Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
Contra Costa County Super. Ct. No. C07-01496
Kline, P.J.
Respondent Peter Patras commenced this action against attorneys Alexander Anolik and John Crossfield and their law firm, Alexander Anolik, a professional law corporation (collectively “appellants”), for malicious prosecution arising out of their participation in an underlying suit against respondent for breach of contract which eventually terminated when appellants’ client voluntarily dismissed it without prejudice. Pursuant to Code of Civil Procedure section 425.16 (section 425.16), the anti-SLAPP statute, appellants filed a special motion to strike the causes of action for malicious prosecution from the complaint herein, claiming that their participation in the filing of the underlying action is an activity protected by the anti-SLAPP statute, which Patras concedes, and that Patras failed to make the necessary showing of a probability he will prevail on his malicious prosecution claim. The trial court determined that Patras made that necessary showing a probability of prevailing on his claim and denied appellants’ special motion to strike.
The chief question presented is whether there was a lack of “probable cause” to commence the underlying action against Patras for breach of contract, a key element of the tort of malicious prosecution. The contract at issue was a promissory note in which Patras promised to pay appellants’ client $35,000 in return for the client’s reciprocal promise to forbear from suing Patras for making false and defamatory statements about him to a police officer investigating whether the client had engaged in criminal acts. As he did in the underlying action, Patras maintains that, because his statements to the officer were absolutely privileged, appellants’ client’s promise to forbear from suing him provided nothing of value and that reasonable attorneys would know that the note was unenforceable for lack of consideration. Agreeing with Patras that probable cause to initiate the underlying action was lacking, the trial court concluded that Patras had demonstrated the probability his malicious prosecution claim would prevail and denied appellants’ special motion to strike those causes of action from the complaint.
We shall conclude that the trial court’s determination was correct and affirm the ruling.
FACTS AND PROCEEDINGS BELOW
In 2002, Detective Rich Glennon of the San Mateo County Sheriff’s office commenced an investigation of travel agent Jai Verma to determine whether he had embezzled funds by collecting money from purchasers of airline tickets and failing to transmit it to the airlines that issued the tickets. In the course of the investigation, Glennon contacted and interviewed respondent Patras, who was a friend of and worked with Verma. The San Mateo County District Attorney thereafter filed a criminal information charging Verma with embezzlement and grand theft, alleging that he took $471,439 from China Airlines and other air carriers. Verma was convicted of both charges and sentenced to a term of imprisonment in the California State prison.
On November 29, 2004, Patras and Verma executed a two-sentence promissory note in which Patras promised to pay Verma $35,000 after six months from the date of the note “in consideration of Jai Verma not suing Peter Patras in [a] civil matter for false and defamatory statements given to police detective Rich Glennon in April 2002 and May 2002.” (In the second sentence Patras “also acknowledged to have given $5,000.00 in bail bond monies to secured [sic] $50,000.00 indemnity bond for Jai Verma due to friendship and goodwill.”)
The Underlying Action
When Patras failed to pay him the agreed upon amount within six months, Verma filed an action against him for breach of contract in the San Francisco Superior Court, alleging as damages Patras’s indebtedness under the note. Verma was represented in that action by appellants in the present action. Verma’s first amended complaint added a cause of action for fraud in the inducement, apparently on the theory that Patras never intended to fulfill his promise to pay and agreed to do so in six months on the expectation Verma would by then have been convicted with the help of Patras’s false statements and unable to compel payment under the note.
Patras demurred to the first amended complaint on the ground that, pursuant to Hagberg v. California Federal Bank (2007) 32 Cal.4th 350 (Hagberg) and other cases, a statement made by an individual to a police department either to begin an investigation or during an investigation is absolutely privileged and any such statement cannot support an action for damages by the person about whom the statement is made against the person making the statement. Patras maintained that, because Verma could not hold him tortiously liable for making statements that were absolutely privileged, he received no consideration for his promise to pay Verma $35,000. Verma filed no opposition to this demurrer and, on June 8, 2006, the court sustained it with leave to amend.
