Diplomat Property Manager v. FortiFi Financial CA4/1

Opinion

Filed 9/23/26 Diplomat Property Manager v. FortiFi Financial CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

DIPLOMAT PROPERTY MANAGER, D086371 LLC,

Plaintiff and Respondent, (Super. Ct. No. 24CU007912C) v. FORTIFI FINANCIAL, INC., Defendant and Appellant.

APPEAL from an order of the Superior Court of San Diego County, Loren G. Freestone, Judge. Affirmed. Orrick Herrington & Sutcliffe, Fredrick S. Levin and Ali M. Abugheida for Defendant and Appellant. Buchalter, R. Jeremy Adamson and Robert Collings Little for Plaintiff and Respondent. This action involves alleged misuse of California’s Property Assessed Clean Energy (PACE) program (Stats. 2008, ch. 159, §§ 1–2, p. 523), which allows homeowners to install renewable energy sources and energy-efficient upgrades to their homes and have the cost added to their property tax bill to be paid in installments. (Morgan v. Ygrene Energy Fund, Inc. (2025) 18 Cal.5th 1061, 1070.) Diplomat Property Manager, LLC’s predecessor made construction loans secured by real properties to real estate developer Andre Wegner, his company Top Flight, Top Flight principal Doug Sanchez, and related entity Palms Blvd Venice Beach, LLC. Sound Equity High Income Debt Fund, LLC serviced and administered the loans for Diplomat. Top Flight then entered into voluntary assessment contracts for each property under the PACE program. FortiFi Financial, Inc., which administers the PACE program for the relevant governmental entities, recorded the assessments to have them added as tax liens on the properties. By law, the PACE liens take priority over other liens and run with the property. (Sts. & Hy. Code, §§ 5898.30; Gov. Code, § 53340, subd. (e); Morgan, 18 Cal.5th at p. 1070.) After Top Flight defaulted on the construction loans and allowed the property taxes to become delinquent, Sound Equity sued Top Flight, Wegner, Sanchez, and Palms. The court appointed a receiver to sell the properties. Diplomat claims buyers generally were unwilling to purchase the properties subject to FortiFi’s PACE liens, so the receiver used sale proceeds to pay the PACE lien balances and clear the titles. Because the receiver paid off the PACE liens first, Diplomat asserts its subsequent recovery was diminished. Diplomat sued FortiFi, alleging it conspired with Top Flight to pay out PACE funds to a construction company owned by Wegner, which never completed the efficiency upgrade work on the homes or did so at inflated prices. It claims FortiFi never monitored or inspected the work and, along 2 with Wegner, pressured the receiver to pay off the PACE liens, which it knew would subordinate Diplomat’s deeds of trust. The complaint asserted causes of action for declaratory judgment, tortious interference with contract, tortious interference with prospective economic advantage, aiding and abetting breach of contract, conspiracy to commit fraud, and unfair competition. FortiFi filed a special motion to strike Diplomat’s complaint, arguing it was a strategic lawsuit against public participation (SLAPP) under Code of Civil Procedure section 425.16 (the anti-SLAPP statute). The court denied the motion, finding FortiFi had not met its initial burden to show that Diplomat’s complaint arose from protected activity. FortiFi appeals, arguing Diplomat’s causes of action arise from protected prelitigation petitioning activity because recording the PACE liens is a prerequisite to pursuing judicial foreclosure. FortiFi also asserts its enforcement of the PACE liens in litigation is protected conduct, and that each of Diplomat’s causes of action arises from FortiFi enforcing the liens in litigation. In our view, FortiFi’s argument that recording PACE liens is protected conduct seeks to push the boundaries of what constitutes protected prelitigation conduct too far afield of the expressed language and intent of section 425.16. We further conclude Diplomat’s claims do not arise from FortiFi’s alleged litigation conduct. Accordingly, we affirm. I. A. According to the operative complaint, although many local governments adopt the PACE program, they typically contract with private PACE administrators like FortiFi to serve as de facto lenders. (See also Morgan, 3 18 Cal.5th at p. 1071.) The administrators select the private contractors that will do the home improvement work and pay them directly. The PACE program encourages installation of “distributed generation renewable energy sources or energy or water efficiency improvements” (see Sts. & Hy. Code, § 5898.21) such as solar panels, artificial turf, and energy efficient water heaters, furnaces, and light fixtures. Diplomat alleges that, starting in early 2019, FortiFi colluded with Wegner to obtain “super-priority” PACE loans on properties already encumbered by Diplomat’s recorded deeds of trust. In nearly every instance, FortiFi distributed the loan proceeds to the contractors before they started any work, rather than incrementally based on progress. None of the distributions were supported by invoices, receipts, purchase orders, or other proof of actual or anticipated costs. As part of the conspiracy, FortiFi paid the funds to a construction company controlled by Wegner, which never completed any of the work. Top Flight then “defaulted strategically” on Diplomat’s construction loans, while simultaneously allowing the property taxes to become delinquent. The complaint alleges this was “no problem for FortiFi, which knew it would be paid out first in the default process.” In April 2021, Sound Equity sued Top Flight, Wegner, Sanchez, and Palms for defaulting on all the construction loans. The court appointed a receiver over specific Top Flight properties and later expanded the receiver’s powers so the receiver could market and sell all eight of the defaulted Top Flight properties. The receiver sought an order that FortiFi understood would authorize the sale of two homes clear of all liens without payment of FortiFi’s PACE assessments.

