Lee v. Silveira

Filed 12/5/16; pub. order 12/8/16 (see end of opn.) (reposted to correct date of pub. order)

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

NANCY ANN LEE et al., D068835

Plaintiffs and Respondents,

v. (Super. Ct. No. 37-215-00009400-
CU-MC-CTL)
SIL SILVEIRA et al.,

Defendants and Appellants.

APPEAL from an order of the Superior Court of San Diego County, Katherine A.

Bacal, Judge. Reversed with directions.

Neuland, Whitney & Michael, Frederick T. Whitney and Constance Trinh for

Defendants and Appellants.

Aguirre & Severson, Michael J. Aguirre and Maria C. Severson for Plaintiffs and

Respondents.

This action was brought by three members of the board of directors (board) of the

Friars Village Homeowners Association (FVHOA) against six other board members and
the FVHOA manager1 but, surprisingly, not against FVHOA itself—despite the fact the

dispute focuses on the activities of the board and its governance of FVHOA and the

Friars Village community.

Friars Village is comprised of 440 townhouses located in San Diego. The three

board members, former plaintiff Lance McDonald (McDonald)2 and plaintiffs and

respondents Nancy Ann Lee (Lee) and Patricia Jean Rocha (Rocha) (sometimes

collectively plaintiffs), sued defendants and appellants Sil Silveira (Silveira), Shelley

Smith (Smith), Wilfried Birleanu (Birleanu), Anne Durst (Durst), Helen Fox (Fox) and

John Nielsen (sometimes collectively director defendants) following a board vote of six-

to-three to renew an FVHOA managerial contract—in which plaintiffs voted against such

renewal.

Director defendants timely moved under Code of Civil Procedure section 425.163

to strike the complaint of plaintiffs, which consisted of a single claim for declaratory

relief. Director defendants argued the complaint was based on decisions and statements

they made in duly noticed board meetings while conducting board business and, thus,

1 Defendants ARK Management Group, LLC, a California Limited Liability
Company (ARK LLC), Vicki MacHale (MacHale), the executive director of ARK LLC
and the general manager of FVHOA, and Kathy Young, the facilities director of ARK
LLC (sometimes collectively manager defendants) are not parties to this proceeding.

2 McDonald filed a voluntary dismissal in late April 2015, after the complaint was
filed.

3 All further statutory references are to the Code of Civil Procedure. Section 425.16
is commonly referred to as the anti-SLAPP statute. (Siam v. Kizilbash (2005) 130
Cal.App.4th 1563, 1568.) "SLAPP is an acronym for 'strategic lawsuit against public
participation.' " (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 732, fn. 1.)
2
involved acts or activities in furtherance of constitutionally protected activity within the

meaning of the anti-SLAPP statute.

The trial court denied the motion. In so doing, it ruled that the "only relief" sought

by plaintiffs was a "determination of what [was] required under the HOA governing

documents" and, as such, that plaintiffs' declaratory relief cause of action did not arise out

of director defendants' "speech/petition rights." The court therefore never reached the

issue of whether plaintiffs could satisfy their burden under subdivision (b)(1) of section

425.16 to establish a probability of success on their claim.

As we explain, we independently conclude the court erred when it found the

gravamen of plaintiffs' complaint did not involve protected activity under section 425.16.

We further conclude plaintiffs cannot show a probability they will prevail on their claim.

Therefore, we reverse the order denying the special motion to strike of director

defendants and direct the trial court to grant that motion with respect to each such

defendant.

FACTUAL BACKGROUND

The following is taken from the allegations in the complaint and the declarations

and evidence proffered in connection with the anti-SLAPP motion.

At all times relevant, the FVHOA board consisted of nine resident homeowners,

each of whom served a staggered three-year term. At the time they filed their March

2015 complaint, plaintiffs McDonald (elected in 2014), Lee (2014) and Rocha (2012) sat

on the board. Shortly after service of the complaint, defendants Durst (2012), Fox (2013)

and Nielsen (appointed) resigned from the board, while Silveira (2010, 2013), Smith

3
(2011, 2014) and Birleanu (2013) remained as active board members. The complaint,

which referred to director defendants as the " '[m]ajority [b]lock,' " alleged they

"developed an affinity for one another as they bec[a]me closely connected and mutually

dependent on another as they carried out the wrongful conduct alleged." (Italics added.)

The complaint alleged that, in March 2011, FVHOA entered into an " 'All-

Inclusive Contract' " with Stos-Robinson Companies, a California corporation dba ARK

Management (Stos-Ark) (sometimes March 2011 contract). Under the terms of the

March 2011 contract, Stos-Ark agreed to provide FVHOA with financial management

services; to maintain and manage its common areas; to supervise third-party contractors;

and to advise the board and its committees in the day-to-day operations of FVHOA,

among many other duties.

In October 2013, ARK LLC was formed. About a month later, it acquired the

property management business belonging to Stos-Robinson Companies, including Stos-

ARK. Following the acquisition of Stos-ARK by ARK LLC, the board—on behalf of

FVHOA—executed a March 13, 2014 contract with ARK LLC (sometimes March 2014

contract).

The March 2014 contract included a term for automatic renewal, which provided:

"Commencing on June 1, 2014 and hereinafter from year-to-year [sic]. If notification by

either party of their intent not to renew this Agreement for one additional year is not

received by the other party in writing at least sixty (60) days prior to the expiration date

of this Agreement, this Agreement shall automatically renew in full force and effect for

the ensuing one-year period, commencing on the date after the final day of the previous

4
term. The renewal deadline date will be included on the annual calendar and [ARK LLC]

will provide at least [a] 120 day reminder of contract renewal to the [b]oard."

On February 7, 2015, director defendants and plaintiffs attended a board meeting

to discuss renewal of the March 2014 contract. The complaint alleged that, during the

meeting, plaintiffs requested the board seek additional bids for the management contract

and even volunteered to obtain such bids before the next board meeting. However,

director defendants believed the board should renew the March 2014 contract for one

more year. Each director defendant testified that, while he or she was open to a new

management company, he or she was concerned it would be "difficult for a new

management company to step in and assist in the oversight" of the "extensive renovation

projects" that were then occurring at Friars Village.

