DeMartini, et al. v. DeMartini, et al.

Filing 99

ORDER signed by Magistrate Judge Carolyn K. Delaney on 4/14/16 ORDERING that Plaintiffs' Request for Judicial notice (ECF No. 86-2) is GRANTED; Plaintiffs' MOTION for more definite statement (ECF No. 86 ) is GRANTED. IT IS HEREBY RECO MMENDED that Plaintiffs/counterdefendants' special MOTION to Strike under California Code of Civil Procedure § 425.16 (ECF No. 86 ) be granted as to the claims for breach of contract, wrongful ouster, and intentional interference with contractual relations alleged in the first amended answer and counterclaim; Plaintiffs/counterdefendants be awarded attorneys' fees and costs pursuant to California Code of Civil Procedure § 425.16 (c) in the amount of $4,600; Plai ntiffs/counterdefendants' MOTION to dismiss defendants/counterclaimants' claims for defamation and defamation per se be denied; Plaintiffs/counterdefendants' MOTION to dismiss defendants/counterclaimants' claim for malicious an d oppressive conduct be denied without prejudice to its renewal as an allegation in support of punitive damages; and Defendants/counterclaimants' claims for attorneys' fees be stricken. These Findings and Recommendations are submitted U.S. District Judge John A. Mendez; Objections to these F&Rs due within fourteen days.(Mena-Sanchez, L)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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TIMOTHY DeMARTINI, et al.,

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Plaintiffs,

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No. 2:14-cv-2722 JAM CKD PS

v.

ORDER AND

MICHAEL DeMARTINI, et al.,

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FINDINGS AND RECOMMENDATIONS

Defendants.

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Pending before the court is plaintiffs/counterdefendants’ motion to strike, motion to

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dismiss and/or strike, and motion for more definite statement. Because oral argument would not

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be of material assistance, the matter was submitted on the briefs. E.D. Cal. L.R. 230(g). Upon

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review of the documents in support and opposition, and good cause appearing therefor, THE

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COURT FINDS AS FOLLOWS:
In this action removed from state court on the basis of diversity jurisdiction,1 plaintiffs

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allege state causes of action for partition of a single parcel of real property located in Grass

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This action was originally filed in Superior Court for the County of Nevada on September 15,
2014. In the original complaint filed in state court plaintiffs sought partition of a parcel of real
property located in Grass Valley and moved for a temporary restraining order. Defendants
removed the action to the United States District Court, District of Nevada, on September 16,
2014, alleging diversity as the basis of jurisdiction. Plaintiffs moved to remand, contending the
action should have been removed to the Eastern District of California. Defendants conceded that
the action should have been removed to this District but moved to have the matter transferred
here. The District Court in Nevada concluded that since subject matter jurisdiction was not
challenged in the pleadings, transfer was appropriate and did so on November 20, 2014.
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Valley, Nevada County, California. The first amended complaint also alleges claims for breach

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of contract,2 dissolution of partnership and accounting. ECF No. 75. Defendants have filed a

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first amended answer and counterclaim in which defendants/counterclaimants allege claims for

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declaratory relief, breach of contract, defamation and defamation per se, wrongful ouster,

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dissolution of partnership and accounting, breach of fiduciary duty, intentional interference with

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contractual relations, and malicious and oppressive conduct. ECF No. 76.

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Plaintiffs/counterdefendants move to strike under California’s Anti–SLAPP3 law,

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California Code of Civil Procedure § 425.16, defendants/counterclaimants’ claims for breach of

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contract, wrongful ouster, and intentional interference with contractual relations.4

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Plaintiffs/counterdefendants also move to dismiss with prejudice defendants/counterclaimants’

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claims for defamation, defamation per se, and malicious and oppressive conduct and to strike

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defendants/counterclaimants’ claims for attorneys’ fees. Finally, plaintiffs/counterdefendants

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move for a more definite statement with respect to defendants/counterclaimants’ claims for

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breach of contract and dissolution of partnership.5

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1. Anti-SLAPP:

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A. Legal Standard:
The anti-SLAPP statute provides that: “A cause of action against a person arising from

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Plaintiffs assert they paid off a loan in the amount of $137,212.51 for which defendants owe
reimbursement to plaintiffs for one half the total amount.

