October 14, 2021

California Appellate Court Affirms Order Granting Anti-SLAPP Motion in Quiet Title Action

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The Court of Appeal of California, Third Appellate District, recently affirmed a trial court's decision striking claims for quiet title and declaratory relief under California's anti-SLAPP statute, finding that recording a judgment constitutes a protected activity which is privileged under Civil Code § 47(b)(2). See Reynolds v. Palmbaum, 2021 WL 3184943 (Cal. Ct. App. July 28, 2021).  The plaintiffs, a husband and wife, purchased a home with each owning a one-half interest as their separate property pursuant to a prenuptial agreement. In 2017, the husband recorded a $900,000 deed of trust in favor of the wife. Two days later, a judgment in favor of the defendants in the amount of $558,190.93 was entered against the husband and his law firm and subsequently recorded in the Sacramento Recorder's Office. When plaintiffs later decided to sell their home, no title insurance company would insure title because of the recorded abstract of judgment, and no buyer would purchase the home without title insurance. After the defendants refused to remove the abstract of judgment to allow the sale, the plaintiffs brought a claim for quiet title, declaratory relief and intentional interference with prospective economic advantage. The defendants moved to strike the complaint under the anti-SLAPP statute, Code of Civil Procedure § 425.16, arguing that "[d]efendants' alleged conduct, i.e., the recording of an abstract of judgment and the creation of a judicial lien thereby, constitutes protected activity which is absolutely privileged pursuant to Civil Code §47(b)(2)."  The trial court agreed and dismissed the action.

On appeal, the Court affirmed. First, it found that the defendants established that the claims for quiet title and declaratory relief arose from the protected activity of filing a judgment lien. Specifically, the quiet title claim sought the removal of the judgment lien and the declaratory relief claim sought a determination of the lien's applicability to the wife and its priority over the deed of trust. Next, the Court found that the plaintiffs' claims were barred by the litigation privilege. The Court noted that, like the case at bar, this privilege has been held to apply to the recording of an abstract of judgment with a county recorder's office. Moreover, the Court noted that while plaintiffs styled their suit as simply determining lien priority and the validity of a deed of trust, the context made clear that the objective was to negate the effect of the recording of the judgment. Specifically, plaintiffs sent a demand letter which conditioned avoiding suit on the lien's removal. Given the foregoing, the Court affirmed the trial court's order granting the defendants' motion to strike the complaint.

For a copy of the decision, please contact Michael O'Donnell at [email protected], Michael Crowley at [email protected], Desiree McDonald at [email protected], or Kevin Hakansson at [email protected].

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