4 In early November 2022, FortiFi intervened and opposed the motion, seeking to block the court from stripping the PACE assessment liens. The receiver revised the motions, and FortiFi advised the court that it did not oppose the sales based on its understanding that the delinquent PACE debts would be paid and that the PACE liens would otherwise remain on the properties. The court ultimately issued orders directing the receiver to pay delinquent PACE assessments and confirming the PACE liens would continue to run with the property after the sale unless prepaid in full. According to Diplomat, because most buyers were unwilling to buy the properties subject to the PACE liens, the receiver used sale proceeds otherwise intended for Diplomat to pay off FortiFi’s PACE liens first. Through its complaint, Diplomat seeks various remedies, including the recovery of $844,205—the amount it anticipates FortiFi will be paid through escrows on the eight properties. B. In its anti-SLAPP motion, FortiFi asked the court to strike Diplomat’s entire complaint. Diplomat opposed the motion. With its reply brief, FortiFi requested judicial notice of a superior court minute order from a different case involving PACE liens. The trial court denied the motion and the request for judicial notice. As to FortiFi’s contention that recording PACE liens is protected activity, the court explained that “‘[p]relitigation communications may constitute protected activity, but only if those communications are related to litigation that is contemplated in good faith and under serious consideration. Litigation is not under consideration if it is only a possibility. . . .’ (People ex rel. Allstate Ins. Co. v. Rubin (2021) 66 Cal.App.5th 5 493, 499.)” It acknowledged PACE liens are like mechanic’s liens in that they can only be enforced by judicial foreclosure, and that this court previously determined in RGC Gaslamp, LLC v. Ehmcke Sheet Metal Co., Inc. (2020) 56 Cal.App.5th 413 that mechanic’s liens constitute protected prelitigation statements. But, citing Medallion Film LLC v. Loeb & Loeb LLP (2024) 100 Cal.App.5th 1272, 1284–1286, the court noted later cases have limited RGC Gaslamp’s holding to “‘prelitigation activities that were intrinsically preparatory to litigation such that no analysis o[f] surrounding circumstances was necessary to determine that they were protected prelitigation activity.’” Under this authority, when the activities are not “‘intrinsically preparatory’” to litigation, courts must still evaluate whether litigation was “‘genuinely contemplated’” at the time the challenged activity occurred. Applying this test, the court concluded that recording PACE assessments was not intrinsically preparatory to litigation because their purpose was to finance home improvements and the expectation was that they would be repaid as an added property tax. Because they are “‘voluntary contractual assessments,’” recorded before any default, and designed to facilitate financing, the court found them more akin to deeds of trust. As FortiFi did not submit evidence showing it was genuinely contemplating litigation at the time it recorded the PACE assessments, the court observed that FortiFi had to rely solely on Diplomat’s allegations to make that showing. The court acknowledged the complaint reflects FortiFi knew its lien would subordinate Diplomat’s and that Top Flight strategically defaulted on the construction loans while also falling behind on its property tax payments. But the court concluded the complaint overall reflected FortiFi’s apathy as to whether litigation resulted, which “d[id] not equate to a genuine contemplation of litigation.” Furthermore, noting that FortiFi did 6 not initiate the litigation as a judicial foreclosure, the court determined that “[t]here is simply no evidence or allegations that at the time it recorded the assessments, FortiFi was genuinely contemplating intervening and filing an opposition 3 ½ years later in a case filed by a non-party to the PACE loan.” The court further concluded FortiFi’s litigation conduct did not form the basis for Diplomat’s claims. As to its first cause of action for declaratory relief, the court determined Diplomat did not allege the PACE liens were illegitimate and fraudulent because of Diplomat’s conduct in the receivership action. In the court’s view, the actions giving rise to the claimed illegitimacy and fraud all predated that litigation. It concluded the remaining five causes of action were all based on the following specific actions listed in the complaint, none of which were predicated on FortiFi’s actions in the receivership case: “‘FortiFi’s (i) failure to vet contractors who performed renovations on the Properties, (ii) failure to monitor, inspect and