Glavinovich v. Catanzarite

























Filed 3/4/13 Glavinovich v. Catanzarite CA4/3













>NOT TO BE PUBLISHED IN OFFICIAL REPORTS





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opinion has not been certified for publication or ordered published for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









IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA



FOURTH
APPELLATE DISTRICT



DIVISION THREE




>

JOHN L. GLAVINOVICH, Plaintiff and Appellant, v. KENNETH J. CATANZARITE et al., Defendants and Respondents.

G046726 (Super. Ct. No. 30-2011-00516101) O P I N I O N

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

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

Catanzarite Law
Corporation, Kenneth J. Catanzarite and Nicole M. Catanzarite-Woodward for
Defendants and Respondents.

* * *

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

In this case, Glavinovich appeals the trial court’s decision to grant
the anti-SLAPP motion filed by defendants Kenneth J.
Catanzarite and Catanzarite Law Corporation (collectively Catanzarite),
one of the law firms involved in the underlying case. Based on the minimal, nonspecific evidence
produced by Glavinovich in the trial court, he has not demonstrated that he can
establish either a lack of probable cause or malice, two of the three
requirements to maintain a cause of action for malicious prosecution. We therefore affirm the trial court’s
decision to grant the anti-SLAPP motion.

I

FACTS

A. The Underlying Case

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

In
April 2008, Glavinovich was elected as a manager of OCPIN, along with Anil V.
Shah, who had held that position since 2005.
According to Glavinovich’s complaint, acquiring Integrated stock was a
“complicated and difficult affair,” resulting in separate litigation that is
apparently still arguing.

In
early 2009, certain members of OCPIN began an effort to remove Shah and
Glavinovich as managers. Glavinovich
later alleged such actions were illegitimate and interrupted OCPIN’s business
operations. The dissident members (the
OCPIN plaintiffs) then instituted the underlying case (the OCPIN litigation).

The
OCPIN litigation began in April 2009, and the OCPIN plaintiffs filed a first
amended complaint in June. The first
amended complaint alleged causes of action against Glavinovich for breach of fiduciary duty, constructive
fraud, injunction, professional negligence, accounting, and several declaratory
relief claims. According to
Catanzarite’s later declaration in support of the instant motion to strike,href="#_ftn3" name="_ftnref3" title="">[3]
the factual allegations were based on Glavinovich’s acts as a comanager of
OCPIN. He was also a licensed insurance
agent with the agency that placed the OCPIN directors and officers liability
coverage. OCPIN was intended to
contribute $30 million in capital to purchase Integrated shares.

Catanzarite’s declaration stated that he had
learned that Shah had pledged to loan OCPIN $20 million and directed the issuance of a private
placement memorandum to attract additional investors. The memorandum claimed Shah had, in fact,
loaned $20 million to OCPIN, but this was false. OCPIN only contributed $15 million to the
share purchase which resulted in a loss of 40 percent of the shares it
originally held.

Disputes
developed thereafter between Integrated’s management and Shah, resulting in a
lawsuit by Integrated filed in May 2007.
Litigation was also initiated by OCPIN.
OCPIN tendered Integrated’s case against Shah to its insurance carrier
(the policy had been purchased through the agency where Glavinovich was
licensed), but the carrier denied coverage.
It deemed Integrated as a subsidiary and therefore excluded claims by it
from coverage, a conclusion Shah and Glavinovich did not, apparently,
contest. Without coverage, defending
Shah would result in substantial costs.
They received a legal opinion in November 2007 that Shah’s rights to indemnity
from OCPIN would be limited to 10 percent of his expenses.

In
September and October 2008, Glavinovich and Shah made two cash calls “with
repriced units” to OCPIN members, which were intended to fund Shah’s defense
and indemnity. According to Catanzarite,
these cash calls ignored the legal opinion regarding Shah’s defense, did not
disclose that a settlement of the Integrated litigation was imminent, and
further failed to inform the members that their interest in OCPIN might be
diluted.

In
March 2009, Catanzarite’s declaration stated, OCPIN’s members were asked to
execute settlement agreements without reading them. They were given signature pages and informed
that time was of the essence. They were
unaware that Shah was purportedly being released for any damages associated
with his statement that he never had the capacity to loan $20 million to OCPIN,
as well as matters related to his indemnity.
The settlement agreements were signed on March 25, 2009. After the agreements were signed, the OCPIN
members learned for the first time that the interests of the members who had
not contributed to the cash calls were significantly diluted.

