Court Opinion

ID: 8206409
Source: CourtListenerOpinion
Date Created: 2022-09-14 18:01:51.768971+00
Date Added: 2024-06-11T16:41:15.378538
License: Public Domain

Filed 9/14/22 Mojtahedi v. Carpenter CA4/3

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                     FOURTH APPELLATE DISTRICT

                                                 DIVISION THREE

 MICHAEL MOJTAHEDI et al.,

      Plaintiffs and Respondents,                                      G059691

           v.                                                          (Super. Ct. No. 30-2018-00998174)

 GREG CARPENTER,                                                       OPINION

      Defendant and Appellant.

                   Appeal from an order of the Superior Court of Orange County, Robert J.
Moss, Judge. Affirmed.
                   London Fischer, Nicholas W. Davila and Jeffrey W. Griffith; Azar Law
Group, David E. Azar; Benedon & Serlin, Gerald M. Serlin and Wendy S. Albers for
Defendant and Appellant.
                   Hejazi Law Group, Ashkan Hejazi; Ezner, Chang & Boyer, Andrew N.
Chang and Kevin K. Nguyen for Plaintiffs and Respondents.
                                             *               *               *
                Plaintiffs Michael Mojtahedi and Mojdeh Mojtahedi along with defendant
Greg Carpenter are homeowners in a condominium complex in Laguna Beach,
California. Plaintiff Mojdeh Mojtahedi and defendant concurrently served on the
homeowners association’s board of directors. Plaintiffs sued defendant, the homeowners
association, and other individual board members for breach of written contract,
enforcement of equitable servitudes, breach of fiduciary duty, declaratory relief, and
injunctive relief. Among other things, the complaint alleges defendant wrongfully used
funds from the homeowners association for projects and repairs benefiting his units and
failed to disclose his personal interests. The complaint also alleges defendant
misrepresented some of the improvements as emergency repairs. The relevant repairs
occurred when defendant was president of the board of directors.
                Defendant filed a special motion to strike (anti-SLAPP motion) under Code
                                    1
of Civil Procedure section 425.16. He asserted plaintiffs’ claims arose, in part, from
protected activity because some of the allegations concerned his statements or voting at
board meetings. He also argued plaintiffs could not establish a likelihood of success on
their claims.
                The court denied the anti-SLAPP motion, finding plaintiffs’ claims did not
arise from the protected conduct of voting. Instead, the court found plaintiffs’ claims
arose from defendant’s “failure to disclose a number of material facts to benefit himself,
and the spending of large sums of the Association’s money and reserves in violation of
the project documents, state law, or based upon [his] fiduciary duty to members of the
association.” The court concluded any voting allegations were incidental to the alleged
wrongdoing. Defendant appealed.

1
                All further statutory references are to the Code of Civil Procedure.

                                               2
              After reviewing the record de novo, we conclude the court properly denied
the anti-SLAPP motion. As we explain below, plaintiffs’ claims did not arise from
protected activity. We therefore affirm.

                                           FACTS
Relevant Background
              The Laguna Sands condominium complex (Laguna Sands) consists of 32
units on the waterfront in Laguna Beach. The complex is governed by Laguna Sands,
Inc. (HOA), a homeowners association. Each homeowner is a member of the HOA. The
HOA’s board of director’s (the Board) consists of five directors and one alternate
director.
              In 2009, plaintiffs purchased one of the units at Laguna Sands. Defendant
also owns a unit at Laguna Sands and previously owned a second unit. Both plaintiff
Mojdeh Mojtahedi and defendant concurrently served on the Board during the time
period relevant to the instant case. Defendant served as the president of the Board from
January 2016 to December 2018.

The Complaint
              Plaintiffs initiated the instant action in June 2018. In September 2019,
plaintiffs filed a second amended complaint against defendant as well as the HOA and
                                                             2
two other Board members who are not parties to this appeal. The complaint generally
alleges defendant was involved in funneling HOA funds to projects and repairs benefiting
his units or common areas adjacent to his units.

