If you lend against California real estate and a lien you believe someone obtained through fraud jumps ahead of yours, you may face an anti-SLAPP motion before anyone looks at the fraud. That’s a special motion that lets defendants knock out claims arising from protected speech or petitioning at the very start of a case.
The defense theory sounds tidy. Recording a lien is the first step toward foreclosure, so recording a lien is the first step toward litigation. But the Court of Appeal just rejected that logic.
How a Senior Lender Ended Up at the Back of the Line
The lender in Diplomat Property Manager, LLC v. FortiFi Financial, Inc. (Cal. Ct. App., 4th Dist., Div. 1, No. D086371, certified for publication Oct. 20, 2026) traces its position to construction loans its predecessor made to developer Andre Wegner and his company, Top Flight, taking deeds of trust (recorded security interests that let a lender foreclose) as collateral. Top Flight then signed contracts under California’s PACE program, which lets owners finance energy upgrades through their property tax bills. FortiFi, the private administrator, recorded the assessments as tax liens, and by statute those liens outrank the others.
Diplomat alleges FortiFi paid the PACE money up front, with no invoices, to a Wegner-controlled contractor that never completed the work. Top Flight then defaulted on the loans and stopped paying property taxes. A court-appointed receiver (a neutral officer who sells property under court supervision) sold the properties, and because buyers wouldn’t take them subject to the PACE liens, Diplomat says the receiver paid FortiFi first. Diplomat sued for interference, conspiracy to commit fraud, and unfair competition, seeking $844,205 among other relief. The trial court denied FortiFi’s motion to strike.
Recording a Lien Isn’t Anti-SLAPP Petitioning When No Dispute Exists
FortiFi argued that judicial foreclosure (a court-supervised sale) is the only way to enforce a PACE lien, and recording comes first. So, in its view, recording counts as protected prelitigation activity.
The court disagreed. Prelitigation conduct earns protection because it connects to a dispute headed for court. When FortiFi recorded these assessments, nobody had a grievance. Owners sign PACE contracts voluntarily, the statute requires recording to create the lien, and in the ordinary course the owner pays the assessment with property taxes and no one ever sees a courtroom. FortiFi, the court said, hadn’t yet reached the “on ramp” of nonpayment.
So the court compared PACE liens to deeds of trust instead of mechanic’s liens. A contractor records a mechanic’s lien because it already went unpaid, and it must sue to foreclose within 90 days. A deed of trust exists to finance something. Litigation only becomes possible after a default that may never come.
The court also refused to let FortiFi use the alleged conspiracy to prove it always planned on court. Borrowing from an earlier decision about inflated earthquake damage reports, it warned that protecting conduct because it might someday reach a courtroom would grant “immunity for any kind of criminal fraud so long as the defrauding party was willing to take its cause to court.”
The Later Litigation Didn’t Change the Claims
FortiFi’s fallback pointed to its intervention in the receivership case, where it objected to sales that would have stripped its liens. But none of Diplomat’s six claims rested on that litigation conduct. The alleged injury was complete once the liens sat on properties that never got the promised upgrades and Top Flight defaulted.
What This Means for Lenders, Investors, and Defendants
Lenders and investors who get primed (pushed behind a lien the law ranks first) now have published authority to clear the threshold step of an anti-SLAPP motion when their claims target how the lien came to exist. That keeps fraud and interference claims alive long enough for a court to test them on the merits.
Defendants get the opposite lesson. Showing that a document is a legal prerequisite to some future lawsuit won’t carry the motion without a real dispute at the time, and later courtroom conduct won’t recast claims built on what came before. The decision has limits, too. It doesn’t decide whether Diplomat’s allegations are true, and it leaves in place earlier precedent treating mechanic’s liens as protected.
Bottom Line
The anti-SLAPP statute protects people who take real disputes to court. It doesn’t convert every recorded document into protected petitioning because a lawsuit might follow someday. If a priority lien pushed you down the payment line, Diplomat gives you a clearer path to the merits. If you’re defending, measure the motion against when the dispute actually began before you file it.
Horst Legal Counsel handles business litigation, real estate and lending disputes, and appeals, including anti-SLAPP motions on both sides. If you have questions about your lien position or a motion you’re facing, we’re glad to talk it through. Contact us here.