Adventure Church v. City of Fresno CA5

Filed 7/19/24 Adventure Church v. City of Fresno CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication

or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

ADVENTURE CHURCH, INC.,

F086428

Plaintiff and Appellant,

(Super. Ct. No. 22CECG04022)

v.

CITY OF FRESNO, OPINION

Defendant and Respondent.

APPEAL from an order of the Superior Court of Fresno County. Jeffrey Y.

Hamilton, Jr., Judge.

Lurie & Kramer, Barak Lurie and Luke Manzo for Plaintiff and Appellant.

Tucker Ellis, Matt J. Fletcher, Douglas A. Hedenkamp; Aleshire & Wynder and

Anthony R. Taylor for Defendant and Respondent City of Fresno.

-ooOoo-

Plaintiff Adventure Church, Inc. (Adventure Church or the church) sued defendant

City of Fresno (city) for, among other things, intentional interference with contractual

relationship (the interference claim). The city responded by filing an anti-SLAPP motion

pursuant to Code of Civil Procedure section 425.16,1 seeking to strike the interference

claim. The city contended its acts of alleged interference arose from protected activity

and the church could not establish a reasonable probability it would prevail on the claim

because (1) the claim was barred by the Government Claims Act (Gov. Code, § 900 et

seq.) and the church did not allege any statutory authority for municipal liability, (2) the

church did not have a valid contract as the contract expired on its own terms, was

rescinded by mutual mistake, was impossible to perform, and was cancelled by the

church, (3) the city did not intend to interfere with the contract, and (4) the city’s acts did

not cause a breach of the contract.

The trial court granted the motion to strike. The trial court found the interference

claim could not be based on any acts of alleged interference that occurred after March 31,

2021, because the contract expired on that date, and the claim based on acts that occurred

prior to that date arose from protected activity. The trial court further found the church

had not demonstrated a likelihood of prevailing on the merits as the church could not

demonstrate a valid contract after March 31, 2021, or a breach of that contract after that

date. Moreover, to the extent the claim was based on the acts that occurred prior to the

contract’s expiration, the claim was time-barred, and the city was immune from liability

because those acts involved planning level decisions by executive and legislative bodies

or their representatives or employees.

On appeal, the church contends the challenged conduct that forms the “gravamen”

of the interference claim is not subject to the anti-SLAPP statute because it is illegal

conduct. The church further contends it met its burden of demonstrating a likelihood of

1 A “SLAPP” is a strategic lawsuit against public participation and a special motion

to strike under Code of Civil Procedure section 425.16 is referred to as an anti-SLAPP

motion. (Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1007, fn. 1 (Bonni).)

Undesignated statutory references are to the Code of Civil Procedure.

2.

prevailing on the merits because: (1) the contract did not expire since the other party to

the contract waived the time for performance; (2) it could prove the elements of the

claim; (3) there was no mutual mistake or rescission of the contract; (4) the purported

rescission took place after the city interfered; (5) performance was not impossible; (6) the

city can be liable for the tortious interference of its council members; and (7) the church

complied with the Government Claims Act.

Based on our independent review of the record, we conclude: (1) the claimed acts

of interference were protected activity; and (2) the church failed to carry its burden of

showing a reasonable probability it would prevail on the interference claim because the

contract on which the claim is based expired by its terms on March 31, 2021, and the

other party to the contract did not waive the time for performance. We therefore affirm

the order.

FACTUAL AND PROCEDURAL BACKGROUND

In September 2020, Adventure Church and Tower Theater Productions for the

Performing Arts (Tower Theater Productions) executed a written purchase contract

whereby Adventure Church would acquire property located at 777-815 E. Olive Avenue

(the Tower property) in Fresno for $3.9 million (the purchase contract), which includes

the Tower Theatre and Sequoia Brewing, a stand-alone commercial building on a portion

of the larger parcel (the brewery premises).2 The purchase contract included a time is of

the essence provision and a requirement that all amendments be in a writing executed by

the buyer and seller. The purchase contract was amended on October 7, 2020, to include

2 Laurence Abbate, Tower Theater Properties’ chief financial officer, signed for

Tower Theater Productions. Although the purchase contract only lists Tower Theater

Productions as the selling party, the first amended complaint alleges that the seller was

both Tower Theater Productions for the Performing Arts and Tower Theater Productions,

which is a general partnership. We refer to the seller of the Tower property collectively

as the Tower owners.

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the adjacent parcel located on 1247 N. Wishon Avenue, on which sat a Me-N-Ed’s

restaurant, and to change the purchase price to $4.815 million.3

Prior to signing the purchase contract, Adventure Church was provided a copy of a

lease between J&A Mash & Barrel, LLC (J&A), doing business as Sequoia Brewing

Company, and Tower Theater Properties, Inc.,4 which included an option to purchase the

brewery premises if the landlord offered it for sale to an unrelated third party.5

Abbate, on behalf of Tower Theater Productions, represented in a property

information sheet provided in connection with the purchase contract that Tower Theater

Productions had “no actual knowledge of any encumbrances, covenants, conditions,

restrictions, easements, licenses, liens, charges or other matters which affect the title of

the Property,” and “no actual knowledge of any options to purchase, rights of first

refusal, rights of first offer or other similar agreements affecting the Property.”

The purchase contract was amended an additional seven times in writing, six of

which extended the escrow closure date. That date was first extended to December 12,

2020, then to January 15, February 12, February 23, and February 26, 2021. The sixth

amendment dated February 11, 2021, which extended the closing to February 23, 2021,

required Adventure Church to deposit a $793,500 down payment into the escrow account

within two business days. As the close of escrow neared in January 2021, the church

3 We refer to the property located at 777-815 E. Olive Avenue and the property

located at 1247 N. Wishon Avenue collectively as the Tower property.

4 Tower Theater Properties, Inc., is one of two partners in Tower Theatre

Productions, a California general partnership.

5 The lease was originally between Tower Theater Properties, Inc., and Craig Scott

Kendall and Michele Kendall, doing business as Sequoia Brewing Company Bar & Grill,

but the Kendalls assigned the lease to J&A in March 2020 with the consent of Tower

Theater Properties, Inc.

4.

learned Abbate and the Tower owners may have failed to fully disclose the sale to J&A

or obtain a waiver of J&A’s potential right to acquire the leased premises.

Sequoia Brewing Lawsuit

On February 16, 2021, J&A filed a complaint for breach of contract against Tower

Theater Properties and added Adventure Church as a defendant the following day. On

February 22, 2021, J&A recorded a lis pendens. Two days later, the superior court

granted J&A a temporary restraining order to halt the sale of the property, issued an order

to show cause, and set a March 17, 2021 hearing on J&A’s request for a preliminary

injunction.

On March 3, 2021, Adventure Church and Tower Theater Productions signed an

eighth amendment to the purchase contract which extended the close of escrow to

March 31, 2021, and provided that $15,000 of the church’s deposit would be released to

the seller, which was nonrefundable but applicable to the purchase price. The $15,000

payment was compensation for the Tower owners’ attorney fees.

On March 17, 2021, the superior court denied J&A’s request for a preliminary

injunction and ordered the lis pendens expunged. (J&A Mash & Barrel, LLC v. Superior

Court (2022) 74 Cal.App.5th 1, 14 (J&A Mash & Barrel).) J&A sought relief from the

superior court’s orders by filing a petition for writ of mandate with this court. (Ibid.) On

March 30, 2021, we issued a temporary stay and after informal briefing, we issued an

alternative writ on April 23, 2021, directing the superior court to either vacate its ruling

expunging the lis pendens or show cause why relief should not be granted. (Ibid.)

On April 26, 2021, the superior court vacated its ruling and set a briefing schedule

and hearing date for Tower Theater Production’s motion to expunge the lis pendens.

(J&A Mash & Barrel, supra, 74 Cal.App.5th at p. 14.) On July 7, 2021, the superior

court granted the motion to expunge the lis pendens. (Id. at p. 15.) On July 27, 2021,

J&A filed a petition for writ of mandate with this court (the J&A writ proceeding). After

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informal briefing was provided, we issued an order to show cause on October 12, 2021.

(Ibid.)

