Opinion
NOT TO BE PUBLISHED
Superior Court County of Santa Barbara No. 1304093 James W. Brown, J. William McLafferty, Judges.
Law Offices of Herb Fox, Herb Fox; Law Office of Michael W. McCann, Inc., Michael W. McCann for Plaintiff and Appellant Paul Camen.
Minehan, McFaul & Fitch, LLP, Thomas P. Minehan, Daniel J. Ryan for Defendant and Appellant Linda Kushner.
Lewis Brisbois Bisgaard & Smith, LLP, Roy G. Weatherup, Bartley L. Becker, Jennifer R. Weatherup for Defendant and Appellant Gordon B. Cutler.
Hager & Dowling, Thomas J. Dowling, Alison M. Holman for Defendant and Respondent David Kushner.
GILBERT, P.J.
Plaintiff Paul Camen (Paul) filed a malicious prosecution action against defendants Linda Kushner (Linda), David Kushner (David), and their attorney Gordon B. Cutler (Cutler) following the defendants' unsuccessful probate court petition challenging the validity of amendments to a trust made by Paul and Linda's mother, Regina Camen (Regina). The defendants filed motions to strike Paul's malicious prosecution action pursuant to Code of Civil Procedure section 425.16 (strategic lawsuit against public participation (SLAPP)). The trial court granted David's motion and denied Linda's and Cutler's motions. Paul, Linda and Cutler appeal.
We refer to the parties by their first names to ease the reader's task.
We conclude, among other things, that the trial court properly granted David's motion, but it erred in denying Linda's and Cutler's motions. There was reasonable probable cause to pursue the petition, and Paul did not show he could prevail on his malicious prosecution claim. We reverse in part and affirm in part.
FACTS
In 1987, Regina was the settlor of a trust. The trust provided that at the time of her death the bulk of her estate would be divided equally between her children, Paul and Linda.
In February 2003, Regina met with attorney Robert Bletcher and executed amendments to the trust. They provided, among other things, that Paul would receive most of the estate; Linda would receive $40,000; and her grandson, David, would receive $15,000. Paul was named as the successor trustee. Regina died in 2006 at the age of 97.
David served Paul with a "safe harbor" petition (Prob. Code, § 21320) and a copy of his proposed trust contest. This petition requires the court to determine whether a challenge to the 2003 trust amendments would violate a no-contest clause in the trust.
Following service of these documents, Kirk Wilson, Paul's attorney, sent a copy of Bletcher's estate file to Cutler, David and Linda's attorney. In an accompanying letter, Wilson opined that the file provided "very persuasive evidence of the fact that the 2003 trust amendments accurately reflect Regina's wishes."
The probate court ruled that David's petition would not violate the no-contest clause.
On October 26, 2006, Wilson wrote another letter to Cutler. He said, "As of the beginning of August, we provided you with a full trust accounting, medical records for Regina from Cottage Hospital and Dr. Harb, Bob Bletcher's estate planning file, and other relevant documentation, including Regina's handwritten notes dated January 9, 2003, outlining her testamentary wishes, which exactly match the plan of distribution contained in the February 2003 trust amendments. You have, therefore, now had all of the information you need to evaluate this case for nearly three months."
On November 22, 2006 David filed a petition contesting the 2003 trust amendments. He claimed Regina was not competent to make them and she had been unduly influenced by Paul. He also sought to remove Paul as trustee. The case went to trial. Bletcher testified about Regina's testamentary capacity. The probate court denied David's petition.
Paul filed a "petition for award of attorney's fees and costs for bad faith prosecution...." The probate court awarded Paul $30,000 in attorney's fees and found the petition challenging the amendments was "filed in bad faith."
Paul then filed a new action for malicious prosecution against David, Linda and Cutler. They each responded with anti-SLAPP motions. David claimed he relied on Cutler's advice in deciding whether to file the petition. Linda was not a named party in the probate action, but nevertheless she filed a declaration. She stated, "There was sufficient reasonableness of our belief that there was probable cause to file and maintain the underlying action, " and there was "no ill will or malice toward" Paul.
