Thursday, December 17, 2015

Olive Properties v. Coolwaters Enterprises (Cal. Ct. App. - Oct. 30, 2015)

Commercial Tenant doesn't feel like paying Landlord rent, so stops doing so.  Around the same time, it also files a lawsuit against Landlord saying that Landlord breached the covenant of quiet enjoyment by leasing space "to a pizza and Italian Restaurant, which for the last 18 months has been taking all of the parking spaces in the shopping center."  Which, presumably, is going to be Tenant's excuse for not paying rent.

Predictably, once Tenant doesn't pay its rent, on November 5, Landlord brings an unlawful detainer action.  But Tenant's got a trick up its sleeve.  It files an anti-SLAPP motion to dismiss, claiming that the unlawful detainer action was filed as "retaliation" for Tenant filing the earlier lawsuit.

And the filing of the anti-SLAPP motion entitles Tenant to all the usual protections therefrom; a stay, briefing, delay, etc.

The trial court, however, is no dummy.  It sees through all this.  It not only denies the anti-SLAPP motion, but awards Landlord $3,392.50 in sanctions for 11.5 hours of attorney time expended in responding to the special motion to strike, finding "that Tenant filed the special motion to strike 'for the purpose of delay.'"  Holding that -- shockingly -- the filing of the unlawful detainer action was not motivated by free speech (i.e., the filing of the lawsuit), but rather the failure to pay rent.

All of which is true.  And awesome.  Exactly what should happen.

Tenant, however, doesn't get the message.  It files an appeal.  Saying that the trial court got is wrong.

The appeal is equally, if not more, frivolous than the underlying motion in the trial court.  I'd be very inclined to spank Tenant with sanctions on appeal.  As well as (likely) its counsel, Lee Durst.  Who's got a couple of additional pending problems of his own.

Respondents are no dummies.  They request sanctions on appeal.

But they make a critical strategic error.  Landlord and its attorneys overreach.

Landlord and its counsel request $73,352.50 in sanctions on appeal.  Twenty-one times what they obtained below.  All for the submission of a brief that the Court of Appeal describes as "essentially was a reiteration of its opposition papers below."

Remember:  Pigs get fat.  Hogs get slaughtered.

The Court of Appeal says essentially the same thing.  Albeit in legalese.  It affirms the denial of the motion to strike, but refuses to award fees on appeal.  Saying:

"‘If . . . the Court were required to award a reasonable fee when an outrageously unreasonable one has been asked for, claimants would be encouraged to make unreasonable demands, knowing that the only unfavorable consequence of such misconduct would be reduction of their fee to what they should have asked for in the first place.’ Accordingly, Landlord’s request for $73,352.50 in sanctions on appeal, particularly in light of the $3,392.50 attorney fee award which it sought and obtained in the court below, is denied as excessive."

Don't be greedy.  Or you may well get squat.