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SLAPP is an acronym for “Strategic Lawsuit Against Public Participation.”

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Defendants/counterclaimants contend the present motions are barred by the stipulation of the
parties. The parties entered into a stipulation and the court issued an order thereon which granted
plaintiffs/counterdefendants 20 days to respond to the amended counterclaim. ECF No. 71, 72.
That time period was thereafter extended to file a responsive pleading, due to the substitution of
counsel, by the court’s October 20, 2015 order. ECF No. 85. Encompassed within the meaning
of “respond” are the motions presently before the court. See Fed. R. Civ. P. 12(b)(e)(f); see also
Cal. Code Civ. P. § 425.16(f) (motion to strike must be brought within 60 days of service of
pleading to which motion is directed). The court finds no waiver in plaintiffs/counterdefendants’
conduct.
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Plaintiffs request that the court take judicial notice of certain pleadings and orders of the court.
ECF No. 86-2. That request will be granted.
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any act of that person in furtherance of the person’s right of petition or free speech under the

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United States or California Constitution in connection with a public issue shall be subject to a

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special motion to strike, unless the court determines that the plaintiff6 has established that there is

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a probability that the plaintiff will prevail on the claim.”7 Cal. Code Civ. P. § 425.16 (b)(1). The

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statute further defines the phrase “any act of that person in furtherance of the person’s right of

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petition or free speech” to include the following: “(1) any written or oral statement or writing

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made before a legislative, executive, or judicial proceeding, or any other official proceeding

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authorized by law; (2) any written or oral statement or writing made in connection with an issue

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under consideration or review by a legislative, executive, or judicial body, or any other official

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proceeding authorized by law; (3) any written or oral statement or writing made in a place open to

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the public or a public forum in connection with an issue of public interest; (4) or any other

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conduct in furtherance of the exercise of the constitutional right of petition or the constitutional

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right of free speech in connection with a public issue or an issue of public interest.” Cal. Code

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Civ. P. § 425.16(e). If the alleged protected activity occurs in the context of a public or official

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proceeding, as described in subdivisions (1) or (2), there is no additional requirement that it be

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connected with an issue of public importance. See Briggs v. Eden Council for Hope &

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Opportunity, 19 Cal. 4th 1106, 1123 (1999).

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Application of the anti-SLAPP statute involves a two-step process: first, the court must

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determine whether the defendant has made the threshold showing that the plaintiff’s cause of

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action is one arising from protected activity under section 425.16, subdivision (e). The critical

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consideration in the anti-SLAPP context “is whether the cause of action is based on the

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defendant’s protected free speech or petitioning activity.” See Navellier v. Sletten 29 Cal. 4th

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82, 89 (2002) (emphasis in original). If this initial burden is met, then plaintiff must demonstrate

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In this case, because the motion to strike arises as a result of defendants/counterclaimants’
claims, the inquiry identified regarding the “plaintiff’s” burden actually refers to the burden borne
by the defendants/counterclaimants (Michael DeMartini, et. al.).
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The anti-SLAPP statute is available to litigants in a federal action. U.S. ex rel. Newsham v.
Lockheed Missiles & Space Co., Inc., 190 F.3d 963, 972-973 (9th Cir. 1999) (anti-SLAPP statute,
including provision for attorney’s fees, applicable to state law counterclaims).
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a probability of prevailing on the merits of the claim. See Navellier v. Sletten 29 Cal. 4th at 88

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(2002) (cause of action subject to being stricken under anti-SLAPP statute where it arises from

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protected conduct and lacks even minimal merit).

