Coltrain v. Shewalter
(Appeal from the Superior Court of Riverside County, No. 278681, Richard G. Van Frank, Judge)
Reid & Hellyer, David G. Moore, James J. Manning, Jr., Daniel E. Katz, and Jason C. Gless for Plaintiffs and Appellants.
Mark Goldowitz and Jason Walsh for Defendants and Appellants.
CERTIFIED FOR PARTIAL PUBLICATION [FN *]
[FN*] Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with the exception of parts III and V.
Plaintiffs Darlene Coltrain and Arthur R. Coltrain, Jr. (collectively the Coltrains) own and manage Victory Apartments, an apartment complex in downtown Riverside.
Defendants Suzette Camacho, Marcos Dominguez, Mike Gorman, David McNiel, Sara Rundle, Clint Shewalter, Kim Shewalter, Theresa Skinner, and Kathleen Smartt (collectively defendants) live in and/or own homes in the neighborhood of Victory Apartments.
Defendants claimed Victory Apartments was a center for drug dealing and other crimes in their community. Each defendant filed a separate nuisance abatement action against the Coltrains in small claims court. (See generally Lew v. Superior Court (1993) 20 Cal.App.4th 866.) The Coltrains responded by filing this action against defendants for defamation, trade libel, and intentional and negligent infliction of emotional distress.
Defendants, volleying back, claimed this was a strategic lawsuit against public participation (SLAPP); they filed a special motion to strike plaintiffs’ complaint under Code of Civil Procedure section 425.16 (sometimes the SLAPP statute). The Coltrains responded by dismissing their complaint.
Defendants, finding the ball in their court again, filed a motion for attorney’ s fees. The trial court awarded them $73,000 in attorney’ s fees against the Coltrains under the SLAPP statute.
The Coltrains appeal, contending:
2.Defendants were not entitled to recover attorney’ s fees because the acts and statements from which the action arose did not concern a public issue.
3.The trial court awarded an excessive amount of attorney’s fees.
Defendants have cross-appealed, contending the trial court awarded an inadequate amount of attorney’s fees.
In the published portion of this opinion, we will uphold the trial court’s finding that defendants were the prevailing parties on the special motion to strike. In the unpublished portion, we will hold that this action arose from acts in furtherance of defendants’ constitutional rights of free speech and petition in connection with a public issue, and thus defendants were entitled to recover attorney’s fees under the SLAPP statute; however, we find insufficient evidence to support the amount of attorney’ s fees awarded. Accordingly, we must reverse and remand.
I. FACTUAL BACKGROUND
The following facts are taken from the evidence in support of defendants’ special motion to strike.
In February 1995, Darlene Coltrain became the owner of an apartment complex called Victory Apartments at Fourth Street and Fairmount Boulevard in downtown Riverside. She placed her son, Arthur Coltrain, in charge of its management.
Each of the defendants lives in and/or owns residential property in the neighborhood of Victory Apartments.
In 1995, gunshots, screaming, obscenities, sounds of fighting, loud music, and other loud noises regularly came from Victory Apartments. These noises continued throughout the night and prevented neighbors from sleeping.
Gang members lived in Victory Apartments and hung out in the vicinity. Prostitutes and drug dealers plied their respective trades there. Drug users smoked “crack” in the stairwells. Prostitutes accosted defendant Kathleen Smartt’s 16-year-old son; men hanging around the apartments propositioned defendant Kim Shewalter’s 14-year-old and 16-year-old daughters. Passersby urinated in the bushes. Residents of Victory Apartments threw furniture, bricks, and compact discs off their balconies and scattered trash around the neighborhood.
Although there had been similar problems before the Coltrains took over Victory Apartments, after they did so, these problems became distinctly worse. In the year after the Coltrains took over, the police were called out to Victory Apartments 37 times, an increase of 32% over the previous year. Fourteen of these calls were regarding “Part I” – i.e., relatively serious – offenses, an increase of 75%. The police were called out regarding drug offenses in the general neighborhood some 46 times, an increase of 44%.
After defendant Theresa Skinner complained to police, she found her tires slashed. Defendant Kim Shewalter’ s car was stolen, and her family’ s dog was poisoned. One night, when the Shewalters were returning home from a trip to Magic Mountain, one resident of Victory Apartments trained the laser sight of a gun on each family member in turn, while he or his companions taunted them, saying, “[N]eighborhood watch, ha, ha.”
Individual neighbors contacted Arthur Coltrain to bring these problems to his attention, but he was unresponsive.
In July 1995, some of the defendants organized a neighborhood watch group called Neighbors United. They held their first meeting in August 1995. The meeting was attended by the Mayor of Riverside, City Councilmember Chuck Beaty, Assistant City Attorney Joel Stern, and several police officials, in addition to perhaps 75 to 100 residents of the community. Coltrain was invited to attend but declined.
Stern, addressing the group, told them one of their options in dealing with an unresponsive property owner was to file a nuisance abatement action in small claims court. Nevertheless, the group decided not to pursue the small-claims strategy right away; instead, its members continued to seek the Coltrains’ cooperation. They asked the Coltrains to do three things: to install lighting, to install secure fencing around the apartments, and to participate in the city’ s Crime Free Multi-Housing Program. The Coltrains refused.
On October 17, 1995, Dwayne Rasheed, a reputed gang member and drug dealer, was shot and killed in front of Victory Apartments. For defendants, this was “the last straw” ; they decided to move ahead with the small-claims strategy.
Defendants understood that, before filing a small claims action, they had to make a demand for payment. Defendant Mike Gorman drafted a form demand letter and gave it to those neighbors who were interested; he told them to check off the complaints that were applicable to them and to describe specific incidents. Sixteen neighbors filled out and signed demand letters. Gorman collected the individual demand letters; on November 3, 1995, he mailed them all to the Coltrains. The Coltrains never responded.
On November 7, 1995, the Riverside Press-Enterprise published a column by Dan Bernstein, entitled “The Boulevard Hanging in the Balance.” It discussed crime along Fairmount Boulevard, including the murder of Rasheed. It described Victory Apartments as “a target of city and property owner concern.” Defendant Kim Shewalter was quoted as saying, “Over the last nine months, it has been the source of all of our problems.” It also quoted defendant Sara Rundle, although she did not mention the Coltrains or Victory Apartments.
