Mack v. Shannahan
Filed 1/23/14 Mack v. Shannahan CA4/1
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 This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115.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 APEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
CARY MACK,
Plaintiff and Respondent,
v.
WILLIAM P.
SHANNAHAN et al.,
Defendants and Appellants.
D061871
(Super. Ct. No. 37-2011-00095853-CU-NP-CTL)
APPEAL from orders
of the Superior Court of San Diego County,
Joan M. Lewis, Judge. Affirmed.
William P.
Shannahan, in pro. per., for Defendants and Appellants William P. Shannahan and
William P. Shannahan, Inc.
Schonfeld, Bertsche
& Preciado, Corrine Bertsche, Cecilia Preciado and Alan H. Schonfeld for
Defendants and Appellants Nicholas A. Boylan and Law Office of Nicholas A.
Boylan.
English &
Gloven, Donald A. English and Christy I. Yee for Plaintiff and Respondent.
Defendants and
appellants Nicholas A. Boylan and his law firm, Law Offices of Nicholas A.
Boylan, APC, (Boylan) and William P. Shannahan and his law firm, William P.
Shannahan, Inc., (Shannahan) (collectively defendants) appeal the orders denying
their respective anti-SLAPP motions brought under
against them by plaintiff and respondent Cary Mack.
and abused its discretion when it denied Boylan's motion to disqualify Mack's
counsel of record.
Mack was retained as a forensic accounting consultant/expert
by Shannahan in a divorce proceeding
filed by Shannahan's former wife (Shannahan
v. Shannahan (Super. Ct. San Diego County, No. D483710)) (the dissolution
action). While pursuing an appeal of the
judgment in the dissolution action, Shannahan sued both Mack and certified
family law specialist Rex Jones III and Jones's law firm, Jones Barnes LLP,
(Jones),
behalf of Shannahan asserted causes against Mack for breach of fiduciary duty,
elder abuse, professional negligence, negligent
misrepresentation and breach of contract (Shannahan
v. Jones et al. (Super. Ct. San Diego County, 2010, No. 37-2009-00088253-CU-PN-CTL))
(the underlying action).
After extensive litigation and the filing of a motion
for summary judgment, Shannahan—shortly before the motion was to be heard and a
few months before trial was to commence—dismissed Mack without prejudice from
the underlying action. Mack subsequently
was awarded his costs of defense as the prevailing party. Mack then filed the instant malicious
prosecution action against defendants. Defendants,
in return, filed anti-SLAPP motions, which the court denied.
As we explain, we affirm the orders denying (1)
defendants' anti-SLAPP motions and (2) Boylan's
record.
FACTUAL AND PROCEDURAL
BACKGROUND
At the time of the
dissolution action, Shannahan was a licensed attorney and certified tax
specialist practicing law for more than 40 years in the specialized areas of
domestic and international tax, estate planning, retirement planning,
partnership and corporation law. Shannahan
hired Jones to represent him in the dissolution action. Jones, in turn, recommended Shannahan hire Mack
and Mack's firm, which Shannahan did in 2004.
Mack's retention agreement was signed both by Shannahan and Jones,
although Shannahan alone was responsible for payment of Mack's invoices.
In June 2006, Shannahan designated Mack as his
forensic accounting expert in the dissolution action. As set forth in that designation (see former § 2034,
subd. (f) & § 2034.260), Mack's expected
the valuation of Shannahan's law practice and the tracing of assets in multiple
retirement plans and IRA's created by Shannahan.
Before retaining Mack and Jones, Shannahan had determined
that all contributions he made to various retirement plans during his marriage
were separate property. Specifically,
Shannahan believed the source of contributions to the plans was separate
property because his law corporation's equity returns or "capital pool"
distributions stemming from its partnership in a law firm predated his marriage
(separate property theory).
In accordance with the scope of his firm's retention,
Mack and his staff analyzed the assets and issues related to Shannahan's multiple
retirement plans, a task that proved "difficult" and "complex"
in large part because of Shannahan's "formation of numerous entities of
various forms throughout a period of more than 25 years, and the many asset
transfers he made to and through these entities for his tax and asset
protection purposes." Mack's work included
"analyzing financial activities of assets in the various retirement plans
and IRA[']s, including numerous rollovers, which occurred both before and
during the [Shannahans'] more than 20-year marriage (which included an 11-month
separation from approximately December 1985 to November 1986)."
"In the course of performing professional
services in the dissolution action, [Mack] was instructed by counsel Mr. Jones
that there was a lack of legal authority to support Mr. Shannahan's separate
property argument. Mr. Shannahan's
argument was that, if it could be proven that all of the contributions to the
numerous retirement accounts came from a 'capital pool' distribution from his
law practice, the contributions were his separate property and not community
earnings [i.e., his separate property theory].
Mr. Jones is a highly[-]experienced certified family law specialist
practicing for over 40 years.
"Based upon Mr. Jones'[s] determination that
there was insufficient legal authority to support Mr. Shannahan's position, Mr.
Jones instructed [Mack and his] firm to not testify to this 'theory' through
[his] financial analysis. In addition to
the lack of legal authority as determined by Mr. Jones, Mr. Shannahan could not
locate or produce the basic documents that would have been necessary to
adequately evaluate and assess his 'capital pool' theory even if there had been
supporting legal authority."
As a result of the lack of both legal and factual
support for Shannahan's separate property theory, Mack followed Jones's instruction. In so doing, according to Mack, Shannahan
never advised Mack during the dissolution action that he disagreed with the
scope of work Mack performed or Mack's testimony.
Mack prepared a written report that he presented both
at his deposition and at trial before Judge Pro Tem Thomas Ashworth (the court). With respect to the retirement plans, Mack
presented four separate alternative financial models, which set forth
calculations of the assets and financial activities in the numerous retirement
plans over the span of about 25 years.
Each of the four alternative models was based on different assumed facts
that would allow the court to select the appropriate model and, if necessary,
make adjustments to specific percentages of separate and community property
interests allocated to Shannahan and his former wife. Each of the models "traced certain
assets in the accounts to pre-marriage contributions made by Mr. Shannahan
based upon available documentation."