Following a discussion of ARK LCC's performance under the March 2014

contract and of the need for a "well-thought out request for proposal" before seeking bids

for a new management contract, and after each board member had expressed his or her

views regarding renewal of the March 2014 contract, Silveira made a motion to approve

the management contract, "subject to the advice of counsel" that the minor changes did

not constitute a new contract.4 Durst seconded the motion, and the motion was put to

vote, which, as noted, passed six to three with plaintiffs voting against renewal.

4 Although the record is silent on this matter, ostensibly counsel subsequently
advised the board the minor modifications to the March 2014 contract did not constitute a
new contract, inasmuch as the board's motion to renew that contract was "subject to"
receiving such advice.
5
 Plaintiffs' complaint alleged director defendants failed to follow proper bid

procedures when they voted in 2015 to renew the March 2014 contract. It further alleged

director defendants unlawfully delegated board duties to MacHale, which "caused

monetary damage[s] to the residents of Friars Village [that the board was] sworn to serve

and to which [the board owed] a fiduciary duty."

Specifically, plaintiffs alleged that director defendants "did not permit sufficient

bids to ensure FVHOA paid the best price for its manager"; that MacHale, as "agent of

the prior manager [i.e., Stos-ARK], exposed FVHOA to wage-and-hour violations of

California law"; that MacHale "orchestrated a settlement in which the FVHOA insurance

policy was tapped to pay for the settlement," resulting "in a substantial increase in the

insurance premiums FVHOA is required to pay for insurance"; that director defendants

"obstructed any due diligence" into manager defendants' conduct, refused to permit a

"bona fide bidding process to be followed in selecting the FVHOA manager" and instead

"automatically approved contracts" hiring MacHale and ARK LLC as FVHOA manager;

that the board voted on the ARK LLC management contract "without negotiating or

seeing the terms of the new proposed contract, and without performing an annual review

as called for in the governing documents"; and that the extension of the March 2014

contract "involved material changes in terms and otherwise required three bona fide bids"

to ensure the board on behalf of FVHOA obtained the "best price available for its

manager."

Plaintiffs' complaint further alleged that director defendants "adopted policies in

violation of the rights of plaintiffs to carry out their respective responsibilities and duties

6
as directors and officers of the FVHOA"; and that director defendants allowed MacHale

to control the bidding process on FVHOA projects including making a recommendation

on the bid winner, which was then approved by director defendants in a "rubber stamp

vote." As a result, the complaint alleged neither FVHOA nor its members "receive[d] the

benefits of the best prices" for such services and products.

As particularly relevant to the anti-SLAPP motion, the complaint alleged that the

board allowed the Friars Village "roofing project" to escalate to about $900,000, when

that project initially "was limited to six buildings" involving four bids obtained by the

board in March 2013, which bids ranged from about $167,000 to about $350,000; that

none of these four bids was accepted; that the board awarded the bid for the roofing work

to RE Reconstruction Experts, Inc. (RE), whose bid of about $296,000 was submitted

about two months after the original bids; and that the contract with RE increased from

about $296,000 to $320,000.

The complaint continued that director defendants subsequently approved a

"change order that increased the RE . . . contract from $320,000 to $777,446 -- an

increase of $442,446"; that the board later agreed to an additional increase that brought

the RE contract up to about $841,000; that the bids on the roofing project were not in any

event open to the public; and that director defendants ignored complaints about the

bidding process.

MacHale in her declaration in support of director defendants' anti-SLAPP motion

testified the roofing project "was prompted due to the deterioration of numerous roofs

throughout the [FVHOA], which, if not remedied, would result in water intrusion into the

7
residences and damage to the buildings. The [FVHOA] retained Fred Baron, a licensed

architect, to evaluate the roofs to identify the buildings that most required maintenance,

and establish a priority schedule in accordance with the urgency for repair. The roofs

were graded one through five, with the most urgent roofs as level one."

According to MacHale, the board received more than three bids in connection with

the roofing project. Ultimately, the board voted to approve RE's bid of about $296,000,

which included a $24,000 "option for upgraded materials" that the board also approved,

for a total contract price of about $320,000.

The record shows Silveira, Smith, Durst and Fox5 were on the board when it voted

to approve the Friars Village roofing project. Silveira in her declaration in support of the

anti-SLAPP motion testified that on May 15, 2013, she attended a board meeting to

discuss the roofing project and the several bids the board had received in connection with

that project; that she reviewed the "various vendors and proposals, evaluated their quotes,

reputation and prior experience, and made a determination as to which contractor, in [her]

opinion, was most suitable. Following discussion of each of the director's viewpoints

regarding the possible vendors, a director made a motion to accept RE[']s proposal to

complete six (6) of the priority level one roofs, which was seconded, and put to a vote.

5 Conversely, Birleanu testified she was not elected to the board until November
2013—after both the May and September 2013 board meetings when the board approved
and extended, respectively, the roofing project. It further appears from the parties' briefs
that Nielsen also was not on the board in May and September 2013 when it considered
and voted on the roofing project. As discussed post, neither Birleanu nor Nielsen can be
responsible as a member of the "majority block" for allegedly approving, without the
required number of bids, the roofing project—including its "next phase"—when they
were not then serving on the board.
8
The motion passed six (6) votes in favor of the motion, including [her] vote, and one (1)

opposed vote."

Silveira testified that at the September 18, 2013 meeting, the board addressed the

"next phase" of the roofing project. At that meeting, the board discussed "whether to

complete the remaining portion of the Priority Level One roofs by way of a change order

with the current contractor, RE . . . . [Silveira] believed that in light of the pending rainy

season, this phase of the [r]oofing [p]roject should be completed by change order, in light

of the most recent competitive bids received just months prior. RE . . . agreed to

complete the remaining seven roofs at the same pricing as initially quoted in the first

phase of the contract. Following discussion of each of the director's viewpoints, a

director made a motion to continue the [r]oofing [p]roject under the current contract with

RE . . . , which was seconded and put to a vote. The motion passed with five (5) votes in

favor, including [her] vote, and one (1) opposed."