document the work performed by its approved contracts, (iii) decision to approve the use of a contractor controlled by Wegner, (iv) willful payment to contractors for work that had not been completed or was completed at inflated and fraudulent prices for equipment and labor, (v) willful conspiracy with Top Flight and Wegner and Sanchez to defraud Diplomat, and abuse the PACE program and (vi) recordation of illegitimate PACE liens with Los Angeles and Riverside Counties.’” The court was unpersuaded by FortiFi’s argument that the alleged fraud “‘was ultimately accomplished in the Sound Equity litigation,’” and that “‘the alleged fraud would not have been completed’” without its actions in that litigation. “[A]lthough the alleged scheme to subordinate Diplomat’s loans with illegitimate and fraudulent PACE liens ‘may have been carried out by the filing of’ documents in the litigation,” the court explained “FortiFi’s 7 actions in the Sound Equity litigation are not the basis for any of the causes of action.” Because the court concluded FortiFi had not met its step one burden of showing that Diplomat’s complaint arose from protected activity, the court denied the motion and did not reach step two. II. The anti-SLAPP statute seeks to cut short “lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.” (§ 425.16(a).) It “provides a procedure for weeding out, at an early stage, meritless claims arising from protected activity.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 384.) An anti-SLAPP motion involves a two-step process. “At the first step, the moving defendant bears the burden of identifying all allegations of protected activity[] and the claims for relief supported by them.” (Baral, 1 Cal.5th at p. 396.) The moving party must establish that the challenged allegations or claims arise from protected activity, which may include, as relevant here, “any written or oral statement or writing made before a . . . judicial proceeding” and “any written or oral statement or writing made in connection with an issue under consideration or review by a . . . judicial body.” (§ 425.16(e)(1), (2).) If the defendant satisfies that burden, then at the second step “the burden shifts to the plaintiff to demonstrate that each challenged claim based on protected activity is legally sufficient and factually substantiated.” (Baral, at p. 396.) We review de novo the denial of an anti-SLAPP motion. (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1067.) In doing so, we consider relevant pleadings and supporting and opposing affidavits. (§ 425.16(b)(2).) We accept the evidence favorable to the plaintiff 8 as true and only evaluate the defendant’s evidence to determine if it has defeated the plaintiff’s submissions as a matter of law. (Flatley v. Mauro (2006) 39 Cal.4th 299, 326.) At the first step here, FortiFi contends Diplomat’s complaint arises from protected activity for two reasons. First, each of Diplomat’s causes of action stems from FortiFi recording allegedly fraudulent and illegitimate PACE liens. According to FortiFi, recording PACE liens is protected prelitigation activity because recording the lien is a prerequisite to pursuing judicial foreclosure, which is the sole enforcement mechanism for a PACE assessment. Second, FortiFi asserts its enforcement of the PACE liens in litigation is protected conduct, and that each of Diplomat’s causes of action arises from FortiFi enforcing the liens in litigation. We disagree on both counts. A. FortiFi seeks to strike all causes of action against it, arguing that each claim arises from its recording of PACE liens. Diplomat acknowledges that its claims center on a fraudulent scheme involving the recorded PACE liens, but it disputes FortiFi’s contention that the act of recording PACE liens constitutes protected prelitigation activity. Courts have long construed the anti-SLAPP statute’s provision providing protection for “any written or oral statement or writing made in connection with an issue under consideration or review by a . . . judicial body” (§ 425.16(e)(2)) as also shielding some prelitigation communications. (Nirschl v. Schiller (2023) 91 Cal.App.5th 386, 401 citing Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1115.) As our high court explained, “courts considering the question have concluded that ‘[j]ust as communications preparatory to or in anticipation of the bringing of an action 9 or other official proceeding are within the protection of the litigation privilege of Civil Code section 47, subdivision (b),’” “such statements are equally entitled to the benefits of section 425.16.” (Briggs, at p. 1115.) The Legislature has made clear the anti-SLAPP statute should be “construed broadly” to protect “the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.” (§ 