
business operations. But interpreting these acts to be representations of facts within the
meaning of section 425.17, subdivision (c)(1) would eviscerate the commercial speech
exemption’s content requirement. Amici curiae claim, for example, that Wells Fargo’s
execution of a lease term with Apple was a representation of fact that Wells Fargo had
the right to engage in such transactions. If we were to accept this reasoning, any act or
conduct by a business could be seen as a representation of fact that the business believes
it has the right to engage in such an act. This characterization, though creative, leads to
an impermissible expansion of the scope of the commercial speech exemption, which we
do not believe is supported by its legislative history and the language of the statute itself.
       The first draft of the bill codifying the exemption had the same expansive view
that amici curiae seek to adopt here. Originally, the bill sought to exempt from the anti-
SLAPP law “[a]ny cause of action against any manufacturer, wholesaler, retailer, or other
entity involved in the stream of commerce, arising from any statement, representation,
conduct, label, advertising, or other communication, made in regard to the product,
services, or business operations of that person or entity, or any competitor.” (Sen. Com.
on Judiciary, Analysis of Sen. Bill No. 1651 (2001-2002 Reg. Sess.) as amended May 7,
2002, p. 3.) The senate committee’s analysis of the bill recognized the broad nature of
the exemption as drafted, stating that “[o]n a policy level, the failure of the proposed
statute to distinguish between conduct that may well fall within the paradigm of a
SLAPP, as opposed to simple commercial speech intended to further the speaker’s
business interest is . . . troubling,” and that “[t]he potential over-inclusiveness of the
proposed exclusion may indeed raise both constitutional and policy concerns.” (Id. at p.
12.)
       The over-inclusive nature of the first iteration of the commercial speech
exemption was clearly rejected by the Legislature when it passed Senate Bill No. 515,

                                              25
which enacted the exemption.13 The analysis of the bill noted that the Consumer
Attorneys of America, sponsors of the bill, asserted that “[SB 515] is a more measured
approach than that considered by this Committee last year in SB 1651. That bill
proposed a wholesale exclusion of defendants who were product sellers from the anti-
SLAPP law. The failure of that proposal to distinguish between conduct that may well
fall within the paradigm of a SLAPP, as opposed to simple commercial speech intended
to further the speaker’s business interest, was also troubling. [¶] Thus, the proposal was
recrafted to take a different tack and instead looks at the conduct and context of the
statement in order to determine if the underlying statement should be protected by the
anti-SLAPP law.” (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 515 (2003-2004
Reg. Sess.) as amended May 1, 2003, p. 11.)
       It is apparent from the legislative history of section 425.17 and the cases
interpreting it that the commercial speech exemption should not be applied as broadly as
proposed by amici curiae and Downtown Sunnyvale. The Legislature intended to target a
specific subset of commercial speech that believed should not be protected under the anti-
SLAPP law. That is why the exemption contains a clear content restriction, applying
only if the statement is a representation of fact about that business’ goods or services, or a
competitor’s goods and services. The statements and conduct at issue here simply do not
meet this requirement.
       Downtown Sunnyvale’s claims also suffer from a persistent flaw: a failure to
parse out the purportedly exempted statements and sufficiently demonstrate all of them
meet the requirements of section 425.17, subdivision (c)(1). In its brief, Downtown

       13
          Prior to the passage of Senate Bill No. 515, another version of the commercial
speech exception was introduced as Senate Bill No. 789, which revised Senate Bill No.
1651. (See Sen. Com. on Judiciary, Analysis of Sen. Bill No. 789 (2001-2002 Reg.
Sess.) as amended Aug. 28, 2002, p. 6.)

                                             26
Sunnyvale lists through several acts and statements that it insists “effectively conveyed
forceful representations of fact about [Wells Fargo’s] secured lending operations and
services.” However, Wells Fargo’s communications with the receiver to fund its court-
authorized expenditures and its negotiations of various settlement agreements are not
representations of fact concerning its business operations. Neither was the “intended
audience” of these statements an “actual or potential buyer or customer” of Wells Fargo’s
goods or services as required under section 425.17, subdivision (c)(1).
       The other arguments advanced by amici curiae are similarly unpersuasive.
Finding the exemption inapplicable here does not mean that large financial institutions
such as Wells Fargo will be able to evade litigation that may arise from its secured
lending business. If a plaintiff meets the relatively low standard of demonstrating a
probability of prevailing on the merits on their claims under the second prong of the anti-
SLAPP law, the action will not be dismissed.
   5. Probability of Prevailing on the Merits
       Since we have determined all of the causes of action in the second amended
complaint are subject to the anti-SLAPP statute, we must next examine if Downtown
Sunnyvale has met its burden to demonstrate a probability of prevailing on any of its
claims.
       “To establish a probability of prevailing, the plaintiff ‘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.’ [Citations.] For purposes of this inquiry, ‘the trial court considers the
pleadings and evidentiary submissions of both the plaintiff and the defendant (§ 425.16,
subd. (b)(2)); though the court does not weigh the credibility or comparative probative
strength of competing evidence, it should grant the motion if, as a matter of law, the
defendant’s evidence supporting the motion defeats the plaintiff’s attempt to establish