The
disposition of the first amended complaint is not completely clear, but a
second amended complaint was filed in November 2009. Various demurrers to that complaint were
sustained with leave to amend. In March
2010, a third amended complaint was filed.
According to Catanzarite’s declaration, Glavinovich’s demurrer and
motion to strike that complaint was only partly successful.href="#_ftn4" name="_ftnref4" title="">[4]
He was ordered to file an answer, which he did on May 17, 2010.

On
August 12, Catanzarite moved to withdraw from the case. That motion was granted on September 10. While that was pending, on August 19,
Glavinovich filed a motion seeking judgment on the pleadings. Catanzarite was substituted out of the case
while that motion was still pending.
Ultimately, Glavinovich’s
demurrer to the sixth amended complaint was sustained, with the court noting
that the OCPIN plaintiffs had not “com[e] even close” to stating a cause of
action against him.



B. The Malicious Prosecution
Case

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

In response, the
defendants, including Catanzarite, filed anti-SLAPP motions. Catanzarite argued the claims against
Glavinovich in the OCPIN litigation “were based upon probative facts of his
misconduct.” Catanzarite argued they
relied upon facts reported to them by the OCPIN plaintiffs and their own
investigation when filing the case. They
also argued that Glavinovich could not establish malice as a matter of
law.

In opposition, Glavinovich argued that the
depositions of two of the plaintiffs, taken in Feburary 2010, “conclusively
demonstrate that neither they nor any other plaintiff in that litigation had
any facts at all to support their claims against Glavinovich. Again and again, when asked for facts which
tended to support their claims . . . the plaintiffs have no response other than
to allege that their attorney — Mr. Catanzarite — possessed such
knowledge.”

With respect to malice, Glavinovich’s entire
argument follows: “Glavinovich can and
will prove this element by showing that the [causes of action] and other
factually unsupported claims were in fact rooted in their desire for greater
control of the OCPIN entity itself, as evidenced in the highly-contentious
proceedings of the April 2009 shareholder meeting repeatedly referenced in all
of the Underlying Complaints and even in these moving papers. While greater control of a business entity
may be a legitimate end, bringing baseless and legally untenable lawsuits in
order to obtain such control is not a legitimate means to that end.”

The court heard the anti-SLAPP motion on
February 24, 2012. The court granted the
motion, concluding that the lawsuit was indeed a SLAPP, and that Glavinovich
had not established a prima facie case of either malicious prosecution or
intentional infliction of emotional distress.href="#_ftn5" name="_ftnref5" title="">[5] Glavinovich now appeals.

II

DISCUSSION

>A. Statutory Framework

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

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

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

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

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

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



B. Malicious Prosecution

“To
prevail on a malicious prosecution claim, the plaintiff must show that the prior
action (1) was commenced by or at the direction of the defendant and was
pursued to a legal termination favorable to the plaintiff; (2) was brought
without probable cause; and (3) was initiated with malice. [Citation.]”
(Soukup, supra, 39 Cal.4th at p.
292.)

We
examine the evidence produced in the trial court to determine if Glavinovich’s
claim passes muster under the anti-SLAPP statute. The only evidence Glavinovich submitted were
deposition excerpts from two of the OCPIN plaintiffs, the court transcript and
notice of ruling relating to the sixth amended complaint, and the notice of
ruling on the fourth amended complaint.
In Meka’s deposition,href="#_ftn6"
name="_ftnref6" title="">[6]
he was asked questions such as “what fiduciary duties did those two doctors
[Shah and Glavinovich] have?” The
question was objected to on the grounds of attorney-client privilege, and Meka
answered that he did not have information other than what his attorney had told
him. When asked for facts underlying the
fiduciary duty claims, he repeatedly answered that he only knew what his
counsel, Kenneth Catanzarite, had told him.
Questions regarding other claims were answered similarly, and Sweiden
answered in a consistent manner. >

In
support of the motion, Kenneth Catanzarite submitted his declaration, which
included a lengthy explanation of the facts he had learned from his
investigation of the case (recounted in significant part in part IA, >ante).
Catanzarite also included a number of exhibits, such as the OCPIN
operating agreement.

>1.
Favorable termination

Catanzarite
argues there was insufficient evidence the OCPIN litigation terminated in
Glavinovich’s favor. “To determine
whether a party has received a favorable termination, we consider ‘“the
judgment as a whole in the prior action . . . .” [Citation.]’
[Citation.] Victory following a
trial on the merits is not required.
Rather, ‘“the termination must reflect the merits of the action and the
plaintiff’s innocence of the misconduct alleged in the lawsuit.” [Citation.]’
[Citation.]” (Siebel v.
Mittlesteadt (2007) 41 Cal.4th 735, 741.)
Catanzarite argues that Glavinovich’s successful demurrer to the sixth
amended complaint did not demonstrate his innocence.

