Chavez v. Mendoza
(Appeal from Superior Court of San Diego County, No. 752868, William R. Nevitt, Jr., Judge)
CERTIFIED FOR PARTIAL PUBLICATION [FN1]
[FN1] Pursuant to California Rules of Court, rule 976.1, this opinion is certified for publication with the exception of Discussion section, part II.
Higgs, Fletcher & Mack and David R. Clark for defendants and appellants.
Paluso & Sceper and Duane H. Sceper, and David A. Kay for plaintiffs and respondents.
In the published portion of this opinion, we hold plaintiffs’ malicious prosecution cause of action was subject to a special motion to strike under California’s anti-SLAPP statute. (Code Civ. Proc., § 425.16.) In the unpublished portion of the opinion, we conclude plaintiffs met their burden to establish a probability they would prevail on their malicious prosecution claim. Accordingly, we affirm the order denying defendants’ anti-SLAPP motion.
FACTUAL AND PROCEDURAL SUMMARY
In February 1999, Enriqueta Mendoza filed suit against Farmers Insurance Group of Companies (Farmers) and Farmers agents, Richard and Ina Chavez, asserting numerous contract and tort claims. In their answer, the Chavezes admitted they owed Mendoza $130,000 on a promissory note, but denied liability on the remaining claims. After Mendoza presented her case at trial on these remaining claims, the court granted the Chavezes’ motion for nonsuit and granted judgment in the Chavezes’ favor on all claims except the $130,000 admitted liability and interest on that liability.
The Chavezes then filed a malicious prosecution complaint against Mendoza and her attorney in the underlying action, Maria Veizaga (collectively Mendoza). The Chavezes alleged Mendoza asserted the unsuccessful claims without probable cause and for an improper motive. Mendoza responded by filing an anti-SLAPP motion under Code of Civil Procedure section 425.16 (section 425.16.) The Chavezes opposed the motion, arguing (1) the anti-SLAPP statute is not applicable to a malicious prosecution action; and (2) the facts show the Chavezes were likely to prevail on their malicious prosecution complaint.
The trial court denied Mendoza’s anti-SLAPP motion, concluding Mendoza failed to show the malicious prosecution complaint falls within the provisions of section 425.16. The court therefore did not reach the issue whether the Chavezes established a probability they would prevail on their claim.
Section 425.16, known as the anti-SLAPP statute, permits a court to dismiss certain types of nonmeritorious claims early in the litigation. (See Dowling v. Zimmerman (2001) 85 Cal.App.4th 1400, 1414.) In bringing a section 425.16 motion to strike, the defendant has the initial burden to make a prima facie showing that the plaintiff’s claims are subject to section 425.16. (Id. at p. 1417.) If the defendant makes that showing, the burden shifts to the plaintiff to establish a probability he or she will prevail on the claim at trial, i.e., to proffer a prima facie showing of facts supporting a judgment in the plaintiff’s favor. (Ibid.) Under these general principles, we analyze whether the parties met their respective burdens.
I. A Malicious Prosecution Claim May be Subject to California’s Anti-SLAPP Statute
Section 425.16, subdivision (b)(1) defines the types of claims that are subject to the anti-SLAPP procedures. These claims include causes of action “arising from” an “act of that person in furtherance of the person’s right of petition . . . under the United States or California Constitution in connection with a public issue.” (§ 425.16, subd. (b)(1), italics added.)
It is well established that filing a lawsuit is an exercise of a party’s constitutional right of petition. (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1115, 969 P.2d 564 (Briggs); see Ludwig v. Superior Court (1995) 37 Cal.App.4th 8, 19; Church of Scientology v. Wollersheim (1996) 42 Cal.App.4th 628, 647-648.) “‘”The constitutional right to petition . . . includes the basic act of filing litigation or otherwise seeking administrative action.”‘” (Briggs, supra, 19 Cal.4th at p. 1115; Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47 Cal.App.4th 777, 784; Ludwig v. Superior Court, supra, 37 Cal.App.4th at p. 19.) Further, the filing of a judicial complaint satisfies the “in connection with a public issue” component of section 425.16, subdivision (b)(1) because it pertains to an official proceeding. (Briggs, supra, 19 Cal.4th at p. 1109; see DuPont Merck Pharmaceutical Co. v. Superior Court (2000) 78 Cal.App.4th 562, 566-567 (DuPont Merck).)