In explaining the cost to complete the next phase of the roofing project, Silveira

further testified that although the "unit pricing was the same, the total square footage of

the seven additional buildings was larger, therefore the cost of the next phase was

$474,265.69. Additionally, during the process of reroofing, there were several problems,

including one building that had significant damage to the main support beam, which cost

9
an additional $46,552 to remedy. Thus, the total amount of the roofing project at this

point [was] $840,829."6

The complaint also alleged there was retaliation by one or more director

defendants, on the one hand, against one or more plaintiffs or members of FVHOA, on

the other hand. The complaint specifically alleged Silveira, at all times relevant the

president of FVHOA, retaliated against McDonald after he joined the board in November

2014 and became its treasurer. With respect to retaliation against FVHOA members, the

complaint alleged when a member raised concerns about whether FVHOA money should

be maintained in an out-of-state bank as opposed to a California bank, the member

received a cease and desist letter from contracted legal counsel of the board. The

complaint provided other examples of such alleged retaliation by director defendants,

including in connection with a "water project" undertaken by the board.7

6 We note the declarations of Smith, Durst and Fox in support of their anti-SLAPP
motion provided nearly similar, and in one case identical, testimony to that given by
Silveira with respect to the roofing project.

7 We note the complaint is entirely devoid of allegations concerning the "water
project," including when that project was voted on by the board, in contrast to the
complaint's detailed allegations concerning the roofing project and the ARK LLC
management contract, as summarized ante. In fact, the 14-page complaint first mentions
the "water project" on page nine and then only in passing in connection with plaintiffs'
allegation that the board allegedly retaliated against 91 FVHOA members for
complaining about that project. The complaint next generally mentions this project when
it asserts the board was required to obtain at least three bids before it could "award
contracts, including those contracts for HOA manager, or roofing and water projects" and
repeats this same general language in its prayer for relief. We thus do not consider the
"water project" to be at issue in this case in connection with plaintiffs' request for a
judicial declaration.
10
 In addition to not following proper bidding procedures, as summarized ante, the

complaint alleged that director defendants refused to allow the board secretary to "take

verbatim transcripts of meetings of the FVHOA because they d[id] not want an accurate

record made of their actions and decisions"; that director defendants instead had

"empowered ARK LCC to produce minutes of the FVHOA [b]oard meetings, rather than

the [s]ecretary"; and that director defendants allowed ARK LCC to "impose onerous

default fees on members of the FVHOA."

PRAYER FOR RELIEF AND REFINEMENT OF DISPUTE

As noted, the complaint consisted of a single cause of action for declaratory relief.

However, the prayer for relief sought a declaration as follows "under the FVHOA

governing documents" on nine different subject matters:

"(1) that at least three bids are required before the FVHOA can award contracts in

material amounts;

"(2) that proper bidding procedures must be followed before awarding contracts,

including the contracts for the manager [and] roofing . . . projects;

"(3) that the duly-elected Secretary may make a verbatim record of what is said at

the FVHOA Board Meetings;

"(4) that the Secretary is the officer charged with the duty of ensuring the accuracy

of the minutes before they are submitted to the FVHOA Board;

"(5) contactors doing business with the FVHOA and FVHOA members should be

free of conflicts of interests;

11
 "(6) the FVHOA should not enter into contracts based upon former employees

using confidential information obtained while at [Friars Village];

"(7) that FVHOA Board members should not disclose confidential information of

the FVHOA with MacHale as agent for ARK LLC;

"(8) that the FVHOA Treasurer should not be retaliated against by the [m]ajority

[b]lock and MacHale because he raised legitimate concerns about the FVHOA reserve

deficiency, and raised ways of reducing FVHOA costs; and

"(9) that the FVHOA or Defendants MacHale or ARK LLC not be permitted to

retaliate against Association members for their lawful public participation or questions of

their Board."

Perhaps because their complaint sought declaratory relief on so many broad

subject matters or because the trial court at the hearing on the anti-SLAPP motion found

plaintiffs' complaint was "not a model of clarity," on appeal plaintiffs argue that director

defendants seek to evade a requested judicial declaration on the following two subject

matters: "(1) the FVHOA board has to obtain 3 bids for FVHOA projects involving

hundreds of thousands of dollars, and (2) the FVHOA can keep verbatim notes . . . ."8

8 Plaintiffs on appeal have wisely limited the subject matters in which they seek a
judicial declaration, inasmuch as several of the nine (i.e., Nos. 1, 5, 6, 7, 8 & 9, ante) do
not appear to involve a justiciable controversy. (See Green v. Travelers Indemnity Co.
(1986) 185 Cal.App.3d 544, 557 [noting the " 'actual controversy' referred to in [section
1060] is one which 'admits of definitive and conclusive relief by judgment within the
field of judicial administration, as distinguished from an advisory opinion upon a
particular or hypothetical state of facts' " (italics added)]; see also Stonehouse Homes
LLC v. City of Sierra Madre (2008) 167 Cal.App.4th 531, 540 [noting that "[w]hether a
12
With regard to the bidding issue, as relevant here plaintiffs on appeal further argued that

the "dispute that forms the basis of the case" arose in connection with the "roofing

contract" and the "contract with the FVHOA manager."

As noted, the trial court denied the special motion to strike of director defendants.

DISCUSSION

A. Guiding Principles

A court employs a two-step analysis in determining whether a claim should be

stricken under the anti-SLAPP statute. (§ 425.16, subd. (b)(1).) In the first step, the

defendant bears the initial burden of making a prima facie showing that the claim

"aris[es] from any act of that person in furtherance of the person's right of petition or free

speech." (Ibid.; see Damon v. Ocean Hills Journalism Club (2000) 85 Cal.App.4th 468,

473 (Damon).)

