Filed 6/23/26 Khan v. Phillips CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
VALENTINA KHAN et al.,
Plaintiffs and Appellants, G064905
v. (Super. Ct. No. 30-2024-
01377575)
JOHN BENEDICT PHILLIPS et al.,
OPINION
Defendants and Respondents.
Appeal from a prejudgment order of the Superior Court of Orange
County, Scott A. Steiner, Judge. Affirmed.
Reeves & Weiss, Jeffrey H. Reeves and Daniel L. Weiss for
Plaintiffs and Appellants.
Kaufman Dolowich, Jeremiah Harvey and Henry Norwood for
Defendants and Respondents.
* * *
Appellants Valentina Khan, Steve A. Abraham, and Betsy E.
Masi (collectively, Trustees), the trustees of three educational trusts (Trusts)
set up for the minor children of Robert O Hill and Andrea Rae Paulin, were
joined as parties in the underlying divorce action between O Hill and Paulin.
After they were eventually dismissed from the divorce action, Trustees filed a
complaint for malicious prosecution against respondents John Benedict
Phillips and law firm Phillips Whisnant Gazin Gorczyca & Curtin, LLP
(collectively, Respondents), who represented Paulin. Respondents filed a
special motion to strike the complaint under California’s anti-SLAPP statute,
Code of Civil Procedure section 425.16.1 The trial court granted Respondent’s
motion on the ground that Trustees could not demonstrate a likelihood of
success on the merits under the second prong of the anti-SLAPP statute. In
particular, the court concluded Trustees could not demonstrate the elements
of lack of probable cause and malice necessary to prove malicious prosecution.
We conclude on our de novo review of the matter that Trustees
failed to make a prima facie showing of malice necessary to prevail at trial on
a claim for malicious prosecution. Accordingly, we affirm the trial court’s
prejudgment order granting Respondents’ anti-SLAPP motion.
FACTS
A. Underlying Divorce Action
Paulin filed a petition for divorce from O Hill in April 2017. At
the time of the divorce, the couple had three minor children. The divorce
action included issues of spousal and child support and determination of
community property. In July 2019, the family law court ordered O Hill to pay
1 All further statutory references are to the Code of Civil
Procedure.
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Paulin $40,000 per month in combined spousal and child support and pay
Paulin’s past and ongoing attorney fees.
O Hill failed to pay the court-ordered support and attorney fees,
claiming an inability to pay. During the course of the divorce proceedings, it
was discovered that O Hill’s income was largely through ownership stakes in
companies and trusts, including the Trusts administered by Trustees for the
benefit of the three minor children. In August 2020, Paulin filed a complaint
for joinder of the Trusts, as well as joinder of a separate company, O Hill
Capital (OHC), which was controlled by O Hill.
In November 2020, the family law court appointed a guardian ad
litem (GAL) to represent the minor children. In August 2020, the court
granted Paulin’s request for joinder as to the Trusts and OHC, concluding
they were indispensable parties to enforce the court’s child support orders.
In August 2021, Paulin filed a first amended complaint (FAC) for
joinder against OHC. The FAC, while expressly naming the Trusts in the
caption and party section, did not assert any causes of action against the
Trusts. In September 2021, GAL filed a report, recommending the Trusts be
dismissed from the divorce litigation. GAL did not make any
recommendations as to whether OHC should be dismissed from the action. In
May 2022, GAL filed a motion to dismiss the joinder complaint against the
Trusts.
In September 2021, OHC’s attorney, Mark C. Bailey, was taking
Paulin’s deposition and respondent Phillips was defending the deposition as
Paulin’s attorney. In a declaration, Bailey stated that, during a break in the
deposition, he overheard Phillips tell another attorney that Phillips had
developed an “‘Irish Grudge’” against Bailey. The other attorney told Bailey
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that Phillips “described it as hating someone so much that you continue that
hatred after you die.”
Trial began in July 2022. In October 2022, the Trusts filed a
motion for judgment dismissing the complaint for joinder pursuant to section
631.8, which Paulin opposed. In February 2023, the family law court granted
the Trusts’ motion for judgment after the completion of Paulin’s case in chief.
B. Malicious Prosecution Action
In February 2024, Trustees filed a complaint for malicious
prosecution. In May 2024, respondents filed a special motion to strike the
complaint pursuant to section 425.16. In October 2024, after briefing and oral
argument, the trial court granted respondents’ anti-SLAPP motion.
The trial court found that Trustees’ allegations for malicious
prosecution arose from respondents’ protected activity under the first prong
of the anti-SLAPP statute, a finding which was uncontested by Trustees.
Under the second prong, the court found that Trustees failed to show a
probability of prevailing on the second and third elements of a claim for
malicious prosecution, i.e., that the underlying complaint in the divorce
action was brought without cause and was initiated with malice.
DISCUSSION
I.
