COUNSEL:

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.

[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:

1.Defendants were not entitled to recover attorney' s fees because they did not prevail on their special motion to strike.

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.

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 In the unpublished portion, we will hold that this action arose from acts in furtherance of defendants' constitutional rights of free speech and petition in connection with a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.

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.

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.

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.)

B. Analysis.

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 [1] any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; [2] 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 [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." (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 [1] and [3] did not necessarily protect all speech in connection with an official proceeding. For example, even though clause [2] 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 [1] and [2] 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.