In a second amended complaint filed on July 3, 2006, Verma added the allegation that Patras’s allegedly false statements were made not only to Detective Glennon but as well to unnamed “others in his community” and that these communications “were harmful to his reputation.” Shortly after the filing of this amendment, Verma was sentenced to state prison and incarcerated. Assertedly for that reason, and also because appellants claimed they had a conflict of interest regarding their dual representation of Verma and Manoj Shailendra (who notarized the promissory note) in unrelated litigation, appellants recommended that Verma dismiss his action without prejudice. Verma did so on July 19, 2006.
The Present Action
In July 2007,Patras filed in the Contra Costa Superior Court a first amended complaint for damages for malicious prosecution against appellants. Insofar as it relates to them, the gist of the complaint is that “no reasonable attorney would have thought the claims made [in the underlying action] were legally tenable or supported by reasonable or probable cause,” the [appellants] held “no honest or reasonable belief in the truth or validity of the allegations made therein,” and their conduct “was wanton, willful and malicious and in reckless disregard of the rights and feelings of [Patras] . . . and was motivated by ill will and an intent to vex, annoy and harass [Patras] . . . and to cause [him] to unnecessarily expend time and money to defend the underlying complaint.”
The complaint also included Verma and Shailendra as defendants on the theory that they conspired to create “a false and forged promissory note” to be used as part of “a series of false legal actions and proceedings against [Patras].” The motion to strike was not filed by appellants in behalf of Verma or Shailendra. The record before us indicates that default was entered against Verma on April 10, 2008, and Shailendra filed his answer to the complaint on January 23, 2008.
About six months later, appellants filed a notice of motion and special motion to strike Patras’s causes of action for malicious prosecution pursuant to section 425.16, the anti-SLAPP statute. The motion asserted that the underlying action was a constitutionally-protected activity under section 425.16, and that the causes of action for breach of contract and fraud were supported by probable cause. Probable cause was shown, appellants argued, not only by evidence that Patras’s signature on the promissory note was not forged, as Patras initially claimed, but also because Verma’s promise to forbear suing Patras for making false and defamatory statements to Detective Glennon provided lawful consideration for Patras’s promise to pay him $35,000. In his opposition to the motion to strike, Patras agreed that appellants’ participation in the filing of the underlying action was activity protected by the anti-SLAPP statute, but maintained Verma had failed to and could not show the absence of a probability Patras would prevail on his malicious prosecution claim, as he had to in order to succeed on his motion to strike.
The basic elements of the tort of malicious prosecution of a civil matter are (1) the initiation of a prior proceeding, (2) without a reasonable belief in the possibility of the suit being successful (i.e., probable cause), (3) termination of that proceeding in favor of the present plaintiff, and (4) malice. (5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 486, p. 712.) In a malicious prosecution action against an attorney, the critical element is probable cause. The question is whether, as an objective matter, “any reasonable attorney would have thought the claim tenable.” (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 886.) According to Patras, no reasonable attorney would have thought there was probable cause to initiate the underlying action because such an attorney would be aware Patras’s statements to Detective Glennon were unqualifiedly privileged and he could not be held liable for making them even if they were false and defamatory. Because Patras received nothing of value from Verma’s promise not to sue him for making false and defamatory statements to Glennon, there was no consideration for the promise sued on in the underlying action.
The trial court agreed with Patras, finding that he met his burden of showing he is likely to prevail on the merits by establishing both that his malicious prosecution claim is legally sufficient and there is sufficient evidence to establish a prima facie case with respect to that claim. According to the trial court, “a reasonable attorney would not have believed that the underlying claims brought by Verma against Patras were tenable. A reasonable attorney would have known that Verma’s purported defamation claim against Patras had no merit, and that there was therefore no consideration for the purported promissory note upon which Verma was suing. Defendants therefore lacked probable cause to bring the underlying action.”
