Kahn v. Dillon
Filed 1/27/14 Kahn v. Dillon CA4/1
OFFICIAL REPORTS
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prohibits courts and parties from citing or relying on opinions not certified
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
CARL KAHN,
Plaintiff and Appellant,
v.
TIMOTHY P. DILLON
et al.,
Defendants and Appellants.
D062715
(Super.
Ct. No. 37-2012-00091827-CU-NP-CTL)
APPEALS
from an order of the Superior Court of San
Diego County, William S. Dato, Judge.
Affirmed.
Burkhardt &
Larson and Philip Burkhardt for Plaintiff and Appellant.
Wingert
Grebing Brubaker & Juskie LLP, Charles R. Grebing and
Andrew A. Servais for Defendants and Appellants.
These
appeals are from an order granting in part and denying in part a
against Timothy P. Dillon and his law firm, Dillon & Gerardi, APC
(collectively Dillon), for malicious prosecution
and abuse of process based on Dillon's representation of a client in a prior
action against Carl and his sister Margaret Kahn.
striking the abuse of process claim, and Dillon appeals the portion refusing to
strike the malicious prosecution claim.
We affirm.
I.
BACKGROUND
A.
1.
Dillon
represented Mohammed Namvar in a prior action against Margaret and Carl and
other defendants for damages for "gross mismanagement" of Namvar's
real property assets. In the complaint,
Namvar alleged Margaret was a real estate broker and mortgage broker whom he
knew from prior business dealings and to whom he granted a power of attorney to
allow her to manage his properties while he sought treatment for substance
abuse. Namvar complained that Margaret "engaged
in a continuous pattern of mismanagement," including putting title to his properties
in her own name, refinancing properties on unfavorable terms, selling properties
for less than they were worth, failing to rent out properties, and failing to
account properly for her management activities.
Namvar's
claims against Carl arose out of Margaret's management of one of Namvar's
properties located in La Quinta. According
to Namvar, Margaret used the power of attorney he had granted her to convey the
property to Carl, who one month later conveyed it to Margaret in her name alone.
When Namvar demanded that Margaret
convey the property back to him, she refused.
Namvar alleged these conveyances caused him to lose his equity in the
property and to suffer adverse income tax consequences. Based on these allegations, Namvar sued Carl
for compensatory and punitive damages for aiding and abetting Margaret's tortious
conduct and for negligence in failing to inquire into the reasons for the
to them.
2.
Michael
Bishop, an attorney with Dillon's law firm, deposed Carl. Carl was unrepresented by counsel during the
deposition. Bishop asked Carl many
questions about his financial situation, including his sources of income for
the previous 20 years; the real properties he has owned, how he financed the
purchases, and at what prices he sold them; his credit rating; and where he did
his banking. Carl did not object to or
refuse to answer any of these questions.
3.
Margaret
settled with Namvar. The case proceeded
to a bench trial against Carl on causes of action for negligence and aiding and
abetting Margaret's tortious conduct.
In its
(Hon. William R. Nevitt, Jr.) found that after a series of
conveyances by which Namvar and Margaret became joint tenants of the La Quinta
property, Margaret, acting on her own behalf and as Namvar's attorney in fact,
conveyed the property to Carl so that he could try to refinance the property. One month later, Carl conveyed the property
to Margaret after he determined he could not do so. Approximately two months later, Namvar conveyed
the property to Margaret so that she could try to refinance it. Margaret then refinanced the property with a
negative amortization loan, but refused Namvar's demands that she convey the
property back to him. Margaret
eventually sold the La Quinta property for less than the amount due on the
loan. The court also specifically found
that Carl had no knowledge of or involvement in Margaret's decisions to
refinance the property with a negative amortization loan or to refuse to convey
the property to Namvar.
Based on these
findings, the trial court concluded Namvar did not establish any of the
essential elements of his claims for negligence and aiding and abetting Margaret's
misconduct and entered judgment for Carl.
B.
1.
After
Carl obtained the favorable judgment in the prior action, he sued Dillon for
malicious prosecution and abuse of process.
Carl alleged Dillon lacked probable cause to commence or maintain the
prior action on behalf of Namvar because Dillon knew Margaret had authority to
undertake the refinancing efforts on which the action was based. Carl also alleged Dillon acted maliciously
both in filing the prior action for the purpose of pressuring Margaret into a
settlement and in maintaining the prior action against Carl after Margaret
settled. Carl further alleged Dillon
misused discovery in the prior action in order to disclose Carl's private
financial information, to embarrass him, and to pressure Margaret into
settling. Carl sought to recover as
damages the attorney fees he had incurred in the prior action and also sought
punitive damages.
2.
