Glavinovich v. Hewitt Wolensky LLP

















Filed 3/4/13 Glavinovich v. Hewitt Wolensky LLP CA4/3









>NOT TO BE PUBLISHED IN OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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.









IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA



FOURTH APPELLATE
DISTRICT



DIVISION THREE




>

JOHN L. GLAVINOVICH, Plaintiff and Appellant, v. HEWITT WOLENSKY LLP, Defendant and Respondent.

G046723 (Super. Ct. No. 30-2011-00516101) O P I N I O N

Appeal from a judgment
of the Superior Court
of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Orange
County, Steven L. Perk, Judge.
Affirmed.

Voss, Silverman &
Braybrooke, David C. Voss, Jr., and Andrew T. Schoppe for Plaintiff and Appellant.

Heather Arambarri;
Hewitt Wolensky, Gary A. Wolensky, Elizabeth V. McNulty and Cyrus Wilkes for
Defendant and Respondent.

* * *

This is one of a number
of appeals from judgments after orders granting defense motions pursuant to
Code of Civil Procedure section 425.16,href="#_ftn1" name="_ftnref1" title="">[1] the anti-SLAPP statute,href="#_ftn2" name="_ftnref2" title="">[2] in a malicious prosecution action by
plaintiff John L. Glavinovich. All of
the anti-SLAPP motions relate to the same underlying case, Sweidan v. Orange> >County>
Physicians Investment Network, LLC (Super. Ct. Orange County, 2013, No. 30-2009-00122142).

In
this case, Glavinovich appeals the trial court’s decision to grant the
anti-SLAPP motion filed by defendant Hewitt Wolensky LLP, one of the law firms
involved in the underlying case.href="#_ftn3" name="_ftnref3" title="">[3] Based
on the minimal, nonspecific evidence produced by Glavinovich in the trial
court, he has not demonstrated that he can establish either a lack of probable
cause or malice, two of the three requirements to maintain a cause of action
for malicious prosecution. We therefore affirm the trial court’s
decision to grant the anti-SLAPP motion.

I

FACTS

A. The Underlying Case

Orange
County Physicians Investment Network (OCPIN) was a Nevada
limited liability company formed by Glavinovich and approximately 19
others. Its primary purpose was as a
holding company for its members’ funds to be used for the acquisition of stock
in a company called Integrated Healthcare Holdings, Inc. (Integrated). This company, an investment entity, purchased
four hospitals in the Orange County
area from Tenet Healthcare Corporation.

In
April 2008, Glavinovich was elected as a manager of OCPIN, along with Anil V.
Shah, who had held that position since 2005.href="#_ftn4" name="_ftnref4" title="">[4] According to Glavinovich’s complaint,
acquiring Integrated stock was a “complicated and difficult affair,” resulting
in separate litigation that is apparently still arguing.

In
early 2009, certain members of OCPIN began an effort to remove Shah and
Glavinovich as managers. Glavinovich
later alleged such actions were illegitimate and interrupted OCPIN’s business
operations. The dissident members (the
OCPIN plaintiffs) then instituted the underlying case (the OCPIN litigation).href="#_ftn5" name="_ftnref5" title="">[5]

Over
the next two years, the OCPIN plaintiffs were represented by three different
sets of lawyers, of which Hewitt Wolensky was the third. At the time Hewitt Wolensky entered the case,
the OCPIN plaintiffs had pled their fourth amended complaint, and a demurrer
hearing was pending. According to Hewitt
Wolensky, the complaint they inherited had four key points. In sum, the first point was that OCPIN had
pledged $30 million to help Integrated fund its acquisition of certain
hospitals. Shah had pledged to loan $20
million to OCPIN and directed the issuance of a private placement memorandum to
attract new investors. The memorandum
claimed that Shah had loaned $20 million to OCPIN, but this was not true, and a
number of the OCPIN plaintiffs had relied on his representations in deciding to
invest. The second key point was that
Shah was eventually sued by Integrated for acts of self-dealing, and OCPIN’s
management elected to indemnify Shah, against the wishes of its members and in
contravention of the relevant operating agreement.

Third,
to fund Shah’s indemnity, OCPIN’s management made two requests for additional
capital under the threat of diluting each noncontributing member’s ownership
interest. These “cash calls,” too, were
alleged to be in violation of the relevant operating agreement. Finally, OCPIN’s management was alleged to
have diluted the interest of each noncontributing member, but kept the dilution
secret to induce the members to approve the settlement agreements ending the
Integrated litigation against Shah. They
were asked to approve the agreements without reviewing them, and had they done
so, they would have learned that the agreements provided large personal
benefits to Shah.