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To establish a probability of prevailing on the claim, plaintiff must state and substantiate a

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legally sufficient claim. See Briggs v. Eden Council for Hope & Opportunity, 19 Cal. 4th at

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1123. “Put another way, the plaintiff ‘must demonstrate that the complaint is both legally

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sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable

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judgment if the evidence submitted by the plaintiff is credited.’” Wilson v. Parker, Covert &

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Chidester, 28 Cal. 4th 811, 821 (2002) (citations omitted). “In deciding the question of potential

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merit, the trial court considers the pleadings and evidentiary submissions of both the plaintiff and

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the defendant (§ 425.16, subd. (b)(2)); though the court does not weigh the credibility or

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comparative probative strength of competing evidence, it should grant the motion if, as a matter

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of law, the defendant’s evidence supporting the motion defeats the plaintiff’s attempt to establish

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evidentiary support for the claim.” Id. (emphasis in original); see also Equilon Enterprises v.

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Consumer Cause, Inc., 29 Cal. 4th 53, 63 (2002) (court must determine only if the plaintiff has

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stated and substantiated a legally sufficient claim).

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B. Analysis
Plaintiffs/counterdefendants move to strike the claims for breach of contract, wrongful

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ouster, and intentional interference with contractual relations. Plaintiffs/counterdefendants

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contend that each of the claims is based on the protected activity of filing the instant lawsuit. In

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support of the breach of contract claim, defendants/counterclaimants allege that “Plaintiffs

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breached the contract with Defendants by filing a lawsuit on September 15, 2014 in Nevada

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County Superior Court limiting the authority of Defendant partners who were advancing the

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interests of the partnership. Plaintiffs further breached the contract by applying for a restraining

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order against Defendants.” ECF No. 76 at p. 7, ¶ 30. Such conduct is protected activity within

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the meaning of the anti-SLAPP statute. Similarly the claim for wrongful ouster is based on

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plaintiffs’ actions in instituting the instant action and contesting defendants’ rights to occupy the

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disputed property. ECF No. 76 at p. 10, ¶¶ 52-54. The claim for intentional interference with
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contractual relations also is predicated upon protected activity in that defendants/counterclaimants

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allege that plaintiff “Timothy DeMartini acted intentionally and improperly in requesting a

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restraining order against Michael DeMartini from the Nevada County Superior Court. The

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restraining order action and the resulting federal case turned performance on the contract into an

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expensive legal battle.” ECF No. 76 at p. 13, ¶ 84. Plaintiffs/counterdefendants have thus met

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their burden of showing the challenged causes of action arise from protected activity under

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section 425.16, subdivision (e).

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The court therefore turns to the question of whether defendants/counterclaimants in

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opposition to the pending motion have demonstrated that the challenged claims in the first

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amended counterclaim are legally sufficient and supported by a prima facie showing of facts

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sufficient to sustain a favorable judgment if the evidence submitted by defendants/

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counterclaimants is credited. Defendants/counterclaimants’ breach of contract claim is predicated

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on both protected and non-protected activity. ECF No. 76 at pp. 6-8, ¶¶ 17-32. As such, this is a

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mixed claim and defendants/counterclaimants can defeat the motion to strike by demonstrating

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minimal merit on any part of the cause of action for breach of contract. See Mann v. Quality Old

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Time Service, Inc., 120 Cal. App. 4th 90 (2004) “Where a cause of action refers to both protected

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and unprotected activity and a plaintiff can show a probability of prevailing on any part of its

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claim, the cause of action is not meritless and will not be subject to the anti-SLAPP procedure.”);

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cf. Cho v. Chang, 219 Cal. App. 4th 521 (2013) (in mixed claim, court may strike allegations

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attacking protected activity and allow unprotected theories to remain).8 As discussed below, the

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allegations pertaining to breach of contract arising out of unprotected activity are so vague that a

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more definite statement is required. In opposition to the pending motion, defendants/

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counterclaimants do not set forth the elements of a breach of contract cause of action and do not

