Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from an order of the Superior Court for the County, Los Angeles County Super. Ct. No. SC 087842, John L. Segal, Judge.
Law Offices of Robert S. Scuderi and Robert S. Scuderi for Plaintiff and Appellant.
Attilio M. Regolo, Jr. in pro. per., for Defendant and Respondent.
E. Clint Allen, in pro. per., for Defendant and Respondent.
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
SUMMARY
The trial court granted a special motion to strike the complaint in a malicious prosecution action because the plaintiff had not shown that the underlying lawsuit lacked probable cause. The trial court erred. A person who sues on allegations he knows are false lacks probable cause for that suit. In this case, the plaintiff presented evidence that the factual allegations underpinning the defendant’s lawsuit were false. This evidence, if believed by the trier of fact, constituted a prima facie showing of no probable cause. Accordingly, the plaintiff’s malicious prosecution complaint appeared to have merit, and the trial court should have denied the defendant’s special motion to strike it.
FACTUAL AND PROCEDURAL BACKGROUND
James Stiebinger sued E. Clint Allen and Attilio M. Regolo, Jr., for malicious prosecution. The complaint alleged that Allen and Regolo (Allen’s attorney at the time) acted without probable cause in suing Stiebinger for breach of express and implied contract. Allen filed a special motion to strike the complaint under the anti-SLAPP (strategic lawsuit against public participation) statute, Code of Civil Procedure section 425.16.
We first describe the underlying action on which Stiebinger’s malicious prosecution claim is based. We then turn to the malicious prosecution claim and the evidence presented on Allen’s anti-SLAPP motion.
1. The underlying action.
Allen’s lawsuit sought damages from Stiebinger for breach of express contract and breach of implied contract. Allen alleged that he moved into Stiebinger’s property on Beverly Glen in Los Angeles in 1998 and that, when he did so, he and Stiebinger entered into an oral agreement. The alleged agreement consisted of mutual promises, including:
· Allen would act as caretaker of the property; · After Allen became a general contractor, he would use his skills to make substantial improvements to the property; Stiebinger would compensate Allen for that work; and · Stiebinger would reimburse Allen for the improvements if he ever sold the property.
Allen also alleged that, at the commencement of and throughout the parties’ relationship, Stiebinger told Allen they were “partners in their mutual endeavors” and Allen would be “given an interest” in the property if it were sold.
Allen’s complaint also alleged breach of an implied-in-fact contract. Allen alleged Stiebinger repudiated the agreement in September 2004, when he told Allen he was selling the property and Allen would have no share in the proceeds or reimbursement for improvements. Damages were “believed to be in excess of $500,000.00.”
Stiebinger served special interrogatories, asking Allen for the factual basis for the complaint’s allegations and for information about previous lawsuits Allen had filed making similar claims against previous landlords. Allen served no answers, and Stiebinger moved to compel responses. A week later, Regolo wrote Stiebinger’s counsel that he had “prevailed upon” Allen to dismiss the action with prejudice if Stiebinger agreed to waive costs and to withdraw his threat of a malicious prosecution claim. Regolo asked counsel to convey the offer to Stiebinger.
Stiebinger apparently declined that offer. At a hearing on August 3, 2005, the court granted the motion to compel answers to the interrogatories. Regolo told the court that Allen had instructed him to file a dismissal of the case. No reason for the dismissal was stated at the hearing, and a dismissal without prejudice was entered on August 8, 2005.
2. The malicious prosecution action and Allen’s special motion to strike the complaint.
Stiebinger sued Allen and attorney Regolo for malicious prosecution, alleging they “did not honestly and reasonably believe that there were grounds for the complaint and they knew of no facts to support any cause of action against” Stiebinger. Regolo answered the complaint, but Allen filed a special motion to strike the complaint under Code of Civil Procedure section 425.16. Allen submitted his declaration in support of the motion. It stated that:
· The action he filed against Stiebinger was based on a real estate dispute. “At the time my lawsuit was filed, and at the present time, I believe that I had a justifiable legal position in connection with my claim against Mr. Stiebinger. In part, my belief concerning the propriety of my claim is based upon the fact that I related to my attorney of record in that action [Regolo] . . ., completely and fairly all of the facts that form the basis of the underlying action. I was advised that the proposed action . . . was tenable and had merit.”
· Allen had no malicious intent -- then or now -- and he dismissed the action without prejudice only because he could not afford to pursue it. Stiebinger had moved to Hawaii, and the cost of deposing Stiebinger there together with other mounting costs “were prohibitive for me at the time.”
Allen submitted no other evidence with his special motion to strike. He merely argued that malicious prosecution actions are subject to the anti-SLAPP statute, and that Stiebinger therefore had to establish a probability of prevailing on the merits of his claim.
