Tranter v. Joseph

Filed 4/30/08 Tranter v. Joseph CA2/4

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

APPEAL from a judgment of the Superior Court of Los Angeles County, Ralph W. Dau, Judge. Affirmed.

Hornberger & Brewer, Michael A. Brewer and Mathias D. Maciejewski, for Defendant and Appellant.

Sedin Begakis & Bish and Mindy S. Bish, for Plaintiffs and Respondents.

The trial court denied a motion by appellant Pius Joseph under Code of Civil Procedure section 425.16-- the law designed to curtail the filing of strategic lawsuits against public participation, often called the anti‑SLAPP law-- in an action for malicious prosecution by respondents Scott Tranter and Crazy Ottos Diner.^[1] We affirm.

RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

Joseph, an attorney, represented Patricia Flores, Beatrice Flores, Gerardo Flores, Fabian Flores, and Silvia Santa Cruz in an action for discrimination and breach of employment contract against respondents. Joseph initiated the action on behalf of his clients in February 2004, and filed a first amended complaint on May 20, 2004. The complaint alleged that his clients had worked in restaurants owned by respondents, and had been improperly terminated for discriminatory reasons and in breach of their employment contracts. In October 2004, Joseph voluntarily dismissed the claims by Beatrice Flores, Gerardo Flores, and Fabian Flores.

On February 17, 2005, respondents filed a motion for summary judgment on the remaining claims by Patricia Flores (Flores) and Silvia Santa Cruz (Santa Cruz) for discrimination and breach of employment contract. The motion argued that the plaintiffs (1) could not carry their burden under the so-called McDonnell Douglas test applicable to discrimination claims, (2) had not exhausted their administrative remedies for workplace harassment, and (3) lacked evidence of a contract to be discharged only for cause.^[2] The motion was granted in its entirety with respect to both plaintiffs.

In March 2006, respondents initiated an action for malicious prosecution against Joseph, Flores, and Santa Cruz. On April 27, 2006, Joseph filed a motion under the anti‑SLAPP law to strike respondents complaint. Following a hearing, the trial court denied the anti-SLAPP motion. This appeal followed.

DISCUSSION

Joseph contends the trial court erred in denying his anti-SLAPP motion. We disagree.

A. Standard of Review

Under section 425.16, [w]hen a lawsuit arises out of the exercise of free speech or petition, a defendant may move to strike the complaint. [Citations.] The complaint is subject to dismissal unless the plaintiff establishes a probability that [he or she] will prevail on the claim. [Citations.] (Beilenson v. Superior Court (1996) 44 Cal.App.4th 944, 949, quoting 425.16, subd. (b).)

Resolution of an anti-SLAPP motion 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. . . .  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. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) We review the trial courts determinations de novo. (Governor Gray Davis Com. v. American Taxpayers Alliance (2002) 102 Cal.App.4th 449, 456.)

A malicious prosecution action arising from the prior filing of a civil lawsuit falls within the scope of the anti-SLAPP statute. (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 732, 741 (Jarrow Formulas).) Accordingly, Joseph shifted the burden to respondents to demonstrate a probability that they would prevail on their malicious prosecution claim. We therefore limit our analysis to whether respondents carried this burden.

Respondents burden resembles that imposed on a plaintiff opposing a motion for summary judgment on his complaint. (Navellier v. Sletten (2003) 106 Cal.App.4th 763, 768.) Respondents were obliged to demonstrate their complaint was both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by [respondents] is credited. (Matson v. Dvorak (1995) 40 Cal.App.4th 539, 548; accord, Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821.)

In determining whether respondents carried this burden, the trial court was required to consider the pleadings and their supporting affidavits, to the extent that these contained admissible evidence. (HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212.) The trial court was also obliged to consider admissible evidence that Joseph submitted in support of the motion, but only to determine whether this evidence defeated respondents showing as a matter of law. (Ibid.) In assessing whether respondents carried their burden, the trial court was precluded from weighing the evidence or making credibility determinations. (Ibid.)

