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Tuttle v. Schneider

California Court of Appeals, First District, Fifth Division
Aug 25, 2009
No. A121857 (Cal. Ct. App. Aug. 25, 2009)

Opinion


CHARLES TUTTLE et al., Plaintiffs and Appellants, v. CARL SCHNEIDER et al., Defendants and Respondents. A121857 California Court of Appeal, First District, Fifth Division August 25, 2009

NOT TO BE PUBLISHED

Humboldt County Super. Ct. No. DR070847

Jones, P.J.

Charles Tuttle and Wendell Row sued Carl Schneider, Edward O’Meara and others alleging malicious prosecution. Schneider, O’Meara and the other defendants filed motions to dismiss under the SLAPP statute (Code Civ. Proc., § 425.16), alleging that Tuttle and Row could not establish a prima facie case. The trial court agreed and granted the motions. Tuttle and Row now appeal contending the trial court applied the SLAPP statute incorrectly. We disagree and will affirm.

Unless otherwise indicated, all further section references will be to the Code of Civil Procedure.

I. FACTUAL AND PROCEDURAL BACKGROUND

This is the fourth time this dispute has been before this court. We set forth the underlying facts briefly.

Respondent Coastal Auto Mart, Inc., was an automobile dealership in Eureka. It was owned primarily by respondent Carl Schneider although respondent Edward O’Meara also owned a minor share.

In 1996, Schneider hired appellant Charles Tuttle to manage the dealership. Appellant Wendell Row was a customer of Coastal and he became a close friend of Tuttle.

Sometime after Tuttle arrived in Eureka, he entered into a relationship with Schneider’s daughter Karen. That relationship ended in 2000, and shortly thereafter, Schneider fired Tuttle.

In November 2000, Coastal filed a complaint against Tuttle and Row alleging three causes of action. The first alleged Tuttle had embezzled funds from the dealership. The second alleged Tuttle and Row had engaged in a conspiracy to extort money from Coastal. The third sought an accounting. Coastal was represented in that action by respondent W. Timothy Needham, of Janssen, Malloy, Needham, Morrison, and Reinholtsen, LLP., a law firm located in Eureka.

Tuttle answered the complaint and filed a cross-complaint against Coastal, Schneider, and O’Meara alleging, inter alia, intentional infliction of emotional distress. Row also answered the complaint and filed a cross-complaint against Coastal, Schneider, and O’Meara.

In the years that followed, Coastal, Schneider, and O’Meara won a series of interim legal victories. In May 2001, the trial court struck Tuttle’s and Row’s answers and cross-complaints because of discovery abuses. At a subsequent “prove-up” hearing, the court awarded Coastal $208,500 in actual damages and $100,000 in punitive damages. When the trial court denied Tuttle’s and Row’s request to set aside the judgment, they filed an appeal. The case was assigned to Division One of this court which reversed the judgment, ruling it had been obtained through the misconduct of Michael T. Morrissey, Tuttle’s and Row’s then and current attorney.

After the case returned to the trial court, Row filed a motion under the SLAPP statute to strike the extortion cause of action. The trial court denied the motion. Row filed an appeal. Division One of this court affirmed ruling that Row had failed to satisfy the requirements of the SLAPP statute.

Row filed a motion for judgment on the pleadings. The trial court denied it.

Row also filed a motion for summary judgment. The trial court denied that too.

While Coastal was securing these interim procedural victories, it was also changing counsel. After Division One issued its ruling reversing the default judgment, Needham and his firm filed a motion to withdraw as counsel of record for Coastal based on nonpayment of fees. The trial court granted the request, and in January 2003, respondent Victor Ferro took over as counsel for Coastal. In June 2005, Ferro joined a new law firm. Thereafter Tuttle and Row filed a motion to recuse Ferro because a partner in his new firm had conducted a mediation in the case many years before. The trial court granted the motion. A new attorney, respondent Stephen P. Arnot substituted in as Coastal’s attorney in October 2005.

