Copenbarger v. Morris Cerullo World Evangelism CA4/3

215 Cal. App. 4th 1237, 156 Cal. Rptr. 3d 70, 2013 WL 1809626, 2013 Cal. App. LEXIS 345
CourtCalifornia Court of Appeal
DecidedApril 3, 2013
DocketG046273
StatusUnpublished
Cited by28 cases

This text of 215 Cal. App. 4th 1237 (Copenbarger v. Morris Cerullo World Evangelism CA4/3) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Copenbarger v. Morris Cerullo World Evangelism CA4/3, 215 Cal. App. 4th 1237, 156 Cal. Rptr. 3d 70, 2013 WL 1809626, 2013 Cal. App. LEXIS 345 (Cal. Ct. App. 2013).

Opinion

Opinion

FYBEL, J.

Introduction

Paul D. Copenbarger, acting individually and derivatively on behalf of Newport Harbor Offices & Marina, LLC (NHOM), appeals from the order *1240 granting the special motion to strike his complaint pursuant to the antiSLAPP statute, Code of Civil Procedure section 425.16 (further code references are to the Code of Civil Procedure unless otherwise specified). 1

NHOM is the sublessee, and defendant/respondent Morris Cerullo World Evangelism (Cerullo) is the sublessor under a sub-ground lease of real property in Newport Beach. After Cerullo served NHOM with a three-day notice to cure or quit, Copenbarger filed a complaint asserting causes of action against Cerullo, Plaza del Sol Real Estate Trust (Plaza del Sol), Roger Artz, Dennis A. D’Alessio, and Vertical Media Group, Inc. (VMG) (collectively, Respondents), for declaratory relief, breach of contract, and intentional interference with contract. 2 Soon thereafter, Cerullo filed an unlawful detainer action against NHOM, and all Respondents brought their successful antiSLAPP motion to strike Copenbarger’s complaint.

The dispositive issue on appeal is whether the causes of action asserted in Copenbarger’s complaint arose out of Cerullo’s petitioning activity—protected under section 425.16, subdivision (b)(1)—of service of the three-day notice to cure or quit and the subsequent unlawful detainer action. We conclude that while the three-day notice might have triggered the complaint, the evidence in the record demonstrates the complaint was based on an underlying dispute over NHOM’s repair and maintenance obligations under the sublease and other unprotected activities. We therefore reverse the order granting the anti-SLAPP motion and the order awarding Respondents attorney fees.

Facts and Allegations of the Complaint

In 1963, John J. Jakosky and Katherine E Jakosky, as lessors, and F. David Young, as lessee, entered into a 55-year ground lease (the Ground Lease) of unimproved real property (the Property) in Newport Beach. In 1987, a multistory office building and marina were constructed on the Property by the lessee at the time. Under the terms of the Ground Lease, the lessee is the owner of any improvements constructed on the Property.

Sometime before December 2003, Cerullo became the lessee under the Ground Lease. In January 2004, Cerullo entered into a sub-ground lease of the Property (the Sublease) with NHOM for a term expiring in November 2018. NHOM had been formed by Kent A. McNaughton and Copenbarger, who are its members. By quitclaim deed, Cerullo conveyed title to the improvements on the Property to NHOM.

*1241 Also in January 2004, The Hazel I. Maag Trust (the Maag Trust) loaned $3 million to NHOM, which used the loan proceeds as partial payment to purchase the improvements on the Property and to acquire the Sublease. The loan was evidenced by a promissory note, which was secured by a first priority deed of trust on the improvements and the Sublease. At the same time, NHOM executed a promissory note in the. amount of $1.15 million in favor of Plaza del Sol. The promissory note to Plaza del Sol (the Plaza del Sol Note) was made to pay for the balance of the purchase price of the improvements and acquisition of the Sublease. The Plaza del Sol Note was secured by a second priority deed of trust (the Plaza del Sol Deed of Trust) on the improvements and the Sublease. Roger Artz was the trustee of Plaza del Sol and a vice-president of Cerallo.

In April 2010, Cerallo, Plaza del Sol, and the Maag Trust entered into an agreement (the Assignment for Collection), under the terms of which the Maag Trust agreed to make certain payments on the Plaza del Sol Note, to reimburse Plaza del Sol for real property taxes it paid on the improvements and the Property, and to make future payments to Plaza del Sol in the amount equal to payments due on the Plaza del Sol Note as such payments became due. Cerallo and Plaza del Sol agreed not to declare a default under the Sublease on account of then existing defaults so long as the Maag Trust made the agreed-upon payments.

D’Alessio was the president of VMG. The complaint alleged that sometime before April 22, 2011, D’Alessio approached Artz and proposed that he cause Cerallo and Plaza del Sol to breach the Ground Lease, the Sublease, and the Assignment for Collection, by declaring a default under the Sublease and terminating it. In appellant’s opening brief, Copenbarger asserts the purpose of D’Alessio’s proposal was “to obtain the Property and the improvements for himself at no cost, free of the Maag Trust Deed, so they could be acquired by D’Alessio and/or an entity controlled by him.” (Some capitalization omitted.) In response to D’Alessio’s proposal, Cerallo and Plaza del Sol entered into a management agreement with VMG and authorized D’Alessio to serve NHOM with default notices.

On April 22, 2011, VMG, on behalf of Cerallo, served NHOM with a 30-day notice (the 30-day notice) to cure certain maintenance and other related defaults under the Ground Lease and the Sublease. The 30-day notice asserted that NHOM breached paragraph 1.2 of the Sublease by failing to maintain and repair both the improvements and the Property. The 30-day notice stated: “[W]e have conducted a limited inspection of the Property and have discerned there to be a wholesale failure on the part of [NHOM] to perform even a modicum of maintenance or repair to any aspect of the building or any part of it, to include major structural components.” The *1242 30-day notice included a list of maintenance and repair issues and demanded that NHOM address them within 30 days.

By letter dated May 18, 2011, Copenbarger, on behalf of NHOM, responded to the 30-day notice. He asserted, among other things, the sublessee’s duty to maintain and repair under the Sublease did not extend to the improvements on the Property because the improvements were never subject to the Ground Lease and were conveyed by quitclaim deed to NHOM. By letter of the same date, Lloyd Copenbarger, as trustee of the Maag Trust, informed Artz and Plaza del Sol that the Maag Trust had requested that a property management company determine what repairs and maintenance needed to be made at the Property and arrange for those repairs and maintenance to be made, at the Maag Trust’s expense.

On May 26, 2011, VMG, on behalf of Cerullo, served a three-day notice to cure or quit (the three-day notice) on NHOM, based on “[y]our failure to cure the breaches of your Sub-Ground Lease . . . .” Five days later, Copenbarger, both in his individual capacity and derivatively on behalf of NHOM, filed this lawsuit. The complaint asserted three causes of action: (1) declaratory relief against Cerullo, Plaza del Sol, D’Alessio, and VMG; (2) breach of contract against Cerullo and Plaza del Sol; and (3) intentional interference with contract against Artz, D’Alessio, and VMG. In the declaratory relief cause of action, Copenbarger alleged a controversy exists among the parties “concerning their respective rights and duties arising under” the Ground Lease, the Sublease, the Plaza del Sol Deed of Trust, and the quitclaim deed.

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Cite This Page — Counsel Stack

Bluebook (online)
215 Cal. App. 4th 1237, 156 Cal. Rptr. 3d 70, 2013 WL 1809626, 2013 Cal. App. LEXIS 345, Counsel Stack Legal Research, https://law.counselstack.com/opinion/copenbarger-v-morris-cerullo-world-evangelism-ca43-calctapp-2013.