These standards obliged respondents to make a prima facie showing regarding all the elements of their malicious prosecution claim. (See Jarrow Formulas, supra, 31 Cal.4th at pp. 742-743 & fn. 13.) [T]o establish a cause of action for malicious prosecution of either a criminal or civil proceeding, a plaintiff must demonstrate that the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination in his, plaintiffs, favor [citations]; (2) was brought without probable cause [citations]; and (3) was initiated with malice [citations]. [Citations.] (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 871-872.) The elements of a claim for malicious prosecution against an attorney mirror the elements of such a claim against his or her clients. (Westamco Investment Co. v. Lee (1999) 69 Cal.App.4th 481, 487-488.)

Here, Joseph does not dispute that the action by Flores and Santa Cruz ended in a manner favorable to respondents. Accordingly, the focus of our inquiry is whether respondents made an adequate showing regarding the remaining elements.^[3]

B. Lack of Probable Cause

Joseph contends respondents failed to make a sufficient prima facie showing that the underlying action lacked probable cause. We disagree. To show the absence of probable cause, respondents were required to demonstrate that Joseph pursued the litigation of at least one legally untenable claim on behalf of Flores or Santa Cruz. (Crowley v. Katleman (1994) 8 Cal.4th 666, 677-679.) Here, the trial court determined that respondents made an adequate showing that the claims for breach of employment contract lacked probable cause. As explained below, we see no error in this ruling.

1. Governing Principles

The probable cause element of a malicious prosecution action requires an objective determination of the reasonableness of the defendants conduct(Sheldon Appel Co.v. Albert & Oliker, supra, 47 Cal.3d at p. 878), that is, to determine whether, on the basis of the facts known to the defendant, the initial assertion or continued litigation of the underlying claims was legally tenable (Zamos v. Stroud (2004) 32 Cal.4th 958, 970-971). The key question is whether any reasonable attorney would have thought the claim tenable . . . . (Sheldon Appel Co.v. Albert & Oliker, supra, 47 Cal.3d at p. 886; accord, Zamos v. Stroud, supra, 32 Cal.4th at p. 971.) Under this standard, lawyers do not lack probable cause when they present issues that are arguably correct, even if it is extremely unlikely that they will win. [Citation.] (Hufstedler, Kaus & Ettinger v. Superior Court (1996) 42 Cal.App.4th 55, 71.)

Unlike the malice element, which relates to the subjective intent or purpose with which the defendant acted in initiating the prior action and ordinarily presents a question for the jury, the presence of probable cause is determined by the trial court as a question of law when the pertinent facts areundisputed. (Sheldon Appel Co.v. Albert & Oliker, supra, 47 Cal.3d at pp. 874‑876.) This is because [t]he question whether, on a given set of facts, there was probable cause to institute an action requires a sensitive evaluation of legal principles and precedents, a task generally beyond the ken of lay jurors . . . . (Id. at p. 875.)

When there is a dispute as to the state of the defendants factual knowledge and the existence of probable cause turns on resolution of that dispute, the jury must resolve the threshold question of the defendants knowledge or belief. (Sheldon Appel Co.v. Albert & Oliker, supra, 47 Cal.3d at p. 881.) However, the extent of the defendants knowledge during the underlying suit is not per se relevant to the determination of probable cause. (Hufstedler, Kaus & Ettinger v. Superior Court, supra, 42 Cal.App.4th at p. 62.) Thus, the issue of probable cause may be properly adjudicated on summary judgment when the record in the underlying action was fully developed . . . . (Ibid.) In such circumstances, evidence about what the attorney knew or did not know at the time when he or she prosecuted the underlying action is irrelevant on summary judgment when undisputed evidence establishes an objectively reasonable basis for instituting the underlying action . . . . (Ibid.)

Here we confront an anti-SLAPP motion, rather than a motion for summary judgment. In view of the principles governing anti-SLAPP motions (see pt. A., ante), respondents had two alternative methods by which they could make a prima facie showing that a claim lacked probable cause. First, they could point to undisputed and relevant facts that upon a fully developed record established that Joseph had no objectively reasonable basis for a claim. (Hufstedler, Kaus & Ettinger v. Superior Court, supra, 42 Cal.App.4th at p. 62; see HMS Capital, Inc. v. Lawyers Title Co., supra, 118 Cal.App.4th at pp. 216-217.) Second, they could submit sufficient evidence of relevant facts which -- if accepted by a jury -- established that Joseph had no basis for the claim. (Sheldon Appel Co.v. Albert & Oliker, supra, 47 Cal.3d at p. 881; see Zamos v. Stroud, supra, 32 Cal.4th at pp. 970-973.)