2
               Plaintiffs subsequently filed a third amended complaint after defendant
filed his anti-SLAPP motion. Because the anti-SLAPP motion is directed at the second
amended complaint and the parties solely focus on the second amended complaint, we
need not address the third amended complaint.

                                             3
              In May 2017, defendant allegedly called a telephonic Board meeting for
emergency repairs to the walkway adjacent to his unit. In July 2017, he called another
telephonic Board meeting for emergency repairs to the wall on the second floor. He also
“arm-twisted and manipulated the Board” to approve a new elevator. In December 2017,
the Board approved the repair and replacement of the hallway wall immediately adjacent
to defendant’s unit. Defendant also unilaterally approved a change to the color and
texture of the hallway walls but failed to secure the proper permits for these
improvements. In February 2018, the Board approved deck coating and waterproofing
for the hallway next to defendant’s unit. In April 2018, defendant unilaterally approved
work on a vertical drain and vent lines for his unit. He also allegedly approved multiple
plumbing repairs that benefited his units. Finally, in July 2018, he demanded an
emergency repair of the pool deck. The complaint alleges the remodel was intended to
increase the sale value of defendant’s unit, which overlooked the pool deck. In total, the
complaint claims defendant induced the Board to approve approximately $150,000 in
improvements directly benefiting defendant or his units.
              The complaint also alleges the repairs were capital improvements requiring
majority homeowner approval under the HOA’s declaration of covenants, conditions, and
restrictions (CC&Rs). But defendant wrongfully characterized the improvements as
“emergency” repairs to bypass the CC&Rs and bylaws. He further failed to disclose his
own interest in the projects or recuse himself from voting on the improvements. Finally,
the complaint alleges defendant bypassed the bidding process for construction work by
hiring his friends to do the work.
              Based on the above allegations, the complaint alleges causes of action for
breach of written contract, enforcement of equitable servitudes, breach of fiduciary duty,
declaratory relief, and injunctive relief.

                                             4
The Anti-SLAPP Motion
              In 2019, defendant filed an anti-SLAPP motion seeking to strike certain
portions of the complaint. The motion specifically sought to strike allegations arising
from statements defendant made or how he voted at the Board meetings. Defendant
argued these allegations arose from protected activity because the statements and
decisions occurred in a public forum and pertained to issues of public interest within the
condominium association community. He also argued plaintiffs could not establish a
likelihood of success on their claims because his decisions were protected by the business
judgment rule.
              The court denied the anti-SLAPP motion. Citing Talega Maintenance
Corp. v. Standard Pacific Corp. (2014) 225 Cal.App.4th 722 (Talega), the court noted a
cause of action generally does not arise from protected activity just because protected
activity may have triggered the cause of action. The court then reasoned defendant’s
“alleged voting as a Board member was incidental to the alleged wrongdoing, i.e., the
improper spending of large sums of HOA funds for projects that either directly, or
indirectly benefited [him] personally.” While plaintiffs’ claims involved the act of
voting, the court held the claims did not arise from defendant’s act of voting with the
Board. Instead, the court emphasized plaintiffs’ claims arose from defendant’s “failure to
disclose a number of material facts to benefit himself, and the spending of large sums of
the Association’s money and reserves in violation of the project documents, state law, or
based upon [his] fiduciary duty to members of the association.” Because the claims did
not arise from the protected conduct of voting, the court held any specific allegations
likewise were incidental to the claims. The court did not address whether plaintiffs had
established a probability of success on the merits.

                                             5
                                       DISCUSSION
              Defendant contends the court erred by denying his anti-SLAPP motion. He
argues plaintiffs’ claims arise, in part, from protected activity because plaintiffs’
challenge is based on how he voted and expressed himself on matters of public interest.
In other words, defendant claims plaintiffs’ pleaded mixed causes of action resting on
allegations of multiple acts, including some of which were protected activity. He also
argues plaintiffs cannot prevail on the merits because his decisions were protected by the
business judgment rule under Corporations Code section 7231 and the challenged repair
decisions did not require majority homeowner approval.
              Contrary to defendant’s assertion, plaintiffs’ claims do not arise from
defendant’s protected activities. While defendant identifies some allegations that
involved the act of voting, those allegations were incidental to the alleged wrongdoing —
defendant’s withholding of information and self-dealing. Other allegations regarding
defendant’s misrepresentations about emergency repairs were not made in connection
with a public issue or an issue of public interest because the record does not show there
was an ongoing controversy, dispute, or discussion about the issue. We therefore affirm.

