Court Opinion

ID: 4766362
Source: CourtListenerOpinion
Date Created: 2021-08-17 18:04:19.273188+00
Date Added: 2024-06-11T08:09:17.163213
License: Public Domain

Filed 8/17/21 Paula v. Lutteroth CA4/1
                   NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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                 COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                       DIVISION ONE

                                              STATE OF CALIFORNIA

 EDWARD PAULA et al.,                                                         D077995

            Cross-complainants and
            Appellants,
                                                                              (Super. Ct. No. 37-2018-
            v.                                                                 00062910-CU-FR-CTL)

 GABRIELA LUTTEROTH et al.,

            Cross-defendants and
            Respondents.

          APPEAL from an order of the Superior Court of San Diego County,
Randa Trapp, Judge. Affirmed.
          Sharif Faust Lawyers, Matthew J. Faust, Blake W. Berger and
Philip J. Cavello for Cross-complainants and Appellants.
          Law Office of Cindy A. Brand, Cindy A. Brand; Law Office of Esther
Fraser and Esther Fraser for Cross-defendants and Respondents.

          Edward Paula and Paula Development, Inc. (together Paula) appeal
from an order of the superior court striking the causes of action for breach of
contract and for declaratory relief from their cross-complaint against
Gabriela Lutteroth and Carlos Lutteroth (together the Lutteroths1). The
court concluded that the two causes of action were a “SLAPP” and struck
them pursuant to Code of Civil Procedure section 425.16 (§ 425.16; at times,

anti-SLAPP statute).2 The court reached this decision after ruling that the
Lutteroths met their initial burden of establishing that the two claims were
based on their constitutionally protected activity of filing a lawsuit and that
Paula did not meet his responsive burden of showing a probability of
prevailing on either of the claims.
      On appeal, Paula has not established reversible error. Thus, following
our de novo review, we will affirm the order in which the court struck the two
causes of action.
                    I. UNDERLYING LEGAL STANDARDS
      Section 425.16, subdivision (b)(1) provides in full: “A cause of action
against a person arising from any act of that person in furtherance of the
person’s right of petition or free speech under the United States Constitution
or the California Constitution in connection with a public issue shall be
subject to a special motion to strike, unless the court determines that the
plaintiff has established that there is a probability that the plaintiff will
prevail on the claim.” The anti-SLAPP statute “shall be construed broadly.”
(§ 425.16, subd. (a).)

1    Gabriela Lutteroth and Carlos Lutteroth, who are married, share a
surname. Where necessary to differentiate between them, we shall refer to
them by their first names. In doing so, we intend no disrespect.

2      “ ‘ “SLAPP” is an acronym for “strategic lawsuit against public
participation.” ’ ” (Sweetwater Union High School Dist. v. Gilbane Building
Co. (2019) 6 Cal.5th 931, 938, fn. 5.) The anti-SLAPP statute, section 425.16,
sets forth the standards and the procedure for striking a cause of action in a
SLAPP. (Sweetwater Union, at p. 940.)

                                        2
      The two causes of action at issue in this appeal are in Paula’s cross-
complaint. For purposes of an application of the anti-SLAPP statute,
“ ‘complaint’ includes ‘cross-complaint.’ ” (§ 425.16, subd. (h).)
      In applying the anti-SLAPP statute, a court generally is required to
engage in a two-step process. “First, the defendant must establish that the
challenged claim arises from activity protected by section 425.16.” (Baral v.
Schnitt (2016) 1 Cal.5th 376, 384 (Baral).) “If the defendant makes the
required showing, the burden shifts to the plaintiff to demonstrate the merit
of the claim by establishing a probability of success.” (Ibid.)
      For purposes of the first step (or prong), a “ ‘cause of action . . . aris[es]
from’ ” protected conduct for purposes of section 425.16, subdivision (b)(1),
when it is “based on” such conduct. (City of Cotati v. Cashman (2002) 29
Cal.4th 69, 78.) A cross-defendant meets the burden of demonstrating that
the cross-complainant’s cause of action (or claim) is based on protected
conduct, if the conduct “ ‘fits one of the [four] categories spelled out in
section 425.16, subdivision (e).’ ” (City of Cotati, at p. 78.) In deciding this
issue, “the court shall consider the pleadings, and supporting and opposing
affidavits stating the facts upon which the liability . . . is based.” (§ 425.16,
subd. (b)(2).)
      For purposes of the second step (or prong), the party opposing the
anti-SLAPP motion must establish that the elements of the challenged
claim(s) are “ ‘ “supported by a sufficient prima facie showing of facts to
sustain a favorable judgment if the evidence submitted by the [party
opposing the motion] is credited.” ’ ” (Oasis West Realty, LLC v. Goldman
(2011) 51 Cal.4th 811, 820 (Oasis West Realty).) In making this showing, the
party opposing the motion cannot rely on the allegations in the complaint,
but must present evidence that would be admissible at trial. (San Diegans

