C.W. Howe Partners, Inc. v. Greg Mooradian

Greg Mooradian and Debra A. Mooradian appeal from the

order denying their special motion to strike under Code of Civil

Procedure section 425.161 directed to the cross-complaint filed

against them by C.W. Howe Partners Inc. and its principal Carl

William Howe (collectively the Howes) for express indemnity,

equitable indemnity, contribution and declaratory relief. The

trial court ruled none of the Howes’ claims arose from protected

speech or petitioning activity within the meaning of

section 425.16. Although a claim of loss or potential loss is an

essential prerequisite to any indemnification obligation, whether

express or equitable, the Howes’ cross-complaint did not arise

from the filing of the Mooradians’ lawsuit, but from the alleged

breach of their agreement to indemnify the Howes for any

liability attributable to information provided by the Mooradians

or the Mooradians’ representatives and the Mooradians’

underlying fault with regard to their decisionmaking.

Accordingly, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

1. The Mooradian Residence Construction Project

The Mooradians, a married couple, were interested in

remodeling or reconstructing their existing Los Angeles

residence. Although they had no prior design or construction

experience, they discovered in 2014 the work of Erla Dogg

Ingjaldsdottir and Tryggvi Thorsteinsson of Minarc, Inc. profiled

in a book featuring cutting-edge homes that were

environmentally conscious, energy efficient and built with major

components prefabricated offsite. The Mooradians were

1 Statutory references are to this code unless otherwise

stated.

3

particularly drawn to a house located in Venice, California, which

the book attributed to the following: “Minarc” as architect, “Core

Construction” as builder, “mnm.MOD” as manufacturer and

“C.W. Howe” as engineer. The home was constructed entirely

from factory-made parts using a “patented panelized system,”

with structural components of metal and panels containing

expanded polystyrene (EPS) insulation.

The Mooradians met with Ingjaldsdottir and

Thorsteinsson, who represented that MNM Mod Corp., also

known as MNMmod and mnmMOD, was one of their companies.

MNM would custom manufacture offsite, in accordance with a

design Ingjaldsdottir and Thorsteinsson created specifically for

the Mooradians, metal-framed EPS panels using the patented

panelized system. Thorsteinsson sent the Mooradians a proposed

agreement pursuant to which Minarc would provide design and

other services for the construction of a new single-family dwelling

at the site of the Mooradians’ existing residence.2

After the Mooradians signed the Minarc agreement,

Thorsteinsson advised hiring a structural engineer and

recommended Carl Howe. He explained Howe had worked with

Minarc on other residential projects. Howe provided a proposal

to Thorsteinsson and then, after being told the proposal was

2 Under the heading “Key Milestones,” the Minarc

agreement included the following provisions: “Zoning regulations

and codes studied”; “[d]rawings establishing all major elements

and outline specifications are prepared including renderings,

plans, elevation and sections of the building”; “[p]reparing Plans

and specification for construction,” but with “‘[e]ngineering by

others’”; “[m]eeting with local City planners”; “provide ready to

issue permit plans”; and “[p]rovide field observations throughout

the project to ensure compliance with the project documents.”

4

accepted, submitted an August 18, 2014 letter agreement

addressed to the Mooradians, printed on the letterhead of

C.W. Howe Partners and signed by Howe as its principal (the

Howe agreement).

2. The Agreement Between the Mooradians and C.W. Howe

Partners

Howe is a civil engineer licensed in California, and

C.W. Howe Partners is in the business of providing structural

design services for single-family homes and other building types.

Structural design typically entails designing the foundation and

structural framework for a building with specified materials to

allow the building to withstand a variety of forces.

The August 18, 2014 Howe agreement stated on the subject

line, “Contract for Structural Engineering Services: Mooradian

Residence – ‘MnM mod’ – Light Gage Steel Stud House, Green

Roof Deck, Concrete Wall Front Elevation Elements.”

3 The first

line of the agreement indicated the C.W. Howe Partners’s

engineering fee for the project was “[i]n accordance with our

review of drawings produced by your Minarc.” Howe understood

Minarc to be the designer of the Mooradian project.