Neighbors United continued to negotiate with the Coltrains’ attorney, but no agreement was reached. Its members obtained government funding for a fence, but the Coltrains still refused to install one.
On February 20 and 21, 1996, defendants each filed a separate small claims action against the Coltrains. They alleged claims for abatement of a building used for selling controlled substances, as a public nuisance (Health & Saf. Code, § 11570), interference with the use and enjoyment of their property, decreased property value, and mental suffering.
II. PROCEDURAL BACKGROUND
On March 19, 1996, the Coltrains filed a complaint in superior court, asserting causes of action for trade libel, defamation, and intentional and negligent infliction of emotional distress. The named defendants were the nine neighbors who had filed small claims actions against them. The Coltrains did not sue those neighbors who had sent demand letters but had not filed small claims actions. The Coltrains sought $250,000 in compensatory damages, and $1 million in punitive damages.
In support of their causes of action for trade libel and defamation, the Coltrains alleged: “On or about November 3, 1995, defendants and each of them, intentionally, wrongfully, without justification, and without privilege published a letter which stated, among other items, that because of the way plaintiffs owned, managed, and operated the Victory Apartments, plaintiffs caused, encouraged, facilitated, and assisted, crimes and public nuisances such as drug dealing, prostitution, excess trash, thefts, brawling, murder, vagrancy’ s [sic], among other items. Defendant’ [sic] and each of them, also conspired among themselves to cause others to publish similar letters. In addition thereto, Defendant Kim Shewalter and others, orally made similar statements to the general public, a portion of said statements being published in the Riverside Press Enterprise Newspaper on November 7, 1995.”
In support of their causes of action for intentional and negligent infliction of emotional distress, the Coltrains incorporated the previous allegations by reference, and further alleged: “Defendants conspired to force plaintiffs to operate the apartments pursuant to Defendants’ whims, re-design and re-build the Victory Apartments in an unnecessary manner by conspiring among themselves to file unwarranted criminal complaints, unjustified complaints with the city government, and solicit factually inaccurate newspaper articles.”
On March 26, 1996, the Coltrains filed a request to have the small claims actions transferred to superior court. (Code Civ. Proc., § 116.390.) On March 28, 1996, the trial court granted the request and ordered the transfer.
On May 2, 1996, defendants filed an answer to the complaint. Defendants were represented by attorneys from three separate law firms: Meredith A. Jury and Juliann Anderson of Best, Best & Krieger (BB&K); Mark Goldowitz of Goldowitz Law Offices; and Jason R. Walsh of Jacobs & Gregory.
On May 9, 1996, the parties stipulated to postpone the deadline for filing a special motion to strike under the SLAPP statute until July 1, 1996, because they were engaged in settlement negotiations.
On June 5, 1996, the Coltrains filed a motion for leave to amend their complaint. On June 13, 1996, they filed a motion to disqualify BB&K.
Evidently any settlement negotiations failed, because on July 1, 1996, defendants filed a special motion to strike.
On July 10, 1996, the Coltrains voluntarily dismissed their complaint without prejudice. As a result, the three pending motions — defendants’ special motion to strike, and the Coltrains’ motions for leave to amend and to disqualify BB&K — were never ruled on. Defendants’ original small claims actions were reassigned to small claims court.
On September 6, 1996, defendants filed a motion for attorney’ s fees under Code of Civil Procedure section 425.16, subdivision (c), or alternatively under Code of Civil Procedure section 1021.5. The motion was filed through attorneys Goldowitz and Walsh. It sought $75,273.53, representing all the fees for their services and those of attorneys working under them; it did not seek any fees for BB&K’s services.
On October 11, 1996, after a hearing, the trial court granted the motion. It awarded $73,000 in attorney’ s fees under Code of Civil Procedure section 425.16, subdivision (c). However, it declined to award fees under Code of Civil Procedure section 1021.5.
On October 18, 1996, the Coltrains filed a notice of appeal. On October 31, 1996, defendants filed a notice of cross-appeal.
III. THE ACTION AROSE OUT OF ACTS IN FURTHERANCE OF DEFENDANTS’
FIRST AMENDMENT RIGHTS IN CONNECTION WITH A PUBLIC ISSUE
[Editor's Note: This section not certified for publication.]
The Coltrains contend the award of attorney’s fees was improper because the statements by defendants that were the subject matter of the action did not concern a public issue.
In awarding attorney’s fees, the trial court ruled: “Was this a SLAPP suit under CCP 425.16? The Court’s convinced it is. And the Court’s convinced it is, not only from the timing of the suit, but also who is named in the suit and who was served in the suit.” “Here the people complained to The Press Enterprise, they complained to their councilman, they took legal action, and they got sued for it.”
A. Standard of Review.
The Coltrains argue this is an issue of statutory interpretation, and therefore the standard of review is de novo. Actually, the issue comprises three distinct subissues. First, there is the question of whether defendants had to show they had a meritorious motion to strike in order to recover attorney’s fees. Even though this is a critical threshold question, the Coltrains do not address it; they simply assume defendants did. Defendants, oddly enough, also do not address it; they, too, assume they did. We will assume, therefore, without deciding, that even after the Coltrains voluntarily dismissed their complaint, defendants still had to show they had had a meritorious motion to strike in order to be awarded attorney’s fees under the SLAPP statute.
Second, there is the question of whether, in order to have a meritorious motion to strike, defendants had to show this action arose out of the exercise of their constitutional rights specifically in connection with a public issue. This is indeed a question of statutory interpretation, which we review de novo. (Averill v. Superior Court (1996) 42 Cal.App.4th 1170, 1174.)
Third, there is the question of whether defendants in fact showed the necessary connection to a public issue. Because this subissue implicates the First Amendment, we have “an obligation to ‘make an independent examination of the whole record’ in order to make sure that ‘the judgment does not constitute a forbidden intrusion on the field of free expression.’ [Citations.]” (Bose Corp. v. Consumers Union of U.S., Inc. (1984) 466 U.S. 485, 499 [104 S.Ct. 1949, 80 L.Ed.2d 502], quoting New York Times Co. v. Sullivan (1964) 376 U.S. 254, 285 [84 S.Ct. 710, 11 L.Ed.2d 686]; accord Connick v. Myers (1983) 461 U.S. 138, 148, fn. 7, 150, fn. 10 [103 S.Ct. 1684, 75 L.Ed.2d 708]; Beilenson v. Superior Court (1996) 44 Cal.App.4th 944, 950.)