                                         3
for Open Government v. San Diego State University Research Foundation
(2017) 13 Cal.App.5th 76, 107 (San Diegans for Open Government); Alpha
and Omega Development, LP v. Whillock Contracting, Inc. (2011) 200
Cal.App.4th 656, 664.) When considering the evidence submitted, the court
does not weigh it or make credibility determinations; rather, the court
accepts as true the opposing party’s evidence, and inferences from this
evidence, and evaluates the moving party’s evidence only to determine if it
has defeated the opposing party’s evidence as a matter of law. (Baral, supra,
1 Cal.5th at pp. 384-385, 391.)
      “ ‘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.’ ”
(Oasis West Realty, supra, 51 Cal.4th at p. 820.)
      “We review de novo the grant or denial of an anti-SLAPP motion.”
(Park v. Board of Trustees of California State University (2017) 2 Cal.5th
1057, 1067 (Park).)

            II. FACTUAL AND PROCEDURAL BACKGROUND3
      The two causes of action which the trial court struck were in Paula’s
cross-complaint. Thus, we have the benefit of the allegations in the
Lutteroths’ second amended complaint (the complaint) and Paula’s cross-
complaint. However, as in most anti-SLAPP appeals, since this case is before
us at the initial pleading stage, there is little evidence in the record.

3      We have disregarded all factual statements in the parties’ appellate
briefs that are presented without accurate record references (Delta
Stewardship Council Cases (2020) 48 Cal.App.5th 1014, 1079; Cal. Rules of
Court, rule 8.204(a)(1)(C)); and there are many.

                                         4
      Without introducing each factual recitation with “Paula alleges in the
cross-complaint . . .” or “the Lutteroths allege in the complaint . . . ,” we do
not imply the existence of factual findings or substantial evidence in support
of factual findings. We merely present the allegations based on the pleadings
for the purpose of ruling on the legal issues presented in this appeal. Where
necessary—namely, for prong two purposes in part III.B., post—we will
identify the evidence presented and clarify when we are referring to evidence
as opposed to allegations.
A.    The Complaint
      The complaint was filed by “Gabriela Lutteroth, individually” and
“Carlos M. Lutteroth L. and Gabriela Peredo C., co-trustees of the Lutteroth
Family Trust dated April 14, 2009” (together Plaintiffs). We understand
Gabriela, individually, to be one of the respondents in this appeal; the parties
tell us nothing about the identities of the co-trustees or the trust. The
defendants are Edward Paula and Paula Development, Inc. (previously
identified as “Paula”).
      The claims relate exclusively to the financing and construction for the
residential real property at 2906 Gate Fourteen Place, Chula Vista,
California, owned by the Lutteroth Family Trust (Gate 14 Property). The
pertinent allegations in the complaint include:
         “Plaintiff’s [sic] relied on the promises of [Paula] that [he]
         would supervise the construction project and work with
         [the original contractor] and [the construction lender] to
         construct the improvements on the Gate [14 P]roperty for
         the benefit of the Plaintiffs and in that context would use
         [his] best efforts and skills to protect the Plaintiff’s [sic]
         interest in relation to the construction project.”
         “In 2017 Plaintiffs discovered that [Paula] had breached
         the[ ] obligations owed to Plaintiff [sic] under the