Specifically
with regard to Glavinovich, he was alleged to have breached his fiduciary duty
by arranging the cash calls in order to fund Shah’s indemnification. Further, along with Shah, he was allegedly
responsible for the dilution of the noncontributing members ownership, and for
inducing the members to sign the settlement agreements.

After the
demurrers to the complaint Hewitt Wolensky had inherited from prior counsel
were heard and sustained in January 2011, leave to amend was granted. The court concluded, among other things, that
the complaint failed to rebut the presumption of the business judgment rule and
failed to state a cause of action against Glavinovich. Hewitt Wolensky interpreted leave to amend to
mean they had leave to amend the complaint beyond the issues the court
specified, but on hearing demurrers to the fifth amended complaint, the court
clarified that only correcting specific deficiencies was permitted.

The sixth
amended complaint was therefore drafted.
It alleged breach of fiduciary duty and misrepresentation, and sought
declaratory relief and an accounting in addition to damages. Glavinovich’s demurrer to the sixth amended
complaint was sustained, with the court noting that the OCPIN plaintiffs had
not “com[e] even close” to stating a cause of action against him. At least in part, this ruling appeared to be
based on a lack of specificity as to time with regard to Glavinovich, as the
court noted he had come into the picture much later than the other parties
before the court. As to Shah, the court
overruled his general demurrer based on the business judgment rule, overruled
his demurrer to the misrepresentation cause of action, and granted leave to
amend on the claim for accounting.
According to Hewitt Wolensky, the litigation continued with Shah as the
defendant.



B. The Malicious Prosecution
Case

After
he was dismissed from the OCPIN litigation, Glavinovich filed the instant
action for malicious prosecution against the OCPIN plaintiffs and their
attorneys in the underlying case. The
first amended complaint, filed in December 2011, alleged malicious prosecution
and intentional infliction of emotional distress.

In
response, the defendants, including Hewitt Wolensky, filed anti-SLAPP
motions. Hewitt Wolensky argued that
probable cause to continue the OCPIN litigation existed, specifically pointing
to the allegations relating to the cash calls and the prohibition of any
requirements of contributing new capital in the relevant operating
agreement. Hewitt Wolensky also pointed
to Glavinovich’s actions regarding the dilution of member interests, arguing
that while the trial court believed the allegations were not sufficient to
rebut the Nevada business judgment rule, they established probable cause. It also argued that Glavinovich could not
establish the requisite malice to maintain a malicious prosecution claim.

While
it is probable that Glavinovich filed an opposition to Hewitt Wolensky’s
motion, it is not in the record in this case.
Glavinovich did include a request for judicial notice, which included
four documents — the court transcript and notice of ruling relating to the
sixth amended complaint, the notice of ruling on the fourth amended complaint,
and excerpts from the depositions of Ajay Meka and Jacob Sweidan, two of the
OCPIN plaintiffs taken in 2010. No other
evidence was submitted.

In
February 2012, the court granted the motion as to Hewitt Wolensky. The court concluded that Glavinovich had not
established lack of probable cause or malice with respect to the malicious
prosecution claim, and also found that the intentional infliction of distress
cause of action was barred on multiple grounds.href="#_ftn6" name="_ftnref6" title="">[6] Glavinovich now appeals.

II

DISCUSSION

>A. Statutory Framework

The
anti-SLAPP statute states: “A cause of action against a person arising from any act of
that person in furtherance of the person’s right of petition or free speech
under the United States Constitution or the California Constitution in
connection with a public issue shall be subject to a special motion to strike,
unless the court determines that the plaintiff has established that there is a
probability that the plaintiff will prevail on the claim.” (§ 425.16, subd. (b)(1).) The purpose of the anti-SLAPP statute
is to dismiss meritless lawsuits designed to chill the defendant’s free speech
rights at the earliest stage of the case.
(See Wilcox v. Superior Court (1994)
27 Cal.App.4th 809, 815, fn. 2.) The statute is to be “construed
broadly.” (§ 425.16, subd. (a).)

Section
425.16, subdivision (e), specifies the type of acts included within the
statute’s ambit. An “‘act in furtherance of a person’s right of petition or
free speech . . . in connection with a public issue’
includes: (1) any written or oral
statement or writing made before a legislative, executive, or href="http://www.mcmillanlaw.com/">judicial proceeding, or any other official
proceeding authorized by law, (2) any written or oral statement or writing made
in connection with an issue under consideration or review by a legislative,
executive, or judicial body, or any other official proceeding authorized by
law, (3) any written or oral statement or writing made in a place open to the
public or a public forum in connection with an issue of public interest, or (4)
any other conduct in furtherance of the exercise of the constitutional right of
petition or the constitutional right of
free speech in connection with a public issue or an issue of public
interest.” (§ 425.16, subd. (e).)