The court in its final statement of decision (SOD) noted
that the dissolution action was "perhaps the most convoluted and
contentious case the Court had encountered in 45 years of experience." It further noted that "[m]ost of the
assets acquired during marriage are currently owned by trusts, partnerships or
corporations and some of these entities have, or had, connections in the Cayman Islands, Hong Kong or Nevada." The court recognized that Shannahan's
position at trial was there was no community property in the various retirement
plans. The court found that such plans in
2006 had a value of about $4 million. Relying
on Mack's work product, the court adopted one of Mack's alternative models,
rejected the model prepared by Mack that all of the plans' assets were separate
property and awarded Shannahan about $3.1 million (or about 77 percent) of
those assets.
In reaching its decision, the court rejected
Shannahan's separate property theory that Shannahan himself had advanced (with
the assistance of another attorney he separately retained, as discussed in more
detail post) in the dissolution
action, noting there was no "legal authority" to support this theory. The court also rejected Shannahan's former wife's
position that all the assets in these accounts were community property.
The court further found that Shannahan breached his
fiduciary duty to his former wife by transferring two substantial assets to "other
entities without her specific knowledge or written consent or adequate
compensation to the community" and that, as such, Shannahan violated
Family Code sections 721 and 1100.
Shannahan appealed the judgment in the dissolution
action to this court (see consolidated appeals in D053701 & D055292). With regard to the retirement plans, Shannahan
represented to this court that the court erred in not awarding him as separate
property 100 percent of the assets of those accounts because the "evidence
at trial—presented by authoritative, direct testimony from [Shannahan],
documented with meticulous exhibits, and confirmed by [Shannahan's] accounting
expert (Cary Mack)—proved that the source
for all of the contributions to [the main retirement accounts] was
property interest in his capital pool income," which main retirement accounts
were the source "for all of the other
retirement accounts . . . ." We nonetheless affirmed the court's ruling on
this issue, noting that Shannahan cited no legal authority to support his
characterization of the distributions he received from the law firm's "capital
pool during marriage as separate property."
While Shannahan's appeal was pending in this court,
he filed the underlying action, naming both Mack (but omitting Mack's firm) and
Jones and Jones's law firm. Mack
demanded that he be dismissed from the underlying action because, among other
reasons, Shannahan allegedly had failed to follow the prefiling alternative
dispute resolution procedure set forth in the retention agreement. After Mack and Shannahan entered into a
tolling agreement, which tolled the statutes of limitations associated with
Shannahan's claims against Mack, Shannahan dismissed Mack from that action without
prejudice. Among other provisions, the
tolling agreement required that Shannahan give Mack 30 days' written notice to
terminate that agreement.
Boylan substituted into the action on behalf of
Shannahan. Boylan filed on behalf of
Shannahan a first amended complaint (FAC) that named Mack as a defendant
despite the parties' tolling agreement and the fact Shannahan had dismissed
Mack from the action. The FAC deleted a breach
of trust cause of action but continued to name Mack as a defendant to each of
the remaining five causes of action. Boylan
subsequently filed a second amended complaint (SAC) that alleged the same five
causes of action against Mack.
Mack wrote Boylan at least three times demanding to
be dismissed with prejudice from the action.
In one of his letters, Mack warned Boylan and Shannahan that the claims
against him in the SAC were "not warranted by existing law, [were] devoid
of evidentiary support, and lack[ed] probable cause . . . ." Mack indicated that unless he was dismissed
from the underlying action, he would file a separate malicious prosecution
action against Boylan and Shannahan once Shannahan's action was terminated in
Mack's favor. Neither Boylan nor
Shannahan responded to Mack's letters.
Mack spent in excess of $300,000 in attorney fees and
costs in defense of the underlying action.
Mack conducted extensive discovery and filed a motion for summary
judgment. In preparing for trial, Mack
retained expert witnesses in the areas of family law forensic accounting and
tracing, standard of care for accountants, employee benefits and retirement
plans, and actuarial services for private corporation retirement plans.
In early August 2010, with trial set for mid-October
2010 and Mack's motion for summary judgment set for hearing in September, Shannahan
dismissed Mack from the underlying action without prejudice after dismissing
Jones from the action a few days earlier in exchange for mutual general
releases and a waiver of costs. In late
August 2010, a judgment of dismissal was entered in favor of Mack, and he was
awarded costs of about $10,700.
Mack subsequently filed the instant malicious
prosecution action against Shannahan and Boylan. Shannahan and Boylan in response each filed
an anti-SLAPP motion to the malicious prosecution action. As noted, Boylan also filed a motion to
disqualify Mack's counsel of record.
After hearing argument and taking the matter under submission, the trial
court denied all the motions.
In its 13-page order, the court ruled in part as
follows:
"Defendants Nicholas A. Boylan and [the] Law
Office of Nicholas A. Boylan, A Professional Corporation ('Defendants' or 'Boylan
Defendants') have brought a special motion to strike pursuant to CCP Sec.
425.15. [¶] The determination of a special motion to
strike 'requires the court to engage in a two-step process. 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 undertaken "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. [Citation.] 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.' (
29 Cal.4th 53, 67.)
"This Court concludes that Defendants have met
their burden of showing that the complaint arises from their protected
petitioning activities. (
Opportunity (1999) 9 Cal.4th 1106, 1115.)
"Having met this initial burden, the burden then
shifts to Plaintiff to present sufficient evidence to establish 'that there is
a probability that the plaintiff will prevail on the claim.' (CCP Sec. 425.16(b)(1).)
"Plaintiff's complaint here is for malicious
prosecution. The elements of a malicious
prosecution action are that the underlying action (1) was initiated by or at
the direction of the defendant and was terminated in plaintiff's favor; (2) was
brought without probable cause; and (3) was initiated with malice. (Sheldon
Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 871.) 'A person who had no part in the commencement
of the action, but who participated in it at a later time, may be held liable
for malicious prosecution.' [(]
157 Cal.App.4th 1385 (Sycamore Ridge)
quoting Paramount General Hospital Co. v.
Jay (1989) 213 Cal.App.3d 360, 366, fn. 2.[)] In this case the Boylan Defendants continued
to prosecute the underlying action after their substitution into the case and
the Court believes Plaintiff has met his burden with respect to the first
element. [See, for example, Plaintiff's
Exs. 22, 24, 25[.]]
