When their family home in Fresno, California (the Property), was foreclosed on pursuant to a forged or fraudulent second deed of trust, Rebecca and Victorino Baquiran filed an action to quiet title to the Property and recorded a lis pendens. Thereafter, the party that had purchased the Property in good faith at the foreclosure sale, La Jolla Group II and its partners, Leroy Kleim and Alan Boyajian (collectively appellants), filed a complaint for slander of title against the Baquirans and the Baquirans' attorney, Daniel A. Bruce and the Law Offices of Zinkin & Bruce (collectively respondents), alleging that the recording of the lis pendens was unprivileged and wrongfully prevented appellants from being able to sell the Property. Respondents then filed a special motion to strike the slander of title complaint under Code of Civil Procedure section 425.16 (also known as an "anti-SLAPP" motion).
On or about June 28, 1989, Victorino Baquiran purchased the Property. At that time, Mr. Baquiran executed a first deed of trust to secure the loan used to purchase the Property. His wife, Rebecca Baquiran, was placed on title to the Property and the Baquirans made it their family home for more than 16 years, until they were evicted by appellants in June 2005.
In July 2003, the Baquirans received notice that foreclosure proceedings were being commenced based on a second deed of trust on the Property securing a promissory note in favor of Steven and Carrie Mahlum. Prior to receiving that notice, the Baquirans had no knowledge that a deed of trust in favor of the Mahlums had been recorded on the Property. Indeed, the Baquirans had never borrowed money from, or even met, the Mahlums. The Mahlums likewise acknowledged that although they had received some payments from Zarrell Williams, which they thought related to the second deed of trust, they had never received any payments from the Baquirans.
It was later discovered that the second deed of trust was procured through the fraud or forgery of the Baquirans' former mortgage broker, Williams. Williams had brokered a refinance of the Baquirans' first deed of trust in April 1997, just prior to the date appearing on the second deed of trust naming the Mahlums as beneficiaries. Although the Baquirans admitted their signatures on the second deed of trust appeared to be authentic, they contended they were deceived because the document was materially altered and they never intended to sign a deed of trust in favor of the Mahlums. It was the Baquirans' theory that during the refinance transaction in 1997, Williams, by means of fraud and deceit, had them execute documents not related to or utilized in the refinance, which documents Williams later altered to fraudulently obtain a loan from the Mahlums in the Baquirans' name, and then Williams converted the proceeds of that loan for his own use. James A. Blanco, a handwriting and document expert retained by respondents, examined the second deed of trust and concluded that it had been materially altered. At various places, information had been covered over with "whiteout" and replaced by other information. For example, under the beneficiary section of the document, two names were covered over using a masking fluid and replaced with the names of Steven and Carrie Mahlum.
On May 25, 2005, the Baquirans, represented by Mr. Bruce, filed a complaint to quiet title against, among others, appellant La Jolla Group II. In that complaint, the Baquirans alleged the disputed second deed of trust was "a forgery and/or a fraudulently obtained document that was created by Williams," and they sought (1) to cancel the purported foreclosure sale based upon the forged deed of trust and (2) to restore possession and title of the Property to the Baquirans. On June 14, 2005, the Baquirans recorded a notice of pending action (the lis pendens) concerning the Property. The pending action specified in the lis pendens was the Baquirans' complaint to quiet title. The lis pendens was signed by Mr. Bruce.
On December 16, 2005, appellant La Jolla Group II filed a motion to expunge the lis pendens. On February 2, 2006, the motion proceeded to hearing. The Honorable Judge Alan M. Simpson considered the papers, evidence and arguments presented by the parties and declined to expunge the lis pendens. As part of his written order denying the motion, Judge Simpson found that the Baquirans "ha[d] shown the probable validity of their claim." The written order further explained: "The Rebecca Baquiran declaration, combined with the evidence of alteration of the deed of trust pursuant to which the property was sold, support [the Baquirans'] theory that the deed of trust was a forgery."
Meanwhile, criminal charges were filed by the Fresno County District Attorney against Williams for multiple acts of theft, forgery and similar crimes against several victims. As to Williams's conduct perpetrated against the Baquirans, the consolidated information specifically charged Williams with four distinct crimes: grand theft of money, forgery of a deed of trust, knowingly performing a notarial act on a false or forged trust deed, and procuring or offering a false or forged instrument (deed of trust) for filing or recording. The consolidated information set forth the following facts in
On September 13, 2006, the jury found Williams guilty as charged on each of the counts relating to the Property, including forgery of the deed of trust, knowingly performing a notarial act on a false or forged trust deed, and procuring or offering a false or forged deed of trust for filing or recording. Williams was also convicted on all but one of the other crimes charged against him that involved other defrauded victims. He was sentenced to serve three years four months in prison.