The Church and Tower Owners Continued Negotiations

While the J&A action was ongoing, the church and the Tower owners discussed

possible alternatives to complete the sale. A meeting was held on March 25, 2021,

attended by Abbate, Adventure Church’s real estate agent Bill Richardson, and pastor

Anthony Flores, in which they discussed the impediments to the church’s ability to close

escrow on the purchase contract and alternatives to the purchase contract. Richardson

confirmed the discussion in an e-mail and listed the alternatives, including cancelling the

current escrow and starting a new escrow whereby the church would purchase a nearly

50 percent interest in the Tower Theater Properties corporation and thereby obtain

ownership of the Tower Theatre.

On March 30, 2021, the Tower owners’ attorney e-mailed the church’s attorney

stating the Tower owners would not extend the next day’s closing date and if the church

wanted to leave its money sitting in escrow, that was their choice, but if they wanted out,

the Tower owners would sign a simple escrow instruction directing the title company to

close the account and refund all refundable money required by the purchase contract.

The church did not deposit the remaining purchase money into escrow or provide a proof

of funds, including underwriting approval from its lender.

On March 31, 2021, Richardson e-mailed Abbate and Flores with three options:

(1) do nothing, go to court, win the appeal and continue with the current escrow; (2) sign

a memorandum in which the church buys close to 50 percent of the shares in the entity

that owns the Tower Theatre, cancel the current escrow, and begin the process to split the

parcel; or (3) cancel the current escrow and enter into a new agreement to buy the Tower

Theatre.

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In mid-April 2021, the general counsel of The Foursquare Church discussed the

situation with the church’s attorney and personnel, including Flores, including the

church’s request for a loan. After the phone meeting, the general counsel sent an e-mail

to Flores and other church personnel that recapped pertinent parts of the conversation,

including that the church was keeping the purchase agreement in place for continuing

negotiation purposes and to maintain leverage in the situation, but the expectation was

that the purchase contract would be cancelled in exchange for a new deal. Richardson

reviewed the e-mail and confirmed this was accurate.

On April 22, 2021, Abbate was interviewed on a KMJ radio podcast. Abbate

stated the sale was “on hold” and “frozen.” Abbate explained: “Contract has expired,

you know, like real estate contract, that has expired, but it doesn’t really mean anything

because whenever a judge steps in and says hey, I’m putting this on hold, that doesn’t

really mean anything. Everything else just goes away. You have to wait until the court

system works its way out. Of course the superior court saw it our way and ruled for us …

[¶] [b]ut then you can appeal. That’s what they’ve done. We’re just waiting on this

appeal. We’re kind of frozen. The contract is frozen … if we give us the go ahead, we

still continue probably. I don’t see any way. You know, they’ve done everything.

We’ve done everything. There’s just been this discussion and what I call kind of a stall

technique, you know, to prolong this thing.” The intention was still for the church to buy

the Tower Theatre.

On April 23, 2021, Abbate stated during an interview with GV Wire on Facebook

Live that he intended to “[f]inalize this transaction, if we can.” Abbate confirmed the

escrow with Adventure Church had ended “[a]s far as the contract on paper,” and “[i]t

has crossed that term, but it really was frozen” due to the legal proceedings. Abbate

further stated, “the contract has lapsed but only because they have made it so it can go

right back on, is my understanding, so we’re continuing forward.” Abbate confirmed the

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church was still interested in buying and he was still interested in selling. Abbate did not

believe he could consider an offer from another group because “we’re in the contract,”

but it was “a gray area that everybody’s discussing” which he would leave to the

attorneys. He believed it was “going to just continue on” and it was “new for us to figure

out how to get through these hurdles.”

In an interview with Oreo Express around the same time, Abbate stated that they

were “trying to figure out an alternate path as far as the sale is concerned.” Abbate

explained that there were no other offers when he received the church’s offer, and he did

not want to tell anyone about the sale until he “got through all the hurdles of the sale.”

Once those hurdles cleared, he disclosed the sale, the media found out, and “all kinds of

offers ended up coming in,” but at that point he was in escrow and “[y]ou got to legally

stay in with them. It’s the right thing and legal. That’s what you have to do.”

At the end of April 2021, the Tower owners’ attorney e-mailed a confidential

settlement communication to the church’s attorney as a follow-up to a conversation. The

attorney stated that as he explained in the conversation, “even though the contract expired

by no fault of my client, it appears that my client remains willing to explore options for

completing the sale to your client.” The attorney further stated that because the brewery

was not going away and wanted to buy the entire property, it appeared the Tower owners

would be locked in litigation for quite some time and his client was not inclined to

continue the “costly battle” unless the church was willing to pick up the costs.

Accordingly, the Tower owners proposed, among other things, that: (1) the

church would file the motion to expunge; (2) the Tower owners would commence the

subdivision process to split the theater, restaurant, and brewery into three separate

parcels, with the parties sharing the costs as specified and the subdivision being

completed within one year and if not, “then the contract—described below—shall be

canceled and each party shall cooperate in the close of escrow and release all claims

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against each other”; (3) the Tower owners “will terminate the current contract and

escrow, with both parties releasing all claims related to the current contract and escrow”

and they would “sign a new contract pursuant to which we sell the theater to the church

once the subdivision is complete”; and (4) the parties would cooperate in the litigation,

with the church paying the Tower owners’ legal fees in defense of the J&A action, as the

only reason the Tower owners would continue to fight the action would be to protect the

church’s interest in buying the property.

The church’s attorney responded, agreeing to some terms, and offering

counterproposals to others. As pertinent here, the attorney stated Adventure Church

would agree to cover the Tower entities’ legal fees “from the date the new deal is

executed.”

On May 5, 2021, Abbate and Richardson exchanged e-mails with additional

thoughts concerning what Abbate called the “new agreement.” Richardson stated that

“[o]nce we cancel escrow both parties will have items to pay.” According to Abbate, the

discussions were designed to reach a new deal with completely different terms than those

agreed to under the purchase contract. On May 14, 2021, Richardson sent “the written

agreement from the attorneys” to Abbate, with a copy to Flores, for his review, along

with “a purchase sales agreement that we will have between both parties.” According to

Abbate, the agreement was in lieu of the original purchase contract.

On June 8, 2021, Richardson e-mailed Abbate and another individual, with a copy

to Flores, with a list of items as a follow-up to a conversation they had. Richardson

believed they had a window between the J&A hearing on June 15, 2021, and the city’s

hearing on July 8 “to be able to get it closed.” The items included, among other things,

amending the current contract to increase the sales price to $5 million, including specific

down payment and financing terms, and having the church take on all expenses,

liabilities, and attorney fees. On June 11, 2021, Richardson sent another e-mail to

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Abbate, with a copy to Flores, which discussed another alternate deal structure for the

sale. An unsigned written ninth amendment to the purchase contract included revised

terms such as the increased purchase price, the buyer’s obligation to subdivide and parcel

split the brewery premises and pizza restaurant, and that escrow would close on July 8,

2021.

On July 20, 2021, Abbate e-mailed Flores and stated that he preferred to terminate

the escrow because the original deal expired but the brewery litigation was continuing,

and the Tower entities were not going to sell the brewery premises to the church while

the brewery lawsuit was ongoing.

The City’s Eminent Domain Proceedings and the Appeal in the J&A Writ Proceeding

Meanwhile, on June 30, 2021, the city filed an action against Tower Theater

Properties and sought an order permitting inspection of the Tower Theatre pursuant to

section 1245.010, which allows “any person authorized to acquire property for a

particular use by eminent domain,” such as the city,6 to “enter upon property to make …

appraisals or to engage in similar activities reasonably related to acquisition or use of the

property for that use.” (§ 1245.010.)

On October 13, 2021, the superior court granted the city’s motion for an order

permitting entry into the Tower Theatre so the city could assess whether the historical

components were being preserved adequately and to complete an appraisal. The city

subsequently had an appraisal conducted.

The appeal in the J&A writ proceeding was decided in January 2022. At the

January 12, 2022 oral argument, Tower Theater Productions’ attorney represented the

purchase contract with the church was expired and null and void. A week later we

published our opinion in which we found the order expunging the lis pendens was

6 Government Code section 37361, subdivision (a) permits a legislative body to

“acquire property for the preservation or development of a historical landmark.”