                                             27
evidentiary support for the claim.’ [Citation.] In making this assessment, it is ‘the
court’s responsibility . . . to accept as true the evidence favorable to the plaintiff . . . .’
[Citation.] The plaintiff need only establish that his or her claim has ‘minimal merit.’ ”
(Soukup v. Law Offices of Herbert Hafif, supra, 39 Cal.4th at p. 291.) To defeat an anti-
SLAPP motion, the plaintiff needs only to demonstrate a probability of prevailing on “
‘any part’ ” of the cause of action. (Oasis West Realty, LLC v. Goldman (2011) 51
Cal.4th 811, 820.)
       First Cause of Action: Set Aside of the Trustee’s Sale
       Downtown Sunnyvale’s first cause of action to set aside the trustee’s sale alleged
that Wells Fargo illegally chilled bidding in violation of Civil Code section 2924h,
subdivision (g).
       In its opposition to the anti-SLAPP motion below, Downtown Sunnyvale’s sole
argument, comprised of one paragraph, asserted the following: “As set forth in the
Factual Background section, infra, and accompanying evidence, DSMU have made a
prima facie showing of standing, authority, and improprieties in the Trustee Sale,
enumerating Wells Fargo’s acts to block DSMU’s redemption of the Loan prior to
foreclosure and chill any potential competitive bidding at the Trustee sale.” Downtown
Sunnyvale made no other attempt to develop this argument or provide any legal analysis.
       On appeal, Downtown Sunnyvale attempts to expand its argument that it has a
probability of prevailing. Many of these arguments were not raised in its opposition to
the anti-SLAPP motion. As a general rule, “[p]oints not raised in the trial court will not
be considered on appeal.” (Hepner v. Franchise Tax Bd. (1997) 52 Cal.App.4th 1475,
1486.) Wells Fargo urges us not to consider these additional claims. However, we have
the discretion to consider matters not raised below to the trial court on their merits if
doing so does not require resolution of a factual dispute. (Cedars-Sinai Medical Center
v. Superior Court (1998) 18 Cal.4th 1, 6.) Assuming without deciding that Downtown

                                                28
Sunnyvale has not waived its arguments, we would nonetheless conclude it failed to
demonstrate a probability of prevailing on the merits.
       As Downtown Sunnyvale opines in its opening brief, “[c]ase law instructs that the
elements of an equitable cause of action to set aside a foreclosure sale are: (1) the trustee
or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property
pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale
(usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in
cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor
tendered the amount of the secured indebtedness or was excused from tendering.” (Lona
v. Citibank, N.A. (2011) 202 Cal.App.4th 89, 104.)
       Generally, “[a] trustee’s sale under a deed of trust is presumed to be valid.”
(Sierra-Bay Fed. Land Bank Assn. v. Superior Court (1991) 227 Cal.App.3d 318, 337.)
However, a “debtor may apply to a court of equity to set aside a trust deed foreclosure.
[Citation.] But in order to support such a request the debtor must allege such unfairness
or irregularity that, when coupled with the inadequacy of price obtained at the sale, it is
appropriate to invalidate the sale.” (Ibid.)
       Downtown Sunnyvale has failed to demonstrate the existence of errors that
impermissibly restrained or chilled bidding in violation of section 2924h, subdivision (g),
which makes it unlawful for a person, either acting alone or in concert with others, to fix
or restrain bidding at a sale of property pursuant to a power of sale in a deed of trust or
mortgage.14

       14
         Wells Fargo argues that Downtown Sunnyvale has not provided evidence of
prejudice, because SHP and Pau failed to tender a redemption. (See Arnolds
Management Corp. v. Eischen (1984) 158 Cal.App.3d 575, 578.) However, we need not
determine whether SHP and Pau were required to make a tender. Even if no tender was
required, or if Downtown Sunnyvale met the tender requirement, it has still failed to
demonstrate it was prejudiced by the bank’s actions for the reasons we explain below.

