Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
Marin County Super. Ct. No. CV074281.
Sepulveda, J.
The trial court struck a malicious prosecution cause of action upon concluding that the action arose from defendants’ exercise of their right of petition, and plaintiffs failed to establish a probability of prevailing on the claim. (Code Civ. Proc., § 425.16.) On appeal, it is undisputed that the cause of action arises from protected activity, but plaintiffs contend that they showed a probability of prevailing. We reject the contention. A malicious prosecution action requires proof that it was prosecuted without probable cause. Defendants’ good faith reliance on the advice of counsel in prosecuting the underlying action establishes probable cause. We affirm the order striking the complaint.
facts
Defendants Kathleen Mahoney Jablonski and Patricia Mahoney Santa Cruz (Mahoney sisters) are the beneficiaries of a trust established by their parents, Edward and Ethel Mahoney. Plaintiffs served the trust in several capacities. Plaintiff M. Gregory Smith was the trustee. Smith also served as an accountant to the trust, working as an employee of plaintiff Chiao Smith & Associates Accountancy Corporation (CSA), a company he owns with his wife, plaintiff Judy Chiao Smith. Plaintiff Victor Obninsky was an attorney for the trustee.
In November 2005, after their parents’ deaths, the Mahoney sisters filed petitions in the probate court against Trustee Smith and his wife, CSA, and Attorney Obninsky (collectively, the Trustee) alleging breach of fiduciary duty and related claims. The Mahoney sisters, represented by Attorney Michael Freedman, sought restitution to the trust for allegedly improper charges for accounting and legal services. The petitions were denied following an April 2006 bench trial in which the court found the accounting and legal fees to be reasonable.
In September 2007, the Trustee brought this malicious prosecution action against the Mahoney sisters and Attorney Freedman and the Freedman Law Firm (collectively, Freedman). The Trustee alleged that the petitions were “frivolous,” brought without probable cause for believing that the Trustee had abused his position, and prosecuted with malice. The Mahoney sisters and Freedman filed separate motions to strike the Trustee’s action, which the trial court granted. (Code Civ. Proc., § 425.16.)
The court found that the malicious prosecution action arose from the protected activity of petitioning the probate court for redress. The court further found that the Trustee failed to make a prima facie showing of a probability of prevailing on the claim. The court concluded that probable cause supported the underlying petitions, and that the Mahoney sisters reasonably relied upon the advice of counsel in bringing the petitions. The Trustee appealed the order striking his complaint. The Trustee represents that he has settled with Freedman and, upon his request, we have dismissed the appeal as to Freedman. This appeal concerns the Mahoney sisters alone.
Discussion
A. Anti-SLAPP statute
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 or California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” (Code Civ. Proc., § 425.16, subd. (b)(1).) The anti-SLAPP statute was enacted to prevent and to deter lawsuits that chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances, and provides “an efficient procedural mechanism to obtain an early and inexpensive dismissal of nonmeritorious claims” arising from the exercise of those constitutional rights. (Code Civ. Proc., § 425.16, subd. (a); Flatley v. Mauro (2006) 39 Cal.4th 299, 312; Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 186.)
An anti-SLAPP motion requires the trial court to engage 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.” (Equilon Enterprises, LLC v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) Second, “[i]f the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim.” (Ibid.) “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, italics in original.) “The trial court’s determination of each step [of the process] is subject to de novo review on appeal.” (Martinez v. Metabolife Internat., Inc., supra, 113 Cal.App.4th at p. 186.)
It is undisputed that the malicious prosecution action here arises from protected petitioning of the probate court. The only question is whether the Trustee demonstrated a probability of prevailing on the claim.
B. Malicious prosecution
“To establish a cause of action for malicious prosecution, a plaintiff must demonstrate that the prior action (1) was initiated by or at the direction of the defendant and legally terminated in the plaintiff’s favor, (2) was brought [or maintained] without probable cause, and (3) was initiated with malice.” (Siebel v. Mittlesteadt (2007) 41 Cal.4th 735, 740; see Zamos v. Stroud (2004) 32 Cal.4th 958, 966 [tort includes “continuing to prosecute a lawsuit discovered to lack probable cause,” italics omitted].) “[C]ourts have long recognized that the tort has the potential to impose an undue ‘chilling effect’ on the ordinary citizen’s willingness to report criminal conduct or to bring a civil dispute to court and, as a consequence, the tort has traditionally been regarded as a disfavored cause of action.” (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 872 .) “[T]he elements of the tort have historically been carefully circumscribed so that litigants with potentially valid claims will not be deterred from bringing their claims to court by the prospect of a subsequent malicious prosecution claim.” (Ibid.)
No one disputes that the Trustee received a favorable termination of the Mahoney sisters’ probate proceedings against him. The key issue is whether the proceedings were prosecuted without probable cause. The existence or absence of probable cause to bring the challenged claim presents a question of law: “the probable cause element calls on the trial court to make an objective determination of the ‘reasonableness’ of the defendant’s conduct, i.e., to determine whether, on the basis of the facts known to the defendant, the institution of the prior action was legally tenable.” (Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3d at pp. 875, 878.)
Probable cause to initiate or to prosecute a lawsuit is viewed leniently by the courts. The lawsuit need only be “legally tenable.” (Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3dat pp. 878.) “Only those actions that any reasonable attorney would agree are totally and completely without merit may form the basis for a malicious prosecution suit.” (Zamos v. Stroud, supra, 32 Cal.4th at p. 970.) It is not enough that the action proves meritless or that at the time of its initiation some, or even most, attorneys would have thought the action meritless. “ ‘Probable cause may be present even where a suit lacks merit. Favorable termination of the suit often establishes lack of merit, yet the plaintiff in a malicious prosecution action must separately show lack of probable cause. Reasonable lawyers can differ, some seeing as meritless suits which others believe have merit, and some seeing as totally and completely without merit suits which others see as only marginally meritless. Suits which all reasonable lawyers agree totally lack merit—that is, those which lack probable cause—are the least meritorious of all meritless suits. Only this subgroup of meritless suits present[s] no probable cause.’ ” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 743, fn. 13, italics in original.)