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flawed, as it was based on erroneous legal rulings and factual findings not supported by

substantial evidence, and J&A had shown the probable validity of its real property

claims. (J&A Mash & Barrel, supra, 74 Cal.App.5th at pp. 10, 42.) Accordingly, we

concluded J&A was entitled to the continued recordation of the lis pendens pending the

outcome of the litigation and issued a writ directing the superior court to vacate the order

granting Tower Theater Productions’ motion to expunge lis pendens and enter a new

order denying the motion. (Id. at pp. 42‒43.)

We also concluded J&A was entitled to recover its attorney fees based on our

finding that Tower Theater Productions did not act with substantial justification in

moving to expunge the lis pendens and other circumstances did not make imposing

attorney fees unjust as a matter of law. Consequently, we directed the superior court to

hold further proceedings to determine J&A’s reasonable attorney fees and costs. (J&A

Mash & Barrel, supra, 74 Cal.App.5th at p. 43.)7

The city was required to engage in good faith negotiations with the Tower

Theatre’s owner before a resolution of necessity could have been presented to the city

council for a vote on whether to exercise eminent domain.8 Consequently, on February

2, 2022, in a confidential settlement letter from the city’s outside counsel, the city

extended an offer to purchase the Tower Theatre and brewery premises for $4.025

million in cash. The city proposed the offer to resolve all issues in both the city’s action

and the J&A litigation, subject to city council approval, which would include the

resolution of all disputes regarding the property’s sale by the applicable parties, including

7 The church asserts the Tower owners were ordered to pay J&A more than $40,000

in attorney fees.

8 Government Code section 7267.1, subdivision (a) provides: “The public entity

shall make every reasonable effort to acquire expeditiously real property by negotiation.”

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any prior buyer. The city sent copies of the offer to counsel for the church and Sequoia

Brewing.

The Church Sues the Tower Owners

On February 8, 2022, Adventure Church sued the Tower owners for breach of

contract seeking specific performance of the purchase contract. The church alleged that

the Tower owners breached the purchase contract by: (1) refusing to close escrow;

(2) representing to this court at oral argument in the J&A writ proceeding that the

purchase contract had “expired and is of no force and effect”; and (3) refusing to provide

clear title as evidenced by the cloud on title created by J&A’s recorded claim of right and

notice of pendency of action.

Abbate testified in his deposition that before this lawsuit, he was willing to sell the

Tower Theatre to the church, but he changed his mind after this lawsuit was filed and he

no longer wanted anything to do with the church. According to Abbate, the decision not

to sell the property to the church was set in stone once the lawsuit was filed.

In March 2022, the city, the Tower owners, J&A, the church’s representatives, and

the parties’ attorneys, participated in a mediation. All offers the city made during the

mediation were to settle the pending litigation matters and to prevent contemplated

litigation over ongoing disputes under eminent domain law.

City Council Approval of the City’s Purchase of Tower Theatre

On April 21, 2022, the city council considered and ultimately adopted a resolution

to purchase the Tower property.9 The recitals in the resolution stated, among other

9 Flores declares that he appeared before the city council on April 21, 2022, and told

the council the church was still under contract to purchase the Tower Theatre.

While Richardson declared on information and belief that the city entered into a

deal or agreement with the Tower owners to purchase the Tower Theatre sometime

between January and May 2022, the city’s outside counsel declared that the city council

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things, that the city council found the purchase contract expired on March 31, 2021,

without the church depositing the full purchase price into escrow, and the fair market

value of the Tower property was at least $6.5 million. The city council approved two

purchase and sale agreements by which the city would purchase the Tower property for

$6.5 million and Sequoia Brewery would buy its portion of the property for a net

purchase price of $950,000. The city council authorized the city manager to enter into a

joint defense and indemnity agreement with the Tower Theatre and Sequoia Brewery for

potential litigation by the church to contest the city’s purchase of the Tower Theatre

property.

On May 19, 2022, the Tower owners’ attorney directed the title company to close

the escrow on the purchase contract. The attorney explained that it was unnecessary to

execute mutual escrow cancellation instructions because the escrow was required to be

terminated the prior year pursuant to Section 8.7 of the purchase contract. The attorney

asserted the escrow must be cancelled for three alternative reasons: (1) the purchase

contract was void due to mutual mistake and, as a result, the Tower owners returned

$15,000 to escrow so it could be returned to the church with the remaining deposits and

the escrow should be terminated, cancelled, or closed;10 (2) the escrow should have been

terminated in 2021 pursuant to Section 8.7 of the purchase contract because certain

buyer’s contingencies were not satisfied and had not been waived; and (3) the parties

expressly agreed in an amendment that escrow shall close on or before March 31, 2021,

did not make a binding offer or commitment to the Tower owners to purchase the Tower

Theatre until the April 2022 council meeting.

10 Third party deposit escrow instructions from the title company show the title

company wired $15,000 to the city’s trust account and instructed the city to apply the

funds for the benefit of Tower Theater Productions, a California general partnership, and

use the funds as the return of the funds that were released to Tower Theater Productions

on March 3, 2021, which were to be returned to the church.

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and since the transaction was not consummated by that date, the Tower owners had no

further obligation to the church to complete the sale.

The escrow on the city’s purchase of the Tower property closed on July 22, 2022.

On July 27, 2022, the church signed escrow cancellation instructions which

directed the title company to return $831,000 held in escrow to the church. The parties

agreed the purchase contract was cancelled in its entirety. When the title company closed

the escrow account, its records showed the church received all the funds it deposited,

including the $15,000 that the Tower owners withdrew.

The Government Claim Process

Meanwhile, on May 3, 2022, the church presented a claim for damages to the city

alleging the city interfered with the church’s purchase contract for the Tower property.

On May 20, 2022, the city sent a notice of insufficiency of the claim to the church’s

attorney notifying him the claim was being returned without action because it failed to

include certain information required by Government Code section 910, such as the date,

place, and other circumstances of the occurrence that gave rise to the claim.

The church submitted an amended claim to the city on June 3, 2022, to address the

inadequacies in the original claim, but the city sent a notice of insufficiency of the claim

and returned the claim without action because it again failed to include information about

damages as provided in Government Code section 910, subdivision (f). The church

submitted another amended claim on June 24, 2022, which removed the reference to a

dollar amount and denoted it was an unlimited civil matter. The city rejected the

amended claim on July 21, 2022.

On November 1, 2022, the church’s attorney submitted a final amendment to the

church’s claim alleging July 22, 2022, as the date the city closed escrow on the Tower

property. The city rejected the amended claim on November 16, 2022.

14.

This Lawsuit

On December 15, 2022, Adventure Church filed a complaint against the city and

Terance Frazier, which alleged seven causes of action, including intentional and

negligent interference with contractual relationship, retaliatory eviction, and violations of

the Religious Land Use and Institutionalized Persons Act, 42 U.S.C. §§ 2000cc et seq.

The intentional interference claim alleged the city intentionally induced the Tower

owners to breach the purchase contract with the church by abandoning the purchase

contract. The church filed a first amended complaint on February 21, 2023, which

removed the cause of action for negligent interference with contract.

The first amended complaint alleged the city, knowing of the existence of the

purchase contract, engaged in a series of acts by which the city intended to induce the

Tower owners to breach the purchase contract: (1) a December 10, 2020 “Original

Zoning Letter” from a city planner to Adventure Church indicating the church could

continue to operate the Tower property as it had been following its intended purchase;

(2) a January 5, 2021 “Revised Zoning Letter” the city manager sent to the church stating

the church could not operate in the Tower Theatre as a religious organization, even as an

incidental use, which the church viewed as an attempt to dissuade it from buying the

property; (3) in early January 2021, the city approached Terance Frazier to be part of an

investment group to purchase the Tower Theatre and sought his advice on how to stop the

sale to the church; (4) a January 11, 2021 meeting between city councilmembers Miguel

Arias and Esmeralda Soria, Soria’s chief of staff Terry Cox, and Abbate regarding the

intended sale of the Tower property to the church in which the councilmembers indicated

the city may explore eminent domain and zoning issues; (5) a January 27, 2021 letter

from Mayor Jerry Dyer to the church asking the church to seek a peaceful resolution to

the community uproar over the church’s planned purchase of the Tower Theatre and

offering another location for the church to meet; (6) at closed session meetings the city

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held from January 28, 2021, through February 3, 2021, options to obtain the Tower

property were discussed; (7) the city’s June 30, 2021 petition for an order to inspect the

Tower property for appraisal, which the church believed was filed to intimidate the

church and induce termination of the purchase contract; (8) the city’s February 2, 2022

letter offering to purchase the Tower property; (9) the April 21, 2022 city council vote to

adopt a resolution allowing the city to purchase the Tower property; and (10) the July 22,

2022 close of escrow on the city’s purchase of the Tower property.