"Defendants argued, in part, that the underlying
action, voluntarily dismissed by their client, did not result in a termination
in Plaintiff's favor. The Court
disagrees. The evidence submitted by
Plaintiff—including the then-pending motion for summary judgment and recently
obtained deposition testimony—permits the reasonable inference that the
underlying action was dismissed based on a recognition that most of the claims
made in that action were meritless. [(]
31[.]]
"Defendants further contend that there was
probable cause to bring the underlying claims. 'An action is deemed to have been pursued
without probable cause if it was not legally tenable when viewed in an
objective manner as of the time the action was initiated or while it was being
prosecuted. The court must "determine
whether, on the basis of the facts known to the defendant, the institution of
the prior action was legally tenable."
(Sheldon Appel,
calls for the application of an objective
standard to the facts on which the defendant acted. [Citation[.]]["] (Ibid.) The test the court is to apply is whether "any
reasonable attorney would have thought the claim tenable . . . [.]" (Id.
at p. 886.)' [(]Sycamore Ridge at 1402.[)]
And, '"[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 in untenable under the facts
known to him."' [(]
Cal.App.4th 151, 164-165.[)]
"Here, the Court concludes that Plaintiff has
met his burden, at a minimum, as to the underlying causes of action for elder
abuse, breach of fiduciary duty and negligent misrepresentation.
"As to the breach of fiduciary duty cause of
action, the evidence submitted by the Plaintiff demonstrates that Plaintiff was
retained to act as an accounting expert witness—and nothing more—in an
underlying dissolution action concerning William Shannahan. The Court concludes that based on the
evidence before it—and without weighing the credibility or comparing the weight
of the evidence—that Plaintiff has demonstrated a probability of prevailing on
the issue that this cause of action was not legally tenable. [See, for example, Declaration of Cary Mack
and Plaintiff's Ex. 1[.]]
"Similarly, the Court finds that Plaintiff has
met his burden with respect to the elder abuse cause of action. The Court believes the evidence before it
does not support a claim that Mr. Shannahan was the victim of elder abuse as
defined by Welfare & Institutions Code Sec. 15610.30. In this regard, the Court notes that although
Mr. Shannahan could qualify as an 'elder' as that term is defined under the
Welfare & Institutions Code, Defendants cited no authority that such fact
alone is sufficient to support a claim for elder abuse. Plaintiff denies engaging in acts of elder
abuse [Plaintiff's Declaration, Para. 53] and Defendants offered no competent
evidence to suggest that Plaintiff took or appropriated Mr. Shannahan's
property for a wrongful use or with the intent to defraud or that Mr. Mack
obtained Mr. Shannahan's property by undue influence.
"The Court also believes Plaintiff has met his
burden with respect to the negligent misrepresentation cause of action. The evidence before the Court reflects an
alleged misrepresentation that did not relate to a past or existing fact. [(]See Tarmann
v. State Farm Mutual Auto Ins. Co. (1991) 2 Cal.App.4th 153, 158.[)] [See, for example, underlying complaint,
Para. 25; amended complaint at Para. 27 and second amended complaint at Para. 28.]
"Finally, Defendants argued that Plaintiff
cannot meet his burden with respect to the malice element. 'The malice element of the malicious prosecution
tort goes to the defendant's subjective intent in initiating the prior
action. (Sheldon Appel, supra, 47
Cal.3d at p. 874.) For purposes of a
malicious prosecution claim, malice "is not limited to actual hostility or
ill will toward the plaintiff. Rather,
malice is present when proceedings are instituted primarily for an improper
purpose." (Sierra Club Foundation v. Graham (1999) 72 Cal.App.4th 1135, 1157.)' This Court finds that the continued
maintenance of the underlying lawsuit that contained claims that Plaintiff has
shown were legally untenable—after correspondence from Plaintiff's counsel so
advising—is sufficient to satisfy the Plaintiff's burden on this element. [See, for example, Plaintiff's Exs. 20, 26
and 27.]
"Based on the above, the
special motion to strike is denied."
After ruling on the parties' evidentiary objections,
the court for nearly identical reasons denied Shannahan's anti-SLAPP motion. As also discussed post, the court denied Boylan's motion to disqualify Mack's
counsel.
DISCUSSION
I
The Anti-SLAPP Motions
A. Guiding
Principles
section 425.16, subdivision (b)(1), 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." In making this determination, the court "shall
consider the pleadings, and supporting and opposing affidavits stating the
facts upon which the liability or defense is based." (§ 425.16, subd. (b)(2).)
In the instant case, there is no dispute among the
parties that a malicious prosecution claim is subject to the anti-SLAPP
statute. (See Jarrow Formulas, Inc.
v. LaMarche, supra,
31 Cal.4th at pp. 728, 736-741; Kleveland
v. Siegel & Wolensky, LLP (2013) 215 Cal.App.4th 534, 548-549.) As such, the burden then shifted to Mack to
show a likelihood of prevailing on the claim.
(See § 425.16, subd. (b)(1).)
To show the likelihood of prevailing on the merits, a
plaintiff "'must demonstrate that the complaint [was] both legally
sufficient and supported by a sufficient prima facie showing of facts to
sustain a favorable judgment if the evidence [he] submitted . . .
[was] credited.' [Citations.]" (Wilson v.
Parker, Covert & Chidester (2002) 28 Cal.4th
811, 821.) "'We 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.]' [Citations.]" (Nygard, Inc. v. Uusi–Kerttula (2008)
159 Cal.App.4th 1027, 1036.)
In opposing an anti-SLAPP motion, a plaintiff need
only establish that the claim subject to section 425.16 has "minimal
merit." (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291;
157 Cal.App.4th 1385, 1397.) We
independently review the trial court's order granting a special motion to
strike under section 425.16. (Rusheen
v. Cohen (2006) 37 Cal.4th 1048, 1055.)
B.
Prosecution Claim
As noted by the trial court, in order to prove a
malicious prosecution claim, Mack must show the underlying action "'(1)
was commenced by or at the direction of the defendant[s] and was pursued to a
legal termination in . . . plaintiff's[ ] favor [citations]; (2) was
brought without probable cause [citations]; and (3) was initiated with malice
[citations].' [Citation.]" (Crowley v. Katleman (1994) 8 Cal.4th
666, 676; see also Soukup v. Law Offices
of Herbert Hafif, supra, 39
Cal.4th at p. 292.)