DISCUSSION
Standard of Review
“Review of an order granting or denying a motion to strike under section 425.16 is de novo. (Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049, 1056.) We consider ‘the pleadings, and supporting and opposing affidavits . . . . upon which the liability or defense is based.’ (§ 425.16, subd. (b)(2).) However, we neither ‘weigh credibility [nor] compare the weight of the evidence. Rather, [we] accept as true the evidence favorable to the plaintiff [citation] and evaluate the defendant’s evidence only to determine if it has defeated that submitted by the plaintiff as a matter of law.’ (HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212.)” (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3.)
The Relationship Between the Anti-SLAPP Statute and Actions for Malicious Prosecution Against an Attorney
Section 425.16, a procedural device for screening out meritless claims, establishes a two-step process for determining whether an action is a “strategic action against public participation” or SLAPP. “First. The court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. . . . If the court finds that such a showing has been made, it must then determine whether the plaintiff has demonstrated a probability of prevailing on the claim.” (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 and lacks even minimal merit—is a SLAPP, subject to being stricken under the statute. (Id. at p. 89.)
As indicated, the parties agree and it is clearly the case that Patras’s causes of action for malicious prosecution challenge conduct—appellants’ participation in the filing of the underlying action—that was in furtherance of petition or free speech rights. (See § 425.16, subd. (e)(1) [acts in furtherance of a person’s constitutional right of petition or free speech include “any written or oral statement in writing made before a . . . judicial proceeding, or any other official proceeding authorized by law”].) Thus, the sole question regarding the motion to strike is whether Patras satisfied the second-prong of the anti-SLAPP statute; that is, whether he demonstrated a probability of prevailing on his malicious prosecution claim. If Patras made such a showing, as the trial court found, the present action is not a SLAPP and appellants’ motion to strike was properly denied.
Appellants advance two reasons why Patras has not demonstrated a probability of prevailing on his malicious prosecution claim: (1) malicious prosecution is a disfavored tort, and subjecting him to liability therefore would “vitiate California’s public policy encouraging free access to its courts” and be unfair; and (2) because Verma and Patras executed the promissory note in good faith, “the validity of the underlying claims is immaterial in determining whether [Verma’s] forbearance from proceeding thereon is sufficient consideration” and he therefore had probable cause to initiate the underlying action. These contentions are far-fetched.
The Fact That Malicious Prosecution Claims Are Disfavored Does Not Render it Irrelevant Whether There Was Probable Cause to File the Underlying Action
Actions for malicious prosecution are often said to be “not favored” (see, e.g., Ball v. Rawles (1892) 93 Cal. 222, 228; Haydel v. Morton (1935) 8 Cal.App.2d 730, 732; Sebastian v. Crowley (1940) 38 Cal.App.2d 194, 202) because of the potentially chilling effect they may have on the public’s willingness to resort to the courts for the resolution of disputes. (Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3d at p. 872; Babb v. Superior Court (1971) 3 Cal.3d 841, 847.) However, as the Supreme Court has said, this policy “should not be pressed further to the extreme of practical nullification of the tort and consequent defeat of the other important policy which underlies it of protecting the individual from the damage caused by unjustifiable criminal [or civil] prosecution.” (Jaffe v. Stone (1941) 18 Cal.2d 146, 159-160.) “The malicious commencement of a civil proceeding is actionable because it harms the individual against whom the claim is made, and also because it threatens the efficient administration of justice. The individual is harmed because he is compelled to defend against a fabricated claim which not only subjects him to the panoply of psychological pressures most civil defendants suffer, but also to the additional stress of attempting to resist a suit commenced out of spite or ill will . . . . In recognition of the wrong done the victim of such a tort, settled law permits him to recover the cost of defending the prior action including reasonable attorney’s fees [citations], compensation for injury to his reputation or impairment of his social and business standing in the community [citations], and for mental or emotional distress. (Bertero v. National General Corp. (1974) 13 Cal.3d 43, 50-51.) And “[t]he judicial process is adversely affected by a maliciously prosecuted cause not only by the clogging of already crowded dockets, but by the unscrupulous use of the courts by individuals ‘ . . . as instruments with which to maliciously injure their fellow men.’ [Citation.]” (Id. at p. 51.)