                                         5
         Agreement[4] by diverting funds to and accepting kick back
         [sic] payments from [the original contractor] totaling at
         [sic] $394,000.00. As a result of the payments from [the
         original contractor] to [Paula], . . . [¶] . . . Plaintiffs ha[ve]
         been damaged as a result of [Paula’s] breach of the Implied
         In Fact Contract between the parties in an amount believed
         to be in excess of $394,000.00.”
Based principally on these allegations, Plaintiffs allege three causes of action
against Paula: breach of contract; breach of fiduciary duty; and fraudulent
concealment.
B.    The Cross-complaint
      Paula filed a cross-complaint against Gabriela and Carlos, in their
individual capacities (previously identified as “the Lutteroths”), and Arturo
Rodriguez. Paula alleged causes of action for slander per se, breach of

contract, and declaratory relief against the Lutteroths.5 Like Plaintiffs’
claims against Paula in the complaint, Paula’s claims against the Lutteroths
for breach of contract and declaratory relief relate exclusively to the Gate 14
Property.
      During the course of construction of the Gate 14 Property, the
Lutteroths discovered that the original contractor was “overcharging for
change orders not provided for under [t]he [construction] [c]ontract, and had
falsified invoices and receipts. As a result, . . . the Lutteroths terminated

4     Plaintiffs earlier described the “Agreement” as a settlement agreement,
negotiated by Paula, “between Plaintiff, Gabriela Lutteroth, and [the original
contractor] whereby [the original contractor] became obligated to reimburse
Plaintiff, Gabriela Lutteroth[,] in the amount of $170,220.59.”

5     Against Rodriguez, Paula also alleged causes of action for slander
per se, breach of contract, and declaratory relief. Neither these claims
against Rodriguez nor the slander per se causes of action against the
Lutteroths are at issue in this appeal.

                                         6
[t]he [construction] [c]ontract and entered into a settlement agreement with

the [original contractor.]”6 (See fn. 4, ante.)
      The original contractor for the construction of the Gate 14 Property also
had construction contracts with Paula for other jobs. When Paula learned of
the overcharges on the Gate 14 Property and the Lutteroths’ termination of
the original contractor, Paula fired that contractor on the other jobs as well.
      Paula hired cross-defendant Rodriguez to help complete the other
projects, and the Lutteroths hired Rodriguez to help finish the construction of

the Gate 14 Property.7
      Based on what Paula contends are “lies” that Rodriguez had told
Gabriela—namely, “that [Paula] had stolen money from the Lutteroths
during the construction of [t]he [Gate 14] Property”—“the Lutteroths became
convinced that [Paula] had defrauded them.” While denying his participation
in the alleged fraud, Paula nonetheless “attempted [to] resolve the matter
informally.” The relevant allegations concern what Paula describes as “an
oral settlement agreement”:
         “In or about March of 2018, [the Lutteroths] and [Paula]
         entered into an oral settlement agreement, which provided
         for a release of any and all potential claims, rights, and
         liabilities against [Paula] relating to the [Gate 14] Property
         in exchange for [Paula] signing over the[ ] ownership
         interests in [two limited liability companies] to the
         Lutteroths.” (Italics added.)

6    In the complaint, Plaintiffs allege that Paula, not the Lutteroths,
terminated the original contractor and negotiated the settlement.

7    In the complaint, Plaintiffs allege that Paula “located” Rodriguez “to
complete construction of the [Gate 14 Property].”