Dillon
filed a special motion to strike under the anti-SLAPP
statute. (Code Civ. Proc., § 425.16.) In support of the motion, Dillon included a
memorandum of points and authorities, his own declaration, and numerous
exhibits. Dillon argued Carl's claims
for malicious prosecution and abuse of process were subject to the anti-SLAPP
statute because both claims arose out of protected litigation activity. Dillon further argued Carl could not establish
a probability of success on either claim.
As to the malicious prosecution claim, Dillon asserted there was
probable cause to sue Carl based on his participation in transferring title of
the La Quinta property from Namvar to Margaret, including the recording of "false
deeds," and an expert's opinion that Margaret's conduct fell below the
standard of care for real estate professionals. Dillon also contended Carl had no evidence
Dillon acted with malice in prosecuting the prior action. As to the abuse of process claim, Dillon claimed
the discovery taken in the prior action was protected by the absolute litigation
privilege of Civil Code section 47, subdivision (b).
3.
Carl
filed opposition to the anti-SLAPP motion, including a memorandum of points and
authorities, declarations from two of his attorneys and Namvar's brother, and several
exhibits. Carl conceded his malicious
prosecution and abuse of process claims both fell within the scope of the
anti-SLAPP statute, but argued the claims had "minimal merit" and
therefore should not be stricken.
As to the
malicious prosecution claim, Carl argued Dillon lacked probable cause to
initiate and maintain the claims for negligence and aiding and abetting
Margaret's tortious conduct. Carl
contended he breached no duty owed to Namvar, and Namvar's conveyance of the La
Quinta property to Margaret after the conveyances between Margaret and Carl
eliminated the possibility that any action by Carl caused the damages suffered
by Namvar. Carl also argued Dillon acted
with malice in prosecuting the prior action against Carl because attorneys with
Dillon's firm stated that they (1) expected to lose the claims against
Carl, (2) continued to sue Carl in order to induce Namvar to settle with
Margaret, and (3) "regretted opting for a bench trial because a jury
would have been more likely than a judge to punish Carl for Margaret's alleged
wrongdoing."
As to the abuse
of process claim, Carl contended Dillon used a deposition for an improper
purpose, namely, to obtain information about Carl's private financial affairs
in violation of both the constitutional right of privacy (Cal. Const.,
art. I, § 1) and the statutory requirement that a plaintiff obtain a
court order before conducting discovery on a defendant's financial condition
for purposes of liability for punitive damages (Civ. Code, § 3295,
subd. (c)). Carl further contended
the litigation privilege did not bar his abuse of process claim because his
financial condition had no relation to Namvar's claims in the prior action.
4. Reply in Support of Anti-SLAPP Motion
In reply to Carl's
opposition, Dillon filed a memorandum of points and authorities, declarations from
himself and his colleague Bishop, and an additional exhibit. Dillon argued Carl had not met his burden to
establish a probability of success on either the malicious prosecution claim or
the abuse of process claim. Dillon
contended Carl's undisputed participation in the various transfers of the La
Quinta property established probable cause to sue him in the prior action. By failing to submit a declaration or
otherwise explain that participation, Dillon claimed, Carl did not show the lack
of probable cause essential to his malicious prosecution claim. Dillon also asserted Carl's purported evidence
of malice showed only vigorous pursuit of a claim on behalf of Namvar. Finally, Dillon argued Carl could not prevail
on his abuse of process claim because the deposition questioning that underlay the
claim was clearly protected by the litigation privilege.
5. Order on Anti-SLAPP Motion
The trial court
granted the special motion to strike the abuse of process claim, on the ground the
litigation privilege barred the claim.
The court, however, denied the special motion to strike the malicious
prosecution claim, on the ground Carl had shown a probability of prevailing on
that claim. According to the court, "the
fact that Namvar independently deeded the [La Quinta] property to Margaret only
two months after Carl had conveyed it to her supports a conclusion that
[Dillon] lacked probable cause to believe Carl's conduct, even if wrongful, was
a substantial factor in causing any harm to Namvar." The court also determined Carl had made a
prima facie showing of malice by submitting "evidence suggesting that
[Dillon] tried the [prior action] against [Carl] without believing it was
meritorious and in order to induce Namvar to settle with the other defendants."
Both Dillon and
Carl appealed the order. (Code Civ.
Proc., §§ 425.16, subd. (h)(1), 904.1, subd. (a)(13).)
II.
DISCUSSION
Both
parties challenge the trial court's order on Dillon's anti-SLAPP motion. Carl contends the court correctly refused to
strike his malicious prosecution claim, because he established a prima facie
case; but erroneously struck his abuse of process claim, because he established
a prima facie claim that is not barred by the litigation privilege. Conversely, Dillon contends the court
correctly struck Carl's abuse of process claim, because it is barred by the
litigation privilege; but erroneously refused to strike his malicious
prosecution claim, because Carl did not meet his burden to prove Dillon
prosecuted the prior action without probable cause and with malice. For reasons we shall explain, we conclude the
trial court ruled correctly with respect to both claims.
