Opinion
A131885
02-15-2012
RICHARD BOTTO, Plaintiff and Appellant, v. EDWARD MATHIEU HIGGINBOTHAM, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Alameda County Super. Ct. No. RG10540730)
Plaintiff Richard Botto appeals from the trial court order granting defendant Edward Mathieu Higginbotham's special motion to strike under Code of Civil Procedure section 425.16 (hereafter section 425.16). Section 425.16 sets out a procedure for striking complaints in lawsuits that are commonly known as "SLAPP" suits (strategic lawsuits against public participation). Plaintiff contends the trial court erred in concluding that his complaint for malicious prosecution lacks merit. We agree with plaintiff and reverse.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
I. The Complaint for Malicious Prosecution
On October 8, 2010, plaintiff filed the underlying complaint stating a cause of action for malicious prosecution against defendant, who is an attorney, and his client Mortimer Howard. The complaint alleges that defendant, acting on behalf of Howard, filed an unlawful detainer action against him on April 22, 2009. Howard claimed he had foreclosed on a deed of trust to the property occupied by plaintiff. The deed contained an assignment of rents, allegedly giving Howard the immediate right to collect unpaid rent. The action was dismissed with prejudice on June 10, 2009, after the trial court sustained plaintiff's demurrer without leave to amend. Both before and after filing of the unlawful detainer action, plaintiff and his counsel repeatedly informed defendant that the claim lacked legal and factual merit because Howard had failed to perfect his title to the property.
Thereafter, on August 10, 2009, defendant instituted a second unlawful detainer action against plaintiff. This action claimed damages in the form of rent owed at the rate of $50.00 per day beginning May 7, 2009 to the date of entry of judgment. Howard alleged that he owned the property by virtue of a sale at a public auction that occurred on May 7, 2009. This allegation was demonstrably untrue, as no such sale could have occurred prior to May 24, 2009, due to statutory notice requirements for nonjudicial foreclosure sales as set forth in Civil Code sections 2924 and 2924f. This action was dismissed by a second trial court judge after plaintiff successfully moved for summary judgment.
Civil Code section 2924, subdivision (a)(3), requires three months elapse from the filing of the notice of default (here February 4, 2009) before the giving of a notice of sale in the manner provided for in Civil Code section 2924f. Civil Code section 2924f, subdivision (b)(1), requires a minimum of 20 days elapse from the date of this notice before the sale of such property is conducted.
Howard's appeal to the appellate department of the superior court was denied on May 16, 2011.
The present complaint alleges that defendants "were repeatedly informed . . . that Civil Code §§ 2924 and 2924f had not been satisfied and that, lacking duly perfected title, the Second Unlawful Detainer was doomed to suffer the same consequences as the First Unlawful Detainer which, in fact, occurred." Plaintiff further alleged that the two actions were brought with malice in that they were instigated with the improper motive of forcing him to incur litigation expenses so as to pressure him into relinquishing rent and/or possession of the property without legal justification. He claimed he has suffered general damages as well as damages in the form of attorney fees and costs in the defense of the two actions.
On December 9, 2010, defendant filed a motion to strike plaintiff's complaint under Code of Civil Procedure section 425.16.
II. Evidence Submitted in Opposition to the Anti-SLAPP Motion
In his opposition to Higginbotham's Anti-SLAPP motion, plaintiff stated that he had occupied the subject property since July 1999 for use as a sculpture studio. He had entered into a verbal agreement with the prior owner, Mark Crotzer, that he would be allowed rent-free possession of approximately 1,500 square feet of the property for a 10-year period in exchange for having made a $35,000 loan to Crotzer. The proceeds of the loan were used by Crotzer to purchase the building and a cut-off steel service business also located on the property. Crotzer promised plaintiff that he would not encumber the property. Unbeknownst to plaintiff, Crotzer borrowed money from defendant Howard, secured by a note on the subject property. Crotzer defaulted on the loan and Howard commenced nonjudicial foreclosure proceedings to obtain the subject property held as security for that loan.