Pursuant to the Howe agreement, the scope of services to

be provided by C.W. Howe Partners included preparing a

preliminary structural design, structural engineering

calculations and structural construction documents. The

agreement listed services that were specifically excluded from the

3 The Howe agreement also stated the Mooradian project

would “be a light gage ‘C’ – stud and joist platform-framed house

where possible and structural steel where required.” According

to Howe, the term “light gage” steel studs refers to studs of a

certain grade of steel.

5

work to be performed by C.W. Howe Partners, including permit

acquisition; construction means and methods or sequences;

design and detailing of any nonstructural element; and

coordination with architectural plans, which was instead to be

performed by the “Designer,” who was to be responsible for

coordination of structural plans with all other professional

disciplines.

Section 4 of the Howe agreement contained the heading

“Client’s Responsibilities,” which was underlined, capitalized and

in bold font. Section 4(a), titled “Information Provided by Client”

in bold font, stated, “Client or Client’s representative shall

provide Engineer with all necessary information for performance

of Engineer’s work on a timely basis. Engineer shall be entitled

to rely upon information provided by Client and Client’s

representative, and shall not be held responsible for accuracy or

completeness of such information; or omission of pertinent

information.”

Section 4(b), titled “Indemnity – Client Provided

Information” in bold font, provided, “Client agrees to indemnify,

defend and hold harmless Engineer, [its] principals, agents and

employees and subcontractors from and against all costs or

liability, including but not limited to attorney fees and expert fees

and costs; arising in whole or in part from errors, omissions or

inaccuracies in any Project related information or documents

provided by, or through Client, or any other person or entity,

acting on Client’s behalf; including but not limited to

recommendations as to the type of foundation by Client’s soils

engineer. Engineer has no duty to defend the Client or any party

claiming through the Client.”

6

Greg Mooradian signed the Howe agreement on August 18,

2014 on behalf of the Mooradians, the “Client.”

3. Construction of the New House

In the last quarter of 2014 the Mooradians’ existing house

was demolished to prepare for the construction of their new

residence. Ingjaldsdottir, Thorsteinsson, Minarc and the Howes

submitted architectural and structural drawings and

specifications for approval by various departments and divisions

of the City of Los Angeles, and the City issued a building permit

in March 2015.

In April 2016 Core Construction and Development Inc., the

general contractor the Mooradians hired at Ingjaldsdottir and

Thorsteinsson’s recommendation, discovered a permit for the roof

deck could not be obtained because the deck railing exceeded the

height limit of the applicable zoning ordinance. The Mooradians

then learned Ingjaldsdottir, Thorsteinsson and Minarc were not

California licensed architects and promptly terminated the

relationship. Claiming substantial construction errors, the

Mooradians also subsequently fired Core Construction and hired

a completion contractor to finish the work.

4. The Litigation

On May 26, 2017 the Mooradians filed a complaint and on

August 8, 2017 a first amended complaint against Ingjaldsdottir,

Thorsteinsson, Minarc, MNM, the Howes, Core Construction and

others. The operative first amended complaint generally alleged

the defendants participated in a joint enterprise designed to

facilitate a variety of unlawful practices, including the practice of

architecture by persons who were not licensed architects and the

manufacture, sale and installation of building materials without

necessary City approvals. In its factual background section it

7

also alleged deficiencies in the Howes’ civil engineering services

and failures in the Howes’ construction supervision.

Three causes of action—fraud, negligent breach of contract,

and restitution and injunctive relief for unfair business

practices—were asserted against the Howes. For the fraud cause

of action and, by its reference to the fraud allegations, the unfair

business practices cause of action, the Mooradians alleged the

Howes claimed in or about 2012 to have engineered the EPS

panels that have since been used in other residential structures

constructed by its coconspirators; knew Ingjaldsdottir,

Thorsteinsson, Minarc and MNM regularly incorporated into

their designs for residential steel-framed structures the MNMbranded C-stud framed EPS panels that were manufactured by

MNM offsite; and regularly served as the civil engineer for such

structures.