Subdivision (e) of section 425.16 provides that an " 'act in furtherance of a

person's right of petition or free speech' " under subdivision (b)(1) of section 425.16

includes, as relevant here, "(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 an issue of

public interest."

case is founded upon an 'actual controversy' centers on whether the controversy is
justiciable"].)
13
 If the defendant meets this threshold burden, in the second step the burden then

shifts to the plaintiff to "establish[ ] that there is a probability that the plaintiff will

prevail on the claim." (§ 425.16, subd. (b)(1); see Kleveland v. Siegel & Wolensky, LLP

(2013) 215 Cal.App.4th 534, 548 (Kleveland).)

"Under section 425.16, subdivision (b)(2), the trial court in making these

determinations considers 'the pleadings, and supporting and opposing affidavits stating

the facts upon which the liability or defense is based.' [Citation.] For purposes of an

anti-SLAPP motion, '[t]he court considers the pleadings and evidence submitted by both

sides, but does not weigh credibility or compare the weight of the evidence. Rather, the

court's responsibility is to accept as true the evidence favorable to the plaintiff . . . .'

[Citation.]" (Kleveland, supra, 215 Cal.App.4th at p. 548.) "These determinations are

legal questions, and we review the record de novo." (Damon, supra, 85 Cal.App.4th at p.

474.)

B. Threshold Burden

As noted, a defendant can meet the burden of making a threshold showing that a

claim arises from protected activity by demonstrating the act or acts underlying the

plaintiff's claim falls within one of the four categories identified in section 425.16,

subdivision (e). (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78.)

1. Public Forum

For purposes of the third category in subdivision (e) of section 425.16, a " 'public

forum' is traditionally defined as a place that is open to the public where information is

freely exchanged." (Damon, supra, 85 Cal.App.4th at p. 475.) This court in Damon

14
concluded the board meetings of a homeowners association constituted a public forum

within the meaning of the anti-SLAPP statute because they "serve[ ] a function similar to

that of a governmental body. As our Supreme Court has recognized, owners of planned

development units ' "comprise a little democratic subsociety . . . ." ' [Citations.] In

exchange for the benefits of common ownership, the residents elect a[ ]

legislative/executive board and delegate powers to this board. This delegation concerns

not only activities conducted in the common areas, but also extends to life within ' "the

confines of the home itself." ' [Citation.] A homeowners association board is in effect 'a

quasi-government entity paralleling in almost every case the powers, duties, and

responsibilities of a municipal government.' " (Ibid.)

Furthermore, "[b]ecause of a homeowners association board's broad powers and

the number of individuals potentially affected by a board's actions, the Legislature has

mandated that boards hold open meetings and allow the members to speak publicly at the

meetings. [Citations.] These provisions parallel California's open meeting laws

regulating government officials, agencies and boards. [Citation.] Both statutory schemes

mandate open governance meetings, with notice, agenda and minutes requirements, and

strictly limit closed executive sessions." (Damon, supra, 85 Cal.App.4th at p. 475.)

We concluded in Damon that the alleged defamatory statements made by the

defendants about the plaintiff during a duly noticed board meeting met the statutory

definition of a "public forum" as provided in subdivision (e)(3) of section 425.16.

(Damon, supra, 85 Cal.App.4th at pp. 474–475.)

15
 Much like the board of directors of the homeowners association in Damon, the

FVHOA board necessarily functioned similar to a quasi-governmental body: it

promulgated and enforced policies and rules, and voted on and approved projects, that

directly affected the lives of FVHOA members who lived in the 440 townhouses that

comprised Friars Village.

What's more, the acts of director defendants that are the primary focus of

plaintiffs' complaint occurred in, or were made in connection with, meetings of the board

as it was conducting board business. This included director defendants' alleged failure to

obtain at least three bids with respect to the roofing project and the renewal of the ARK

LLC management contract and their refusal to allow the board secretary to take verbatim

board minutes. On this record, we therefore independently conclude the meetings of the

board in which director defendants allegedly engaged in such "wrongful conduct"

constituted a "public forum" within the meaning of subdivision (e)(3) of section 425.16.

2. Issue of Public Interest

"The definition of 'public interest' within the meaning of the anti-SLAPP statute

has been broadly construed to include not only governmental matters, but also private

conduct that impacts a broad segment of society and/or that affects a community in a

manner similar to that of a governmental entity. [Citations.] ' "[M]atters of public

interest . . . include activities that involve private persons and entities, especially when a

large, powerful organization may impact the lives of many individuals." ' " (Damon,

supra, 85 Cal.App.4th at p. 479.)

16
 Here, we independently conclude the acts of director defendants that are the

"principal thrust or gravamen" (see Martinez v. Metabolife Intern., Inc. (2003) 113

Cal.App.4th 181, 188) of plaintiffs' complaint—as more precisely defined by plaintiffs on

appeal—concerned matters of "public interest" within the meaning of subdivision (e)(3)

of section 425.16. Indeed, director defendants' decisionmaking process and debate in

approving both the roofing project, which affected multiple buildings in Friars Village,

and the ARK LLC management contract, which management entity was responsible for

the day-to-day operations of FVHOA and the Friars Village community, impacted a

broad segment, if not all, of FVHOA members. (See, e.g., Country Side Villas

Homeowners Assn. v. Ivie (2011) 193 Cal.App.4th 1110, 1118 [noting a homeowner's

complaints about the actions of a homeowners association board in connection with the

repair and replacement of balconies and shingle siding were matters of "public interest"

within the meaning of section 425.16 because, even if not all of the members' balconies

and siding needed repair or replacement, the board's decision "affected all members of

the association" as the expenses to make these repairs would be "borne by all"]; Cabrera

v. Alam (2011) 197 Cal.App.4th 1077, 1082 [noting a defendant's statements at a

homeowners association meeting in which the defendant was seeking reelection to the

board of directors of the association involved protected activity because such statements

"concerned an issue of public interest, namely, the qualifications of a candidate for office

in the association"].)