Subdivision (b) of Code of Civil Procedure section 425.16 permits a special motion to strike “[a] cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States or California Constitution in connection with a public issue . . . .”
Subdivision (e) of Code of Civil Procedure section 425.16, as it stood when defendants’ motion was decided, provided: “As used in this section, ‘act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue’ includes  any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law;  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; or  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.” (Former Code Civ. Proc., § 425.16, subd. (e), Stats. 1993, ch. 1239, § 1.) As the use of the word “includes” indicates, these three categories are examples; they are not exclusive. (Zhao v. Wong (1996) 48 Cal.App.4th 1114, 1127; Averill v. Superior Court, supra, 42 Cal.App.4th at p. 1175.)
This language has given rise to a split among the appellate courts. In Zhao v. Wong, supra, 48 Cal.App.4th 1114 [First Dist., Div. One], the defendant’s brother had died under mysterious circumstances. The brother’s girlfriend filed an alleged will for probate which named her as sole beneficiary. The defendant’s father contested the will. The girlfriend then filed a slander action against the defendant, alleging he had made statements, to his father and to a newspaper reporter, to the effect that she had murdered his brother. The defendant filed a special motion to strike, which was granted. (Id., at pp. 1118-1119.)
The appellate court reversed. It held the defendant’s statements were not protected by the SLAPP statute: “The existence of a public issue depends . . . on whether the statements possessed the sort of relevance to self-government that places them in a specially protected category of First Amendment values . . . .” (Zhao v. Wong, supra, 48 Cal.App.4th at p. 1132; see also id., at p. 1122.) The court reasoned that the statute primarily protects the right to petition; it protects the right to free speech only secondarily, as an adjunct to the right to petition. (Id., at p. 1132; see also id., at pp. 1124-1129.) It reasoned further that clauses  and  did not necessarily protect all speech in connection with an official proceeding. For example, even though clause  referred to speech in connection with a judicial proceeding, “[i]t cannot be seriously contended that every comment on a lawsuit involves a public issue.” (Id., at p. 1131.) Rather, these clauses protected speech in connection with an official proceeding only if the speech was additionally shown to concern a public issue. The court concluded the defendant’s statements, even though they were made to a newspaper reporter and they pertained to a will contest, were not in connection with a public issue. (Id., at pp. 1131-1133.)
Braun v. Chronicle Publishing Co. (1997) 52 Cal.App.4th 1036 [First Dist., Div. Four] disagreed with Zhao. It held clauses  and  protected all statements in connection with an official proceeding; it was unnecessary to make any additional showing that such statements concerned a public issue. (Id., at pp. 1048-1049.) It was equally unnecessary to show that such statements “pertain[ed] to the heart of self-government.” (Id., at pp. 1046-1047.) Finally, it was unnecessary to show that such statements were in furtherance of the right to petition. Thus, it held the SLAPP statute protected any news report of an official proceeding. (Id., at p. 1046.)
The matter is complicated further by the fact that, in 1997, the Legislature amended the SLAPP statute, effective January 1, 1998. The amendment wrought two changes relevant here. First, it added the provision: “[T]his section shall be construed broadly.” (Code Civ. Proc., § 425.16, subd. (a); Stats. 1997, ch. 271, § 1.) Second, it added a fourth, “catch-all” clause to the list of acts protected by the statute: “[A]ny 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.” (Code Civ. Proc., § 425.16, subd. (e)(4); Stats. 1997, ch. 271, § 1.) The legislative history of the amendment indicates it was intended to reject Zhao’s narrow reading of the statute. (Los Carneros Community Assoc. v. Penfield & Smith Engineers, Inc. (1998) 65 Cal.App.4th 168, 175.) The Coltrains, however, suggest the amendment is not retroactive.
This issue, as to precisely what type of speech and other conduct the SLAPP statute protects, is presently before the Supreme Court in Briggs v. Eden Council for Hope & Opportunity (1997) 54 Cal.App.4th 1237 [First Dist., Div. One], review granted Aug. 13, 1997 (S062156). However, we need not take sides as between Braun and Zhao to decide this case; we may assume, without deciding, Zhao’s reading of the SLAPP statute is the correct one.
The Coltrains alleged defendants’ demand letters were defamatory. Defendants, however, believed they had to send demand letters before they could file their small claims actions. Indeed, defendants were correct: A claim filed in small claims court must state under oath, among other things, “that the plaintiff, where possible, has demanded payment,” and “that the defendant has failed or refused to pay . . .” (Code Civ. Proc., § 116.320, subds. (a), (b).) Accordingly, the demand letters were statements made in connection with a judicial proceeding.
Moreover, the demand letters were intimately connected with defendants’ right of petition. As the Zhao court recognized, “[i]t is well established that ‘[t]he right of access to the courts is an aspect of the First Amendment right to petition the government for redress of grievances. [Citations.]’ [Citation.]” (Zhao v. Wong, supra, 48 Cal.App.4th at p. 1122, quoting Church of Scientology v. Wollersheim (1996) 42 Cal.App.4th 628, 647.) In the case before it, it found the defendant’s statements did not relate to his right of petition because he was not a party to the will contest and because his statements could not have been “intended to influence the outcome of the will contest.” (Id., at p. 1132.) Here, by contrast, all defendants were parties to a small claims action, and their demand letters not only were intended to influence the outcome of those actions, they were a crucial prerequisite to the success of those actions.
The Coltrains also alleged defendants made statements to the general public, including some published in the Press-Enterprise, that were defamatory. The trial court essentially found, however, this was a “make-weight” allegation, and the small claims actions were the gist of the Coltrains’ defamation claim. It reasoned the Coltrains had named as defendants only those persons who had filed small claims actions against them. They had not sued those persons who had sent them demand letters but failed to file a small claims action; they likewise had not sued the Press-Enterprise, Dan Bernstein, or the public officials who had also been quoted in the newspaper. Six of the nine named defendants had not even talked to Dan Bernstein. Thus, we agree these allegations need not be considered.
