Filed 10/29/20 Barrett Daffin Frappier Treder & Weiss, LLP v. Garau CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
BARRETT DAFFIN FRAPPIER B297827
TREDER & WEISS, LLP,
(Los Angeles County
Plaintiff and Respondent, Super. Ct. No. YC072760)
v.
CARLOS GARAU,
Defendant and Appellant;
TORRANCE UNIFIED SCHOOL
DISTRICT,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of
Los Angeles County, Ramona G. See, Judge. Affirmed.
Olga H. Garau for Defendant and Appellant Carlos Garau.
Law Offices of Robert E. Weiss and John A. Perry for Plaintiff
and Respondent Barrett Daffin Frappier Treder & Weiss, LLP.
Burke, Williams & Sorenson, Joseph P. Buchman and Brian
I. Hamblet for Defendant and Respondent Torrance Unified School
District.
Plaintiff and respondent Barrett Daffin Frappier Treder &
Weiss, LLP (Barrett), acting as a neutral foreclosure trustee,
brought a complaint in interpleader to allow the trial court to
determine the proper disposition of $150,209.15 in surplus proceeds
from the sale of real property owned by defendant and appellant
Carlos Garau (Garau), and his wife, Olga Garau. The surplus
proceeds were subject to three competing claims: two claims
were asserted by Torrance Unified School District (TUSD) and
Investment Retrievers, Inc. (Investment Retrievers), creditors
holding judgments against Garau from unrelated litigation. The
third claim was made by the Garaus themselves. In their claim,
the Garaus contended the surplus proceeds were the result of a
wrongful foreclosure by a lender, which was the same position the
Garaus unsuccessfully advanced in two previous cases, one in state
court and one in federal court. In both cases, the courts entered
judgment in favor of the lenders and other defendants. The state
court judgment was subsequently affirmed by this court. (Garau v.
Nationstar Mortgage, LLC (Dec. 12, 2018, B281879) [nonpub. opn.].)
Garau, represented by Olga Garau, an attorney, responded
by filing a special motion to strike the complaint in interpleader
under Code of Civil Procedure section 425.16,1 commonly referred
to as the anti-SLAPP statute (strategic lawsuit against public
participation). Garau argued the interpleader action arose from
his constitutionally-protected rights of petition and free speech—
ostensibly, the two wrongful foreclosure actions and his written
claim for the surplus funds—and contended Barrett had no
probability of prevailing on the complaint.
1 Unless otherwise specified, further statutory references are
to the Code of Civil Procedure.
2
The trial court denied the anti-SLAPP motion on the ground
Garau failed to meet his threshold burden of establishing the
complaint in interpleader arose from protected conduct. Instead,
the existence of competing claims for the surplus funds triggered
Barrett’s statutory right to interplead those funds with the trial
court for a judicial determination as to the appropriate distribution.
We conclude that the trial court correctly found the claims made by
Garau’s judgment creditors and the Garaus, themselves, were not
constitutionally protected activity under the anti-SLAPP statute.
Accordingly, the judgment is affirmed.
FACTS AND PROCEDURAL BACKGROUND2
Garau and his wife, Olga Garau, purchased real property
(the property) on Walnut Street in Torrance, California in 1989.
In June 2007, they borrowed $432,250 from NBGI, Inc. (NBGI),
secured by the property. They signed a 30-year promissory note,
as well as a deed of trust, identifying NBGI as the lender, and
Mortgage Electronic Registration Systems, Inc. (MERS) as a
nominee for the lender and the lender’s successors and assigns,
and as the beneficiary under the deed of trust. The deed of trust
included a power of sale in the event of the borrowers’ default.
Countrywide Home Loans, Inc. was the original loan servicer
until it was acquired by Bank of America in July 2009. In
September 2013, servicing of the loan was transferred to Nationstar
Mortgage, LLC (Nationstar). In September 2015, Nationstar
2 In addition to the record before us, on this court’s own
motion we take judicial notice of certain limited background facts
from the December 12, 2018 opinion by Division Three of this court.