The interference claim alleged that due to the city’s intentional acts, the business

relationship between the church and the Tower owners was disrupted as the Tower

owners abandoned the purchase contract. The church alleged the city’s intentional

interference resulted in the following damage to the church: (1) loss of rental income in a

monthly amount not less than $9,575 beginning February 2021; (2) loss of income from

events in a weekly amount of not less than $4,500 beginning June 2021; (3) $175,000 in

rent the church continued to pay; (4) improvements the church made to the Tower

Theatre of not less than $300,000; and (5) the cost of relocation and loss of church

attendance due to eviction from the property.

The Special Motion to Strike

On April 14, 2023, the city filed a special motion to strike the first cause of action

in the first amended complaint, which is the interference claim.11 The city asserted the

interference claim rested almost entirely on the following protected activities within the

meaning of the anti-SLAPP law: (1) the city’s successful lawsuit for an order permitting

an inspection of the Tower Theatre to obtain an appraisal; (2) the city council’s

compliance with the Brown Act in publishing an agenda item regarding real property

11 The city earlier filed a demurrer to the first amended complaint on the grounds it

failed to state facts sufficient to constitute a cause of action and was uncertain, but the

demurrer was never ruled on.

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negotiations and holding closed session meetings; (3) the city’s privileged settlement

communication to resolve the church’s threatened litigation against the city for

interference with contract; and (4) non-binding letters from city staff interpreting

provisions of the Fresno Municipal Code.

The city argued the church could not prevail on its interference claim because it

could not establish a viable theory for government liability or prove the required elements

for interference with a contract. The city asserted the church could not show government

liability because: (1) the church first submitted a claim for damages to the city on May 3,

2022, therefore, any claim that accrued more than one year earlier was barred under

Government Code section 911.2; and (2) the city was immune from liability for the

December 10, 2020 and January 5, 2021 letters from the city planner and city manager

because those employees issued the letters in the exercise of their discretionary authority

(Gov. Code, §§ 815.2, subd. (a), 820.2).

The city also argued the church could not prove the required elements of the

interference claim. The city contended the church did not have a valid purchase contract

as: (1) none of the city’s actions from June 30, 2021, through July 22, 2022, could have

interfered with the purchase contract because the contract expired on March 31, 2021;

(2) the parties were discharged from performing under the purchase contract when the

escrow period expired on March 31, 2021, because the Tower owners were unable to

provide clear title due to J&A’s right of first refusal; (3) the purchase contract was

rescinded based on mutual mistake, as both the Tower owners and the church should

have known of J&A’s right of first refusal before signing the purchase contract, and the

Tower owners notified the church the contract was void due to mutual mistake and

restored the $15,000 it had been allowed to withdraw from escrow; (4) the doctrine of

impossibility resulted in waiving performance, as the Tower owners could not provide

17.

clean title due to J&A’s lis pendens; and (5) the church cancelled the purchase contract

when it signed escrow cancellation instructions in July 2022.

The city contended it did not intend to interfere with the purchase contract. It

asserted that out of the 10 complained-of acts alleged to have occurred before the

purchase contract expired on March 31, 2021, only the January 11, 2021 meeting

between Abbate and two councilmembers would have been known to the Tower owners,

but the outcome of this meeting was that the purchase contract could not be unwound.

And while the first amended complaint alleged the city met with Frazier, who advised the

city to file a lis pendens or force a zoning change, the city took neither of these actions.

The city next argued its alleged acts did not cause the Tower owners to breach the

purchase contract because: (1) it was the church’s lawsuit against the Tower owners that

caused them to no longer want to sell the Tower property to the church; (2) the church

never had sufficient funds to purchase the property; and (3) the Tower owners were not

influenced by the city’s alleged acts since the Tower owners were committed to selling

the Tower property to the church up to the March 31, 2021 deadline, when the purchase

contract expired, and the city could not interfere with an expired contract. Finally, the

city argued that under the sham pleading rule, the church was bound by the allegation it

made in the February 2022 lawsuit against the Tower owners that they breached and

repudiated the purchase contract. Therefore, the city’s acts after that date could not have

caused the Tower owners to breach the contract.

The Church’s Opposition

In opposing the motion, the church argued the interference claim did not arise

from protected free speech activities under the anti-SLAPP law. The church asserted the

city’s motion ignored the “ ‘gravamen’ ” of the interference claim, namely, that the city

wrongfully induced the Tower owners to breach the purchase contract and instead sell the

Tower Theatre to the city, which the city accomplished by tempting the Tower owners

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with a compensation package worth close to $2 million more than the purchase contract.

The church argued its claim was based on the city officially deciding to make an offer to

purchase the Tower property despite knowing the church was actively under contract

with the Tower owners, which was not protected free speech as a matter of law. The

church asserted whether other conduct constituted protected free speech was irrelevant

for an anti-SLAPP determination. The church also argued the city mischaracterized the

content of the first amended complaint and the city’s own conduct, which did not concern

protected first amendment speech.

The church asserted it was more than likely to prevail on its interference claim, as

it could prove all elements of such a claim. The church asserted there was a valid

contract as: (1) the purchase agreement did not expire on March 31, 2021, because

Abbate waived the time for performance, which made his attempted cancellation invalid;

(2) there was no mutual mistake regarding J&A’s purported right of first refusal as the

Tower owners affirmatively represented to the church that there were no options or right

of first refusals affecting title to the Tower property and Abbate told the church J&A

waived its right to exercise its option; (3) the purported rescission only came after the

city’s interference; (4) the church agreed to escrow cancellation instructions only after the

city’s interference with the purchase contract was complete; and (5) it was not impossible

to complete performance of the purchase contract, as shown by the city’s ability to

purchase the property, and it was not settled that the Tower owners could never provide

clean title.

The church asserted the city knew of the church’s purchase contract, and the

Tower owners were selling the Tower property to the church until the city offered

indemnification and an extra $2 million. The church asserted our finding in J&A Mash &

Barrel that Tower Theater Productions was liable for attorney fees and costs related to its

attempt to expunge J&A’s lis pendens, along with the social pressure from the protests

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over the sale, incentivized Abbate to submit to the city’s pressure and accept an offer

more generous than the church’s offer. The church also asserted its lawsuit against the

Tower owners was consistent with its current pleadings, as it planned on amending the

complaint in that action to include the city as a defendant, but dismissed the action before

it could do so.

Finally, the church asserted it timely complied with the Government Claims Act

because it filed its complaint within one year of the date the interference claim accrued,

which did not occur until the Tower owners’ actual breach of the contractual relationship

with the church sometime between January and May 2022, when the Tower owners

agreed to sell the Tower property to the city.

The City’s Reply

In reply, the city argued that if the interference claim was based on the city’s offer

to purchase the Tower property for $2 million more than the church offered, the city’s

initial offer to purchase the Tower property was a protected settlement offer to resolve

pending litigation and the city council’s April 21, 2022 resolution was protected as a

statement made in connection with a legislative proceeding. The city further argued the

other alleged city actions also were protected under the anti-SLAPP law.