Alternatively, even assuming these allegations must be treated separately, Shewalter and Rundle’s statements to the Press-Enterprise concerned a matter of public interest. The Coltrains seek to portray defendants as individual property owners, each protecting his or her own property interests. However, if enough people maintain identical selfish, narrow private interests, at some point they coalesce into a single public interest. Here, that point had been reached. A neighborhood crime wave, and the reasons for that crime wave, are of significant public interest. These topics are a legitimate “matter of political, social, or other concern to the community” (Connick v. Myers, supra, 461 U.S. at p. 146), “upon which ‘free and open debate is vital to informed decision-making by the electorate.’” (Id., at p. 145, quoting Pickering v. Board of Education (1968) 391 U.S. 563, 571-572 [88 S.Ct. 1731, 20 L.Ed.2d 811].) While the fact that a newspaper saw fit to report defendants’ comments, by itself, is not determinative, it is at least evidence they were relevant to a larger public issue. (Zhao v. Wong, supra, 48 Cal.App.4th at p. 1121.) The fact that the mayor, the city councilmember for the neighborhood, and a representative of the city attorney’s office all became involved also is evidence of a public issue.
The Coltrains argue defendants essentially accused them of aiding and abetting crimes, and hence of committing crimes themselves. (As an aside, we note this argument reflects a serious misunderstanding of the criminal doctrine of aiding and abetting. (See People v. Prettyman (1996) 14 Cal.4th 248, 259 [aider and abettor must act with knowledge of the perpetrator’s criminal purpose, and with the intent of encouraging or facilitating the commission of the offense].)) Admittedly, Zhao suggests that a mere accusation of crime does not necessarily create a public issue. However, even assuming defendants’ complaints about crimes somehow implicated the Coltrains in those crimes, the number, persistence, and neighborhood-wide effects of the crimes distinguish this case from Zhao and demonstrate the existence of a genuine public issue.
Finally, the Coltrains alleged defendants inflicted emotional distress on them by filing “unwarranted criminal complaints” and “unjustified complaints with the city government,” and by “solicit[ing] factually inaccurate newspaper articles.” Defendants’ complaints to city government and to the police are classic instances of the exercise of the right of petition. The right of petition includes “‘[t]he right of the people to inform their representatives in government of their desires with respect to the passage or enforcement of laws . . . .’ [Citation.]” (Zhao v. Wong, supra, 48 Cal.App.4th at p. 1122, quoting Eastern R. Conf. v. Noerr Motors (1961) 365 U.S. 127, 139 [81 S.Ct. 523, 5 L.Ed.2d 464].) And the newspaper article, as we have already noted, dealt with a public issue.
The Coltrains argue that, by denying defendants’ motion for attorney’s fees under Code of Civil Procedure section 1021.5, the trial court implicitly found no public issue was involved. Section 1021.5 allows the prevailing party to recover attorney’s fees if the action “has resulted in the enforcement of an important right affecting the public interest,” and if “(a) a significant benefit . . . has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any.” When the trial court refused to award attorney’s fees under section 1021.5, it explained: “I can’t see where this case conferred a significant benefit on the general public or a large class of persons as a result of the defendants’ prevailing.”
We fail to perceive any connection. As we have already held, defendants made various statements concerning a matter of public interest. The Coltrains sued them, asserting their statements were defamatory and otherwise tortious. Defendants filed a special motion to strike, and the complaint was dismissed. The trial court could properly conclude the dismissal of the complaint did not confer a significant benefit on the general public. But this has nothing to do with whether defendants’ underlying statements concerned a matter of public interest.
We conclude this action did arise from acts in furtherance of defendants’ constitutional rights of free speech and petition in connection with a public issue.
IV. THE TRIAL COURT’S FINDING THAT DEFENDANTS WERE THE PREVAILING PARTIES ON THE SPECIAL MOTION TO STRIKE
The Coltrains contend defendants were not entitled to attorney’s fees because they were not “prevailing defendant[s] on a special motion to strike” within the meaning of Code of Civil Procedure section 425.16, subdivision (c).
The trial court ruled that defendants were the prevailing parties. It explained: “If you look at CCP 1032, [s]ubdivision (a), [s]ubsection (4), it tells you who the prevailing party is. And that’ s someone who gets a case dismissed[,] or a case is dismissed and it terminates the case.” “[I]t doesn’ t say in th[e] [SLAPP] statute that it must be that the defendant is successful in the hearing on the special motion to strike . . . . It just says they must be the prevailing defendant on a special motion to strike. [¶ ] So therefore, I think 1032, [s]ubdivision (a), [s]ubsection (4) does apply.”
The issue before us is primarily one of statutory interpretation. Code of Civil Procedure section 425.16, subdivision (c) provides: “In any action subject to subdivision (b), a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney’ s fees and costs.” However, it does not otherwise define “prevailing.”
In cases where there has been a voluntary dismissal, “‘ prevailing party’ has no settled technical meaning . . . .” (Santisas v. Goodin (1998) 17 Cal.4th 599, 609.) In some instances, the Legislature has headed the issue off at the pass by specifying in the applicable statute whether a voluntary dismissal makes the defendant the prevailing party. For example, under Code of Civil Procedure section 1032, costs are to be awarded to the “prevailing party.” (Code Civ. Proc., § 1032, subd. (b).) As defined in Code of Civil Procedure section 1032, “prevailing party” specifically includes “a defendant in whose favor a dismissal is entered . . . .” (Code Civ. Proc., § 1032, subd. (a)(4); see also Civ. Code, § 798.85 [in action under the Mobilehome Residency Law, "[a] party shall be deemed a prevailing party . . . where the litigation is dismissed in his or her favor prior to or during the trial, unless the parties otherwise agree in the settlement or compromise.”].)
On the other hand, under Civil Code section 1717, in an action on a contract with an attorney’ s fees provision, attorney’ s fees are to be awarded to “the party prevailing on the contract.” (Civ. Code, § 1717, subd. (a).) Civil Code section 1717 specifically provides that “[w]here an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party . . . .” (Civ. Code, § 1717, subd. (b)(2); see also Civ. Code, § 3176 [in action on bonded stop notice, "[w]here an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party . . . .” ].)
