Appellant client moved to strike respondent law firm’s second amended cross-complaint as a strategic lawsuit against public participation (SLAPP). The Orange County Superior Court, California, denied the client’s anti-SLAPP motion, concluding that the client did not meet her burden of establishing the cross-complaint arose out of protected activity. The client appealed. During trial, the party litigants and their respective class action attorney strongly put forth evidence to the court and jurors.

Overview

The instant court concluded that each of the firm’s causes of action in its cross-complaint fell within the protection of the anti-SLAPP statute, Code Civ. Proc., § 425.16, because each of them was based substantially upon the client’s petitioning activity — first her initiation of a fee arbitration proceeding under California’s Mandatory Fee Arbitration Act (MFAA), and then her initiation of a cross-complaint against the firm in this action. The firm failed to demonstrate a probability of prevailing on its causes of action for fraud and negligent misrepresentation. Consequently, the trial court erred in denying the client’s anti-SLAPP motion with respect to these claims. However, the trial court properly denied the anti-SLAPP motion with respect to the firm’s breach of contract and breach of covenant claims. The client waived her right to enforce the MFAA when she filed her own cross-complaint against the law firm in court. Even if the client had not waived her rights under the MFAA, the firm’s failure to comply with the MFAA’s notice requirement did not mandate dismissal of the firm’s fee claims in its cross-complaint. Such dismissal was discretionary, rather than mandatory.

Outcome

The order denying the client’s anti-SLAPP motion was reversed, and the case was remanded to the trial court with directions to grant the motion with regard to the firm’s causes of action for fraud and negligent misrepresentation.

Procedural Posture

Plaintiff buyer appealed the decision of the Superior Court of Santa Clara County (California) that determined that he take nothing on his complaint for money had and received and further awarded defendant seller $ 34,575 plus interest on his cross-complaint against plaintiff for breach of contract.

Overview

Plaintiff buyer entered into a written agreement with defendant seller to purchase shares of stock. Plaintiff paid the initial installment on time and made an additional payment, but the check remitted for the balance due never cleared. Defendant reclaimed the stock certificates held by plaintiff’s attorney. Plaintiff argued that the evidence revealed no actionable breach on his part. The court affirmed the trial court as to liability and concluded that the letter which defendant’s attorney wrote to plaintiff’s attorney, which stated that there would be no sale as a result of plaintiff’s delay in performing the contract, did not constitute an unlawful repudiation of the contract, was therefore not a breach of the contract by defendant, and thus did not discharge plaintiff’s duty to perform the contract or, alternatively, to respond to defendant in damages. As to damages, the court found that the trial court applied the appropriate measure of damages for breach of a contract to accept and pay for the stock: the difference between the contract price and the market price at the time and place of delivery. The court modified the damages award by deleting the award of interest.

Outcome

The court affirmed the decision of the trial court, which held that plaintiff buyer breached the contract with defendant seller for the purchase of stock when he failed to make final payment to defendant because defendant did not repudiate the contract by sending a letter cancelling the sale after plaintiff failed to make payment. The court modified the damage award and deleted the award of interest.