The city contended the church failed to meet its burden of showing a probability of

success on the interference claim. The city claimed the alleged acts of interference were

privileged under Civil Code section 47. The city argued the church did not make a prima

facie showing of a valid contract as: (1) the purchase contract expired on March 31,

2021, or on January 12, 2022, at the latest, and there was no waiver of the time for

performance as Abbate could not waive the time for performance on his own, his

statements did not show an intention to waive a known right and were made after the

contract expired on March 31, 2021, and the parties were working on a new agreement;

(2) the city’s alleged interference could not have caused the Tower owners’ purported

20.

breaches since they occurred before the city made its offers to purchase the property;

(3) the purchase contract expired due to nonperformance of mutual conditions; (4) the

purchase contract was impossible to perform under its terms; and (5) the purchase

contract was rescinded due to mutual mistake.

The city contended the church did not make a prima facie showing that the city

intended to or did interfere with the purchase contract or that it could overcome the city’s

asserted privileges and defenses.

The Trial Court’s Order After Hearing

After the trial court issued a tentative decision on the city’s motion, a hearing was

held, at which both parties appeared and presented argument. The trial court took the

matter under submission and subsequently issued an order after hearing granting the

motion. The trial court first found that the purchase contract expired on March 31, 2021,

so the city could not have interfered with the contract after that date. Therefore, the trial

court only addressed the city’s actions occurring before that date, which consisted of:

(1) the zoning opinion letters; (2) the alleged meeting with Frazier; (3) the January 11,

2021 meeting with councilmembers, staff, and Abbate; (4) the mayor’s letter; and (5) the

closed session city council meetings. The trial court found the city made a prima facie

showing that the interference claim arose from protected activities, as these acts involved

writings and speech made in connection with an issue under consideration by an

executive or legislative body.

With respect to whether the church could show a probability of prevailing on the

interference claim, the trial court first considered whether there was any authority for

municipal liability and, if so, whether the church had sufficiently demonstrated

intentional interference with a contractual relationship. On the issue of government

liability, the trial court found that because the purchase contract expired on March 31,

2021, and the church submitted its claim for damages to the city on May 3, 2022, the

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church’s claims arising out of the city’s conduct occurring between December 7, 2020,

and February 3, 2021, were time barred, as the church was required to bring a claim for

money damages within one year of accrual of the cause of action. The trial court further

found that since these were the only acts that could have constituted interference with a

contractual relationship, the church would not be able to demonstrate a likelihood of

prevailing on the merits.

The trial court also addressed the city’s contention that it was immune from suit

under Government Code section 815. The trial court noted that for the first time at oral

argument, the church contended the city was vicariously liable for its employee’s conduct

under Government Code section 815.2.12 The trial court analyzed the city’s acts that

occurred before March 31, 2021, and determined: (1) the city was immune with respect

to the zoning letters under Government Code section 818.4; (2) with respect to the acts of

the elected officials, such as the mayor and city councilmembers, the city could not be

held liable on the interference claim unless the elected officials and city were named as

codefendants, which was not the case here; and (3) even if elected officials were added

before any judgment, their acts involved planning level decisions which made them and

the city immune under Government Code sections 815.2 and 820.2.

With respect to whether the church had a probability of prevailing on the merits of

its interference claim, the trial court found the church would not be able to demonstrate it

had a valid contract or a breach of that contract after March 31, 2021. The trial court

explained the purchase contract states time is of the essence and it could only be amended

in a writing signed by both parties, and while the parties executed extensions, with the

last expiring on March 31, 2021, the church did not show or argue it was extended further

12 The reporter’s transcript of the hearing shows the church’s counsel raised this

argument in response to the trial court’s tentative ruling that the church failed to allege a

statute that would impose municipal liability on the City.

22.

in writing. The trial court rejected the church’s argument that the Tower owners waived

the time for performance, as the ongoing discussions to complete the sale to the church

did not indicate the deal set forth in the purchase contract was being kept alive and

Abbate’s statements to the media only indicated a deal was still in the works or possibly

alive. The trial court therefore found the purchase contract expired on March 31, 2021,

which meant the city’s acts that occurred after that date could not have interfered with a

contractual relationship or caused the Tower owners to breach the contract.

In summary, the trial court found the city met the threshold requirement to show

the letters and meetings were protected acts taken in connection with a matter being

considered by an executive or legislative body. The trial court further found the church

had not demonstrated a likelihood of prevailing on the merits as: (1) the purchase

contract expired on March 31, 2021; (2) the alleged conduct prior to that date was time-

barred because the church did not timely present its claim to the city; (3) even if the

claims were not time-barred, each alleged act prior to the expiration of the purchase

contract involved planning level decision-making by the executive and legislative bodies

or their representatives or employees; and (4) the church could not prevail where it could

not demonstrate a valid contract after March 31, 2021, or a breach of contract after that

date.

DISCUSSION

I. Anti-SLAPP Motions and the Standard of Review

The anti-SLAPP statute authorizes a special motion to strike a “cause of action”

“arising from any act … in furtherance of [a] person’s right of petition or free speech

under the United States Constitution or the California Constitution in connection with a

public issue …, 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).) The

statute dictates a two-step process for resolving an anti-SLAPP motion: “First, ‘the

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moving defendant bears the burden of establishing that the challenged allegations or

claims “aris[e] from” protected activity in which the defendant has engaged.’ [Citation.]

Second, for each claim that does arise from protected activity, the plaintiff must show the

claim has ‘at least “minimal merit.” ’ ” (Bonni, supra, 11 Cal.5th at p. 1009.) Only a

claim that “satisfies both prongs of the anti-SLAPP statute—i.e., that arises from

protected speech or petitioning and lacks even minimal merit” will be stricken.

(Navellier v. Sletten (2002) 29 Cal.4th 82, 89 (Navellier).)

We review de novo the grant or denial of an anti-SLAPP motion. (Park v. Board

of Trustees of California State University (2017) 2 Cal.5th 1057, 1067 (Park).) This

includes independently determining, based on our own review of the entire record,

“whether any of the acts from which challenged claims arise” are protected under the

statute. (Bonni, supra, 11 Cal.5th at p. 1009; see Park, at p. 1067.) In both the first and

second steps we consider “the pleadings[] and supporting and opposing affidavits stating

the facts upon which the liability or defense is based.” (§ 425.16, subd. (b)(2); City of

Cotati v. Cashman (2002) 29 Cal.4th 69, 79.) We are also mindful of the directive to

broadly construe the anti-SLAPP statute. (§ 425.16, subd. (a).)

II. Protected Activity

The church’s interference claim is based on multiple acts by the city that the

church alleges interfered with the purchase contract by causing the Tower owners to

breach the contract. Instead of examining all 10 acts to determine whether each one

constituted protected activity within the meaning of the anti-SLAPP law, the trial court

limited its analysis to those acts that occurred prior to March 31, 2021—the date the trial

court determined the purchase contract expired—and found they were protected acts.

On appeal, the church does not challenge the trial court’s finding that the city’s

pre-March 31, 2021 acts are protected activities under section 425.16, subdivision (e)(2),

which applies to statements or writings “made in connection with an issue under

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consideration or review by a legislative, executive, or judicial body,” other than to

generally argue its finding is contrary to public policy. The church asserts that if the city

is granted anti-SLAPP protection for its own petitioning activity, it will be protected in

any case against it since all of its actions are taken in connection with government

proceedings. But as the city points out, it does not always act through statements or

writings—noncommunicative acts and statements that do not concern a public proceeding

or an issue of public importance would not be protected. While the church is concerned

that an elected official could obtain anti-SLAPP protection by declaring a given issue is

under consideration in an official proceeding, that is not what occurred here. Clearly the

sale of the Tower Theatre was a significant issue of public importance and the subject of

an official zoning inquiry by the church and several city council meetings. The issues in

this litigation clearly were under consideration in legitimate official proceedings. The

church does not contend otherwise.

Rather than analyze the city’s pre-March 31, 2021 acts, the church asserts that

“conduct was incidental to the primary allegations” of the interference claim because it

“did not result in breach or disruption of the [purchase contract].” The church urges us to

look at the “ ‘principal thrust or gravamen’ of the interference cause of action,” which it

asserts is the “Interference Offer,” and argues that cannot be protected activity because it

is illegal as a matter of law.

“A claim arises from protected activity when that activity underlies or forms the

basis for the claim.” (Park, supra, 2 Cal.5th at p. 1062.) Our Supreme Court’s recent

anti-SLAPP decisions counsel lower courts to “take[] a claim-by-claim approach to the

anti-SLAPP analysis, rather than attempting to evaluate a cause of action as a whole.”