The vast majority of attorney’ s fee statutes do not explicitly provide for the event of a voluntary dismissal. In International Industries, Inc. v. Olen (1978) 21 Cal.3d 218, the Supreme Court was called upon to resolve this issue under Civil Code section 1717 as it then stood, which merely provided: “‘[P]revailing party” means the party in whose favor final judgment is rendered.’” (International Industries, Inc. v. Olen, supra, at p. 222, italics omitted, quoting former Civ. Code, § 1717, Stats. 1968, ch. 266, § 1, p. 578.) As the court noted, where the plaintiff voluntarily dismisses before trial, there are three possibilities: (1) automatically awarding attorney’s fees to the defendant; (2) “providing for application of equitable considerations . . .”; or (3) automatically denying attorney’s fees. (International Industries, Inc. v. Olen, supra, at p. 225.)
The court rejected an automatic award of attorney’s fees to the defendant, as inequitable: “Although a plaintiff may voluntarily dismiss before trial because he learns that his action is without merit, obviously other reasons may exist causing him to terminate the action. For example, the defendant may grant plaintiff — short of trial — all or substantially all relief sought, or the plaintiff may learn the defendant is insolvent, rendering any judgment hollow. . . . Moreover, permitting recovery of attorney fees by defendant in all cases of voluntary dismissal before trial would encourage plaintiffs to maintain pointless litigation in moot cases or against insolvent defendants to avoid liability for those fees.” (International Industries, Inc. v. Olen, supra, 21 Cal.3d at p. 224.)
The court also rejected a case-by-case approach: “It has been suggested that in pretrial dismissal cases the court should determine whether, and to what extent, the complaint is meritorious and award attorney fees accordingly. However, to arrive at that determination would require the court to try the entire case. The purpose of litigation is to resolve participants’ disputes, not compensate participating attorneys. Our courts are sufficiently burdened without combat kept alive solely for attorney fees.” (International Industries, Inc. v. Olen, supra, 21 Cal.3d at p. 224.)
The court concluded, as a matter of “sound public policy and recognized equitable considerations” (International Industries, Inc. v. Olen, supra, 21 Cal.3d at p. 223), that, if the plaintiff voluntarily dismissed before trial, the defendant was not the prevailing party and could not recover attorney’ s fees under Civil Code section 1717. (International Industries, Inc. v. Olen, supra, at pp. 223-225.) In 1981, the Legislature amended Civil Code section 1717 so as to adopt the holding of Olen. (Stats. 1981, ch. 888, § 1, p. 3399; see Hsu v. Abbara (1995) 9 Cal.4th 863, 873.)
Recently, however, the Supreme Court retreated from its position in Olen. In Santisas v. Goodin, supra, 17 Cal.4th 599, the plaintiffs asserted both contract and tort causes of action, all based on a contract with an attorney’ s fees clause which allowed “the prevailing party” to recover attorney’ s fees in any legal action “arising out of” the contract. (Id., at p. 603.) Eventually, the plaintiffs voluntarily dismissed their complaint. The trial court then awarded attorney’ s fees to some of the defendants. (Id., at pp. 603-604.) The Supreme Court recognized that, under Olen, as codified in Civil Code section 1717, these defendants were not the prevailing parties on the contract claims. It held, however, the defendants could be the prevailing parties on the tort claims under the contractual attorney’ s fee provision and under Code of Civil Procedure sections 1032 and 1033.5, subdivision (a)(10). (Santisas v. Goodin, supra, at pp. 614-623.)
The court explained: “[U]pon fresh consideration of the matter, we are of the view that the practical difficulties associated with contractual attorney fee cost determinations in voluntary pretrial dismissal cases are not as great as suggested by the majority in Olen . . . . The Olen majority soundly reasoned that attorney fees should not be awarded automatically to parties in whose favor a voluntary dismissal has been entered. In particular, it seems inaccurate to characterize the defendant as the ‘prevailing party’ if the plaintiff dismissed the action only after obtaining, by means of settlement or otherwise, all or most of the requested relief, or if the plaintiff dismissed for reasons, such as the defendant’s insolvency, that have nothing to do with the probability of success on the merits. The Olen majority also soundly reasoned that scarce judicial resources should not be used to try the merits of voluntarily dismissed actions merely to determine which party would or should have prevailed had the action not been dismissed. But we do not agree that the only remaining alternative is an inflexible rule denying contractual attorney fees as costs in all voluntary pretrial dismissal cases. Rather, a court may determine whether there is a prevailing party, and if so which party meets that definition, by examining the terms of the contract at issue . . . . If, as here, the contract allows the prevailing party to recover attorney fees but does not define ‘prevailing party’ or expressly either authorize or bar recovery of attorney fees in the event an action is dismissed, a court may base its attorney fees decision on a pragmatic definition of the extent to which each party has realized its litigation objectives, whether by judgment, settlement, or otherwise. [Citation.]” (Santisas v. Goodin, supra, 17 Cal.4th at pp. 621-622.)
In the case before it, the court held the defendants were indeed the prevailing parties: “Plaintiffs’ objective in bringing this litigation was to obtain the relief requested in the complaint. The objective of the . . . defendants in this litigation was to prevent plaintiffs from obtaining that relief. Because the litigation terminated in voluntary dismissal with prejudice, plaintiffs did not obtain by judgment any of the relief they requested, nor does it appear that plaintiffs obtained this relief by another means, such as a settlement. Therefore, plaintiffs failed in their litigation objective and the . . . defendants succeeded in theirs. Giving the term ‘prevailing party’ its ordinary or popular meaning, the . . . defendants are the ‘ prevailing part[ies]‘ under their agreement with plaintiffs . . . .” (Santisas v. Goodin, supra, 17 Cal.4th at p. 609.)
