Opinion
F060909
01-03-2012
GEORGE PATRICK JOHNSTON et al., Plaintiffs and Respondents, v. SHARON KELLY et al., Defendants and Appellants.
Murphy, Pearson, Bradley & Feeney, Gregory A. Bastian and Robert W. Lucas for Defendants and Appellants. Hakeem, Ellis & Marengo and Albert M. Ellis for Plaintiffs and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Super. Ct. No. 652765)
OPINION
APPEAL from a judgment of the Superior Court of Stanislaus County. Hurl W. Johnson III, Judge.
Murphy, Pearson, Bradley & Feeney, Gregory A. Bastian and Robert W. Lucas for Defendants and Appellants.
Hakeem, Ellis & Marengo and Albert M. Ellis for Plaintiffs and Respondents.
Defendants, as attorneys representing Miguel Toro, filed an application for penalty with the Worker's Compensation Appeals Board (WCAB), seeking imposition of penalties against Toro's employer, Rocking S Dairy (Dairy). Toro asserted his employer discriminated against him by terminating his employment because he suffered a workplace injury and made a claim for worker's compensation benefits. After hearing, the WCAB found in favor of the employer. The employer and one if its owners filed this action against defendants for malicious prosecution and unfair competition. Defendants responded with a special motion to strike (Code Civ. Proc. § 425.16), which the trial court denied. Defendants appeal the denial of that motion. We conclude the motion should have been granted, except as to Dairy's malicious prosecution cause of action, and reverse with directions to enter a new order.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
FACTUAL AND LEGAL BACKGROUND
Miguel Toro was employed by plaintiffs, Dairy and its owner, George Patrick Johnston, as a milker. Toro was injured on the job and required surgery in March 2008. In early May, 2008, when his doctor had released him to return to work, Toro approached Dairy's foreman, Cesar Sanchez, with his paperwork and asked to return. Sanchez told Toro he needed to discuss the matter with Johnston, who was then on vacation. Toro contacted Sanchez subsequently to find out if Johnston had returned from vacation. On May 12, 2008, Johnston returned from vacation and found in his mail a notice from the Employment Development Department (EDD) indicating Toro had applied for unemployment benefits and had quit his job. Johnston then received a letter from Toro's wife, stating that Toro did not intend to quit his job; the EDD designates it that way when an employee receiving worker's compensation benefits is released to return to work but no work is available. The dairy employees had recently unionized, and Johnston understood he was obligated to meet and confer with union representatives before terminating any employee; Johnston contacted the union to discuss the matter, because another employee would have to be terminated in order to reinstate Toro to his position. On May 29 or 30, 2008, Johnston and the union representatives, Richard Benson and Julian Perez, agreed on a method of displacing other workers in order to reinstate Toro. Perez, who speaks Spanish, was to notify Toro, who is Spanish speaking, of his reinstatement; Perez failed to do so. Toro did not report for work and, on June 3, Johnston sent Toro his accrued vacation pay, on the assumption Toro had abandoned his job. Johnston testified he would still have honored the reinstatement agreement if Toro had come back to work after he sent the vacation pay.
Through his attorneys, defendants Sharon Kelly and Frailing, Rockwell, Kelly & Duarte, Toro filed an application pursuant to Labor Code section 132a with the WCAB, alleging Dairy terminated Toro's employment for the purpose of discriminating against him because he sustained an industrial injury and filed a claim for worker's compensation benefits. In December, 2008, the depositions of Benson and Perez were taken; they testified to the reinstatement agreement they negotiated with Johnston. In February, 2009, Kelly filed an amended application with the WCAB, adding allegations about a discriminatory reduction in Toro's rate of pay. After hearing, the application was denied.
Labor Code section 132a provides in pertinent part: "It is the declared policy of this state that there should not be discrimination against workers who are injured in the course and scope of their employment. [¶] (1) Any employer who discharges, or threatens to discharge, or in any manner discriminates against any employee because he or she has filed or made known his or her intention to file a claim for compensation with his or her employer or an application for adjudication, or because the employee has received a rating, award, or settlement, is guilty of a misdemeanor and the employee's compensation shall be increased by one-half .... Any such employee shall also be entitled to reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer."