In his declaration Cutler said he concluded that Regina "could not possibly understand the nature of a testamentary act." Kaiser Permanente Hospital's medical records showed Regina suffered from depression, mild dementia and had a 17/30 score on a Mini Mental State Examination (MMSE). When Regina was hospitalized in 2002, the medical staff discussed the option of placing her in an "assisted living" arrangement. Cutler concluded she had Alzheimer's. Cutler said that he also knew that Paul "frequently visited" Regina at the time the 2003 amendments were executed and that Paul was a law school graduate who had "sophisticated legal knowledge." The amendments "radically changed" the estate distribution to Paul's benefit. But for over 20 years prior to the amendments, Regina "had intended for the bulk of her estate to be shared equally...." Cutler said he reviewed Bletcher's estate planning file. He noted that one of the documents in that file was a 2003 letter from Bletcher to Regina stating, "I request that you DO NOT use your son, Paul Camen, to communicate with this office...."
In his opposition, Paul included, among other things, the declaration of Jeffrey Harb, M.D., who was Regina's physician from July 2003 until her death in 2006. Harb said that in 2003 Regina had short-term memory loss but that would not interfere with her "recollection" of family members. Her MMSE score showed mild dementia, but she had sufficient mental capacity to execute an amendment to the trust. Paul claimed Cutler's conclusions about the merits of the case were not reasonable because of documents in Bletcher's estate planning file. Paul noted that Bletcher wrote a series of memos and concluded that Regina had the mental capacity to amend the trust.
The trial court granted David's anti-SLAPP motion and denied Linda's and Cutler's motions.
DISCUSSION
David's Anti-SLAPP Motion
Paul contends the trial court erred in granting David's anti-SLAPP motion. We disagree.
"In analyzing a section 425.16 motion, the trial court engages in a two-step process. 'First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity.'" (Nagel v. Twin Laboratories, Inc. (2003) 109 Cal.App.4th 39, 45.)
"If the defendant meets this initial burden, the burden then shifts and the plaintiff must show a probability of prevailing on the claim." (Nagel v. Twin Laboratories, Inc., supra, 109 Cal.App.4th at p. 45.) "The plaintiff must make a prima facie showing of facts that would, if proven, support a judgment in the plaintiff's favor." (Ibid.) "In ruling on a motion to strike, the trial court does not weigh the evidence or determine questions of credibility; instead the court accepts as true all of the evidence favorable to the plaintiff." (Id. at pp. 45-46.)
David established that this lawsuit arose from protected activity because Paul's cause of action is for malicious prosecution. (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 739-741.) Because David met the first anti-SLAPP prong, the burden shifted to Paul to establish that he could prevail on a malicious prosecution cause of action.
"'To establish a cause of action for the malicious prosecution of a civil proceeding, a plaintiff must plead and prove that the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination in... plaintiff's[] favor...; (2) was brought without probable cause...; and (3) was initiated with malice....'" (Crowley v. Katleman (1994) 8 Cal.4th 666, 676.)
David concedes that the first element of a malicious prosecution claim was satisfied because his petition was denied. He claims, however, that Paul did not meet his burden to establish lack of probable cause. David argues that the trial court correctly found that he had a complete defense to Paul's action. We agree.
"Reliance in good faith on the advice of counsel is a defense to an action for malicious prosecution, inasmuch as such defense shows probable cause." (Kennedy v. Byrum (1962) 201 Cal.App.2d 474, 481.)
David presented evidence showing that he had completely relied on his counsel in making the decision to file the petition. In his declaration, he said, "I have no legal experience or knowledge. I do not know anything about the litigation process, or probate procedures. That is why I retain an attorney to advise me about legal matters. At all times I relied on the advice of Mr. Cutler in deciding whether there was a legal basis to challenge the amendments to the Trust, and the method of doing so." David stated that Cutler "thought Paul exerted undue influence on [David's] grandmother, " and that "Paul should be removed as the trustee because of his abuse of the Trust." David also stated, "I relied completely and entirely on Mr. Cutler's opinions and advice that we should file the Petition. Had Mr. Cutler advised that I did not have a case, ... I would not have authorized him to file the Petition."
Paul claims he presented evidence showing that David did not rely in good faith on his counsel's advice. But Paul's opposition to David's motion was almost entirely focused on responding to Linda's and Cutler's motions. In that response, Paul claimed that "Linda Kushner was the real party in interest in the probate action and directed its prosecution." (Emphasis omitted.) He said Cutler had ignored documentary evidence that showed that challenging the amendments was meritless.