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In Baral v. Schnitt, 233 Cal. App. 4th 1423 (2015), the court adopted the approach to mixed
cases used in Mann, concluding that “if the nonmoving party demonstrates a prima facie case of
prevailing on any part of a mixed cause of action, the anti-SLAPP motion fails.” Id., 183 Cal.
Rptr. 3d 615, 625. The issue of mixed cases is now pending before the California Supreme Court.
Baral v. Schnitt, 347 P. 3d 988 (May 13, 2015). This court need not decide the appropriate
approach to mixed cases because, as discussed below, defendants/counterclaimants fail to bear
their burden even with respect to the nonprotected activity.
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submit competent evidence in support of each element. Moreover, insofar as the breach of

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contract claim arises out of protected conduct, defendants/counterclaimants make no argument

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that the alleged contract included a material term preventing plaintiffs/counterdefendants from

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instituting the present action. See, e.g., City of Alhambra v. D’Ausilio, 193 Cal. App. 4th 1301,

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1307-1308 (2011) (claim was not subject to anti-SLAPP motion to strike because cause of action

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was predicated on scope and enforceability of settlement agreement preventing party from

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engaging in certain speech-related conduct). Having failed to meet their burden of demonstrating

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minimal merit on the breach of contract claim, the motion to strike should be granted as to this

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claim.
Plaintiffs/counterdefendants also move to strike the claims for wrongful ouster9 and

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intentional interference with contract,10 contending these claims are absolutely barred under the

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litigation privilege, California Civil Code § 47, which immunizes participants from liability for

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torts arising from communications made during judicial proceedings. See Silberg v. Anderson,

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50 Cal. 3d 205, 214 (1990). The litigation privilege under section 47 is absolute and bars all tort

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causes of action except a claim of malicious prosecution. See Flatley v. Mauro, 39 Cal. 4th 299,

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322 (2006). “The privilege in section 47 is “relevant to the second step in the anti-SLAPP

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analysis in that it may present a substantive defense the plaintiff must overcome to demonstrate a

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probability of prevailing.” Flatley, 39 Cal. 4th at 323. Defendants/counterclaimants make no

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showing overcoming the privilege. In sum, plaintiffs/counterdefendants have shown that the

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challenged causes of action arise from protected activity; defendants/counterclaimants fail to

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demonstrate minimal merit of their claims. The motion to strike should therefore be granted as to

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all three causes of action.

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The “wrongful ouster” claim appears to be a breach of contract claim because it based on
counterdefendants’ activities with respect to an alleged partnership asset. In opposition,
defendants/counterclaimants assert that the “wrongful ouster” claim is based on conduct
occurring in August 2014, before the filing of the instant action. ECF No. 95-1 at 10:15-11:8.
However, these allegations are not made in the first amended counterclaim. If a second amended
counterclaim is filed, it appears any “wrongful ouster claim” should be included in the cause of
action for breach of contract.
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As pled in the first amended counterclaim, neither of these causes of action are mixed claims.
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C. Attorneys’ Fees

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As prevailing parties on the motion to strike under the anti-SLAPP statute,

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plaintiffs/counterdefendants are entitled to attorney’s fees under California Code of Civil

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Procedure § 425.16(c)(1). In determining reasonable fees under this provision, the court applies

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the prevailing lodestar adjustment method utilized by California courts. See Ketchum v. Moses,

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24 Cal. 4th 1122, 1136-1137 (2001); see also Serrano v. Priest, 20 Cal. 3d 25, 49 (1977) (factors

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to be considered in adjustment of lodestar). In support of the motion for attorney’s fees,

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plaintiffs/counterdefendants submit the declaration of Christian Kemos, attorney for the moving

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parties. ECF No. 97-1. Plaintiffs/counterdefendants adduce no evidence regarding the prevailing

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market rate but simply set forth their hourly rate and the number of hours expended on the

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motion. Plaintiffs/counterdefendants also do not indicate whether representation was undertaken

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on a contingency or fee basis and do not set forth counsel’s years in practice or areas of expertise.