(Bonni, supra, 11 Cal.5th at p. 1010, citing Baral v. Schnitt (2016) 1 Cal.5th 376; see

Bonni, at pp. 1010–1011.) This guidance appeared most recently in the 2021 Bonni

decision where the high court disapproved the use of a “gravamen approach” to discern

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the “ ‘essence’ of a cause of action that encompasses multiple claims.” (Bonni, at

p. 1011.) “Instead, courts should analyze each claim for relief—each act or set of acts

supplying a basis for relief …—to determine whether the acts are protected ….” (Id. at

p. 1010.)

The first-prong analysis proceeds in two parts. Courts must initially “ ‘consider

the elements of the challenged claim and what actions by the defendant supply those

elements and consequently form the basis for liability.’ ” (Bonni, supra, 11 Cal.5th at

p. 1009, quoting Park, supra, 2 Cal.5th at p. 1063.) “Courts then must evaluate whether

the defendant has shown any of these actions fall within one or more of the four

categories of ‘ “act[s]” ’ protected by the anti-SLAPP statute.” (Wilson v. Cable News

Network, Inc. (2019) 7 Cal.5th 871, 884; see § 425.16, subd. (e).) The Supreme Court

has consistently instructed our twin foci must be: (1) “what ‘the defendant’s activity [is]

that gives rise to his or her asserted liability,’ ” and (2) “ ‘whether that activity constitutes

protected speech or petitioning.’ ” (Park, at p. 1063, quoting Navellier, supra, 29 Cal.4th

at p. 92.)

“Under Bonni, it is still appropriate to consider the gravamen of a claim to

determine whether the protected conduct identified by the moving party supplies an

element of the claim or is merely incidental.” (Pech v. Doniger (2022) 75 Cal.App.5th

443, 462, fn. 3.) But, as courts have recognized even before Bonni, “[t]he concepts of

‘principal thrust’ and ‘gravamen,’ … may be too indefinite and abstract to provide a clear

rule with predictable results.” (Old Republic Construction Program Group v. The

Boccardo Law Firm, Inc. (2014) 230 Cal.App.4th 859, 868.) This is the clearer rule: a

claim “can only be said to arise from protected conduct if it alleges at least one wrongful

act—conduct allegedly breaching a duty and thereby injuring the plaintiff—that falls

within [section 425.16]’s definition of protected conduct.” (Id. at p. 869; see Wong v.

Wong (2019) 43 Cal.App.5th 358, 365 [adopting this rule].) “ ‘If the core injury-

26.

producing conduct upon which the plaintiff’s claim is premised does not rest on protected

speech or petitioning activity,’ ” anti-SLAPP protection does not apply. (Area 51

Productions, Inc. v. City of Alameda (2018) 20 Cal.App.5th 581, 594.)

Beginning with the first inquiry, the elements of a claim for intentional

interference with contractual relations are: “(1) the existence of a valid contract between

the plaintiff and a third party; (2) the defendant’s knowledge of that contract; (3) the

defendant’s intentional acts designed to induce a breach or disruption of the contractual

relationship; (4) actual breach or disruption of the contractual relationship; and

(5) resulting damage.” (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148.) The issue of

contention is the second inquiry—“ ‘what actions by [the city] supply those elements and

consequently form the basis for liability.’ ” (Bonni, supra, 11 Cal.5th at p. 1009.)

The church asserts that while the city engaged in multiple acts of “attempted

interference” as alleged in the first amended complaint, the act that supplies the fourth

element—the intentional act that caused the actual breach of the church’s contractual

relationship with the Tower owners—is the “Interference Offer.” The church explains

that while the city began its attempts to interfere with the contract in 2021, the actual

breach of the purchase contract did not occur until 2022, when the Tower owners agreed

to sell the Tower property to the city in response to the city’s interference offer.

The church, however, does not define the term “Interference Offer.” The first

amended complaint alleges the city made a written offer to the Tower owners to purchase

the Tower property on February 2, 2022; but on appeal, the church asserts the Tower

owners declined this offer and thus that offer did not cause the breach. The first amended

complaint next alleges the city interfered when the city council voted to adopt the April

21, 2022 resolution that would allow the city to enter into a purchase agreement with the

Tower owners. If the church’s claim is that the Tower owners breached the purchase

27.

contract by accepting the city’s offer, that could only have occurred because of the city

council’s vote to adopt the resolution.

The city asserts the interference offer must be the city council vote to adopt the

resolution, as the first amended complaint does not allege an offer was made or

transmitted to the Tower owners. Therefore, the city argues, the interference claim

cannot be based on the offer being made to the Tower owners as opposed to the vote

approving the offer. While the church responds it alleged an offer was made, the first

amended complaint lacks any such allegation. The church asserts it could not allege

transmission of an offer because it was not privy to those facts and the only information

available to it was that the city “made numerous interference attempts for a year and a

half, adopted a resolution to enter into the agreement, and then subsequently [the city]

and the Tower Owners closed on the property (i.e. the Tower Owners breached the

[purchase contract]).” The church also asserts it does not know when the city’s attempts

to interfere with the purchase contract were successful and induced the Tower owners to

breach the purchase agreement.

It does not matter whether the interference claim is based on the February 2022

offer letter, the April 2022 city council resolution, or some unspecified offer by the city

that occurred either prior to, or after, the resolution, because communications concerning

an offer to purchase the Tower property and the city council’s vote adopting the

resolution are both protected acts within the meaning of the anti-SLAPP statute.13

Section 425.16, subdivision (e) expressly defines an “ ‘act in furtherance of a person’s

right of petition or free speech’ ” to include “any written or oral statement or writing

13 While the first amended complaint also alleges the July 2022 closing of escrow as

an act of interference, the city correctly points out that the interference claim cannot be

based on that act since the church asserts the Tower owners breached the purchase

contract by accepting the city’s offer to purchase the Tower property, which occurred

before escrow closed. The church does not contend otherwise.

28.

made before a legislative, executive, or judicial proceeding …” and “any written or oral

statement or writing made in connection with an issue under consideration or review by a

legislative, executive, or judicial body ….” (§ 425.16, subd. (e)(1) & (2).)

The February 2022 offer letter from the city’s outside counsel to the Tower

owners’ attorney was a settlement offer, as the letter states the offer was being extended

pursuant to Evidence Code section 115214 and references the city’s suit against the

Tower owners. Settlement negotiations while a suit is pending are protected for purposes

of the anti-SLAPP statute because they “involve communications in connection with a

matter pending before or under consideration by an official body, and so fall within the

scope of section 426.16, subdivision (e)(2). (Bonni, supra, 11 Cal.5th at p. 1024.)15

The city council’s April 2022 vote to adopt the resolution allowing the city to offer

$6.5 million to purchase the Tower property also is protected activity. Councilmember’s

votes, as well as statements made during deliberations at the city council meeting where

the votes are taken, qualify as “any written or oral statement or writing made before a

legislative … proceeding” under section 425.16, subdivision (e)(1). (City of Montebello

v. Vasquez (2016) 1 Cal.5th 409, 422‒423.)

Finally, any statements and writings made by the city in negotiating a contract to

purchase the Tower property, including offers made to the Tower owners, qualify as

“ ‘any written or oral statement or writing made in connection with an issue under

14 Evidence Code section 1152, subdivision (a), provides that compromise offers are

inadmissible to prove liability.

15 Similarly, claims that arise out of the filing of a lawsuit arise from protected

activity for purposes of the anti-SLAPP statute, as “[t]he filing of a lawsuit is an exercise

of the First Amendment right to petition the government.” (Bonni, supra, 11 Cal.5th at

p. 1024.) Therefore, the city’s filing of the lawsuit to obtain a court order to permit an

inspection of the Tower Theatre is protected activity.

29.

consideration or review by a legislative … body’ ” under section 426.16, subdivision

(e)(2). (City of Montebello v. Vasquez, supra, 1 Cal.5th at p. 423.)

The church contends the city’s offer to purchase the Tower property is not

protected activity because it is illegal as a matter of law. Due to the important interests

the anti-SLAPP statute seeks to protect, the Legislature commands that it be construed

broadly. (§ 425.16, subd. (a); Flickinger v. Finwall (2022) 85 Cal.App.5th 822, 832.)