Plaintiffs contend their declaratory relief claim does not implicate section 425.16,

subdivision (e)(3) because this law "applies to statements, not actions." In support of this

17
contention, plaintiffs principally rely on Talega Maintenance Corp. v. Standard Pacific

Corp. (2014) 225 Cal.App.4th 722 (Talega).

There, the plaintiff homeowners association sued two developers for construction

defects with respect to certain trails that were badly damaged during rains in 2005 and

again in 2010. Of significance here, the suit also named three former employees of one

of the developers who, upon formation of the board, were appointed to represent the

interests of the developer. The three former employees then comprised a majority of the

board. In 2005, these three board members represented that the homeowners association,

as opposed to the developers, were responsible for the damage to the trails. The

complaint alleged these three board members then knew, "but failed to disclose, that

under the relevant controlling documents, the [d]evelopers were responsible for the cost

of repairs." (Talega, supra, 225 Cal.App.4th at p. 726.)

In 2010, when the trails were again damaged by heavy rains, the board of the

homeowners association was then comprised of "independent" members. (Talega, supra,

225 Cal.app.4th at p. 726.) As a result, the board of directors hired its own consultants

who, after investigation, determined "for the first time that the [d]evelopers were bound

forever to provide repairs to the [t]rails, that the [t]rails were not actually completed, and

that the [t]rails' failures were likely the result of construction defects." (Id. at p. 727.) In

response, the plaintiff homeowners association sued the developers and the three former

employees of the developer for breach of fiduciary duty, fraud, constructive fraud and

negligence. As relevant here, the three developer board members moved under section

425.16 to dismiss all four causes of action. (Talega, at p. 727.)

18
 In affirming the trial court's denial of the anti-SLAPP motion of the developer

board members, the Talega court noted it could "immediately rule out all but the fraud

cause of action" because the thrust or gravamen of the homeowners association's action

against the developer board members was "principally based on . . . withholding

information and improperly directing the expenditure of funds," which acts, the court

further noted, were not " 'written or oral statements' " within the meaning of subdivisions

(e)(1), (2) and (3) of section 425.16. (Talega, supra, 225 Cal.App.4th at p. 728.)

In rejecting the developer board members' argument their act of voting at board

meetings in connection with the trails constituted protected activity, the Talega court

noted voting could be, but was not, "per se protected activity." (Talega, supra, 225

Cal.App.4th at p. 729.) The court concluded the mere fact the developer board members

had voted did not implicate the protections afforded by section 425.16 because the claims

of the homeowners association arose from the "act of spending money in violation of the

[d]eveloper [b]oard [m]embers' fiduciary duties. The allegations in the complaint

concerning the breach of fiduciary duty cause of action, for example, include no mention

of voting. While the expenditure of money may have been precipitated by a vote, . . .

[t]he vote was merely incidental." (Id. at pp. 729-730, italics added.)

The Talega court found the issue of whether the fraud cause of action was subject

to the anti-SLAPP statute to be a "closer question." (Talega, supra, 225 Cal.App.4th at p.

730.) Nonetheless, and, as relevant here, it ultimately determined the issue of who was

going to pay for repairing the trails was not an issue of public interest within the meaning

of subdivision (e)(3) of section 425.16 because that issue was not subject to any

19
"controversy, dispute, or discussion" when the developer board members in 2005

represented that the homeowners association was responsible to pay the costs of repair.

(Id. at p. 734.)

In contrast, the Talega court noted there had been an "ongoing controversy" in this

court's decision in Damon, inasmuch as the alleged defamatory statements in Damon

" 'concerned . . . the decision whether to continue to be self-governed or to switch to a

professional management company' " (Talega, supra, 225 Cal.App.4th at p. 735) and the

general manager's " 'competency' " to manage the association (ibid.). The Talega court

further noted the residents of the homeowners association in Damon were " 'split into two

camps' " on these issues. (Ibid.)

Talega is factually and legally distinguishable from the instant case. As we

discuss post, we conclude it is significant that plaintiffs—and not FVHOA—brought this

action against director defendants, which is quite unlike the facts of Talega in which the

complaint against the developer board members was brought by the homeowners

association. Moreover, Talega involved allegations that the three developer board

members were appointed to the newly created board of the homeowners association to

represent the developer's interests. Here, in contrast, director defendants were each

volunteers and, with the exception of Nielsen (who was appointed), were duly elected to

serve on the FVHOA board for three-year staggered terms. In addition, director

defendants were each FVHOA members and residents of Friars Village; as such, and

unlike the developer board members in Talega, director defendants presumably were

representing the interests of the community when serving on the board.

20
 Further, the acts complained of by plaintiffs in the instant case involved director

defendants' decisionmaking on "public issues" (i.e., the roofing project and the ARK LLC

management contract) that divided the board, as clearly indicated by the instant lawsuit.

In contrast, the complaint in Talega involved allegations the three developer board

members in 2005 withheld information on what was then a noncontroversial issue

pending before the board of the homeowners association regarding the party responsible

for repair of the damaged trails. (Talega, supra, 225 Cal.App.4th at p. 727.)

Finally, and perhaps most importantly, although the three developer board

members in Talega argued that their votes to expend money to repair the trails constituted

protected activity within the meaning of the anti-SLAPP statute, the Talega court found

this vote was "merely incidental" to the gravamen of the complaint, which concerned

their violation of fiduciary duties. (See Talega, supra, 225 Cal.App.4th at p. 730.)

Unlike the facts of Talega, here it is clear from the substance of plaintiffs'

declaratory relief claim that director defendants' acts in voting were not "merely

incidental" to the allegations of "wrongful conduct" asserted against the "majority block."

To the contrary, plaintiffs allege director defendants engaged in such "wrongful conduct"

as a result of how they voted in board meetings on "public issues" affecting FVHOA

members. (See Navellier v. Sletten (2002) 29 Cal.4th 82, 92 [noting the "anti-SLAPP

statute's definitional focus is not the form of the plaintiff's cause of action but, rather, the

defendant's activity that gives rise to his or her asserted lability—and whether that

activity constitutes protected speech or petitioning" (italics added)].) As such, for this

separate reason we conclude Talega provides no guidance in our case.

