Court Opinion

ID: 4110401
Source: CourtListenerOpinion
Date Created: 2016-12-22 20:03:28.205501+00
Date Added: 2024-06-11T07:46:10.209940
License: Public Domain

Filed 11/30/16 Certified for Publication (order attached)

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                   FOURTH APPELLATE DISTRICT

                                               DIVISION THREE

NEWPORT HARBOR VENTURES, LLC,
et al.,
                                                                G052660
    Plaintiffs and Respondents,
                                                                (Super. Ct. No. 30-2013-00665314)
         v.
                                                                OPINION
MORRIS CERULLO WORLD
EVANGELISM et al.,

    Defendants and Appellants.

                  Appeal from an order of the Superior Court of Orange County,
Deborah C. Servino, Judge. Affirmed. Appellants‟ request for judicial notice. Granted.
Respondents‟ request for judicial notice. Granted.
                  Galuppo & Blake, Louis A. Galuppo, Steven W. Blake, Andrew E. Hall
and Daniel T. Watts for Defendants and Appellants.
                  Knypstra Law, Bradley P. Knypstra and Grant Hermes for Plaintiffs and
Respondents.
                                           *                *      *
                                    INTRODUCTION
              A special motion to strike under California‟s anti-SLAPP statute, Code of
                                1
Civil Procedure section 425.16, is to be filed “within 60 days of the service of the
complaint or, in the court‟s discretion, at any later time upon terms it deems proper.”
                     2
(§ 425.16, subd. (f).) In this case, we address whether an anti-SLAPP motion was timely
when it was filed within 60 days of service of a third amended complaint and no previous
anti-SLAPP motion had been filed. We conclude the filing of an amended complaint
does not automatically reopen the period for bringing an anti-SLAPP motion. Whether
the filing of an amended complaint reopens the period for bringing an anti-SLAPP
motion depends on the basis and nature of the claims in the amended complaint.
              Defendants and appellants Morris Cerullo World Evangelism (Cerullo) and
Roger Artz filed a special motion under the anti-SLAPP statute to strike the third
amended complaint brought by plaintiffs and respondents Newport Harbor Ventures,
                                                       3
LLC (NHV), and Vertical Media Group, Inc. (VMG). The third amended complaint
alleged four causes of action: (1) breach of written contract, (2) breach of the implied
covenant of good faith, (3) quantum meruit, and (4) promissory estoppel. The first two
causes of action had been pleaded in earlier complaints while the latter two causes of
action were new to the third amended complaint.
              The act asserted by Cerullo and Artz to have been “in furtherance of [their]
right of petition or free speech” (§ 425.16(b)(1)) was the settlement of an unlawful
detainer action. That settlement had been alleged in the initial complaint and each

 1
   “SLAPP” is an acronym for “strategic lawsuit against public participation.” (Equilon
Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57.) Further code references
are to the Code of Civil Procedure.
 2
    We refer to section 425.16, subdivision (f) as section 425.16(f). In like fashion, we
refer to section 425.16, subdivision (b)(1) as section 425.16(b)(1), and section 425.16,
subdivision (e) as section 425.16(e).
 3
    We refer to Cerullo and Artz‟s special motion to strike as the anti-SLAPP motion.

                                             2
succeeding complaint. The trial court denied the anti-SLAPP motion on the ground it
was untimely filed because it should have been filed in response to the earlier complaints.
              We hold that, under section 425.16(f), an anti-SLAPP motion is untimely if
not filed within 60 days of service of the first complaint that pleads a cause of action
coming within anti-SLAPP protection unless the trial court, in its discretion and upon
terms it deems proper, permits the motion to be filed at a later time. Thus, we conclude
the anti-SLAPP motion was untimely as to the breach of contract and breach of implied
covenant causes of action because Cerullo and Artz could have challenged those causes
of action by filing an anti-SLAPP motion to prior complaints. The anti-SLAPP motion
was timely as to the quantum meruit and promissory estoppel causes of action because
they were new causes of action that could not have been challenged by an anti-SLAPP
motion to a prior complaint.
              Because we exercise de novo review, we address the merit of the
anti-SLAPP motion as to the quantum meruit and promissory estoppel causes of action.
Those causes of action arose out of protected activity as defined in section 425.16(e); that
issue is not in dispute. We conclude that NHV and VMG met their burden of
establishing a probability of prevailing on both the quantum meruit cause of action and
the promissory estoppel cause of action. We therefore affirm.