                                               29
       Courts have invalidated unfairly or unlawfully conducted foreclosure sales in
cases where purchasers or sellers took proactive steps to thwart the competitive process.
For example, in Lo v. Jensen (2001) 88 Cal.App.4th 1093, the Second District affirmed
the trial court’s order setting aside a nonjudicial foreclosure sale. Lo involved two buyers
who colluded together to purchase a condo for $5,412. (Id. at p. 1095.) The buyers had
initially planned to bid $100,000 on the condo, which they valued to be worth at least
$150,000. (Ibid.)
       South Bay Building Enterprises, Inc. v. Riviera Lend-Lease, Inc. (1999) 72
Cal.App.4th 1111 also involved a sale where key players proactively restrained bidding.
There, a junior lienholder appealed after the trial court denied its motion to amend its
complaint and granted the senior lienholder’s motion for a directed verdict. (Id. at p.
1120.) The junior lienholder alleged that the senior lienholder and the trustee of the
foreclosed property had entered into an agreement for the senior lienholder to purchase
the property. The trustee delayed the foreclosure sale several times when another bidder
was present and misrepresented the amount of the senior lienholder’s interest in the
secured property. (Id. at pp. 1116-1118.)
       In sharp contrast to the aforementioned cases, Downtown Sunnyvale does not
submit any evidence indicating Wells Fargo colluded with the trustee to restrain or fix
bidding. Instead, Downtown Sunnyvale characterizes the bidding process as prejudicially
unfair, because Wells Fargo did not notify bidders who participated in the receiver sale
process about the upcoming trustee’s sale. Downtown Sunnyvale also alleges Wells
Fargo did not inform bidders that the agreement with Starwood no longer applied, and the
contract with Starwood remained open even after the trustee’s sale. This, according to
Downtown Sunnyvale, created “uncertainty” with serious bidders, who would have had
reservations about the outcome of the trustee’s sale given the appearance of an
outstanding deal with Starwood. Downtown Sunnyvale further speculates that this

                                             30
uncertainty negated any possibility that Starwood would have come to bid on the
property during the trustee’s sale, because it may have erroneously believed it still
retained rights to the Project.
       These arguments appear to suggest ways in which Wells Fargo could have
generated more interest in the trustee’s sale. However, even if we assume that
Downtown Sunnyvale’s allegations are true, these allegations are not evidence that the
bank restrained or chilled bidding, or otherwise failed to follow the statutory procedures
required to complete a lawful trustee’s sale.
       Under California law, “[u]pon default by the trustor, the beneficiary may declare a
default and proceed with a nonjudicial foreclosure sale. (Civ. Code, § 2924; [citation].)
The foreclosure process is commenced by the recording of a notice of default and
election to sell by the trustee. (Civ. Code, § 2924; [citation].) After the notice of default
is recorded, the trustee must wait three calendar months before proceeding with the sale.
(Civ. Code, § 2924, subd. (b); [citation].) After the 3-month period has elapsed, a notice
of sale must be published, posted and mailed 20 days before the sale and recorded 14
days before the sale. (Civ. Code, § 2924f; [citation].) The trustee may postpone the sale
at any time before the sale is completed. (Civ. Code, § 2924g, subd. (c)(1); [citation].) If
the sale is postponed, the requisite notices must be given. (Civ. Code, § 2924g, subd.
(d).) The conduct of the sale, including any postponements, is governed by Civil Code
section 2924g. [Citation.] The property must be sold at public auction to the highest
bidder. (Civ. Code, § 2924g, subd. (a); [citation].)” (Moeller v. Lien (1994) 25
Cal.App.4th 822, 830.)
       Wells Fargo filed a notice of default more than three months before the notice of
sale was recorded, a fact that Downtown Sunnyvale does not dispute. Procedurally, the
bank was not required to do anything else. Yet Downtown Sunnyvale faults the bank for
its failure to go beyond its legal obligations--failing to notify the rejected bidders from

                                                31
the receiver sale of the impending trustee’s sale. There is no evidence Wells Fargo
restrained or chilled bidding.
       More importantly, whether the bank’s failure to personally notify bidders from the
receiver’s sale about the trustee’s sale contributed to the absence of bidders at the
trustee’s sale is purely speculative. Downtown Sunnyvale has not submitted evidence to
show there was a viable bidder who was ready, willing, and able to bid at the trustee’s
sale, but failed to do so because of Wells Fargo’s alleged improprieties. Accordingly, it
has failed to provide evidence that it was prejudiced or harmed by the bank’s actions, an
element that is required to set aside a trustee’s sale.
       Instead, Downtown Sunnyvale insists the number of interested buyers during the
receiver sale process is evidence that there must have been multiple parties interested in
the Project during the trustee’s sale process. This inference has no support in the record.
“[D]eclarations that lack foundation or personal knowledge, or that are argumentative,
speculative, impermissible opinion, hearsay, or conclusory are to be disregarded.”
(Gilbert v. Sykes (2007) 147 Cal.App.4th 13, 26.) That there were multiple buyers
interested in the Project during the receiver sale process is not evidence that there would
have been bidders interested in purchasing the property at the trustee’s sale.15
       Similarly, we must also reject Downtown Sunnyvale’s claim that Starwood would
have bid at the trustee’s sale had it not possessed a mistaken belief that it had contractual

       15
          Courts have held that “the proper inquiry in the context of an anti-SLAPP
motion ‘is whether the plaintiff proffers sufficient evidence for such an inference.’ ”
(Oasis West Realty, LLC v. Goldman, supra, 51 Cal.4th at p. 822.) Therefore, a
reviewing court “must consider not only facts supported by direct evidence, but also facts
that reasonably can be inferred from the evidence.” (Ulkarim v. Westfield LLC (2014)
227 Cal.App.4th 1266, 1274.) However, Downtown Sunnyvale has not offered sufficient
evidence to support the inference that the lack of bidders at the trustee’s sale was due to
Wells Fargo’s failure to notify the previous bidders from the receiver sale process. As
Wells Fargo noted, it published the trustee’s sale in several newspapers.