A. General
Principles Governing Anti-SLAPP Motions
When a party
files a special motion to strike, the anti-SLAPP statute requires the court to
engage in a two-step process. First, the
court determines whether the moving party has shown that the challenged cause
of action arises from protected speech or petitioning activity. (Code Civ. Proc., § 425.16,
subds. (b)(1), (e); Equilon
Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) Second, if the moving party has made such a
showing, the court then determines whether the nonmoving party has shown a
probability of prevailing on the claim, by pleading a legally sufficient claim
and supporting it with evidence that, if credited, would suffice to sustain a
judgment. (Code Civ. Proc.,
§ 425.16, subd. (b)(1); Navellier
v. Sletten (2002) 29 Cal.4th 82, 88-89.)
The court considers the pleadings and evidence submitted by the parties
to determine only whether the nonmoving party has established a prima facie
case; the court does not weigh the evidence to determine whether it is more
probable than not that the nonmoving party will prevail on the claim. (Code Civ. Proc., § 425.16,
subd. (b)(2); Taus v. Loftus (2007)
40 Cal.4th 683, 713-714.) We review an
order granting or denying an anti-SLAPP motion de novo. (Oasis
West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820.)
B. Application
to Dillon's Anti-SLAPP Motion
We
now apply the two-step process to Carl's claims against Dillon. The parties agree, as do we, that Carl's
malicious prosecution and abuse of process claims against Dillon arose from
protected petitioning activity and therefore were subject to being stricken
under the anti-SLAPP statute. (See,
e.g., Kleveland v. Siegel &
Wolensky, LLP (2013) 215 Cal.App.4th 534, 548 [malicious prosecution];
Cal.App.4th 1366, 1370-1371 [abuse of process].) The parties disagree on whether Carl met his
statutory burden to show a probability of prevailing on the claims, with Carl
contending that he met his burden as to both claims and Dillon contending that
Carl did not meet his burden as to either claim. We analyze each claim separately below.
1. Malicious Prosecution Claim
Dillon
contends the trial court should have stricken Carl's malicious prosecution
claim because Carl did not show a probability of prevailing on the claim. To establish a cause of action for malicious
prosecution, the plaintiff must prove that a prior action that terminated in his
favor was commenced or continued at the direction of the defendant without
probable cause and with malice. (
39 Cal.4th 260, 292 (Soukup);
973 (Zamos); Yee v. Cheung (2013) 220 Cal.App.4th 184, 199.) There is no dispute that the prior action
terminated in Carl's favor or that Dillon directed the litigation of the prior
action. The dispute concerns whether Dillon
had probable cause to sue Carl and whether Dillon acted with malice in doing
so. We thus turn to those issues.
a. Probable
Cause
Probable
cause to assert a claim exists when the claim, objectively considered, is
legally tenable. (Zamos, supra, 32 Cal.4th
at p. 971; Drummond v. Desmarais (2009)
176 Cal.App.4th 439, 453 (Drummond).) Probable cause exists if a reasonable
attorney would conclude, based on the known facts, that the claim is legally
sufficient and can be substantiated by competent evidence. (Zamos,
at p. 971; Jay v. Mahaffey (2013)
218 Cal.App.4th 1522, 1540 (Jay)
" 'A litigant will lack probable cause for his action either
if he relies upon facts which he has no reasonable cause to believe to be true,
or if he seeks recovery upon a legal theory which is untenable under the facts
known to him.' " (
every cause of action advanced in the underlying action. '[A]n action for malicious prosecution lies
when but one of alternate theories of recovery is maliciously
asserted . . . .' " (Ibid.) Whether Dillon had probable cause to sue Carl
in the prior action is a question of law.
(Zamos, at p. 971.)
Thus, to
determine whether Dillon, as Namvar's attorney, had probable cause to sue Carl
in the prior action, we must answer the following question: Based on the facts known to Dillon, would any
reasonable attorney have thought the negligence and aiding and abetting claims
asserted against Carl were both legally
tenable? We answer in the negative
because no reasonable attorney would have considered legally tenable Namvar's negligence
claim against Carl.
The "well-known
elements of any negligence cause of action" are "duty, breach of duty,
proximate cause and damages." (
Cal.4th 604, 614.) Namvar's negligence
claim was based entirely on Carl's participation in two transfers of the La
Quinta property that took title out of Namvar's name and put it into Margaret's
name alone. Namvar's theory was that
Carl breached his duty to exercise reasonable care to inquire into the reasons
for the transfers or whether Namvar consented to them, and thereby caused
Namvar to lose his equity in the property and to suffer adverse income tax
consequences. This theory was not
legally tenable because any reasonable attorney would have concluded that three
of the four elements of the negligence claim could not be established.