4 The Mooradians further alleged, to fraudulently

induce them to sign the Howe agreement and in furtherance of

the defendants’ conspiracy, the Howes intentionally suppressed

certain material facts that should have been disclosed, including

that Minarc was not a licensed architect; MNM did not have City

approval to manufacture the EPS panels offsite; and the EPS

4 Debra Mooradian’s February 21, 2018 declaration, which

was filed in support of the Mooradians’ special motion to strike,

included, among other exhibits, a March 2012 posting on the

website of C.W. Howe Partners referring to a “two story steel and

styrofoam kit-of-parts systems” it had engineered for “Minarc

Architects,” as well as an August 2012 email from Howe to

Thorsteinsson referring to the Howes “spending time, money, and

effort on developing the MnM System.”

8

panels included materials not approved for use in residential

construction within the City.5

On December 22, 2017 the Howes filed a cross-complaint

against the Mooradians for express indemnity, equitable

indemnity, contribution and declaratory relief. In its general

allegations the cross-complaint set forth verbatim sections 4(a)

and 4(b) of the Howe agreement and asserted the Howes’

structural design under the Howe agreement was to be based on

information and drawings provided by the Mooradians’ designer

Minarc; the Mooradians, or Minarc as the Mooradians’

representative, had provided the Howes an architectural design

using elements labeled “EPS Panels”; and the selection of

EPS panels had been solely by the Mooradians and/or Minarc. It

also referred to the Mooradians’ filing of their first amended

complaint, alleging the Mooradians in their first amended

complaint admitted the EPS panels had been specified in plans

prepared by Minarc, manufactured by an entity owned by

Minarc’s owners and featured as the subject of various

representations by the Minarc’s owners and of Minarc’s and

MNM’s website postings that the Mooradians had reviewed.

For the express indemnity claim, the Howes alleged the

Mooradians had agreed to the indemnification provisions of the

Howe agreement, which obligated them to indemnify, defend and

5 For the negligence-based cause of action, the Mooradians

alleged the Howes’ negligence included preparing structural

plans referring to Minarc as an architect, participating in the

delivery of unapproved EPS panels and failing to detect MNM

was not approved by the City to manufacture or assemble the

EPS panels offsite.

9

hold harmless the Howes for any liability arising from the use of

the EPS panels as asserted in the Mooradians’ first amended

complaint, but breached the agreement by failing and refusing to

comply with their indemnification obligations.

For the equitable indemnity claim, the Howes denied

liability for the events described in the Mooradians’ first

amended complaint arising from the Mooradians’ and/or Minarc’s

decision to use the EPS panels. The Howes claimed that the

Mooradians and/or Minarc were wholly or partially responsible

for any injuries arising from their decision to use the EPS panels

and that the Mooradians should be required to pay a share of any

liability imposed on the Howes in proportion to the Mooradians’

comparative negligence.

The contribution claim alleged the Howes were entitled to

contribution from the Mooradians because of any judgment

against Howe as a result of the Mooradians’ first amended

complaint. By their declaratory relief claim, the Howes sought a

declaration of the Mooradians’ obligation to indemnify the Howes,

their duty to pay the Howes’ costs of defense and their

comparative liability for any damages claimed in the first

amended complaint.

5. The Mooradians’ Special Motion To Strike

The Mooradians responded to the Howes’ cross-complaint

by filing a section 425.16 special motion to strike, which was

supported by the Mooradians’ declarations. In their moving

papers the Mooradians argued the Howes’ cross-claims arose

from the Mooradians’ acts in furtherance of their right of petition

within the meaning of section 425.16—specifically, from the filing

of the Mooradians’ complaint. The Mooradians also argued the

10

Howes could not establish a probability of prevailing on their

claims.

In their opposition the Howes disputed their cross-claims

arose from actions in furtherance of a right of petition.6 They

contended their cross-complaint did not allege the Mooradians’

wrongful act was the filing of the complaint, which constituted

arguably protected activity, but rather the breach of the

obligation to indemnify the Howes for any liability attributable to

information provided by the Mooradians or the Mooradians’

representatives.

