Opinion
G044243 Super. Ct. No. 30-2010-00353229
09-20-2011
GEORGE SETO, Plaintiff and Appellant, v. GENE SHIODA, Defendant and Respondent.
Magarian Law, Mark D. Magarian, and Krista L. Dimercurio for Plaintiff and Appellant. Law Offices of Steven L. Sugars, Steven L. Sugars; Law Offices of Steven P. Chang, and Steven P. Chang for 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
OPINION
Appeal from a judgment of the Superior Court of Orange County, Sheila Fell, Judge. Affirmed.
Magarian Law, Mark D. Magarian, and Krista L. Dimercurio for Plaintiff and Appellant.
Law Offices of Steven L. Sugars, Steven L. Sugars; Law Offices of Steven P. Chang, and Steven P. Chang for Defendant and Respondent.
George Seto appeals from the court's order granting Attorney Gene Shioda's motion to strike Seto's complaint as a strategic lawsuit against public participation (SLAPP) under Code of Civil Procedure section 425.16 (also referred to herein as the anti-SLAPP statute). Seto challenges the court's order only as to his complaint's malicious prosecution cause of action. We conclude Seto failed to make a prima facie case of malice against Shioda and therefore the court correctly found Seto had not met his burden of showing a probability of prevailing on his malicious prosecution claim.
All statutory references are to the Code of Civil Procedure unless otherwise stated. An order granting an anti-SLAPP motion to strike is appealable. (§ 425.16, subd. (i).)
At a later hearing on Osako's separate anti-SLAPP motion, Seto's counsel stated he would dismiss the defamation claim against her. His sole remaining cause of action was for malicious prosecution, and is the only cause of action argued in this appeal.
FACTS
The Allegations Made in Seto's Operative Complaint
Seto's first amended complaint for defamation and malicious prosecution against Gene Shioda and Etsuko Osako (Shioda's client in the prior lawsuit) alleged the following: Around 1978, Seto opened a Japanese restaurant. Seto's corporation, Matsutow Corporation (Matsutow), owned the restaurant. Around the late 1990's or early 2000's, Seto hired Osako to work at the restaurant. Around April 2005, Seto sold the restaurant to Yamachan Corporation (Yamachan) and Yuji Yamazaki. Two years later, Osako voluntarily stopped working there.
One year later, Osako, represented by Shioda, filed a complaint against Yamachan and Yamazaki for age discrimination, constructive wrongful termination, harassment/hostile work environment, failing to provide her with overtime pay or meal and rest breaks, and other causes of action. Four months later, Yamachan and Yamazaki settled with Osako and agreed to pay her $16,000 in return for her dismissing her action against them.
The following month, Osako substituted in Seto and Matsutow as Doe defendants in the action. In all other respects, Osako's complaint remained unchanged.
Seto and Matsutow answered with general denials. Their attorney, Mark Magarian, sent a letter to Osako's counsel, Shioda, alleging Osako's action against Seto and Matsutow violated section 128.7 and "strongly suggesting that Osako dismiss the entire action against Seto and Matsutow with prejudice." Magarian contended Shioda had violated section 128.7 by, inter alia, improperly amending Osako's complaint to substitute Seto and Matsutow for Doe defendants. Magarian noted Osako's settlement agreement with Yamachan and Yamazaki specified that: (1) the settlement would not benefit any predecessor of Yamachan for any claims Osako might have arising from her employment with the predecessor, and (2) Seto and Matsutow were predecessors of Yamachan. Magarian argued: "The foregoing (as well as simple logic) makes it clear that your client was fully aware my clients employed her before April 2005. Yet, she did not include them as named defendants in the Complaint at the time it was filed on April 15, 2008. Being that neither you nor your client were 'genuinely ignorant' of my clients['] identity when the Complaint was filed, the DOE Amendment you filed on September 15, 2008 is a farce. In addition, it was filed without leave of court; a requirement in this instance." Magarian further argued "that the applicable statutes of limitation had already run on virtually each cause of action in the Complaint at the time it was filed on April 15, 2008" and that Osako had failed to exhaust her administrative remedies as to her discrimination claim.
