Defendants and appellants City of Lancaster, R. Rex Parris, Ronald D. Smith, Ken Mann, Sherry Marquez, Ed Sileo and Mark V. Bozigian (collectively, the defendants or the City) appeal an order denying their special motion to strike the complaint filed by plaintiff and respondent Mongols Nation Motorcycle Club, Inc. (Mongols Inc.). (Code Civ. Proc., § 425.16.)
On June 25, 2010, Mongols Inc., which is the sole plaintiff, commenced this action, naming the following defendants: the City; Parris, mayor and member of the City Council; Smith, vice-mayor and member of the City Council; Mann, Marquez and Sileo, members of the City Council; and Bozigian, City Manager. The complaint pled in pertinent part: Mongols Inc., a California corporation, is a social and fraternal organization with emphasis on riding motorcycles in Southern California. Mongols Inc. planned to hold its annual convention during the weekend of July 17 to 19, 2009, in Lancaster. Mongols Inc. secured lodging for its convention by entering into a contract with the Desert Inn Hotel (the Hotel) in Lancaster. Mongols Inc. paid the Hotel about $14,000 to reserve over 100 rooms, and an additional $2,500 for a food and beverage guarantee.
Three days before the convention, on July 14, 2009, Parris stated at a City Council meeting that city officials would do whatever it takes to prevent Mongols Inc. from staying in Lancaster that weekend. On July 15, the various defendants met with the owner of the Hotel and told the Hotel the City would close it down unless the Hotel refused to accommodate Mongols Inc.; the City's pretext for the threatened closure was that the Hotel owed the City back taxes.
On July 15, 2009, Parris stated to a local television station that "The Mongols are domestic terrorists, and we will treat them accordingly"; the Hotel "will be closed forever tomorrow"; and "I don't care about the civil rights of gang members." He also publicly stated: "We will direct law enforcement to incarcerate you [(the Mongols)], we will not tolerate your presence. Anybody wearing Mongol colors will serve as a beacon for law enforcement."
Based on the above, Mongols Inc. pled the following causes of action: (1) interference with exercise of civil rights (Civ. Code, § 52.1); (2) deprivation of civil rights under color of state law (42 U.S.C. § 1983); (3) interference with civil rights (Civ. Code, § 51.7); (4) intentional interference with contractual relationship; (5) negligent interference with contractual relationship; (6) intentional infliction of emotional distress (IIED); (7) libel per se; and (8) slander per se.
Defendants demurred to the complaint in its entirety, and concurrently filed a motion to strike various portions of the complaint, including punitive damages allegations.
In addition, defendants filed a special motion to strike the complaint pursuant to section 425.16. The moving papers asserted: the defendants were entitled to anti-SLAPP protection because Mongols Inc., a notorious motorcycle gang, was an issue of public interest and its intention to bring hundreds of members to Lancaster for a weekend convention was an issue of intense concern to the City, its officials and its inhabitants.
The moving papers further argued Mongols Inc. could not carry its burden to establish a reasonable probability of prevailing on the merits of its complaint. Movants contended, inter alia: the complaint was legally insufficient; Mongols Inc. lacked standing to press any of the claims raised in the complaint; numerous immunities and privileges barred the claims made in the complaint; the alleged statements constituted nonactionable opinion and were protected by absolute privilege; a corporation cannot recover for mental suffering, so as to bar the IIED claim; there was no allegation that Mongols Inc.'s pecuniary interests were harmed by any defamatory statements and Mongols Inc. could not plead a defamation claim on behalf of its members; and the closing of the Hotel was well within the City's police power, which closed the Hotel due to missing smoke alarms and other code violations.
Mongols Inc. denied its complaint arose out of a public issue; rather, there was no public issue until defendants broadcast their intention to violate
The sole evidence which Mongols Inc. submitted in its opposition papers was the six-page declaration of David Santillan, president of Mongols Inc.
On July 15, Parris told a local television station, "The Mongols are domestic terrorists, and we will treat them accordingly"; the Hotel "will be closed forever tomorrow"; and "I don't care about the civil rights of gang members." On the same day, Parris also stated publicly: "We will direct law enforcement to incarcerate you [(the Mongols)], we will not tolerate your presence. Anybody wearing Mongol colors will serve as a beacon for law enforcement."
On July 16, 2009, various defendants and individuals acting on their behalf erected a chain-link fence around the Hotel and forcibly shut it down.
On January 4, 2011, the various motions came on for hearing.
The trial court denied the City's special motion to strike the complaint under section 425.16.
With respect to the special motion to strike, the trial court ruled in essence: the defendants had not met their burden of establishing the complaint of Mongols Inc. fell within the ambit of section 425.16 so as to be subject to early scrutiny by way of a special motion to strike. Further, even assuming the complaint fell within the anti-SLAPP statute, plaintiff Mongols Inc. established a probability of success on the merits of all its claims except the fifth cause of action for negligent interference with contractual relationship.
The City filed a timely notice of appeal from the order denying the special motion to strike.
On April 10, 2012, following oral argument in this matter, the matter was submitted.
On April 20, 2012, this court notified the parties it had taken judicial notice of the records of the California Secretary of State (Evid. Code, §§ 452, subd. (c), 459), which records indicated Mongols Inc. (entity No. C3181302) is a dissolved corporation.
On May 28, 2012, this court issued an order to show cause and placed the matter back on calendar, with the essential questions being "(1) whether the City's appeal from the SLAPP ruling should be dismissed as moot and (2) whether the matter should be remanded to the trial court with directions to enter an order dismissing Mongols's lawsuit."
The parties filed supplemental letter briefs prior to the hearing on the order to show cause, which was scheduled for July 17, 2012.
In reliance on Corporations Code section 2010, subdivisions (a) and (b), Mongols Inc. contends the corporate dissolution has no impact on this litigation because a dissolved corporation continues to exist for the purpose of winding up its affairs, and no action or proceeding to which a corporation is a party abates by reason of its dissolution.
This court has before it a copy of the certificate of dissolution which Mongols Inc. filed with the Secretary of State on September 19, 2011.
In dissolving, Mongols Inc. was taking irreconcilable positions — it sought to continue prosecuting its complaint for damages against the City, while seeking to avoid the prospect of having to pay the City's attorney fees and costs in the event the City were to obtain an appellate reversal of the order denying the special motion to strike. (§ 425.16, subd. (c)(1).)
In the certificate of dissolution, Mongols Inc. represented to the California Secretary of State that the "corporation has been completely wound up." (Italics added.) The certificate of dissolution, in stating the "corporation has been completely wound up," contradicts any claim that the instant lawsuit is part of a plan of winding up and dissolving. The certificate of dissolution also stated the corporation "never acquired any known assets" and that the corporation "never incurred any known debts or liabilities."
In sum, because the corporation admittedly was completely wound up as of the dissolution date of September 19, 2011, the continued prosecution of the instant litigation cannot be deemed part of the winding up process of Mongols Inc.
The City's appeal from the order denying the special motion to strike is dismissed as moot. The matter is remanded to the trial court with directions to enter an order dismissing Mongols Inc.'s action in its entirety. The parties shall bear their respective costs on appeal.
Croskey, J., and Kitching, J., concurred.