First,
Carl owed Namvar no duty to ascertain the reasons for the transfers of the La
Quinta property or whether Namvar consented to them, because Namvar had given
Margaret a broad power of attorney, which she exercised to convey the property
to Carl. A power of attorney authorizes
an agent to perform specified acts on behalf of the principal (
Cal.App.4th 13, 21), and "it is only in the case where the agent lacks
authority that the principal may exact the duty of inquiry and that the failure
to inquire imposes a penalty upon the [third party]" (Palo Alto etc. Assn. v. First Nat. Bank (1917) 33 Cal.App. 214,
223). Here, the power of attorney was in
the form prescribed by statute, signed by Namvar, notarized, and specifically
authorized Margaret to act on behalf of Namvar in real property
transactions. (See Prob. Code,
§ 4401 [prescribing uniform statutory form power of attorney].) Where, as here, a power of attorney has been
properly executed and appears valid on its face, a third party ordinarily may
rely upon it and is not liable to the principal for doing so. (
v. Yager (2004) 120 Cal.App.4th 970, 982.)
broad power of attorney, there is no obligation on a third party to go behind
the power." (Milner v. Milner (1990) 183 W.Va. 273, 277 [395 S.E.2d 517, 521];
accord, Iglesias v. Pentagon
Title & Escrow, LLC (2012) 206 Md.App. 624, 663 [51 A.3d 51, 74] [when
fully executed and notarized power of attorney authorized agent to execute
documents in connection with real estate purchase on behalf of principal, escrow
company involved in transaction had "no duty to inquire behind the power"].)
Second,
since Carl owed Namvar no duty to inquire into the reasons for the transfers or
Namvar's consent, Carl obviously could not breach that duty. Even if we were to assume Carl had such a
duty, no reasonable attorney would have believed Namvar could prove Carl breached
that duty. Namvar's conveyance of the
property to Margaret, acknowledged by a notary in a formal grant deed,
accomplished the same outcome as the prior conveyances between Carl and
Margaret and effectively ratified those conveyances. (See Navrides
v. Zurich Ins. Co. (1971) 5 Cal.3d 698, 704 ["Ratification is approval
of a transaction that has already taken place."]; White v. Moriarty (1993) 15 Cal.App.4th 1290, 1295 [same].) The effect of that ratification was to treat
the conveyances between Carl and Margaret as if they originally had been
authorized by Namvar, and to cure any defects in the form or manner of their
execution. (Rakestraw v. Rodrigues (1972) 8 Cal.3d 67, 73 (Rakestraw); City of Monterey
v. Jacks (1903) 139 Cal. 542, 558.)
Third, Carl did
not cause the damages of which Namvar complained. To establish causation, the plaintiff must
show the defendant's conduct was a substantial factor in bringing about the
harm to the plaintiff. (
1041, 1052-1053; Mills v. U.S. Bank (2008)
166 Cal.App.4th 871, 899.) The defendant's
conduct is not a substantial factor in bringing about the plaintiff's harm if
the harm would have befallen the plaintiff even had the defendant's conduct not
occurred. (Yanez v. Plummer (2013) 221 Cal.App.4th 180, 186;
tax consequences Namvar allegedly suffered resulted from his conveyance to
Margaret of his entire interest in the La Quinta property, which she then
refused to convey back to him, encumbered with a negative amortization mortgage
loan, and sold for less than the amount due on the loan. Since all of those acts occurred after and
independently of the conveyances between Margaret and Carl, Namvar would have
sustained the claimed losses even if Carl had not participated in the earlier transfers. Hence, Namvar could not establish the essential
causation element of his negligence claim against Carl.
We
further conclude no reasonable attorney knowing what Dillon knew would have
thought the negligence claim against Carl was legally tenable. When Namvar sued Carl in the prior action, Dillon
knew about Margaret's power of attorney, the various transfers of the La Quinta
property and Carl's limited involvement in them, Margaret's encumbrance of the
property, and her refusal to reconvey the property to Namvar, because all of those
matters were specifically alleged in the complaint Dillon prepared and filed. Moreover, Dillon introduced into evidence the
power of attorney, the deeds, and the note for the mortgage loan at the trial
in the prior action. After examining
these documents, considering the dates on which the pertinent events occurred,
and analyzing the elements of a negligence claim, no reasonable attorney would
have thought Namvar could establish the duty, breach, or causation element of
the claim. In other words, Dillon did
not have probable cause to sue Carl for negligence, because "any
reasonable attorney would agree" the claim was "totally and
completely without merit." (
Furthermore, because a malicious prosecution action " 'lies
when but one of alternate theories of recovery is maliciously asserted' "
(Soukup, supra, 39 Cal.4th at p. 292), Carl made the prima facie showing
of lack of probable cause needed to defeat Dillon's anti-SLAPP motion (
Scattered
throughout his briefing, Dillon offers several arguments in opposition to our
conclusion that Carl made a showing of lack of probable cause sufficient to
support his malicious prosecution claim.
None is persuasive.