Subdivision (b) of section 128.7 provides: "By presenting to the court, whether by signing, filing, submitting, or later advocating, a pleading, petition, written notice of motion, or other similar paper, an attorney . . . is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, all of the following conditions are met: (1) It is not being presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. (2) The claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law. (3) The allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery. (4) The denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief."
Shioda denied any violation of section 128.7 and refused to dismiss the action.
Seto and Matsutow initiated discovery, including requests for admission, "customized to[,] inter alia[,] elicit admissions with respect to the contentions raised by" Magarian in his letter. At Shioda's request, Magarian extended the deadline for Osako to respond to Seto's and Matsutow's discovery requests. On the new deadline for Osako's discovery responses, she dismissed without prejudice four of her causes of action (including the age discrimination, constructive wrongful termination, harassment/hostile work environment, and employment records claims) and transferred the case to limited jurisdiction. She also served her discovery responses, but they were unresponsive.
The following month, Shioda told Magarian that Osako wished to dismiss the entire action in return for a waiver of costs. Seto rejected the offer and counter-offered that Osako dismiss the action and pay Seto's attorney fees and costs.
Over three months after receipt of Osako's discovery responses (after § 2033.290's 45-day deadline for a motion to compel further responses), Seto demanded that she supplement those responses. As to Seto's counter-offer, Shioda replied that Osako would only dismiss the case in exchange for Seto's waiver of costs; Shioda did not include any supplemental discovery responses with that correspondence. Seto again rejected the waiver of costs and demanded discovery responses "lest he be forced to file a motion to compel and seek appropriate monetary sanctions." Shioda replied, "There is no need . . . to file any motions in this case — as my client may consider dismissing the entire action." Osako then filed a request for dismissal of the entire case without prejudice.
The malicious prosecution cause of action in Seto's complaint contained the following additional allegations: Osako's lawsuit ended in Seto's favor when it was dismissed; no reasonable person in Osako's and Shioda's circumstances would have believed there were reasonable grounds to bring the lawsuit against Seto; Osako and Shioda acted primarily for a purpose other than succeeding on the merits of the claim; Seto had been damaged as a result; and Osako's and Shioda's acts were willful and constituted fraudulent, oppressive, and malicious conduct.
Shioda's Anti-SLAPP Motion
Shioda moved to strike Seto's complaint under the anti-SLAPP statute. Shioda argued, inter alia, that Seto could not establish a probability of success on his malicious prosecution claim because he failed to allege facts sufficient to show malice and lack of probable cause, both of which are elements of a malicious prosecution cause of action. Shioda's motion was supported only by his attorney's declaration concerning his requested attorney fees and sanctions.
In Seto's opposition to Shioda's motion, he argued, inter alia, his malicious prosecution claim was supported by sufficient evidence. As to Shioda's lack of probable cause to bring and maintain Osako's action against him, he argued: "[Shioda] has provided no evidence (either by way of declarations or otherwise) to support his argument that he had lack [sic] probable cause to prosecute the action. On the other hand, both the allegations in the Complaint, as well as the evidence submitted by [Seto] in support of this opposition, reveal that [Seto] can satisfy this element of his malicious prosecution claim. Indeed, the actions taken by [Shioda] in the underlying lawsuit reveal his opinion that the action lacked merit or if pursued would result in a decision in favor of [Seto]. For example, [Shioda] refused to respond to tailored requests for admissions that would have revealed, under oath, the lack of merit associated with OSAKO's lawsuit. In addition, when the time came to reveal the lack of merit, he dismissed the lawsuit. At a minimum, [Seto] has presented (both by way of his Complaint and the evidence submitted herewith) a triable issue as to whether SHIODA lacked probable cause."