Applicable Law and Standard of Review
              “[T]he anti-SLAPP statute is designed to protect defendants from meritless
lawsuits that might chill the exercise of their rights to speak and petition on matters of
public concern. [Citations.] To that end, the statute authorizes a special motion to strike
claims ‘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.’” (Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th
871, 883-884.)
              The trial court conducts a potentially two-step inquiry to evaluate an anti-
SLAPP motion. (Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1009

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(Bonni).) First, the court must decide whether the defendant has met its burden of
establishing the plaintiff’s claim arises from protected activity in which the defendant has
engaged. (Ibid.) Second, assuming defendant has met its burden, the court determines
whether the plaintiff has established “there is a probability . . . the plaintiff will prevail on
the claim.” (§ 425.16, subd. (b)(1).) In meeting this burden, “the plaintiff must show the
claim has ‘at least “minimal merit.”’” (Bonni, at p. 1009.)
              We review the court’s ruling de novo, applying the legal principles
discussed above. (Falcon Brands, Inc. v. Mousavi & Lee, LLP (2022) 74 Cal.App.5th
506, 518.)

Protected Activity
              In determining whether plaintiffs’ claims arise from protected activity, “the
critical consideration is whether the cause of action is based on the defendant’s protected
free speech or petitioning activity.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 89.) “At
this first step, courts are to ‘consider the elements of the challenged claim and what
actions by the defendant supply those elements and consequently form the basis for
liability.’ [Citation.] The defendant’s burden is to identify what acts each challenged
claim rests on and to show how those acts are protected under a statutorily defined
category of protected activity.” (Bonni, supra, 11 Cal.5th at p. 1009.) “We review the
parties’ pleadings, declarations, and other supporting documents at this stage of the
analysis only ‘to determine what conduct is actually being challenged, not to determine
whether the conduct is actionable.’” (Castleman v. Sagaser (2013) 216 Cal.App.4th 481,
490-491.)
              If a plaintiff pleads mixed causes of action based on allegations of both
protected and unprotected activity, “analysis of an anti-SLAPP motion is not confined to
evaluating whether [the] entire cause of action, as pleaded by the plaintiff, arises from
protected activity or has merit.” (Bonni, supra, 11 Cal.5th at p. 1010.) Instead, courts

                                               7
analyze each act supplying a basis for relief to determine whether the acts are protected.
(Baral v. Schnitt (2016) 1 Cal.5th 376, 393, 395 (Baral).) “So long as a ‘court
determines that relief is sought based on allegations arising from activity protected by the
statute, the second step is reached’ with respect to these claims.” (Bonni, at p. 1010.)
But “[a]llegations of protected activity that merely provide context, without supporting a
claim for recovery, cannot be stricken under the anti-SLAPP statute.” (Baral, at p. 394.)
              The anti-SLAPP statute identifies four categories of protected activity: “(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 on an issue of public interest.”
(§ 425.16, subd. (e)(1)-(4).)
              Relying on the latter two categories, defendant insists plaintiffs’ claims are
based on how he voted and what he said on matters of public interest (common area
maintenance and repair work) at seven Board meetings. (§ 425.16, subd. (e)(3)-(4).) He
points to the following allegations in the complaint: (1) defendant “made numerous
decisions and votes . . . that were influenced by his interests rather than the interests of
the HOA and Members”; (2) defendant “did not disclose his . . . interests . . . in numerous
votes and decisions made by the Board and then failed to recuse himself from discussions
and votes on those issues”; (3) defendant “used his status as President to actively
influence those same votes”; (4) defendant “obtained the necessary votes through a storm
of misrepresentations, threats of lawsuits against the Board, arm-twisting, and deceit”; (5)
defendant breached the CC&Rs and bylaws by engaging in wrongful conduct, which