                              ALLEGATIONS OF THE
                           THIRD AMENDED COMPLAINT
              NHV is a California limited liability company. VMG is a Delaware
corporation. Dennis D‟Alessio is the manager of NHV and the president of VMG.
Cerullo is a California corporation. Artz is a vice-president of Cerullo and the trustee of
Plaza del Sol Real Estate Trust (Plaza del Sol).
              Cerullo is a successor lessee under a ground lease of real property in
Newport Beach (the Property), the term of which expires in November 2018. In 2004,
Cerullo, as sublessor, entered into a sub-ground lease of the Property (the Sublease) with

                                              3
Newport Harbor Offices & Marina, LLC (NHOM). The Property had been improved
with an office building and marina (the Improvements). In order to sublease the
Property, NHOM obtained a loan for more than $2 million from the Hazel I. Maag Trust
(the Maag Trust).
              By 2011, NHOM was in default of the sublease for failure to properly
maintain the Property and the Improvements. In March 2011, Cerullo and Plaza del Sol
entered into an asset management and option agreement (the Management Agreement)
with NHV. Pursuant to the Management Agreement, Cerullo and Plaza del Sol granted
certain irrevocable rights to NHV, including an option to acquire an assignment of the
ground lease. In exchange, NHV agreed to act as asset manager and “perform all duties
normally associated with the administration of a sub-lease by the master lessor.” In
particular, NHV agreed to (1) “[t]ake all action necessary to enforce the terms of the
[Sublease],” including the “filing and prosecution of legal action for Unlawful Detainer”;
(2) “serve appropriate Notices of Default and other statutory notices as conditions
precedent to any Unlawful Detainer action”; and (3) obtain Cerullo‟s written permission
before commencing legal action against NHOM, the sublessee. NHV was responsible for
the costs of any unlawful detainer action.
              Under the Management Agreement, NHV would be responsible for getting
NHOM evicted from the Property and the Sublease terminated and, in exchange, would
receive an irrevocable option to acquire the sublease and, potentially, an assignment of
the ground lease from Cerullo. In April 2011, NHV, Cerullo, and Plaza del Sol entered
into a modification to the Management Agreement, making VMG the asset manager in
place of NHV.
              Pursuant to the Management Agreement, VMG took action to evict NHOM
due to its failure to adequately maintain the Property and the Improvements. VMG
retained Attorney Darryl Paul, who filed an unlawful detainer action against NHOM (the
Unlawful Detainer Action). VMG paid for the costs and expenses of the Unlawful

                                             4
Detainer Action, including attorney fees, costs, expert fees, and appraiser fees. Those
costs totaled more than $500,000. As asset manager, VMG spent more than $200,000 for
such things as insurance premiums, travel, office supplies, meals, entertaining,
accounting, salaries, wages, and service bureau.
              In August 2012, Cerullo and Artz entered into a settlement agreement
regarding the Unlawful Detainer Action. The settlement agreement was made and signed
without the knowledge or approval of Paul, and without the knowledge, participation, or
approval of VMG.
              Under the settlement agreement, Cerullo and Artz agreed to dismiss the
Unlawful Detainer Action against NHOM in exchange for payment of “a substantial
sum” by the Maag Trust. The trial of the Unlawful Detainer Action was taken off
calendar. Although trial of the Unlawful Detainer Action “remains the subject of
ongoing litigation,” NHV and VMG contended “there is no certain or predictable
outcome in view of the Settlement Agreement.” NHV and VMG alleged: “The
execution by Defendants of the Settlement Agreement was fraudulent and constitutes a
high jacking [sic] of the [Unlawful Detainer] Action from the discretion and auspices of
Plaintiffs and from the authority and direction of counsel . . . Paul.”
              The third amended complaint asserted causes of action for breach of written
contract, breach of the covenant of good faith, quantum meruit, and promissory estoppel.
The third amended complaint alleged that Cerullo and Artz breached the Management
Agreement by failing to reimburse VMG for money spent on the Unlawful Detainer
Action and in managing the Property and that Cerullo and Artz breached the covenant of
good faith of the Management Agreement by failing to make those reimbursements and
by settling the Unlawful Detainer Action. NHV and VMG sought recovery under
quantum meruit for the benefit their services bestowed on Cerullo and Artz.
              In the promissory estoppel cause of action, NHV and VMG alleged that, in
March 2011, Artz made oral promises to D‟Alessio that NHV and VMG would become

                                              5
the asset manager for the Property and, in exchange for litigating the Unlawful Detainer
Action and evicting NHOM, would have an option to acquire the ground lease to the
Property and the Improvements. Those alleged oral promises were made at restaurants in
Carlsbad and San Clemente. (The promises basically mirror the terms of the
Management Agreement.) In reliance on those promises, NHV and VMG agreed to act
as asset manager and “undert[ook] the litigation and expense of the [Unlawful Detainer]
Action.”
                                PROCEDURAL HISTORY
               VMG initiated this litigation by filing a form complaint for breach of
contract and intentional tort in July 2013. The complaint alleged that Cerullo and Artz
breached the Management Agreement and/or interfered with it by “entering into a
settlement agreement, and settling unlawful detainer action, in secret, and without P‟s
consent.”
               A first amended complaint was filed in December 2013. The first amended
complaint added NHV as a plaintiff and asserted causes of action for breach of written
contract, breath of the covenant of good faith, breach of fiduciary duty, negligence, fraud,
and declaratory relief. The first amended complaint alleged, “[t]he execution by
Defendants of The Settlement Agreement was fraudulent and constitutes a highjacking of
The Litigation from the discretion and auspices of Plaintiffs and from the authority and
direction of counsel . . . Paul.”
               NHV and VMG filed a second amended complaint in March 2014. The
second amended complaint had three causes of action—breach of written contract, breach
of the covenant of good faith, and fraud. The second amended complaint included
substantially the same references to the settlement agreement as the first amended
complaint.
               NHV and VMG filed the third amended complaint in June 2015. Within 60
days, Cerullo and Artz filed the anti-SLAPP motion to the third amended complaint. In