                                              32
rights to the Project. First, this argument is speculative and without support. (Gilbert v.
Sykes, supra, 147 Cal.App.4th at p. 26.) Second, Downtown Sunnyvale does not clearly
articulate what it expected Wells Fargo to do in this situation. The contract between
Starwood and the receiver was just that: a contract between the Starwood and the
receiver. Wells Fargo was not a party to the contract, and it could not have repudiated it.
       Downtown Sunnyvale’s argument that Wells Fargo “clogged the equity of
redemption and otherwise interfered with [its] rights of redemption” by “ ‘piling on’ two
years’ worth of unauthorized improvement and development costs, unnecessary and
excessive carrying costs, unauthorized junior lien payments” and adding it to the debt in
violation of the deed of trust is also without merit. As we determined in Downtown
Sunnyvale II, the receiver acted within his appointment powers when he signed leases and
made improvements to the Project. (Downtown Sunnyvale II, supra, H038572,
H039024.) The receiver, acting as an agent of the court, obtained court approval
confirming many of its major actions, including the work related to signing a lease with
Nokia. Wells Fargo’s funding of the receiver’s activities were, as a result, part and parcel
of the court-approved receivership. Downtown Sunnyvale has failed to show the actions
taken by the receiver were unauthorized or that Wells Fargo’s advancements to the
receiver were somehow inappropriate.
       Downtown Sunnyvale has also failed to show that Wells Fargo violated section
726.16 In its amended complaint, Downtown Sunnyvale alleged the bank violated section

       16
           In its reply brief, Wells Fargo argues that Downtown Sunnyvale is precluded
from litigating this point, because it was raised and decided in Downtown Sunnyvale I.
We agree in part. To the extent Downtown Sunnyvale claims a violation of section 726
based on the same actions taken by Wells Fargo and supported by the same evidence as
litigated in Downtown Sunnyvale I, Downtown Sunnyvale I is law of the case. However,
to the extent that Downtown Sunnyvale has advanced additional arguments, or has
provided additional evidentiary support, these claims would not have been finally decided
in the prior appeal. Therefore, Downtown Sunnyvale would not be precluded from
(continued)
                                             33
726 by failing to conduct a commercially reasonable trustee’s sale, failing to make an
even playing field for all potential bidders, and proceeding to a public auction even
though the Project was encumbered by the contract with Starwood.
       Section 726 provides that a beneficiary of a note or deed of trust for a real property
seeking to collect the debt “can bring only one lawsuit to enforce its security interest and
collect its debt.” (Security Pacific National Bank v. Wozab (1990) 51 Cal.3d 991, 997
(Wozab).) The secured creditor must proceed against the real property first; he cannot
treat the debt as an ordinary debt and base an independent cause of action on it. (Ibid.)
“[W]here the creditor sues on the obligation and seeks a personal money judgment
against the debtor without seeking therein foreclosure of such mortgage or deed of trust,
he makes an election of remedies, electing the single remedy of a personal action, and
thereby waives his right to foreclose on the security to or sell the security under a power
of sale.” (Walker v. Community Bank (1974) 10 Cal.3d 729, 733.) Thus, section 726 has
a dual application. A debtor can raise it as an affirmative defense in an action on the
promissory note, forcing the creditor to proceed against the security, or he may invoke it
as a sanction against the creditor on the basis that the creditor, by not foreclosing first on
the security, has waived his right to do so. (Wozab, supra, at p. 997.)
       Downtown Sunnyvale has not provided any evidence that would demonstrate a
probability of prevailing on its claims that Wells Fargo violated section 726 either by
breaching the one form of action rule or the security first rule. Wells Fargo filed a
complaint seeking judicial foreclosure, which is permitted under section 726. The
judicial foreclosure did not proceed to a judgment and while that action was pending
Wells Fargo entered into a settlement agreement with the Borrowers where the property

litigating those claims. Regardless, even if Downtown Sunnyvale were not precluded
from relitigating its section 726 arguments, we would find that it has failed to
demonstrate a probability of prevailing.