In his declaration supporting the opposition Howe stated,

in preparing structural designs, C.W. Howe Partners relies on

information provided by others, including architects, designers

and other consultants, who are typically hired directly by the

property owner. Because the services of C.W. Howe Partners are

intertwined with services others provide, C.W. Howe Partners

typically includes the provisions set forth in sections 4(a) and 4(b)

of the Howe agreement. For the Mooradian residence,

C.W. Howe Partners based the structural design from the set of

plans by the Mooradians’ designers, with whom C.W. Howe

Partners did not have a contractual relationship. Howe further

explained C.W. Howe Partners had no role in the selection of the

insulation material, a nonstructural item, used in the Mooradian

project. Moreover, the decision whether to use framing

assemblies fabricated offsite or onsite pertains to means, methods

and sequences of construction excluded from the scope of work

under the Howe agreement.

6 The Howes’ opposition also disputed they could not

establish the probability of prevailing on their claims.

11

The trial court heard the Mooradians’ special motion to

strike on April 18, 2018. After taking the matter under

submission, the court later that same day denied the motion,

ruling the Mooradians had failed to establish the Howes’ crosscomplaint arose from an act in furtherance of the Mooradians’

right of petition or free speech. The court, however, denied the

Howes’ request for attorney fees, finding the arguments advanced

by the Mooradians “were not completely and totally without

merit.” The Mooradians filed a timely notice of appeal. (§ 904.1,

subd. (a)(13).)7

DISCUSSION

1. Section 425.16, the Anti-SLAPP Statute,

8 and the

“Arising From” Requirement

Section 425.16 provides, “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

Constitution or the California Constitution in connection with a

7 Although the Mooradians’ notice of appeal failed to specify

the date of the order being appealed, there is no question they

sought review of the April 18, 2018 order denying their special

motion to strike, which was the only appealable order included in

their designation of the record on appeal. (See Cal. Rules of

Court, rule 8.100(a)(2) [notice of appeal “must be liberally

construed”]; D’Avola v. Anderson (1996) 47 Cal.App.4th 358, 362

[reviewing court may consider the contents of the designation of

the record in determining whether a respondent has been misled

by the notice of appeal].) The Howes do not contend they were

prejudiced in any way by that omission.

8 SLAPP is an acronym for “strategic lawsuit against public

participation.” (City of Montebello v. Vasquez (2016) 1 Cal.5th

409, 413, fn. 2.)

12

public issue shall be subject to a special motion to strike, unless

the court determines that the plaintiff has established that there

is a probability that the plaintiff will prevail on the claim.”

(§ 425.16, subd. (b)(1).)

Pursuant to section 425.16, subdivision (e), an “‘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, (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, or (4) any 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.”

In ruling on a motion under section 425.16, the trial court

engages in a two-step process. “First, the defendant must

establish that the challenged claim arises from activity protected

by section 425.16. [Citation.] If the defendant makes the

required showing, the burden shifts to the plaintiff to

demonstrate the merit of the claim by establishing a probability

of success.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 384.) “Only a

cause of action that satisfies both prongs of the antiSLAPP statute—i.e., that arises from protected speech or

petitioning and lacks even minimal merit—is a SLAPP, subject to

being stricken under the statute.” (Navellier v. Sletten (2002)

13

29 Cal.4th 82, 89 (Navellier), italics omitted.) If the moving party

fails to demonstrate that any of the challenged claims for relief

arise from protected activity, the court properly denies the

motion to strike without addressing the second step (probability

of success). (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 80-

81; Trilogy at Glen Ivy Maintenance Assn. v Shea Homes, Inc.

(2015) 235 Cal.App.4th 361, 367.)