Dillon's main
argument is that expert testimony at the trial of the prior action — that the
conveyances of the La Quinta property between Margaret and Carl "did not
comply with the custom and practice of the industry for a real estate broker
doing property management and financial management for a principal or client" —
"alone establishes probable cause." We disagree.
The expert's testimony was plainly insufficient to establish probable
cause to sue Carl for negligence,
because the expert stated he reviewed the conveyances "to see what opinion
[he] could derive based on the custom and practice of the industry as to
whether . . . Margaret
Kahn's conduct complied with the custom and practice of the industry."
(Italics added.) Although Margaret was a real estate broker
managing properties for Namvar, Carl was not; and the expert expressed no
opinion regarding Carl's conduct.
Dillon
also contends there was probable cause to pursue the negligence claim because Carl's
involvement in the various transfers of the La Quinta property violated the
prohibition of Penal Code section 115 against recording "any false or
forged instrument,"
name="_ftnref4" title="">[4] and
those violations constituted negligence per se.
Again, we disagree. Under the
doctrine of negligence per se, the failure to exercise due care is presumed if,
among other things, a person violates a statute, the violation proximately
causes harm to another, and the harm results from an occurrence of the nature
the statute was designed to prevent. (Evid. Code, § 669, subd. (a);
"core purpose" of the statute Dillon claims Carl violated "is to
protect the integrity and reliability of public records" (
1030, 1061) by "prevent[ing] the recordation of spurious documents
knowingly offered for record" (Generes
v. Justice Court (1980) 106 Cal.App.3d 678, 681-682). Even if we assume, without deciding, that the
deeds between Carl and Margaret were false or forged, recording those deeds did
not cause the harm Namvar alleged in the prior action. As we have explained, the adverse income tax
consequences and lost equity for which Namvar sued Carl resulted from Namvar's
transfer of the La Quinta property to Margaret and her subsequent encumbrance
and sale of the property (see pp. 13-14, ante), events in which Carl had no involvement and not of the type
Penal Code section 115 was designed to prevent. The negligence per se doctrine thus does not
apply. (See, e.g., Nunneley v. Edgar Hotel (1950) 36 Cal.2d 493, 498 ["no
liability can be predicated upon noncompliance with a statutory command if the
act or omission had no causal connection with the plaintiff's injury"];
229, 238 [negligence per se inapplicable when statute violated "was not
designed to prevent the type of occurrence that resulted in plaintiff's injury"].)
Dillon further
argues there was probable cause to sue Carl based on Namvar's testimony that he
was "completely under the influence" and told Margaret he "had
just used" when he conveyed the La Quinta property to her. According to Dillon, since "Namvar's
testimony remained a constant" in the prior action and his intoxication prevented
the conveyance from being considered a ratification (see Rakestraw, supra, 8
Cal.3d at p. 73 [ratification must be "truly voluntary in character"]),
probable cause existed throughout the prior action. We are not persuaded. Although an attorney generally may rely on
information provided by a client, if the attorney later learns the information is
false, he cannot continue to rely on it in prosecuting an action and may be
liable for malicious prosecution if he does.
(Zamos, supra, 32 Cal.4th at p. 973; Daniels v. Robbins (2010) 182 Cal.App.4th 204, 223.) Here, other information available to Dillon
indicated Namvar was not intoxicated when he conveyed the La Quinta property to
Margaret. Most importantly, the grant
deed was acknowledged by a notary, which is strong evidence Namvar voluntarily
executed the deed. (See, e.g.,
1173, 1185 [acknowledgment is formal declaration before authorized official by
person executing instrument that execution " 'is his free act and
deed' "]; Ware v. Julian (1932)
122 Cal.App. 354, 355 [notarization is prima facie evidence of due execution of
instrument].) Additionally, Margaret
testified Namvar did not tell her he had just used drugs; and one of Carl's
attorneys stated in a declaration that "Bishop concurred with [her] that
[Namvar] had not been high on drugs when he signed and delivered [the] deed." In reviewing the trial court's ruling on the
anti-SLAPP motion, we are required to accept as true the evidence favorable to
Carl (Zamos, supra, 32 Cal.4th at p. 965; Daniels, at p. 215); and doing so, we conclude the evidence is
sufficient to show a lack of probable cause (see Soukup, supra, 39 Cal.4th
at p. 292 [attorney lacks probable cause " 'if he relies upon
facts which he has no reasonable cause to believe to be true' "]).
Next,
Dillon complains Carl did not establish a lack of probable cause because he did
not submit a declaration in opposition to the anti-SLAPP motion and "has
never explained why he agreed to go on title to a property owned by a stranger,
knowing he had no interest, and then happily transfer[red] the interest back to
his sister alone." Carl, of course,
had no obligation to submit his own declaration as part of the opposition to
Dillon's anti-SLAPP motion. All Carl had
to do to defeat the motion was to make " 'a sufficient prima facie
showing of facts to sustain a favorable judgment if the evidence submitted by
[him] is credited.' " (
Chidester (2002) 28 Cal.4th 811, 821.) As we have explained, the declarations and other
evidence submitted in connection with the anti-SLAPP motion were sufficient to establish
a prima facie case of lack of probable cause.