Johnston and Dairy filed their complaint in this action, alleging two causes of action - for malicious prosecution and unfair business practices - against Kelly and her law firm. They alleged that, two months after the WCAB application was filed, they explained to Toro's attorneys the circumstances surrounding the end of Toro's employment with Dairy, including the fact that Johnston had agreed to reinstate Toro and did not terminate his employment. They supplied copies of written documents confirming Johnston's agreement with the union. The depositions of the two union representatives corroborated Dairy's explanation. Nonetheless, although defendants were aware Toro's Labor Code section 132a claim was baseless and without merit, they continued to pursue it in order to extort a settlement from plaintiffs; in February 2009, Kelly filed an amended application adding an allegation that Johnston reduced Toro's wages as an act of discrimination due to his workplace injury. Prior to the WCAB trial, Kelly made a $10,000 settlement offer to plaintiffs. When plaintiffs rejected it, Kelly allegedly commented that "these cases always settle." After trial, the WCAB judge ruled in favor of Johnston and Dairy, finding Toro failed to carry his burden of proof of a violation of section 132a; there was no substantial evidence that the events of May 2008 were in any way related to Toro's work injury and there was no substantial evidence of termination of Toro's employment until June 2008, when he failed to report for work after Dairy agreed to reinstate him.
Defendants filed a special motion to strike the complaint pursuant to section 425.16. The trial court denied the motion, and defendants appeal.
DISCUSSION
I. Anti-SLAPP Motions
Strategic lawsuits against public participation (SLAPP suits) have "been described as 'a meritless suit filed primarily to chill the defendant's exercise of First Amendment rights.' [Citation.]" (Macias v. Hartwell (1997) 55 Cal.App.4th 669, 672 (Macias).) In response to "a disturbing increase" in such suits, the Legislature enacted section 425.16, the anti-SLAPP statute. (§ 425.16, subd. (a); Macias, supra, at p. 672.) The statute provides, in pertinent part: "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).) "In making its 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).)
A special motion to strike (anti-SLAPP motion) involves a two-step process: First, the moving defendant must make a threshold showing that the challenged cause of action arises from the defendant's protected free speech or petitioning activity. (Coretronic Corp. v. Cozen O'Connor (2011) 192 Cal.App.4th 1381, 1387 (Coretronic); City of Alhambra v. D'Ausilio (2011) 193 Cal.App.4th 1301, 1306 (D'Ausilio).) The defendant makes this showing by demonstrating that the act underlying the plaintiff's cause of action fits one of the categories of protected activity set out in section 425.16, subdivision (e). (Navellier v. Sletten (2002) 29 Cal.4th 82, 88 (Navellier).)
Second, if the court determines the defendant has met this burden, the burden shifts to the plaintiff to demonstrate the probability that plaintiff will prevail on the merits. (D'Ausilio, supra, 193 Cal.App.4th at p. 1306.).) To meet this burden, "the plaintiff need only have '"stated and substantiated a legally sufficient claim."' [Citations.] '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.]" (Navellier, supra, 29 Cal.4th at pp. 88-89.)
A cause of action must both arise from protected speech or petitioning and lack even minimal merit in order to be stricken as a SLAPP suit pursuant to section 425.16. (Navellier, supra, 29 Cal.4th at p. 89.) "A special motion to strike may be addressed to individual causes of action and need not be directed to the complaint as a whole." (Coretronic, supra, 192 Cal.App.4th at p. 1387.)