                                              34
could be sold via a nonjudicial foreclosure process. At all times, there was only one
action brought, and Wells Fargo did not seek to appropriate assets before exhausting the
security first.
       Downtown Sunnyvale also argues that Wells Fargo blocked its efforts to redeem
the loan. Downtown Sunnyvale asserts that Pau and SHP tendered a redemption to Wells
Fargo in November 2010 and to the receiver in April 2011. However, it claims that these
attempts at redemption were ignored.
       A borrower can redeem property from foreclosure prior to a foreclosure sale by
exercising the equitable right to redemption. (Knapp v. Doherty (2004) 123 Cal.App.4th
76, 87.) A tender is an offer of performance made with the intent to extinguish an
obligation, in this case, the debt owed. (Civ. Code, § 1485.) “As a general rule, the
debtor in a nonjudicial foreclosure may avoid the loss of the property by ‘pay[ing] all
amounts due at any time prior to the sale . . . .’ ” (Multani v. Witkin & Neal (2013) 215
Cal.App.4th 1428, 1444-1445.) Typically, a credible offer to tender the full amount of
indebtedness by a borrower is required to set aside a foreclosure sale under a deed of
trust. (Gaffney v. Downey Savings & Loan Assn. (1988) 200 Cal.App.3d 1154, 1165.)
       First, Pau and SHP’s attempt to purchase the property in November 2010 was not
a redemption. That is, Pau and SHP did not make a credible offer to pay the full amount
of the indebtedness. In its letter to Wells Fargo, SHP requested that it be given the right
to be selected as the buyer by matching the “best bona fide offer” submitted to purchase
the Project with a premium of 1 percent. This is not a credible offer to purchase the
property by tendering the amount of indebtedness owed. It is unclear what the market
price for the Project was at that time, and if this price would have covered the amount of
the debt.
       In its April 2011 letter, SHP and Pau made an offer to pay $100,000 above the best
bona fide offer made to the receiver and not less than $185 million. This purchase offer

                                             35
was not framed as a redemption, which is an equitable right that may be exercised by the
borrowers to reclaim a property under foreclosure. (Gaffney v. Downey Savings & Loan
Assn., supra, 200 Cal.App.3d at p. 1165.) Based on the wording of the offer letter, it was
not clear whether SHP and Pau sought to redeem the property as borrowers, or sought to
purchase the property as interested third party developers of the Project who possessed a
vested stake in the Project.
          The issue of Pau and SHP’s managerial authority over the borrowers was a
contested issue in the proceedings below. The existence of this dispute was underscored
in Wells Fargo’s letter in August 2011 to Pau and SHP specifying some of the terms of
redemption. The terms included a condition that Wells Fargo’s discussions with Pau and
SHP regarding the repayment of the loan would not be interpreted as waiver of any
argument that Pau and SHP were not in control of the borrowers and a condition that
Wells Fargo reserved the right to evaluate RREEF’s response to the potential repayment
and to conduct its own research before committing to a repayment. In its reply brief,
Downtown Sunnyvale claims the April 2011 offer letter was made by SHP as the
“Borrowers’ manager after RREEF’s removal in July 2009.” However, there is no
evidence indicating this was the case. Neither does this conclusory statement
acknowledge the very real dispute over who had authority to act on the Borrower’s
behalf.
          Downtown Sunnyvale argues that irrespective of whether it had control over the
Borrowers, SHP and Pau retained a right to redeem the loan because it was an interested
third party. We disagree. The case law establishes that borrowers in default are the ones
who may tender a redemption in order to retain a property in the process of foreclosure.
The case relied on by Downtown Sunnyvale, O’Neil v. General Security Corp. (1992) 4
Cal.App.4th 587, 600-601, has nothing to do with the right of redemption. O’Neil
concluded that the “sanction aspect of section 726 operates for the benefit of both the

                                             36
primary debtor and third parties claiming an interest in the property, whether as
successors-in-interest or third party lienholders.” (Id. at p. 600.) O’Neil is not relevant to
the issues raised by the parties here.
          Additionally, it does not appear that SHP and Pau’s offer of $185 million would
have covered the full amount of the indebtedness owed, which Wells Fargo estimated at
$189,418,440. The bank’s August 2011 letter expressly stated that it would consider the
loan repaid if SHP and Pau submitted $189,418,440 prior to the trustee’s sale. However,
neither SHP, Pau, or RREEF (i.e., none of the borrowers) submitted payment to Wells
Fargo to redeem the loan amount. This letter did not condition redemption on a
determination of who was in control of the Borrowers. Wells Fargo simply cautioned
SHP and Pau that acceptance of the tender should not be taken as the bank’s
acknowledgement that SHP and Pau had authority over the Borrowers, since that was a
contested issue. Based on the foregoing, there is no evidence Wells Fargo blocked or
ignored SHP and Pau’s attempts to redeem.
          Therefore, we find that for the reasons set forth above, Downtown Sunnyvale has
not met its burden to demonstrate a probability of prevailing on its cause of action to set
aside the trustee’s sale. Accordingly, the trial court did not err in striking this cause of
action.
          The Second through Fourth Causes of Action
          Downtown Sunnyvale’s second through fourth causes of action (cancellation of
the trustee’s deed, slander of title, and an accounting) are all derivative of the allegations
set forth in his first cause of action to set aside the trustee’s sale. Since we conclude
Downtown Sunnyvale has failed to demonstrate a probability of prevailing on the first
cause of action, we must also find that it has failed to demonstrate a probability of
prevailing on the second, third, and fourth causes of action.