Yet, “not all speech or petition activity is protected by section 425.16.” (Flatley v.

Mauro (2006) 39 Cal.4th 299, 313.) As relevant here, section 425.16 does not protect

“speech or petition activity [that is] illegal as a matter of law.” (Flatley, at p. 320.) This

exception applies only in “narrow circumstance[s]” where “either the defendant concedes

… or the illegality is conclusively shown by the evidence” to be illegal as a matter of law.

(Id. at p. 316.)

This exception, however, “requires criminal conduct, not a mere violation of court

rules or statutes.” (RGC Gaslamp, LLC v. Ehmcke Sheet Metal Co., Inc. (2020)

56 Cal.App.5th 413, 427, fn. 9 [illegality exception inapplicable to filing duplicative

mechanic’s liens; although conduct may be statutorily unauthorized, it is not criminal];

G.R. v. Intelligator (2010) 185 Cal.App.4th 606, 616 [illegality exception inapplicable to

failure to redact personal identifiers from credit reports in violation of California Rules of

Court, as that is not criminal activity]; Mendoza v. ADP Screening & Selection Services,

Inc. (2010) 182 Cal.App.4th 1644, 1654 [use of phrase “illegal” in Flatley intended to

mean criminal not just violative of statute].)

Here, the church asserts the city engaged in illegal conduct by allegedly interfering

with the church’s contractual relationship with the Tower owners. But the cases the

church cites address another tort—intentional interference with prospective economic

advantage—and hold that independently wrongful conduct is required to establish the

tort. (Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393

30.

[defendant’s conduct must be “wrongful by some legal measure other than the fact of

interference itself”]; Gemini Aluminum Corp. v. California Custom Shapes, Inc. (2002)

95 Cal.App.4th 1249, 1257 [plaintiff has the burden of proving the defendant’s conduct

was independently wrongful].) To the extent these cases apply to a claim for interference

with contractual relationship,16 the city’s conduct must be independently wrongful. But

extending a settlement offer, making an offer to purchase property, or adopting a

resolution to enter into a real estate purchase contract, are not independently wrongful.

More importantly, they are not criminal acts. Accordingly, the illegality exception does

not apply here.

In sum, the city satisfied its burden of showing its alleged conduct on which the

interference claims is based arose from protected speech or petitioning.

III. Probability of Prevailing

Since the interference claim arose from protected activity, we proceed to the

second step where the church must demonstrate a probability of prevailing on the claim,

meaning the claim has “at least ‘minimal merit.’ ” (Park, supra, 2 Cal.5th at p. 1061.)

“In order to establish a probability of prevailing on the claim (§ 425.16, subd. (b)(1)), a

plaintiff responding to an anti-SLAPP motion must ‘ “state[] and substantiate[] a legally

sufficient claim.” ’ [Citations.] Put another way, the plaintiff ‘must demonstrate that the

complaint is both legally sufficient and supported by a sufficient prima facie showing of

facts to sustain a favorable judgment if the evidence submitted by the plaintiff is

credited.’ ” (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821.)

16 In a concurring opinion in Della Penna, Justice Mosk stated he would find the tort

of intentional interference with prospective economic advantage “requires objective, and

unlawful, conduct or consequences.” (Della Penna v. Toyota Motor Sales, U.S.A., Inc.,

supra, 11 Cal.4th at p. 408 [conc. opn. of Mosk, J.].) Justice Mosk, however, did not

address whether such a requirement applied to the related tort of intentional interference

of contract, although he noted an argument could be made that this requirement should

not apply to that tort. (Id. at p. 408, fn. 9 [conc. opn. of Mosk, J.].)

31.

The plaintiff must demonstrate this probability of success with admissible

evidence. (Sheley v. Harrop (2017) 9 Cal.App.5th 1147, 1162; City of Costa Mesa v.

D’Alessio Investments, LLC (2013) 214 Cal.App.4th 358, 376 [a “ ‘plaintiff may not rely

solely on its complaint, even if verified; instead, its proof must be made upon competent

admissible evidence’ ”].) Neither the trial nor the appellate court weighs credibility or

compares the weight of the evidence. (Soukup v. Law Offices of Herbert Hafif (2006)

39 Cal.4th 260, 269, fn. 3.) “Rather, the court’s responsibility is to accept as true the

evidence favorable to the plaintiff [citation] and evaluate the defendant’s evidence only to

determine if it has defeated that submitted by the plaintiff as a matter of law.” (HMS

Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212.)

As set forth above, a claim for interference with a contractual relationship requires

the existence of a valid contract. (Reeves v. Hanlon, supra, 33 Cal.4th at p. 1148.) In

addressing this element, the church concedes the March 31, 2021 deadline to close

escrow as stated in the eighth amendment to the purchase contract elapsed without further

written extension or amendment. The church, however, contends it is clear from

Abbate’s conduct on behalf of the Tower owners that they expressly and impliedly

waived any time for performance.

In a contract for the sale of real property, the buyer’s obligation to deposit the

purchase price into escrow within the time specified in the contract, and the contract’s

provision that time is of the essence, are as binding on the buyer as the promise to convey

the land is on the seller. (Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1337–1338

(Galdjie); Pitt v. Mallalieu (1948) 85 Cal.App.2d 77, 81.) “Thus, where the parties have

made time the essence of the contract, at the expiration of time without tender by either

party, both parties are discharged.” (Pittman v. Canham (1992) 2 Cal.App.4th 556, 560.)

In this circumstance, a buyer’s failure to pay the money within the specified time

32.

deprives it of the right to enforce performance of the seller, who holds the privilege of

terminating the sale contract. (Pitt, at p. 81.)

A contract’s timeliness provision, however, may be waived by the party for whose

benefit it was made. (Galdjie, supra, 113 Cal.App.4th at p. 1339.) “ ‘Waiver is the

intentional relinquishment of a known right after full knowledge of the facts and depends

upon the intention of one party only. Waiver does not require any act or conduct by the

other party.’ [Citation.] Thus, ‘[t]he pivotal issue in a claim of waiver is the intention of

the party who allegedly relinquished the known legal right.’ ” (Old Republic Ins. Co. v.

FSR Brokerage, Inc. (2000) 80 Cal.App.4th 666, 678.) The party claiming waiver has the

burden of proving it by clear and convincing evidence that does not leave the matter to

speculation, and doubtful cases are decided against waiver. (Ibid.) Even if a party

waives the time for performance, it may reinstate the time conditions by giving definite

notice to the other party. (Gonzalez v. Hirose (1948) 33 Cal.2d 213, 216.)

Waiver may be “either express, based on the words of the waiving party, or

implied, based on conduct indicating an intent to relinquish the right.” (Waller v. Truck

Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 31.) Courts generally find waiver when a party

intentionally relinquishes a right or the party’s acts are so inconsistent with an intent to

enforce the right as to induce a reasonable belief that he or she has relinquished the right.

(Id. at pp. 33‒34.) While the existence of waiver is usually a question of fact, the trial

court may resolve the issue as a question of law when the underlying facts are

undisputed. (Old Republic Ins. Co. v. FSR Brokerage, Inc., supra, 80 Cal.App.4th at

p. 679.)

The church relies on Galdjie to support its argument that the Tower owners

waived the time for performance. There, the parties entered into a purchase agreement

related to an apartment building and set an April 9 deadline to close escrow. (Galdjie,

supra, 113 Cal.App.4th at p. 1334.) Like the present case, the purchase agreement

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contained a time is of the essence provision and mandated that extensions or

modifications of the agreement be in writing. (Ibid.) On April 1, one of the sellers

informed the buyer in writing that the contract would not be extended beyond April 9, but

escrow did not close by that date. (Ibid.) Between April 9 and mid-May, the buyer and

one of the sellers were in constant communication and the buyer advised that seller of his

efforts to obtain a loan. (Id. at p. 1336.) That seller communicated her approval of the

buyer’s efforts, orally agreed to extend escrow beyond April 9, told the buyer to call the

escrow company and have the escrow extended, and as of May 8, she continued to

cooperate and encourage the buyer to go forward with the transaction. (Id. at pp. 1336‒

1337.) On May 13, however, the sellers requested cancellation of escrow on the basis

that escrow did not close on time. (Id. at pp. 1334‒1335, 1337.) The trial court

determined the sellers’ conduct after April 9 evidenced a waiver of the escrow deadline

and awarded the buyer specific performance. (Id. at pp. 1336‒1337, 1340.)