(Garau v. Nationstar Mortgage, LLC, supra, B281879.) (See Evid.
Code, § 452, subd. (d).)
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recorded an assignment of deed of trust, indicating that MERS,
as nominee for NBGI, had assigned the Garaus’ deed of trust to
HSBC Bank USA (HSBC). Two months later, HSBC recorded
a substitution of trustee, naming Barrett as successor trustee.
On November 17, 2015, Barrett recorded a notice of default
and election to sell under the deed of trust, stating that the Garaus
were $18,761 behind in their mortgage payments. On February 16,
2016, Barrett recorded notice of a trustee’s sale to be conducted on
March 23, 2016.
Two days before the scheduled sale, the Garaus filed a
verified petition in the Los Angeles County Superior Court against
Nationstar, HSBC, and Barrett, seeking a writ of mandate (§ 1085),
writ of prohibition (§ 1102), and declaratory relief (§ 1060). Their
pleading sought to have the foreclosure sale canceled or stayed until
the rights and duties of the parties could be finally adjudicated,
to prohibit the defendants from proceeding with a nonjudicial
foreclosure, and to obtain a declaration with respect to the rights
of the parties in connection with the imminent foreclosure sale. The
Garaus alleged, inter alia: The reassignment of their note to HSBC
was void; MERS was not authorized to do business in California;
and the corporate assignment of the deed of trust, the substitution
of trustee, the notice of default, and the notice of trustee’s sale, were
defective and had been wrongfully recorded.
After Barrett unilaterally rescinded the notice of trustee’s
sale, the trial court sustained demurrers to the writ of mandate
and writ of prohibition causes of action without leave to amend,
and overruled the demurrer to the declaratory relief claim. The
trial court ruled the Garaus were not entitled to a writ of mandate
under section 1085 because they were not seeking to compel the
defendants to perform any statutory or constitutional duty, and
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they were not entitled to a writ of prohibition under section 1102,
which lies to restrain the exercise of a judicial function, because a
nonjudicial foreclosure is not a judicial function.
The defendants filed motions for judgment on the pleadings,
arguing the sole remaining cause of action for declaratory relief
should be dismissed because there was no pending foreclosure
and thus no justiciable controversy. Further, even assuming
the existence of a judicial controversy, the Garaus lacked standing
to challenge the assignments of the deed of trust, could not show
they were prejudiced by a procedural irregularity in the foreclosure
process because they were in default on their loan, and had failed
to comply with the requirement that they tender payment.
The trial court granted the defense motions for judgment
on the pleadings and, on February 17, 2017, entered a judgment
of dismissal in favor of Nationstar, HSBC, and Barrett. Our
colleagues in Division Three affirmed the judgment on December
12, 2018, concluding the Garaus could not maintain a preemptive
action for declaratory relief challenging the right, power, and
authority of a foreclosing beneficiary or beneficiary’s agent to
initiate and pursue foreclosure.
Meanwhile, on September 25, 2017, shortly before the
scheduled foreclosure sale, the Garaus filed a complaint in federal
court alleging violations of the Truth in Lending Act (15 U.S.C.
§ 1601 et seq.) and asserting claims for fraud, unfair business
practices, and financial abuse of disabled persons against
Nationstar, HSBC, and Barrett (the federal action). According
to Garau, the federal action asserted his position that the lender’s
title claim was void and could not form the basis of nonjudicial
foreclosure proceedings, and also that the substitution of Barrett as
trustee was unlawful as it was allegedly made without the Garaus’
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knowledge. The district court granted a motion for judgment on the
pleadings filed by Barrett and dismissed the case on April 13, 2018.
The Garaus did not appeal the dismissal.