                                              37
       The Fifth Cause of Action: Breach of Contract
       Lastly, we must determine if Downtown Sunnyvale met its burden to demonstrate
it had a probability of prevailing on its last cause of action for breach of contract and
breach of the implied covenant of good faith and fair dealing.17
       The elements of a breach of contract consists of: (1) a contract, (2) a plaintiff’s
performance or excuse for nonperformance, (3) the defendant’s breach, and (4) resulting
damages. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d
1371, 1388.) The complaint alleged that the parties had entered into a contract (the deed
of trust) and that Downtown Sunnyvale had done all of what it was required to do in the
event of a default under the deed of trust. The complaint further alleged Downtown
Sunnyvale breached the deed of trust by helping itself to improper remedies,
characterized as (1) artificially inflating the debt through unauthorized development and
improvement charges, unnecessary and excessive carrying costs, and unauthorized junior
lien payments, (2) precluding competitive bidding at the trustee’s sale by improperly
inflating the debt and failing to notice the default after the court’s order halting the
receiver’s sale, and (3) rejecting the borrowers’ attempt at redemption. The amended

       17
         Because the trial court found that this cause of action did not arise from
protected activity, it did not reach the second prong of the anti-SLAPP analysis and did
not make a ruling on whether Downtown Sunnyvale had established a probability of
prevailing on the merits of its breach of contract claim. However, we review an order
denying an anti-SLAPP motion de novo, so we may determine, if the record is sufficient,
whether Downtown Sunnyvale has met its burden in the second prong since the issues
involved are matters of law. (See, e.g., Mann v. Quality Old Time Service, Inc. (2004)
120 Cal.App.4th 90.) We conclude the record is sufficient for us to make a determination
on whether Downtown Sunnyvale met its burden on the second prong with respect to its
breach of contract claim. Downtown Sunnyvale does not seek to introduce any other
evidence that would require a factual determination and instead relies on the materials
submitted to the trial court below. Remand would therefore be a waste of judicial
resources, as we are in as good of a position as the trial court to determine whether the
second prong has been satisfied.

                                              38
complaint asserted that Wells Fargo had breached the covenant of good faith and fair
dealing and alleged damages in its loss of fee ownership of the Project and loss of equity.
       For the same reasons Downtown Sunnyvale has failed to demonstrate a probability
of prevailing on its first four causes of action, it has failed to meet its burden to
demonstrate a probability of prevailing on its breach of contract claim and its claim that
Wells Fargo violated the implied covenant of good faith and fair dealing.
       First, the complaint fails to identify what contractual obligations Wells Fargo
breached. The complaint merely alleges Wells Fargo breached the deed of trust by
committing various improper acts. There is nothing in the complaint that discusses how
these acts breached specific provisions in the deed of trust.
       Additionally, in its cross-respondent’s reply brief, Downtown Sunnyvale spends
approximately two pages on the key argument that it demonstrated a probability of
prevailing, asserting that “the prima facie validity of the [breach of contract] claim is
highlighted by the same evidentiary showing” it relies on its discussion of the first four
causes of action. There is no discussion of the elements required for establishing a
breach of contract or a violation of the implied covenant of good faith and fair dealing. “
‘[E]very brief should contain a legal argument with citation of authorities on the points
made. If none is furnished on a particular point, the court may treat it as waived and pass
it without consideration.’ [Citation.] [¶] It is the duty of appellants’ counsel, not of the
courts, ‘by argument and the citation of authorities to show that the claimed error exists.’
” (Sprague v. Equifax, Inc. (1985) 166 Cal.App.3d 1012, 1050.)
       However, Downtown Sunnyvale insists in its cross-respondent’s reply brief that it
did identify specific provisions in the deed of trust that were breached in its opening brief
on appeal and in its cross-respondent’s reply brief, including the deed of trust provisions
allowing Wells Fargo to add maintenance and preservation costs to the secured debt, but
not allowing the addition of costs associated with the construction and completion of the