“A claim arises from protected activity when that activity

underlies or forms the basis for the claim.” (Park v. Board of

Trustees of California State University (2017) 2 Cal.5th 1057,

1062-1063 (Park).) Thus, “[t]he defendant’s first-step burden is to

identify the activity each challenged claim rests on and

demonstrate that that activity is protected by the anti-SLAPP

statute. A ‘claim may be struck only if the speech or petitioning

activity itself is the wrong complained of, and not just evidence of

liability or a step leading to some different act for which liability

is asserted.’” (Wilson v. Cable News Network, Inc. (2019)

7 Cal.5th 871, 884 (Wilson); accord, Park, at p. 1060.) “‘[T]he

mere fact that an action [or claim] was filed after protected

activity took place does not mean the action [or claim] arose from

that activity for the purposes of the anti-SLAPP statute.’” (Park,

at pp. 1062-1063; see Rand Resources, LLC v. City of Carson

(2019) 6 Cal.5th 610, 621 [“a claim does not ‘arise from’ protected

activity simply because it was filed after, or because of, protected

activity, or when protected activity merely provides evidentiary

support or context for the claim”].) “To determine whether a

claim arises from protected activity, courts must ‘consider the

elements of the challenged claim and what actions by the

defendant supply those elements and consequently form the basis

for liability.’” (Wilson, at p. 884; accord, Park, at p. 1063.)

14

We review de novo an order granting or denying a special

motion to strike under section 425.16 (Wilson, supra, 7 Cal.5th at

p. 884; Park, supra, 2 Cal.5th at p. 1067), considering the parties’

pleadings and affidavits describing the facts on which liability or

defenses are predicated. (§ 425.16, subd. (b)(2); see Navellier,

supra, 29 Cal.4th at p. 89; see also San Diegans for Open

Government v. San Diego State University Research Foundation

(2017) 13 Cal.App.5th 76, 94.)

2. The Howes’ Cross-complaint Does Not Arise from the

Mooradians’ Protected Petitioning Activity

The Howes’ causes of action for express and equitable

indemnity constitute the essence of their cross-complaint.9

“Express indemnity refers to an obligation that arises ‘“by virtue

of express contractual language establishing a duty in one party

to save another harmless upon the occurrence of specified

circumstances”’” and “is enforced in accordance with the terms of

the contracting parties’ agreement.” (Prince v. Pacific Gas &

9 In addition to their claims for express and equitable

indemnity, the Howes alleged causes of action for contribution

and declaratory relief. However, “the dichotomy between

[contribution and indemnity] is more formalistic than

substantive,” and “‘[[i]ndemnity] is only an extreme form of

contribution.’” (American Motorcycle Assn. v. Superior Court

(1978) 20 Cal.3d 578, 591 & fn. 3; see Prince v. Pacific Gas &

Electric Co. (2009) 45 Cal.4th 1151, 1162, fn. 7 [“[c]ontribution

and indemnity are related doctrines, but contribution

‘“presupposes a common liability which is shared by the joint

tortfeasors on a pro rata basis”’”].) As for the Howes’ request for

declaratory relief, the Mooradians acknowledge in their opening

brief that this claim “is predicated solely upon their claim for

indemnity and defense.”

15

Electric Co. (2009) 45 Cal.4th 1151, 1158 (Prince); see Valley

Crest Landscape Development, Inc. v. Mission Pools of Escondido,

Inc. (2015) 238 Cal.App.4th 468, 481 [applying four-year statute

of limitations for breach of written contract to express indemnity

claim because, by bringing claim for express indemnity under

subcontract, “Valley Crest was, in effect, suing . . . for breach of

contract”]; Ranchwood Communities Limited Partnership v. Jim

Beat Construction Co. (1996) 49 Cal.App.4th 1397, 1417 [“we

must treat the cross-complaints’ causes of action for express

indemnity as contract based”].) “[T]he elements of a cause of

action for breach of contract are (1) the existence of the contract,

(2) plaintiff’s performance or excuse for nonperformance,

(3) defendant’s breach, and (4) the resulting damages to the

plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th

811, 821; accord, Professional Collection Consultants v. Lujan

(2018) 23 Cal.App.5th 685, 690; see Four Star Electric, Inc. v.