                                         7
Paula’s two causes of action against the Lutteroths at issue in this appeal—
i.e., breach of contract and declaratory relief—are based on the March 2018
oral agreement. In both, Paula seeks relief based on the release that he
alleges is part of the agreement.
C.    The Anti-SLAPP Motion
      In response to Paula’s cross-complaint, the Lutteroths filed an
anti-SLAPP motion as to all of the causes of action against each of them—
slander per se, breach of contract, and declaratory relief. Consistent with the
requirements of the anti-SLAPP statute (§ 425.16, subds. (b)(1), (e)(1), (e)(2)),
the Lutteroths argued both that the actions complained of by Paula were in
furtherance of the Lutteroths’ constitutional right to petition (either in
connection with or before a judicial proceeding—i.e., the filing the complaint
in this action) and that Paula could not establish a probability of prevailing
on any of the causes of action. In support of their motion, the Lutteroths
submitted a memorandum of points and authorities and three declarations
(one each from Gabriela, Carlos, and their attorney).
      Paula opposed the Lutteroths’ anti-SLAPP motion. Procedurally, Paula
argued that the court should deny the motion because the Lutteroths “failed
to meet and confer.” Substantively, Paula argued both that the Lutteroths’
statements at issue in the cross-complaint were not made in furtherance of
the constitutional right to petition and that, in any event, he is likely to
prevail on the claims in the cross-complaint. In support of the opposition,
Paula submitted a memorandum of points and authorities, four declarations
(one each from Edward Paula, two witnesses to statements from Rodriguez,
and Paula’s attorney), and six exhibits.

                                        8
      In reply to Paula’s opposition, the Lutteroths filed a memorandum of
points and authorities, a declaration from counsel, an exhibit, and objections
to some of the evidence Paula submitted in support of the opposition.
      Prior to oral argument, the court issued a tentative ruling, and at the
hearing, the court allowed both counsel to respond. At the conclusion of the
hearing, the court confirmed its tentative ruling. After ruling on the

Lutteroths’ evidentiary objections,8 the court granted in part and denied in
part the Lutteroths’ motion. The court struck the causes of action for breach
of contract and declaratory relief and allowed the two causes of action for

slander per se to proceed.9 The court also concluded that the Lutteroths
were entitled to reasonable attorney fees and costs as the prevailing parties.

8     There are no issues on appeal as to any of the evidentiary rulings.

9     On appeal, Paula’s attorney tells us that, at the hearing, the trial court
“spent the lion’s share of the hearing on [a motion for sanctions being heard
at the same time] and neglected [Paula’s counsel’s] arguments against [the
Lutteroths’ anti-SLAPP Motion] altogether.” Notably, Paula’s attorney
provides no record reference for this statement. Moreover, as we explain, our
independent review of the reporter’s transcript confirms that counsel’s
hyperbole is unfounded and unwarranted.
      The purpose of the hearing was not, as counsel implies, for the court to
explain its four-page tentative ruling which had been given to counsel prior to
the hearing; rather, the purpose was to allow counsel to argue the client’s
case, having received the benefit of the court’s tentative ruling. In this
regard, on at least three occasions, the court expressly invited counsel to raise
the issues counsel wanted to argue based on the court’s tentative. Finally, in
the end, the court agreed with counsel and denied the Lutteroths’
anti-SLAPP motion as to two of the four causes of action to which the motion
was directed.

                                       9
D.    The Appeal
      Paula timely appealed from the order granting in part and denying in
part the Lutteroths’ anti-SLAPP motion. (Code Civ. Proc., §§ 904.1,
subd. (a)(13), 425.16, subd. (i).)
                                III. DISCUSSION
      Because the trial court’s order is presumed correct, Paula (as the
appellant) has the burden of affirmatively establishing reversible error.
(Jameson v. Desta (2018) 5 Cal.5th 594, 609.)
      Paula argues that the trial court erred in striking both the breach of
contract and the declaratory relief causes of action. More specifically, he
contends that neither of the causes of action arises from protected activity
and, in the event this court rules otherwise, that he met the responsive
burden of showing a probability of prevailing on each of the causes of action.
As we explain, Paula did not meet his burden of establishing trial court error

as to its ruling on either prong.10
A.    Prong One: The Lutteroths Met Their Initial Burden of Establishing
      that the Two Causes of Action Arise from Constitutionally Protected
      Activity
      Section 425.16, subdivision (b)(1) protects a person’s constitutional
right of petition in connection with a public issue. Section 425.16,
subdivision (e) sets forth four categories of acts in furtherance of such

10      Paula also argues for a reversal of that portion of the trial court’s order
finding the Lutteroths to be the prevailing parties (and, thus, entitled to
reasonable attorney fees and costs). However, having raised this issue for the
first time in his reply brief—indeed, in the final pages of his reply brief—
Paula forfeited appellate review of the issue. (Golden Door Properties, LLC v.
County of San Diego (2020) 50 Cal.App.5th 467, 518 [“By not raising this in
its opening brief, the [appellant] has forfeited the point”].)

