Olivares v. Pineda – Litigation Privilege Only Counts If Your Math Checks Out, and Rent Demand Without Eviction May Be Actionable

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In Olivares v. Pineda, attorneys for a landlord appealed from the denial of their anti-SLAPP motion. The attorneys moved to strike a tenant’s lawsuit for wrongful eviction and misuse of a security deposit, directed at a failed first eviction lawsuit followed by a corrected three-day notice that never resulted in a second.

For the first rent notice, the owner demanded rent due in the amount of $2,750, while the tenants insisted that he had overcharged them $3,350 over the course of their tenancy. (Presumably, they were claiming an offset.) They tendered the rent due for the current month ($2,000), which the landlord rejected as a non-conforming payment before filing an unlawful detainer lawsuit.

During that lawsuit, the landlord provided a rent ledger with inconsistent information about deposits and testified that he was trying to sell the property vacant. The landlord ended up dismissing the lawsuit but served a new three-day notice the same day.

A few weeks later, the tenants filed a lawsuit against both the landlord and his attorney, alleging, among other things, that “the notice was designed to trick them into either paying an excessive amount of rent or vacating the premises, and there was “no good faith contemplation of litigation, and, in fact, Defendants never filed an unlawful detainer based upon the October 2 Notice prior to it being superseded’ by a subsequent three-day notice”. They also alleged that the landlord violated state law governing security deposits.

The attorney filed an anti-SLAPP motion, arguing that the tenants’ claims arose from protected activity because they were based on the unlawful detainer and actions that were “requisite precursors” to it. The attorney argued that the voluntary dismissal was not a termination in the tenants’ favor because he relied on information provided by the landlord, and the original notice allegedly understated the amount of rent due.

In the two prong anti-SLAPP analysis, the tenants did not dispute that the claims for wrongful eviction and malicious prosecution arose from protected activity for prong one (as they must), but contended that the claim related to misapplication of the security deposit did not. The court agreed, noting that the “principal thrust of the claim is the application of plaintiffs’ security deposit toward the payment of rent when they were not in default. Misuse of a security deposit is not an act in furtherance of the attorney defendants’ rights of free speech or petition, nor is it a communication preparatory to or in anticipation of litigation.”

In prong two, the burden shifted to the tenants to establish that they were likely to prevail on the wrongful eviction and malicious prosecution claims. As for malicious prosecution, voluntary dismissal is presumed to be a favorable termination on the merits, unless proven otherwise (since a plaintiff does not generally abandon a meritorious action). A landlord cannot recover in an unlawful detainer based on a three-day notice that overstates the amount of rent due. The tenants produced evidence that the landlord failed to credit several thousand dollars of payments, and this permitted the inference that no rent was owed when the first notice was served.

As for wrongful eviction, the claims were based on the later notice (upon which the landlord never filed an unlawful detainer). The court noted that “A prelitigation communications such as this is privileged only when it relates to litigation that is contemplated in good faith and under serious consideration”.

“Whether a prelitigation communication relates to litigation that is contemplated in good faith and under serious consideration is an issue of fact. The failure to file a threatened action is one factor supporting a contrary inference of good faith and serious contemplation of future litigation.” The fact that the landlord did not file an unlawful detainer on the second notice created an inference that the landlord was using it tactically rather than for a lawsuit. The attorney defendant argued that this was explained by the plaintiffs creating a conflict of interest between him and the landlord (by suing both for malicious prosecution), but the court concluded that a finder of fact could reasonably reject that explanation, which was enough to defeat the motion.