1. Favorable Termination
The record shows Mack was
dismissed in the underlying action with trial scheduled to start in about two
months, while his motion for summary judgment was pending and within days after
codefendant Jones was dismissed from the same action. In addition, the record shows that a judgment
of dismissal was subsequently entered in favor of Mack and he was awarded costs
of about $10,700.
We independently conclude that Mack satisfied his
burden under subdivision (b)(1) of section 425.16 of showing the underlying action
was terminated in his favor. (See
supra, 157 Cal.App.4th at p. 1400
[noting that a voluntary dismissal, such as in the instant case, "is
presumed to be a favorable termination on the merits, unless otherwise proved
to a jury"]; cf. Lackner v. LaCroix (1979)
25 Cal.3d 747, 750-751 [observing that a dismissal (i.e., for failure to
prosecute) "'reflect[s] on the merits of the action'" in favor of the
defendant because of "'the natural assumption that one does not simply
abandon a meritorious action once instituted'"].)
Moreover, we note that defendants have not challenged
in this proceeding the finding by the court that the underlying action was
terminated in Mack's favor for purposes of his malicious prosecution action. For this separate and independent reason, we
conclude Mack made a prima facie showing of favorable termination. (See Johnston
v. Board of Supervisors (1947) 31 Cal.2d 66, 70 [issues raised in the trial
court but not argued by the parties on appeal are deemed waived], overruled on
another ground as stated in Bailey v.
County of L.A. (1956) 46 Cal.2d 132, 139.)
"An action is deemed to have been pursued
without probable cause if it was not legally tenable when viewed in an
objective manner as of the time the action was initiated or while it was being
prosecuted. The court must 'determine
whether, on the basis of the facts known to the defendant, the institution of
the prior action was legally tenable.' (Sheldon
Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 878.) 'The resolution of that question of law calls
for the application of an objective standard to the facts on which the
defendant acted. [Citation.]' (Ibid., italics omitted.) The test the court is to apply is whether
have thought the claim tenable . . . .' (Id. at p. 886.) The tort of malicious
prosecution also includes the act of 'continuing to prosecute a lawsuit
discovered to lack probable cause.' (Zamos v. Stroud (2004) 32 Cal.4th
958, 973.) In determining the probable
cause issue, the same standard applies 'to the continuation as to the
initiation of a suit.' (Id. at p.
970.)
analyzing the issue of probable cause
in a malicious prosecution context, the trial court must
consider both the factual circumstances established by the evidence and the
legal theory upon which relief is sought.
A litigant will lack probable cause
for his [or her] action either if he [or she] relies upon facts which he [or
she] has no reasonable cause to believe to be true, or if he [or she] seeks
recovery upon a legal theory which is untenable under the facts known to him
[or her].' [Citation.]
determining whether the prior action was legally tenable, i.e., whether the
action was supported by probable cause,
the court is to construe the allegations of the underlying complaint liberally,
in a light most favorable to the malicious prosecution
defendant. [Citation.]" (Kleveland
v. Siegel & Wolensky, LLP, supra,
215 Cal.App.4th at pp. 550-551.)
If, as in the instant case, the prior action charged
multiple grounds of liability, a malicious prosecution action will lie if
without probable cause and with malice.
(Crowley v. Katleman,
"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"].)
evidence in opposition to defendants' anti-SLAPP motions that, if believed by
the trier of fact, was sufficient to support a finding that defendants initiated
or continued to prosecute this cause of action against Mack without probable
cause. We conclude Mack has proffered
sufficient evidence to make the minimal showing required to support this
finding. (See Soukup v. Law Offices of Herbert Hafif, supra, 39 Cal.4th at p. 291.)
The SAC prepared by Boylan on behalf of Shannahan
alleges Mack at all times relevant was a "certified public accountant
practice in the State of California," who was "working as an expert witness and professional
consultant on forensic accounting and litigation matters." (Italics added.) The SAC further alleges that Jones, who at
all times relevant was a "certified specialist in family law,"
recommended that Mack be retained to "perform professional services,
provide professional advice as a business consultant, and to trace the origin
of Shannahan's IRAs and Retirement Plans and to present his evidence and
conclusions as an expert witness."
The SAC alleges that "Defendants [i.e., Mack and
Jones] owed to Plaintiff [i.e., Shannahan] various duties including that of good
faith and fair dealing, and a duty to do nothing to deprive him [i.e.,
Shannahan] of the benefit of the various contracts and other legally-binding
transactions in which he entered. In
addition, each of the Defendants [i.e., Mack and Jones] had duties set forth in
the Rules of Professional Conduct governing the actions of attorneys. These Defendants held themselves out as
experts in divorce law and the tracing of assets in the manner necessary to
establish a spouse's rights therein."
In addition, the SAC alleges Mack and Jones as
fiduciaries each allegedly breached
that duty "by failing to represent him competently as his attorneys,
accountants, and trusted advisors. They
failed to adequately and competently trace the sources of various assets and
accounts of Shannahan, failed to advise him to seek other counsel and other
advisors if they did not fully understand these issues, failed to give
competent legal advice, failed to adequately protect his interests in separate
property and exposed him to claims that could deprive him of much of the assets
he worked a lifetime to earn." As a
result of the breach of fiduciary duty, the SAC alleges Shannahan suffered
damages of "not less than $1,000,000."
"'The elements of a cause of action for breach
of fiduciary duty are: (1) existence of a fiduciary duty; (2) breach of the
fiduciary duty; and (3) damage proximately caused by the breach.' [Citation.]" (Gutierrez
v. Girardi (2011) 194 Cal.App.4th 925, 932.)
Boylan contends Mack cannot satisfy his minimal
burden under subdivision (b)(1) of section 425.16 to show Boylan filed and
prosecuted on behalf of Shannahan a breach of fiduciary duty cause of action in
the SAC that was not legally tenable when viewed in an objective manner. Specifically, Boylan proffers evidence
showing he reviewed the files, documents and evidence from the dissolution
action, including the file from Jones and Mack's reports and drafts of reports,
and had multiple conferences, interviews and meetings with Shannahan and his
appellate counsel and, from this information and the information he obtained
during the pendency of the underlying action, he "believed the claims
against Mr. Mack were clearly tenable."