Barrett, acting as the duly substituted foreclosure trustee,
moved the foreclosure through a trustee’s sale on September 29,
2017. At the sale, the winning bid by a third party at public auction
exceeded the debt owed to the lender by $150,209.15.3 Barrett gave
notice of the surplus funds to all lienholders of record, including the
Garaus.
Defendant and respondent TUSD asserted two separate
claims to the excess proceeds in the amounts of $12,606.98 and
$1,093,074.58, pursuant to judgments entered in its favor and
against Garau in a prior unrelated civil matter. Defendant
Investment Retrievers asserted a claim in the amount of $19,137.09
arising from an abstract of judgment recorded in 2013.
Garau and Olga Garau, in turn, made a lengthy written
demand to Barrett, refusing to accept the results of the completed
foreclosure sale, disputing the validity of the junior liens and
associated lienholder claims, and instructing Barrett not to disburse
the surplus funds. The Garaus asserted three “ ‘junior liens or
encumbrances’ ” recorded against the property. The first was
a declaration of homestead recorded in 2007 and purportedly
3 Garau asks this court to take judicial notice of the trustee’s
deed upon sale resulting from the foreclosure sale. He also seeks
judicial notice of his complaint against TUSD. (Garau v. Torrance
Unified School District (Super. Ct. L.A. County, No. BC313368).)
We decline to do so as neither document is relevant to any
dispositive issue on appeal. (Doe v. City of Los Angeles (2007)
42 Cal.4th 531, 544, fn. 4; Schifando v. City of Los Angeles (2003)
31 Cal.4th 1074, 1089, fn. 4.)
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“securing statutory rights . . . up to the maximum statutory amount
under [section] 714.730[, subdivision] (a)(3) for which [the Garaus]
may qualify at the time of final adjudication on the merits.” The
Garaus also identified a notice of pendency of action they recorded
in 2016 in connection with the state action by the Garaus against
Nationstar and other entities. The third encumbrance was a notice
of lis pendens recorded by the Garaus on the same date the federal
action was filed.
In the face of competing claims to the surplus funds, Barrett
commenced an interpleader action and deposited the funds with
the trial court. Barrett disavowed any interest in the surplus
funds and alleged it was “unable to determine the priority of
[the competing] claims or to safely distribute the remaining
sale proceeds without risk of liability to one or more of the other
claimants.”
In addition to a demurrer and a motion to strike the
complaint in interpleader, Garau, represented by Olga Garau,
brought a special motion to strike pursuant to section 425.16 (anti-
SLAPP motion). Garau asserted the complaint in interpleader was
brought primarily to chill his valid exercise of his constitutional
rights of freedom of speech and petition for the redress of
grievances. Specifically, Garau contended the interpleader
action violated the couple’s “litigation against both TUSD’s and
[Investment Receiver’s] claims” and the “legal nonexistence of [the]
‘surplus funds’ and Barrett’s right to interplead them.” (Italics
omitted.) Garau claimed the surplus funds were the result of a
“wrongful foreclosure that Barrett had no legal right to conduct,”
which assertion was the subject of both the state action and
the federal action. (Italics omitted.) In short, Garau argued the
interpleader action lacked merit, and was a SLAPP or “strategic
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lawsuit against public participation,” because the foreclosure
proceedings from which the surplus funds were derived was
wrongful in the first instance.
The court denied the anti-SLAPP motion, finding Garau
failed to meet his burden to establish the complaint in interpleader
arose from an act in furtherance of his right to petition or free
speech and, accordingly, the burden never shifted to Barrett
to demonstrate a probability of prevailing on the merits. In
particular, the trial court found the complaint in interpleader
did not affect Garau’s ability to seek redress for his claim that the
foreclosure was wrongful and, in fact, Garau “pursued numerous
civil actions to redress those grievances in both [s]tate and [f]ederal
[c]ourt.” Having found Garau could not meet his threshold burden,
the trial court found the burden of proof did not shift to Barrett to
establish a probability of prevailing on its complaint.
Garau timely appealed the trial court’s order.