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The bulk of the work on the motion was performed by attorney Christian Kemos who was

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admitted to the Bar11 in 2005 and claims an hourly rate of $325 per hour. The remaining work on

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the motion was performed by attorney Peter Kleinbrodt, who was admitted to the Bar in 1979 and

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claims an hourly rate of $500. Although counsel’s office is located in Marin County, this case is

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venued in Sacramento and the court will apply prevailing market rates in this area. In this court’s

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experience, defense work of the kind performed on the motion to strike is compensated at an

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hourly rate of $250 per hour for an attorney with the experience of counsel Kemos and $350 per

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hour for an attorney with the experience of counsel Kleinbrodt.12 Because of the intertwined

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nature of the motions presently before the court, counsel simply estimated that of $7,3797.5013

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The court takes judicial notice of the records of the State Bar of California.

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While not dispositive, the court notes that the statutory maximum rate under the Equal Access
to Justice Act, 28 U.S.C. § 2412(d)(1), for the year 2015 is $190.28 per hour. Although fees
awarded under the federal EAJA statute serve an entirely different purpose than the fees awarded
under the California anti-SLAPP statute, in the absence of any proffer from plaintiffs’ counsel
regarding prevailing rates, the court has considered the EAJA rates as a reasonable indicator of a
base rate.
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Attorney Kemos claimed 21.9 hours was spent in total on all the motions and attorney
Kleinbrodt claimed 1.6 hours total.
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spent in total on the motions, $6,250.00 was expended on the anti-SLAPP motion to strike. Upon

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review of all of the pleadings pertaining to the pending motions, the court finds that 17 hours

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attorney time by counsel Kemos and 1 hour of attorney time by counsel Kleinbrodt was expended

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on the motion to strike. Plaintiffs/counterdefendants make no argument regarding adjustment of

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the lodestar and in the circumstances of this case, the court finds no adjustment is warranted. The

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court will therefore recommend a total award in the amount of $4,600 be made.

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2. Defamation/Defamation Per Se

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Plaintiffs/counterdefendants also move to dismiss with prejudice defendants/

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counterclaimants’ claims for defamation and defamation per se on the ground that said cause of

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action is barred by the statute of limitations. In considering a motion to dismiss for failure to

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state a claim upon which relief can be granted, the court must accept as true the allegations of the

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complaint in question, Erickson v. Pardus, 127 S. Ct. 2197, 2200 (2007), and construe the

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pleading in the light most favorable to the plaintiff, see Scheuer v. Rhodes, 416 U.S. 232, 236

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(1974).

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In order to avoid dismissal for failure to state a claim a complaint must contain more than

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“naked assertions,” “labels and conclusions” or “a formulaic recitation of the elements of a cause

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of action.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-557 (2007). In other words,

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“[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory

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statements do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Furthermore, a claim

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upon which the court can grant relief has facial plausibility. Twombly, 550 U.S. at 570. “A

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claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw

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the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S.

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at 678.

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The statute of limitations for defamation is one year. Cal. Code Civ. P. § 340(c).

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Defendants/counterclaimants allege the defamatory utterances were made by plaintiff Timothy

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DeMartini on July 23, 2014 and August 27, 2014. ECF No. 76 at p. 8, ¶¶38, 39.

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Plaintiffs/counterdefendants assert that because the first amended counterclaim was filed

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September 30, 2015,14 the cause of action for defamation is time barred. They contend the claim

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cannot relate back to the filing of the original counterclaim, filed on September 25, 2014, (ECF

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No. 4) because the original counterclaim fails to set forth facts that could serve as a basis for a

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defamation claim. Construing defendants/counterclaimants’ pro se pleadings liberally, as this

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court must do, this argument is unavailing. The original counterclaim contains factual allegations

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regarding defamatory statements which appear to be related to the defamatory utterances alleged

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in the first amended counterclaim. ECF No. 4 at p. 6, ¶¶ 50, 51. As such, the court finds that the

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cause of action pled in the first amended counterclaim relates back to the original counterclaim

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and is not time barred. See Fed. R. Civ. P. 15(c)(1)(B); see generally Santana v. Holiday Inns,

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Inc., 686 F.2d 736 (9th Cir. 1982) .