We review the trial court's order denying an anti-SLAPP motion de novo, to determine whether the challenged causes of action arose from the defendant's free speech or petitioning activity and, if so, whether the plaintiff has shown a probability of prevailing on the merits. (D'Ausilio, supra, 193 Cal.App.4th at p. 1306.) "We do not reweigh the evidence, but accept as true all evidence favorable to the plaintiff and evaluate the defendant's evidence only to determine if it has defeated the evidence submitted by the plaintiff as a matter of law. [Citations.] If the trial court's decision denying an anti-SLAPP motion is correct on any theory applicable to the case, we may affirm the order regardless of the correctness of the grounds on which the lower court reached its conclusion. [Citation.]" (Id. at pp. 1306-1307.)
II. Cause of Action Arising From Defendant's Speech or Petitioning Activity
The defendant must make an initial showing that the act underlying the plaintiff's cause of action fits one of the categories of protected activity set out in section 425.16, subdivision (e). (Navellier, supra, 29 Cal.4th at p. 88.) Those categories include: "(1) any written or oral statement or writing made before a ... judicial proceeding, or any other official proceeding authorized by law," and "(2) any written or oral statement or writing made in connection with an issue under consideration or review by a ... judicial body, or any other official proceeding authorized by law." (§ 425.16, subd. (e)(1), (2).) These categories include "'"the basic act of filing litigation or otherwise seeking administrative action."'" (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1115 (Briggs); see also, Navellier, supra, 29 Cal.4th at p. 90.) Although section 425.16, subdivision (b)(1) identifies the causes of action subject to a special motion to strike as those "arising from any act of that person in furtherance of the person's right of petition or free speech ... in connection with a public issue" (italics added), clauses (1) and (2) of section 425.16, subdivision (e), do not require a "public issue"; the Legislature "effectively deem[ed] statements and writings made before or connected with issues being considered by any official proceeding to have public significance per se." (Briggs, supra, 19 Cal.4th at pp. 1122, 1123.)
Plaintiffs' first cause of action for malicious prosecution is based on defendants' filing and prosecution of an administrative application for penalty with the WCAB. The second cause of action is based on the same facts, and adds an allegation that "it is a business practice and strategy of Defendants to initiate and pursue claims against employers with malice, for an improper purpose, and without probable cause." Thus, the claims asserted in plaintiffs' complaint arise from acts of defendants in furtherance of their right of petition, including statements made before an administrative proceeding or in connection with an issue under consideration by an administrative body. (§ 425.16, subd. (b)(1), (e)(1), (e)(2).) Defendants met their burden of demonstrating that both causes of action of plaintiffs' complaint arise from their protected free speech or petitioning activity.
III. Plaintiffs' Probability of Prevailing on the Merits
Because defendants met their burden, the burden shifted to plaintiffs to demonstrate the probability that they will prevail on the merits of their claims for malicious prosecution and unfair competition.
A. Malicious prosecution
In order to establish a cause of action for malicious prosecution, a plaintiff must prove "'that the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination in his, plaintiff's, 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 (Sheldon Appel).) In defending against a special motion to strike under section 425.16, a plaintiff need only show these elements are "'"supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited."'" (Navellier, supra, 29 Cal.4th at p. 89.) There is no dispute that the prior action - the WCAB proceeding - was commenced by or at the direction of defendants and was terminated in favor of Dairy.
Defendants contend plaintiffs failed to show a probability they will prevail on the merits of the malicious prosecution cause of action because Johnston cannot establish the underlying proceeding terminated in his favor and Dairy cannot establish lack of probable cause or malice.
1. Standing
Defendants contend that Johnston cannot show a probability he will prevail on his malicious prosecution cause of action because he lacks standing to sue. They assert he was not a party to the underlying proceeding, which named only Dairy as a defendant, so he cannot demonstrate that the underlying proceeding terminated in his favor. Plaintiffs argue that Dairy is a partnership in which Johnston is a general partner, and, as such, he is personally liable for the debts and obligations of the partnership. They seem to argue that this gives Johnston a sufficient interest in the matter to confer standing to sue for malicious prosecution.