An attorney's discovery of information showing the case lacks merit may subject counsel to liability if he or she continues to pursue the action. (Zamos v. Stroud (2004) 32 Cal.4th 958, 970.) But it does not automatically subject clients who are unaware of those facts to liability. In such a case, counsel must inform the client of the unfavorable information and recommend dismissal. (Ibid.) Here Cutler gave no such advice to David. Paul argues that because Cutler made the decision to proceed, David is "potentially liable." But in malicious prosecution cases, an attorney's erroneous decision is not imputed to clients who rely on their attorney's judgment in good faith. (Brinkley v. Appleby (1969) 276 Cal.App.2d 244, 247 ["There can be no imputation to a client of his attorney's misconceived legal analysis so as to void the client's good faith reliance on his counsel's advice as providing probable cause"].) Moreover, David said, "I was not involved in any decisions regarding the prosecution of the case after the filing of the Petition."
Paul claims David may not claim good faith reliance on counsel's advice because David failed to disclose all the necessary information to Cutler. But, in his declaration, David said, "We told him all of the informationwe had about the trust, the amendments to the trust, my grandmother's physical and mental health, and her relationship with Mr. Camen." (Italics added.) Paul claims this was insufficient because David selectively used the term "we" instead of "I" in referring to the disclosure of information. But as David notes, he used the term "we" because he and Linda met with Cutler and this choice of words does not mean he failed to disclose all the information he knew as the term "we" includes "I."
Even so, it was Paul's burden to present evidence showing "a probability of prevailing on [his] claim." (Nagel v. Twin Laboratories, Inc., supra, 109 Cal.App.4th at p. 45.) Attorney Wilson's declaration does not address the issues of Cutler's advice to David. Consequently, it did not refute David's defense. Paul notes that Cutler did not conduct discovery. But counsel's allegedly erroneous trial strategy is not imputed to the client without proof that the client was involved in making the litigation decisions. (Brinkley v. Appleby, supra, 276 Cal.App.2d at p. 247.) We conclude that Paul has not shown that the trial court erred by granting David's motion.
Cutler's Anti-SLAPP Motion
Cutler does not dispute that Paul presented evidence with his opposition on the elements of malicious prosecution. He claims, however, that evidence was not relevant to the legal standard for an attorney's liability.
An attorney is responsible for assessing the validity of the case. He or she may be liable for malicious prosecution by continuing to prosecute an action after discovering information showing that the litigation is not meritorious. (Zamos v. Stroud, supra, 32 Cal.4th at p. 970.) Cutler notes that if a court determines that "on the basis of the facts known to the defendant, the filing of the prior action was objectively reasonable, " then this issue is one of law and he prevails. (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 883.) He claims the trial court erred by allowing Paul's action to proceed against him. We agree.
In his declaration, Cutler claims he reviewed the relevant medical records regarding Regina's competency before he filed the petition. He also obtained information from his clients about Regina's memory problems. Paul claims Cutler did not have probable cause because Linda did not provide complete information to him. But the fact that a client may have omitted facts does not mean that the attorney lacked probable cause to file the contest. An attorney reasonably may assume that his or her clients are telling the truth unless the attorney has information that shows otherwise. Paul notes that the probate court found that the evidence at the hearing exposed the lack of merit to the petition. But that does not mean Cutler knew the case lacked merit when he filed the action or that he could anticipate how the court would weigh the evidence.
Moreover, Cutler had medical records to support his belief about Regina's lack of competency. A doctor at Kaiser Permanente had determined that Regina had dementia and a significantly diminished score on a mental competency test (17/30 score on the MMSE), and hospital staff had mentioned the option of assisted living for Regina. The diagnosis of dementia is significant. It calls into question Regina's ability to understand what she was doing. She was over 90 years of age, and she made a change in the trust that essentially gave Paul the bulk of her estate. Paul's access to Regina at that time was substantial. Regina relied heavily on Paul who had superior knowledge and a financial motive to amend the trust. Bletcher had to tell Regina that Paul should not communicate with his office. From this, a reasonable attorney could conclude that there was a presumption of undue influence that Paul might not be able to rebut in the probate court.
Paul claims that Harb's medical assessment shows that Regina was competent to make the change in the trust. That was his conclusion, but Harb was not Regina's doctor at the time she made the change to the trust. In addition, Harb agreed that Regina had both short-term memory loss and mild dementia. In other words, Harb's findings, combined with the Kaiser's medical records, raised questions about her competency.
Paul argues that Cutler had in his possession Bletcher's estate planning file. In the file, Bletcher documents his efforts to assure that Regina understood her estate plan. But Bletcher was not a medical doctor. That he had an opinion favoring her competency does not preclude a reasonable attorney from reaching a different conclusion based on the medical evidence. (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 822.) The probate court found Bletcher's testimony to be compelling. But that does not mean that we evaluate Cutler's decisions on a standard of 20/20 hindsight or by relying on evidence most favorable to his opponent. (Ibid.) Paul notes that the probate court also said Cutler should have conducted discovery. But the lack of discovery is not relevant on the issue of probable cause. (Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3d at p. 883.)