Even before Santisas, two lower courts had applied a similar approach in construing statutes which did not define “prevailing party.” In Heather Farms Homeowners Assn. v. Robinson (1994) 21 Cal.App.4th 1568, the statute involved was Civil Code section 1354, subdivision (f), which provides that, in an action to enforce condominium conditions, covenants, and restrictions, “the prevailing party shall be awarded reasonable attorney’s fees and costs.” As a result of an agreement to settle complex multiparty litigation, the plaintiff voluntarily dismissed the complaint as to all defendants, including one who had not agreed to be bound by the settlement agreement. The trial court found the nonsettling defendant was a prevailing party for purposes of costs, but not for purposes of attorney’s fees. (Heather Farms Homeowners Assn. v. Robinson, supra, at pp. 1570-1571.)
The defendant argued the prevailing party for purposes of attorney’s fees should be the same as the prevailing party for purposes of costs, and therefore the court should apply the general costs statute, Code of Civil Procedure section 1032, which provides that after a voluntary dismissal the defendant is the prevailing party. The appellate court disagreed: “[T]he premise for this argument, that a litigant who prevails under the cost statute is necessarily the prevailing party for purposes of attorney fees, has been uniformly rejected by the courts of this state. [Citation.]” (Heather Farms Homeowners Assn. v. Robinson, supra, 21 Cal.App.4th at p. 1572.)
The plaintiff, on the other hand, argued the court should be guided by the definition of “prevailing party” in Civil Code section 1717, which provides that after a voluntary dismissal there is no prevailing party. Again, the court disagreed: “While the definition of ‘ prevailing party’ found in section 1717, subdivision (b) or in Code of Civil Procedure section 1032 might otherwise be persuasive as to the meaning intended in section 1354, under the principle that similar language used in statutes ‘in pari materia’ should be given similar effect [citations], that rule of construction is of little help here. Section 1717, subdivision (b) and Code of Civil Procedure section 1032 are both ‘in pari materia’ with section 1354 in a broad sense, yet they provide conflicting definitions of the critical term. Neither party to this appeal has supplied a principled reason why we should select one definition over the other.” (Heather Farms Homeowners Assn. v. Robinson, supra, 21 Cal.App.4th at pp. 1572-1573.)
After reviewing cases dealing with similar statutes, the court summarized them as follows: “In each case, the court declined to adopt a rigid interpretation of the term ‘prevailing party’ and, instead, analyzed which party had prevailed on a practical level. [Some of the cases] further clarify that the trial court must determine who is the prevailing party, and . . . the court’s ruling should be affirmed on appeal absent an abuse of discretion. We conclude similar rules should apply when determining who the ‘prevailing party’ is under [Code of Civil Procedure] section 1354.” (Heather Farms Homeowners Assn. v. Robinson, supra, 21 Cal.App.4th at p. 1574.)
The court upheld the trial court’s ruling that the defendant had not prevailed: “The [plaintiff] voluntarily dismissed its complaint against [the defendant] as part of a global settlement agreement, not because he succeeded on some procedural issue or otherwise received what he wanted. That dismissal apparently was more the result of [the defendant's] obdurate behavior rather than any successful legal strategy.” (Heather Farms Homeowners Assn. v. Robinson, supra, 21 Cal.App.4th at p. 1574.)
Similarly, in Gilbert v. National Enquirer, Inc. (1997) 55 Cal.App.4th 1273, the controlling statute was Civil Code section 3344, subdivision (a), which provides that in an action for commercial misappropriation of name or likeness, “[t]he prevailing party . . . shall also be entitled to attorney’s fees and costs.” The plaintiff had voluntarily dismissed her commercial misappropriation complaint before trial. The trial court nevertheless denied the defendant’s motion for attorney’s fees, ruling it was not the prevailing party. (Gilbert v. National Enquirer, Inc., supra, at p. 1275.)
On appeal, the defendant argued the court should look to Code of Civil Procedure section 1032. (Gilbert v. National Enquirer, Inc., supra, 55 Cal.App.4th at p. 1276.) The court, however, declined to do so. It found Heather Farms “on point.” (Id., at p. 1277.) It therefore held, quoting Heather Farms: “‘ [T]he trial court must determine who is the prevailing party’ ” by “‘analyz[ing] which party had prevailed on a practical level.’” (Ibid., quoting Heather Farms Homeowners Assn. Inc. v. Robinson, supra, 21 Cal.App.4th at p. 1574.)
The appellate court upheld the trial court’s finding that the defendant was not the prevailing party. It reasoned the plaintiff’s commercial misappropriation claims had successfully withstood a demurrer, even though her libel and invasion of privacy claims had not; the plaintiff claimed she dismissed her commercial misappropriation claims to expedite an appeal regarding the libel and invasion of privacy claims; and insufficient discovery had been taken to permit a determination as to who was the prevailing party. (Gilbert v. National Enquirer, Inc., supra, 55 Cal.App.4th at p. 1277; see also Damian v. Tamondong (July 29, 1998) ___ Cal.App.4th ___, ___-___ [1998 WL 426043 at pp. 6-10] [after voluntary dismissal, trial court has discretion to determine prevailing party for purposes of attorney's fees under Rees-Levering Automobile Sales Finance Act (Civ. Code, § 2983.4); neither Civ. Code, § 1717 nor Code Civ. Proc., § 1032 is controlling].)
The Coltrains try to distinguish Heather Farms and Gilbert, arguing the statutes involved in those cases allowed attorney’s fees to the party who prevailed in the entire action, whereas here the SLAPP statute merely allows attorney’s fees to the party who prevails on a motion. We fail to see the distinction. The motion at issue is, after all, a motion to strike the complaint. Thus, in both situations, when the plaintiff dismisses the complaint, it voluntarily cedes to the defendant all the relief the trial court could have granted if the matter had been pressed to a ruling. The principle that the defendant need not obtain a ruling from the court in order to “prevail” for attorney’s fees purposes applies equally in both situations.
We do not believe the policies behind the SLAPP statute call for any different result. Certainly these policies do not support the Coltrains’ contention that a voluntary dismissal should automatically preclude an award of attorney’s fees to the defendant. Otherwise, SLAPP plaintiffs could achieve most of their objective with little risk — by filing a SLAPP suit, forcing the defendant to incur the effort and expense of preparing a special motion to strike, then dismissing the action without prejudice. The specter of the action being refiled (at least until the statute of limitations had run) would continue to have a significant chilling effect on the defendant’ s exercise of its First Amendment rights. At that point, the plaintiff would have accomplished all the wrongdoing that triggers the defendant’s eligibility for attorney’s fees, but the defendant would be cheated of redress.
