Tuesday, April 22, 2014

Suit Against Developer for Alleged HOA Swinde Is Not a SLAPP

Talega Maintenance Corp. v. Standard Pac. Corp., No. G048282 (D4d3 Apr. 15, 2014)

The court considers an anti-SLAPP motion filed in a dispute between a homeowners’ association and a developer, and three of the developer’s employees who sat on the HOA board at the developer’s behest. When rain caused half a million dollars in damage to some trails on the development property, the employees—who controlled the board at the time—caused the HOA to take responsibility for their repair, even though legal responsibility allegedly remained firmly with the developer. When the HOA found out the true facts, it sued for fraud, constructive fraud, breach of fiduciary duty, and negligence. The developer filed a motion to strike under Code of Civil Procedure § 425.16, which the trial court denied.

The court holds that the non-fraud claims are not protected activity under the anti-SLAPP statute because they dealt primarily with decisions to expend the HOA’s funds. As spending decisions are not written or oral communications or otherwise communicative acts, they weren’t protected activity. The fraud claim was a closer call, as it involved allegedly false statements made at board meetings to the effect that the HOA was, in fact responsible for the trail repair. But homeowner’s association meetings are not “official proceedings,” or matters under consideration by a government body so they don’t fall within § 425.16(e)(1) or (e)(2). Nor do the statements fall within the broader categories of protected activity under § 425.16(e)(3)
—statements in public foraor (e)(4)—"other conduct in furtherance"because the trail conditions, while clearly important to the private interests of the homeowners, did not rise to the level of public issues or issues of public interest concern. Absent that, they are not protected activity under § 425.16(e)(3) and (e)(4). Thus, no cause of action arose from protected activity. The anti-SLAPP motion was properly denied.


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