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. (See Shekhter v. Financial Indemnity Co. (2001) 89 Cal.App.4th 141, 151.) The essence of the Chavezes’ malicious prosecution claim is that the plaintiff in the underlying action (Mendoza) filed litigation that was improper because it was allegedly filed with a malicious motive and without probable cause. This claim “arises from” the defendant’s constitutionally protected petitioning activity, and therefore is subject to the anti-SLAPP statute. (§ 425.16, subd. (b)(1).)
The Chavezes criticize this analysis as “breathtakingly simple,” but the application of a statute to a particular set of facts need not be complex to be correct. Further, although no published California decision has specifically considered the question whether a malicious prosecution claim can be subject to the anti-SLAPP statute, several California appellate courts have recently held section 425.16 applicable to causes of action that are functionally indistinguishable from malicious prosecution claims. (See ComputerXpress v. Jackson (2001) 93 Cal.App.4th 993, 1005-1010, 1015 (ComputerXpress) [holding plaintiff's abuse of process claim based on defendants' filing of an SEC complaint was subject to the anti-SLAPP statute]; Shekhter v. Financial Indemnity Co., supra, 89 Cal.App.4th at p. 151 [holding claim arising from the allegedly improper filing and prosecution of prior action arose "from litigation activity" and therefore "may appropriately be the subject of a section 425.16 motion"]; see also Church of Scientology v. Wollersheim, supra, 42 Cal.App.4th 628, 647-649 [holding that a complaint seeking to overturn a prior judgment based on alleged bias of trial judge was subject to anti-SLAPP statute].) [FN2]
[FN2] Other jurisdictions have likewise held that actions in the form of malicious prosecution claims are subject to strike under anti-SLAPP statutes. (See McLarnon v. Jokisch (2000) 431 Mass. 343, 347 727 N.E.2d 813, 817; see also Stetson, Reforming SLAPP Reform: New York’s Anti-SLAPP Statute (1995) 70 N.Y.U. L.Rev. 1324, 1329.)
Despite the statutory and case law supporting the applicability of section 425.16 to a malicious prosecution claim, the Chavezes urge us to reach a contrary conclusion because they say applying the statute in this context would undermine section 425.16′s purpose of deterring frivolous lawsuits. The Chavezes maintain that permitting malicious prosecution defendants to obtain relief under the anti-SLAPP statute will merely “protect” those who file meritless complaints and therefore “turn[ ] the statutory purpose on its head.”
This argument is unavailing because a court is required to interpret a statute as written and not to construe the statute to reach a result that it thinks the Legislature was intending to accomplish. (People v. Weidert (1985) 39 Cal.3d 836, 843, 218 Cal. Rptr. 57, 705 P.2d 380.) Moreover, although the Chavezes’ argument has intuitive appeal, it ultimately fails because the Chavezes are confusing the threshold question concerning the applicability of the anti-SLAPP statute with the question whether a malicious prosecution plaintiff can establish a probability of success on the merits. The purpose of section 425.16 is not to prevent lawsuits that arise from the exercise of constitutional rights, but it is to deter frivolous and improperly motivated lawsuits arising from those rights. Section 425.16 provides a “fast and inexpensive unmasking and dismissal” of frivolous claims that are subject to the statute. (Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 823.) Thus, a determination that the anti-SLAPP statute applies to a malicious prosecution claim will not prevent valid malicious prosecution claims, but will require a plaintiff bringing this claim to demonstrate early on that the complaint is supported by a sufficient prima facie showing of facts to sustain a favorable judgment. This result is consistent with the disfavored nature of the malicious prosecution tort, and the view that such claims are too frequently used as a dilatory and harassing device, and that the remedy for frivolous “litigation does not lie in an expansion of malicious prosecution liability.” (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 873, 254 Cal. Rptr. 336, 765 P.2d 498; see also Crowley v. Katleman (1994) 8 Cal.4th 666, 680, 881 P.2d 1083.)