                                             6
the anti-SLAPP motion, Cerullo and Artz argued that settlement of the Unlawful Detainer
Action was an act arising from the right to petition and therefore was protected by the
anti-SLAPP statute. Cerullo and Artz argued that “each of the four causes of action
arises from [Cerullo] signing the Purported Settlement in the [Unlawful Detainer]
Action.”
              In opposition, NHV and VMG argued the anti-SLAPP motion was not
timely filed because it was not filed within 60 days of the initial complaint, the first
amended complaint, or the second amended complaint. The trial court agreed. In
denying the anti-SLAPP motion, the trial court ruled: “Defendants‟ Special Motion to
Strike the Third Amended Complaint under CCP § 425.16 is denied as untimely. The
case has been pending for over two years. The court notes that the Complaint and every
pleading filed by Plaintiffs thereafter, all referenced the Settlement Agreement at the
heart of Defendants‟ argument. Defendants demurred to every pleading filed by
Plaintiffs. They filed a Motion to Strike the Complaint and the Second Amended
Complaint. The court has also heard and ruled on Defendants‟ Motion for Judgment on
the Pleadings and Motion for Summary Judgment. Substantial discovery has already
taken place. The court has granted several discovery motions filed by Plaintiffs. The
purpose of the anti-SLAPP statute is to dismiss meritless lawsuits designed to chill free
speech rights at the earliest stage of the case. That purpose no longer applies at this late
stage in the litigation. [Citations.]”
                         REQUESTS FOR JUDICIAL NOTICE
              After oral argument, counsel for Cerullo and Artz filed a request for judicial
notice of the fact that NHV‟s corporate status had changed to suspended. Attached as an
exhibit to the request was business entity information from the California Secretary of
State showing that as of September 16, 2016, NHV‟s status was “FTB SUSPENDED.”
NHV then filed a request for judicial notice of (1) a certificate of revivor for NHV issued
by the California Franchise Tax Board on October 6, 2016 and (2) business entity detail

                                              7
from the California Secretary of State‟s Web site reflecting that, as of October 7, 2016,
NHV‟s status was “ACTIVE.” We grant both requests for judicial notice.
              The certificate of revivor for NHV states, “[t]his Limited Liability
Company was relieved of suspension or forfeiture and is now in good standing with the
Franchise Tax Board.” Because NHV is now a corporation in good standing, it may
defend and participate in this action. (See Cadle Co. v. World Wide Hospitality
Furniture, Inc. (2006) 144 Cal.App.4th 504, 513.) NHV was ineligible to appear at oral
argument because at that time NHV was a suspended corporation. But counsel appearing
for NHV also represented VMG at oral argument and therefore could appear and argue.
Cerullo and Artz argue NHV cannot proceed because it did not seek a continuance to
secure a revivor. Although the “„normal practice‟” is for the court to grant a short
continuance to enable the suspended corporation to obtain reinstatement (id. at p. 512),
the suspended corporation is not required to ask for a continuance for that purpose.

                                        DISCUSSION
                                               I.
                        Background Law and Standard of Review
              “A cause of action against a person arising from any act of that person in
furtherance of the person‟s right of petition or free speech under the United States
Constitution or the California Constitution in connection with a public issue shall be
subject to a special motion to strike, unless the court determines that the plaintiff has
established that there is a probability that the plaintiff will prevail on the claim.”
(§ 425.16(b)(1).)
              “The anti-SLAPP statute does not insulate defendants from any liability for
claims arising from the protected rights of petition or speech. It only provides a
procedure for weeding out, at an early stage, meritless claims arising from protected
activity. Resolution of an anti-SLAPP motion involves two steps. First, the defendant

                                               8
must establish that the challenged claim arises from activity protected by [Code of Civil
Procedure] section 425.16. [Citation.] 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. We have described this second step as a „summary-judgment-like
procedure.‟ [Citation.] The court does not weigh evidence or resolve conflicting factual
claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim
and made a prima facie factual showing sufficient to sustain a favorable judgment. It
accepts the plaintiff‟s evidence as true, and evaluates the defendant‟s showing only to
determine if it defeats the plaintiff‟s claim as a matter of law. [Citation.] „[C]laims with
the requisite minimal merit may proceed.‟ [Citation.]” (Baral v. Schnitt (2016) 1 Cal.5th
376, 384-385, fn. omitted.)
              We review an order granting or denying an anti-SLAPP motion under the
de novo standard. (Karnazes v. Ares (2016) 244 Cal.App.4th 344, 351.)
                                              II.