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3. Malicious and Oppressive Conduct

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Plaintiffs/counterclaimants also move to dismiss the claim for malicious and oppressive

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conduct, contending that state law provides for no such cause of action. This contention is

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correct. An allegation of malicious and oppressive conduct may be made in support of a claim

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for punitive damages but is not a stand-alone claim. The court will therefore recommend that the

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eighth claim for relief be dismissed without prejudice to its renewal as an allegation in support of

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punitive damages.15

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4. Defendants/Counterclaimants’ Attorneys’ Fees

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Plaintiffs/counterdefendants further move to strike under Federal Rule of Civil Procedure

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12(f) the claims for attorneys’ fees pled throughout the first amended counterclaim. “‘[T]he

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function of a 12(f) motion to strike is to avoid the expenditure of time and money that must arise

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from litigating spurious issues by dispensing with those issues prior to trial . . . .’” Fantasy, Inc.

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v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993) (quoting Sidney-Vinstein v. A.H. Robins Co.,

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697 F.2d 880, 885 (9th Cir. 1983)), rev’d on other grounds, 510 U.S. 517 (1994). Grounds for a

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The first amended counterclaim was filed twice, once on September 30, 2015 and again on
October 15, 2015. ECF Nos. 73, 76.
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By this recommendation, the court does not mean to suggest a claim for punitive damages is
appropriate in this matter. Any such claim must be made consonant with the strictures of Federal
Rule of Civil Procedure 11.
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motion to strike must appear on the face of the pleading or from matters which the court may

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judicially notice. See Fantasy, Inc., 984 F.2d at 1528; Securities and Exch. Comm’n v. Sands,

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902 F. Supp. 1149, 1165 (C.D. Cal. 1995). When ruling on a motion to strike, the court must

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accept as true the pleader’s factual allegations. See Vokal v. United States, 177 F.2d 619, 623-24

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(9th Cir. 1949).

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In the first amended counterclaim, defendants/counterclaimants allege that they are

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entitled to attorney’s fees and costs on the first claim for declaratory relief, on the third claim for

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defamation and defamation per se, on the fourth claim for wrongful ouster, on the sixth claim for

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breach of fiduciary duty, on the seventh claim for intentional interference with contractual

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relations, and on the eight claim for malicious and oppressive conduct. There is no apparent

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basis, either statutory or in case law, for an award of attorney’s fees in connection with these

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claims. Defendants/counterdefendants in opposition cite no basis for the claimed attorney’s fees.

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The motion to strike should therefore be granted.

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5. More Definite Statement

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Finally, plaintiffs/counterdefendants move for a more definite statement with respect to

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the claims for breach of contract and dissolution of partnership. Motions for more definite

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statement are governed by Rule 12(e). “Rule 12(e) is designed to strike at unintelligibility, rather

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than want of detail.” Woods v. Reno Commodities, Inc., 600 F. Supp. 574, 580 (D. Nev. 1984);

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Nelson v. Quimby Island Reclamation Dist., 491 F.Supp. 1364, 1385 (N.D. Cal. 1980). Rule

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12(e) permits a party to move for a more definite statement “[i]f a pleading is so vague that a

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party cannot reasonably be required to frame a responsive pleading.” The function of such a

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motion is thus not to require the pleader to disclose details of the case, Boxall v. Sequoia Union

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High School Dist., 464 F.Supp. 1104, 1114 (N.D. Cal. 1979), nor to provide the evidentiary

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material that may properly be obtained by discovery. Famolare, Inc. v. Edison Bros. Stores, Inc.,

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525 F.Supp. 940, 949 (E.D. Cal. 1981). A motion for more definite statement should be denied if

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a pleading meets federal standards by providing a “short and plain statement” of the claim

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showing that the pleader is entitled to relief. See Fed. R. Civ. P. 8(a)(2).