On the other hand, these policies likewise do not support defendants’ contention that a voluntary dismissal while a special motion to strike is pending should automatically entitle a defendant to attorney’s fees. At that point, there has been no judicial determination that the action is in fact a SLAPP suit. Also, regardless of whether the action is a SLAPP suit or not, the plaintiff may have good-faith reasons for the dismissal that have nothing to do with oppressing the defendant or avoiding liability for attorney’s fees.
We conclude that where the plaintiff voluntarily dismisses an alleged SLAPP suit while a special motion to strike is pending, the trial court has discretion to determine whether the defendant is the prevailing party for purposes of attorney’s fees under Code of Civil Procedure section 425.16, subdivision (c). In making that determination, the critical issue is which party realized its objectives in the litigation. Since the defendant’s goal is to make the plaintiff go away with its tail between its legs, ordinarily the prevailing party will be the defendant. The plaintiff, however, may try to show it actually dismissed because it had substantially achieved its goals through a settlement or other means, because the defendant was insolvent, or for other reasons unrelated to the probability of success on the merits.
Here, the trial court applied an erroneous legal standard. It deemed Code of Civil Procedure section 1032 controlling; thus, it failed to exercise its discretion to find that defendants were not the prevailing parties. Nevertheless, we believe it reached the correct result. “‘There is perhaps no rule of review more firmly established than the principle that a ruling or decision correct in law will not be disturbed on appeal merely because it was given for the wrong reason. If correct upon any theory of law applicable to the case, the judgment will be sustained regardless of the considerations that moved the lower court to its conclusion.’ [Citation.]” (Tippett v. Terich (1995) 37 Cal.App.4th 1517, 1539, quoting Belair v. Riverside County Flood Control Dist. (1988) 47 Cal.3d 550, 568.)
Upon the Coltrains’ voluntary dismissal, a presumption arose that defendants were the prevailing parties. There was no evidence that the Coltrains’ reasons for dismissing were such as to dispel this presumption. The Coltrains claim they dismissed because they had run out of money. However, they introduced no evidence to support this claim. In any event, this reason, if proved, would only confirm that defendants were the prevailing parties on the motion to strike. The Coltrains are essentially admitting they filed an action they could not afford to win. Indeed, this arguably proves it was a pure SLAPP suit.
There was some evidence the Coltrains dismissed the action because they had agreed to install lighting, to install a fence around the apartments, and to participate in the city’s Crime Free Multi-Housing Program. The Coltrains do not mention this evidence in this appeal; they maintain they dismissed solely and exclusively because they had run out of money. Thus, they have waived any claim the trial court erred by failing to consider this evidence. In any event, this reason would mean the Coltrains not only dismissed their action against defendants, but also gave defendants everything they were really seeking in the small claims actions. Thus, this reason, too, would confirm that defendants were the prevailing parties on the motion to strike.
We conclude the trial court correctly found that defendants were the prevailing parties on the special motion to strike.
V. THE AMOUNT OF ATTORNEY’S FEES AWARDED
[Editor's Note: This section not certified for publication.]
The Coltrains contend the amount of the attorney’s fees award is excessive. Defendants, in their cross-appeal, contend the trial court erred by awarding them less fees than they were seeking.
A. Factual Background.
In their motion, defendants sought $75,273.53, representing their attorney’s fees and expenses for the entire action. The trial court, however, ruled it would award only fees in connection for the motion to strike. It asked the parties if they could stipulate to the amount of fees attributable to defendants’ answer. Counsel for the Coltrains answered, “I could not find it in their fee schedule.” Counsel for defendants responded, “ . . . BB&K, which was pro bono counsel for the defendants . . . , did the vast bulk of the work on the answer. My guess is — I’d have to check the billing records, but my guess is that there’s probably no more than three or four hours of time . . . with respect to the answer.” The court then said, “Okay. I’m just going to make a call on it, then. Someone’s going to have to decide it.” It deducted $2,273.53, representing fees for the answer, and awarded only $73,000.
“An award of attorney fees is within the trial court’s discretion and that decision will be reversed only if there has been a prejudicial abuse of discretion. [Citation.]” (Guinn v. Dotson (1994) 23 Cal.App.4th 262, 268.) “We cannot substitute our judgment for that of the trial court, but only determine if any judge reasonably could have made such an order. [Citation.] Our review of factual findings is limited to a determination of whether there is any substantial evidence to support the trial court’s conclusions. [Citation.]” (In re Marriage of Chandler (1997) 60 Cal.App.4th 124, 128; see also Church of Scientology v. Wollersheim, supra, 42 Cal.App.4th at p. 659.)
“The major factors to be considered by a court in fixing a reasonable attorney’s fee . . . [are]: ‘the nature of the litigation, its difficulty, the amount involved, the skill required and the skill employed in handling the litigation, the attention given, the success of the attorney’s efforts, his learning, his age, and his experience in the particular type of work demanded [citation]; the intricacies and importance of the litigation, the labor and the necessity for skilled legal training and ability in trying the cause, and the time consumed. [Citations.]’ [Citations.]” (In re Marriage of Cueva (1978) 86 Cal.App.3d 290, 296, quoting Berry v. Chaplin (1946) 74 Cal.App.2d 669, 679.) “[T]he trial judge is regarded as competent from his own knowledge of legal practice to fix the amount of attorney’s fees to be paid to or by civil litigants . . . . [Citations.]” (People v. Amor (1974) 12 Cal.3d 20, 32.)
First, the Coltrains argue the award here was much higher than the awards in most (though not all) reported SLAPP cases. But not all SLAPP cases are created equal. In terms of the list of factors the trial court is to consider — including difficulty, amount involved, attorney qualifications, and time consumed — they may vary widely. Accordingly, the amounts awarded in other reported appellate cases is not one of the significant factors.
Second, the Coltrains contend defense counsel’s hourly rate was excessive. In the trial court, the Coltrains challenged only the hourly rate of $320 charged by Mark Goldowitz. Mr. Goldowitz was shown to be a specialist in First Amendment and anti-SLAPP litigation. He had first-hand knowledge of the legislative history of the SLAPP statute. We cannot say the trial court abused its discretion by awarding his fees at this rate.