Here, respondents attempted the latter, and tendered evidence that Joseph litigated the breach of employment claims on the theory that Flores and Santa Cruz were not at-will employees, despite his awareness of facts that rendered the theory baseless. Labor Code section 2922 establishes a presumption that employment is at-will.^[4] (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 335 (Guz).) Such employment may be ended by either party at any time without cause, for any or no reason, and subject to no procedure except the statutory requirement of notice. [Citations.] (Ibid.) This presumption may be superseded by an implied‑in‑fact contract that the employee may be discharged only for good cause. (Foleyv. Interactive Data Corp. (1988) 47 Cal.3d 654, 665, 677.) Factors relevant to the existence of such a contract include the personnel policies or practices of the employer, the employees longevity of service, actions or communications by the employer reflecting assurances of continued employment, and the practices of the industry in which the employee is engaged. [Citations.] (Id. at p. 680.)

In Guz, our Supreme Court held that lengthy service, coupled only with routine indicia of satisfactory performance, is insufficient to establish an implied‑in‑fact contract. There, an employee argued that his employer, by retaining him for over 20 years and providing him with steady raises, promotions, and good performance reviews, had agreed to terminate him only for cause. In rejecting this contention, the court stated: [A]n employees mere passage of time in the employers service, even where marked with tangible indicia that the employer approves the employees work, cannot alone form an implied‑in‑fact contract that the employee is no longer at will. Absent other evidence of the employers intent, longevity, raises and promotions are their own rewards for the employees continuing valued service; they do not, in and of themselves, additionally constitute a contractual guarantee of future employment security. (Guz, supra, 24 Cal.4th at pp. 341-342.)

2. Parties Showings

In opposition to the anti-SLAPP motion, respondents pointed to evidence supporting the following version of the underlying events: Floress and Santa Cruzs first amended complaint alleged that they were hired, respectively, in July 1985 and January 2002, and were fired in September 2002. Regarding the breach of employment contract claims, Flores and Santa Cruz alleged that respondents orally represented to them that the terms and conditions of employment were nondiscriminatory, and that [respondents] would reward each employee based on seniority and job performance. In addition, they alleged that their termination breached their employment contract.

During discovery, respondents asked Flores and Santa Cruz whether they asserted their employment relationship was not at-will, and requested the factual basis for their answer. Each denied she was an at-will employee, and pointed only to her length of service to show that she could be fired only for cause. Flores responded: [I was] employed by Crazy Ottos Restaurant since July 1985. In 1991, []Trantor purchased said restaurant and employment continued. A contract was never drawn for employment thereafter. She added: [I] was assured long employment based on duration. Santa Cruz responded only that she was employed by Crazy Ottos Restaurant since January[] 2002. Joseph signed both sets of responses in June 2004.

In seeking summary judgment in February 2005, respondents contended that the breach of employment contract claims failed because neither Flores nor Santa Cruz could establish that she was not an at-will employee. Their statement of undisputed facts cited the aforementioned discovery responses, as well as additional evidence that Santa Cruz was laid off after eight weeks of employment to permit renovations in the restaurant, and that she refused an invitation to resume her employment when the renovations were completed.

Josephs opposition to summary judgment did not dispute that Flores and Santa Cruz had made the discovery responses in question. In an apparent effort to raise a triable issue of fact regarding Santa Cruzs claim, Joseph submitted a declaration from Santa Cruz, stating that when she was laid off, she was told she would get her job back after the restaurant was renovated, but that she never received a call asking her to return to work.