As relevant to this cause of action, Boylan, in
support of the anti-SLAPP motion, cites to evidence from Shannahan in which
Shannahan stated under oath that Mack improperly assumed the role of legal
advisor and legal decision maker in connection with Shannahan's separate
property theory.
title="">[5]
Mack, in response, proffered evidence showing that Shannahan
did not retain Mack or the (two) firms where he worked to provide Shannahan
legal services; that neither Mack nor his firms have ever provided legal
services to anyone, including to Shannahan; that Mack has never been employed
by a law firm and has never represented himself to be a "practicing
attorney"; that consistent with the retention agreement signed by
Shannahan and Jones, on the one hand, and Mack on the other, Mack and his firm
were retained in the dissolution action solely in the capacity of valuation and
forensic accounting experts; that Shannahan had hired Jones—a certified family
law specialist—and not Mack to provide Shannahan legal services in the
dissolution action and later hired attorney Darvy Mack Cohan to assist him in presenting
his separate property theory at trial in the dissolution action; that Shannahan
also hired attorney John Morris as legal counsel to assist him during the
posttrial and appellate phases of the dissolution action; and that the first
time Shannahan suggested Mack owed him a fiduciary relationship as a result of
Mack being a licensed attorney was in the underlying action.
In addition, the attorney declaration accompanying
the expert witness exchange (as amended) stated the "general substance of
the testimony" (see § 2034.260, subd. (c)(1)) Mack was expected to
give in the dissolution action involved (1) valuing Shannahan's law practice
and (2) the tracing of his retirement plans.
From the foregoing, even construing the allegations
of the underlying action liberally in favor of defendants, we conclude Mack
proffered sufficient admissible evidence that, if believed, satisfies his minimal
burden to make a prima facie showing that defendants relied on facts that they had
no reason to believe were true and also relied on a legal theory that was
untenable when they asserted in the SAC that Mack allegedly owed Shannahan a
fiduciary duty because Mack, in the dissolution action, provided legal services
to and acted as an attorney for Shannahan.
We further conclude the evidence proffered by Boylan, if believed, gives
rise to a dispute as to the state of defendants' knowledge with respect to
probable cause, or lack thereof, in connection with the duty issue, which
dispute must be resolved by a jury. (See
Daniels v. Robbins (2010) 182
Cal.App.4th 204, 223.)
This does not end our inquiry on the issue of lack of
probable cause and duty, however. As
stated, defendants also alleged in the underlying action that Mack owed Shannahan
a fiduciary duty based on the fact Mack was hired in the dissolution action to "perform
professional services, provide professional advice as a business consultant,
and to trace the origin of Shannahan's IRAs and Retirement Plans and to present
his evidence and conclusions as an expert witness."
As already noted, the evidence in the record shows
that Mack and his firm were retained by Shannahan based on the recommendation
of Jones; that when Mack was designated as an expert witness, the subject
matter of his testimony involved the valuation of Shannahan's law practice and
the tracing of assets in the various retirement plans; that Jones was
responsible for the scope and direction of the work Mack was performing,
subject to the parameters and requirements governing CPA's; and that Mack testified
as an expert witness on these subject matters both at deposition and at trial
in the dissolution action.
We conclude from the foregoing that Mack proffered
sufficient admissible evidence to make a prima facie showing that defendants relied
on a legal theory—that Mack owed a fiduciary duty to Shannahan based on Mack's
retention as an expert witness in the dissolution action—that was objectively untenable. Indeed, at a minimum, once Mack was
designated and testified as an expert witness in the dissolution action
regarding the tracing of assets in the various retirement accounts, Shannahan
had no reasonable expectation of maintaining the confidentiality of Mack's work
product and communications with respect to this subject matter, which subject
matter is at the heart of Shannahan's alleged damages in the underlying action. (See Wolf
v. Superior Court (2003) 107 Cal.App.4th 25, 29 [noting a fiduciary
relationship "'"ordinarily arises where a confidence is reposed by
one person in the integrity of another, and in such a relation the party in
whom the confidence is reposed, if he [or she] voluntarily accepts or assumes
to accept the confidence, can take no advantage from his [or her] acts relating
to the interest of the other party without the latter's knowledge or consent"'"];
Shadow Traffic Network v. Superior Court (1994)
24 Cal.App.4th 1067, 1079 [noting the protections afforded by the
attorney-client privilege and work product doctrine are "lost upon
designation of the expert as a witness because the decision to use the expert
as a witness manifests the client's consent to disclosure of the information"].)
But even if we concluded defendants' theory that Mack
owed Shannahan a fiduciary duty was reasonably tenable with respect to Mack's
role in the dissolution action, we would still conclude Mack has satisfied his
burden to show a lack of probable cause in connection with this claim. In addition to alleging Mack owed Shannahan a
fiduciary duty, defendants in the underlying action also alleged in the SAC
that Mack breached that duty and that his breach caused Shannahan damage. (See Gutierrez
v. Girardi, supra, 194
Cal.App.4th at p. 932.)
Mack's evidence is sufficient to make a prima facie
showing that Shannahan relied on facts that he had no reason to believe were
true when defendants alleged Mack breached a fiduciary duty to Shannahan in the
dissolution action. As stated, it was
Jones and not Mack who determined there was a lack of legal authority to
support Shannahan's own separate
property theory.
Jones testified that he discussed Shannahan's
separate property theory with Shannahan in or about the "first quarter"
of 2005 and that Mack was also present at that meeting. During the meeting, Jones told Shannahan
there were "no legal basis" and "no legal support" for
Shannahan's separate property theory.
Jones testified that because of the laws in the
Family Code, it is presumed that all property acquired during marriage is
community and that all income generated during the marriage is community "unless
it can be traced back to a separate property source." Jones testified he advised Shannahan that
because, in Jones's view, the "chief contributing factor to the creation
of income that he received from the [law] firm was his [i.e., Shannahan's]
skill, energy, and labor during marriage, that . . . all income from
that source was community." According
to Jones, Shannahan disagreed with Jones's "tactical decision" not to
go forward with Shannahan's "separate property tracing claim or theory."