DISCUSSION
A. Relevant law governing anti-SLAPP motions
Section 425.16 permits a defendant to file a special motion
to strike [i.e., anti-SLAPP motion] when a plaintiff brings a claim
against the defendant “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.” (§ 425.16, subd. (b)(1).)
“Resolution of an anti-SLAPP motion involves two steps.
First, the defendant must establish that the challenged claim
arises from activity protected by section 425.16. [Citation.] If the
defendant makes the required showing, the burden shifts to the
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plaintiff to demonstrate the merit of the claim by establishing a
probability of success.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 384.)
“ ‘Only a cause of action that satisfies both prongs of the
anti-SLAPP statute—i.e., that arises from protected speech or
petitioning and lacks even minimal merit—is a SLAPP, subject
to being stricken under the statute.’ ” (Soukup v. Law Offices of
Herbert Hafif (2006) 39 Cal.4th 260, 278–279.) If the defendant
fails to meet the threshold showing that the plaintiff ’s cause of
action is one arising from protected activity under section 425.16,
subdivision (e), the court must deny his anti-SLAPP motion.
(Navellier v. Sletten (2002) 29 Cal.4th 82, 88.)
An appellate court reviews de novo the grant or denial of an
anti-SLAPP motion. (Park v. Board of Trustees of California State
University (2017) 2 Cal.5th 1057, 1067.) We do not weigh the
evidence; rather, we accept as true evidence favorable to Barrett,
and evaluate evidence favorable to Garau, to determine whether
as a matter of law, it defeats Barrett’s evidence. 4 (Soukup v.
Law Offices of Herbert Hafif, supra, 39 Cal.4th at p. 269, fn. 3.)
4 Barrett contends Garau’s failure to designate the transcript
from the anti-SLAPP hearing warrants affirmance of the order
below. California Rules of Court, rule 8.120(b) requires a reporter’s
transcript on appeal only if “an appellant intends to raise any issue
that requires consideration of the oral proceedings in the superior
court.” California Rules of Court, rule 8.130(a)(4) provides
that an appellant may “elect[ ] to proceed without a reporter’s
transcript.” A record of oral argument is not necessary where,
as here, our review is de novo, none of the parties relies upon the
oral proceedings before the trial court, and the appellate record
includes the trial court’s written order and all the evidentiary
materials germane to the anti-SLAPP motion. (See People ex rel.
Harris & Becerra v. Shine (2017) 16 Cal.App.5th 524, 533 [no
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B. The Complaint in Interpleader Does Not Arise
from Protected Activity
“In the anti-SLAPP context, the critical point is whether the
plaintiff ’s cause of action itself was based on an act in furtherance
of the defendant’s right of petition or free speech.” (City of
Cotati v. Cashman (2002) 29 Cal.4th 69, 78, italics omitted.) The
anti-SLAPP’s statute focuses not on the form of a cause of action,
but on the defendant’s underlying activity that gives rise to the
asserted liability and whether that activity constitutes protected
speech or petitioning. (Navellier v. Sletten, supra, 29 Cal.4th at
pp. 92–93.)
“ ‘Interpleader is an equitable proceeding by which an obligor
who is a mere stakeholder may compel conflicting claimants to
money or property to interplead and litigate the claims among
themselves instead of separately against the obligor . . . .’
[Citation.]” (Southern California Gas Co. v. Flannery (2014)
232 Cal.App.4th 477, 486.) “ ‘The true test of suitability for
interpleader is the stakeholder’s disavowal of interest in the
property sought to be interpleaded, coupled with the perceived
ability of the court to resolve the entire controversy as to
entitlement to that property without need for the stakeholder to
be a party to the suit. “ ‘[I]f the relations of the parties are such
that the court’s decision would determine the responsibility of the
[interpleader plaintiff], he is for the purposes and within the scope
of the code section authorizing interpleader a mere stake-holder.’ ”
[Citations.]’ [Citation.]” (Id. at pp. 486–487.)
reporter’s transcript of motion hearing was necessary on appeal
where the “arguments on appeal do not require consideration of
colloquy during hearing on the motion”].)