F & H Construction (1992) 7 Cal.App.4th 1375, 1380 [“[a]n

indemnitee seeking to recover on an agreement for

indemnification must allege the parties’ contractual relationship,

the indemnitee’s performance of that portion of the contract

which gives rise to the indemnification claim, the facts showing a

loss within the meaning of the parties’ indemnification

agreement, and the amount of damages sustained”].)

Equitable indemnity, which “requires no contractual

relationship,” “‘is premised on a joint legal obligation to another

for damages’”; it is “subject to allocation of fault principles and

comparative equitable apportionment of loss.” (Prince, supra,

45 Cal.4th at p. 1158.) “‘The elements of a cause of action for

[equitable] indemnity are (1) a showing of fault on the part of the

indemnitor and (2) resulting damages to the indemnitee for

16

which the indemnitor is . . . equitably responsible.’” (Bailey v.

Safeway, Inc. (2011) 199 Cal.App.4th 206, 217.)

The Mooradians contend the existence of a claim of loss to

be indemnified is a necessary prerequisite to any indemnification

obligation and argue the filing of their first amended complaint

supplies an essential element of the Howes’ cross-claims for

indemnity. The element of “fault,” they contend, connotes

responsibility for a claim of loss; the element of “resulting

damages” refers to damages arising from a claim of loss. They

assert there would be no claim of loss without the filing of their

first amended complaint.

To be sure, a cause of action arising from the defendant’s

(or, as applicable here, cross-defendant’s) litigation activity

directly implicates the right to petition and is subject to a special

motion to strike. (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056

[“‘[a] cause of action “arising from” defendant’s litigation activity

may appropriately be the subject of a section 425.16 motion to

strike’”]; Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th

728, 741 [malicious prosecution action by its very nature arises

out of defendant’s constitutionally protected petitioning activity—

the underlying lawsuit]; see Navellier, supra, 29 Cal.4th at p. 90.)

But to satisfy the first prong, the Mooradians had to

establish the Howes’ causes of action “arise from” the

Mooradians’ litigation activity; and they misunderstand the

analysis employed to determine whether a claim arises from

protected conduct. The “elements” analysis as articulated by the

Supreme Court in Park, supra, 2 Cal.5th at page 1063 and

adopted in Wilson, supra, 7 Cal.5th at page 884 does not mean

any allegation of protected activity supporting an element of a

cause of action subjects that cause of action to a challenge under

17

section 425.16. Courts should only consider the elements of the

challenged cause of action as part of an analysis to determine

what actions by the defendant form the basis for liability. As

cautioned by the Park Court, in the first step of the anti-SLAPP

analysis, care must be taken “to respect the distinction between

activities that form the basis for a claim and those that merely

lead to the liability-creating activity or provide evidentiary

support for the claim.” (Park, at p. 1064.) As discussed, the

Supreme Court in both Park and Wilson made clear “the speech

or petitioning activity itself” must constitute “the wrong

complained of.” (Wilson, at p. 884; Park, at p. 1060.)

The filing of the Mooradians’ first amended complaint is

not the wrongful act forming the basis for the Mooradians’

liability as alleged in the Howes’ cross-claims. Rather, the

alleged wrongful act that forms the basis for the express

indemnity cause of action is the Mooradians’ failure to indemnify,

defend and hold harmless the Howes in breach of section 4(b) of

the Howe agreement, including to indemnify the Howes from any

liability arising from the use of the EPS panels selected by the

Mooradians or the Mooradians’ representative Minarc. Similarly,

the alleged wrongful act supporting the equitable indemnity

cause of action—the alleged “fault” for which they should be held

equitably responsible for any damages suffered by the Howes—is

the decision they or their representative Minarc made to use the

EPS panels.10

10 As the Mooradians indicate in their reply brief, the

Supreme Court in Baral v. Schnitt, supra, 1 Cal.5th at page 396

stated, “When relief is sought based on allegations of both

protected and unprotected activity, the unprotected activity is

disregarded.” The Howes’ cross-claims, however, do not allege

18

Navellier, supra, 29 Cal.4th 82 illustrates the difference.