                                               8
included “wrongfully characterizing non-emergency capital improvements as
‘emergency’ repairs”; and (6) defendant breached his duties by “intentionally
misrepresenting the existence of an ‘Emergency Situation’ as defined by the CC&Rs.”
The first four categories involve the act of voting while the latter two categories concern
defendant’s alleged misrepresentations regarding emergency repairs. We address each in
turn.

               A. Voting Allegations
               While some of the complaint’s allegations involved the act of voting at
Board meetings, “voting is not per se protected activity.” (Talega, supra, 225
Cal.App.4th at p. 729, italics added.) Indeed, these allegations appear in two short
paragraphs under the “introduction” section of the complaint’s background allegations.
They merely provide context for defendant’s wrongful expenditure of HOA funds for
projects that benefited him personally and for his failure to disclose material facts. In
other words, plaintiffs’ claims could be asserted without reference to defendant’s voting.
               For example, in the fifth cause of action for breach of fiduciary duty, the
complaint emphasizes defendant breached his duties “by using his position as a Board
member to direct a substantial amount of HOA funds to improve his units or common
areas immediately adjacent to his units.” The complaint also alleges defendant breached
his duties by “repeatedly hir[ing] his friends to perform repairs and improvements” and
by failing “to disclose his . . . interest[s] . . . .” In the third and fourth causes of action for
breach of contract and equitable servitudes, the complaint alleges defendant breached the
HOA’s governing documents by failing to follow proper procedures when signing
contracts and before performing repairs. Neither defendant’s voting nor any statements
were the wrongful conduct at issue. The complaint references defendant’s voting as
context and evidence of his efforts to seek personal gain. Thus, defendant’s voting as a
Board member was incidental to the alleged wrongdoing.

                                                 9
              Talega, supra, 225 Cal.App.4th 722 is instructive. In Talega, a
homeowners association sued two developers and former board members who were
appointed by the developers to serve on the board. (Id. at p. 726.) After riding and
hiking trails were damaged by severe rain, the board members represented that the
association was responsible and expended HOA funds to pay for the repairs. (Ibid.)
Several years later, independent board members discovered the developers were
financially responsible and the trails’ failure was likely due to construction defects.
(Id. at pp. 726-727.) The homeowners association filed suit, alleging causes of action for
breach of fiduciary duty, fraud, constructive fraud, construction defect, negligence, and
declaratory relief. (Id. at pp. 727-728.) According to the complaint, the former board
members knew, but failed to disclose, the developers were responsible for the repairs and
that the damages were caused by the developers’ improper construction. (Id. at p. 726.)
The board members filed an anti-SLAPP motion arguing the claims arose from protected
statements they made at board meetings. (Id. at p. 729.)
              Another panel of this court denied the anti-SLAPP motion. (Talega, supra,
225 Cal.App.4th at p. 735.) With respect to the breach of fiduciary duty, constructive
fraud, and negligence claims, the court found the claims were “principally based on the
Developer Board Members withholding information and improperly directing the
expenditure of funds.” (Id. at p. 728.) The court acknowledged “the expenditure of
money may have been precipitated by a vote.” (Id. at p. 729.) But the court emphasized
“‘the fact that protected activity may have triggered a cause of action does not necessarily
mean the cause of action arose from the protected activity.’” (Ibid.) The court
accordingly concluded the vote was merely incidental to the wrongful conduct. (Id. at
pp. 729-730.) As to the fraud cause of action, the court held the issue was a “closer
question.” (Id. at p. 730.) But the court determined the claim was not based on protected
activity because the alleged fraudulent statements were not made in connection with an