Jones testified not only was there no legal authority
and insufficient documentation to support Shannahan's separate property theory
but also he was concerned that, if they pursed that theory, it would create a "credibility
issue" with respect to other legal issues that were pending in the
dissolution action, including whether Shannahan breached his fiduciary duty to
his former wife with respect to the transfer of assets.
Mack proffered evidence showing Mack (through
counsel, as discussed post)
letter in which Mack specifically told Boylan that Shannahan's causes of action
in what was then the FAC were frivolous and would be the subject of a malicious
prosecution action because, as the court in the dissolution action found, there
was no "legal or factual basis" to support Shannahan's separate
property theory; Shannahan did not have documents dating back to the
approximate 20-year time span that would have been needed to support that
theory; and significantly, Jones had "counseled Mr. Shannahan against
asserting such a claim in the dissolution action." Mack also explained to Boylan that Jones
believed advocating an "unsupportable theory" would undermine
Shannahan's credibility with the court.
We conclude this evidence, if believed, supports the finding
that it was Jones and not Mack who refused to pursue Shannahan's separate
property theory in the dissolution action; that defendants—including Boylan—were
clearly on notice of this fact in January 2010, at the latest; and that defendants
therefore had no reasonable cause to continue to rely on the fact that it was
Mack who refused to pursue Shannahan's theory and thus breached his alleged
fiduciary duty to Shannahan.
That Boylan proffered evidence showing Shannahan
believed otherwise, including that Mack failed to develop and present Shannahan's
separate property theory after allegedly agreeing to do so and/or failed to
notify promptly Shannahan of his decision not to pursue this theory, after
charging Shannahan thousands of dollars to work it up, does not change our
conclusion here.
Indeed, these facts, if believed, do not establish probable
cause as a matter of law but rather merely give rise to a factual dispute between
the parties for purposes of the anti-SLAPP statute regarding whether Shannahan
and Boylan objectively believed they had sufficient probable cause to institute
and/or continue to prosecute the breach of fiduciary duty cause of action against
Mack. (See Daniels v. Robbins, supra,
182 Cal.App.4th at p. 223; see also Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3d at p. 881
[noting that when "there is a dispute as to the state of the defendant's
knowledge and the existence of probable cause turns on resolution of that
dispute . . . the jury must resolve the threshold question of the
defendant's factual knowledge or belief"].)
In addition, the record shows that Shannahan, with
the assistance of Cohen, did in fact present his separate property theory at
the trial in the dissolution action and that the court rejected this theory because
it found no legal authority supported it.
This evidence further supports the conclusion that Mack satisfied his
minimal burden of showing that defendants in Shannahan's SAC relied on facts in
Shannahan's breach of fiduciary duty cause of action that they had no
reasonable cause to believe were true with respect to the alleged cause
arising from the alleged breach of duty.
Because we conclude for purposes of the anti-SLAPP
statute that at least one of the causes of action against Mack was brought without
probable cause, we need not decide whether any of the remaining causes of
action in the underlying action also were brought without probable cause for
purposes of deciding whether Mack satisfied his burden to show a probability of
success on the merits in connection with his malicious prosecution action. (See Crowley
v. Katleman, supra, 8 Cal.4th at
p. 671.)
Nonetheless, we separately conclude Mack also
satisfied his burden of showing a lack of probable cause with respect to the
elder abuse cause of action asserted by defendants in Shannahan's SAC. Mack proffered sufficient evidence to show no
reasonable attorney would have thought that claim was tenable under the known
facts, inasmuch as the evidence, if believed, supports the findings (1) that
Shannahan was neither an "infirm elderly person[]" nor a "dependent
adult[]" deserving of protection in the dissolution action (see Welf.
& Inst. Code, § 15600, subds. (a), (c) & (h)), as there is substantial
evidence showing Shannahan at all times relevant in that action was a
sophisticated, highly-experienced tax specialist who aggressively pursued his
made a tactical decision and refused to do so, including offering expert
witness testimony in support of that theory; and (2) that Mack did not
wrongfully take or misappropriate Shannahan's property "for a wrongful use
or with intent to defraud, or both" or by means of undue influence, in
connection with Mack's engagement and work as a forensic accounting expert for
Shannahan in the dissolution action.
(See id., § 15610.30.)
Again, the evidence proffered by Boylan that Mack
allegedly "took financial advantage" of Shannahan by "representing
he would do the separate property tracing, billing Mr. Shannahan for two years,
preparing a report which he threw out and admits he threw out [and] collecting
fees from Mr. Shannahan," even if admissible
on the issue of probable cause that is for the jury to decide. (See Daniels
v. Robbins, supra, 182
Cal.App.4th at p. 223.)
3. Malice
Defendants next contend Mack failed to meet his minimal
burden to show a probability of prevailing on the malice element of his
malicious prosecution case. We disagree.
The malice element focuses on a defendant's
subjective intent in initiating the prior action and is generally an issue to
be determined by a jury. (
supra, 47 Cal.3d at p. 874; HMS
Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 218.) To establish malice, Mack was required to
show by a preponderance of the evidence that defendants brought the underlying action
based on hostility or ill will or for another improper purpose. (See Ross
v. Kish (2006) 145 Cal.App.4th
188, 204; Padres L.P. v.
"Malice is usually proved by circumstantial
evidence. [Citation.] Although a lack of probable cause, standing
alone, does not support an inference of malice, malice may still be inferred
when a party knowingly brings an action without probable cause. [Citation.]" (Padres
L.P. v. Henderson, supra, 114
Cal.App.4th at p. 522.) Whether malice
exists presents a factual question, and its proof may be inferred from all the
circumstances of the case. (Sheldon
Appel Co. v. Albert & Oliker, supra,
47 Cal.3d at p. 874.)
Here, we conclude Mack has submitted sufficient evidence for
purposes of the anti-SLAPP statute from which a reasonable person could infer
an improper motive by defendants in asserting causes of action for breach of
fiduciary duty and/or elder abuse against Mack in the underlying action. As stated, Mack wrote Shannahan and/or Boylan
at least three times after he was sued in the underlying action.
