No. G015273.
California Court of Appeal, Fourth District, Division 3
Feb. 27, 1997.
(Superior Court, Orange County, No. 631092, Nancy Wieben Stock, J.)
As Modified on Denial of Rehearing March 31, 1997.
COUNSEL:
Margaret Kathryn Maas, San Clemente, R. Richard Farnell, Newport Beach, and LeonardSacks, Granada Hills, for Plaintiff and Appellant.
Long & Williamson, John S. Williamson, III, John A. Delis, Santa Ana, Swanson & Gieser, Robert G. Williamson, Jr., Santa Ana, Waters, McCluskey & Boehle, Fritz B. Hax, Santa Monica, Roppo, Massie & Berman, Anna F. Roppo and Andrew E. Berman, San Diego, for Defendants and Respondents.
OPINION
SILLS, Presiding Judge.
A "slapp" suit is a legal action aimed at preventing or punishing citizens from exercising political rights, particularly the right to petition the government for redress of grievances and the right of free speech. (See Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 815, 33 Cal.Rptr.2d 446.) The acronym "slapp" stands for "strategic lawsuits against public participation," a term coined by two professors. (See Dixon v. Superior Court (1994) 30 Cal.App.4th 733, 736, fn. 1, 36 Cal.Rptr.2d 687.) Before the word "slapp" gained widespread legal currency, such suits were sometimes referred to as "intimidation suits." (E.g., Brecher, The Public Interest and Intimidation Suits: A New Approach (1988), 28 Santa Clara L.Rev. 105.) The typical causes of action in a slapp suit are defamation and interference with economic advantage. (See Wilcox, supra, 27 Cal.App.4th at p. 816, 33 Cal.Rptr.2d 446.)
If ever there was a slapp suit, the one filed in March 1989 by a mobilehome park owner and its management company against a rent control activist was it. In 1988, residents of mobilehome parks in Anaheim fought a bitter political battle in an unsuccessful attempt to establish mobilehome park rent control. During that battle, one of the residents published a newsletter accusing a park owner of being greedy and illegally attempting to entice park residents into long-term leases to circumvent the proposed rent control ordinance.
The conflict came to a head in January 1989, when the Anaheim City Council turned down the effort to put a rent control proposal on the ballot. Afterwards, the resident pointed out in his newsletter that certain Anaheim City Council members who had voted against putting the proposal on the ballot had also accepted campaign contributions "from Park owner supported organizations." The newsletter stated that the particular council member who had made the motion to deny the proposed ordinance had accepted $1,200 in campaign contributions from park owners. It asked rhetorically, "Now who do you suppose he is going to swing his vote toward?"
In March 1989 the park owner and its management filed a libel and economic interference suit against the resident newsletter publisher. Just a little over a year later, in May 1990, they voluntarily dismissed it.
Two months later, the resident newsletter publisher "slapped back" with a lawsuit of his own for malicious prosecution. [FN1] The trial of this slapp- back suit was bifurcated, with the issue of whether there was probable cause to bring the first suit tried first. After three days of testimony the trial judge granted a motion for nonsuit. From the ensuing judgment of dismissal the activist has appealed to this court.
In late 1986, Nelson Lucas purchased a mobilehome in the Del Prado Mobilehome Park in Anaheim. Most of the residents were senior citizens living on fixed retirement incomes. Lucas soon became active in the park homeowners' association and began writing newsletters about rent control. In particular, he tried to drum up support for a rent control initiative then circulating for presentation to the Anaheim City Council.
In July 1988 there was a 9.4 percent rent increase. The same month Lucas was elected president and chairman of the homeowners' association. He continued to champion the cause of mobilehome rent control in his newsletters to association members.