It is quite true, as appellants are keen to remind us, that there is a “rather lenient standard for bringing a civil action,” and attorneys “ ‘ “have a right to present issues that are arguably correct, even if it is extremely unlikely they will win” ’ [citation]” (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 817, abrogated by statute on another point of law as stated in Hutton v. Hafif (2007) 150 Cal.App.4th 527, 545-550), and that California courts therefore carefully scrutinize malicious prosecution actions. However, this policy clearly cannot be used for the preemptive purpose for which appellants invokes it, which is to make it irrelevant whether, as Patras claims, the underlying action was maliciously commenced and not even arguably meritorious.
Thus we turn to the genuine question, which is whether appellants had probable cause to participate in the filing of the underlying action and it was therefore error for the trial court to deny their special motion to strike.
Patras Adequately Demonstrated a Probability of Prevailing on His Claim
Though there are some differences in the rules governing actions based on prior criminal and civil proceedings, the basic elements of the tort of malicious prosecution are the same. (Hudson v. Zumwalt (1944) 64 Cal.App.2d 866, 872.) As earlier pointed out, the elements of the tort are: (1) initiation of a prior proceeding, (2) termination of that proceeding favorably to the plaintiff in the malicious prosecution claim, (3) lack of probable cause, and (4) malice. (5 Witkin, Summary of Cal. Law, supra, Torts, § 486, p. 712.) The parties have little to say about the first, second, and fourth elements; apparently with reason. The initiation of the underlying action and appellants’ participation therein as counsel is undisputed. The fact that termination of that action by Verma’s voluntary dismissal without prejudice does not render it unfavorable to Patras. Although not res judicata, such a termination is generally considered favorable to the defendant (see, e.g., Weaver v. Superior Court (1979) 95 Cal.App.3d 166, 185, disapproved on other grounds in Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3d at pp. 882-883, fn. 9; MacDonald v. Joslyn (1969) 275 Cal.App.2d 282, 289) and the circumstances of this case—i.e., the fact that the dismissal took place after the trial court sustained Patras’s demurrer to the first amended complaint, and the dubious allegations of the second amended complaint—further confirm that the termination was favorable to Patras.
It is settled “that the existence or nonexistence of probable cause is a legal question to be resolved by the court in the malicious prosecution case; . . . [P]robable cause is determined objectively, i.e., without reference to whether the attorney bringing the prior action believed the case was tenable [citation], and that the standard of probable cause to bring a civil suit was equivalent to that for determining the frivolousness of an appeal [citation], i.e., probable cause exists if ‘any reasonable attorney would have thought the claim tenable.’ [Citation.] This rather lenient standard for bringing a civil action reflects ‘the important public policy of avoiding the chilling of novel or debatable legal claims.’ [Citation.] Attorneys and litigants . . . ‘ “have a right to present issues that are arguably correct, even if it is extremely unlikely that they will win. . . .” ’ [Citations.] Only those actions that ‘ “any reasonable attorney would agree [are] totally and completely without merit” ’ may form the basis for a malicious prosecution suit. [Citation.]” (Wilson v. Parker, Covert & Chidester, supra, 28 Cal.4th at p. 817; accord, Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3d 863.)
As we have said, the trial court’s finding that Patras demonstrated a probability of prevailing on his malicious prosecution claims rested on the conclusion that there was no probable cause for the underlying suit inasmuch as Verma’s promise not to sue Patras for making statements to Detective Glennon provided no valuable consideration for his reciprocal promise to pay Verma $35,000, because his statements to Glennon were absolutely privileged even if Verma could show they were “false and defamatory.” Therefore, the court concluded, because there was “no consideration for the purported promissory note upon which Verma was suing,” “a reasonable attorney would not have believed that the underlying claims brought by Verma against Patras were tenable.”
