Wednesday, January 7, 2015

A Class Action Is Community Property

Lennar Homes of Cal. v. Stella Stephens, E057280 (D4d2 Dec. 18, 2014)

Defendants in this case are a husband and wife who bought a house from the plaintiff, Lennar Homes. The husband was the named plaintiff in an unsuccessful federal class action alleging illegality in the transaction. Lennar sued both husband and wife for express contractual indemnification for the costs incurred in defending the class action, based on an indemnity clause in the purchase agreement.  Defendants brought an anti-SLAPP motion, which the trial court granted. Lennar appealed.

The court applies the familiar two-part analysis. First, it finds that the trial court correctly found that the suit arose from protected activity. That was conceded as to husband—since he is, in effect, being sued for filing a lawsuit—but not as to wife. Lennar asserts that because wife was not a party to the federal case, its claim her does not arise from her protected activity. The court doesn’t buy it. In a case where husband is asserting rights that are tied up with the family’s community property, the petitioning entailed is as much hers as it is his, notwithstanding the name on the caption. Moreover, Lennar couldn’t show a likely success on the merits because the indemnification provision was, in fact, unconscionable and thus could not be enforced.


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