21
 Conversely, we conclude the case of Schwarzburd v. Kensington Police Protection

& Community Services District Board (2014) 225 Cal.App.4th 1345 (Schwarzburd)

informs our decision in the instant case. In Schwarzburd, a local board as well as three

individual board members were named as respondents in a writ petition brought by two

other board members challenging the salary of, and a merit bonus awarded to, a police

chief. (Id. at pp. 1348-1349.) The Schwarzburd court followed the case of San Ramon

Valley Fire Protection Dist. v. Contra Costa County Employees' Retirement Association

(2004) 125 Cal.App.4th 343 (San Ramon) in concluding that the petition did not arise

from protected activity insofar as it targeted the board as an entity. (Schwarzburd, at p.

1353.)

However, as particularly relevant here, the Schwarzburd court also concluded that

the three individual board members who voted in favor of the salary increase and merit

bonus were protected by subdivision (e)(2) of section 425.16.9 (Schwarzburd, supra, 225

Cal.App.4th at pp. 1354-1355.) In so concluding, the court noted that the three individual

board members were sued by the two other members for allegedly violating board policy

by "voting in a manner inconsistent" with that policy (id. at p. 1355), and that the three

board members "were not sued simply because they voted, but based on how they voted

and expressed themselves at the [b]oard meeting" (ibid.). As a result, the Schwarzburd

court declined to follow Donovan v. Dan Murphy Foundation (2012) 204 Cal.App.4th

9 Subdivision (e)(2) of section 425.16 provides "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"
constitutes an " 'act in furtherance of a person's right of petition or free speech.' "
22
1500 (Donovan)—on which plaintiffs herein also rely, which held " '[t]he mere act of

voting . . . is insufficient to demonstrate that conduct challenged in a cause of action

arose from protected activity.' " (Schwarzburd, at p. 1355, quoting Donovan, at pp. 1506-

1507.)

In focusing on whether the conduct of the three board members implicated section

425.16, the court in Schwarzburd noted that when the trial court questioned legal counsel

of the two board members regarding "why they had sued the three individuals when they

could get the relief they were looking for by just suing the [d]istrict, petitioners' attorney

responded, 'Those three individuals violated the procedures and the rules.' He also

admitted: 'I don't think there's any additional advantage there, any strategic advantage.'

Petitioners have not alerted us to any additional justifications for the decision to sue the

three individual Board members [footnote omitted]. Thus, while they could have sued

the [d]istrict directly to challenge the validity of [the chief of police's] contract, they

elected not to do so, lending support to defendants' assertion that petitioners' motivation

in filing this lawsuit was, at least in part, to intrude upon the First Amendment rights of

the individual [b]oard members. This is the kind of conduct section 425.16 was intended

to discourage [footnote omitted]." (Schwarzburd, supra, 225 Cal.App.4th at p. 1352, fns.

omitted & italics added.)

Just recently, our high court in City of Montebello v. Vasquez (2016) 1 Cal.5th 409

(Vasquez) cited Schwarzburd approvingly when it concluded that votes cast in favor of a

hauling contract by three former councilmembers and a former city administrator were

23
protected activity under section 425.16.10 The Vasquez court noted Schwarzburd was

"consistent with [its] reasoning that votes taken after a public hearing qualify as acts in

furtherance of constitutionally protected activity. And Schwarzburd, like this case,

demonstrates that elected officials may assert the protection of section 425.16 when sued

over how they voted without chilling citizens' exercise of their right to challenge

government action by suing the public entity itself." (Vasquez, at p. 427.)

Relying on Vasquez, Schwarzburd and San Ramon as guidance, we conclude

director defendants' voting at board meetings on both the roofing project, including the

"next phase" of that project, and on the ARK LLC management contract, were acts in

furtherance of their right to free speech made in connection with a "public issue" and,

thus, were protected under subdivision (e)(3) of section 425.16.11

10 We sought and received, and have considered in connection with our decision,
supplemental briefing from the parties regarding the impact, if any, of Vasquez and of
another recent California Supreme Court case, Baral v. Schnitt (2016) 1 Cal.5th 376, on
the issue(s) in the instant case.

11 We recognize Vasquez relied on subdivision (e)(1) ["any written or oral statement
or writing made before a legislative, executive, or judicial proceeding, or any other
official proceeding authorized by law"] and (e)(2) of section 425.16—and Schwarzburd
on subdivision (e)(2) of this statute, in concluding the individual defendants' acts of
voting during official board meetings involved protected activity within the meaning of
the anti-SLAPP statute. In light of our conclusion ante that the acts herein complained of
occurred in a "public forum" in connection with a "public issue" within the meaning of
subdivision (e)(3) of this statute, we conclude this is a distinction without a difference.
We further note Schwarzburd also relied on subdivision (e)(4) of this statute—the catch-
all provision—in concluding the individual board members' votes involved protected
activity. (See Schwarzburd, supra, 225 Cal.App.4th at p. 1354; see also Lieberman v.
KCOP Television, Inc. (2003) 110 Cal.App.4th 156, 164 [noting subdivision (e)(4) of
section 425.16 "provides a catch-all for 'any other conduct in furtherance of the
exercise' " of petition or free speech " 'in connection with a public issue or an issue of
24
 In fact, the instant case—when considered in light of Schwarzburd12—provides

an even more compelling example of why an individual board member's vote on a

"public issue" implicates his or her right to free speech under section 425.16: unlike

Schwarzburd, where the "local board" or entity was at least named as a defendant in the

action, here plaintiffs purposely omitted the entity itself—FVHOA—from their lawsuit.

