Crossroads Investors v. Federal National Mortgage Assn.

July 26, 2017 by Justia

This appeal challenged the trial court's denial of defendant's special motion to strike the complaint under Code of Civil Procedure section 425.16 (the anti-SLAPP statute). Defendant Federal National Mortgage Association (Fannie Mae) initiated nonjudicial foreclosure proceedings against property owned by plaintiff Crossroads Investors, L.P. (Crossroads), but Crossroads filed for bankruptcy protection, staying the proceedings. Its proposed reorganization plan called for selling the property to a third party, who would reinstate the loan but on different material terms less favorable to Fannie Mae. Fannie Mae would not be paid what it was owed in full. The bankruptcy court called the plan "dubious," and Crossroads' counsel agreed they were "trying to have our cake and eat it too." Crossroads failed to obtain confirmation of a reorganization plan, and the bankruptcy court granted Fannie Mae relief from the stay. Fannie Mae shortly thereafter sold the property, and it did so without providing prior notice to Crossroads. Crossroads filed suit for wrongful foreclosure, breach of contract, fraud, and other tort and contract causes of action. Fannie Mae filed an anti-SLAPP motion, contending the actions on which Crossroads based its complaint arose from the exercise of its constitutional rights of speech and petition; specifically, statements and omissions made in, or concerning issues under review in, the bankruptcy action. The trial court denied the motion. The California Supreme Court granted Fannie Mae's petition for review, depublished the Court of Appeals' original opinion, and transferred the matter to back to the appellate court to reconsider the appeal in light of Baral v. Schnitt, 1 Cal.5th 376 (2016). The Court of Appeals reversed the trial court's ruling and directed it to grant the anti-SLAPP motion: all of Crossroads' claims arose from Fannie Mae's constitutionally protected actions that were taken as part of, or related to, the bankruptcy action. Further, Crossroads did not establish a prima facie case in support of those claims, as all of its tort claims based on protected activity attacked statements privileged under Civil Code section 47, and its contract claims arising from protected activity were barred as a matter of law. View "Crossroads Investors v. Federal National Mortgage Assn." on Justia Law