ANTI-SLAPP LEGAL PRINCIPLES AND STANDARD OF REVIEW
Section 425.16, subdivision (b)(1) provides, “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
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prevail on the claim.” This statute provides “‘a procedure for the early
dismissal of what are commonly known as SLAPP suits . . .—litigation of a
harassing nature, brought to challenge the exercise of protected free speech
rights.’ [Citation.] A SLAPP suit is generally brought to obtain an economic
advantage over the defendant, not to vindicate a legally cognizable right of
the plaintiff.” (Gotterba v. Travolta (2014) 228 Cal.App.4th 35, 40.) The
Legislature has mandated that courts construe this statute “broadly” in favor
of the moving party. (§ 425.16, subd. (a).)
“Litigation of an anti-SLAPP motion involves a two-step process.
First, ‘the moving defendant bears the burden of establishing that the
challenged allegations or claims “aris[e] from” protected activity in which the
defendant has engaged.’” (Bonni v. St. Joseph Health System (2021) 11
Cal.5th 995, 1009 (Bonni).)
“Second, for each claim that does arise from protected activity,
the plaintiff must show the claim has ‘at least “minimal merit.”’” (Bonni,
supra, 11 Cal.5th at p. 1009.) This step of the anti-SLAPP analysis “has been
described as a summary-judgment-like procedure. [Citation.] The court
determines whether ‘“the plaintiff has stated a legally sufficient claim and
made a prima facie factual showing sufficient to sustain a favorable
judgment.”’ [Citation.] The plaintiff ‘“may not rely solely on its complaint,
even if verified; instead, its proof must be made upon competent admissible
evidence.”’ [Citation.] The defendant may submit evidence in support of its
motion. [Citation.] However, ‘“[t]he court does not weigh evidence or resolve
conflicting factual claims.”’ [Citation.] Rather, the court ‘“accepts the
plaintiff’s evidence as true, and evaluates the defendant’s showing only to
determine if it defeats the plaintiff’s claim as a matter of law. [Citation.]
‘[C]laims with the requisite minimal merit may proceed.’”’” (Billauer v.
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Escobar-Eck (2023) 88 Cal.App.5th 953, 962 (Billauer).) Conversely, “[i]f the
plaintiff cannot make this showing, the court will strike the claim.” (Bonni, at
p. 1009.)
“On appeal, we review [an anti-SLAPP] motion de novo and
independently determine whether the parties have met their respective
burdens.” (Cross v. Cooper (2011) 197 Cal.App.4th 357, 371.) We employ the
same two-step process used by the trial court. (Billauer, supra, 88
Cal.App.5th at p. 962.) “‘Only a [claim] that satisfies both prongs of the anti-
SLAPP statute—i.e., that arises from protected speech or petitioning and
lacks even minimal merit—is a SLAPP, subject to being stricken under the
statute.’” (Ibid.)
II.
TRUSTEES FAILED TO MEET THEIR BURDEN TO PROVE A PROBABILITY OF
PREVAILING ON THEIR CLAIM FOR MALICIOUS PROSECUTION
The parties do not dispute that a malicious prosecution claim
necessarily arises from protected activity. (See Jarrow Formulas, Inc. v.
LaMarche (2003) 31 Cal.4th 728, 734–735.) Therefore, where, as here, the
defendant makes a prima facie showing the plaintiff’s complaint arises from
constitutionally protected activity, the burden then shifts to the plaintiff to
establish, with admissible evidence, a “‘minimal merit’” of prevailing on the
claims challenged by the anti-SLAPP motion. (Id. at p. 741; § 425.16, subd.
(b); Robertson v. Rodriguez (1995) 36 Cal.App.4th 347, 355.)
To establish a cause of action for malicious prosecution of a civil
proceeding, a plaintiff must demonstrate the prior action: (1) was terminated
in the plaintiff’s favor, (2) was brought without probable cause, and (3) was
initiated with malice. (Casa Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336,
341.)
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We agree with the trial court Trustees demonstrated the first
element of a claim for malicious prosecution, that is, the underlying action
ended in their favor with a judgment under section 631.8. A judgment under
section 631.8 “operates as an adjudication upon the merits” unless the court
specifies otherwise, which did not occur here. (§ 631.8, subd. (c).)
Under the second element of a malicious prosecution claim, an
attorney is liable for “continuing to prosecute a lawsuit discovered to lack
probable cause,” which is an “action[] that any reasonable attorney would
agree [is] totally and completely without merit.” (Zamos v. Stroud (2004) 32
Cal.4th 958, 970.)
Here, Trustees argue that Respondent’s filing of the FAC, which
omitted all causes of action against the Trusts but nevertheless kept the
Trusts as named parties, operated as an admission that Respondents lacked
probable cause. Trustees also argue it was clear the joinder suit lacked
probable cause once GAL filed its report recommending dismissal of the
joinder action against the Trusts.