Probable cause has a low threshold. "Counsel and their clients have a right to present issues that are arguably correct, even if it is extremely unlikely that they will win...." (In re the Marriage of Flaherty (1982) 31 Cal.3d 637, 650.) By this standard, Cutler had probable cause. The trial court erred in not granting Cutler's motion.
Linda's Motion
Linda did not file the petition challenging the trust amendments. She was not a named party to that proceeding. Paul claims she encouraged David to pursue the action. But in his declaration, David said he authorized Cutler to file the petition. He said, "[h]ad Mr. Cutler advised that I did not have a case, ... I would not have authorized him to file the Petition." (Italics added.) David's declaration supports a finding that the action was filed at his direction, not Linda's. (Crowley v.Katleman, supra, 8 Cal.4th at p. 676.) That Linda may have benefited by the filing does not mean that Paul prevails on the issue of who directed the action to be filed. Even so, there are other obstacles to Paul's pursuit of a malicious prosecution cause of action against Linda.
Paul argues that Linda may not rely on an advice of counsel defense because she did not explicitly raise it in her anti-SLAPP motion. But in her declaration Linda states that the information she provided Cutler "was believed to be true and correct, " that Cutler reviewed the trust documents and medical records, and that she and David believed that there was probable cause to file and maintain the petition. She also relies on Cutler's declaration and the medical records he relied on. David's declaration corroborates her reliance on the advice of counsel defense. David said he and Linda "consulted Mr. Cutler regarding our concerns about the amendments, " and that Cutler advised them that "we had a good case and that [Cutler] thought Paul exerted undue influence on" Regina. (Italics added.) Cutler had sufficient probable cause to file the petition. David relied on Cutler's legal assessment of the merits, and so did Linda. Cutler's analysis had some support in the medical evidence.
Paul claims that Linda animus towards him was motivated by financial considerations. But her subjective state of mind is not the relevant issue on the objective standard for probable cause. (Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3d at p. 883.) Paul asserts that the evidence available to Linda to challenge the amendments was weak. But "[a] litigant or attorney who possesses competent evidence to substantiate a legally cognizable claim for relief does not act tortiously by bringing the claim, even if also aware of evidence that will weigh against the claim. Plaintiffs and their attorneys are not required, on penalty of tort liability, to attempt to predict how a trier of fact will weigh the competing evidence, or to abandon their claim if they think it likely the evidence will ultimately weigh against them." (Wilson v. Parker, Covert & Chidester, supra, 28 Cal.4th at p. 822.)
There are additional problems on the merits of Paul's cause of action. Paul pled a malicious prosecution cause of action in his representativecapacity as the trustee of the trust. This raises the question of his standing to seek personal injury damages for emotional distress. He did not sue in his individual capacity. "The powers of a trustee are not personal...." (Moeller v. Superior Court (1997) 16 Cal.4th 1124, 1131.) Paul failed to allege facts concerning his authority under the trust instrument to continue to act as trustee after the final probate judgment to bring a tort action against the trust beneficiaries. (Stanton v. Wells Fargo Bank & Union TrustCo. (1957) 150 Cal.App.2d 763, 770 ["the trust instrument constitutes the measure of the trustee's powers"].)
In addition, Paul sought attorney's fees for bad faith in the probate court and was awarded $30,000 on a claim of $120,557.28. He alleges that he is entitled to file a malicious prosecution action to seek the remaining attorney's fees not awarded by the probate court. But he sought fees under Probate Code section 15642, subdivision (d), the section that involves fees for attempts to remove trustees. Moreover, Paul does not explain: 1) why he did not seek fees under other statutory provisions (e.g., Code Civ. Proc, § 128.5); 2) why he did not appeal the probate court order; and 3) why the finality of that order does not bar the claim for additional fees under the doctrines of res judicata and collateral estoppel. (Mark v. Spencer (2008) 166 Cal.App.4th 219, 229; Hulsey v. Koehler (1990) 218 Cal.App.3d 1150, 1156-1157.)
The orders denying Cutler's and Linda's motions are reversed. In all other respects, the judgment is affirmed. Costs on appeal are awarded in favor of appellants Cutler, Linda and respondent David.
We concur: YEGAN, J., PERREN, J.