Hagberg, supra, 32 Cal.4th 350, the principal case Patras relies upon, supports the trial court’s ruling. In that case, a female bank customer of Hispanic descent, who had been arrested while trying to cash a check, filed a complaint against the bank, alleging that on the basis of her race or ethnicity the bank had called the police and falsely reported that she was attempting to negotiate a counterfeit check. The complaint alleged causes of action for, among other things, racial discrimination, false arrest and false imprisonment, slander, invasion of privacy, intentional infliction of emotional distress, and negligence. The trial court granted the bank’s motion for summary judgment on the ground that the absolute privilege established by section 47, subdivision (b) of the Civil Code (section 47(b)) applied to the bank’s statement to the police concerning suspected criminal activity. The Court of Appeal affirmed the ruling, agreeing that the privilege applied to the bank’s communication with the police. The Supreme Court affirmed the judgment of the Court of Appeal.
Reiterating statements earlier made in Silberg v. Anderson (1990) 50 Cal.3d 205—in which the court directed that the privilege established by section 47(b) be applied broadly to bar tort actions based on privileged communications, excepting only the tort of malicious prosecution—the Hagberg court explained how the statutory privilege “serves the important public policy of assuring free access to the courts and other official proceedings. It is intended to ‘ “assure utmost freedom of communication between citizens and public authorities whose responsibility is to investigate and remedy wrongdoing.” ’ [Citation.] We have explained that both the effective administration of justice and the citizen’s right of access to the government for redress of grievances would be threatened by permitting tort liability for communications connected with judicial or other official proceedings. Hence, without respect to the good faith or malice of the person who made the statement, or whether the statement ostensibly was made in the interest of justice, ‘courts have applied the privilege to eliminate the threat of liability for communications made during all kinds of truth-seeking proceedings: judicial, quasi-judicial, legislative, and other official proceedings.’ [Citation.]” (Hagberg, supra, 32 Cal.4th at pp. 360-361.)
Noting that “the overwhelming majority of cases conclude that when a citizen contacts law enforcement personnel to report suspected criminal activity and to instigate law enforcement personnel to respond, the communication also enjoys an unqualified privilege under section 47(b)” (Hagberg, supra, 32 Cal.4th at p. 364), the court discussed Williams v. Taylor (1982) 129 Cal.App.3d 745 (Williams), which it described as “the leading case in this area” (Hagberg, at p. 364). “In that case, the Court of Appeal applied the absolute privilege of section 47(b) to statements made by an employer who contacted the police to report suspected theft on the part of an employee and to request that the police conduct an investigation. As a result of the police investigation, the employee was charged with various crimes. Most of the charges ultimately were dismissed, and the employee was acquitted of the remaining charge that went to trial. Thereafter, the employee sued the employer for slander, intentional and negligent infliction of emotional distress, and malicious prosecution.” (Hagberg, at p. 364.)
As noted at the outset, the record indicates Patras did not initiate contact with Detective Glennon or otherwise “instigate” the investigation, but simply responded to inquiries initiated by Glennon, rendering it more obvious to a reasonable attorney than would otherwise be the case that his statements are all within the ambit of the section 47(b) privilege.