             The Anti-SLAPP Motion Was Untimely as to the Breach of
             Contract and Breach of Implied Covenant Causes of Action.
A. General Analysis of Timing of Anti-SLAPP Motion
              Section 425.16(f) states, “[t]he special motion may be filed within 60 days
of the service of the complaint or, in the court‟s discretion, at any later time upon terms it
deems proper.” Section 425.16(f) imposes a time limit for bringing an anti-SLAPP
motion; that is, “[a] party may not file an anti-SLAPP motion more than 60 days after the
filing of the complaint, unless the trial court affirmatively exercises its discretion to allow
a late filing.” (Platypus Wear, Inc. v. Goldberg (2008) 166 Cal.App.4th 772, 775.)
              The term “the complaint” in section 425.16(f) has been interpreted to
include amended complaints. (Lam v. Ngo (2001) 91 Cal.App.4th 832, 840.) Key to the
decision in Lam is the concern a plaintiff could circumvent the anti-SLAPP statute if
amended complaints were not subject to anti-SLAPP motions: “Primarily, the purpose of

                                               9
the anti-SLAPP suit law would be readily circumventable if a defendant‟s only
opportunity to strike meritless SLAPP claims were in an attack on the original complaint.
Causes of action subject to a special motion to strike could be held back from an original
complaint . . . . [¶] In context, the „special‟ anti-SLAPP suit motion is directed at a
particular document, namely „the complaint.‟ It would make no sense to read „complaint‟
to refer to an earlier complaint that contained no anti-free-speech claims, but not allow
such a motion for a later complaint that had been amended to contain some. After all, the
whole purpose of the statute is to provide a mechanism for the early termination of
claims that are improperly aimed at the exercise of free speech or the right of petition.”
(Id. at pp. 840-841.)
              Cerullo and Artz argue an interpretation of the term “the complaint” to
include an amended complaint is absolute and means the filing of any amended
complaint automatically reopens the period for bringing an anti-SLAPP motion. We
disagree and follow the rule, expressed by the Court of Appeal in Hewlett-Packard Co. v.
Oracle Corp. (2015) 239 Cal.App.4th 1174, which recognizes the anti-SLAPP statute‟s
purpose and the need to prevent gamesmanship by both the plaintiff and the defendant.
In Hewlett-Packard Co. v. Oracle Corp., the Court of Appeal stated: “The rule that an
amended complaint reopens the time to file an anti-SLAPP motion is intended to prevent
sharp practice by plaintiffs who might otherwise circumvent the statute by filing an initial
complaint devoid of qualifying causes of action and then amend to add such claims after
60 days have passed. [Citation.] But a rule properly tailored to that objective would
permit an amended pleading to extend or reopen the time limit only as to newly pleaded
causes of action arising from protected conduct. A rule automatically reopening a case to
anti-SLAPP proceedings upon the filing of any amendment permits defendants to forgo
an early motion, perhaps in recognition of its likely failure, and yet seize upon an
amended pleading to file the same meritless motion later in the action, thereby securing

                                             10
the „free time-out‟ condemned in [People ex rel. Lockyer v.] Brar [(2004)] 115
Cal.App.4th 1315, 1318.” (Id. at p. 1192, fn. 11.)
              Cerullo and Artz rely on Yu v. Signet Bank/Virginia (2002) 103
Cal.App.4th 298, 313, 315 (Yu), in which the Court of Appeal concluded an anti-SLAPP
motion filed within 60 days of service of a third amended complaint was timely, even
though the motion could have been filed at the outset of the case. “Admittedly,” the Yu
court stated, “this is not a case where an anti-SLAPP motion was promptly made to
counter SLAPP allegations first added to an amended pleading” and the defendants‟
anti-SLAPP theory appeared to have been “an afterthought.” (Id. at p. 315.)
              But the holding in Yu is not as clear-cut as Cerullo and Artz portray it to be.
The plaintiffs in Yu had argued the anti-SLAPP statute did not permit an anti-SLAPP
motion to be filed, without leave of the court, more than 60 days after service of the
original complaint. (Yu, supra, 103 Cal.App.4th at p. 313.) The Yu court agreed with
Lam v. Ngo that the word “complaint” in the anti-SLAPP statute included an amended
complaint. (Yu, supra, at p. 314.) The Yu court noted, however, it was “unclear” under
the plaintiffs‟ construction of the anti-SLAPP statute when the defendants would have
been entitled as a matter of right to file their motion because the original complaint had
never been served and an amended complaint, filed shortly after the original one, was the
first complaint to be served. (Ibid.)
              We disagree with Yu to the extent it holds that a defendant has an absolute
right to file an anti-SLAPP motion to an amended complaint, even when the motion
could have been brought against an earlier complaint. “The Legislature enacted [Code of
Civil Procedure] section 425.16 to prevent and deter „lawsuits [referred to as SLAPP‟s]
brought primarily to chill the valid exercise of the constitutional rights of freedom of
speech and petition for the redress of grievances.‟ [Citation.] Because these meritless
lawsuits seek to deplete „the defendant‟s energy‟ and drain „his or her resources‟
[citation], the Legislature sought „“to prevent SLAPPs by ending them early and without