As to Shioda's malice, Seto argued: Seto "has alleged both subjective and objective malice. Indeed, he has alleged that no 'reasonable person in defendants' circumstances would have believed that there were reasonable grounds to bring the lawsuit against SETO.' [Citations.] He has further alleged that SHIODA subjectively knew he was bringing an unmeritorious case against [Seto], yet they proceeded anyway." Seto's opposition was supported by Magarian's declaration and attached exhibits including: (1) documentation purporting to show that Seto opened the restaurant (owned by his corporation, Matsutow) in 1978; (2) documentation purporting to show that Yamachan bought the restaurant in late 2004 or early 2005; (3) the April 15, 2008 complaint of Osako (represented by Shioda) against Yamachan and Yamazaki; (4) the August 25, 2008 settlement agreement between Osako, on the one hand, and Yamachan and Yamazaki, on the other; (5) the September 15, 2008 Doe amendment by which Osako, represented by Shioda, amended the complaint to substitute Seto and Matsutow for Doe defendants and stating that plaintiff, upon initially filing the complaint, was "ignorant of the true name" of a defendant; (6) Magarian's November 2008 letter to Shioda stating the Doe amendment was a "farce"; (7) Shioda's letter reply, which stated, as to the Doe amendment, that Yamazaki informed Shioda he bought the business from Seto and that, prior to Yamazaki's representation, Shioda had no knowledge Seto was the prior owner; (8) Magarian's requests for admission asking Osako to admit or deny, inter alia, that she learned in 2005 that Seto sold the restaurant to Yamazaki and understood after that date that Yamazaki (not Seto) was then her boss and that Yamazaki (not Seto) terminated her employment at the restaurant; (9) Osako's responses to Seto's requests for admission, which stated (as to the foregoing requests) that Osako would not provide a response at that time but would supplement her responses; and (10) Seto's first amended complaint against Osako and Shioda.
Documentation not authenticated by a competent witness.
Documentation not authenticated by a competent witness.
Document not authenticated by a competent witness.
The Court's Ruling
The court granted Shioda's anti-SLAPP motion based on the litigation privilege (Civ. Code, § 47, subd. (b)), because the "only evidence presented by Plaintiff was the underlying file, and because the "prior case was resolved by settlement/dismissal, not by a judgment" in Seto's favor.
DISCUSSION
Seto Failed to Establish a Prima Facie Showing that Shioda Acted with Malice
Seto contends the court erred by granting Shioda's special motion to strike his complaint under section 425.16. He argues he alleged facts sufficient to show malice and lack of probable cause (the elements of malicious prosecution on which Shioda based his contention in his anti-SLAPP motion that Seto could not establish a probability of success on the merits).
The purpose of the anti-SLAPP statute is to "screen[] out meritless claims" (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 737) "at an early stage of the litigation" (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192). "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." (Navellier v. Sletten (2002) 29 Cal.4th 82, 89.) The defendant in the underlying lawsuit bears the initial burden of "showing that the challenged cause of action is one arising from protected activity." (Id. at p. 88.)
"If the defendant meets this initial burden, the burden then shifts and the plaintiff must show a probability of prevailing on the claim." (Contemporary Services Corp. v. Staff Pro Inc. (2007) 152 Cal.App.4th 1043, 1052.) This does not mean a plaintiff must "'prove the specified claim to the trial court'"; otherwise section 425.16 might result in the "'deprivation of jury trial.'" (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1123.) Instead, the "plaintiff need only have '"stated and substantiated a legally sufficient claim."'" (Navellier v. Sletten, supra, Cal.4th at pp. 88-89.) Put another way, the plaintiff "is required to make a prima facie showing of facts which would, if proven at trial, support a judgment in plaintiff's favor." (Marijanovic v. Gray, York & Duffy (2006) 137 Cal.App.4th 1262, 1270 (Marijanovic).) Stated yet a third way, "the plaintiff need only demonstrate the cause of action has some merit." (A.F. Brown Electrical Contractor, Inc. v. Rhino Electric Supply, Inc. (2006) 137 Cal.App.4th 1118, 1125 (Brown). If a plaintiff fails to make this demonstration, "the cause of action must be stricken." (Id. at p. 1124.)