To rebut respondents contention that Flores and Santa Cruz were at-will employees, Josephs opposition to summary judgment argued: [Respondents] used [] Floress image in [an] advertisement. Further, [Flores] was in the employment of the business for approximately 17 years prior to her termination. The facts surrounding [Floress] employment creates [sic] a triable issue of fact as to the nature of [the] employment. Similarly, []Santa Cruz was offered the employment after completion of renovation of [respondents] business creating an estoppel against defendants regarding the implied[-]in[-]fact employment contract.

Josephs evidentiary showing in support of his anti-SLAPP motion attempts to establish the existence of probable cause for the breach of employment contract claims. Josephs declaration states that in late 2004 he decided that the claims of Beatrice Flores, Gerardo Flores, and Fabian Flores -- who are apparently members of Floress family -- were likely to fail at trial, but continued to pursue Floress and Santa Cruzs claims. He states that Flores had an implied contract based on her long-term employment with [respondents], the employment of many of her family members, and her perception of assurances of continued employment . . . from [respondents] that she would not be terminated without cause. Moreover, he states that there was an implied agreement to re-employ Santa Cruz based on respondents alleged assurances that she would have a job after their restaurant had been renovated.

Joseph also submitted declarations from Flores and Santa Cruz in support of his anti-SLAPP motion. Flores stated that in January 2004, she told Joseph about her long-term employment with respondents, the employment of her relatives by respondents, and what [she] perceived to be assurance of continued employment [by respondents]. Santa Cruz stated that in June 2002, she was laid off with an assurance of re-employment, but when she phoned respondents two months later after the restaurants renovations were completed, no one asked her to return to work.

3. Analysis

We conclude that respondents made a sufficient prima facie showing that Joseph lacked probable cause in litigating the breach of employment contract claims. In examining the parties showings, we accept as true the evidence favorable to [respondents]. (HMS Capital, Inc. v. Lawyers Title Co., supra, 118 Cal.App.4th at p. 212.) Respondents evidence shows that as early as June 2004, Joseph knew that the claims relied on implied‑in‑fact contracts arising solely from the longevity of Floress and Santa Cruzs employment. Under Guz --which was decided in 2000 -- any such claim is fatally defective.

Moreover, respondents evidence shows that when respondents motion for summary judgment pressed Joseph for additional facts supporting the existence of implied‑in‑fact contracts, he supplied none. Regarding Floress claim, he alleged only that respondents had used Floress image in advertising, but offered no evidence to support this allegation. Moreover, regarding Santa Cruzs claim, he argued only that respondents alleged assurance of renewed employment following the renovations estopped them from denying the existence of an implied‑in‑fact contract. However, he tendered no evidence that Santa Cruz had, in fact, relied on any such representation to her detriment, an essential element of promissory and equitable estoppel (1 Witkin, Summary of Cal. Law (10th ed. 2005) Contracts,  246, p. 277 [promissory estoppel]; City of Long Beach v. Mansell (1970) 3 Cal.3d 462, 489 [equitable estoppel]). Josephs failure to provide evidence of additional facts supporting the existence of implied‑in‑fact contracts, coupled with the earlier discovery responses, raises the reasonable inference that Floress and Santa Cruzs claims were objectively baseless.

Pointing to Jarrow Formulas, Joseph contends that the summary judgment in respondents favor is not sufficient evidence of the absence of probable cause. There, the party opposing an anti-SLAPP motion argued that the summary judgment in its favor in the underlying action established the absence of probable cause for the action as a matter of law. (Jarrow Formulas, supra, 31 Cal.4th at p. 742.) Our Supreme Court rejected this contention, reasoning that a claim may be tenable when filed, but fails in the face of a motion for summary judgment for reasons having to do with the sufficiency of the evidence actually adduced as the litigation unfolds. (Ibid.) Here, unlike Jarrow Formulas, respondents presented evidence that well before they sought summary judgment, Joseph predicated Floress and Santa Cruzs claims on facts that could not establish implied‑in‑fact contracts to discharge only for cause, and he never adduced evidence of any other facts. The case before us thus falls outside the scope of Jarrow Formulas. (See Sycamore Ridge Apartments LLC v. Naumann (2007) 157 Cal.App.4th 1385, 1403-1406 [for purpose of opposing anti-SLAPP motion, discovery responses from lawyers client disclosing meritlessness of clients claims constituted adequate showing lawyers lacked probable cause to pursue the claims].)