The complaint and cross-complaints finally went to trial in October 2006. A jury rejected the causes of action Coastal had alleged and found in favor of Tuttle on his cross-complaint alleging emotional distress. The jurors also found that Coastal, Schneider and O’Meara “conduct” was “oppressive, fraudulent, or malicious.”

Coastal, Schneider, and O’Meara appealed the judgment. Division One of this court affirmed.

Having prevailed in the underlying litigation, Tuttle and Row then filed the new complaint that is at issue in the current appeal. It contained a cause of action for malicious prosecution and named as defendants Coastal, Schneider, O’Meara, Needham and his law firm, Ferro, Arnot and his law firm, Schneider’s wife Narcel, and two business organizations allegedly controlled by Schneider and O’Meara.

The complaint also contains a cause of action alleging fraudulent conveyance. That cause of action is not at issue in this appeal.

Each of the defendants filed a motion under the SLAPP statute alleging Tuttle and Row could not establish a prima facie case. The trial court agreed and granted the motions reasoning in part that the interim legal victories the defendants had obtained in the underlying litigation prior to trial demonstrated that the complaint had been filed with probable cause.

Tuttle and Row then filed the present appeal challenging the court’s SLAPP rulings.

II. DISCUSSION

A. Appellants’ Briefs

Before we turn to the merits of this appeal, we must address the briefs that appellants have submitted. They are, to put it bluntly, grossly defective because they largely ignore the requirement set forth in California Rules of Court, rule 8.204(a)(1)(C), that all factual assertions must be supported by a citation to the record. Appellants violate this rule in three different ways. First, long segments of their briefs contain factual assertions that are not supported by any citation to the record. (See, e.g., AOB p. 3, ¶ 3, p. 5, ¶ 2, p. 6, ¶ 1, p. 6, ¶ 2, p. 16, ¶ 2, pp. 17-19, ARB p. 5, ¶ 5.) Second, in many instances, the portion of the record appellants do cite does not support the statements they make. (See, e.g., AOB p. 4, ¶ 2, p. 6, ¶ 3, p. 8, ¶ 2.) This aspect of the problem is particularly serious because appellants sometimes make scurrilous statements about some of the parties that are simply not supported. (For example, see the first partial paragraph on AOB page 8 where appellants describe Schneider’s daughter Karen as “a belligerent drunk” who “was often obnoxious to Tuttle’s children.” The page cited for this statement, appellants’ appendix, page 437, says nothing like that.) Third, sometimes appellants cite portions of the record that simply do not exist. (See AOB p. 10, ¶ 1.)

The violations we note are even more egregious because they are part of a pattern of conduct that has been exhibited by appellants’ counsel on appeal, Michael T. Morrissey. Our colleagues in the Six District recently chastised Morrissey for these very same violations in Drummond v. Temmerman (June 10, 2009, H030601 [nonpub. opn.].)

We cite the unpublished Sixth District opinion not as authority, but as grounds for our disciplinary observations concerning appellants' deficient briefing. (See Cal. Rules of Court, rule 8.1115(b)(2).)

We point out these deficiencies not to be pedantic, but to underscore an important point. The rules governing appeals exist to enable courts to resolve important issues in an efficient and predictable manner. When litigants ignore the rules, it makes our job more difficult, and it injects needless uncertainty into the appellate process. This court will expect and require appellants’ counsel to comply strictly with the rules governing appeals in all future filings with this court.

B. SLAPP Ruling

As is relevant here, section 425.16 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 or 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).) Under the statute, the party moving to strike a cause of action has the initial burden to show that the cause of action arises from an act in furtherance of the moving party’s right of petition or free speech. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) Once that burden is met, the burden shifts to the plaintiff to demonstrate the probability that it will prevail on the claim. (Ibid.) To satisfy that latter burden, the plaintiff must “‘state[] and substantiate[] a legally sufficient claim.’ [Citation.] ‘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.”’ [Citation.]” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 741, fn. omitted (Jarrow).) On appeal, this court independently reviews whether section 425.16 applies and whether the plaintiff has shown a probability of prevailing. (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 999.)