The park was purchased on November 1, 1988, by a limited partnership calling itself the Del Prado Mobilehome Park, L.P. [FN2] In light of the effort to institute mobilehome rent control in Anaheim, the new owners sought to have park residents enter into long-term leases, which would have effectively circumvented the circulating ordinance. In the November 22 edition of his newsletter, Lucas urged homeowners not to sign five-year leases. And he stated that if any homeowner lost a sale because the new owner would not allow new residents who did not sign five-year leases, "management [would be] liable for damages." [FN3] On December 7, Lucas wrote that rents had been increased for new buyers and that the management company was not offering any alternatives to new buyers except long term leases, practices which he described as "illegal." He ended with a warning that if residents did not join in the "struggle," the end result might be to be "kicked out of our homes." [FN4]
[FN3] Here is the text of Lucas' comments, taken from the complaint that would later be filed against him: "APAC [Anaheim Political Action Committee] and GSMOL [Golden State Mobile Home Owners League] have urged that NO homeowners sign 5-year leases. They only benefit Park owners and remove you from Rent Stabilization benefits NOW. If anyone loses a sale of his mobilehome because management refuses to allow new residents who will not sign a 5-year lease, management is liable for damages. You and your realtor keep close watch."
[FN4] Here is the text from the December 7 newsletter as set forth in the partnership's complaint: "The new info I have so far is: rents are $475/mo for new buyers! That's a 16.7% increase!! Is that what you want? It also appears Management is not offering any options to new buyers except 5-yr leases with 9% yearly increases and 10% afterward. Further, some
tactics are to threaten huge increases if residents don't agree to 5-yr leases. All of this is illegal. Don't fall for it!! If you are involved in any of this let us know right away or call GSMOL (members only. JOIN if not a member). Get a copy of latest Californian (GMSOL newspaper) for details. Also, anyone who paid a security deposit, and has been here over a year can request a refund. I have copies you can use. [P] I can't stress strongly enough that this struggle with the new owners is FOR REAL and you each one better decide now to support your Park. Just because you don't know all that's happening to mobilehome park [sic ], doesn't mean it is not happening! Remember, together we stand, divided we get kicked out of our homes!!!"
[FN7] Here is the text from the partnership's later complaint: "You may be interested to know, the Anaheim Bulletin reports that Councilman Tom Daly (who made the motion to deny our initiative) received about $1,200 in campaign contributions from park owners. Now who do you suppose he is going to swing his vote toward?"
[FN8] Here is the text from the partnership's later complaint: " ... Items of interest about the City Council: Councilmember Tom Daly, who moved to keep the initiative, collected approx $4,000 for his campaign from Park owner supported organizations, received $1,800 after he was elected! Councilmember Irv Pickler, who also voted against us, also collected approx
$4,000 for his campaign, $700 after election from the same sources...."
The case came to trial in August 1993. The trial was bifurcated so the issue of probable cause could be tried first. After hearing three days of testimony, the trial court concluded that the defendants had probable cause to bring their action. The judge reasoned that the "essential body of information" on the issue was Lucas' newsletters. "[A]s to some of the statements made" in them, "there was a tenable, if not colorable, claim." The court specifically identified Lucas' comment (in the court's words) "that management was engaging in tactics to threaten huge increases if residents did not agree to five-year leases and statements that all of this conduct is illegal." It further pointed to Lucas' statement to his readers, "If you don't know about it, it doesn't mean its not happening" [FN9] as indicative that "these things are actually happening." Finally, the court pointed to statements in the newsletters (again, in the judge's words) "that management refuses to allow new residents who will not sign five-year leases to have a contractual relationship." The court concluded a reasonable attorney could "form at least a prima facie opinion that there was a tenable basis upon which to bring a libel action inasmuch as [these] type[s] of statements, if false, would tend to reflect poorly upon the management company" as well as "diminish" the economic relationship it had with the park tenants. As to the injunction sought by the partnership, the trial judge concluded that the cause of action "on its face" did not "specifically purport to enjoin protected conduct." There was "nothing that suggest[ed] that petition conduct or free speech or political conduct [was] to be enjoined." Rather, "the injunction merely suggest[ed] that wrongful conduct be enjoined" and "reasonable counsel would not intend that that be read to include constitutionally protected conduct." Concluding there was a failure of proof as to the element of probable cause, the court entered
judgment in the defendants' favor. From that judgment Lucas now appeals.