The Supreme Court endorsed the Williams court’s explanation of its determination that the employee’s slander and emotional distress claims failed because the statements to the police were subject to the section 47(b) privilege: “ ‘In our view,’ the appellate court stated, ‘a communication concerning possible wrongdoing, made to an official governmental agency such as a local police department, and which communication is designed to prompt action by that entity, is as much a part of an “official proceeding” as a communication made after an official investigation has commenced. [Citation.] After all, “[t]he policy underlying the privilege is to assure utmost freedom of communication between citizens and public authorities whose responsibility it is to investigate and remedy wrongdoing.” [Citation.] In order for such investigation to be effective, “there must be an open channel of communication by which citizens can call . . . attention to suspected wrongdoing. That channel would quickly close if its use subjected the user to a risk of liability for libel. A qualified privilege is inadequate under the circumstances. . . . [¶] The importance of providing to citizens free and open access to governmental agencies for the reporting of suspected illegal activity outweighs the occasional harm that might befall a defamed individual. Thus the absolute privilege is essential.” [Citation.] And, since the privilege provided by section 47[(b)] is absolute, it cannot be defeated by a showing of malice.’ (Williams, supra, 129 Cal.App.3d at pp. 753-754.)” (Hagberg, supra, 32 Cal.4th at pp. 364-365.)
Williams was also cited with approval by the Supreme Court in Slaughter v. Friedman (1982) 32 Cal.3d 149, 156.
It is elemental that consideration is an essential element of a contract (Civ. Code, § 1550), so that the absence thereof is a defense to a suit on a promissory note. Because Patras’s statements to Detective Glennon are protected by the absolute privilege afforded under section 47(b), they cannot subject Patras to the risk of liability for defamation. Since Verma has no right to subject Patras to risk of that liability, his promise to forbear exercise of such a right is worthless, and Patras did not receive good consideration for his reciprocal obligation to pay Verma $35,000, which is therefore legally unenforceable.
Though it involved a different privilege, Doria v. International Union (1961) 196 Cal.App.2d 22, is illustrative. Doria, an official in an AFL-CIO union, became the focal point of an attack by AFL-CIO leaders concerned with corruption or unethical practices in his union. When he submitted his resignation, Doria told the president of his union he was doing so to be in a better position to sue the union for defamation for $1,000,000 based upon an article in the AFL-CIO “News Reporter.” After Doria’s resignation became effective, he and the union entered into a “Settlement Agreement and Release” providing for, among other things, two promissory notes of the union payable to Doria, one for $25,000 payable June 1, 1957, the other for $30,000 payable 60 days after February 1, 1958. Doria sued the union on the notes and the union’s answer included the defense that consideration was lacking. The Court of Appeal agreed with the union. Sustaining the trial court’s implied finding that the only consideration was the settlement of Doria’s threatened million-dollar damage action for defamation arising from the article in the union newspaper, the appellate court also agreed that the damages claim for defamation was “sham and frivolous,” because “[t]he article in the ‘News Reporter’ was a privileged publication relating to union policies and administration and falls within the recognized area of permissible fair comment without civil responsibility in damages.” (Id. at p. 38, citing, e.g., Emde v. San Joaquin County, Central Labor Council (1943) 23 Cal.2d 146; Krause v. Bertrand (1958) 159 Cal.App.2d 318; and Mott v. Amalgamated Meat Cutters (1958) 157 Cal.App.2d 13.)
Considering that Hagberg has been the keystone of Patras’s case from the beginning, appellants’ failure even to mention it (or any of the many other cases giving the same preclusive effect to the section 47(b) privilege) in their briefs is inexplicable. Appellants focus instead upon cases involving no privilege but explaining that in certain circumstances “forbearance to press a claim or a promise of such forbearance, may be a sufficient consideration even though the claim is wholly ill-founded” (Healy v. Brewster (1967) 251 Cal.App.2d 541, 551, italics added), and argue that application of that exception is warranted in the circumstances of this case. The cases appellants rely upon do not, however, support the application of such an exception in the circumstances of this case. Because none involve a tort claim based upon a statement protected by an absolute privilege, they do not show, as appellants claim, that “a reasonable attorney would have been justified bringing an action for breach of contract [against Patras]—notwithstanding the fact that [his] statements to the police were privileged.” Nor do they even establish, as appellants also claim, that “there was a colorable legal argument, and thus probable cause, that the [promissory note] was supported by legal consideration.”