425.16(a); Briggs, at p. 1119.) The Legislature’s stated intention offers the key to our resolution of the dispute in this case. Once a homeowner signs a contract agreeing to a PACE assessment, the relevant legislative body “shall direct its clerk to record a notice of the existence and amount of each contractual assessment with the county recorder of the county in which the lot or parcel is located.” (Sts. & Hy. Code, § 5898.32, italics added.) As FortiFi acknowledges, the assessments must be recorded to create the lien that, in turn, obligates the property owner to pay the assessment. In fact, the notices of assessment in the record expressly state, “[notice is further given] that upon the recording of this notice in the office of the County Recorder, the Assessment shall become a lien upon the Property.” The purpose of recording the assessment was thus to create a tax lien, not to “redress” a “grievance.” The absence of any sort of grievance at this stage is reinforced by the fact that homeowners voluntarily enter into PACE assessment contracts. And in the normal course, the tax lien is paid off in due course by the homeowner without any disputes and without the need for any litigation. Therefore, we are not persuaded that the anti-SLAPP statute applies to the act of recording PACE assessments. FortiFi nonetheless contends that “because PACE assessments must be recorded in order to be enforced and the only enforcement mechanism available in the event of non-payment is judicial foreclosure,” there is a direct 10 and logical connection between recording PACE assessments and litigation. FortiFi cites a series of cases to justify its assertion that all it must show is that the activity is a legal prerequisite to pursuing judicial remedies. (See Birkner v. Lam (2007) 156 Cal.App.4th 275 and Feldman v. 1100 Park Lane Associates (2008) 160 Cal.App.4th 1467; Lunada Biomedical v. Nunez (2014) 230 Cal.App.4th 459; CKE Restaurants, Inc. v. Moore (2008) 159 Cal.App.4th 262; Salma v. Capon (2008) 161 Cal.App.4th 1275.) But we are not convinced that demonstrating the act is a prerequisite to pursuing judicial remedies, without more, is enough to satisfy the anti-SLAPP statute. In the cases FortiFi relies on, an underlying dispute or grievance existed at the time the petitioning occurred. (See Lunada Biomedical, 230 Cal.App.4th at p. 465 [“Attorneys for a consumer served on a company a notice required for damages under the Consumers Legal Remedies Act, Civil Code section 1750 et seq. (CLRA), setting forth alleged violations of the CLRA and demanding action.”]; CKE Restaurants, 159 Cal.App.4th at pp. 266–267 [respondents served 60-day notice that CKE violated Safe Drinking Water and Toxic Enforcement Act of 1986 because it failed to warn consumers that its french fries contained chemical known to cause cancer]; Salma, 161 Cal.App.4th at p. 1281 [while searching for an attorney, defendant served and recorded notice of rescission of an equity purchase agreement after filing complaints with police and district attorney alleging fraudulent purchase of his home and retention of his personal property]; Feldman, 160 Cal.App.4th at pp. 1474–1475 [owner of apartment building served tenants with three-day notice to quit during ongoing dispute as to whether owner had approved their sublease]; Birkner, 156 Cal.App.4th at p. 279 [landlord served tenants with notice to terminate tenancy and refused to rescind it even after tenant’s counsel notified him tenants could not be evicted because they were protected 11 under rent ordinance].) Thus, these cases do not mandate the conclusion that a recording is protected solely because it is a prerequisite to pursuing judicial remedies. FortiFi also cites an unpublished trial court decision from another court, purportedly for its reasoning—the very same decision the trial court declined to consider via FortiFi’s request for judicial notice. Diplomat moved to strike FortiFi’s reply brief based on its reliance on this non-citable authority. Because FortiFi did not expressly violate the rules offered by Diplomat, we deny the motion and decline to impose sanctions. But, although FortiFi claims it provided the case solely for its reasoning, FortiFi provided only the trial court’s conclusion with no indication of how the court grappled with Supreme Court or published appellate authority to reach that conclusion. Thus, it appears FortiFi actually cited the case for its precedential value. As the trial court correctly noted in denying FortiFi’s request for judicial notice of this case, a trial court order has no precedential value. (Crab Addison, Inc. v. Superior Court (2008) 169 Cal.App.4th 958, 963, fn. 3.) For this reason, we decline to consider this trial