                                             11
great cost to the SLAPP target”‟ [citation].” (Varian Medical Systems, Inc. v. Delfino
(2005) 35 Cal.4th 180, 192.) The argument advanced by Cerullo and Artz would
encourage gamesmanship that could defeat rather than advance that purpose.
              We therefore conclude a defendant must file an anti-SLAPP motion within
60 days of service of the first complaint (or cross-complaint, as the case may be) that
pleads a cause of action coming within section 425.16(b)(1) unless the trial court, in its
discretion and upon terms it deems proper, permits the motion to be filed at a later time
(§ 425.16(f)). An amended complaint reopens the time to file an anti-SLAPP motion
without court permission only if the amended complaint pleads new causes of action that
could not have been the target of a prior anti-SLAPP motion, or adds new allegations that
make previously pleaded causes of action subject to an anti-SLAPP motion.
B. Application of Timing Rule to This Case
              In this case, the anti-SLAPP motion challenged the third amended
complaint on the ground that settlement of the Unlawful Detainer Action was an act
arising from the right to petition and that “each of the four causes of action arises from
[Cerullo and Artz] signing the Purported Settlement in the [Unlawful Detainer] Action.”
On appeal, Cerullo and Artz argue that each cause of action in the third amended
complaint arose out of the protected activity of signing the settlement of the Unlawful
Detainer Action.
              Settlement of the Unlawful Detainer Action was first alleged in the initial
complaint, which asserted causes of action for breach of contract and intentional tort.
Settlement of the Unlawful Detainer Action was pleaded again in the first amended
complaint and again in the second amended complaint. The first amended complaint and
the second amended complaint included causes of action for breach of contract and
breach of the implied covenant of good faith.
              Cerullo and Artz could have filed anti-SLAPP motions against any of those
complaints on the ground that settling the Unlawful Detainer Action constituted protected

                                             12
activity under section 425.16(e). They did not do so. Instead, they waited until the third
amended complaint, by which time they had brought (1) a demurrer to and motion to
strike the initial complaint, (2) a demurrer to the first amended complaint, (3) a demurrer
to, motion to strike, motion for judgment on the pleadings, and motion for summary
judgment on, the second amended complaint, and (4) a demurrer to the third amended
complaint. The parties had engaged in extensive discovery and the trial court had ruled
on several discovery motions. Entertaining the anti-SLAPP motion would have defeated
rather than advanced the anti-SLAPP‟s statute‟s “central purpose” of “screening out
meritless claims that arise from protected activity, before the defendant is required to
undergo the expense and intrusion of discovery.” (Baral v. Schnitt, supra, 1 Cal.5th at
p. 392; see Platypus Wear, Inc. v. Goldberg, supra, 166 Cal.App.4th at p. 776 [purpose of
anti-SLAPP statute is “ensuring the prompt resolution of lawsuits that impinge on a
defendant‟s free speech rights”]; Kunysz v. Sandler (2007) 146 Cal.App.4th 1540, 1543
[“the purpose of the anti-SLAPP statute is to dismiss meritless lawsuits designed to chill
the defendant‟s free speech rights at the earliest stage of the case”].)
              Cerullo and Artz did not file the anti-SLAPP motion within 60 days of
service of the initial complaint, the first amended complaint, or the second amended
complaint. They did not seek leave of court to file a late anti-SLAPP motion. The trial
court did not err by denying the anti-SLAPP motion as untimely—at least as to the causes
of action for breach of contract and breach of the implied covenant of good faith, which
appeared in earlier complaints.
              The third amended complaint added two causes of action not before
pleaded: quantum meruit and promissory estoppel. The quantum meruit cause of action
alleged that NHV and VMG performed services under the Management Agreement
which resulted in benefit to Cerullo and Artz for which NHV and VMG should be
compensated. The promissory estoppel cause of action was premised on alleged oral
promises made by Artz to D‟Alessio that NHV and VMG would become the asset

                                              13
manager for the Property and, in exchange for litigating the Unlawful Detainer Action
and evicting NHOM, would have an option to acquire the ground lease to the Property
and the Improvements.
              The anti-SLAPP motion was timely as to the quantum meruit and
promissory estoppel causes of action. To conclude otherwise would allow NHV and
VMG to circumvent the purpose of the anti-SLAPP statute by holding back those two
causes of action from earlier complaints. (Lam v. Ngo, supra, 91 Cal.App.4th at
pp. 840-841.) An anti-SLAPP motion to the initial complaint, the first amended
complaint, or the second amended complaint, even if successful, would not have
prevented NHV and VMG from bringing a lawsuit for quantum meruit and promissory
estoppel. That is because an earlier anti-SLAPP motion would not necessarily have
resolved whether NHV and VMG could demonstrate the probability of prevailing on their
claims for quantum meruit and promissory estoppel.
                                             III.

