Monday, April 20, 2009
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Court: Arbitration Not ‘Protected Activity’ Under Anti-SLAPP Law
By STEVEN M. ELLIS, Staff Writer
California’s law barring strategic lawsuits against public participation does not protect the act of initiating private, contractual arbitration, the Fourth District Court of Appeal ruled Friday.
Reasoning such activity is neither a “judicial” nor “official” proceeding under the anti-SLAPP statute, Div. Three rejected a Bellflower attorney’s argument that a complaint resulting from her demand for arbitration in a dispute over the marketing of her house arose from protected activity.
The marketer, Century 21 Chamberlain & Associates, sued attorney Lisa Haberman for account stated, alleging she failed to pay almost $14,000 in interest on a $200,000 loan secured by a deed of trust. Century 21 also requested a declaration that no arbitration agreement existed.
Motion to Strike
Haberman appealed Orange Superior Court Judge Franz E. Miller’s order denying her motion to strike under Code of Civil Procedure Sec. 425.16 and continuing her motion to compel arbitration, but the Court of Appeal affirmed in an opinion by Justice Raymond J. Ikola.
Attorney Darin L. Wessel of the Los Angeles office of Manning & Marder, Kass, Ellrod, Ramirez represented Century 21. He told the MetNews the decision “helps to show that private arbitration remains a creature of contract and not subject to being struck as anti-SLAPP.”
Haberman could not be reached for comment.
After finding the complaint did not arise from protected activity, Miller denied Haberman’s motion to strike and ordered Pacific West to produce documents on the purported duty to arbitrate.
He also bifurcated the counts, setting an evidentiary hearing on the arbitration motion and a bench trial on the declaratory relief cause of action.
Specific Categories
Haberman appealed, but Ikola wrote the account stated cause of action arose from her alleged failure to pay interest on the loan, and not on one of the four specific categories of protected activity in the anti-SLAPP statute.
The statute requires a movant to show the conduct underlying the cause of action was a statement in a “judicial…or any other official proceeding authorized by law;” a statement “in connection with an issue under consideration or review by a…judicial body, or any other official proceeding authorized by law;” a statement in public for a on an issue of public interest; or conduct in connection with a public issue.
The justice also rejected Haberman’s contention that the declaratory action fell within the first two categories, explaining that private contractual arbitration is an alternative to a “judicial proceeding,” and cannot be an “official proceeding authorized by law” because it is a nongovernmental activity not reviewable by administrative mandate or required by statute.
Litigation Privilege
Ikola further swept aside Haberman’s contention that statements protected by the litigation privilege are automatically protected by the anti-SLAPP statute.
“It would be anomalous if the anti-SLAPP statute could be used to strike a declaratory relief cause of action seeking to avoid arbitration,” he said.
“Generally, the court must determine whether a dispute is subject to contractual arbitration, unless the parties clearly and unmistakably agree otherwise…. It would provide cold comfort to parties resisting arbitration to recognize their right to a judicial determination on arbitrability, yet strike their means for obtaining that determination before arbitration.”
The justice also wrote that dismissal was required as to Haberman’s appeal on her motion to compel arbitration, reasoning that no appealable order existed where the trial court did not rule on the motion but merely continued the hearing.
Presiding Justice David G. Sills and Justice William F. Rylaarsdam joined Ikola in his opinion.
The case is Century 21 Chamberlain & Associates v. Haberman, 09 S.O.S. 2132.
Copyright 2009, Metropolitan News Company