In any event, it is simply not true that Carl never explained his
involvement in the transfers of the La Quinta property. At his deposition in the prior action, Carl
testified he agreed to the transfers to try to help Margaret obtain refinancing
at a lower interest rate; and he submitted a copy of the transcript of the deposition
in opposition to the anti-SLAPP motion.
Dillon
also complains that in ruling that Carl had made a prima facie showing of lack
of probable cause, the trial court erroneously relied on Judge Nevitt's findings
in the prior action that Namvar had not presented evidence sufficient to establish
any of the elements of his claims against Carl. We agree with Dillon that those findings
cannot be considered as evidence of lack of probable cause. The statement of decision from the prior
action was before the trial court by way of judicial notice. Although the court could take judicial notice
that certain findings were made, it could not take judicial notice of the truth
of those findings. (Professional Engineers v. Department of Transportation (1997) 15
Cal.4th 543, 590; Steed v. Department of
Consumer Affairs (2012) 204 Cal.App.4th 112, 120.) Any erroneous use by the trial court of the
statement of decision does not require reversal, however. "[A] ruling or decision, itself correct
in law, will not
be disturbed on appeal merely
because given for a wrong
any theory of the law applicable to the case, it must be sustained regardless
of the considerations which may have moved the trial court to its conclusion."
(Davey v. Southern Pacific Co.
(1897) 116 Cal. 325, 329.) Because the challenged
ruling was correct based on evidence that was properly before the trial court,
we may not reverse on the ground that the court erroneously relied on Judge
Nevitt's findings in the prior action.
Finally,
Dillon devotes much of his briefing to arguing that Carl did not meet his
burden to establish that the claim for aiding and abetting Margaret's tortious
conduct was maliciously prosecuted against him in the prior action. We need not, and do not, address these
arguments. Our Supreme Court repeatedly has
held that "a suit for malicious prosecution lies for bringing an action
charging multiple grounds of liability when
some but not all of those grounds were asserted with malice and without
probable cause." (
666, 671, italics added; accord, Soukup,
supra, 39 Cal.4th at p. 292;
13 Cal.3d 43, 57 & fn. 5; Singleton
v. Perry (1955) 45 Cal.2d 489, 497-498.)
Hence, Carl's prima facie showing that there was no probable cause to
sue him for negligence in the prior action was sufficient by itself to defeat
Dillon's anti-SLAPP motion insofar as it challenged the malicious prosecution
claim; Carl did not also have to make a prima facie showing that there was no
probable cause to sue him on the aiding and abetting theory.
b. Malice
The
malice element of a malicious prosecution claim relates to the subjective
intent or purpose with which the defendant acted in prosecuting the prior
action. (Soukup, supra, 39 Cal.4th
at p. 292; Jay,
required . . . is not limited to actual hostility or ill
will toward plaintiff but exists when the proceedings are instituted primarily
for an improper purpose." (
375, 383 (Albertson).) "[T]he 'principal situations in which
the civil proceedings are initiated for an improper purpose
those in which (1) the person initiating them does not believe that his
claim may be held valid; (2) the proceedings are begun primarily because
of hostility or ill will; (3) the proceedings are initiated solely for the
purpose of depriving the person against whom they are initiated of a beneficial
use of his property; (4) the proceedings are initiated for the purpose of
forcing a settlement which has no relation to the merits of the claim.' " (Ibid.;
accord, Jay, at p. 1543.) Whether Dillon acted with malice in
prosecuting the prior action against Carl presents a question of fact. (Sheldon
Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 874;
Here,
Carl submitted evidence from which a trier of fact could find Dillon prosecuted
the prior action against Carl with malice.
A declaration from one of the attorneys who represented Carl in the
prior action recounted a conversation she had with Bishop, an attorney with
Dillon's firm, after the trial. Bishop
told her that he and Dillon "expected to lose on the issues of causation
and damages." Another attorney who
represented Carl in the prior action stated in a declaration that he asked
Dillon why he continued to sue Carl after Namvar had received a substantial
settlement from Margaret and other defendants. Dillon responded that he had assured Namvar he
would continue prosecuting the action "in order to induce [Namvar] to
accept the settlement from the co-defendants." Namvar's brother submitted a declaration
stating he had attended a meeting with Namvar and Dillon during which there was
a discussion of "Dillon's rationale and motivation for suing [Carl]. [Dillon] stated that he had conducted an
investigation . . . regarding [Carl's] financial condition
and had determined . . . it [would be] advantageous to
bring him into the lawsuit and to continue to prosecute the action against him." Based on this evidence,
trier of fact could find that " 'the person initiating [the
negligence claim against Carl did] not believe that [the] claim [might] be held
valid,' " or that " 'the proceedings [were] initiated for
the purpose of forcing a settlement which ha[d] no relation to the merits of
the claim.' " (
p. 383.) "Moreover, malice can
also be inferred from the evidence that [Dillon] lacked probable cause to
initiate and maintain the [prior] action against [Carl]." (Soukup,
supra, 39 Cal.4th at
p. 296.) Carl therefore made a
prima facie showing of malice sufficient to defeat Dillon's anti-SLAPP motion. (Id.
at p. 291.)