                                        10
right.11 Here, the trial court ruled that the Lutteroths met their initial
burden of establishing that Paula’s filing of both the breach of contract and
the declaratory relief claims arise from protected activity for purposes of the
anti-SLAPP statute, since protected activity includes “a ‘statement or writing
made before a . . . judicial proceeding.’ ” (Quoting § 425.16, subd. (e)(1).)
      The court based its ruling on the allegations in the cross-complaint in
which Paula contends that, in or around March 2018, he and the Lutteroths
entered into an oral settlement agreement of all claims related to the Gate 14
Property. More specifically, the court relied on paragraph 61 of the cross-
complaint, in which Paula alleges in full:
         “[The Lutteroths] breached the oral settlement agreement
         by filing the instant lawsuit, alleging claims which all
         relate to the [Gate 14 Property].” (Italics added.)
Paula could not have been more clear: He filed the causes of action for breach
of the agreement and for a declaration of the parties’ rights and obligations
under the agreement in direct response to the “filing [of] the instant lawsuit.”
(Italics added.) As we explain, because the filing of the Lutteroths’ lawsuit
forms the bases of both the breach of contract and the declaratory relief
causes of action in the cross-complaint, the trial court ruled correctly: Paula’s

11     In part, section 425.16, subdivision (e) provides: “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) . . . , (3) . . . , or (4) . . . .” Where, as here, the party
filing the anti-SLAPP motion contends that the activity is constitutionally
protected under subdivision (e)(1)—as a statement made in a judicial
proceeding—there is no requirement that the statement be made in
connection with a public issue. (Briggs v. Eden Council for Hope &
Opportunity (1999) 19 Cal.4th 1106, 1116 (Briggs).)

                                        11
causes of action for breach of contract and declaratory relief arise from
protected activity under subdivision (e)(1) of the anti-SLAPP statute.
      As our Supreme Court ruled almost 20 years ago, “A claim for relief
filed in . . . court indisputably is a ‘statement or writing made before a . . .
judicial proceeding’ ” for purposes of section 425.16’s prong one determination
whether a cause of action arises from protected activity. (Navellier v. Sletten
(2002) 29 Cal.4th 82, 90 (Navellier) [citing § 425.16, subd. (e)(1)].) That is
because “ ‘ “[t]he constitutional right to petition . . . includes the basic act of
filing litigation.” ’ ” (Briggs, supra, 19 Cal.4th at p. 1115; accord, Jay v.
Mahaffey (2013) 218 Cal.App.4th 1522, 1538-1539 [“ ‘filing a lawsuit is an
exercise of a party’s constitutional right of petition’ ”].) As our Supreme
Court more recently explained: “[A] claim is not subject to a motion to strike
simply because it contests an action or decision that was arrived at following
speech or petitioning activity . . . . Rather, a claim may be struck only if the
speech or petitioning activity itself is the wrong complained of, and not just
evidence of liability or a step leading to some different act for which liability
is asserted.” (Park, supra, 2 Cal.5th at pp. 1060-1061.)
      Here, Paula’s claims did not merely follow the Lutteroths’ protected
activity of filing the underlying action. As the cross-complaint expressly
provides, the alleged breach of contract and, therefore, the claims alleged in
the cross-complaint, are based exclusively on, and thus arise from, “the filing
[of] the instant lawsuit” by the Lutteroths—i.e., activity protected by the
anti-SLAPP statute. (Cf. Third Laguna Hills Mutual v. Joslin (2020) 49
Cal.App.5th 366, 373 [“The fact that an activity protected by the anti-SLAPP
statute may have triggered a lawsuit does not necessarily mean that the
causes of action arose from the protected activity.”].)