The Court of Appeal affirmed the judgment after rejecting the sellers’ argument

that the purchase agreement automatically terminated on April 9. (Galdjie, supra,

113 Cal.App.4th at pp. 1340‒1342.) The appellate court explained there was no basis to

overturn the judgment, as the trial court found the sellers waived the time provisions by

continuing to deal with the buyer after the dates specified in the contract and the seller’s

statement that time would not be extended past April 9 was contradicted by her actions of

staying in communication with the buyer and approving and assisting his efforts to locate

a willing lender. (Id. at pp. 1340, 1342.) The trial court further found that by the time the

sellers notified the escrow holder of their desire to cancel without reestablishing time

conditions, the buyer had tendered the loan approval letter, and the buyer’s failure to

tender the loan funds was due to the seller’s failure to put the termite report into escrow.

(Ibid.)

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Here, the evidence does not indicate the Tower owners intended to relinquish their

right to enforce the March 31, 2021 deadline for performance. The day before that

deadline, the Tower owners’ attorney asked the church’s attorney to confirm that the

church would sign the escrow instruction to cancel the escrow and when the church

apparently declined to do so, advised the church’s attorney that the escrow would not

close the following day, the Tower owners would not extend the escrow deadline, and it

was the church’s choice if it wanted to leave its money sitting in escrow. On March 31,

2021, Richardson e-mailed Abbate with three options, one of which involved winning the

appeal in the J&A action and continuing with the “current escrow,” and the other two

involved cancelling the escrow and either the church purchasing shares in the entity that

owned the property or entering into a new agreement to buy the Tower Theatre.

After the deadline passed, the Tower owners’ position was that the purchase

contract had expired, as stated in their attorney’s e-mail from the end of April 2021.

Nevertheless, they remained willing to sell the Tower Theatre to the church on new terms

that became necessary due to J&A’s lawsuit. Those terms included moving to expunge

J&A’s lis pendens, subdividing the Tower property, terminating “the current contract and

escrow, with both parties releasing all claims related to the current contract and escrow,”

signing a new contract selling the Tower Theatre to the church once the subdivision is

complete, and providing “the current full purchase agreement” to the brewery and

informing them the property was being subdivided and giving them “one last chance to

take the deal at the appraised value once the subdivision is done.”

To that end, the Tower owners and the church left the purchase contract and

escrow open, which the parties intended to use for negotiation purposes and to maintain

leverage with the expectation that the contract would be cancelled in exchange for a new

deal. The parties recognized that the new deal could be accomplished by either amending

the terms of the purchase contract and escrow or entering into a new agreement and

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escrow. Either way, however, the Tower property would need to be subdivided, with the

church buying only the Tower Theatre and pizza restaurant parcels.

The Tower owners, however, did not intend to keep the escrow open so the terms

of the purchase contract could be fulfilled or agree to an extension of the purchase

contract. Rather, both parties understood the purchase contract could not be complied

with as written as it did not include J&A, which wanted to exercise its right of first

refusal on the brewery premises. This is not a situation, as in Galdjie, where the seller

assisted the buyer with completing the buyer’s obligations under the purchase agreement

after the deadline for performance passed. Instead, the Tower owners worked with the

church to fight J&A’s claimed right to a portion of the property and establish a new

agreement to address that claim with a new deadline for performance. Continuing to

negotiate with the church to address a circumstance not contemplated in the purchase

contract did not result in a waiver of the right to cancel the purchase contract for the

church’s nonperformance since there is no indication the agreement as specified in the

purchase contract remained open and viable.

While moving to expunge the lis pendens would have helped the church obtain

funding to complete the purchase, the expungement was part of a plan to enter into a new

agreement on different terms, including subdividing the Tower property, not to complete

the purchase contract as written. That the parties might accomplish this by amending the

purchase contract, rather than terminating the contract and closing escrow, does not mean

the Tower owners waived the time for performance under the purchase contract.

Moreover, the Tower owners did not cancel the purchase contract after the church

satisfied the contingencies. Instead, the church did not tender the money necessary to

close the purchase and was not able to do so because the lis pendens precluded the church

from obtaining funding. This distinguishes the present case from Galdjie, where the

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seller assisted the buyer’s efforts to locate a lender and then cancelled escrow just as the

buyer obtained a firm loan commitment. (Galdjie, supra, 113 Cal.App.4th at p. 1340.)

The church asserts the Tower owners believed the purchase contract remained

operative because their attorney used the term “current contract and escrow,” rather than

expired contract and escrow, in his late-April 2021 e-mail. In the same e-mail, however,

the attorney asserted the purchase contract had “expired.” When read together, the

attorney used the term “current contract and escrow” simply to distinguish the prior

contract from the proposed new one. There is nothing in the e-mail to indicate the

agreement as set forth in the purchase contract remained operative.

The church also relies on Abbate’s statements to the media in April 2021, which it

argues show he intended to waive the time for performance. When read in context,

Abbate’s statements show that he understood the contract was expired and the escrow

had ended, but he still wanted to sell the property to the church, he believed the sale was

put on hold as the legal proceedings played out, and they were trying to figure out an

alternate path. While Abbate believed they were “in the contract,” he recognized it was a

“gray area” that he would leave to the attorneys, although he also stated he had to

“legally stay with them” and it was “the right thing and legal.” Rather than stating that

the purchase contract remained in effect, Abbate’s statements are consistent with the

position that the Tower owners had taken with respect to the purchase contract and

escrow—that both had expired but they were willing to negotiate a new contract to

complete the sale. That Abbate may have believed he had a legal obligation to sell the

Tower property to the church does not mean that he expressly waived the right to declare

the purchase contract terminated based on the church’s failure to perform.

The church also argues the Tower owners’ retention of the $15,000 of the church’s

deposit that was released to the Tower owners in March 2021 for more than a year

indicates they considered the purchase contract to be operative since the $15,000 was to

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be applied to the purchase price. But the amendment that authorized the release of the

funds specifically stated they were nonrefundable. Accordingly, the Tower owners’

retention of those funds does not indicate they intended to waive the time for

performance or considered the purchase contract to be operative.17

In sum, the evidence shows that the Tower owners did not waive the March 31,

2021 deadline for performance. Instead, they negotiated with the church for a new

contract that would address J&A’s asserted right to purchase the brewery premises—to

subdivide the property and sell only the Tower Theatre and pizza restaurant parcels to the

church. Thus, the Tower owners did not act inconsistently with the intent to enforce their

right to cancel the purchase contract such that one would reasonably believe they had

relinquished that right. Since the Tower owners did not waive the time for performance,

the purchase contract expired on March 31, 2021. As such, the church cannot establish a

valid contract after that date. The church asserts the city induced the Tower owners to

breach the purchase contract in 2022. But because the purchase contract had expired, the

city could not intentionally interfere with the purchase contract. Accordingly, the church

cannot establish a probability that it will prevail on its interference claim and the trial

court did not err granting the city’s special motion to strike.18

17 The church points out that the Tower owners eventually returned the $15,000

through the city after they purported to rescind the purchase contract and cancelled the

escrow. Even if the purported rescission were ineffective, as the church argues, the fact

remains that the Tower owners’ retention of the money did not show they considered the

purchase contract to be operative, as they were permitted to retain the funds even if

escrow did not close.

18 Since we have found that the church cannot prevail on the interference claim

because the purchase contract expired on March 31, 2021, we do not address the other

issues the parties raise, including governmental immunity, impossibility, rescission, and

the timeliness of the claim presented to the city under the Government Claims Act.

38.

DISPOSITION

The trial court’s June 12, 2023 order is affirmed. Costs on appeal are awarded to

respondent.

DE SANTOS, J.

WE CONCUR:

POOCHIGIAN, Acting P. J.

SMITH, J.

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