Here, Shioda met his burden of showing that his client's lawsuit against Seto was petitioning activity protected under the anti-SLAPP statute. (§ 425.16, subd. (e)(1); Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 735 ["By definition, a malicious prosecution suit alleges that the defendant committed a tort by filing a lawsuit"].) Thus, the parties agree that the sole issue before us relates to the second step of the anti-SLAPP inquiry: Did Seto establish a probability of success as to the malice and lack of probable cause elements of his malicious prosecution claim?
"Malicious prosecution consists of the initiation and maintenance of legal proceedings against another with malice and without probable cause." (5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 469, p. 696.) The malicious prosecution "plaintiff must plead and prove that the prior proceeding, commenced by or at the direction of the malicious prosecution defendant, was: (1) pursued to a legal termination favorable to the plaintiff; (2) brought without probable cause; and (3) initiated with malice." (Villa v. Cole (1992) 4 Cal.App.4th 1327, 1335.)
In assessing whether Seto established a probability of prevailing on his malicious prosecution claim, we consider "the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based." (§ 425.16, subd. (b)(2).) Seto may not simply rely on his pleadings, "but must adduce competent, admissible evidence." (Roberts v. Los Angeles County Bar Assn. (2003) 105 Cal.App.4th 604, 614.) We "accept[] all admissible evidence [from plaintiff] as true and indulg[e] in every reasonable inference to be drawn from that evidence." (Nagel v. Twin Laboratories, Inc. (2003) 109 Cal.App.4th 39, 52.) We do not weigh credibility or compare the weight of the evidence. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3.) "We review a trial court's ruling on a motion to strike under section 425.16 de novo, 'conducting an independent review of the entire record.'" (Brown, supra, 137 Cal.App.4th at p. 1124.)
Our independent review reveals Seto failed to present admissible evidence supporting a prima facie showing that Shioda prosecuted the action against him with malice. Therefore, we need not address the issue of lack of probable cause.
Subject to certain exceptions inapplicable here, a trial court's ruling may be affirmed on grounds other than those on which the trial court relied. (9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, §§ 346, 349, pp. 397, 401-402.)
"The 'malice' element of the malicious prosecution tort relates to the subjective intent or purpose with which the defendant acted in initiating the prior action." (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 874 (Sheldon Appel).) "[T]he defendant's motivation is a question of fact to be determined by the jury." (Ibid.) "If the trial court concludes that the prior action was not objectively tenable, evidence that the defendant attorney did not subjectively believe that the action was tenable would clearly be relevant to the question of malice." (Id. at p. 881.) In this respect, "the extent of a defendant attorney's investigation and research may be relevant to the further question of whether or not the attorney acted with malice." (Id. at p. 883.) To support a finding of malice, the defendant's motive "'must have been something other than that of . . . the satisfaction in a civil action of some personal or financial purpose. [Citation.] The plaintiff must plead and prove actual ill will or some improper ulterior motive.' Improper purposes can be established in cases in which, for instance: (1) the person bringing the suit does not believe that the claim may be held valid; (2) the proceeding is initiated primarily because of hostility or ill will; (3) the proceeding is initiated solely for the purpose of depriving the opponent of a beneficial use of property; or (4) the proceeding is initiated for the purpose of forcing a settlement bearing no relation to the merits of the claim." (Daniels v. Robbins (2010) 182 Cal.App.4th 204, 224 (Daniels).) "'Since parties rarely admit an improper motive, malice is usually proven by circumstantial evidence and inferences drawn from the evidence.'" (Id. at p. 225.) Additionally, "malice can be inferred when a party continues to prosecute an action after becoming aware that the action lacks probable cause." (Id. at p. 226.)