Courts engage in a
two-step process to resolve anti-SLAPP motions.
“‘First, the court decides whether the defendant has made a threshold
showing that the challenged cause of action is one arising from protected
activity. The moving defendant’s burden
is to demonstrate that the act or acts of which the plaintiff complains were
taken “in furtherance of the [defendant]’s right of petition or free speech
under the United States or California Constitution in connection with a public
issue,” as defined in the statute. (§
425.16, subd. (b)(1).)’” (>Jarrow Formulas, Inc. v. LaMarche, supra,
31 Cal.4th at p. 733.)

“‘If the court finds
such a showing has been made, it then determines whether the plaintiff has
demonstrated a probability of prevailing on the claim.’ [Citation.]”
(Jarrow Formulas,> Inc. v. LaMarche, supra, 31 Cal.4th at p. 733.)
To establish the requisite probability of prevailing, the plaintiff must
state and substantiate a legally sufficient claim (Briggs
v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106,
1122-1123), thereby demonstrating his case has at least minimal merit. (Cole v. Patricia A. Meyer & Associates,
APC (2012)
206 Cal.App.4th 1095, 1105 (Cole).) “Put another way, the plaintiff ‘must
demonstrate that the complaint is both legally sufficient and supported by a
sufficient prima facie showing of facts to sustain a favorable judgment if the
evidence submitted by the plaintiff is credited.’ [Citations.]”
(Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811,
821.) Glavinovich “must produce evidence that would be admissible at
trial. [Citation.]” (HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204,
212.)

On
appeal, we “review an order granting an anti-SLAPP motion de novo,
applying the same two-step procedure as the trial court. [Citation.]”
(Cole, supra, 206 Cal.App.4th
at p. 1105.) In conducting our review, “[w]e consider ‘the
pleadings, and supporting and opposing affidavits . . . upon which the
liability or defense is based.’
[Citation.] However, we neither
‘weigh credibility [nor] compare the weight of the evidence. Rather, [we] accept as true the evidence
favorable to the plaintiff [citation] and evaluate the defendant’s evidence
only to determine if it has defeated that submitted by the plaintiff as a
matter of law.’ [Citation.]” (Soukup v. Law Offices of Herbert
Hafif (2006) 39 Cal.4th 260, 269, fn. 3 (Soukup).)

The
first step of the anti-SLAPP analysis is readily satisfied here, as it is in
nearly all claims for malicious prosecution.
(See Jarrow Formulas,> Inc. v. LaMarche, supra, 31 Cal.4th at pp. 734-735.)
“It is well established that filing a lawsuit is an
exercise of a party’s constitutional right of petition. [Citations.]
‘“‘[T]he constitutional right to petition . . . includes the basic act
of filing litigation or otherwise seeking administrative action.’”’ [Citations.]”
(Chavez v. Mendoza
(2001) 94 Cal.App.4th 1083, 1087.) “Under
these accepted principles, a cause of action arising from a defendant’s alleged
improper filing of a lawsuit may appropriately be the subject of a section
425.16 motion to strike. [Citation.] The essence of the [plaintiffs’] malicious
prosecution claim is that the plaintiff in the underlying action . . . filed
litigation that was improper because it was allegedly filed with a malicious
motive and without probable cause. This
claim ‘aris[es] from’ the defendant’s constitutionally protected petitioning
activity, and therefore is subject to the anti-SLAPP statute. [Citation.]”
(Id. at p. 1087-1088; >see also Cole, supra, 206 Cal.App.4th at
p. 1105.) We therefore turn to
the question of whether Glavinovich has established the requisite probability
of prevailing on his claim.



B. Malicious Prosecution

“To
prevail on a malicious prosecution claim, the plaintiff must show that the
prior action (1) was commenced by or at the direction of the defendant and was
pursued to a legal termination favorable to the plaintiff; (2) was brought
without probable cause; and (3) was initiated with malice. [Citation.]”
(Soukup, supra, 39 Cal.4th at
p. 292.) Continuing an already filed
lawsuit without probable cause may also be the basis for a malicious
prosecution claim. (Zamos v. Stroud (2004) 32
Cal.4th 958, 969 (Zamos); see also >Daniels v. Robbins (2010) 182
Cal.App.4th 204, 226.)