Plaintiffs presented no evidence that Dairy is a partnership or that Johnston is a general partner in that partnership. Even if Johnston had established these facts, they would not give rise to standing to sue for malicious prosecution in this case. Actions for malicious prosecution "are personal actions which do not give rise to a cause of action in anyone other than the person directly aggrieved." (Coverstone v. Davies (1952) 38 Cal.2d 315, 324.) "A partnership is an entity distinct from its partners." (Corp. Code, § 16201.) "A partnership may sue and be sued in the name of the partnership." (Corp. Code, § 16307, subd. (a).) "A judgment against a partnership is not by itself a judgment against a partner. A judgment against a partnership may not be satisfied from a partner's assets unless there is also a judgment against the partner." (Corp. Code, § 16307, subd. (c).) Thus, if liability had been imposed against Dairy in the WCAB proceeding, it would not have directly affected Johnston individually, even if he were a general partner in the Dairy partnership. He would not have been a person directly aggrieved, with standing to bring an action for malicious prosecution based on maintenance of the WCAB proceeding.
Consequently, plaintiffs failed to demonstrate a probability that Johnston will prevail on the merits of his malicious prosecution cause of action, and defendants' motion to strike that cause of action should have been granted.
2. Lack of probable cause
In the context of a malicious prosecution cause of action, "the question whether there was probable cause to institute the prior action is purely a legal question, to be determined by the trial court on the basis of whether, as an objective matter, the prior action was legally tenable or not." (Sheldon Appel, supra, 47 Cal.3d at p. 868.) "[T]he probable cause element calls on the trial court to make an objective determination of the 'reasonableness' of the defendant's conduct, i.e., to determine whether, on the basis of the facts known to the defendant, the institution of the prior action was legally tenable. The resolution of that question of law calls for the application of an objective standard to the facts on which the defendant acted." (Id. at p. 878.) "Only those actions that any reasonable attorney would agree are totally and completely without merit may form the basis for a malicious prosecution suit." (Zamos v. Stroud (2004) 32 Cal.4th 958, 970.) Malicious prosecution includes continuing to prosecute an action after discovering probable cause is lacking, and the same standard applies in that situation. (Id. at pp. 970, 973.)
Rather than contending defendants initiated the WCAB proceeding without probable cause and for an improper purpose, Dairy contends defendants maliciously prosecuted the WCAB proceeding by continuing it after they obtained evidence that it lacked merit. Evidence submitted to the trial court indicated the following. On May 2 and May 5, 2008, Toro took notes from his doctor releasing him to go back to work to his employer; he gave them to the foreman, Sanchez, who told him Johnston was on vacation. Sanchez said he could not do anything until Johnston returned from vacation in about a week. On May 8, 2008, Toro filed an unemployment insurance claim with the EDD, which indicated the reason for separation was "I QUIT." Johnston returned from vacation on May 12. Toro's wife sent a letter to Johnston, dated May 13, 2008, stating that the EDD notice was wrong, Toro did not intend to quit, and "quit" was a designation the EDD used.
Prior to May 2008, the union had become the collective bargaining representative of the Dairy's employees, but there was no collective bargaining agreement in place at that time. Johnston contacted the union because another employee would have to be laid off in order to reinstate Toro, and Johnston wanted the union's input in determining which employee would be terminated. Dairy was willing to reinstate Toro and never refused to do so. Perez called Toro to find out if he wanted his job back, and Toro said yes. On or about May 30, 2008, the union and Dairy reached an agreement that Toro would be reinstated to his previous position, displacing the milker with the least seniority, who would then have the option to bump Dairy's lowest seniority worker and take that position. Perez was to notify Toro of his reinstatement, but he did not. Toro did not return to work.