                                             10
issue of public interest. (Id. at p. 734.) The court noted the issue of who would pay for
repairing the trails was not subject to any controversy, dispute, or discussion. (Ibid.)
               Like the complaint in Talega, the complaint here is not based on
defendant’s speech or petitioning activity. Instead, the complaint challenges defendant’s
withholding of information and self-dealing, which included the wrongful expenditure of
HOA funds for projects that benefited him personally. Defendant’s vote is not the wrong
complained of, but instead “a step leading to some different act for which liability is
asserted.” (Park v. Board of Trustees of California State University (2017) 2 Cal.5th
1057, 1060.)
               Defendant suggests Talega is no longer controlling in light of Baral, supra,
1 Cal.5th 376. Not true. In Baral, our Supreme Court held an anti-SLAPP motion can be
directed to specific allegations of protected activity within a cause of action that also
includes allegations of unprotected activity. (Baral, at pp. 382, 392-393.) But the court
reaffirmed “assertions that are ‘merely incidental’ or ‘collateral’ are not subject to” an
anti-SLAPP motion. (Id. at p. 394.) Indeed, in Bonni, supra, 11 Cal.5th 995, our
Supreme Court later clarified that not every court labeling its approach as a gravamen test
has erred because courts can “determine whether particular acts alleged within the cause
of action supply the elements of a claim [citation] or instead are incidental
background . . . .” (Id. at p. 1012.)
               Defendant’s reliance on Lee v. Silveira (2016) 6 Cal.App.5th 527 (Lee) also
is misplaced. In Lee, minority board members sued six other board members regarding
the board’s renewal of the association’s management contract and the decisionmaking
process at board meetings. (Id. at pp. 530-531, 542.) The defendants filed an anti-
SLAPP motion arguing the declaratory relief claim was based on their decisions and
statements at board meetings. (Id. at p. 531.) In reversing the trial court’s denial of the
anti-SLAPP motion, the court held the plaintiffs’ claim arose from the defendants’ voting
at board meetings. (Id. at p. 545.) The court emphasized “it [was] significant” the

                                              11
defendants were individual board members and not the homeowners association. (Id. at
p. 542.)
              Unlike the plaintiffs in Lee, plaintiffs are not suing defendant based on his
individual vote. As discussed ante, defendant’s vote was incidental to the claims, which
concerned the violation of his fiduciary duties. The other cases defendant cites are
distinguishable for the same reason. (Schwarzburd v. Kensington Police Protection &
Community Services Dist. Bd. (2014) 225 Cal.App.4th 1345; City of Montebello v.
Vasquez (2016) 1 Cal.5th 409.) We also note the plaintiffs in Lee did not sue the
association. In the instant case, plaintiffs filed a derivative suit and named the HOA as a
defendant.
              For the foregoing reasons, any voting allegations were incidental and did
not relate to any protected activity.

              B. Allegations Regarding Misrepresented Emergency Repairs
              In the first and second causes of action for breach of contract and
enforcement of equitable servitudes, the complaint alleges defendant breached the HOA’s
governing documents and his duties by misrepresenting the improvements as emergency
repairs. These allegations present a closer question.
              As noted ante, section 425.16, subdivision (e)(3) applies to statements
“made in a place open to the public or a public forum in connection with an issue of
public interest.” (Ibid.) Likewise, section 425.16, subdivision (e)(4) applies to any other
conduct “in connection with a public issue or on an issue of public interest.” (Ibid.)
              Plaintiffs argue section 425.16, subdivision (e)(3) does not apply because
defendant’s written or oral statements are not at issue. We disagree. The complaint
clearly alleges defendant made false representations and wrongful characterizations about
the repairs. Regardless, we find section 425.16, subdivisions (e)(3) and (e)(4) do not

