Court of Appeal Rejects Tenant’s Claim that Landlord’s Unlawful Detainer Complaint Arose Out of Tenant’s Exercise of Protected Activity

In Olive Properties v. Coolwaters Enterprises, Inc., the Court of Appeal rejected the tenant’s claim that the landlord’s filing of an unlawful detainer action several weeks after the tenant filed suit for breach of the lease covenants was retaliatory and subject to strike. Coolwaters Enterprises leased a shopping center space from Olive Properties. In October 2014, the tenant filed a complaint against the landlord for breach of the covenant of quiet enjoyment and interference with prospective economic relations. The tenant claimed that the landlord leased a neighboring space to an Italian restaurant and that because of the restaurant’s customers, the tenant’s customers could not patronize tenant’s business.

In November 2014, the landlord filed an unlawful detainer action against the tenant for unpaid rent and past due CAM charges. The tenant responded with a special motion to strike the unlawful detainer complaint. The tenant asserted that its lawsuit against the landlord was the basis for the unlawful detainer action and claimed that the landlord brought the action because the tenant “has exercised its rights to seek redress for a wrong in the court system and use its right of freedom of speech.” In its opposition, the landlord explained that the unlawful detainer action was the result of the tenant’s failure to pay rent, not the tenant’s lawsuit. The court in the unlawful detainer action took judicial notice of the tenant’s earlier complaint, but rejected the tenant’s argument that the unlawful detainer complaint was retaliatory. The court noted that the fact the tenant filed suit first, did not necessarily mean that the landlord’s later unlawful detainer action was retaliatory. As such, the court denied the motion to strike. The tenant appealed. On appeal, the Court discussed the special motion to strike procedure. It explained that with a special motion to strike, the defendant must make a prima facie showing that the plaintiff’s claims arise from an act by the defendant in furtherance of defendant’s right of petition or free speech in connection with a public issue. If the defendant makes this showing, the cause of action will be stricken unless the plaintiff can establish a probability that the plaintiff will prevail. With respect to the first issue, the Court of Appeal noted that the gravamen of the unlawful detainer complaint was tenant’s failure to pay rent and that the tenant’s failure to pay rent was not an act in furtherance of its right of petition or free speech. The Court agreed with the reasoning of the lower court that the fact the tenant filed suit first was not determinative. Otherwise, a tenant could stall an anticipated eviction by filing a preemptive complaint against the landlord and then filing a special motion to strike in response to an unlawful detainer action. Thus, the trial court properly denied the motion to strike.

Hannah M. Shafsky, Attorney, hms@sbj-law.com