Dillon
insists, however, that Carl "has come nowhere close to refuting Dillon's
declaration and supporting evidence negating any claim of malice." According to Dillon, he had no incentive to sue
Carl other than to fulfill his fiduciary duty vigorously to represent Namvar; he
did not even know Carl before commencing the prior action; and there was no
evidence he bore Carl any ill will. But,
evidence sufficient to establish malice is not limited to proof that Dillon
bore ill will toward Carl; evidence that Dillon prosecuted the prior action
against Carl primarily for an improper purpose may suffice. (Albertson,
supra, 46 Cal.2d at p. 383;
218 Cal.App.4th at p. 1543.) As we have
explained, Carl submitted evidence from which a trier of fact reasonably could
find that Namvar sued Carl because Dillon viewed Carl as a "deep pocket"
who might settle or put pressure on Margaret to settle, not because Dillon
believed Carl was liable for negligence.
Dillon's contrary protestations that he was merely performing his duty
of zealous advocacy, and his and Bishop's denials that they made the statements
attributed to them by Carl's attorneys and Namvar's brother, only "serve
to create factual disputes that are not sufficient grounds upon which to grant
the anti-SLAPP motion." (
was "sufficient to establish malice for the limited purpose of defeating
[Dillon's] motion[] to strike." (
2. Abuse of Process Claim
Carl
contends the trial court erred by striking his abuse of process claim because
he established a probability of prevailing on the claim, and the litigation
privilege (Civ. Code, § 47, subd. (b)) does not bar the claim. We disagree.
To establish a
cause of action for abuse of process, the plaintiff must prove the defendant
used the process for an ulterior motive and, in the course of using the
process, willfully did something unauthorized by the process. (Rusheen
v. Cohen (2006) 37 Cal.4th 1048, 1057 (Rusheen);
Coleman v. Gulf Ins. Group (1986) 41
Cal.3d 782, 792.) Here, Carl claimed
Dillon "misused the taking of a deposition to conduct impermissible
discovery of Carl's assets and financial condition" in violation of his constitutional
privacy rights (Cal. Const., art. I, § 1; Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652, 656)
and statutory restrictions on pretrial discovery of a defendant's financial
condition (Civ. Code, § 3295, subd. (c); Kerner v. Superior Court (2012) 206 Cal.App.4th 84, 119-120). In support of this claim, Carl submitted the
transcript of his deposition taken in the prior action, which included
extensive questioning by Bishop about Carl's finances. (See pt. I.A.2., ante.) Even if we assume,
without deciding, that this was sufficient to establish a prima facie case of
abuse of process, the claim would be barred by the litigation privilege.
The
litigation privilege generally precludes imposition of tort liability for any "publication
or broadcast" made in connection with a "judicial proceeding." (Civ. Code, § 47, subd. (b); see
40 Cal.4th 948, 952 (Jacob B.).) The privilege "is not limited to statements
made during a trial or other proceedings, but may extend to steps taken prior
thereto" (Rusheen,
including depositions and other pretrial discovery (Moore v. Conliffe (1994) 7 Cal.4th 634, 637-638;
Cal.App.4th 600, 615-617 (Gallanis-Politis);
Sipple v. Foundation for Nat. Progress (1999)
71 Cal.App.4th 226, 243 (Sipple)). The privilege "applies to any
communication (1) made in judicial or quasi-judicial proceedings; (2) by
litigants or other participants authorized by law; (3) to achieve the objects
of the litigation; and (4) that ha[s] some connection or logical relation
to the action." (
205, 212 (Silberg).) If a communication satisfies these criteria,
the privilege defeats an abuse of process claim based on the communication. (See, e.g., Rusheen, supra,
188 Cal.App.4th 531, 536, 543-544 (Mallard);
Pollock v. University of Southern
California (2003) 112 Cal.App.4th 1416, 1429.)