Accepting as true all evidence favorable to Dairy (D'Ausilio, supra, 193 Cal.App.4th at p. 1306), we conclude Dairy presented sufficient evidence to make the required prima facie showing of a lack of probable cause that would support a judgment in their favor if the evidence is credited (Navellier, supra, 29 Cal.4th at p. 89). The evidence summarized above was either within the personal knowledge of Toro or included in the deposition testimony of Benson or Sanchez. Thus, by the end of December, 2008, defendants had this information in their possession. Toro's original WCAB application alleged Toro underwent surgery for an industrial injury and, when he was released to return to full duty, his employer stated there was no work for him; his employer terminated his employment "without just cause" and as a result of discrimination against Toro for having sustained an industrial injury. The evidence available to defendants by the end of 2008 was sufficient to support a finding that Toro's employment ended because of a failure of communication among the employer, the union, and the employee. It would support a determination that Dairy did not terminate Toro's employment at all, or that any termination was not a response to his workplace injury or his worker's compensation claim. Despite defendants' knowledge of this evidence, they continued to pursue Toro's claims against Dairy for discriminatory termination.
Defendants argue they based their decision to file the WCAB application on information provided by their client, Toro, including his statement that he went to Johnston's office and asked Johnston to either reinstate him or give him his vacation pay. Johnston did not tell him he had been reinstated; he terminated Toro and gave him his vacation pay. In reviewing the denial of an anti-SLAPP motion, we "accept as true all evidence favorable to the plaintiff and evaluate the defendant's evidence only to determine if it has defeated the evidence submitted by the plaintiff as a matter of law." (D'Ausilio, supra, 193 Cal.App.4th at p. 1306-1307.) The evidence presented by defendants did not defeat Dairy's evidence as a matter of law; it merely raised a conflict in the evidence that must be resolved by the trier of fact.
"'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.' [Citation.]" (Daniels v. Robbins (2010) 182 Cal.App.4th 204, 223.) The evidence indicates Toro gave inconsistent explanations of what occurred when he sought reinstatement after Johnston returned from vacation. Toro testified at trial that he talked to Johnston when Johnston returned from vacation and Johnston said he had received a letter from EDD indicating Toro had quit; Johnston told Toro to come back and talk to him after he resolved the problem with EDD. Toro went to the EDD office for an explanation; he then took the May 13, 2008, letter written by his wife and gave it to Sanchez. He never heard back from Johnston regarding whether he would be reinstated. At another point, Toro testified he went to see Johnston and ask for work; Johnston told him there was no work for him then. Toro was tired of asking for work and asked for his vacation pay to avoid more problems and start looking for work elsewhere. In his deposition, Toro testified Perez contacted him and asked if he would be willing to return to his job if Dairy offered him his job back, and he said yes; in the same conversation, Perez told him Dairy was willing to give him his job back.
The inconsistencies in Toro's statements combined with the deposition testimony of Benson and Perez, which defendants obtained in December 2008, give rise to factual issues requiring determination by the trier of fact in order to resolve the probable cause issue. Dairy made the required prima facie showing of a lack of probable cause and defendants' evidence did not defeat that showing as a matter of law.
3. 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.' [Citations.] Malice 'may range anywhere from open hostility to indifference. [Citations.] Malice may also be inferred from the facts establishing lack of probable cause.' [Citation.]" (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 292.) "Improper purposes can be established in cases in which, for instance: (1) the person bringing the suit does not believe that the claim may be held valid; (2) the proceeding is initiated primarily because of hostility or ill will; (3) the proceeding is initiated solely for the purpose of depriving the opponent of a beneficial use of property; or (4) the proceeding is initiated for the purpose of forcing a settlement bearing no relation to the merits of the claim." (Daniels, supra, 182 Cal.App.4th at p. 224.) Lack of probable cause alone is insufficient to establish malice; but lack of probable cause combined with other evidence, such as knowingly bringing an action without probable cause, may support an inference of malice. (Id. at pp. 225, 226.) Further, "malice can be inferred when a party continues to prosecute an action after becoming aware that the action lacks probable cause." (Id. at p. 226.)