                                               39
Project. Even if we were to consider these bare allegations, we would still conclude
Downtown Sunnyvale failed to provide evidence to show its breach of contract claim has
even minimal merit. Here, Wells Fargo’s evidence supporting its motion to strike defeats
Downtown Sunnyvale’s attempt to establish any evidentiary support for its breach of
contract claim. (See Soukup v. Law Offices of Herbert Hafif, supra, 39 Cal.4th at p. 291.)
       The interpretation of a contract is a judicial function. (Wolf v. Walt Disney
Pictures & Television (2008) 162 Cal.App.4th 1107.) The trial court “ ‘give[s] effect to
the mutual intention of the parties as it existed’ ” at the time the contract was executed.
(Pacific Gas & E. Co. v. G.W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 38, fn. 5.)
Ordinarily, the intent of the contracting parties is a legal question that is determined
solely by examining the contract’s terms. (Civ. Code, §§ 1638, 1639.)
       With respect to Downtown Sunnyvale’s claims regarding the inflation of the debt,
Wells Fargo points out that the deed of trust expressly allowed it, as the administrative
agent, to pay sums including but not limited to those costs necessary for protection,
maintenance, alterations, renovations, and repairs. The deed of trust stated that “[a]ny
amounts so paid shall bear interest at the default rate stated in the Loan Agreement and
shall be secured by this Deed of Trust.” The deed of trust also stated that Wells Fargo
would have the right to request appointment of a receiver from the court to manage,
lease, and operate the Project. We previously determined in Downtown Sunnyvale II that
the receiver acted within the scope of his appointment order when he paid off certain
liens and when he made improvements and developed the Project. (See Downtown
Sunnyvale II, supra, H038572, H039024.) Pursuant to the appointment order, these
amounts were added to the amount of the secured debt. In Downtown Sunnyvale II, we
also determined the receiver’s appointment order did not retroactively expand the
provisions of the deed of trust. (Ibid.) As a result, the evidence provided by Downtown
Sunnyvale to support its claim that Wells Fargo breached the deed of trust by adding on

                                              40
carrying costs, paying off junior liens, and developing and improving the Project--all
actions taken by the court-appointed receiver--do not establish a breach.
        Furthermore, Downtown Sunnyvale failed to provide evidence it was damaged by
Wells Fargo’s alleged breach, which is “a necessary element of the breach of contract
cause of action.” (Navellier v. Sletten (2003) 106 Cal.App.4th 763, 775.) As we
discussed before, there is no admissible evidence that there was a bidder who was willing
and able to purchase the Project for more than Wells Fargo’s credit bid at the trustee’s
sale.
        Lastly, we have already addressed and rejected, in the previous section of our
opinion discussing the first cause of action to set aside the trustee’s sale, Downtown
Sunnyvale’s claims that Wells Fargo frustrated or blocked SHP and Pau’s attempts at
redemption and conducted restrained competitive bidding during the trustee’s sale. There
is no evidence, aside from Downtown Sunnyvale’s conclusory assertions and
speculations, to support these allegations. Therefore, Downtown Sunnyvale has also
failed to show its theory that Wells Fargo breached the implied covenant of good faith
and fair dealing has a probability of prevailing on the merits.
        Since Downtown Sunnyvale fails to submit any other evidence to support its
breach of contract theories, this last cause of action must be stricken.
   6. Motion for Anti-SLAPP Discovery
        Finally, Downtown Sunnyvale argues the trial court erred in denying its motion
for anti-SLAPP discovery.
        “Generally, discovery is closed once a motion to strike under section 425.16 has
been filed. (§ 425.16, subd. (g).) However, the trial court may allow discovery limited to
the issues raised by the motion to strike upon ‘a timely and proper showing in response to
the motion to strike.’ (Lafayette Morehouse, Inc. v. Chronicle Publishing Co. (1995) 37
Cal.App.4th 855, 868.) The ‘proper showing’ includes ‘good cause’ for the requested

                                             41
discovery. (§ 425.16, subd. (g).) ‘We review for abuse of discretion as to the trial court’s
decision as to whether a plaintiff has complied with the requirements of section 425.16,
subdivision (g) to merit discovery prior to a hearing on the motion to strike. [Citations.]’
(Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106
Cal.App.4th 1219, 1247.)” (Tutor-Saliba Corp. v. Herrera (2006) 136 Cal.App.4th 604,
617.) A trial court abuses its discretion if its decision is arbitrary, capricious, or exceeds
the bounds of all reason. (Ibid.)
       Downtown Sunnyvale filed its motion for anti-SLAPP discovery on September 14,
2012, acknowledging that Wells Fargo’s anti-SLAPP motion was set for a hearing in less
than two weeks on September 27, 2012. Its discovery motion requested the opportunity
to depose three Wells Fargo employees who were personally involved with the
transactions related to the Project’s deed of trust and asked that Wells Fargo produce
“limited” documents in advance of these depositions.18 Downtown Sunnyvale asserted
this discovery was necessary because it may produce evidence to show it had made a
prima facie case on the merits in order to survive Wells Fargo’s anti-SLAPP motion.
       On September 27, 2012, the court held a hearing on the pending anti-SLAPP
motion. Downtown Sunnyvale reminded the court of its pending anti-SLAPP discovery
motion. In response, the court questioned the request for discovery, stating: “You never
indicated to me what is out there that’s going to compel me to continue this [anti-SLAPP]
motion in terms of what you’re seeking discovery [sic].” On November 16, 2012, the

       18
          In an attachment to the motion for anti-SLAPP discovery, Downtown Sunnyvale
requested that Wells Fargo provide, for example, all communications between Wells
Fargo and the Borrowers between January 1, 2009, and August 17, 2011, regarding the
collateral for the Sunnyvale deed of trust, all communications between Wells Fargo and
RREEF between the same dates regarding the collateral, and all communications between
Wells Fargo and the receiver regarding the collateral for the deed of trust and the subject
property.