                 NHV and VMG Made a Prima Facie Showing on the
                   Quantum Meruit and the Promissory Estoppel
                              Causes of Action.
              The first prong of the anti-SLAPP procedure—whether the challenged
claims arose from activity protected by section 425.16—is not in dispute. Cerullo and
Artz argue the causes of action of the third amended complaint arise out of the act of
settling the Unlawful Detainer Action, which is an act in furtherance of their right of
petition. (§ 425.16(e).) NHV and VMG do not contend otherwise.
              In the second prong of the anti-SLAPP procedure, the burden shifts to the
plaintiff to demonstrate the merit of the claim by establishing a probability of success.
(Baral v. Schnitt, supra, 1 Cal.5th at p. 384.) That issue was fully briefed before the trial
court and on appeal. In view of its decision on timeliness, however, the trial court did not
reach the question “whether the plaintiff has stated a legally sufficient claim and made a

                                             14
prima facie factual showing sufficient to sustain a favorable judgment.” (Id. at pp.
384-385.) The standard of review is de novo (Karnazes v. Ares, supra, 244 Cal.App.4th
at p. 351), meaning we are in as good a position as the trial court to make that inquiry.
A. Quantum Meruit
              Cerullo and Artz contend NHV and VMG did not state a legally sufficient
claim for quantum meruit because (1) the quantum meruit cause of action was
time-barred and (2) the quantum meruit allegations were inconsistent with the breach of
contract allegations.
              The statute of limitations for quantum meruit claims is two years. (Maglica
v. Maglica (1998) 66 Cal.App.4th 442, 452.) Cerullo and Artz argue, with no
disagreement from NHV and VMG, that the quantum meruit cause of action accrued, and
the statute of limitations began to run, in August 2012, when the Unlawful Detainer
Action was settled. NHV and VMG filed the third amended complaint in June 2015,
nearly three years later.
              NHV and VMG contend the third amended complaint relates back to earlier
complaints for statute of limitations purposes, making the quantum meruit cause action
timely. An amended complaint is considered a new action for purposes of the statute of
limitations only if the claims do not “relate back” to an earlier timely filed complaint.
(Pointe San Diego Residential Community, L.P. v. Procopio, Cory, Hargreaves &
Savitch, LLP (2011) 195 Cal.App.4th 265, 276.) Under the relation-back doctrine, an
amendment relates back to the original complaint if the amendment (1) rests on the same
general set of facts; (2) involves the same injury; and (3) refers to the same
instrumentality. (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 408-409.) An amended
complaint relates back to an earlier complaint if the amended complaint is based on the
same general set of facts, even if the plaintiff alleges a different legal theory or new cause
of action. (Smeltzley v. Nicholson Mfg. Co. (1977) 18 Cal.3d 932, 934, 936.)

                                             15
              The general set of facts forming the basis for the quantum meruit cause of
action is included in the second amendment complaint, which was filed in March 2014.
The second amended complaint alleged that VMG retained and paid for counsel to
prosecute the Unlawful Detainer Action, paid for all of the costs and expenses of the
Unlawful Detainer Action (which totaled more than $500,000), and spent over $200,000
for expenses as asset manager. The second amended complaint alleged that Cerullo
settled the Unlawful Detainer Action without the knowledge of VMG and that Cerullo
received “payment of a substantial sum” in exchange for dismissing the Unlawful
Detainer Action. Those same allegations, the same injury, and the same instrumentality
form the basis for the quantum meruit cause of action in the third amended complaint.
              Thus, the quantum meruit cause of action relates back to the second
amended complaint for statute of limitations purposes. Because the second amended
complaint was filed within two years of August 2012, the quantum meruit cause of action
is timely.
              As Cerullo and Artz contend, the breach of contract cause of action and
quantum meruit cause of action are inconsistent. Quantum meruit recovery is
inconsistent with recovery for breach of written contract. (Hedging Concepts, Inc. v.
First Alliance Mortgage Co. (1996) 41 Cal.App.4th 1410, 1419.) “A quantum meruit or
quasi-contractual recovery rests upon the equitable theory that a contract to pay for
services rendered is implied by law for reasons of justice. [Citation.] However, it is well
settled that there is no equitable basis for an implied-in-law promise to pay reasonable
value when the parties have an actual agreement covering compensation.” (Ibid.)
              NHV and VMG had the obligation under the Management Agreement of
paying for the costs of the Unlawful Detainer Action. In the quantum meruit cause of
action, NHV and VMG seek to recover those costs from Cerullo and Artz. Quantum
meruit recovery that is contrary to an express contractual term is not allowed. (Hedging
Concepts, Inc. v. First Alliance Mortgage Co., supra, 41 Cal.App.4th at p. 1419.)