Plaintiff also correctly noted that in an unlawful detainer proceeding brought under Code of Civil Procedure section 1161a, subdivision (b)(3), a plaintiff who has purchased a property as a foreclosure must show that he or she acquired the property at a regularly conducted sale. (Vella v. Hudgins (1977) 20 Cal.3d 251, 255.) A plaintiff's lack of title is a defense to the unlawful detainer action. (Ibid.)
Although plaintiff informed both Howard and Higginbotham of his ownership interest in the property, they demanded rent and threatened him with an unlawful detainer proceeding. His attorney informed defendant that the claimed foreclosure was defective in that the minimum notice requirements for a nonjudicial foreclosure had not been observed. After defendant filed the first unlawful detainer action, plaintiff's counsel informed him that the action lacked legal merit. Defendant replied that he had his "marching orders" from his client. He also confirmed his client had caused plaintiff to be locked out of the premises.
Two months after the demurrer to the first unlawful detainer action was sustained, defendant filed the second action on behalf of Howard. Plaintiff propounded limited discovery seeking an admission by Howard that the nonjudicial foreclosure notice statutes had not been satisfied and that duly perfected title had not been obtained. After sanctions were awarded to plaintiff for failure to comply with this discovery request, defendant filed two unsuccessful motions for summary judgment. Following a second award of discovery sanctions, Howard admitted that he had not timely complied with Civil Code sections 2924, subdivision (a), and 2924f, subdivision (b)(1). After the second unlawful detainer action was dismissed, Howard conducted a second foreclosure sale in July 2010 and served notice, after which plaintiff vacated the premises.
Prior to this filing, plaintiff's counsel had informed defendant that that he could "easily remedy the unlawful foreclosure and, therefore, perfect title your client has by simply renewing the process. In doing so, you and your client will be in compliance with the law ultimately entitling you all to dispossess [plaintiff] from the subject premises—in lawful fashion."
III. Trial Court's Ruling on Anti-SLAPP Motion
The trial court granted the Anti-SLAPP motion, finding plaintiff failed to meet his burden to establish a probability of prevailing on the merits of his malicious prosecution cause of action. This appeal followed.
DISCUSSION
I. Section 425.16 and the Standard of Review
Section 425.16, known as the anti-SLAPP statute, provides: "A cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim." (§ 425.16, subd. (b)(1).) "The phrase 'arising from' . . . has been interpreted to mean that 'the act underlying the plaintiff's cause' or 'the act which forms the basis for the plaintiff's cause of action' must have been an act in furtherance of the right of petition or free speech." (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1001.) " 'The goal [of section 425.16] is to eliminate meritless or retaliatory litigation at an early stage of the proceedings.' " (Seelig v. Infinity Broadcasting Corp. (2002) 97 Cal.App.4th 798, 806.)
Courts engage in a two-step process in determining whether a cause of action is subject to a special motion to strike under section 425.16. First, the court determines if the challenged cause of action arises from protected activity. If the defendant makes such a showing, the burden shifts to the plaintiff to establish, with admissible evidence, a reasonable probability of prevailing on the merits. (Navellier v. Sletten (2002) 29 Cal.4th 82, 88.) "Only a cause of action that satisfies both prongs of the anti-SLAPP statute— i.e., that arises from protected speech or petitioning and lacks even minimal merit—is a SLAPP, subject to being stricken under the statute." (Id. at p. 89.)
A ruling on a section 425.16 motion is reviewed de novo. (Thomas v. Quintero (2005) 126 Cal.App.4th 635, 645.) We review the record independently to determine whether the asserted cause of action arises from activity protected under the statute and, if so, whether the plaintiff has shown a probability of prevailing on the merits. (ComputerXpress, Inc. v. Jackson, supra, 93 Cal.App.4th 993, 999; Seelig v. Infinity Broadcasting Corp., supra, 97 Cal.App.4th 798, 807.)