                                         12
      Applying language from the above-cited Supreme Court authorities to
the present case, “[B]ut for the [Lutteroths’] lawsuit and [the Lutteroths’]
alleged actions taken in connection with that litigation, [Paula’s] present
[cross-]claims would have no basis. This [cross-complaint] therefore falls
squarely within the ambit of the anti-SLAPP statute’s ‘arising from’ prong.”
(Navellier, supra, 29 Cal.4th at p. 90, quoted in Park, supra, 2 Cal.5th at
p. 1063.)
      Paula’s arguments to the contrary are not convincing.
      Paula tells us that his “grievance is not the act of [the Lutteroths] filing
a lawsuit. Rather, [Paula] filed a Cross-Complaint because [he] had foregone
valuable consideration without the benefit of the[ ] bargain.” Given that, in
the cross-complaint, Paula alleges this “valuable consideration” to be that he
agreed to “sign[ ] over [his] ownership interests in [two identified limited
liability companies] to the Lutteroths” in exchange for “a release of any and
all potential claims, rights, and liabilities against [Paula] relating to the
[Gate 14] Property,” Paula’s only “grievance” is the Lutteroths’ filing of their
action. In any event, based on Paula’s express allegation—viz., that the
Lutteroths “breached the oral settlement agreement by filing the instant

lawsuit” (italics added)12—we reject Paula’s attempt to establish that the
breach of contract and declaratory relief causes of action arose from any other
conduct.

12    Paula confirmed this allegation in his opening brief on appeal. In
attempting to establish a sufficient prima facie showing of facts to sustain a
favorable judgment (under the second prong of the anti-SLAPP analysis),
Paula explains: “By filing their lawsuit against [Paula] while retaining the
LLC’s, [the Lutteroths] breached their agreement, and caused [Paula] to
suffer damages.” (Italics added.)

                                        13
      Paula relies on Delois v. Barrett Block Partners (2009) 177 Cal.App.4th
940 (Delois) for the proposition that, where a settlement agreement is
reached prior to any litigation having been filed, a later lawsuit alleging
breach of the agreement and declaratory relief (and related torts) does not

arise from protected activity. (Id. at pp. 948-949.13) Delois is inapplicable.
In Delois, the plaintiff did not file the lawsuit until after the defendants
allegedly failed to perform their obligations under the settlement agreement.
(Id. at p. 943.) By contrast, here the alleged breach of the settlement
agreement is the Lutteroths’ filing of the lawsuit; and Paula asserted the
cross-complaint solely because of and in response to the Lutteroths’
complaint.
      With regard to the declaratory relief cause of action, Paula additionally
relies on City of Alhambra v. D’Ausilio (2011) 193 Cal.App.4th 1301 for the
proposition that, just because a claim for declaratory relief follows
constitutionally protected activity (in D’Ausilio, participation in
demonstrations or protests) does not mean that the claim arises from the
constitutionally protected activity for anti-SLAPP purposes. (Id. at
p. 1307.) In D’Ausilio, the plaintiff city sued the defendant individual
for: (1) breach of a settlement agreement between the plaintiff and the
defendant from prior litigation that involved alleged civil rights violations,
after the defendant later participated in public demonstrations against the
city; and (2) declaratory relief regarding the scope and enforceability of the
settlement agreement. (Id. at pp. 1303-1305.) The defendant moved to strike

13    Paula’s opening brief contains an eight-line block quotation which
Paula attributes to Delois, supra, 177 Cal.App.4th at page 948. We have
ignored the last two and a half lines of the block quotation, since the opinion
does not contain language close to what Paula quotes in his brief.