After Allen filed his special motion to strike, Regolo filed a “notice of joinder” in Allen’s motion. In support, Regolo filed a declaration stating that:
· He believed Allen “had a justified legal position in connection with his legal claims against Mr. Stiebinger and that his proposed action had legal merit,” and the action was not filed for an improper purpose or with malicious intent on his (Regolo’s) part.
· Stiebinger moved to Hawaii after Regolo noticed his deposition. Allen expressed concern about the costs of discovery and asked Regolo to dismiss the case without prejudice; the action was dismissed “for this reason and this reason alone . . . .”
Stiebinger’s opposition to Allen’s special motion to strike the complaint included his own declaration and three others. He requested judicial notice of the records in the underlying lawsuit, and of complaints in two other lawsuits Allen had filed against his previous landlords in 1997 and 1998 after his lease of their property was terminated. Allen’s complaints against his previous landlords alleged, among other things, that Allen was entitled to reimbursement for labor and materials he had provided to repair and renovate the property. Stiebinger’s opposition also showed the following:
· Stiebinger met Allen in the early 1990s when they were neighbors. When Allen’s landlord died, Allen told Stiebinger that he (Allen) had sued, alleging he had not been paid for work he had done on the premises. Stiebinger rented one of his properties to Allen in March 1998. Knowing of Allen’s propensity to sue, Stiebinger had Allen sign an addendum to the lease, dated March 31, 1998. The addendum stated, among other things:
-- “If [Allen] decides to do any work on the premises, it will be with the written consent of the owner, James Stiebinger, and at Clint Allen’s direct cost with no reimbursement from James Stiebinger.”
-- “There is no promise to extend the lease time. There is no promise to sell the residence. There are no outside agreements and all agreements will be in writing.”
· Before he filed the underlying lawsuit, Regolo sent Stiebinger “a copy of the lawsuit [to be] filed against you by Clint Allen.” Regolo advised Stiebinger that Allen had authorized him to settle all claims for $150,000, and that Allen’s offer would remain open for seven days.
· The complaint enclosed with Regolo’s letter was different from the complaint Regolo filed and served several weeks later. It alleged causes of action for breach of express and implied contract, as did the filed complaint. But it also included allegations that Stiebinger “began romantically pursuing [Allen]” in 1998 and that Allen moved into Stiebinger’s property on Beverly Glen “wherein the parties became constant companions.” Allen alleged Stiebinger asked Allen to be his “constant companion, confidante and act as a helpmate and caretaker of [Stiebinger’s] N. Beverly Glen real property, as well as his partner and that [Allen] support [Stiebinger] emotionally in both his personal and professional life.” This version of the complaint also alleged Stiebinger promised “he would always provide financial support and a place to live to [Allen] and that [Allen] would be financially compensated for any improvements that [Allen] made to [Stiebinger’s] property” if Stiebinger ever sold it.
· Stiebinger retained counsel, who wrote to Regolo on October 11, 2004, advising him the lawsuit was meritless and an “obvious attempt to extort money from [Stiebinger].”
· Regolo responded to the letter from Stiebinger’s counsel, saying he was “not in the business of extorting people for money.” He enclosed an amended complaint, and stated he had decided to amend the lawsuit “after further investigation into the part[ies’] relationship . . . .”
Stiebinger’s evidence also included a declaration from Richard Stegman, an attorney who had a conversation with Allen in the latter part of 2004. Allen said, “I guess you know about the lawsuit,” and Stegman replied, “[Y]es, I do, but I didn’t know you were gay.” Allen then said, “[O]h, no we’re going to change that.”
· Stiebinger’s declaration also stated that the allegations in the first version of Allen’s complaint were “absolute lies” and “an attempt to extort money from [him] with the threat of public humiliation and slander,” and that he was and always had been heterosexual. Stiebinger pointed out that the allegations of an oral agreement directly contradicted the written addendum signed when Allen first moved into Stiebinger’s property. Stiebinger asserted that Allen’s allegations were false, and that there never had been any such agreement -- oral, written, or implied.
Allen submitted no evidence in reply to Stiebinger’s opposition. He did not deny that he had signed the addendum to the lease. Allen argued only that Stiebinger had failed to present evidence of lack of probable cause and of malice. Regolo filed a reply declaration, but it concerned only a contention of Stiebinger’s relating to the malice prong of his malicious prosecution claim.
Regolo responded to Stiebinger’s contention that the underlying case was not the first time that Regolo and Allen had “joined together to sue a landlord,” and to Stiebinger’s claim of similarity between the underlying case and Allen’s previous suit against his landlords. Regolo’s declaration noted that another lawyer had represented Allen when the previous case initially was filed. Allen had hired Regolo to defend him against a cross-complaint, and Regolo later took over the entire case.