Plaintiffs' tactical decision to omit FVHOA from their action, when clearly the relief they

seek involves FVHOA, its board and their governance of the Friars Village community,

further supports our conclusion that director defendants' were sued for exercising their

First Amendment rights as a result of how they voted on subject matters pending before

the board. (See Schwarzburd, supra, 225 Cal.App.4th at p. 1352.)

C. Probability of Success on the Merits

Because we conclude director defendants made a prima facie showing that the

gravamen of plaintiffs' complaint arose from protected activity within the meaning of the

anti-SLAPP statute, the burden then shifted to plaintiffs to proffer sufficient evidence to

demonstrate a probability of prevailing on their claim. (See § 425.16, subd. (b)(1); see

also Kleveland, supra, 215 Cal.App.4th at p. 548.) Although, as noted, the trial court

never reached this issue, we do under an independent standard of review. (See

public interest' "].) Because we conclude the allegations in plaintiffs' complaint triggered
subdivision (e)(3) of section 425.16, we need not decide whether those same allegations
also triggered subdivision (e)(4) of this statute.

12 In Vasquez, the public entity itself—the City of Montebello—filed the action
against its former councilmembers and former city administrator.
25
Schwarzburd, supra, 225 Cal.App.4th at p. 1355; see also Roberts v. Los Angeles County

Bar Assn. (2003) 105 Cal.App.4th 604, 615-616.)

In satisfying their burden in step two of the anti-SLAPP analysis, plaintiffs may

not merely rely on the allegations in their complaint (see Nagel v. Twin Laboratories, Inc.

(2003) 109 Cal.App.4th 39, 45 (Nagel)) or evidence that would not be admissible at trial

(see Hall v. Time Warner, Inc. (2007) 153 Cal.App.4th 1337, 1346).

To qualify for declaratory relief under section 1060,13 plaintiffs were required to

show their action (as refined on appeal) presented two essential elements: "(1) a proper

subject of declaratory relief, and (2) an actual controversy involving justiciable questions

relating to the rights or obligations of a party." (Brownfield v. Daniel Freeman Marina

Hospital (1989) 208 Cal.App.3d 405, 410 (Brownfield).) "The 'actual controversy'

language in . . . section 1060 encompasses a probable future controversy relating to the

legal rights and duties of the parties." (Environmental Defense Project of Sierra County

v. County of Sierra (2008) 158 Cal.App.4th 877, 885.) It does not embrace controversies

that are "conjectural, anticipated to occur in the future, or an attempt to obtain an

advisory opinion from the court." (Brownfield, at p. 410.)

"While section 1060's language 'appears to allow for an extremely broad scope of

an action for declaratory relief' [citation], 'an actual controversy that is currently active is

13 Section 1060 provides in relevant part: "Any person interested under a written
instrument, excluding a will or a trust, or under a contract, or who desires a declaration of
his or her rights or duties with respect to another . . . may, in cases of actual controversy
relating to the legal rights and duties of the respective parties, bring an original action . . .
in the superior court for a declaration of his or her rights and duties."
26
required for such relief to be issued and both standing and ripeness are appropriate

criteria in that determination. [Citation.]' [Citation.] 'One cannot analyze requested

declaratory relief without evaluating the nature of the rights and duties that the plaintiff is

asserting, which must follow some recognized or cognizable legal theories that are

related to subjects and requests for relief that are properly before the court.' " (D.

Cummins Corp. v. United States Fidelity & Guaranty Co. (2016) 246 Cal.App.4th 1484,

1489.)

" 'Whether a claim presents an "actual controversy" within the meaning of . . .

section 1060 is a question of law that we review de novo.' " (American Meat Institute v.

Leeman (2009) 180 Cal.App.4th 728, 741.) The same standard of review applies when

we determine whether a matter is ripe for adjudication. (Farm Sanctuary, Inc. v.

Department of Food & Agriculture (1998) 63 Cal.App.4th 495, 501, fn. 5.) "To

determine whether an issue is ripe for review, we evaluate two questions: the fitness of

the issue for judicial decision and the hardship that may result from withholding court

consideration." (Security National Guaranty, Inc. v. California Coastal Com. (2008) 159

Cal.App.4th 402, 418 (Security National).)

Turning first to whether there was an "actual controversy" concerning the taking

of verbatim notes of board meetings by the board secretary, we conclude plaintiffs cannot

show a probability of prevailing on this claim. Although plaintiffs contend the board

secretary allegedly had the right to take such notes verbatim, ostensibly because plaintiff

Lee was a "certified court reporter," plaintiffs neither direct us to any language in the

March 2014 contract, nor to any provision in the two pages of the (incomplete) multi-

27
paginated amended bylaws of FVHOA they lodged in opposition to the anti-SLAPP

motion, nor to any other evidence in the record showing the secretary was required to, or

even had the discretion to, record verbatim the board minutes.

What's more, the March 2014 contract, which was renewed by majority vote of the

board in February 2015, further provided ARK LLC's agents were required to "type

minutes, and [to] take or record such minutes in accordance with best business practices

of regular meetings of the [b]oard of [d]irectors" and to "transcribe and provide them to

the [b]oard of [d]irectors in [d]raft form."

Thus, other than the bare-bones allegations in their complaint, which alone are

insufficient to satisfy their burden under step two of the anti-SLAPP statute (see Nagel,

supra, 109 Cal.App.4th at p. 45), plaintiffs proffered no evidence showing there is an

"actual controversy" between the parties concerning the taking of verbatim notes of board

meetings by the board secretary.14 As such, plaintiffs cannot show a probability of

prevailing on this particular claim.

Nor can plaintiffs show a probability of prevailing on their roofing project claim.

The record shows the board obtained more than three bids before it voted in May 2013 to

retain RE as the contractor for that project. What's more, the record shows that only a

few months later, the board again voted to undertake the "next phase" of that same

14 In light of our decision on this claim, we need not decide whether typing verbatim
the minutes of board meetings was an issue that was fit "for judicial decision" or whether
plaintiffs would suffer "hardship" if we withheld our consideration on this issue, which,
candidly, appears to be relatively trivial. (See Security National, supra, 159 Cal.App.4th
at p. 418.)