                                        14
the declaratory relief cause of action under the anti-SLAPP statute, arguing
for prong one purposes that the claim arose from protected activity—namely,
the demonstrations. (Id. at p. 1307.) The appellate court affirmed the trial
court’s denial of the motion, ruling in relevant part that the plaintiff’s cause
of action for declaratory relief did not arise from the demonstrations—i.e., the
protected activity. (Ibid.) Instead, the claim arose from the defendant’s
actions which the plaintiff alleged to be a breach of the settlement
agreement, resulting in a dispute as to the scope and validity of the
agreement. (Id. at p. 1308.) By contrast, here, Paula expressly alleges that
his declaratory relief claim arises from the Lutteroths’ “filing [of] the instant
lawsuit”; and, as we concluded ante, the Lutteroths’ filing of this action is
constitutionally protected activity for purposes of the anti-SLAPP statute.
      For the foregoing reasons, in our de novo review of the prong one issue,
we conclude that Paula did not meet his burden on appeal of establishing
trial court error. Thus, we proceed to the prong two analysis with the
understanding that Paula’s causes of action in the cross-complaint for breach
of contract and declaratory relief arise from constitutionally protected
activity for purposes of section 425.16, subdivision (b)(1).
B.    Prong Two: Paula Did Not Meet His Responsive Burden of Presenting
      Evidence of a Prima Facie Case Against the Lutteroths in Either of the
      Two Causes of Action
      The inquiry into whether Paula stated “legally sufficient” claims and
made a “prima facie factual showing” requires an analysis of whether Paula
presented competent, admissible evidence sufficient to sustain a favorable
judgment on each of the challenged causes of actions. (Baral, supra, 1
Cal.5th at pp. 384-385; Wilson v. Parker, Covert & Chidester (2002) 28
Cal.4th 811, 821.)

                                       15
      1.    Breach of Contract
      Paula argues that he met his prong two burden of demonstrating the
merit of his breach of contract cause of action based on: (1) the allegations in

his cross-complaint;14 (2) the presentation in his memorandum of points and
authorities in opposition to the Lutteroths’ anti-SLAPP motion; and (3) the
evidence in his opposition to the Lutteroths’ anti-SLAPP motion. We
disagree.
      First, because a party opposing an anti-SLAPP motion is “required to
submit ‘competent and admissible evidence’ establishing a prima facie case,”
Paula may not rely on the allegations in his cross-complaint. (San Diegans
for Open Government, supra, 13 Cal.App.5th at p. 107.) “[T]he allegations of
even a verified [cross-]complaint cannot establish probability of success on
the merits under the anti-SLAPP statute.” (Id. at p. 108, fn. 19.) This is
because “an assessment of the probability of prevailing looks to trial, and the
evidence that would be admissible to create triable factual issues at that
time.” (Id. at pp. 108-109.)
      Second, for similar reasons, Paula may not rely on the arguments in
the memorandum of points and authorities in support of his opposition to the
anti-SLAPP motion. Where, as here, evidence is necessary to establish a fact,
reliance on pleadings or arguments is insufficient. (In re Zeth S. (2003) 31
Cal.4th 396, 413, fn. 11 [“the unsworn statements of counsel are not
evidence”]; Davenport v. Blue Cross of California (1997) 52 Cal.App.4th 435,

14    Actually, Paula tells us that the allegations he is relying on are found
in the “Second Amended Complaint,” but since the record reference Paula
supplies is to his cross-complaint, we assume that Paula meant the cross-
complaint.