court decision. In our view, FortiFi’s position—that any activity is protected prelitigation conduct so long as it is a prerequisite to eventually, possibly pursuing judicial remedies—is too attenuated from our Supreme Court’s rationale for extending anti-SLAPP coverage to prelitigation activities in the first place. As the court explained, “[u]nder the plain terms of the statute[,] it is the context or setting itself that makes the issue a public issue: all that matters is that the First Amendment activity take place in an official proceeding or be made in connection with an issue being reviewed by an official proceeding.” (Briggs, 19 Cal.4th at p. 1116, italics added.) Filing a PACE assessment with the county recorder for the purposes of complying 12 with a statutory mandate and creating a voluntary lien is not an activity in connection with an issue currently under review by a court or even one contemplated at the time of filing. And FortiFi does not argue that the actions of the recorder’s office constitute official proceedings authorized by law, such that the mere filing of the assessment, independent of any later litigation, independently satisfies the anti-SLAPP statute. (See § 425.16(e)(1), (2).) For this reason, we agree with the trial court that recording a PACE assessment is more akin to filing a deed of trust than a mechanic’s lien. “Deeds of trust are filed with the owner’s consent and, at least initially, their purpose is to facilitate credit rather than to collect debts.” (Wilton v. Mountain Wood Homeowners Assn. (1993) 18 Cal.App.4th 565, 570.) “Although deeds of trust may be foreclosed judicially after a default, they are not at their inception related to judicial proceedings.” (Ibid.) Thus, neither deeds of trust nor PACE liens are created or recorded to “redress” a “grievance.” In arguing that “the only enforcement mechanism available in the event of non-payment [on a PACE lien] is judicial foreclosure,” FortiFi implicitly acknowledges that a grievance necessitating judicial foreclosure only arises in the event of nonpayment. Mechanic’s liens, meanwhile, are filed in the event of nonpayment, and thus are premised on the existence of a grievance. The contractor, supplier, or laborer has performed work on a property or delivered materials and has not been paid. (See RGC Gaslamp, 56 Cal.App.5th at p. 422 [mechanic’s liens are available to resolve payment disputes in private construction projects].) As we noted in RGC Gaslamp, the recording of a mechanic’s lien “is a necessary prerequisite to a foreclosure action” and “is not a prerequisite for contractual performance or anything else.” (Id. at p. 430.) Recording a PACE 13 assessment, by contrast, is a prerequisite to something else—receiving repayment along with taxes. Thus, although we stated in RGC Gaslamp that no additional showing besides recording was necessary to satisfy the moving party’s burden, that case pre-supposed the existence of a grievance in need of redress and the recording occurred under materially different circumstances. (See ibid.) A claimant also must enforce their mechanic’s liens through a foreclosure suit within 90 days. (RGC Gaslamp, 56 Cal.App.5th at p. 423 citing Civ. Code, § 8460(a).) Although litigation was likewise in view in the cases FortiFi relies on, FortiFi never filed a foreclosure action and only intervened three-and-a-half years after recording the liens. During oral argument, FortiFi’s counsel appeared to argue it did not matter how much time passed between recording and enforcement in this case because there were no “off ramps” during that time span. In our view, at the time of recording, FortiFi had not yet reached the on ramp of non-payment necessary to potentially demonstrate the statutorily required grievance. We also reject FortiFi’s argument that Birkner, Feldman, Lunada Biomedical, CKE Restaurants, and Salma “hold true to the intent of section 425.16, which ‘is construed broadly, to protect the right of litigants to the utmost freedom of access to the courts without [the] fear of being harassed subsequently by derivative tort actions.’ (Rohde v. Wolf (2007) 154 Cal.App.4th 28, 35 [cleaned up].)” We do so because “[s]ection 425.16 is not concerned with securing for litigants freedom of access to the judicial process.” (Flatley, 39 Cal.4th at p. 324.) That is the objective of the litigation privilege. (Ibid.) “The purpose of section 425.16 is to protect the valid exercise of constitutional rights of free speech and petition from the abuse of the judicial process (§ 425.16(a)), by allowing a defendant to bring a motion to 14 strike any action that arises from any activity by the defendant in furtherance of those rights.” (Ibid.) Declining to apply the anti-SLAPP statute here will not deprive FortiFi of access to the courts. The lawsuit is to recover funds that were allegedly fraudulently obtained, not to suppress FortiFi’s right to record PACE liens under normal, lawful circumstances—or, for that matter, to record illegitimate PACE assessments against other parties. Accordingly, a holding declining to protect the recording of PACE liens will not, as FortiFi claims, run afoul of the anti-SLAPP statute’s purpose of protecting litigants from meritless claims designed to chill speech. The trial court concluded that recording PACE liens was not protected conduct by applying the test that prelitigation communications may only qualify for statutory protection if they concern the subject of the dispute and if the anticipated litigation is contemplated in good faith and under serious consideration. (Medallion Film, 100 Cal.App.5th at p. 1284.) Although some courts, including our own, have questioned the appropriateness of this test (see RGC Gaslamp, 56 Cal.App.5th at p. 429 [but concluding it need not resolve whether to apply this test while noting it “may be helpful in evaluating prelitigation statements that do not intrinsically anticipate litigation”]), most courts apply it. (See Medallion Film, at pp. 1284–1285 [collecting cases].) But we are not persuaded we must reach the stage of employing this test because at the time FortiFi recorded the PACE assessments pursuant to its statutory duty, no dispute existed, and neither party had a grievance it sought to redress. This was not a protected act of petitioning under the anti-SLAPP statute. Nonetheless, FortiFi responds the complaint’s allegations demonstrate litigation was always the intention in this particular case. In its view, 15 because FortiFi and Top Flight purportedly entered a conspiracy to defraud Diplomat by “strategically” placing the PACE assessments into default, and because the only way to obtain payment aside from voluntary payment is litigation, the complaint alleges litigation was the plan all along. FortiFi also contends the complaint accuses FortiFi of “priming”—“jump[ing] in front of otherwise first-position creditors [like Diplomat] in the payment waterfall.” Somewhat ironically, in arguing the trial court erred in considering whether the anticipated litigation was contemplated in good faith and under serious consideration, FortiFi characterizes this test as an inappropriate intent-based analysis. Yet, in asking us to consider the intent of the conspiracy to conclude that recording the PACE assessments really was done in anticipation of litigation in this case, FortiFi asks us to consider its intent. We decline to do so. We further find FortiFi’s argument problematic for three reasons. First, only one party in this scenario was aware that recording the PACE liens was envisioned as prelitigation activity. On this point, we agree with other cases finding an attorney’s subjective expectations of litigation insufficient to establish the activity was protected prelitigation conduct. (See, e.g., Rubin, 66 Cal.App.5th at p. 501 [concluding doctor’s medical reports and bills were not protected where doctor’s argument that they were intended to be used in litigation “‘hinge[d] on his subjective understanding of the purpose of his reports and bills’”]; People ex rel. Fire Ins. Exchange v. Anapol (2012) 211 Cal.App.4th 809, 829 [concluding “an insurance claim cannot be transformed from a simple claim for payment submitted in the usual course of business into protected prelitigation conduct solely on the basis of the subjective intent of the attorney submitting the claim”].) Second, assuming for the sake of resolving this issue that the allegations are true, 16 finding this recording protected would allow a co-conspirator to not only defraud another lender but also rely on its conspiracy to avoid facing the merits of a complaint alleging wrongdoing. And third, it would result in a lack of uniformity as to whether the recording of PACE liens is considered protected activity. People ex rel. 20th Century Ins. Co. v. Building Permit Consultants, Inc. (2000) 86 Cal.App.4th 280 addressed a similar argument. There, an insurance company alleged fraud related to insurance claims following the Northridge earthquake. (Id. at p. 282.) In the underlying complaint, 20th Century claimed that “in cases where a homeowner had been paid by 20th Century for earthquake damage, ‘defendants would prepare a false and fraudulent report which indicated that the earthquake damage was more extensive than previously claimed by the homeowner and paid for by ex rel. Plaintiff 20th Century. Defendants falsely and fraudulently attributed damage to the Northridge earthquake when, as defendants were aware, there was no damage at all or, if