28
project; that RE agreed to do the work on the "next phase" of this project under the same

terms voted on by the board when it initially approved the project; and that in both votes,

there was only one board member who voted against the project, and it is not even clear

the one dissenting vote was a named plaintiff in this case.

In addition, the record shows neither Birleanu nor Nielsen was on the board when

it—as opposed to the "majority block"—voted during the May and September 2013

meetings to approve and extend, respectively, the roofing project. Clearly, plaintiffs

cannot prevail on their claim that the "majority block" violated board rules concerning the

bidding of the roofing project when two members of that "block" were not even on the

board.15

For these reasons, we independently conclude plaintiffs cannot show that there is

an "actual controversy" on their claim the "majority block" allegedly failed to obtain the

necessary bids in connection with the roofing project. Plaintiffs therefore cannot satisfy

their burden under step two of the anti-SLAPP statute with respect to this particular

claim. (See § 425.16, subd. (b)(1).)

This leaves the ARK LLC management contract. As noted, the board in March

2014 voted to approve that contract. Plaintiffs do not complain the 2014 vote was made

in violation of any rule or board policy, including, for example, without the requisite

number of bids allegedly required for such contracts. Rather, plaintiffs only complain

15 Of course, if plaintiffs had merely named FVHOA as a defendant in their
complaint, as opposed to the individual director defendants who served as volunteers on
the FVHOA board, this would never have been an issue.
29
about the vote of the "majority block" in February 2015, when the board voted six to

three to renew (under the "automatic renewal" provision) the March 2014 contract for

another year.

Although plaintiffs' complaint alleges there were "material changes" in the terms

of the renewed March 2014 contract, they proffered no evidence whatsoever to support

this allegation. (See Nagel, supra, 109 Cal.App.4th at p. 45.) As such, and because

plaintiffs do not contend the board—as opposed to the "majority block"—failed to obtain

the alleged necessary bids when it initially approved the March 2014 contract, we

independently conclude plaintiffs cannot show an "actual controversy" exists and, thus,

satisfy their burden under step two of the anti-SLAPP statute in connection with this

claim. (See § 425.16, subd. (b)(1).)

Lastly, as noted ante, several of the subject matters in which plaintiffs requested a

judicial declaration appear to involve controversies that were "conjectural," "anticipated

to occur in the future," or would result in an "advisory opinion" from the court,16

including: number 1 ["at least three bids are required before the FVHOA can award

contracts in material amounts"]; number 5 ["contractors doing business with the FVHOA

. . . should be free of conflicts of interests"]; number 6 ["FVHOA should not enter into

contracts based upon former employees using confidential information]; number 7 [the

FVHOA board "should not disclose confidential information of the FVHOA" with the

manager defendants]; and number 9 [manager defendants and FVHOA should "not be

16 See footnote 8, ante.
30
permitted to retaliate against [FVHOA] members for their lawful public participation or

questions of their [b]oard"]. (See Pacific Legal Foundation v. California Coastal Com.

(1982) 33 Cal.3d 158, 170–171 [ripeness doctrine generally prevents courts from issuing

purely advisory opinions on matters before the controversy between the parties has

become sufficiently " 'definite and concrete' "]; see also Brownfield, 208 Cal.App.3d at p.

410.)

In addition, it appears at least one of the nine subject matters in plaintiffs' request

for judicial declaration involved past wrongdoing of one or more members of the

"majority block" that cannot be the basis of a judicial declaration: number 8 ["the

FVHOA treasurer [i.e., McDonald] should not be retaliated against by the [m]ajority

[b]lock . . . because he raised legitimate concerns about the FVHOA reserve deficiency,

and raised ways of reducing FVHOA costs"].17 (See Canova v. Trustees of Imperial

Irrigation Dist. Employee Pension Plan (2007) 150 Cal.App.4th 1487, 1497 [recognizing

the often-cited rule that declaratory relief "operates prospectively to declare future rights,

rather than to redress past wrongs"].)18

17 The complaint specifically alleged that Silveira retaliated against McDonald after
McDonald joined the board in November 2014 and became its treasurer; that Silveira
asked McDonald to resign as treasurer (but not from the board) in 2015 because he had
questioned the amount of reserve funding of FVHOA and had repeatedly urged the board
to exercise cost restraint in connection with its contracts for landscape maintenance, pest
control and the management of Friars Village; and that when McDonald sought
clarification regarding why he was being asked to resign as treasurer, Silveira was unable
or refused to give any specific reason.

18 In light of the basis of our decision in this case concerning step two of the anti-
SLAPP statute, which did not involve a defense plaintiffs claim was improperly raised by
31
 DISPOSITION

The trial court's order denying director defendants' anti-SLAPP motion to strike

plaintiffs' declaratory relief claim is reversed. On remand, the trial court is directed to

grant the anti-SLAPP motion with respect to each director defendant. Director

defendants to recover their costs of appeal.

BENKE, J.

WE CONCUR:

McCONNELL, P. J.

HUFFMAN, J.

director defendants on appeal, we deem plaintiffs' unopposed request for judicial notice
moot.
32
Filed 12/8/16
CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

NANCY ANN LEE et al., D068835

Plaintiffs and Respondents,

v. (Super. Ct. No. 37-215-00009400-
CU-MC-CTL)
SIL SILVEIRA et al.,

Defendants and Appellants.

THE COURT

The opinion in this case filed December 5, 2016 was not certified for publication.

It appearing the opinion meets the standards for publication specified in California Rules

of Court, rule 8.1105(c), the request pursuant to California Rules of Court, rule 8.1120(a)

for publication is GRANTED.

IT IS HEREBY CERTIFIED that the opinion meets the standards for publication

specified in California Rules of Court, rule 8.1105(c); and

ORDERED that the words "Not to Be Published in the Official Reports" appearing

on page 1 of said opinion be deleted and the opinion herein be published in the Official

Reports.

McCONNELL, P. J.

Copies to: All parties