Respondents contend they had probable cause to join the Trusts
in the underlying divorce action in order to properly calculate child support
and community property because O Hill’s assets were tied up in complicated
trusts and he had failed to pay the support obligations and attorney fees
ordered by the court.
Although we agree with respondents they had probable cause to
initiate the joinder action against the Trusts, we think it is a closer question
whether they had probable cause to continue to prosecute the action. The fact
the FAC omitted any causes of action against the Trusts while
simultaneously retaining them as named parties, which apparently required
them to expend attorney fees to defend the action through trial, suggests
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respondents no longer believed they had any meritorious claim against the
Trusts at the time they filed the FAC.
However, we do not have to determine whether Trustees met
their burden to demonstrate lack of probable cause because we conclude they
have failed to establish malice. “‘The malice element of the malicious
prosecution tort goes to the defendant’s subjective intent in initiating the
prior action. [Citations.]’ [Citations.] . . . The requisite showing of malice ‘is
not limited to actual hostility or ill will toward plaintiff but exists when the
proceedings are instituted primarily for an improper purpose. [Citations.]’ . . .
And ‘[s]ince parties rarely admit an improper motive, malice is usually
proven by circumstantial evidence and inferences drawn from the evidence.
[Citation.]’” (Maleti v. Wickers (2022) 82 Cal.App.5th 181, 222.) “The absence
of probable cause alone does not establish malice.” (Id. at p. 223.) However,
“‘“[m]alice may . . . be inferred from the facts establishing lack of probable
cause.” [Citation.]’” (Id. at pp. 223–224.)
Trustees argue they made a prima facie showing of malice based
on: (1) the lack of probable cause, (2) the fact Phillips complained O Hill had
not paid attorney fees O Hill owed respondents, and (3) Phillips’ purported
comment he bore an “‘Irish Grudge’” against OHC’s attorney. First, an
alleged lack of probable cause does not alone establish malice. To find that it
does improperly collapses the probable cause and malice elements of a
malicious prosecution claim. Nor can malice necessarily be inferred from the
circumstances here. GAL’s recommendation the Trusts be dismissed from the
lawsuit was not binding on the family law court or the parties. Furthermore,
the decision to join the Trusts in the divorce action was based at least in part
on the fact O Hill’s wealth was held in trusts and he had a history of failure
to pay court-ordered support obligations and attorney fees.
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Second, Trustees cite a portion of Phillips’ declaration in support
of Respondents’ anti-SLAPP motion as evidence of malice because it
“reveal[ed] [Phillips] resent[ed] that . . . O Hill’s estate planning ha[d]
impeded his ability to collect fees and nonchalantly threaten[ed] to file a
baseless motion for reconsideration if he [wa]s not paid.” We do not agree
with Trustees’ interpretation of Phillips’ declaration and conclude it does not
support a finding of malice. Phillips’ declaration merely noted Paulin had the
right to bring a motion for reconsideration of the Trustees’ motion to dismiss
the complaint for joinder once the trial was complete. Nowhere in the
declaration does Phillips threaten to file a motion for reconsideration unless
O Hill paid the court-ordered attorney fees he owed respondents.
Finally, Trustees cite to Phillips’ purported comment that he bore
an “‘Irish Grudge’” as proof of malice. However, even crediting this evidence
as true, Phillips’ comment was made regarding OHC’s attorney, not the
Trusts’ attorney. The fact Phillips may have harbored ill will against another
party’s attorney does not establish he acted with malice toward the Trusts.
Moreover, our decision is informed by the fact that malicious
prosecution suits are disfavored (Babb v. Superior Court (1971) 3 Cal.3d 841,
847), particularly, as here, in the context of a marital dissolution action
(Chauncey v. Niems (1986) 182 Cal.App.3d 967, 978–980; Bidna v. Rosen
(1993) 19 Cal.App.4th 27, 34). The Chauncey court concluded that “the
element of malice should be assessed according to a high, strict standard” in
family law matters, reasoning that “[u]nlimited access to a forum in which to
litigate malicious prosecution claims based on marital dissolutions would clog
the courts, and exacerbate and prolong what is ordinarily an acutely unhappy
state of affairs.” (Chauncey, supra, at p. 979.) The court therefore held that,
“[i]n the marital dissolution context, the showing of malice in a malicious
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prosecution action must be convincing as to its egregiousness, and the
scrutiny devoted to it by the courts minute.” (Id. at p. 980.) Given the lack of
evidence of malice in the record, we conclude Trustees have failed to meet the
heightened requirement for pleading malice in a divorce action.
DISPOSITION
The prejudgment order is affirmed. Respondents are entitled to
recover their costs on appeal.
SANCHEZ, J.
WE CONCUR:
MOTOIKE, P. J.
SCHWARM, J.*
*Judge of the Orange County Superior Court, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.
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