On December 19 rents were increased again, in some cases bringing the total rent increases during 1988 to 44.6 percent. Lucas described the situation as one in which "real live people" were being "bankrupt[ed] for the benefit of greedy park-owners." [FN5]
On January 18, 1989, Lucas again inveighed against long-term leases. [FN6] The next week, on January 26, campaign contributions by "park owners" to one city council member were his target. [FN7] Finally, on February 22, after the Anaheim City Council had rejected the effort to put a mobilehome rent control proposal on the ballot, Lucas noted that two members of the council who voted against his position had received campaign contributions from the park owners. [FN8]
A month later, the Del Prado Mobilehome Park, L.P. and Glenneyre Management, Inc. filed suit for libel, trade libel and interference with prospective economic advantage. They asked for punitive damages of $500,000, and a permanent injunction to stop Lucas' "course of conduct of defamation." By January 1990, however, the partnership and the management company substituted new counsel, and in May in reliance on the new counsel's advice, dismissed the entire action. Lucas filed the present malicious prosecution action in July.
We may begin by recognizing the irony in the present lawsuit as it is now postured before us: Lucas probably would not feel the need to bring a malicious prosecution action against the park owners if their libel and economic interference action against him had been brought after 1992. That year, the Legislature solved the nagging problem of how to remedy slapp suits by enacting section 425.16 of the Code of Civil Procedure, which provides for attorney fees and costs to the successful defendant in the initial litigation. (See particularly Code Civ.Proc. s 425.16, subd. (c).) [FN10] Unfortunately for Lucas, section 425.16 became effective January 1, 1993 -- more than two and one-half years after the original lawsuit against him had been dismissed.
We must deal with Lucas' malicious prosecution action on its own terms, and not filtered through the prism of subsequent legislation which, had it been available, certainly would have afforded him a speedier remedy. [FN11]
The leading case on malicious prosecution in California is Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 254 Cal.Rptr. 336, 765 P.2d 498, which noted that the tort is, with good reason, traditionally disfavored. (Id. at p. 872, 254 Cal.Rptr. 336, 765 P.2d 498). Sheldon Appel further stated that the "better means of addressing the problem of unjustified litigation is through the adoption of measures facilitating the speedy resolution of the initial lawsuit." (Id. at p. 873, 254 Cal.Rptr. 336, 765 P.2d 498, emphasis added; see also Bidna v. Rosen (1993) 19 Cal.App.4th 27, 30, 23 Cal.Rptr.2d 251 ["The remedy for egregious conduct in family law court is for the family law bench to nip it in the bud with appropriate sanctions, not to expand tort liability for malicious prosecution to the family law bar."].)
In Sheldon Appel our Supreme Court settled two basic issues regarding the probable cause element of malicious prosecution. It held that the absence of probable cause is a question of law for the court, not a question of fact for the jury. (See id. at p. 875, 254 Cal.Rptr. 336, 765 P.2d 498.) In addition, it made it clear that the test for probable cause is objective tenability, a phrase used no less than five times in the Sheldon Appel opinion. (See id. at pp. 881, 254 Cal.Rptr. 336, 765 P.2d 498 ["If the trial court concludes that the prior action was not objectively tenable...."]; id. at pp. 883, 254 Cal.Rptr. 336, 765 P.2d 498 [error in previous Court of Appeal decision was in shifting focus away "from the objective tenability of the prior claim"]; id. at pp. 884, 254 Cal.Rptr. 336, 765 P.2d 498 ["the objective tenability of the prior action is a question of law to be determined by the court"]; id. at pp. 885, 254 Cal.Rptr. 336, 765 P.2d 498 [law seeks to protect "legally tenable claims"]; id. at pp. 886, 254 Cal.Rptr. 336, 765 P.2d 498 [describing standard as "whether any reasonable attorney would have thought the claim tenable"].)
Tenability means "defensible" or "capable of being maintained against argument or objection." (See Webster's Third New Internat. Dict. (1979) at p. 2354.) The implication of the Supreme Court's use of the word is that no probable cause should be found where reasonable minds can differ, not simply where someone is not likely to win. (See Sheldon Appel, supra, 47 Cal.3d at pp. 885-886, 254 Cal.Rptr. 336, 765 P.2d 498 [analogizing the objective tenability standard to the "reasonable attorney" test articulated for frivolous appeals under Flaherty [FN12]].) As the Sheldon Appel court apparently wanted to make clear, presenting a successful malicious prosecution claim is a hard row to hoe. On the other hand, tough as the standard is, Sheldon Appel certainly did not categorically abolish malicious prosecution claims when individuals are sued without an objectively tenable basis.