In the first letter, which was written less than a
week after Shannahan filed the underlying action, Mack noted Shannahan had
filed that action without regard to the provision in the retention agreement
signed by Mack and Shannahan requiring the parties first to participate in a
mediation administered by the American Arbitration Association under the
Professional Accounting and Related Services Dispute Resolution Rules before
resorting to litigation. Mack also
warned that the causes of action against him lacked probable cause and that he
would seek appropriate relief, including sanctions under section 128.7, if
Shannahan did not dismiss Mack from the complaint. Shannahan did not respond to this letter.
Mack next wrote Shannahan and Boylan in early January
2010 after Boylan filed the SAC on behalf of Shannahan. Mack again demanded that he be dismissed from
the underlying action and noted that the parties' tolling agreement required 30
days' written notice before termination.
In addition, as noted ante,
who counseled against asserting Shannahan's separate property theory at the
trial in the dissolution action because, like the court in its SOD, Jones had
concluded there was no legal or factual basis to support it and because Jones
was concerned pursuing that theory would undermine Shannahan's credibility on
other material issues. Mack again warned
Shannahan and Boylan that if he was not dismissed from the underlying action,
he would vigorously defend the lawsuit, seek sanctions when appropriate and
pursue them for malicious prosecution. Neither
Shannahan nor Boylan responded to this letter.
A week later, Mack again wrote Boylan after receiving
three letters from Boylan regarding discovery issues, among other subject
matters, in connection with the underlying action. Mack once more demanded that he be dismissed
from the underlying action, but, again, neither Shannahan nor Boylan responded
to his request.
In addition, as shown ante, there is admissible
evidence showing Shannahan knew as early as 2005—about four years
the underlying action—that it was Jones and not Mack that determined there was
no legal support for Shannahan's own separate
property theory and that, therefore, this theory would not be pursued at the
trial in the dissolution action.
We conclude this evidence supports the inference that
defendants acted with malice in connection with the filing of the lawsuit,
including the FAC and SAC, against Mack, and thus Mack has satisfied his
minimal burden under the anti-SLAPP statute to show a probability of success on
this element of his malicious prosecution action.
II
Boylan's Motion to Disqualify
Mack's Counsel
Boylan alone alternatively contends the court abused
its discretion and thus erred when it denied the motion to disqualify Mack's
counsel of record, Donald English and the law firm of English & Gloven
(English), because English represented Mack in the underlying action and is
also acting as his counsel of record in the malicious prosecution action.
In denying Boylan's motion, the court ruled as
follows:
"The Declaration of Mr. Mack confirms that he
has given his informed written consent to his counsel's continued
representation.
"Notwithstanding counsel having received his
client's consent, Defendants argue that disqualification may still be ordered
upon a 'convincing demonstration of detriment to the opposing party or injury
to the integrity of the judicial process.' [(]Smith,
Smith & Kring v. Superior Court (Oliver) (1997) 60 Cal.App.4th 573 ('
here because Mr. English will necessarily be called as a witness at trial and
testify as to key issues in the case. The
Court concludes that Defendants have failed to demonstrate detriment to them or
to the integrity of the judicial process if Mr. English is not disqualified.
"In denying this motion the Court has first considered
'the combined effects of the strong interest parties have in representation by
counsel of their choice and in avoiding the duplicate expense and
time-consuming effort involved in replacing counsel already familiar with the
case.' [(]Smith, Smith & Kring, at 580-81, citing Lyle v. Superior Court (1981) 86 Cal.App.3d 470, 481 and
Cal.App.3d 180, 201.[)] Insofar as this
consideration, the Court does not agree with Defendants that because this
action is in its somewhat early state that significant duplicative efforts and
expenses will not be incurred.
"Although the Court does not believe Plaintiff
has demonstrated that Defendants are using this motion to disqualify for purely
tactical reasons and/or to delay the litigation, the Court is mindful of the
fact that to grant this motion would result in delay of the litigation.
"The Court has also considered whether Mr.
English's testimony is genuinely needed and, if so, the significance of the
matters to which he might testify, the weight that testimony might have and the
availability of other witnesses or evidence by which these matters may be
established. Here, although not entirely
clear that Mr. English will testify, it appears there is a relative likelihood
that some testimony from him will be needed.
"In their reply, Defendants argued that '[t]he
fact that English is of the opinion that he obtained the favorable
termination he contends occurred highlights the fact that English is a material
witness as to that issue, an issue that is disputed, and hence, supports the
basis for his disqualification.'
[Defendants' emphasis[.]] Although
favorable termination may well be a disputed issue at trial, it is not clear to
the Court how Mr. English's opinion that he obtained a favorable termination
will be the subject of his examination.
For example, Mr. English possibly may testify that there was a summary
judgment motion pending at the time the dismissal was filed. He may also testify regarding deposition
testimony he obtained from witnesses preceding the dismissal. However, it does not appear to the Court that
Mr. English would be called to express his own opinion that these events
constituted a favorable termination of the underlying action in his client's
favor.
"Similarly, the Court does not find persuasive
Defendants' argument that letters Mr. English wrote in the underlying action
(which this Court cited to in its earlier tentative ruling and has now cited to
in its order denying the motions to strike) will be the subject of Mr. English's
testimony so as to cause harm to the integrity of the judicial process. Again, it does not appear to the Court that
Mr. English will be testifying as to the ultimate issue of whether these
letters demonstrate malice or not; rather, presumably, he will testify to
foundational facts such as that he authored the letters.
"For the above reasons, the Court finds
disqualification to not be appropriate."
A.
We may review a trial court's decision on a
disqualification motion only for
of discretion.
(People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems,
Inc. (1999) 20 Cal.4th 1135, 1143; Jorgensen
v. Taco Bell Corp. (1996) 50 Cal.App.4th 1398, 1402.) If the trial court resolved disputed factual
issues, we determine whether substantial evidence supports the trial court's
findings of fact. (In re Charlisse C.
(2008) 45 Cal.4th 145, 159; Sabbah v. Sabbah (2007) 151 Cal.App.4th 818,
822.) When the factual findings are
supported by substantial evidence, we review the conclusions based on those
findings for abuse of discretion. (People
ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc., supra, at p. 1144.)
The issue before us involves rule 5-210 of the Rules
of Professional Conduct (rule 5-210). It
provides in part: "A member shall
not act as an advocate before a jury which will hear testimony from the member
unless: [¶] . . . [¶]
written consent of the client. . . ."