We
examine the evidence produced in the trial court to determine if Glavinovich’s
claim passes muster under the anti-SLAPP statute. As noted above, the only evidence Glavinovich
submitted was the court’s rulings and excerpts from the depositions of two of
the OCPIN plaintiffs,href="#_ftn7"
name="_ftnref7" title="">[7]
taken long before Hewitt Wolensky involved itself in this case. In Meka’s deposition, he was asked questions
such as “what fiduciary duties did those two doctors [Shah and Glavinovich]
have?” The question was objected to on
the grounds of attorney-client privilege, and Meka answered that he did not
have information other than what his attorney had told him. When asked for facts underlying the fiduciary
duty claims, he repeatedly answered that he only knew what his counsel, Kenneth
Catanzarite, had told him. Questions
regarding other claims were answered similarly, and Sweiden answered in a
consistent manner.

In
support of its motion, Hewitt Wolensky submitted the declaration of Cyrus
Wilkes, an attorney at the firm. In the
declaration, Wilkes stated that before the firm was retained, he was informed
about the cash calls used to raise funds to indemnify Shah for expenses
incurred during the Integrated litigation.
Based on his review of the relevant OCPIN operating agreement, which was
attached as an exhibit, he believed it contained an express provision prohibiting
mandatory cash calls. He was also
informed that Shah and Glavinovich had diluted the interests of the
noncontributing members, a fact about which the members were not aware until
the settlement agreements in the Integrated litigation had been signed. He believed these facts provided sufficient
probable cause to proceed against Glavinovich.
He was also aware of the confusion surrounding the time frame in which
Glavinovich was a manager of OCPIN created by different statements by
Glavinovich in different documents.

>1.
Probable Cause

“Probable
cause exists when a lawsuit is based on facts reasonably believed to be true,
and all asserted theories are legally tenable under the known facts.” (Cole,
supra, 206 Cal.App.4th at p. 1106.) Whether the facts known to an attorney
constituted probable cause to prosecute an action is a question of law. (Zamos, supra, 32 Cal.4th at p. 971.) More specifically, “‘[t]he presence or
absence of probable cause is viewed under an objective standard applied to the
facts upon which the defendant acted in prosecuting the prior case. [Citation.]
The test of determining probable cause is whether any reasonable
attorney would have thought the claim to be tenable. [Citation.] . . . [¶] Hence, “probable cause to bring an action
does not depend on it being meritorious, as such, but upon it being arguably
tenable, i.e., not so completely lacking in merit that no reasonable
attorney would have thought the claim tenable.
[Citation.]”’ [Citation.] Probable cause exists if the claim is legally
sufficient and can be substantiated by competent evidence. [Citation.]”
(Antounian v. Louis Vuitton Malletier (2010) 189 Cal.App.4th 438,
448-449.)

Glavinovich bears the
burden of establishing a prima facie case.
(Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811,
821.) His argument on this point in his
opening brief is sparse. It primarily
consists of the following. “As illustrated in the above-cited excerpts
from the depositions of lead OCPIN Defendant Meka, neither Meka nor any other
OCPIN Defendant had probable cause to bring any of their claims against
Glavinovich. This includes the ‘cash
call’-related claims cited by the Court in its order granting the motions to
strike filed by Hewitt & Wolensky . . . and extends to the other claims—for
breach of fiduciary duty, fraud, misrepresentation, constructive fraud,
professional negligence, etc. — which were alleged in the OCPIN Defendants’
Second through Sixth Amended Complaints.
[¶] In view of the fact that the OCPIN Defendants and the Attorney
Defendants had merely to reveal some portion of the facts which were allegedly
known only to Catanzarite in order to survive the demurrers which eventually
extinguished their claims against Glavinovich, it is even more reasonable to
infer that those facts never existed in the first instance, and that the claims
alleged against Glavinovich were assuredly ‘based upon suspicion, imagination,
speculation, surmise, conjecture or guesswork.’”

Thus,
Glavinovich relies on the deposition testimony of only two of more than a dozen
plaintiffs, taken more than a year before Hewitt Wolensky entered the case, to
support his contention that no probable cause existed. This is not sufficient evidence to support a
prima facie case. The 2010 depositions
of two plaintiffs merely demonstrate what those
two plaintiffs knew, and were willing to disclose under relevant law, at
the time their depositions were taken.
There is no legal basis for attributing their knowledge, or lack
thereof, to all other OCPIN plaintiffs.
It also does not demonstrate the lack of probable cause by others —
namely, Hewitt Wolensky — when they entered the case more than a year
later. Further, it does not speak to the
relevant standard applied to attorneys
in malicious prosecution actions, specifically, “‘whether any reasonable
attorney would have thought the claim to be tenable.’” (Antounian v. Louis Vuitton Malletier, supra, 189 Cal.App.4th at
pp. 448-449.) Indeed, Glavinovich
submitted no evidence on this point. As
a matter of law, Glavinovich has not established a lack of probable cause.