Appellants do cite one such case, Chabak v. Monroy (2007) 154 Cal.App.4th 1502, but only insofar as it relates to the nature of the burden on a plaintiff to show a probability of prevailing on the merits when confronted with a motion to strike pursuant to the anti-SLAPP statute.
Appellants chiefly rely upon Fuller v. Towne (1920) 184 Cal. 89, which they think stands for the proposition that “settling doubtful or even invalid claims has value, and in the absence of bad-faith California courts should enforce contracts settling disputes,” even if they are otherwise unsupported by good consideration. Appellants badly misread the case, which is inapposite.
Fuller, the assignee of certain claims against one La Rue, brought the action against Towne upon his alleged promise to pay claims against La Rue arising from the latter’s contract with a school district to construct a schoolhouse. At the time of the contract La Rue induced a surety to execute bonds on his behalf, including one for payment of the cost of materials furnished for the building. The bonds were furnished by the surety in reliance upon a written contract with Towne, who agreed to indemnify the surety against any loss it might suffer on the bonds. Before completing construction of the building and paying for materials furnished for that purpose, La Rue disappeared. Induced by his contractual duty to indemnify, Towne completed construction of the building. However, after La Rue’s disappearance, Fuller’s assignors had placed stop notices on behalf of claims for the price of the materials furnished La Rue, which prevented the school district from paying Towne money due him for completing construction of the school. (See Civ. Code, § 3161.) In order to obtain this money, Towne orally promised Fuller’s assignors that if they would withdraw their stop notices, thereby enabling him to secure payment from the school district, he would use the money so obtained to pay their claims and, if it was insufficient, pay any deficiency out of his own pocket. The plaintiff’s assignors accepted Towne’s verbal promise and withdrew the stop notices; however, the amount Towne received from the school district was insufficient to entirely satisfy the claims. The complaint sought judgment against Towne for the deficiency. (Fuller v. Towne, supra, 184 Cal. at pp. 91-92.)
Among numerous other claims, Towne maintained that he “never received any consideration for executing the indemnity contract” and was therefore “under no obligation because of La Rue’s default.” (Fuller v. Towne, supra, 184 Cal. at p. 94) The Supreme Court’s answer to this claim was “that it is wholly immaterial whether [Towne] was so obligated or not. He is not being sued upon that obligation, but upon a wholly independent one which he later assumed voluntarily, in consideration of the plaintiff’s assignors releasing their stop notices. His motive for assuming this later obligation may have been his belief that he was responsible for La Rue’s bills, because of the indemnity contract, but his mistaken belief in this respect, if it was a mistake, does not entitle him now to deny or avoid the contractual arrangement which he made. Even if he could have avoided that arrangement in the first instance on the ground of mistake, which is very doubtful at best, he certainly cannot do so now, when it is wholly impossible to restore the creditors to the position they were in when by his promise he induced them to release their stop notices.” (Id. at pp. 94-95.)
According to appellants, the foregoing language means that Fuller’s assignors’ “forbearance from filing stop notices, preventing [Towne] from receiving payment for a construction project, would be legal consideration for a contract even if those stop notices were ‘legally ineffective’ since [the plaintiff’s assignors imposed] them ‘in good faith’ and [they] ‘had a right to insist upon them and were under no right to release them.’ [(Fuller v. Towne, supra, 184 Cal. at p. 96.)]” As appellants see it, “[s]uch a rule recognizes the reality that settling doubtful or even invalid claims has value, and in the absence of bad-faith California courts should enforce contracts settling disputes.” (Ibid.)