                                            16
              But NHV and VMG were permitted to plead inconsistent counts. “When a
pleader is in doubt about what actually occurred or what can be established by the
evidence, the modern practice allows that party to plead in the alternative and make
inconsistent allegations.” (Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th
1395, 1402.) “The plaintiff remains free to allege any and all „inconsistent counts‟ that a
reasonable attorney would find legally tenable on the basis of the facts known to the
plaintiff at the time.” (Crowley v. Katleman (1994) 8 Cal.4th 666, 691.) Thus, a plaintiff
may plead inconsistent causes of action for breach of contract and common count. (4
Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 407, p. 546.) NHV and VMG cannot
recover for both breach of contract and quantum meruit (see Hedging Concepts, Inc. v.
First Alliance Mortgage Co., supra, 41 Cal.App.4th at pp. 1419-1420), but they can plead
both causes of action. Nothing in the anti-SLAPP statute required NHV and VMG to
make an election between the breach of contract and quantum meruit causes of action in
                                     4
response to the anti-SLAPP motion.
              Cerullo and Artz argue in their reply brief that the quantum meruit claim
fails because, in opposition to the anti-SLAPP motion, NHV and VMG did not produce
evidence they spent any money performing their obligations as asset manager. Cerullo
and Artz waived that argument by not presenting it in their opening brief. (Chicago Title
Ins. Co. v. AMZ Ins. Services, Inc. (2010) 188 Cal.App.4th 401, 427-428.) The argument
also has no merit. D‟Alessio submitted a declaration in opposition to the anti-SLAPP
motion. At paragraph 14 of that declaration, D‟Alessio stated he “incurred thousands of

 4
   At some point, NHV and VMG might have to elect between a breach of contract
remedy and a quantum meruit remedy. (4 Witkin, Cal. Procedure, supra, Pleading,
§ 409, pp. 547-548.) But that point is not now. “„Plaintiff is entitled to introduce his
evidence upon each and all of these causes of action, and the election, or in other words
the decision as to which of them is sustained, is, after the taking of all the evidence, a
matter for the judge or the jury.‟” (Id., § 406, p. 545, quoting Tanforan v. Tanforan
(1916) 173 Cal. 270, 274.)

                                            17
dollars in fees and costs” in preparing for the trial of the Unlawful Detainer Action and
“incurred well over $700,000 in expenses while Asset Manager.” In the same paragraph,
D‟Alessio declared that “[a]s of April 2014, the total costs and expenses I incurred as
Asset Manager total no less than $791,605.73.” Although the declaration is not drafted
as precisely and directly as might be desirable (e.g., D‟Alessio does not state that he
“spent money” or “wrote checks” in certain amounts), a fair reading of the declaration is
that D‟Alessio spent no less than $791,605.73 as asset manager.
B. Promissory Estoppel
              Cerullo and Artz contend that NHV and VMG did not state a legally
sufficient claim for promissory estoppel because (1) the promissory estoppel cause of
action was time-barred under a two-year statute of limitations, (2) the promissory
estoppel allegations were inconsistent with the breach of contract allegations, and
(3) NHV and VMG failed to produce evidence of a prima facie factual showing sufficient
to sustain a favorable judgment.
              The statute of limitations for promissory estoppel based on oral promises is
                            5
two years. (§ 339, subd. 1.) The promissory estoppel cause of action accrued in August
2012, as did the quantum meruit cause of action, when the Unlawful Detainer Action was
settled. Although the third amended complaint was filed more than two years later, the

 5
    The applicable statute of limitations is determined by the nature of the right sued upon
rather than the form of the action or the relief demanded. (Day v. Greene (1963) 59
Cal.2d 404, 411.) The California Supreme Court accordingly has held that where the
primary purpose of an equitable cause of action is to recover money under a contract, the
statute of limitations applicable to contract actions governs the equitable claim.
(Jefferson v. J. E. French Co. (1960) 54 Cal.2d 717, 718-719 [accounting action was
subject to the two-year statute of limitations of section 339 because “the primary purpose
of the action [was] to recover money under the oral contract” and the “accounting [was]
merely ancillary to the perfection of plaintiff's right under the oral contract”].) In this
case, NHV and VMG‟s claim for promissory estoppel is closest in nature to a claim of
breach of oral contract and, therefore, the two-year period of section 339, subdivision 1
(action on an obligation not in writing) is applicable.

                                             18
promissory estoppel cause of action relates back, for statute of limitations purposes, to
the second amended complaint or the first amended complaint. The third amended
complaint alleged Artz made a series of promises to D‟Alessio at restaurants in Carlsbad
and San Clemente in March 2011. Those promises were substantially the same as the
terms of the Management Agreement, the existence and terms of which were alleged in
the prior complaints. The relief sought by the promissory estoppel cause of action
(amounts spent as asset manager) is essentially the same as the relief sought by the
breach of contract cause of action in the prior complaints.
               As we explained above, an amended complaint relates back to an earlier
complaint if the amended complaint is based on the same general set of facts, even if the
plaintiff alleges a different legal theory or new cause of action. (Smeltzley v. Nicholson
Mfg. Co., supra, 18 Cal.3d at pp. 934, 936.) The promissory estoppel cause of action,
though a new cause of action, was based on generally the same facts as the prior
complaints, related back to those complaints, and therefore was not barred by a two-year
statute of limitations.
               Cerullo and Artz contend the promissory estoppel cause of action is
inconsistent with the breach of contract cause of action. Although they are correct, NHV
and VMG could plead inconsistent causes of action. Promissory estoppel is an equitable
claim that substitutes reliance on a promise as a substitute for bargained-for
consideration. (Fleet v. Bank of America N.A. (2014) 229 Cal.App.4th 1403, 1412-1413.)
Promissory estoppel does not apply if the promisee gave actual consideration and,
therefore, a cause of action for promissory estoppel is inconsistent with a cause of action
for breach of contract based on the same facts. (Id. at p. 1413.) But “„[w]hen a pleader is
in doubt about what actually occurred or what can be established by the evidence, the
modern practice allows that party to plead in the alternative and make inconsistent
allegations.‟” (Ibid.) At this stage, NHV and VMG do not have to elect between a