In a related argument, the Chavezes contend that because the court in the underlying action determined Mendoza’s unsuccessful causes of action lacked evidentiary support, the action did not involve a constitutionally protected right to petition. Section 425.16 applies only when the claims arise from an exercise of a constitutionally protected right (Paul for Council v. Hanyecz (2001) 85 Cal.App.4th 1356, 1363-1367), and the courts have recognized that a person does not have a constitutionally protected right to file a complaint that is unsupported by the facts. (See McDonald v. Smith (1985) 472 U.S. 479, 485, 86 L. Ed. 2d 384, 105 S. Ct. 2787.) But “the Legislature did not intend that in order to invoke the special motion to strike the defendant must first establish her actions are constitutionally protected under the First Amendment as a matter of law.” (Fox Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294, 305; accord Paul for Council v. Hanyecz, supra, 85 Cal.App.4th at p. 1365; DuPont Merck, supra, 78 Cal.App.4th at p. 566.) Instead, under the statutory scheme, a court must generally presume the validity of the claimed constitutional right in the first step of the anti-SLAPP analysis, and then permit the parties to address the issue in the second step of the analysis, if necessary. (Fox Searchlight Pictures, Inc. v. Paladino, supra, 89 Cal.App.4th at p. 305.) Otherwise, the second step would become superfluous in almost every case, resulting in an improper shifting of the burdens. (Ibid.) A limited exception to the rule precluding a court from determining the validity of the asserted constitutional right in the first step of the anti-SLAPP analysis applies only where the defendant indisputably concedes the claim arose from illegal or constitutionally unprotected activity. (Paul for Council v. Hanyecz, supra, 85 Cal.App.4th at p. 1365.) The exception does not apply here because the parties dispute whether Mendoza’s claims were supported in the initial action.
The Chavezes next argue that section 425.16 is inapplicable because the malicious prosecution action could not have had a “chilling effect” on Mendoza’s decision to assert the earlier claims because Mendoza’s lawsuit terminated before the Chavezes filed their malicious prosecution lawsuit. However, as this court has recognized, the potential for a malicious prosecution claim does have a “chilling effect on the willingness of persons to report crimes or pursue legal rights and remedies in court . . .,” even though the claim is necessarily brought after the termination of the prior action. (Ferreira v. Gray, Cary, Ware & Freidenrich (2001) 87 Cal.App.4th 409, 413.) Moreover, the courts have never held section 425.16 applies only when a defendant’s exercise of his or her First Amendment rights is ongoing. The critical point is whether the cause of action itself was based on an act in furtherance of the right of petition or free speech. (See ComputerXpress, supra, 93 Cal.App.4th at pp. 1002-1003.) Claims that arise from a defendant’s prior free speech or petition activities are subject to an anti-SLAPP motion regardless of whether the protected activities have concluded before the lawsuit was filed.
The Chavezes’ final argument is that section 425.16 does not apply here because there was no showing they were “in a position to obtain an economic advantage over [Mendoza] by prosecuting a meritless action designed to divert resources from some other political or judicial contest.” Although the anti-SLAPP law was originally envisioned to apply narrowly only when “‘powerful and wealthy’” developers bring claims against financially weak protestors (M. G. v. Time Warner, Inc. (2001) 89 Cal.App.4th 623, 628-629; Sipple v. Foundation for Nat. Progress (1999) 71 Cal.App.4th 226, 240), the Legislature ultimately wrote the law as applying regardless of the relative economic strength of the parties, and then amended the statute to direct that its provisions be interpreted broadly. (§ 425.16, subd. (a).) The courts are thus required to apply the statute without regard to the financial motivations or resources of the parties.
We conclude the trial court erred in determining the Chavezes’ malicious prosecution complaint was not subject to anti-SLAPP procedures.
II. The Chavezes Adequately Established a Probability of Prevailing on the Merits
Because Mendoza met her initial burden of showing the Chavezes’ malicious prosecution claim arose from Mendoza’s exercise of her constitutional petition rights, the burden shifted to the Chavezes to establish a probability they would prevail on the claim, i.e., to proffer a prima facie showing of facts supporting a judgment in their favor. [FN3] (Dowling v. Zimmerman, supra, 85 Cal.App.4th at p. 1420.) The evidentiary burden is similar to that applied in summary judgment motions: the pleadings frame the issues to be decided, and the plaintiff must make a showing “by competent admissible evidence within the personal knowledge of the declarant.” (Church of Scientology v. Wollersheim, supra, 42 Cal.App.4th at p. 654.)
[FN3] Because the issue of probability of prevailing on the merits is a legal question subject to de novo review, we may address the question in the first instance despite the trial court’s failing to do so. (See ComputerXpress, supra, 93 Cal.App.4th at p. 1010.)
To establish a cause of action for malicious prosecution, a plaintiff must plead and prove that a prior claim was: “(1) pursued to a legal termination favorable to the plaintiff; (2) brought without probable cause; and (3) initiated with malice. [Citations.]” (Villa v. Cole (1992) 4 Cal.App.4th 1327, 1335.)
We conclude the Chavezes adequately met their anti-SLAPP motion burden as to each of these elements.