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The causes of action for breach of contract and dissolution of partnership as presently pled

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in the first amended counterclaim are too vague to give notice to counterdefendants of the claims

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being asserted. The material terms of the contract that have been breached are not specifically

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alleged and the pleadings appear to be a mishmash of theories regarding breach of fiduciary duty,

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breach of good faith and fair dealing and/or duty of loyalty. The court will therefore grant the

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motion for more definite statement and grant leave to amend. The second amended counterclaim

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may not include claims predicated on protected activity or include allegations or claims that have

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been stricken.

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In addition, defendants/counterclaimants are informed that the court cannot refer to a prior

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pleading in order to make defendants/counterclaimants’ second amended counterclaim complete.

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Local Rule 15-220 requires that an amended complaint be complete in itself without reference to

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any prior pleading. This is because, as a general rule, an amended complaint supersedes the

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original complaint. See Loux v. Rhay, 375 F.2d 55, 57 (9th Cir. 1967). Once defendants/

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counterclaimants file a second amended counterclaim, the prior pleadings no longer serve any

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function in the case. Therefore, in an amended counterclaim, as in an original counterclaim, each

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claim and the involvement of each counterdefendant must be sufficiently alleged. To foster

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compliance with the requirement of Federal Rule of Civil Procedure 8 that the complaint must set

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forth a short and plain statement of the claims, the second amended counterclaim will be limited

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to 20 pages.

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Accordingly, IT IS HEREBY ORDERED that:

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1. Plaintiffs’ request for judicial notice (ECF No. 86-2) is granted;

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2. Plaintiffs’ motion for more definite statement (ECF No. 86) is granted. Within twenty-

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eight days from the date of the District Court’s resolution of the herein findings and

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recommendations, defendants/counterclaimants shall file a second amended counterclaim, limited

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to 20 pages, setting forth the material terms of both the alleged contract and partnership

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agreement, and the terms of the contract which defendants/counterclaimants allege were

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breached; the second amended counterclaim shall not include any claims which have been

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dismissed or stricken; failure to file a second amended counterclaim in accordance with this order
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shall result in a recommendation that all counterclaims be dismissed; and

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IT IS HEREBY RECOMMENDED that:

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1. Plaintiffs/counterdefendants’ special motion to strike under California Code of Civil

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Procedure § 425.16 (ECF No. 86) be granted as to the claims for breach of contract, wrongful

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ouster, and intentional interference with contractual relations alleged in the first amended answer

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and counterclaim;

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2. Plaintiffs/counterdefendants be awarded attorneys’ fees and costs pursuant to
California Code of Civil Procedure § 425.16 (c) in the amount of $4,600;
3. Plaintiffs/counterdefendants’ motion to dismiss defendants/counterclaimants’ claims
for defamation and defamation per se be denied;
4. Plaintiffs/counterdefendants’ motion to dismiss defendants/counterclaimants’ claim for

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malicious and oppressive conduct be denied without prejudice to its renewal as an allegation in

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support of punitive damages; and

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5. Defendants/counterclaimants’ claims for attorneys’ fees be stricken.

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These findings and recommendations are submitted to the United States District Judge

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assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(l). Within fourteen days

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after being served with these findings and recommendations, any party may file written

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objections with the court and serve a copy on all parties. Such a document should be captioned

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“Objections to Magistrate Judge’s Findings and Recommendations.” Failure to file objections

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within the specified time may waive the right to appeal the District Court’s order. Martinez v.

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Ylst, 951 F.2d 1153 (9th Cir. 1991).

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Dated: April 14, 2016

_____________________________________
CAROLYN K. DELANEY
UNITED STATES MAGISTRATE JUDGE

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4 demartini2722.mts-mtd

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