"'Since parties rarely admit an improper motive, malice is usually proven by circumstantial evidence and inferences drawn from the evidence.' [Citation.]" (Daniels, supra, 182 Cal.App.4th at 225.) The evidence before the trial court indicated the depositions of Benson and Perez were taken in the WCAB proceeding in December 2008. Benson and Perez were union representatives who negotiated with Dairy on behalf of Toro for his reinstatement as a milker. They testified Dairy was not only willing, but actually agreed, to displace other workers in order to reinstate Toro. Their testimony indicated Perez was to inform Toro of his reinstatement, but he failed to do so. A reasonable inference from this evidence was that Toro was not terminated by Dairy at all, but failed to return to work because the union representative neglected to inform him of his reinstatement. Additionally, Toro stated in his deposition, which was also taken in December 2008, that Perez told him Dairy was willing to give him his job back if he wanted it. Thus, the evidence provided by Toro himself and by witnesses independent of the employer tended to show Toro's claim of discriminatory termination lacked merit.
After obtaining the deposition testimony, defendants continued to pursue Toro's WCAB claim. They filed an amended application for penalty, which included allegations of facts obtained from the depositions, including allegations that "[t]he employer contacted the union and the union determined the lowest seniority worker would be terminated and [Toro] would be reinstated," Dairy never informed Toro that he could return, and Toro was not reinstated. The amended application also added an allegation that, after Toro's injury, "[d]ue to his work restrictions, [Toro's] employment was changed and his pay was reduced." Toro's new first cause of action alleged this reduction in pay constituted discrimination against Toro for sustaining an industrial injury and was intended to force Toro out of his employment. At trial, defendants did not present any evidence to substantiate the allegations of a discriminatory pay reduction. In their reply brief, defendants argue that the failure to present such evidence demonstrates that they abandoned the issue.
Collectively, this evidence suggests that defendants amended Toro's application for penalty in an attempt to bolster his claims against his employer, which they realized, after taking depositions, lacked substance. Their later abandonment of the discriminatory pay reduction claim suggests they realized it too lacked substance. It could be inferred that they chose to press the case in the hope of achieving a settlement despite the lack of merit in Toro's claims.
In their complaint, plaintiffs alleged that, after they rejected Kelly's settlement demand in the WCAB proceedings, Kelly commented that "these cases always settle"; they implied this demonstrated that defendants maintained the WCAB proceeding in order to shake defendants down for an unjustified settlement. In opposition to defendants' anti-SLAPP motion, plaintiffs reiterated this allegation, without presenting any evidence to prove it. Because it was a mere allegation, without supporting evidence, we disregard it, just as the trial court did.
The evidence presented was sufficient to meet Dairy's burden of making a prima facie showing of malice; defendants' evidence did not defeat that showing as a matter of law.
B. Unfair competition
1. Standing
Defendants assert that Johnston did not demonstrate a probability that he will prevail on the merits of the unfair competition cause of action, because he does not have standing to maintain it. A private action for relief under the unfair competition law (Bus. & Prof. Code, § 17200, et seq.) may be brought only "by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition." (Bus. & Prof. Code, § 17204.) Plaintiffs' unfair competition cause of action is based on the same factual allegations as the malicious prosecution cause of action, but adds an allegation that "it is a business practice and strategy of Defendants to initiate and pursue claims against employers with malice, for an improper purpose, and without probable cause." It seeks "disgorgement of wrongfully obtained profits" and "restitution of attorneys' fees paid in connection with the deposition of Miguel Toro." Plaintiffs do not allege that defendants initiated or pursued any claim against Johnston individually. He was not a party to the WCAB proceeding and he does not allege that defendants obtained any money, property, or profits from him as a result of the alleged wrongful business practices of defendants. He presented no evidence in opposition to defendants' motion to prove that he suffered injury or loss as a result of the alleged unfair competition. Thus, he has not "'"stated and substantiated a legally sufficient claim"'" for unfair competition. (Navellier, supra, 29 Cal.4th at pp. 88.) Johnston failed to demonstrate the probability that he will prevail on the merits of this cause of action, and defendants' motion to strike it should have been granted.