>2.
Malice

Even if we
had found that Glavinovich established probable cause, he must also demonstrate
a prima facie case supporting the last element of a malicious prosecution action,
malice. “The ‘malice’ element
. . . relates to the subjective intent or purpose with
which the defendant acted in initiating the prior action. [Citation.]
The motive of the defendant must have been something other than that of
bringing a perceived guilty person to justice or the satisfaction in a civil
action of some personal or financial purpose.
[Citation.] The plaintiff must
plead and prove actual ill will or
some improper ulterior motive.”
(Downey Venture v. LMI Ins. Co. (1998) 66 Cal.App.4th 478, 494 (>Downey Venture).)

Glavinovich
argues that malice can be inferred from nothing more than the lack of probable
cause, but the lack of probable cause alone is insufficient. (Drummond v. Desmarais (2009) 176
Cal.App.4th 439, 452.) Were it otherwise,
the malice requirement would simply disappear.
“A lack of probable cause is a factor that may be considered in
determining if the claim was prosecuted with malice [citation], but the lack of
probable cause must be supplemented by other, additional evidence.” (HMS Capital, Inc. v. Lawyers Title Co.,> supra, 118 Cal.App.4th at p. 218.) “Merely because the prior action lacked legal
tenability, as measured objectively (i.e., by the standard of whether any
reasonable attorney would have thought the claim tenable [citation]), without
more, would not logically or reasonably permit the inference that such lack
of probable cause was accompanied by the actor’s subjective malicious state of
mind. In other words, the presence of
malice must be established by other, additional evidence.” (Downey Venture, supra, 66 Cal.App.4th
at p. 498, fn. omitted.)

“[T]hat
evidence must include proof of either actual hostility or ill will on the part
of the defendant or a subjective intent to deliberately misuse the legal system
for personal gain or satisfaction at the expense of the wrongfully sued
defendant. [Citation.]” (Downey
Venture, supra, at
pp. 498-499; see also Daniels v.
Robbins, supra, 182 Cal.App.4th
at p. 225.) While malice may be inferred
from circumstantial evidence such as the lack of probable cause, such evidence must be
“supplemented with proof that the prior case was instituted largely for an
improper purpose.” (Cole, supra, 206
Cal.App.4th at p. 1114.)

Moreover,
we keep in mind that malicious prosecution is a “disfavored action.” (Leonardini v. Shell Oil Co. (1989)
216 Cal.App.3d 547, 566.) “[T]he
elements of [malicious prosecution] have historically been carefully
circumscribed so that litigants with potentially valid claims will not be
deterred from bringing their claims to court by the prospect of a subsequent
malicious prosecution claim.” (Sheldon
Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 872.) We are therefore entirely disinclined to read
out the malice requirement from a malicious prosecution cause of action, as
Glavinovich would have us do.

The
evidence is completely insufficient to establish a prima facie case of malice
against Hewitt Wolensky.href="#_ftn8"
name="_ftnref8" title="">[8]
Unlike Zamos, >supra, 32 Cal.4th 958, a case upon which he relies, the evidence
presented to the trial court does not demonstrate Hewitt Wolensky had knowledge
of any lack of probable cause. The only
evidence offered by Glavinovich in addition to pleadings and court rulings, the
2010 depositions of two plaintiffs, are simply insufficient on this point. In contrast, Hewitt Wolensky submitted
evidence in the form of Wilkes’s declaration, stating why the firm believed the
case had sufficient cause to proceed.
Glavinovich has failed to meet his burden to demonstrate malice, and
therefore the probability of success on his malicious prosecution claim. Thus, Hewitt Wolensky’s anti-SLAPP motion was
properly granted by the trial court.

III

DISPOSITION

The
judgment is affirmed. Pursuant to
section 425.16, subdivision (c)(1), Hewitt Wolensky may file the appropriate
motion for attorney fees with the trial court.
Hewitt Wolensky is also entitled to costs
on appeal.







MOORE,
J.



WE CONCUR:







BEDSWORTH, ACTING P. J.







IKOLA, J.