Appellants’ interpretation of Fuller v. Towne wholly distorts the opinion. The Supreme Court rejected the trial court finding that the creditors’ stop notices were ineffective as to Towne, stating that Towne “simply stepped into La Rue’s shoes, and consequently a stop notice was effective under the statute as to all money due or thereafter becoming due under the contract . . . .” (Id. at p. 95.) Neither Fuller v. Towne nor any other case appellants have brought to our attention provides any support for the novel theory that a settlement agreement entered into in good faith may be enforceable despite the absence of legal consideration. The Supreme Court dismissed Towne’s argument that he could not be held liable under the indemnity contract due to a failure of consideration. As indicated by the language of Fuller v. Towne we have quoted, the court found the existence or nonexistence of consideration for the indemnity agreement irrelevant because Towne was not being sued upon that obligation “but upon a wholly independent one which he later assumed voluntarily, in consideration of the plaintiff’s assignors releasing their stop notices.” (Id. at p. 94, italics added.) In other words, the oral contract that mattered was unquestionably supported by valid consideration.
So, too, do appellants distort the meaning of the other cases they rely upon. For example, throughout their briefs appellants repeatedly cite Goldstone-Tobias Agency, Inc. v. Barbroo Enterprises Productions, Inc. (1965) 237 Cal.App.2d 720, 722, for the proposition that, as stated in appellants’ opening brief, “[i]n the absence of bad-faith, the validity of the underlying claims is immaterial in determining whether forbearance from proceeding thereon is sufficient consideration.” This statement is presumably based upon the statement at page 722 of the opinion in Goldstone-Tobias that: “It is settled that unless a claim is advanced in bad faith, or is without foundation, the actual validity of the claim is immaterial in determining whether forbearance from proceeding thereon is sufficient consideration.” By conveniently omitting the words we have italicized, appellants misrepresent the statement in which they appear.
To be sure, there are circumstances in which forbearance from advancing an ill-founded claim may be a sufficient consideration (see, e.g., Healy v. Brewster, supra, 251 Cal.App.2d at p. 551, and cases there cited), but such circumstances are not presented in this case. Neither Fuller v. Towne nor any other case appellants rely upon or we know of allows a cause of action for breach of an agreement in which the consideration offered by the plaintiff for the promise upon which he or she sues is forbearance from seeking to impose liability for conduct protected by an absolute privilege. Stated differently, the fact that at the time he executed the promissory note Patras may have (in good faith) erroneously believed Verma could successfully sue him for defamation does not provide valid consideration for Patras’s promise to pay him $35,000 for forbearing to commence such a legally meritless suit. Accordingly, appellants’ reliance on A. J. Industries, Inc. v. Ver Halen (1977) 75 Cal.App.3d 751 is misplaced. The fact that the settlement agreement in that case was entered into in good faith had nothing to do with the judicial determination to uphold it. The gravamen of A.J. Industries was that the settling corporation intentionally relinquished a legally unquestionable right, which cannot be said of Verma in the present case.
Appellants alternatively endeavor to find probable cause to file the underlying breach of contract action in the fact that Verma’s second amended complaint alleged that Patras’s assertedly false and defamatory statements were made not only to Detective Glennon but also to unspecified “others” at unspecified times, and those communications are not protected by any privilege. Appellants also emphasize that “[t]here is no evidence . . . contrary” to this new allegation. This argument borders on the frivolous. Patras did not in the promissory note represent that he would not make false and defamatory statements to anybody; and if he had in the past made such statements to persons other than Glennon, Verma was not obliged by the promissory note to forbear from suing Patras for defamation. Under the note, Verma promised only to forbear suing Patras “for false and defamatory statements given to police detective Rich Glennon in April 2002 and May 2002.” (Italics added.) It is thus irrelevant whether the allegation that Patras made defamatory statements about Verma to others is uncontradicted by evidence; however, it is worth noting that Patras, who now describes the second amendment as “a sham complaint” calculated to “invent consideration,” was deprived of a full opportunity to provide such evidence by Verma’s voluntary dismissal of the complaint.
DISPOSITION
Appellants have not and cannot defeat the showing Patras has made of a probability he will prevail on his malicious prosecution claim. The ruling denying appellants’ special motion to strike the complaint is affirmed.
The judgment is affirmed. Patras shall be awarded his costs on appeal.
We concur: Haerle, J., Lambden, J.