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It appears that Garau asserts the complaint in interpleader
was not merely an attempt to compel him and the other claimants
to litigate their respective rights to the surplus foreclosure funds
between themselves, but was instead a disguised attempt to further
wrongful conduct by distributing funds from a foreclosure he
contends should never have occurred. Garau argues the complaint
in interpleader arose from a wide variety of conduct, including
his “lawsuits and appeals against TUSD and Barrett,” his
recording of a homestead exemption, his recording of notices
of lis pendens related to the state action and the federal action,
and his December 16, 2017 response to Barrett’s notice of
surplus foreclosure proceeds. In other words, Garau believes
the interpleader action was a response to all of the prior litigation
matters—those that gave rise to the judgments in favor of TUSD
and Investment Retrievers, as well as the state and federal actions
the Garaus took to attempt to stop the foreclosure. The trial court
rejected these arguments, finding instead that the interpleader
action arose from the competing claims to the surplus funds
asserted by TUSD, Investment Retrievers, and the Garaus
themselves. We agree with the trial court’s analysis.
Barrett indisputably received three claims to the surplus
funds: one from TUSD and one from Investment Retrievers based
on their separate judgments against Garau, and a third from the
Garaus. In their claim, the Garaus asserted Barrett was precluded
from disbursing the funds because “litigation is pending disputing
the validity of the instruments upon which the wrongful foreclosure
of the property is based,” Garau was entitled to all of the surplus
funds as compensation for “damages,” and Olga Garau’s community
property share in the surplus funds could not be used to satisfy
Garau’s obligations.
11
Section 386, subdivision (b) permits “[a]ny person, firm,
corporation, association or other entity against whom double
or multiple claims are made, or may be made, by two or more
persons which are such that they may give rise to double or
multiple liability, [to] bring an action against the claimants
to compel them to interplead and litigate their several claims.”
Barrett’s interpleader claim was thus simply a procedural
mechanism for placing in one action competing claims to a
fund it was holding and in which Barrett itself had no claim.
Put differently, receipt of claims by TUSD, Investment
Receivers, and the Garaus was, in and of itself, sufficient to trigger
Barrett’s statutory right to interpleader. Barrett owed no duty
to attempt to resolve the dispute between the warring claimants.
(See Hood v. Gonzales (2019) 43 Cal.App.5th 57, 76.) Thus, it was
the existence of these competing claims, and not the foreclosure
proceedings that generated the surplus funds, that gave rise to
the complaint in interpleader.5
Our decision that the complaint in interpleader was not
brought to chill Garau’s constitutional rights is bolstered by the
inescapable fact the state action and the federal action, both of
which pursued the same “wrongful foreclosure” theme woven
throughout Garau’s anti-SLAPP motion, were both fully litigated
to judgments adverse to the Garaus. On that ground alone, the
complaint in interpleader did not arise from acts in furtherance of
5 Notably, even absent the Garaus’ claim, Barrett
nonetheless would have been compelled to file a complaint in
interpleader when presented with the competing claims by TUSD
and Investment Retrievers. (§ 386, subd. (b).)
12
Garau’s right of petition or free speech. (Briggs v. Eden Council
for Hope & Opportunity (1999) 19 Cal.4th 1106.)
Accordingly, we conclude Garau has failed to make the
necessary prima facie showing that his activity came within the
protection of the anti-SLAPP statute. Having so concluded, it is
unnecessary to determine whether Barrett established the probable
validity of its interpleader action.
DISPOSITION
The order denying Garau’s anti-SLAPP motion is affirmed.
Barrett is to recover its costs on appeal.
NOT TO BE PUBLISHED.
ROTHSCHILD, P. J.
We concur:
CHANEY, J.
BENDIX, J.
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