On July 6, 2009, the Baquirans recorded a notice of withdrawal of lis pendens. According to Mr. Bruce, the lis pendens was withdrawn as part of a negotiated settlement reached between the Baquirans, the Mahlums and All-Cal Foreclosure Services, Inc. The Mahlums and All-Cal Foreclosure Services, Inc., were additional defendants in the quiet title action.
On June 29, 2010, appellants filed their complaint for slander of title against respondents. The complaint for slander of title alleged that the recording of the lis pendens was not privileged and wrongfully prevented appellants from being able to sell the Property from June 2005 to July 2009, resulting in damages to appellants. Allegedly, the Baquirans' admission that their signatures on the second deed of trust were authentic established that there was no justifiable basis for alleging the second deed of trust was a forgery or for seeking to invalidate the foreclosure sale. Thus, according to
On August 6, 2010, respondents moved to strike appellants' slander of title complaint pursuant to section 425.16 (the "anti-SLAPP" statute) on the grounds that (1) recording the lis pendens was a protected activity under the statute (see § 425.16, subd. (e)) and (2) appellants could not establish a probability of prevailing on the slander of title claim (§ 425.16, subd. (b)(1)). In their opposition, appellants conceded that the filing of the lis pendens was a protected activity under the statute. Therefore, the focus of the motion was on the second step or prong of the analysis under section 425.16 — that is, whether appellants could show a probability of prevailing on the merits of their complaint for slander of title.
After considering the evidence and arguments presented by the parties, the trial court found that the disputed deed of trust was a forgery since it had been materially altered by Williams. Therefore, it was "void" and not merely voidable; and, as a consequence, it could not convey title — not even to a good faith purchaser at a foreclosure sale. The trial court further held that under the circumstances, the litigation privilege of Civil Code section 47(b) was applicable to the recording of the lis pendens. For these reasons, the trial court concluded appellants did not have a probability of prevailing and, therefore, the special motion to strike was granted.
Appellants' notice of appeal followed.
We review de novo the trial court's ruling on an anti-SLAPP motion. (Flatley v. Mauro (2006) 39 Cal.4th 299, 325 [46 Cal.Rptr.3d 606, 139 P.3d 2].) "Resolving the merits of a section 425.16 motion involves a two-part analysis, concentrating initially on whether the challenged cause of action arises from protected activity within the meaning of the statute and, if it does, proceeding secondly to whether the plaintiff can establish a probability of prevailing on the merits. [Citation.]" (Overstock.com, Inc. v. Gradient Analytics, Inc. (2007) 151 Cal.App.4th 688, 699 [61 Cal.Rptr.3d 29] (Overstock.com).) In our de novo review, "`[w]e consider "the pleadings, and supporting and opposing affidavits ... upon which the liability or defense is based." (§ 425.16, subd. (b)(2).) However, we neither "weigh credibility [nor] compare the weight of the evidence. Rather, [we] accept as true the evidence
Under the first step of the analysis under section 425.16, respondents must make a threshold showing that the challenged cause of action arose from protected activity within the meaning of the statute. (§ 425.16, subd. (b)(1); Equilon Enterprises, supra, 29 Cal.4th at p. 67; Overstock.com, supra, 151 Cal.App.4th at p. 699.) Here, the complaint for slander of title was premised on a single activity: the recording of the lis pendens. Unquestionably, the recording of the lis pendens constituted a written statement made in connection with issues under consideration in a judicial proceeding — that is, the underlying quiet title action. (§ 425.16, subd. (e).)
We now turn to the heart of this appeal, which is the second step of the statutory analysis. In response to the anti-SLAPP motion, once respondents made their initial threshold showing, the burden shifted to appellants to demonstrate a probability of prevailing on their claim. (§ 425.16, subd. (b)(1); Park 100 Investment Group II, LLC v. Ryan (2009) 180 Cal.App.4th 795, 805 [103 Cal.Rptr.3d 218].) That meant appellants had to state and substantiate a legally sufficient cause of action for slander of title. (Rusheen v. Cohen, supra, 37 Cal.4th at p. 1056.) As noted above, we consider (but we do not weigh) the evidence presented by both sides, and we may decide that respondents' evidence defeats appellants' showing as a matter of law, "`such as by establishing a defense or the absence of a necessary element.' [Citation.]" (Carver v. Bonds, supra, 135 Cal.App.4th at p. 344.)