Catanzarite
takes the Supreme Court’s words here a bit too literally. A case resolved on demurrer almost never
establishes a plaintiff’s “innocence.”
Rather, a sustained demurrer reflects the inability to successfully
plead facts sufficient to state a cause of action. Glavinovich’s successful demurrer to the
sixth amended complaint sufficiently spoke to the merits of the case as to
satisfy the requirement of favorable termination.

>2.
Probable Cause

“Probable
cause exists when a lawsuit is based on facts reasonably believed to be true,
and all asserted theories are legally tenable under the known facts.” (Cole,
supra, 206 Cal.App.4th at p. 1106.) Whether the facts known to an attorney
constituted probable cause to prosecute an action is a question of law. (Zamos v. Stroud (2004) 32 Cal.4th 958, 971.) More specifically, “‘[t]he presence or
absence of probable cause is viewed under an objective standard applied to the
facts upon which the defendant acted in prosecuting the prior case. [Citation.]
The test of determining probable cause is whether any reasonable
attorney would have thought the claim to be tenable. [Citation.] . . . [¶] Hence, “probable cause to bring an action
does not depend on it being meritorious, as such, but upon it being arguably
tenable, i.e., not so completely lacking in merit that no reasonable
attorney would have thought the claim tenable.
[Citation.]”’ [Citation.] Probable cause exists if the claim is legally
sufficient and can be substantiated by competent evidence. [Citation.]”
(Antounian v. Louis Vuitton Malletier (2010) 189 Cal.App.4th 438,
448-449.)

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

Even
giving the most favorable reading possible to the deposition testimony of Meka
and Sweidan, Glavinovich’s reliance on these excerpts as the key evidence of a
lack of probable cause is misplaced.
These deposition excerpts only demonstrate what those two plaintiffs
knew and understood at the time their depositions were taken. There is no legal basis for
attributing their knowledge, or lack thereof, to all other OCPIN
plaintiffs. Glavinovich cannot and does not prove or even create any reliable
inference that Meka and Sweidan were Catanzarite’s only source of
information. There were other
plaintiffs, and as Catanzarite’s declaration stated, he performed other
research, such as reviewing the relevant OCPIN operating agreement.

Further,
Glavinovich’s reliance on the deposition testimony of two plaintiffs does not
speak to the relevant standard applied to attorneys
in malicious prosecution actions, specifically, “‘whether any reasonable
attorney would have thought the claim to be tenable.’” (Antounian v. Louis Vuitton Malletier, supra, 189 Cal.App.4th at
pp. 448-449.) Indeed, Glavinovich
submitted no evidence on this point. As
a matter of law, Glavinovich has not established a lack of probable cause.

3.
Malice

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

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

“[T]hat
evidence must include proof of either actual hostility or ill will on the part
of the defendant or a subjective intent to deliberately misuse the legal system
for personal gain or satisfaction at the expense of the wrongfully sued
defendant. [Citation.]” (Downey
Venture, supra, at pp. 498-499;
see also Daniels v. Robbins (2010)
182 Cal.App.4th 204, 225.) While malice
may be inferred from circumstantial evidence such as the lack of probable
cause, such evidence must be “supplemented with proof that the prior case was
instituted largely for an improper purpose.”
(Cole, supra, 206 Cal.App.4th at p. 1114.)

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

The evidence is completely insufficient to
establish a prima facie case of malice against Catanzarite.href="#_ftn7" name="_ftnref7" title="">[7]
Unlike Zamos,> supra, 32 Cal.4th 958, a case upon
which he relies, the evidence presented to the trial court does not demonstrate
Catanzarite had knowledge of any lack of probable cause. The only evidence offered by Glavinovich in addition
to pleadings and court rulings, the 2010 depositions of two plaintiffs, are
simply insufficient on this point. In
contrast, Catanzarite submitted evidence in the form of a declaration, stating
why the firm believed the case had sufficient cause to proceed. Glavinovich has failed to meet his burden to
demonstrate malice, and therefore the probability of success on his malicious
prosecution claim. Thus, Catanzarite’s
anti-SLAPP motion was properly granted by the trial court.

III

DISPOSITION

The judgment is affirmed. Pursuant to section 425.16, subdivision
(c)(1), Catanzarite may file the appropriate motion for attorney fees with the
trial court. Catanzarite is also entitled to href="http://www.fearnotlaw.com/">costs on appeal.







MOORE,
J.



WE CONCUR:







BEDSWORTH, ACTING P. J.







IKOLA, J.