Seto's only proffered evidence in opposition to the anti-SLAPP motion was his lawyer's declaration and the attached exhibits. Seto's attorney's declaration and exhibits (if admissible) showed, inter alia: Seto opened the restaurant in 1978; Yamachan bought it in 2005; Osako worked for Seto or Matsutow before working for Yamazaki; Osako in her discovery responses refused to admit or deny her knowledge of these facts; Osako substituted Seto for a Doe defendant in her complaint on the basis she had been ignorant of his true name; Seto's attorney advised Osako's counsel of asserted deficiencies in Osako's case relating to the Doe substitution, the statute of limitations, and the requirement for exhaustion of administrative remedies; and Shioda replied that he (the attorney) had been ignorant of Seto's true name.
On appeal, Seto argues Osako's September 15, 2008 substitution of him for a Doe defendant was invalid under section 474, because Osako could not have been genuinely ignorant of his name (or of the facts underlying her causes of action against him) on April 15, 2008, the day she filed her complaint against Yamachan and Yamazuki. But this is a conclusion. Seto offered no admissible evidence in support of his argument. Seto's complaint alleges that Matsutow was the owner of the restaurant, and no evidence was submitted showing that Seto and Osako had even met each other. Even if we assumed that Seto's profferred evidence raised a factual question for the jury on this issue (which we do not), any infirmity of the Doe substitution would not have invalidated Osako's entire case. This is because, as of the date of the Doe substitution, the statute of limitations had not run on Osako's seventh cause of action (which alleged Seto engaged in an unlawful and fraudulent business practice under Bus. & Prof. Code, § 17200 by failing to pay overtime compensation to Osako). (Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 167, 178-179 [four-year statute of limitations applies to wage claim as an unfair competition claim].) Thus, even if Osako had simply amended her complaint to add Seto as a defendant (so that the statute of limitations applied to the filing date of the amended complaint (Woo v. Superior Court (1999) 75 Cal.App.4th 169, 176)), her unfair competition claim would not have been time barred.
Thus, as may be relevant to malice, there is no evidence based on the Doe amendment or the statute of limitations that Shioda initiated Osako's suit believing the claim to be invalid or for the purpose of forcing an unwarranted settlement. Nor did Seto submit his own declaration or any other evidence that Osako's unfair business practice claim lacked merit. In sum, nothing in the record fairly suggests that Shioda acted out of "'actual ill will or some improper ulterior motive,'" as opposed to simply bringing a civil action to satisfy a financial purpose. (Daniels, supra, 182 Cal.App.4th at p. 224.)
Seto has failed to establish a probability of prevailing on his malicious prosecution claim.
Malicious prosecution has long been a disfavored cause of action. (Sheldon Appel, supra, 47 Cal.3d at p. 872.) The anti-SLAPP statute makes it more so. The statute essentially requires parties to have admissible evidence supporting their claim before they file the complaint, because they may need to present the evidence in opposition to an anti-SLAPP motion before they conduct discovery. And because lack of probable cause is an element of malicious prosecution, parties need to have admissible evidence, without the benefit of discovery, showing the other side actually knew the underlying action was legally untenable. We wonder how often this kind of evidence is readily available. Thus, parties must weigh carefully the availability of this kind of evidence against the amount of damages incurred in defending the underlying action. Sometimes, this calculation will weigh in favor of asserting a malicious prosecution claim. In other cases — many other cases, we imagine — it will not. When the underlying action has been defeated quickly and relatively inexpensively, one wonders if a malicious prosecution action is worth the risk of losing to an anti-SLAPP motion and paying attorney fees and costs to the moving party. (§ 425.16, subd. (c).)
--------
DISPOSITION
The judgment is affirmed. Shioda shall recover his costs on appeal.
IKOLA, J.
WE CONCUR:
RYLAARSDAM, ACTING P. J.
ARONSON, J.