Under
these authorities, Dillon may not be held liable for abuse of process. The inquiry into his financial condition of
which Carl complains took the form of questioning during a deposition conducted
by Bishop, an attorney representing Namvar in the prior action. Such questioning thus occurred "in
judicial or quasi-judicial proceedings" and was conducted "by
litigants or other participants authorized by law." (Silberg,
supra, 50 Cal.3d at p. 212; see
qualifies as "participant"]; Sipple,
supra, 71 Cal.App.4th at p. 243
["a deposition is considered a judicial proceeding within the meaning of
Civil Code section 47, subdivision[] (b)"].) Furthermore, since Namvar sued Carl for
punitive damages in the prior action and "a plaintiff who seeks to recover
punitive damages must bear the burden of establishing the defendant's financial
condition" (Adams v. Murakami (1991)
54 Cal.3d 105, 123), the deposition questions of which Carl complains were
asked "to achieve the objects of the litigation" and "ha[d] some
connection or logical relation to the [prior] action" (
to discover information that would support defense]). Hence, the questions are protected by the litigation
privilege.
Carl
argues the litigation privilege does not apply "[b]ecause the deposition
was conducted in a manner not authorized by law, and the particulars of [his]
financial condition had no relation to the claims brought by
Namvar . . . ."
Carl asserts that because personal financial information falls within
the zone of privacy protected by the California Constitution and Namvar had not
obtained a court order authorizing pretrial discovery into his financial
condition, Bishop's deposition questions on that subject "were off limits." According to Carl, such "impermissible
questioning was conducted for an improper purpose — to obtain asset
discovery. It was therefore not
protected by the litigation privilege."
We are not persuaded.
The fact that the
deposition questions concerned Carl's private financial information does not
make the litigation privilege inapplicable.
The privilege applies fully to discovery into private matters put in
issue by litigation. (
applies even to a constitutionally based privacy cause of action"].) The fact Dillon did not obtain the
statutorily required court order before asking the deposition questions (Civ.
Code, § 3295, subd. (c)) also does not defeat application of the
litigation privilege. Although we do not
condone Dillon's failure to comply with the statutory restrictions on pretrial
discovery of Carl's financial condition, our Supreme Court has held that " 'it
is desirable to create an absolute privilege . . . not
because we desire to protect the shady practitioner, but because we do not want
the honest one to have to be concerned with [subsequent derivative]
actions . . . .' " (Rusheen,
supra, 37 Cal.4th at p. 1064.) "The salutary policy reasons for an
absolute privilege supersede individual litigants' interests in recovering
damages for injurious publications made during the course of judicial
proceedings." (Silberg, supra, 50 Cal.3d
at p. 218.) "Moreover, the
denial of an abuse of process claim is mitigated by the fact that [Carl] had
adequate alternative remedies [in the prior action]." (Rusheen,
at p. 1064.) He could have objected
and refused to answer the questions (Jabro
v. Superior Court (2002) 95 Cal.App.4th 754, 759; Shaffer v. Superior Court (1995) 33 Cal.App.4th 993, 997, 999;
Cal.App.3d 899, 903), or terminated the deposition and sought a protective
order (Civ. Code, § 3295, subds. (a), (c); Richards v. Superior Court (1978) 86 Cal.App.3d 265, 273). Carl may not, however, now sue Dillon in a
separate action for abuse of process. (
Carl
also argues, for the first time in his reply brief, that the litigation
privilege does not bar his abuse of process claim because Dillon's conduct that
gave rise to the claim was not "communicative." (See Rusheen,
supra, 37 Cal.4th at p. 1058 ["litigation
privilege protects only publications and communications"].) According to Carl, "the gravamen of the
action was the extraction of privileged financial information in contravention
of Civil Code section 3295. It was
not a 'publication or broadcast' as required by Civil Code section 47."
We reject this argument. We ordinarily do not consider new arguments
raised in an appellant's reply brief, "because such consideration would
deprive the respondent of an opportunity to counter the argument." (American
Drug Stores, Inc. v. Stroh (1992) 10 Cal.App.4th 1446, 1453.) Moreover, the argument is frivolous. The litigation "privilege is applicable
to any communication, whether or not it amounts to a publication [or a
broadcast]" (Gallanis-Politis,
asking questions at a deposition, which Carl argued in his opening brief constituted
the " 'abuse' at issue here," is "quintessentially
communicative" (id. at p. 617).
In
sum, "[b]ecause the trial court correctly found that there was no
reasonable probability [Carl's] abuse of process claim would prevail on the
ground [Dillon's] allegedly wrongful conduct was privileged (Civ. Code,
§ 47, subd. (b)), it properly granted the anti-SLAPP motion (Code
Civ. Proc., § 425.16) . . . ." (Rusheen,
supra, 37 Cal.4th at p. 1065.)
DISPOSITION
The order is affirmed. The parties shall bear their own costs on
appeal.
IRION, J.
WE CONCUR:
McDONALD, Acting P. J.
McINTYRE, J.
name="_ftn1" title="">[1] Because Carl and
Margaret have the same last name, we use their first names for clarity and
brevity in this opinion. In so doing, we
intend no disrespect or undue familiarity.
name="_ftn2" title="">[2] SLAPP is an acronym
for strategic lawsuit against public participation.