Joseph also contends the trial court, in denying his anti-SLAPP motion, failed to credit the evidence regarding probable cause he submitted in support of the motion. We disagree. As explained above (see pt. A, ante) to rebut respondents prima facie showing, Joseph was required to conclusively defeat it. (HMS Capital, Inc. v. Lawyers Title Co., supra, 118 Cal.App.4th at p. 212.) Because his evidence merely raised disputes about the existence of facts underpinning a determination of probable cause regarding Floress and Santa Cruzs claims, it could not overcome respondents showing. (See ibid).^[5]

C. Malice

Joseph contends that respondents failed to make a sufficient prima facie showing of malice. Again, we disagree.

The malice element of the malicious prosecution tort goes to the defendants subjective intent. . . .  It is not limited to actual hostility or ill will toward the plaintiff. [Citation.] It can exist, for example, where the proceedings are initiated for the purpose of forcing a settlement which has no relation to the merits of the claim. A lack of probable cause is a factor that may be considered in determining if the claim was prosecuted with malice [citation], but the lack of probable cause must be supplemented by other, additional evidence. [Citation.] Since parties rarely admit an improper motive, malice is usually proven by circumstantial evidence and inferences drawn from the evidence. [Citation.]

(HMS Capital, Inc. v. Lawyers Title Co., supra, 118 Cal.App.4th at p. 218.)

Here, respondents submitted declarations from attorneys Peter F. Wisner and Tammy L. Sedin, who represented them in the underlying action. According to Wisner, after Joseph deposed Tranter and learned he had a criminal record, Joseph repeatedly cited Tranters felony convictions as a reason for continuing the action when Wisner urged him to dismiss it due to its lack of merit. Sedin stated that in November 2004, she attended a hearing on respondents ex parte application for a continuance of the trial to permit them to file a summary judgment motion. At the hearing, Joseph told Sedin that he would agree to a continuance of the trial, but not to permit respondents to seek summary judgment. He explained that a continuance for the latter purpose, in his view, would prejudice his client in that [Sedins] office would prevail. In addition, respondents also noted that Josephs opposition to summary judgment twice referred to Tranter as a convicted felon.^[6]

The trial court concluded that this evidence, coupled with respondents evidence regarding the absence of probable cause, constituted a sufficient prima facie showing of malice, namely, that Joseph maintained the suit for the improper purpose of forcing a settlement that had no relation to the merits of the claim. We see no error in this determination. Respondents showing raised the reasonable inference that Joseph knew the action was meritless, and that he prolonged it in the hope that Tranters criminal record could be used to secure a favorable outcome for his clients. (See Sycamore Ridge Apartments LLC v. Naumann, supra, 157 Cal.App.4th at pp. 1407-1409 [for purpose of opposing anti-SLAPP motion, evidence that lawyers knowingly pursued numerous meritless claims, coupled with their filing demand for damages, constituted adequate showing of malice].)

Joseph contends his showing in support of his anti-SLAPP motion established that he acted reasonably in connection with the action. He points to his dismissal of the claims of three of his clients, and argues that Tranters criminal record was a proper basis for impeaching Tranters testimony at trial. However, because Josephs evidence -- though sufficient to raise triable issues of fact -- did not conclusively rebut respondents prima facie showing of malice, it could not defeat that showing as a matter of law. In sum, the trial court properly denied Josephs anti-SLAPP motion.

DISPOSITION

The order denying the anti-SLAPP motion is affirmed. Respondents are awarded their costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

MANELLA, J.

We concur:

EPSTEIN, P. J.

SUZUKAWA, J.

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^[1] All statutory citations are to the Code of Civil Procedure unless otherwise indicated.

^[2] California has adopted the three-stage burden-shifting test established by the United States Supreme Court for trying claims of discrimination . . .  based on a theory of disparate treatment. [Citations.] [Citation.] This is commonly known as the McDonnell Douglas test [citation], after McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792  . . . . (Slatkin v. University of Redlands(2001) 88 Cal.App.4th 1147, 1156, quoting Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 354, fn. omitted.)