Third, the Coltrains contend defendants’ attorneys spent time on duplicative tasks. In the trial court, the Coltrains labeled any time one of defendants’ lawyers talked to another “duplicative.” But “[t]he use of multiple counsel is permissible when the demands of the case warrant hiring more than one attorney.” (Pearl, Cal. Attorney Fee Awards (Cont.Ed.Bar Sept. 1997) § 12.20 at p. 12-23.) The trial court could reasonably find this was such a case. Moreover, the trial court could reasonably find defendants’ various attorneys had to talk to each other. There was no showing multiple attorneys ever actually did the same work. (See id.)
Fourth, the Coltrains point out there is no evidence defendants or their counsel made any effort to obviate the motion to strike by discussing it with them before it was filed. While the courts encourage such premotion conferences, and they are statutorily required in other contexts (see, e.g., Code Civ. Proc., § 2023, subd. (a)(9)), the SLAPP statute does not require a premotion conference as a condition of an attorney’s fees award. We decline to impose such a requirement by judicial fiat.
Fifth, defendants contend they were entitled to all fees reasonably related to their motion to strike, and that this necessarily included all fees for the answer. When the trial court deducted fees for the answer, it explained: “An answer is something you have to do in any case. It puts you in a position to file [a special motion to strike]. But I don’t know that it’s related.”
“[A] prevailing defendant on a special motion to strike brought pursuant to Code of Civil Procedure section 425.16 is entitled to recover attorney fees and costs only for the motion to strike, not for the entire action.” (Lafayette Morehouse, Inc. v. Chronicle Publishing Co. (1995) 39 Cal.App.4th 1379, 1381, fn. omitted.) Under the SLAPP statute, a motion to strike “may be filed within 60 days of the service of the complaint . . . .” (Code Civ. Proc., § 425.16, subd. (f).) The statute provides for a stay of discovery (Code Civ. Proc., § 425.16, subd. (g)), but does not provide for a stay of any pleading deadlines. The defendant is free to ask the trial court for an extension of time to plead. Otherwise, however, the defendant must answer (or demur) regardless of whether he or she plans to file a special motion to strike. The answer, as a matter of sound lawyering, must be prepared on the assumption that the motion to strike may be denied. Thus, while the trial court arguably could have come to a different conclusion, it did not abuse its discretion in ruling the answer was not reasonably related to the motion.
Sixth — and finally — the Coltrains contend the trial court awarded fees that were not related to the motion to strike. Defendants, on the other hand, contend the trial court abused its discretion by deducting $2,273.53 as fees for the answer. They argue the evidence demonstrated the fees for the answer totaled not more than $379.
Reluctantly, we agree, in a way, with both sides. There was insufficient evidence to support the trial court’s allocation of fees as between the motion to strike and the answer. Defendants’ motion for attorney’s fees sought all of their fees, in connection with the entire action. For this reason, their motion contained no plain statement by a witness with personal knowledge that all the fees, or any particular portion of them, actually related to the motion to strike. Obviously, some individual fee items — even, perhaps, the bulk of them — did relate to the motion to strike. For example, on April 23, 1996, one attorney spent 5.3 hours to “[p]repare motion to strike.” Similarly, on June 25, 1996, another attorney spent 2.0 hours to “[e]dit Kim Shewalter declaration.”
Just as obviously, some individual fee items related to the answer, and hence (as the trial court not unreasonably concluded) did not relate to the motion to strike. For example, on April 29, 1996, attorney Mark Goldowitz spent 0.1 hours on “[t]elephone call to Jason Walsh regarding filing of answer . . . .” As defendants point out, the total amount of fees obviously related to the answer in this way total a mere $379.
But what are we to make of such items as “[t]elephone call with Jason Walsh regarding case status,” “[r]eview letter from Juliann Anderson to [the Coltrains’ counsel],” or simply, “[t]elephone call with Kim Shewalter”? The Coltrains specifically objected that defendants were not entitled to recover all their fees and demanded an apportionment. There is no evidence from which the trial court could reasonably conclude these items related to the motion to strike, to the answer, or to something entirely different. The trial court could not even assume all work done after May 2, 1996, when the answer was filed, related to the motion to strike. Some of the fee items which defendants admit were related to the answer were for work done after May 2. It would seem defendants failed to meet their burden of proving they were entitled to recover these items. (See Evid. Code, § 500; Hadley v. Krepel (1985) 167 Cal.App.3d 677, 682-683; Pearl, Cal. Attorney Fee Awards, supra, § 14.29 at p. 14-30.)
The trial court apparently reasoned as follows: All the work done by defense counsel in this case had to relate either to the answer or to the special motion to strike. Based on the trial court’s own knowledge of legal practice, a reasonable amount of attorney’s fees for the preparation of the answer in this case would be $2,273.53. Hence, the rest of the fees must relate to the motion to strike.
The problem with this reasoning, in the circumstances here, was that defendants were also represented by BB&K. Their motion, however, did not seek any attorney’s fees for work done by BB&K, and there was no evidence as to how much of the work on the answer had been done by BB&K. Even assuming the trial court could have accepted defense counsel’s unsworn representation that BB&K did nearly all the work, so that only three or four hours’ worth of the fees sought related to the answer, it evidently did not; instead, it came up with a number for which there was no evidentiary basis.
If defendants had submitted a declaration to the effect that, except for the $379 of fees that related to the answer, all the attorney’s fees sought related to the motion to strike, the trial court could reasonably have relied on it. Given the absence of any such declaration, however, we must reverse.
Regarding defendants’ entitlement to an award of attorney’s fees, the order appealed from is affirmed. Regarding the amount of the award of attorney’ s fees, the order appealed from is reversed. The matter is remanded to the trial court for further proceedings. Defendants shall recover attorney’s fees and costs on appeal, in amounts to be determined, upon proper application, in the trial court. (Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47 Cal.App.4th 777, 785; Church of Scientology v. Wollersheim, supra, 42 Cal.App.4th at pp. 659-660; Evans v. Unkow (1995) 38 Cal.App.4th 1490, 1499-1500.)
We concur: Ramirez, P.J., and Gaut, J.