"The usual formulation is that the privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action. [Citations.]" (Silberg v. Anderson, supra, 50 Cal.3d at p. 212.) "It is not limited to statements made during a trial or other proceedings, but may extend to steps taken prior thereto, or afterwards. [Citation.]" (Rusheen v. Cohen, supra, 37 Cal.4th at p. 1057.) It applies to "any publication required or permitted by law in the course of a judicial proceeding to achieve the objects of the litigation, even though the publication is made outside the courtroom and no function of the court or its officers is involved." (Silberg v. Anderson, supra, at p. 212.)
Previously, the absolute privilege of Civil Code section 47(b) has been broadly applied to the recording of a lis pendens. (Albertson v. Raboff (1956) 46 Cal.2d 375, 379 [295 P.2d 405] (Albertson).) "If the publication has a reasonable relation to the action and is permitted by law, the absolute privilege attaches. [Citations.] It therefore attaches to the recordation of a notice of lis pendens, for such a publication is permitted by law, and like other documents that may be filed in an action, it has a reasonable relation thereto and it is immaterial that it is recorded with the county recorder instead of being filed with the county clerk." (Id. at p. 381.)
Here, the subject lis pendens expressly identified the Baquirans' previously filed action — namely, the Baquirans' complaint to quiet title. In addition, that action was clearly one that affected title or right to possession of the Property, since it sought to quiet title to the Property through cancellation of the
Appellants nevertheless contend the privilege of Civil Code section 47(b) does not apply to the lis pendens in this case. They argue that because the Baquirans' complaint to quiet title lacked evidentiary merit to the extent the facts showed the second deed of trust was merely "voidable" rather than void, the privilege did not attach. In so arguing, appellants take the position that the privilege only applies to a recorded lis pendens if it is shown that the underlying action has evidentiary merit. In support of that proposition, appellants rely on language from Palmer, supra, 109 Cal.App.4th 1367, a prior decision of this court. We now consider that decision at length.
In Palmer, the plaintiffs acquired ownership of a house in Bakersfield by purchasing it at a sheriff's sale that took place to satisfy a judgment lien in a creditor's collection action. Later, the former owners filed a bankruptcy action and also filed an appeal in the collection action. In connection with these court filings, the former owners recorded a lis pendens that effectively prevented the plaintiffs from being able to sell or refinance the property. (Palmer, supra, 109 Cal.App.4th at pp. 1370-1374.) The plaintiffs then sued the former owners for slander of title, asserting that the actions brought by the former owners were not the type of proceedings for which it was appropriate to file a lis pendens. (Id. at p. 1381.) Palmer agreed with the plaintiffs' theory, holding that the privilege of Civil Code section 47(b) did not apply to the lis pendens in question, since the underlying collection and bankruptcy actions filed by the former owners did not allege a real property claim. (Palmer, supra, at p. 1381.) On that record, the holding in Palmer was correct.
The language relied on herein by appellants came at the end of Palmer's discussion of developments in the law. Palmer summarized the revisions enacted in 1992 to the lis pendens statutes, in which former sections 409 to 409.9 were repealed and replaced by sections 405 to 405.61. (Palmer, supra, 109 Cal.App.4th at pp. 1377-1378.) Palmer noted that under the new statutory scheme, a motion to expunge a lis pendens could be based not only on a failure to plead a real property claim (§ 405.31), but also on a failure of the claimant to establish by a preponderance of the evidence the probable
Palmer observed that in the same year that these revisions to the lis pendens statutes took place (1992), the Legislature also amended section 47 of the Civil Code to add former subdivision (b)(3), now subdivision (b)(4), which "`partially abrogated'" the holding of Albertson that recording a notice of lis pendens is absolutely privileged. (Palmer, supra, 109 Cal.App.4th at pp. 1378-1379.) After quoting the language of Civil Code section 47(b)(4), Palmer concluded its summary of the lis pendens statutes and Civil Code section 47(b)(4) with the following statement: "Therefore, if the pleading filed by the claimant in the underlying action does not allege a real property claim, or the alleged claim lacks evidentiary merit, the lis pendens, in addition to being subject to expungement, is not privileged. It follows the lis pendens in that situation may be the basis for an action for slander of title." (Palmer, supra, at p. 1380, italics added.)