C. Defendants’ good faith reliance on advice of counsel establishes probable cause
“Reliance upon the advice of counsel, in good faith and after full disclosure of the facts, customarily establishes probable cause” for lay people sued for malicious prosecution. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1556.) “ ‘Probable cause may be established by the defendants in a malicious institution proceeding when they prove that they have in good faith consulted a lawyer, have stated all the facts to him, have been advised by the lawyer that they have a good cause of action and have honestly acted upon the advice of the lawyer.’ ” (Ibid.)
The Mahoney sisters submitted declarations on the motion to strike averring their good faith and full disclosure. One sister is a retired school teacher; the other is a retired high school guidance counselor. Neither has any legal education or training. The Mahoney sisters declared that they retained Attorney Freedman as “an expert in the field of trusts and estates litigation” and “fully disclosed everything” they knew about their parents’ finances and interactions with the Trustee. They “had no preconceived plan” when they consulted Attorney Freedman, nor did they “suggest the idea of filing petitions against any of the plaintiffs who are now suing” them. Attorney Freedman recommended filing the probate petitions, and the Mahoney sisters followed his advice. The Mahoney sisters averred that they “acted in good faith,” without malice, and were motivated “by [their] concern for [their] family’s financial situation.”
Attorney Freedman also submitted a declaration on the motion to strike. He averred that he has practiced law for more than 22 years and specializes in trusts and estates. Attorney Freedman declared that the Mahoney sisters consulted him about concerns with their family’s finances and informed him about their family history, their parents’ finances, and the activities of the Trustee. Attorney Freedman stated: “I believe that [they] related to me all the relevant facts and circumstances concerning their parents, [the Trustee], and the Mahoney trust. . . . In my judgment, and based on what I learned during the course of discovery and trial of the underlying litigation, I believe [the Mahoney sisters] told me everything they knew” about the Trustee. Attorney Freedman also stated: “I firmly believe that in all their dealings with me, [the Mahoney sisters] acted in the utmost good faith. Based on the facts that were presented at trial, as well as all else that I learned in the underlying case, I believe they told me everything about which they were aware that might be relevant, or which might lead to relevant information. They withheld no relevant or potentially relevant information from me. In my judgment, they bore no malice toward any of the plaintiffs in this action . . . .”
The Trustee presents no evidence to refute these declarations of good faith, and instead simply argues that the Mahoney sisters could not have reasonably believed they had a case against the Trustee for misconduct when the judge, in the underlying lawsuit, found no wrongdoing. This argument would equate every losing prosecution with malicious prosecution. That is not the law. “ ‘Probable cause may be present even where a suit lacks merit. Favorable termination of the suit often establishes lack of merit, yet the plaintiff in a malicious prosecution action must separately show lack of probable cause.’ ” (Jarrow Formulas, Inc. v. LaMarche, supra, 31 Cal.4th at p. 743, fn. 13, italics in original.) Lawyers may reasonably differ when evaluating the merits of a case. (Ibid.) Lay persons are even more apt to differ when evaluating the merits of a case. The fact that a court ultimately finds a plaintiff’s case to lack merit does not prove that the plaintiff acted without good faith in bringing the case.
Nor do we accept the Trustee’s argument that the Mahoney sisters lacked good faith because they delegated investigation of certain facts to their attorney, rather than investigating all facts themselves. A plaintiff has never been required personally to “ ‘institute an investigation’ ” of the perceived wrongdoing nor “required to exhaust all sources of information bearing upon the facts which have come to his [or her] knowledge.” (Johnson v. Southern Pacific Co. (1910) 157 Cal. 333, 338.) This is not a case, like the one relied upon by the Trustee, where plaintiffs withheld material facts and “unleashed” their attorney on “a hunting expedition” to manufacture a basis for suit. (Bertero v. National General Corp. (1974) 13 Cal.3d 43, 55.) The evidence here established that the Mahoney sisters disclosed everything they knew about the matter to Attorney Freedman, and simply relied upon him to use his expertise to gather additional facts.
Finally, we reach plaintiff Judy Chiao Smith’s argument that she played a minor role in the affairs of the Mahoney trust, and thus has a stronger case for malicious prosecution than do the other plaintiffs. Ms. Smith maintains that she was simply a shareholder with her husband, Trustee Smith, in the company that provided accounting services to the trust, and thus should never have been sued in the underlying litigation because shareholders generally are not liable for the debts of a corporation. But Ms. Smith was not sued as a shareholder. She was sued under a theory of “aiding and abetting” Trustee Smith to commit breach of trust. More importantly, it was Attorney Freedman, not the Mahoney sisters, who decided to include Ms. Smith in the underlying litigation. Attorney Freedman declared, on the motion to dismiss, that he (not the Mahoney sisters) was responsible for all “litigation strategies,” including the identification of causes of action and parties. There is no evidence that the Mahoney sisters lacked good faith in relying upon their attorney’s advice that they had a viable cause of action against Ms. Smith.
Disposition
The order is affirmed. Respondents shall recover their costs and attorney fees incurred on appeal, upon timely application in the trial court. (Code Civ. Proc., § 425.16, subd. (c); Cal Rules of Court, rule 8.278.)
We concur: Reardon, Acting P.J., Rivera, J.