there was damage, it resulted from causes other than the Northridge earthquake.’” (Id. at p. 284.) If 20th Century did not pay the additional insurance benefits demanded, the defendants used biased appraisers and referred clients to attorneys who were instructed to file litigation. (Id. at p. 282.) In a subsequent anti-SLAPP motion, the defendants argued “their right to petition [was] implicated by the allegation that they prepared and used false and fraudulent damage reports and repair estimates.” (20th Century, 86 Cal.App.4th at p. 284.) They supported their motion with a declaration from the owner explaining that the majority of the reports were prepared in anticipation of litigation. (Ibid.) The court disagreed, explaining that the damage reports were sent to demand performance on an insurance contract 17 and that no issue was under consideration in any official proceeding at the time the defendants created and submitted their reports and claims. (Id. at p. 285.) Relevant here, the court concluded, “[i]f we protect the reports and claims under section 425.16 because they eventually could be used in connection with an official proceeding, we would effectively be providing immunity for any kind of criminal fraud so long as the defrauding party was willing to take its cause to court. Defendants have cited nothing to us that demonstrates the anti-SLAPP law embraces such actions. We are satisfied it does not.” (Ibid.) We agree with 20th Century’s conclusion on this point. Accordingly, we conclude the trial court correctly determined that recording the PACE liens is not prelitigation activity protected by the anti-SLAPP statute and thus did not err in denying FortiFi’s motion to strike on this basis. B. FortiFi next argues Diplomat’s complaint arises from FortiFi’s enforcement of PACE assessments in the Sound Equity litigation. We disagree. It is undisputed none of Diplomat’s six causes of action mention FortiFi filing a lawsuit or its actions during the Sound Equity litigation. Its first cause of action for declaratory relief seeks a declaration the PACE liens are “illegitimate and fraudulent” such that FortiFi must “disgorge all proceeds therefrom.” The remaining five causes of action are based on the actions listed previously, which included FortiFi’s “willful conspiracy with Top Flight and Wegner and Sanchez to defraud Diplomat, and abuse the PACE program.” FortiFi contends the causes of action all arise from its alleged actions during the Sound Equity litigation because these acts were all part of the 18 fraudulent conspiracy to defraud Diplomat referenced in each of the causes of action. FortiFi summarizes the allegations relating to its litigation activity, which were listed in the complaint under the heading “FortiFi’s Fraudulent Conspiracy With Top Flight,” (bolding omitted) as follows: (1) “FortiFi resisted requests for information from the receiver in litigation”; (2) “FortiFi interfered with the orderly operation of the court-ordered receivership”; (3) “FortiFi threatened to object (and did object) to pending sale motions in court”; (4) “FortiFi and Wegner ‘wrongfully collaborate[d]’ to ‘pressure’ the receiver to pay off the allegedly ‘illegitimate’ PACE liens”; and (5) “[t]his included ‘[o]n at least two occasions, shortly after the receiver discussed specific FortiFi loans with FortiFi’s CFO, Mark Roh, . . . Wegner texted or called the receiver to demand that the receiver stop auditing the loans and “just pay it off.”’” According to the complaint, “[t]his behavior by FortiFi created a mosaic of conspiracy and collusion with Wegner. The structural protections of the PACE program, the lack of any oversight and enforcement by FortiFi over its loans and work to be completed, the collusion between Wegner and Forti[F]i, and the obvious financial incentive for both Wegner and FortiFi, all facilitated this fraud, the only true victim of which is Diplomat.” As FortiFi sees it, its alleged conduct in the Sound Equity litigation forms an essential part of the “fraudulent conspiracy” because each act was done in furtherance of the purported conspiracy. FortiFi argues the aim of the purported conspiracy—to maintain the PACE assessments’ super priority lien status—was accomplished when FortiFi intervened, objected to the motions that would have stripped the PACE assessments from the homes, and prevailed in its efforts. Thus, it contends that absent its alleged conduct in the Sound Equity litigation, Diplomat would have nothing to complain 19 about because its first lien position would have been preserved. Because litigation conduct is protected activity, and because FortiFi contends each cause of action is predicated on the same fraudulent conspiracy, it asserts each claim arises from