In Navellier the Supreme Court held a claim for breach of a

release clause in a contract was subject to section 425.16 because

the alleged breach consisted of asserting claims in litigation (in a

counterclaim in a federal lawsuit that had been initiated prior to

the release agreement) that had purportedly been released under

the contract: “In alleging breach of contract, plaintiffs complain

about Sletten’s having filed counterclaims in the federal action.

Sletten, plaintiffs argue, ‘counterclaimed for damages to recover

money for the very claim he had agreed to release a year

earlier’ and ‘was sued for that act.’” (Navellier, at p. 90; see id. at

p. 89 [“[p]laintiffs . . . alleged that Sletten had committed breach

of contract by filing counterclaims in the federal action”].)

Similarly, in Moss Bros. Toy, Inc. v. Ruiz (2018)

27 Cal.App.5th 424 the petitioning activity itself constituted the

alleged breach. In that case an employer filed a breach of

contract action against an employee alleging the employee had

breached two arbitration agreements by failing to submit his

employment-related disputes to arbitration, instead filing a

putative class action complaint in superior court against the

employer. The trial court granted the employee’s special motion

to strike. (Id. at pp. 430-432.) In affirming, the court of appeal

relied, among other cases, on Vivian v. Labrucherie (2013)

214 Cal.App.4th 267, where a motion pursuant to section 425.16

successfully challenged a breach of contract action that had

alleged protected activity constituted the breach: “There, the

plaintiff’s breach of contract claims were based on the defendant’s

any part of the Mooradians’ breach or other wrongful conduct

includes the protected activity of filing their lawsuit.

19

protected activity of making statements to internal affairs

investigators and in family court papers . . . . Because the

plaintiff was seeking to impose liability on the defendant for her

acts of making protected statements, the plaintiff’s action was

based on protected activity.” (Moss Bros. Toy, at pp. 438-439.)

Unlike the plaintiffs in Navellier and Moss Bros. Toy, the Howes

did not allege in their cross-complaint that by filing their lawsuit

the Mooradians had breached the Howe agreement or otherwise

engaged in wrongful activity.

Neither Lennar Homes of California, Inc. v. Stephens

(2014) 232 Cal.App.4th 673 (Lennar Homes) nor the recent case

from Division Four of this court, Long Beach Unified School Dist.

v. Margaret Williams, LLC (Dec. 9, 2019, B290069)

__ Cal.App.5th __ [2019 Cal.App. Lexis 1228] (Williams), which

affirmed trial court orders granting special motions to strike first

party contractual indemnity causes of action, provides persuasive

support for the Mooradians’ motion.

In Lennar Homes defendants Stella Stephens and Timothy

and Melissa Young, a married couple, purchased homes from

builder Lennar Homes of California, Inc., entering into

agreements that required the homebuyers to indemnify and

defend Lennar from any costs and liabilities arising from claims

the homebuyers might make based on the builder’s nondisclosure

or incomplete disclosure of various items. Stella Stephens and

Timothy Young, but not Melissa Young, were named plaintiffs in

a federal class action lawsuit asserting claims of fraudulent

nondisclosure and misrepresentation against Lennar. After

dismissal of the federal action, Lennar sued all three homebuyers

for express contractual indemnity to recover its attorney fees and

costs in defending the federal action. The trial court granted the

20

homebuyers’ section 425.16 motion, and the court of appeal

affirmed. (Lennar Homes, supra, 232 Cal.App.4th at pp. 677-

679.) Significantly, however, Lennar did not dispute on appeal

that its cause of action for indemnity as asserted against

Stephens and Timothy Young arose from actions in furtherance

of their right to petition (id. at p. 680); Lennar argued Melissa

Young had failed to satisfy the first prong of the anti-SLAPP

analysis because, unlike her husband, she was not named as a

plaintiff in the federal action (ibid.).

11 Applying authority holding

that section 425.16 applies to one who did not personally engage

in protected petitioning activity but who provided support for

that activity, the appellate court concluded Timothy Young

effectively brought suit on behalf of both himself and his wife,

asserting rights belonging jointly to them, and the federal

litigation therefore constituted an act in furtherance of Melissa

Young’s right of petition, even though she was not named as a

plaintiff. (Lennar Homes, at pp. 681, 684.)