Appellants rely on the above quoted language in Palmer, supra, 109 Cal.App.4th 1367 to support their position that the litigation privilege does not apply to a lis pendens if the underlying action is lacking in evidentiary merit. Respondents counter that Civil Code section 47(b)(4) contains no evidentiary merit exception and they argue it would be improper to insert such an exception into the statute. In this regard, respondents argue that the subject language in Palmer, to the extent it added an evidentiary test to the privilege statute, is not a correct statement of the law. We agree with respondents.
In Alpha & Omega, supra, 200 Cal.App.4th 656, the Fourth District Court of Appeal recently examined Civil Code section 47(b)(4) and concluded there is no "`lack of evidentiary merit exception'" under the statute. (Alpha & Omega, supra, at p. 667.) There, as in our case, a party suing for slander of title had argued — based on the language in Palmer, supra, 109 Cal.App.4th 1367 — that the privilege did not attach if the underlying real property claim lacked evidentiary merit. (Alpha & Omega, supra, at p. 666.) The Court of Appeal explained its rejection of that interpretation of the statutory privilege: "We reject Alpha's interpretation of subdivision (b)(4) of Civil Code section 47. In discerning the Legislature's intent, we look to the words of the statute,
Civil Code section 47(b)(4) clearly describes the conditions for application of the privilege to a recorded lis pendens as follows: "A recorded lis pendens is not a privileged publication unless it identifies an action previously filed with a court of competent jurisdiction which affects the title or right of possession of real property, as authorized or required by law." (Civ. Code, § 47(b)(4).) Those conditions are (1) the lis pendens must identify a previously filed action and (2) the previously filed action must be one that affects title or right of possession of real property. We decline to add a third requirement that there must also be evidentiary merit.
Moreover, we believe that if the Legislature had intended to erect an evidentiary hurdle or create an exception to the privilege based on lack of evidentiary merit, it would have said so. Since the Legislature did not do so, we are not at liberty to insert what has been omitted. For these reasons, we reject appellants' proposition that the availability of the litigation privilege to a recorded lis pendens depends upon whether the claimant is able to make a certain evidentiary showing of merit to support the real property claim. On this issue, the dicta in Palmer, supra, 109 Cal.App.4th 1367, that is relied upon by appellants was in error and we decline to follow it.
In conclusion, we hold that the absolute privilege of Civil Code section 47(b) applied to the recorded lis pendens in this case and, therefore, appellants cannot prevail on their complaint for slander of title as a matter of law. Accordingly, the trial court correctly granted respondents' special motion to strike.
The second reason the trial court's anti-SLAPP ruling was correct is based on the evidence of forgery. Appellants argue that since the Baquirans admitted they may have signed the second deed of trust, it was merely voidable, not void. Respondents contend that since the second deed of trust was materially altered, it was a forgery and therefore void. As we briefly explain, respondents are correct.
Here, respondents have produced uncontradicted evidence to establish that the second deed of trust was materially altered after it was signed. The Baquirans were apparently induced to sign a deed of trust in favor of Allstar Financial Services and Ronna L. Williams, which deed of trust was later altered by Zarrell Williams to create something materially different — a deed of trust in favor of the Mahlums. Existing names and other information were covered over by Williams with masking fluid and the Mahlums' names as beneficiaries were fraudulently inserted to replace what was there before. The second deed of trust was altered by Williams in an attempt to fraudulently support an unrelated loan or debt he had with the Mahlums. The Baquirans never met the Mahlums, never sought a loan from the Mahlums and never borrowed any money from them. In short, the Baquirans never contemplated, never authorized and never signed a deed of trust in favor of the Mahlums. Respondents contend that this evidence conclusively shows that the second deed of trust in favor of the Mahlums was a forgery. We agree. Since the second deed of trust was materially altered after it was signed, it was a forgery and was therefore void. (Montgomery v. Bank of America, supra, 85 Cal.App.2d at p. 563 [materially altered deed was void].)
Since the second deed of trust was a forgery and was void, appellants received no title by it.
The order granting respondents' special motion to strike is affirmed. Costs on appeal are awarded to respondents.
Wiseman, Acting P. J., and Cornell, J., concurred.