                                       16
454 [“unsworn averments in a memorandum of law prepared by counsel do
not constitute evidence”].)
      Finally, as a matter of law, the evidence Paula submitted in opposition
to the anti-SLAPP motion—which, along with reasonable inferences, we
accept as true (Baral, supra, 1 Cal.5th at pp. 385, 391)—does not establish a
prima facie case for breach of an oral contract as Paula alleged in the cross-
complaint. “The elements of a breach of oral contract claim are the same as
those for a breach of written contract: a contract; its performance or excuse
for nonperformance; breach; and damages.” (Stockton Mortgage, Inc. v. Tope
(2014) 233 Cal.App.4th 437, 453.) As to the first element, the existence of a
contract requires a showing of: “[p]arties capable of contracting”; “[t]heir
consent”; “[a] lawful object”; and “[a] sufficient cause or consideration.” (Civ.
Code, § 1550; see Monster Energy Co. v. Schechter (2019) 7 Cal.5th 781, 789
[anti-SLAPP appeal].)
      On appeal, Paula relies on the following testimony from the declaration
of Edward Paula to establish all of the elements of his cause of action for
breach of contract against the Lutteroths:
         “Specifically, [the Lutteroths and Rodriguez] said that I
         stole money from them in connection with the building of
         [the Gate 14 Property]. . . . [¶] . . . [¶] . . . During this
         time, I agreed to transfer my shares in two LLC’s to the
         Lutteroths to globally resolve our issues. Unfortunately,
         the Lutteroths sued me anyway in violation of our
         agreement.”
This evidence does not mention, let alone establish, Paula’s performance (or
excuse for nonperformance); i.e., Paula’s agreement to transfer shares is not
evidence of a transfer (or excuse for not transferring) the shares. Nor does
this evidence establish damages. In addition, based on the statement that
“the Lutteroths sued me . . . in violation of our agreement” (italics added), we
may infer that the parties to the alleged agreement are Edward Paula and
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the Lutteroths; however, that inference does not include evidence of any of
the parties’ capability of contracting or consent for purposes of Civil Code
section 1550. In short, the evidence on which Paula relies does not establish
either the existence of a contract or (even if we were to assume a contract) the
elements necessary to establish a breach.
      Thus, in our de novo review of the prong two issue on the breach of
contract claim, we conclude that Paula did not meet his responsive burden of
demonstrating the merit of the claim by establishing a probability of success.
Stated differently, Paula did not make a sufficient prima facie showing of
facts to sustain a favorable judgment for breach of contract.
      2.    Declaratory Relief
      The elements of a cause of action for declaratory relief include: “ ‘(1) a
proper subject of declaratory relief, and (2) an actual controversy involving
justiciable questions relating to the rights or obligations of a party.’ ” (Lee v.
Silveira (2016) 6 Cal.App.5th 527, 546; see Code Civ. Proc., § 1060.)
      For purposes of his prong two burden under the anti-SLAPP statute,
Paula tells us that he “made a prima facie showing to sustain a favorable
judgment” on the declaratory relief claim. The entirety of Paula’s prima facie
showing consists of the statement: “The parties filed competing declarations
regarding the settlement agreement and its’ [sic] validity, thereby
demonstrating that a controversy exists as to the parties’ obligations under
the agreement.”
      This statement—which, we note, lacks any record reference for the
testimony in the allegedly “competing declarations”—is necessarily
insufficient, since it does not contain (or directly refer to) “ ‘competent and
admissible evidence’ establishing a prima facie case.’ ” (San Diegans for
Open Government, supra, 13 Cal.App.5th at p. 107) In any event, the “actual

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controversy” for which Paula seeks a declaration of “rights and duties” is the
scope of the same alleged oral agreement that forms the basis of Paula’s
breach of contract claim. Since, as we just concluded at part III.B.1., ante,
Paula did not present evidence of a prima facie case of the existence of an oral
agreement, Paula necessarily failed to present evidence sufficient to seek a
declaration of rights and duties under the alleged contract. (See
International Brotherhood of Teamsters, Chauffeurs, Warehousemen &
Helpers of America, Local Union No. 389 v. Bekins Van & Storage Co. (1955)
135 Cal.App.2d 692, 697 [without a potentially enforceable contractual right,
“declaratory relief will not lie”].)
      Thus, in our de novo review of the prong two issue on the declaratory
relief cause of action, we conclude that Paula did not meet his responsive
burden of demonstrating the merit of the claim by establishing a probability
of success. Stated differently, Paula did not make a sufficient prima facie
showing of facts to sustain a favorable judgment for declaratory relief.

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                               IV. DISPOSITION
      The order granting the Lutteroths’ anti-SLAPP motion in part (by
striking the causes of action against the Lutteroths for breach of contract and
declaratory relief in Paula’s cross-complaint) and denying the motion in part
is affirmed. The Lutteroths are entitled to their costs on appeal. (Cal. Rules
of Court, rule 8.278(a)(2).)

                                                           IRION, Acting P. J.

WE CONCUR:

DATO, J.

GUERRERO, J.

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