2. Litigation privilege
Defendants contend Dairy cannot prevail on its cause of action for unfair competition based on the filing and prosecution of the WCAB application for penalty because that cause of action is barred by the litigation privilege (Civ. Code, § 47, subd. (b)). A plaintiff cannot establish the probability of prevailing at trial, for purposes of an anti-SLAPP motion, when its action is based on the defendant's communicative conduct and that conduct is absolutely privileged under Civil Code section 47. (Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47 Cal.App.4th 777, 784-785.) Civil Code section 47, subdivision (b), provides, in pertinent part: "A privileged publication or broadcast is one made: [¶] (b) In any (1) legislative proceeding, (2) judicial proceeding, (3) in any other official proceeding authorized by law," with certain exceptions not relevant here.
"'Although originally enacted with reference to defamation [citation], the privilege is now held applicable to any communication, whether or not it amounts to a publication [citations], and all torts except malicious prosecution. [Citations.] ... The usual formulation is that the privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action. [Citations.]' [Citations.]" (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1057 (Rusheen).) "The '[p]leadings and process in a case are generally viewed as privileged communications.' [Citation.]" (Id. at p. 1058.)
"Because the litigation privilege protects only publications and communications, a 'threshold issue in determining the applicability' of the privilege is whether the defendant's conduct was communicative or noncommunicative. [Citation.] The distinction between communicative and noncommunicative conduct hinges on the gravamen of the action. [Citations.] That is, the key in determining whether the privilege applies is whether the injury allegedly resulted from an act that was communicative in its essential nature. [Citations.]" (Rusheen, supra, 37 Cal.4th at p. 1058.) "[I]f the gravamen of the action is communicative, the litigation privilege extends to noncommunicative acts that are necessarily related to the communicative conduct .... Stated another way, unless it is demonstrated that an independent, noncommunicative, wrongful act was the gravamen of the action, the litigation privilege applies." (Id. at p. 1065.)
The gravamen of the unfair competition cause of action is that defendants violated the unfair competition law by initiating and pursuing claims against employers before the WCAB, maliciously or for an improper purpose. This cause of action incorporates allegations that defendants wrongfully pursued a claim against Dairy on behalf of Toro for discriminatory termination and reduction in pay. The initiation of such quasi-judicial proceedings is generally considered to be a communication protected by the litigation privilege, as is the filing of further pleadings in the proceeding. (Rusheen, supra, 37 Cal.4th at pp. 1055, 1058.) Dairy has not shown that the gravamen of the unfair competition cause of action is an independent, noncommunicative, wrongful act, and we do not so interpret it. "[T]he privilege is virtually absolute and ... the only tort cause of action which can be based upon the initiation of a lawsuit (or communicative acts related to the lawsuit) is that of malicious prosecution." (Ludwig v. Superior Court (1995) 37 Cal.App.4th 8, 24.) Because Dairy's unfair competition cause of action is based on the initiation and pursuit of quasi-judicial proceedings, the litigation privilege applies and bars this cause of action. As a result, Dairy has not established the probability it will prevail on the merits. Defendants' motion to strike this cause of action should have been granted.
IV. Failure to Exhaust Administrative Remedies
Defendants argue that Dairy's action is precluded by its failure to exhaust its administrative remedies, relying on Labor Code section 5813, which authorizes an award of sanctions for "bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay." Defendants concede they did not raise this argument in the trial court, but assert it is "purely a question of law on undisputed facts," which may be raised for the first time on appeal. We conclude defendants have forfeited their right to assert this argument on appeal by failing to raise it in the trial court.
Labor Code section 5813, provides, in its entirety: "(a) The workers' compensation referee or appeals board may order a party, the party's attorney, or both, to pay any reasonable expenses, including attorney's fees and costs, incurred by another party as a result of bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay. In addition, a workers' compensation referee or the appeals board, in its sole discretion, may order additional sanctions not to exceed two thousand five hundred dollars ($2,500) to be transmitted to the General Fund.
"(b) The determination of sanctions shall be made after written application by the party seeking sanctions or upon the appeal board's own motion.