Appellants do not dispute that the malicious prosecution complaint they filed is subject to the SLAPP statute. That implied concession is consistent with the conclusion reached by every court that has addressed the question. (Jarrow, supra, 31 Cal.4th at pp. 735, 741.) Thus, the issue is reduced to whether appellants presented evidence in opposition to respondents’ SLAPP motions that would be sufficient to support a judgment in their favor. (Zamos v. Stroud (2004) 32 Cal.4th 958, 965.)

In order to establish a cause of action for malicious prosecution, a plaintiff must demonstrate, (1) the prior action was terminated in his or her favor; (2) the prior action was brought without probable cause; and (3) the action was initiated with malice. (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 871 (Sheldon Appel).)

Here, the briefs that have been submitted primarily focus of the second factor; i.e., whether the underlying action was brought with probable cause. Appellants argue the trial court interpreted the interim legal victories that Coastal, Schneider, and O’Meara obtained in the underlying litigation too broadly. Respondents argue, among other things, that those interim victories demonstrate the probable validity of their cause of action. We need not address those arguments because we find a different factor that the parties have addressed only briefly to be determinative.

“The malice element of the malicious prosecution tort goes to the defendant’s subjective intent in initiating the prior action. [Citation.] For purposes of a malicious prosecution claim, [malice] is not limited to actual hostility or ill will toward the plaintiff. Rather, malice is present when proceedings are instituted primarily for an improper purpose. [Citation.] Suits with the hallmark of an improper purpose include, but are not necessarily limited to, those in which... (1) the person initiating them does not believe that his claim may be held valid; (2) the proceedings are begun primarily because of hostility or ill will; (3) the proceedings are initiated solely for the purpose of depriving the person against whom they are initiated of a beneficial use of his property; (4) the proceedings are initiated for the purpose of forcing a settlement which has no relation to the merits of the claim.” (Sycamore Ridge Apartments LLC v. Naumann (2007) 157 Cal.App.4th 1385, 1407, internal quotation marks omitted.)

Here, appellants cited to no evidence of malice when opposing the SLAPP motions in the court below and they cite no evidence of malice on appeal. Instead, they argue that “at this stage of the proceeding[,] malice is presumed from the want of probable cause.” This is simply incorrect. The court in Downey Venture v. LMI Ins. Co. (1998) 66 Cal.App.4th 478 (Downey), addressed this precise issue. The Downey court explained, “by itself, the conclusion that probable cause is absent logically tells the trier of fact nothing about the defendant’s subjective state of mind. That being so, it does not seem logical to permit any inference to be drawn as to a subjective state of mind solely from the absence of objective tenability. Evidence Code section 600, subdivision (b), provides, ‘An inference is a deduction of fact that may logically and reasonably be drawn from another fact or group of facts found or otherwise established in the action.’ (Italics added.) 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 [see Sheldon Appel, supra, 47 Cal.3d pp. 885-886]), 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, supra, 66 Cal.App.4th at p. 498, fn. omitted, cited with approval in Jarrow, supra, 31 Cal.4th at p. 743.)

Counsel for appellants tried to remedy this omission at oral argument by citing what they claim is evidence of malice that is in the record. We do not address points that are raised for the first time at oral argument. (Roberts v. Assurance Co. of America (2008) 163 Cal.App.4th 1398, 1408.)