                                              42
trial court concluded this discovery motion was moot, because the ruling on the anti-
SLAPP motion was pending.
       We find the trial court did not abuse its discretion when it denied the motion for
additional discovery. First, the discovery request and the opposition to the anti-SLAPP
motion were at odds with one another. The discovery motion asserted that additional
evidence was required in order for Downtown Sunnyvale to make a prima facie case.
However, in its opposition to the anti-SLAPP motion, Downtown Sunnyvale’s position
was that the gravamen of its complaint did not arise out of protected petitioning activity.
Additionally, the anti-SLAPP opposition claimed that even if the complaint did arise out
of protected petitioning activity, Downtown Sunnyvale had met its burden to demonstrate
a probability of prevailing on the merits of the complaint through the voluminous amount
of evidence demonstrating Wells Fargo’s wrongdoings.
       Downtown Sunnyvale also did not show good cause existed for the court to grant
its request for anti-SLAPP discovery. “Decisions that have considered what constitutes
such a showing of good cause have described it as a showing ‘that a defendant or witness
possesses evidence needed by plaintiff to establish a prima facie case.’ [Citation.] The
showing should include some explanation of ‘what additional facts [plaintiff] expects to
uncover . . . .’ ” (1-800 Contacts, Inc. v. Steinberg (2003) 107 Cal.App.4th 568, 593.)
During the hearing on the anti-SLAPP motion and in its motion for discovery, Downtown
Sunnyvale did not clearly identify the specific information it sought to obtain, and it did
not demonstrate the evidence could not be obtained by other means.
       Much of the evidence that Downtown Sunnyvale sought in its discovery motion
would have been duplicative of the information it already had in its possession. For
example, Downtown Sunnyvale requested information pertaining to the receivership’s
costs. This information was obtained during the discovery process for the litigation

                                             43
underlying Downtown Sunnyvale II, the case that concerned the discharge of the court-
appointed receiver.
       Downtown Sunnyvale also sought evidence regarding Wells Fargo’s failure to
affirmatively notify bidders of the trustee’s sale. Since Downtown Sunnyvale claims that
Wells Fargo did not inform the bidders of the sale, there would have been nothing to
discover. Additionally, this information is not the type that could have only been
obtained from Wells Fargo. In order to demonstrate prejudice stemming from Wells
Fargo’s failure to act, Downtown Sunnyvale could have obtained a declaration from one
of the bidders that it was ready, willing, and able to bid on the Project, but only failed to
do so because it was not notified of the pending trustee’s sale. This information would
not have been discovered by taking depositions of Wells Fargo’s employees or by
combing through Wells Fargo’s communications regarding the sale.
       Downtown Sunnyvale relies on Lafayette Morehouse, Inc. v. Chronicle Publishing
Co., supra, 37 Cal.App.4th 855 for the proposition that courts should “liberally” exercise
their discretion to allow anti-SLAPP discovery “when evidence to establish a prima facie
case is reasonably shown to be held, or known, by defendant or its agents and
employees.” (Id. at p. 868.) However, the dicta in Lafayette Morehouse has been
superseded as the “decision ‘predate[s] the 1997 amendment requiring a broad
interpretation of section 425.16.’ [Citation.] Accordingly, we join the courts that have
limited the reach of Lafayette Morehouse’s language.” (Paterno v. Superior Court
(2008) 163 Cal.App.4th 1342, 1351.)
       Here, Downtown Sunnyvale did not specifically identify what facts it intended to
discover, much of the evidence it sought was duplicative of items already in its
possession, and it is not clear that the discovery sought was attainable only through Wells
Fargo. Furthermore, Downtown Sunnyvale’s argument in its opposition to the anti-
SLAPP motion was not that it required more evidence to establish a prima facie case on

                                              44
the merits of its claims. Rather, its position in the opposition and here on appeal is that it
had provided ample evidence of wrongdoing that establishes a probability of prevailing
on all of its causes of action.
       Therefore, we conclude the trial court did not abuse its discretion in concluding
that Downtown Sunnyvale did not satisfy its burden to demonstrate the existence of good
cause in order to lift the discovery stay.
   7. Conclusion
       Wells Fargo has met its burden to show that all of the causes of action alleged in
the amended complaint arise from protected petitioning activity. However, Downtown
Sunnyvale has failed to meet its burden to demonstrate a probability of prevailing on any
of its claims. Therefore, we must reverse the trial court’s order denying Wells Fargo’s
anti-SLAPP motion on the fifth cause of action.
                                        DISPOSITION
       The order granting the anti-SLAPP motion in part and denying it in part is
reversed. The trial court is directed to enter a new order granting the anti-SLAPP motion
on all five causes of action. Wells Fargo is entitled to its costs on appeal.

                                              45
                    Premo, J.

WE CONCUR:

    Rushing, P.J.

    Elia, J.