Plaintiff's malicious prosecution complaint alleged that defendant and Howard wrongfully pursued the unlawful detainer actions, which is activity protected by the free speech and petition clauses. (See Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 734-735.) Plaintiff does not dispute that the actions were protected activity or that his malicious prosecution complaint falls within the reach of section 425.16. He argues instead that the trial court erred in determining that he did not carry his burden to show that he would prevail on the merits of his claim that the defendants were liable for malicious prosecution of the unlawful detainer actions. (See Drummond v. Desmarais (2009) 176 Cal.App.4th 439, 449.)
II. Probability of Prevailing on the Merits
"To demonstrate a probability of prevailing on the merits, the plaintiff must show that the complaint is legally sufficient and must present a prima facie showing of facts that, if believed by the trier of fact, would support a judgment in the plaintiff's favor. [Citations.] The plaintiff's showing of facts must consist of evidence that would be admissible at trial. [Citation.] The court cannot weigh the evidence, but must determine whether the evidence is sufficient to support a judgment in the plaintiff's favor as a matter of law, as on a motion for summary judgment. [Citations.] If the plaintiff presents a sufficient prima facie showing of facts, the moving defendant can defeat the plaintiff's evidentiary showing only if the defendant's evidence establishes as a matter of law that the plaintiff cannot prevail." (Hall v. Time Warner, Inc. (2007) 153 Cal.App.4th 1337, 1346.)
Three elements must be pleaded and proved to establish the tort of malicious prosecution: (1) A lawsuit was " ' "commenced by or at the direction of the defendant [which] was pursued to a legal termination in . . . plaintiff's . . . favor" ' "; (2) the prior lawsuit " ' "was brought without probable cause" ' "; and (3) the prior lawsuit " ' "was initiated with malice." ' [Citations.]" (Citi-Wide Preferred Couriers, Inc. v. Golden Eagle Ins. Corp. (2003) 114 Cal.App.4th 906, 911.) In the present case, there is no dispute that the two prior actions were commenced by defendant at the direction of Howard and that the actions terminated in plaintiff's favor. Accordingly, we need only consider whether plaintiff has made a sufficient showing that the actions were brought without probable cause and were initiated with malice.
A. Probable Cause
To make a prima facie case of lack of probable cause, plaintiff must show no reasonable attorney would have thought the unlawful detainer actions were tenable in light of the facts known to defendant at the time the suit was filed. (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 885-886 (Sheldon Appel).) "Where there is no dispute as to the facts upon which an attorney acted in filing the prior action, the question of whether there was probable cause to institute that action is purely legal. [Citations.] If there is a dispute as to such facts, that dispute must be resolved by the trier of fact before the objective standard can be applied by the court. [Citations.]" (Ross v. Kish (2006) 145 Cal.App.4th 188, 202.)
Here, there is no dispute as to the facts underlying the unlawful detainer actions. Howard initiated nonjudicial foreclosure proceedings against Crotzer. Civil Code section 2924, subdivision (a)(3), requires three months to have elapsed from the filing of the notice of default (here February 4, 2009) before a notice of sale is served in accordance with Civil Code section 2924f. Civil Code section 2924f, subdivision (b)(1), imposes an additional minimum of 20 days (from the date of notice of sale) before the sale of the property can be conducted. Three months from February 4, 2009 was May 4, 2009. Twenty days from May 4, 2009 was May 24, 2009. The date of the sale alleged in the unlawful detainer complaints was May 6, 2009 (in the first action) and May 7, 2009 (in the second action). Both dates are well within the aforementioned statutorily mandated minimum period of 110 days (90 days plus 20 days). Accordingly, the unlawful detainer actions were doomed because Howard had not first obtained duly perfected title by means of a regularly conducted foreclosure sale. Plaintiff's counsel informed Howard and his counsel as to the legal import of these facts prior to the filing of the first unlawful detainer action. The trial court in that action confirmed that the claim lacked merit, yet defendant proceeded to file a second similarly flawed action after the first was dismissed with prejudice. Accordingly, there is a triable issue of fact as to whether a reasonable attorney would have pursued the underlying litigation in light of these circumstances.