In arguing that malice must be presumed, appellants rely primarily on an isolated sentence from a recent Supreme Court decision where the court stated: “Moreover, malice can also be inferred from the evidence that defendants lacked probable cause to initiate and maintain the underlying action against [the malicious prosecution plaintiff].” (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 296 (Soukup).) What appellants fail to acknowledge, and what they fail to disclose in their brief, is that the sentence upon which they rely comes at the end of a long paragraph where our Supreme Court cited a long list of evidence that was submitted to prove malice. The entire passage from Soukup is as follows: “With respect to malice, Soukup argues that the fact the underlying action was dismissed as a SLAPP — that is, that it was brought primarily to chill the exercise of her constitutional rights of speech and petition — establishes a prima facie showing of malice because interference with the exercise of those rights is, by definition, an improper purpose to initiate and maintain litigation. We do not agree with the premise of Soukup’s claim that an action eventually adjudicated to be a SLAPP was necessarily initiated and maintained with malice. However, Soukup also cites evidence of attitudes ranging from ‘open hostility to indifference’ (Grindle v. Lorbeer [1987]196 Cal.App.3d [1461], 1465), that satisfies the requirement of a showing of minimal merit to her malicious prosecution claim so as to defeat defendants’ motions. For example, she cites evidence that Hafif physically threatened her when she refused to accept unregistered stock as part of LOHH’s distribution of its pension plan, the event she alleges ultimately resulted in her having been named as a defendant in the underlying action; that Stock told her Hafif had named her in the underlying action to prevent her from making trouble for him in the future; that Hafif admitted at a deposition he had no witnesses to testify to her involvement in the malicious prosecution cause of action in the underlying action; that Gregory Hafif threatened the lawyer Soukup retained to look into the pension plan matter with lawsuits and attorney fee claims; that Aitken failed to provide her with an explanation as to why she had been named a defendant in the underlying action and refused her request to be dismissed from the action; and that Stock refused to dismiss Hafif’s appeal of the dismissal of the underlying action after she prevailed on her anti-SLAPP motion. Moreover, malice can also be inferred from the evidence that defendants lacked probable cause to initiate and maintain the underlying action against Soukup. (See id., at p. 1466.) We conclude that Soukup’s showing is sufficient to establish malice for the limited purpose of defeating defendants’ motions to strike.” (Soukup, supra, 39 Cal.4th at pp. 295-296.)

Thus, read in context, the Soukup case simply stands for the proposition that the evidence presented, together with the presumption cited, was sufficient to establish a prima facie case of malice. It does not signal any retreat from the principle recognized in Downey, supra, 66 Cal.App.4th at page 498 and cited with approval in Jarrow, supra, 31 Cal.4th at page 743, that malice cannot be presumed from a lack of probable cause alone.

Appellants also seem to suggest that malice must be presumed at this stage of the litigation because the filing of a SLAPP motion stays discovery and they were prevented from obtaining the evidence they needed to prove malice. We reject this argument because it was never raised in the court below or in appellants’ opening brief. It is doubly forfeited. (Lambert v. Carneghi (2008) 158 Cal.App.4th 1120, 1135.) It is also unpersuasive. While the filing of a SLAPP motion stays discovery proceedings (425.16, subd. (g)), the court retains the discretion to authorize whatever discovery is necessary to establish a prima facie case. (Lafayette Morehouse, Inc. v. Chronicle Publishing Co. (1995) 37 Cal.App.4th 855, 867.) We find nothing in the record that indicates appellants availed themselves of that right.

Having failed to present any evidence of malice, we conclude appellants failed to establish a prima facie case. The trial court correctly granted respondents’ SLAPP motions.

III. DISPOSITION

The court’s SLAPP rulings and the resulting judgments are affirmed.

We concur: Simons, J., Bruiniers, J.


Summaries of

Tuttle v. Schneider

California Court of Appeals, First District, Fifth Division
Aug 25, 2009
No. A121857 (Cal. Ct. App. Aug. 25, 2009)
Case details for

Tuttle v. Schneider

Case Details

Full title:CHARLES TUTTLE et al., Plaintiffs and Appellants, v. CARL SCHNEIDER et…

Court:California Court of Appeals, First District, Fifth Division

Date published: Aug 25, 2009

Citations

No. A121857 (Cal. Ct. App. Aug. 25, 2009)