                                             12
apply because the allegedly false statements were not made in connection with a public
issue or an issue of public interest.
              “In articulating what constitutes a matter of public interest, courts look to
certain specific considerations, such as whether the subject of the speech or activity ‘was
a person or entity in the public eye’ or ‘could affect large numbers of people beyond the
direct participants’ [citation]; and whether the activity ‘occur[red] in the context of an
ongoing controversy, dispute or discussion’ [citation], or ‘affect[ed] a community in a
manner similar to that of a governmental entity.’” (FilmOn.com Inc. v. DoubleVerify
Inc. (2019) 7 Cal.5th 133, 145-146.) Next, courts consider “what functional relationship
exists between the speech and the public conversation about some matter of public
                                   3
interest.” (Id. at pp. 149-150.)
              Turning to the context here, defendant was not a person or entity “in the
public eye.” (FilmOn.com Inc. v. DoubleVerify Inc., supra, 7 Cal.5th at p. 146.) The
issue also was not of interest to the public at large but to a limited portion of the public —
namely, the HOA’s 32 members. At a minimum, the speech or conduct therefore had to
occur in the context of an ongoing controversy, dispute or discussion. (Talega, supra,
225 Cal.App.4th at p. 734, quoting Du Charme v. International Brotherhood of Electrical
Workers (2003) 110 Cal.App.4th 107, 119.) Defendant contends he satisfied this
requirement because plaintiff Mojdeh Mojtahedi objected to the repairs. He also points
to his declaration, which generally stated agenda topics were discussed at every Board
meeting. But the record before us does not establish there was an ongoing controversy,
dispute, or discussion surrounding defendant’s characterization of the improvements as
emergency repairs. Indeed, plaintiff Mojdeh Mojtahedi was not even present and did not

3
              FilmOn.com Inc. v. DoubleVerify Inc., supra, 7 Cal.5th 133 concerned
protected conduct under section 425.16, subdivision (e)(4). (FilmOn.com Inc., at pp.
139-140.) Because section 425.16, subdivision (e)(3) similarly includes the requirement
that a statement be “in connection with an issue of public interest,” the court’s
consideration of context appears equally applicable to section 425.16, subdivision (e)(3).

                                             13
vote on the emergency repairs at issue during the May 2017 and July 27, 2017 Board
meetings. While it appears she voted against the emergency repairs at issue during the
July 10, 2017 and July 2018 Board meetings, these two instances are insufficient to show
there was an ongoing topic of debate about defendant’s characterization of the
improvements as emergency repairs. (Talega, supra, 225 Cal.App.4th at p. 734
[statement that homeowners association was liable for certain repairs did not involve a
matter of public interest because “there was no controversy about the issue”].)
               Defendant relies on distinguishable cases where the requirement of an
ongoing controversy, dispute, or discussion was satisfied. In Lee, supra, 6 Cal.App.5th
527, the court emphasized the defendants’ voting on a roofing project and management
contract had divided the board. (Id. at pp. 542-543.) In Cabrera v. Alam (2011) 197
Cal.App.4th 1077, the defamatory statements were made in the context of an election
campaign and accused the plaintiff of stealing money from the homeowners association.
(Id. at pp. 1081-1082.) Finally, in Colyear v. Rolling Hills Community Assn. of Rancho
Palos Verdes (2017) 9 Cal.App.5th 119, the court found “there was an ongoing
controversy, dispute, or discussion regarding the applicability of tree-trimming covenants
to lots not expressly burdened by them, and the [homeowners association’s] authority to
enforce such covenants.” (Id. at pp. 132-133.) Although the evidence was sparse, the
court concluded that “the issue was an ongoing topic of debate between the board and
homeowners, resulting in multiple hearings, letters, and several changes to the board’s
policy on the matter starting as early as 2002 and continuing up to the current dispute.”
(Id. at p. 133.)
               Because the emergency repairs in the instant case were noncontroversial
issues pending before the Board, defendant’s allegedly false statements did not concern a
public issue or an issue of public interest. For the foregoing reasons, the complaint does
not seek relief based on allegations arising from protective activity. We accordingly need

                                            14
not address the second prong of the anti-SLAPP analysis. (Sheley v. Harrop (2017) 9
Cal.App.5th 1147, 1162.)

                                     DISPOSITION

             The order is affirmed. Plaintiffs shall recover costs incurred on appeal.

                                                SANCHEZ, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

MARKS, J.*

*Judge of the Orange County Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.

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