"(c) This section shall apply to all applications for adjudication that are filed on or after January 1, 1994."
While some early cases have viewed failure to exhaust administrative remedies as invalidating a court's subject matter jurisdiction, so that the defendant may raise the issue at any time, more recent cases have concluded a defendant waives the defense by failing to timely assert it. (Mokler v. County of Orange (2007) 157 Cal.App.4th 121, 135.) "'Application of a procedural doctrine subject to numerous exceptions and which may require case-by-case analysis is not the sort of issue which should fall outside the general rule of civil litigation that arguments and objections not raised and preserved in the trial court are waived on appeal.' [Citation.]" (Id. at p. 134.) As stated in Cummings v. Stanley (2009) 177 Cal.App.4th 493: "We agree with the weight of recent cases that have concluded a defendant waives the defense by failing timely to assert it. [Citations.] We recognize that a split of authority exists on the issue of whether an exhaustion of remedies defense is waived by failure to assert it in a timely fashion at trial. We choose to follow the influential trend of recent authority that exhaustion does not implicate subject matter jurisdiction, but rather is a judicially created rule of procedure, with numerous exceptions, which must be applied by the courts equitably and depends on a qualitative analysis on a case-by-case basis of the facts presented at trial. Hence, we find a waiver of a claim of exhaustion appropriate on appeal if the defense was not raised below." (Id. at pp. 505-506, fn. omitted.)
Even if we were to consider defendants' exhaustion argument, we would find it without merit. The doctrine of exhaustion of remedies states "that where an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act." (Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 292.) "The doctrine typically applies only to statutory claims." (Jacobs Farm/Del Cabo, Inc. v. Western Farm Service, Inc. (2010) 190 Cal.App.4th 1502, 1523.) "'[W]here a statute creates a right that did not exist at common law, and provides a comprehensive system of administrative enforcement, a requirement that administrative remedies be exhausted may be implied. [Citation.] But, generally, "where a statutory remedy is provided for the enforcement of a pre-existing common-law right, the newer statutory remedy will be considered only cumulative."' [Citation.]" (Campbell v. Regents of University of California (2005) 35 Cal.4th 311, 328; accord Rojo v. Kliger (1990) 52 Cal.3d 65, 83, "The rule is that where a right is given and a remedy provided by statute, the remedy so provided must ordinarily be pursued.") The right not to be maliciously prosecuted is a common law right. (Oren Royal Oaks Venture v. Greenberg, Bernhard, Weiss & Karma, Inc. (1986) 42 Cal.3d 1157, 1169.) To the extent Labor Code section 5813 may provide a remedy for malicious prosecution, it provides a newer statutory remedy for a pre-existing common law right, which is a cumulative remedy that does not give rise to a requirement that its remedy be exhausted before an injured party may bring suit.
Relying on City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, defendants assert that "courts have required parties to pursue remedies before quasi-judicial administrative tribunals before pursuing common law causes of action in court in some circumstances." (Id. at p. 210.) This has occurred when those courts "'"have expressly or implicitly determined that the administrative agency possesses a specialized and specific body of expertise in a field that particularly equips it to handle the subject matter of the dispute."' [Citation.] Exhaustion may be required if the application of the agency's expertise to the matter in the first instance is considered '"'indispensable.'"' [Citation.]" (Ibid.) Determining whether a party has maliciously prosecuted a claim against another party is not a matter requiring the "specialized and specific body of expertise" of the WCAB, nor is the WCAB's expertise indispensable to making that determination. Consequently, Dairy's malicious prosecution cause of action is not barred by a failure to exhaust its administrative remedies.
DISPOSITION
The order denying defendants' special motion to strike is reversed. The matter is remanded and the trial court is directed to enter a new order granting the motion to strike both of Johnston's causes of action and Dairy's cause of action for unfair competition, and denying the motion to strike Dairy's cause of action for malicious prosecution. The parties shall bear their own costs on appeal.
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HILL, P. J.
WE CONCUR:
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LEVY, J.
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CORNELL, J.