Rule 5-210 was addressed in Smith, supra, 60
Cal.App.4th 573. There, the plaintiff
sued her former attorneys, SS&K, for legal malpractice among other claims, asserting
SS&K misled her into agreeing to settle for too little money in a personal
injury lawsuit arising from an automobile accident. SS&K hired the attorneys that had
represented the defendant in the plaintiff's personal injury action, HB&B,
to defend it in the legal malpractice case.
The plaintiff then moved to disqualify HB&B, which motion was
granted. The Court of Appeal reversed. (
In so doing, the Smith
court reviewed former rule 2-111(A)(4), including an amendment to that rule
that was made in response to our Supreme Court's decision in
Cal.3d 906, 915-916, which applied an earlier version of rule 2-111(A)(4) to
uphold a trial court's decision to recuse an attorney solely on the basis that
the attorney was a potential trial
witness. The Smith court noted that after former rule 2-111(A)(4) was amended
(see fn. 7, ante), a "'trial
court, when balancing the several competing interests, should resolve the close
case in favor of the client's right to representation by an attorney of his or
her choice and not as in Comden [
withdrawal of the attorney. Under the
present rule [i.e., amended former rule 2-111(A)(4)], if a party is willing to
accept less effective counsel because of the attorney's testifying, neither his
opponent nor the trial court should be able to deny this choice to the party
without a convincing demonstration of detriment to the opponent or injury to
the integrity of the judicial process.'
[Citations.]" (
Because HB&B obtained written consent from
SS&K, much like English has obtained the written consent of Mack here, the
proffered by the plaintiff to determine whether she satisfied her burden to
show a "'convincing demonstration of detriment.'" (Smith,
supra, 60 Cal.App.4th at p.
579.) After balancing the several
competing interests in ruling on such a motion, the Smith court concluded that the plaintiff had not met her burden. (Id. at
pp. 580-582.)
With regard to the balancing of competing interests,
the Smith court noted a court should "start
with the proposition that '[t]he right of a party to be represented in
litigation by the attorney of his or her choice is a significant right'"
and noted that rule 5-210 "'permit[ed] HB&B to act as both advocate
and witness since the firm obtained SS&K's consent and 'the fact that the
client has consented to the dual capacity must be given great weight.'" (Smith,
supra, 60 Cal.App.4th at p. 580.) The court then looked at a variety of factors,
which provide some guidance on the issue here:
"First, the court must consider the combined
effects of the strong interest parties have in representation by counsel of
their choice, and in avoiding the duplicate expense and time-consuming effort
involved in replacing counsel already familiar with the case. [Citations.]
'[I]t must be kept in mind that disqualification usually imposes a
substantial hardship on the disqualified attorney's innocent client, who must
bear the monetary and other costs of finding a replacement.' [Citation.]
"Second, the court must consider the possibility
counsel is using the motion to disqualify for purely tactical reasons. [Citation.]
Should counsel freely be able to disqualify opposing counsel simply by
calling them as witnesses, it would 'pose the very threat to the integrity of
the judicial process that [motions to disqualify] purport to prevent.' [Citation.]
'"After all, in cases that do not involve past representation
[conflict cases] the attempt by an opposing party to disqualify the other side's
lawyer must be viewed as part of the tactics of an adversary proceeding."' [Citation.]
"Finally, '"[W]henever an adversary
declares his intent to call opposing counsel as a witness, prior to ordering
disqualification of counsel, the court should determine whether counsel's
testimony is, in fact, genuinely needed."'
[Citations.] In determining the
necessity of counsel's testimony, the court should consider 'the significance
of the matters to which he [or she] might testify, the weight his [or her]
testimony might have in resolving such matters, and the availability of other
witnesses or documentary evidence by which these matters may be independently
established.' [Citations.] The court should also consider whether it is
the trial attorney or another member of his or her firm who will be the
witness." (Smith, supra, 60
Cal.App.4th at pp. 580-581.)
B.
Here, the record shows the court considered the
factors discussed in Smith when it denied
Boylan's motion to disqualify English as Mack's counsel of record. We conclude substantial evidence supports the
finding of the court that recusal of English would result in "significant
duplicative efforts and expenses" to Mack, given the evidence in the
record that English has extensive knowledge of the issues and subject matter
raised both in the dissolution and underlying actions that is relevant to Mack's
malicious prosecution action and given the evidence that Mack
| Description | Defendants and appellants Nicholas A. Boylan and his law firm, Law Offices of Nicholas A. Boylan, APC, (Boylan) and William P. Shannahan and his law firm, William P. Shannahan, Inc., (Shannahan) (collectively defendants) appeal the orders denying their respective anti-SLAPP motions brought under Code of Civil Procedure section 425.16[1] to strike the malicious prosecution action filed against them by plaintiff and respondent Cary Mack.[2] Boylan separately contends the court erred and abused its discretion when it denied Boylan's motion to disqualify Mack's counsel of record. Mack was retained as a forensic accounting consultant/expert by Shannahan in a divorce proceeding filed by Shannahan's former wife (Shannahan v. Shannahan (Super. Ct. San Diego County, No. D483710)) (the dissolution action). While pursuing an appeal of the judgment in the dissolution action, Shannahan sued both Mack and certified family law specialist Rex Jones III and Jones's law firm, Jones Barnes LLP, (Jones),[3] who had represented Shannahan in the dissolution action. The operative complaint filed by Boylan on behalf of Shannahan asserted causes against Mack for breach of fiduciary duty, elder abuse, professional negligence, negligent misrepresentation and breach of contract (Shannahan v. Jones et al. (Super. Ct. San Diego County, 2010, No. 37-2009-00088253-CU-PN-CTL)) (the underlying action). After extensive litigation and the filing of a motion for summary judgment, Shannahan—shortly before the motion was to be heard and a few months before trial was to commence—dismissed Mack without prejudice from the underlying action. Mack subsequently was awarded his costs of defense as the prevailing party. Mack then filed the instant malicious prosecution action against defendants. Defendants, in return, filed anti-SLAPP motions, which the court denied. As we explain, we affirm the orders denying (1) defendants' anti-SLAPP motions and (2) Boylan's motion to disqualify Mack's counsel of record. |
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