Selectively quoting from Navellier, supra, 29 Cal.4th 82,

Lennar Homes relied on a facile “but for” analysis to conclude

Lennar’s claim against Melissa Young arose from protected

activity because, but for the federal litigation, Lennar’s

indemnification claim would have no basis. (Lennar Homes,

11 Lennar contended the express indemnity cause of action

against Melissa Young did not arise from her own petitioning

activity. Because Melissa Young had agreed “‘to indemnify

Lennar for costs incurred in defending a meritless suit by a third

party (here Mr. Young),’” Lennar unsuccessfully attempted to

characterize its claim against Melissa Young as a

“‘straightforward third-party indemnity claim.’” (Lennar Homes,

supra, 232 Cal.App.4th at p. 684.)

21

supra, 232 Cal.App.4th at pp. 684-685.) The Lennar Homes

court, which decided the case several years before the Supreme

Court’s clarification of proper section 425.16 analysis in Wilson,

supra, 7 Cal.5th 871 and Park, supra, 2 Cal.5th 1057, did not

consider whether the wrongful act giving rise to an express

indemnity claim for purposes of the first prong of section 425.16

was the filing of the underlying action or the refusal to honor the

contractual indemnification obligation.

12

Williams, supra, ___ Cal.App.5th ___ involved a first party

contractual indemnity claim filed by the Long Beach Unified

School District as a cross-complaint in a lawsuit by Margaret

Williams and Margaret Williams, LLC alleging the District had

wrongfully terminated the LLC’s contract to perform construction

management and environmental compliance work for the District

and unlawfully caused Williams’s arsenic poisoning.13 (Id. at

p. ___ [2019 Cal.App. Lexis 1228, *1-2].) Relying on the

truncated first prong reasoning in Lennar Homes, the Williams

court concluded, “Here, the District’s cross-claims for defense and

12 As explained by Division One of the First District in Wong

v. Wong (Dec. 13, 2019, A154286) __ Cal.App.5th __ [2019

Cal.App. Lexis 1252, *13], which involved a third party

indemnity claim, “Lennar Homes was decided before Park and did

not employ Park’s elements-based analysis. The builder

effectively conceded that the husband and the other woman had

met their first-prong burden.”

13 In Williams the District’s cross-complaint included a breach

of contract cause of action; the LLC’s contract contained an

indemnity provision, which the District alleged the LLC breached

by failing to accept the District’s tenders of defense and

indemnity. (Williams, supra, __ Cal.App.5th __ [2019

Cal.App. Lexis 1228, *9-11].)

22

indemnity likewise would have no basis without the Underlying

Action in which it seeks to be defended and indemnified.” (Id. at

p. __ [2019 Cal.App. Lexis 1228, *17].) However, implicitly

recognizing the flaw inherent in utilizing a simple “but for”

analysis, rather than considering the elements of the challenged

claims to determine what actions form the basis for liability, as

required by Park, supra, 2 Cal.5th at page 1063, the Williams

court went on to conclude, even if the District’s cross-complaint

for indemnity did not arise from the underlying action, it

nonetheless arose from protected activity within the meaning of

section 425.16, subdivision (e)(4), because funding or refusing to

fund litigation (that is, refusing the District’s demand for a

defense and indemnification) constituted protected conduct in

furtherance of petitioning activity and Williams and her LLC’s

lawsuit involved an issue of public interest (allegations of an

environmental hazard at a construction site for a public school).

(Williams, at p. __ [2019 Cal.App. Lexis 1228, *18].) The

Mooradians do not, and cannot, assert that their refusal to honor

the Howes’ indemnity demand similarly implicates an issue of

public interest.

In sum, the trial court properly determined the Mooradians

failed to establish the Howes’ cross-claims arose from protected

activity.

The order denying the Mooradians’ special motion to strike is affirmed. The Howes are to recover their costs on appeal.