First, with respect to the favorable termination requirement, the Chavezes established they obtained a final judgment in their favor on each of Mendoza’s claims, except for the cause of action admitted in their answer (money owed on a promissory note). The fact that Mendoza prevailed on one claim does not defeat this favorable termination element because the claims were severable. (See Sierra Club Foundation v. Graham (1999) 72 Cal.App.4th 1135, 1153; Paramount General Hospital Co. v. Jay (1989) 213 Cal. App. 3d 360, 363, 261 Cal. Rptr. 723.) Moreover, the parties’ subsequent settlement appears to have involved a portion of the lawsuit unrelated to the claims relied upon by the Chavezes in their malicious prosecution claim.
Second, with respect to the probable cause element, the Chavezes were required to produce facts showing at least one of the claims asserted against them was not “legally tenable,” viewed in an objective manner. (Sierra Club Foundation v. Graham, supra, 72 Cal.App.4th at p. 1153.) Mendoza’s fraud and breach of fiduciary duty claims were based on four alleged discrete acts by the Chavezes: (1) taking Mendoza’s jewelry without intending to return the items; (2) taking cash payments for the insurance premiums; (3) borrowing $130,000 without intending to repay the loan; and (4) overinsuring Mendoza’s property. With respect to the first three acts, the court expressly found Mendoza presented “no evidence of any fraud by [the Chavezes] regarding the cash allegations or the jewelry allegations . . . [or] the loans made to [the Chavezes] by [Mendoza].” (Italics added.) The court likewise found “there was no evidence of any breach of fiduciary duty by Ina Chavez or Richard Chavez.” (Italics added.) Moreover, the Chavezes produced Mendoza’s deposition testimony wherein she confessed ignorance of any facts showing that Mr. Chavez’s acceptance of the cash payments was improper. With respect to the final act — overinsurance — Mendoza dismissed this ground before trial, and there was evidence this dismissal was based on Mendoza’s recognition of the absence of any factual basis for the claim.
By showing that Mendoza failed to produce any evidence at trial to support her fraud or breach of fiduciary claim and proffering deposition testimony of Mendoza and her expert, the Chavezes satisfied their burden to establish a reasonable probability they would prevail on the probable cause element at trial. (See Mabie v. Hyatt (1998) 61 Cal.App.4th 581, 597 ["in a situation of complete absence of supporting evidence, it cannot be adjudged reasonable to prosecute a claim"].)
With respect to the malice element, the Chavezes were required to show Mendoza had an improper motive in bringing the prior action. (Downey Venture v. LMI Ins. Co. (1998) 66 Cal.App.4th 478, 494-499.) Malice is usually proved by circumstantial evidence. (See Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3d at p. 875.) Here, there was evidence from which a reasonable person could infer Mendoza asserted the fraud and breach of fiduciary duty claims against the Chavezes because she knew that Farmers and Mr. Chavez were involved in a wrongful termination dispute and she wanted to pressure Farmers to settle her claims and to interfere with the Chavez-Farmers settlement negotiations. This evidence, considered with the facts showing Mendoza had no evidence to support her fraud and breach of fiduciary claims, was sufficient to establish a prima facie case of improper motive as an element of the malicious prosecution claim.
In a footnote in her appellate brief, Mendoza suggests that even if the Chavezes established the elements of a malicious prosecution claim, the court erred in not granting her anti-SLAPP motion because she adequately established an affirmative defense — reliance on counsel — and the Chavezes failed to set forth sufficient evidence to refute the defense. This defense, however, would not apply to the Chavezes’ claims against Mendoza’s attorney. Moreover, on the record showing Mendoza had no evidence to support a fraud or breach of fiduciary duty claim and showing Mendoza’s improper motivations in asserting the claims, there is a reasonable probability the Chavezes could defeat this reliance-on-counsel defense at trial by showing Mendoza did not fully disclose the true facts or she did not reasonably rely on counsel’s advice. [FN4] (See Leonardini v. Shell Oil Co. (1989) 216 Cal. App. 3d 547, 569, fn. 7, 264 Cal. Rptr. 883.)
[FN4] In the trial court, the Chavezes responded to this argument by describing the need for additional discovery on this issue, particularly because the issue concerned previously privileged attorney-client discussions. The court should have granted this additional discovery request. The discovery issue, however, is moot because trial is schedule to begin shortly.
Because the Chavezes produced facts supporting each of the three elements of a malicious prosecution tort, the Chavezes satisfied their burden to show a prima facie case of their malicious prosecution claim. In reaching this conclusion, we do not express any view on whether there will be any merit to the Chavezes’ claims at trial. We have merely determined that on the record before us, the Chavezes met their burden to show a probability of success within the meaning of section 425.16.
Order affirmed. The parties to bear their own costs on appeal.
HUFFMAN, Acting P. J.