Higginbotham claims that the trial court wrongly dismissed the unlawful detainer actions, relying on Knapp v. Doherty (2004) 123 Cal.App.4th 76. That case is distinguishable. In Knapp, the mailing of the notice of sale was premature by nine days, but the sale date in the notice of sale gave the additional requisite 20 days provided for in Civil Code section 2924. (Id. at p. 92.) Further, the actual sale took place a year later and the process was in all other regards timely satisfied. (Id. at p. 94.)
--------
B. Malice
The term "malice," which appears throughout the law of torts, almost always refers to a reprehensible mental state. Its particular meaning, however, varies from one context to the next. As an element of the tort of malicious prosecution, malice at its core refers to an improper motive for bringing the prior action. (See Sheldon Appel, supra, 47 Cal.3d 863 at p. 874 [referring to "the defendant's motivation" and "the subjective intent or purpose with which the defendant acted in initiating the prior action"].) As an element of liability it reflects the core function of the tort, which is to secure compensation for harm inflicted by misusing the judicial system, i.e., using it for something other than to enforce legitimate rights and secure remedies to which the claimant may tenably claim an entitlement. Thus, the cases speak of malice as being present when a suit is actuated by hostility or ill will, or for some purpose other than to secure relief. (See Sycamore Ridge Apartments LLC v. Naumann (2007) 157 Cal.App.4th 1385, 1407 (Sycamore Ridge); Albertson v. Raboff (1956) 46 Cal.2d 375, 383; Richter v. Neilson (1936) 11 Cal.App.2d 503, 507.) It is also said that a plaintiff acts with malice when he asserts a claim with knowledge of its falsity, because one who seeks to establish such a claim "can only be motivated by an improper purpose." (Albertson v. Raboff, supra, 46 Cal.2d at p. 383.) A lack of probable cause will therefore support an inference of malice. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 292; cf. Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 675 [lack of probable cause not sufficient by itself].)
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. (Sycamore Ridge, supra, 157 Cal.App.4th at p. 1407.) While the facts underlying the question of probable cause and the issue of malice are questions of fact to be determined by the jury, on a motion to strike ". . . the court 'accepts as true all evidence favorable to the plaintiff.' [Citation.]" (Walker v. Kiousis (2001) 93 Cal.App.4th 1432, 1444 (Walker).) As in a motion for directed verdict, inferences are drawn in favor of the party opposing the motion to strike. (Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 827-828, disapproved on other grounds in Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 68.)
Here, plaintiff has sufficiently alleged that defendant filed the unlawful detainer actions with the requisite mental state. As noted above, a trier of fact could readily find defendant acted without probable cause when he filed the actions against plaintiff as he was fully aware at all times that the alleged sale was ineffective to support an action for unlawful detainer. Plaintiff has presented sufficient evidence to demonstrate that defendant and Howard's motive in bringing the unlawful detainer actions was to force him to engage in meritless litigation in order to coerce him into abandoning the property. For example, a correspondence states: "If my client were to dismiss the appeal, would your client give him a full satisfaction of judgment on both cases? [¶] That is a very reasonable offer, and your client's last chance to avoid significant, future litigation." Defendant claims there is no evidence that his actions were dishonest or done with intent to cause harm. The motive in instituting the unlawful detainer action is a question of fact to be determined by the jury. At this point, given the standard to be applied to factual conflicts arising in a motion to strike under section 425.16 (Walker, supra, 93 Cal.App.4th at p. 1444), plaintiff has demonstrated a probability of success on the merits.
DISPOSITION
The order granting defendants' motion to strike under section 425.16 is reversed.
Dondero, J. We concur: Marchiano, P.J. Margulies, J.