protected activity. This argument hinges on the faulty premise that Diplomat would not have been harmed but for FortiFi intervening in the litigation to defend its lien position. But this is not accurate. As FortiFi admits, the receiver asked the court to strip FortiFi’s PACE assessment liens without compensation or notice at the closing of each sale.1 There is no indication, however, the court intended to grant this request. Furthermore, FortiFi argued in the Sound Equity Litigation that Article XIII, section 32 of the California Constitution and Revenue & Taxation Code section 4807 barred the receiver’s request because those provisions prohibit a court from entering any order that would prevent or enjoin the collection of property taxes, which include PACE assessments. According to FortiFi, the court agreed. We will not presume that, absent FortiFi highlighting this law, the court would have ruled contrary to law. (Cf. Wilson v. Sunshine Meat & Liquor Co. (1983) 34 Cal.3d 554, 563 [“it is presumed that the court followed the law”].) Thus, we will not assume the court would have stripped the loans without compensation. This left two options: either the receiver would have paid off the PACE liens in full to provide clean title to the buyers or it would have had to sell the properties subject to the PACE liens. As the complaint alleges no one would buy the properties subject to the liens, if they sold at all, they most likely 1 This statement is also somewhat misleading, as counsel for the receiver clarified during oral argument in the trial court that the receiver sought only to pay off the amount of the PACE liens that was in arrears, not the amount due going forward. Counsel asserted the receiver intended the PACE liens would remain on the property. 20 would only have eventually sold at a loss equivalent to the value of the liens since the PACE improvement work was never done. Either option would result in a financial loss to Diplomat. Therefore, the conspiracy “to defraud Diplomat, and abuse the PACE program” was complete and the damages incurred when Top Flight defaulted and stopped paying its taxes. In other words, Diplomat’s claims were not based on FortiFi’s subsequent litigation conduct. (See Park, 2 Cal.5th at p. 1062.) As described in the allegations, what makes the liens illegitimate and fraudulent is that “FortiFi pre-funded the loans in full” and “there is no evidence that the renovation work was done at all.” These actions damaged Diplomat because they created a superior debt on properties that did not appreciate based on the improvements because the work was never done. FortiFi intervened in the litigation after these acts underlying Diplomat’s claims, including Top Flight’s default, occurred. “[T]he mere fact that an action was filed after protected activity took place does not mean the action arose from that activity for the purposes of the anti-SLAPP statute.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 89.) Therefore, FortiFi has not shown its alleged litigation activity was the injury-producing conduct necessary to prove FortiFi: (1) intentionally acted to induce disruption of the contractual relationship between Diplomat and Top Flight and did actually disrupt the relationship (see Jenni Rivera Enterprises, LLC v. Latin World Entertainment Holdings, Inc. (2019) 36 Cal.App.5th 766, 782); (2) intentionally engaged in wrongful acts designed to interfere with the economic relationship between Diplomat and Top Flight and actually disrupted the relationship (see Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153–1154); (3) engaged in a common plan to knowingly make a false representation with the intent to defraud and induce 21 justifiable reliance (see AREI II Cases (2013) 216 Cal.App.4th 1004, 1021– 1022); or (4) engaged in an unfair or fraudulent business practice (see Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1359) and caused Diplomat to suffer damage as a result. And although Diplomat concedes its cause of action for aiding and abetting breach of contract is not recognized in California, it correctly notes FortiFi has not demonstrated its alleged litigation activity supplied any of the elements of the claim asserted or the related California tort of inducing breach of contract. (See Shamblin v. Berge (1985) 166 Cal.App.3d 118, 122–123 [claim of inducing breach of contract requires knowledge of valid contract, intent to induce its breach, actual breach by unjustified or wrongful conduct, and damages].) Because FortiFi has not met its burden at the first step of the anti- SLAPP analysis, we need not address the second step.

22 III. We affirm the order. Diplomat shall recover its costs on appeal.

CASTILLO, J.

WE CONCUR:

DO, Acting P. J.

KELETY, J.