                                             19
promissory estoppel remedy and a breach of contract remedy. (4 Witkin, Cal. Procedure,
supra, Pleadings, §§ 406, 409.)
              Finally, we conclude that NHV and VMG met their burden of making a
prima facie factual showing on the promissory estoppel cause of action. The elements of
promissory estoppel are (1) a promise, (2) the promisor should reasonably expect the
promise to induce action or forbearance on the part of the promisee or a third person,
(3) the promise induces action or forbearance by the promisee or a third person, and
(4) injustice can be avoided only by enforcement of the promise. (Kajima/Ray Wilson v.
Los Angeles County Metropolitan Transportation Authority (2000) 23 Cal.4th 305, 310.)
              Cerullo and Artz contend that NHV and VMG failed to produce evidence
of promises made to D‟Alessio and that the evidence presented in connection with the
anti-SLAPP motion proved that no promises were made. In his declaration submitted in
opposition to the anti-SLAPP motion, D‟Alessio stated that he had met with Artz in
March 2011 to discuss NHOM‟s default under the Sublease. D‟Alessio declared that he
and Artz had “c[o]me to a solution” by which NHV “agreed to take the necessary actions
to evict NHOM for its Default” and, in exchange, “[Cerullo] would assign the ground
lease that it has with the Property owner . . . to me (NHV), so that I could take over the
Property and Improvements once NHOM was evicted and have the opportunity to operate
a successful business venture at the Property.”
              Cerullo and Artz argue D‟Alessio‟s declaration failed to set forth any
promises made by Artz. An agreement is an exchange of promises. (E.g., Chicago Title
Ins. Co. v. AMZ Ins. Services, Inc., supra, 188 Cal.App.4th at pp. 421-422.) D‟Alessio‟s
declaration, by setting forth agreements made at the meeting between D‟Alessio and
Artz, also set forth promises made at that meeting.
              In support of the anti-SLAPP motion, Cerullo and Artz submitted portions
of the transcript of D‟Alessio‟s deposition taken in November 2011 in connection with
the Unlawful Detainer Action. During the deposition, D‟Alessio was asked whether he

                                             20
had an agreement with Cerullo or Plaza del Sol as to what would happen to the Property
and the Improvements if Cerullo prevailed in the Unlawful Detainer Action. D‟Alessio
responded: “Other than what we‟ve already talked about, no. No agreement.” Cerullo
and Artz contend this testimony defeats any claim that promises were made to D‟Alessio.
D‟Alessio‟s deposition testimony does not defeat the promissory estoppel cause of action
as a matter of law (Baral v. Schnitt, supra, 1 Cal.5th at pp. 384-385) because D‟Alessio
testified there were other agreements “we‟ve already talked about.”
              Moreover, in assessing the anti-SLAPP motion, we accept as true NHV and
VMG‟s evidence, which included D‟Alessio‟s declaration. That evidence established the
promissory estoppel cause of action has “„the requisite minimal merit‟” to proceed.
(Baral v. Schnitt, supra, 1 Cal.5th at p. 385.)

                                      DISPOSITION
              The order denying the anti-SLAPP motion is affirmed. Respondents shall
recover costs on appeal.

                                                   FYBEL, J.

WE CONCUR:

O‟LEARY, P. J.

BEDSWORTH, J.

                                              21
Filed 12/22/2016

                              CERTIFIED FOR PUBLICATION

             IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                               FOURTH APPELLATE DISTRICT

                                       DIVISION THREE

NEWPORT HARBOR VENTURES, LLC,
et al.,
                                                       G052660
    Plaintiffs and Respondents,
                                                       (Super. Ct. No. 30-2013-00665314)
        v.
                                                       ORDER GRANTING REQUEST
MORRIS CERULLO WORLD                                   FOR PUBLICATION
EVANGELISM et al.,

    Defendants and Appellants.

                   Appellants have requested that our opinion, filed on November 30, 2016, be
certified for publication. It appears that our opinion meets the standards set forth in
California Rules of Court, rule 8.1105(c)(2)-(6). The request is GRANTED. The
opinion is ordered published in the Official Reports.
                      FYBEL, J.

WE CONCUR:

O‟LEARY, P. J.

BEDSWORTH, J.

                 23