The trial court granted the special motion to strike, as to both Allen and Regolo. The court concluded that Stiebinger had failed to establish a probability that he would prevail on his malicious prosecution claim at trial. Specifically, the court stated, Stiebinger had failed to make a prima facie showing on the element of lack of probable cause. The court observed that:
“[Stiebinger] does not meet his burden by simply denying the allegations of the underlying complaint. Contrary to [Stiebinger’s] assertion, just because the ‘allegations of the underlying complaint are false’ and [Stiebinger] denies everything [Allen] claimed in the underlying action does not mean that ‘there is a lack of probable cause.’ The underlying complaint may have been weak, meritless, wrong, and incorrect, but under Jarrow [Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728] and Zamos [v. Stroud (2004) 32 Cal.4th 958] that alone does not [mean that the action] lack[ed] probable cause. [Stiebinger] submits insufficient evidence that the underlying action falls into the subgroup of the least meritorious cases that all reasonable lawyers agree totally lack all merit. The existence of a factual dispute between the parties, even one that [Stiebinger] would win easily at trial, does not make a prima facie showing of lack of probable cause.”
Stiebinger filed a timely notice of appeal from the trial court’s order.
DISCUSSION
The law governing anti-SLAPP motions is well established. The anti-SLAPP statute is a procedural remedy to dispose of lawsuits brought to chill the valid exercise of free speech or petition rights. (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055-1056 (Rusheen).) The trial court is to employ a two-pronged analysis. It first must decide whether the defendant has made a threshold showing that the challenged cause of action arises from protected acts in furtherance of free speech or petition rights. (Id. at p. 1056.) If the defendant has made the necessary showing, the trial court then must decide whether the plaintiff has demonstrated a probability of prevailing on his claim. To do so, the plaintiff must show the complaint is both legally sufficient and “ ‘ “supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.” ’ ” (Ibid., citations omitted.) Whether the plaintiff has established a prima facie case is a question of law. (Zamos v. Stroud, supra, 32 Cal.4th at p. 965.) In deciding the question of potential merit, the court is to consider the pleadings and evidentiary submissions of both parties. While the court does not weigh the evidence, “ ‘it should grant the motion if, as a matter of law, the defendant’s evidence supporting the motion defeats the plaintiff’s attempt to establish evidentiary support for the claim.’ ” (Ibid.)
The parties agree that Stiebinger’s malicious prosecution action arises from protected activity. (Jarrow Formulas, Inc. v. LaMarche, supra, 31 Cal.4th 728.) The only issue is whether Stiebinger presented evidence that, if believed by the trier of fact, was sufficient to support a judgment in his favor. Thus Stiebinger was required to present evidence of the three necessary elements of a malicious prosecution claim: that the underlying action was terminated in Stiebinger’s favor, was brought or continued without probable cause, and was initiated with malice. (Zamos v. Stroud, supra, 32 Cal.4th at pp. 960, 965-966.)
Allen does not contend that Stiebinger did not show a legal termination of the underlying action in his favor, so we need not discuss that element of his claim. (See Hurgren v. Union Mutual Life Ins. Co. (1904) 141 Cal. 585, 587 [fact that the legal termination of the prior suit would not be a bar to another civil suit founded on the same alleged cause is not a defense to a malicious prosecution action].)
a. Lack of probable cause.
We disagree with the trial court’s conclusion that Stiebinger did not make a prima facie showing of facts that, if believed by the trier of fact, would establish lack of probable cause. The existence or absence of probable cause is a question of law to be determined by the court. (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 875.) As the trial judge pointed out, a complaint does not lack probable cause merely because it is meritless. The standard for assessing probable cause is an objective one. (Roberts v. Sentry Life Insurance (1999) 76 Cal.App.4th 375, 382 [“[o]nly this subgroup of meritless suits” – those which all reasonable lawyers agree totally lack merit – presents no probable cause].) But a plaintiff who files a complaint based on allegations he knows to be false necessarily lacks probable cause to file that complaint. In this case, Allen’s complaint against Stiebinger was based on his allegations of an oral contract: that Stiebinger made oral promises that he would reimburse Allen for improvements Allen made to the property, and that he and Allen were “partners” and Allen would be given an interest in the property if it were sold. If these allegations are false -- as Stiebinger says they are -- there is no factual basis for Allen’s breach of contract claim. Moreover, it is undisputed that Allen signed an addendum in which he agreed that he would not do any work on the property without Stiebinger’s written consent, that Stiebinger would not reimburse Allen for any improvements, and that any further agreements between the parties would be in writing to be valid. In short, the trial court was mistaken when it concluded that “just because the ‘allegations of the underlying complaint are false’ . . . does not mean that ‘there is a lack of probable cause.’ ” Falsity of the key allegations indeed does mean there is no probable cause for the case. If the lawsuit has no factual basis, one cannot reasonably believe it has merit.
In sum, Stiebinger presented a prima facie showing of facts which, if believed, would support the conclusion that Allen lacked probable cause to file his complaint against Stiebinger. (Rusheen, supra, 37 Cal.4th at p. 1056.) In response to Allen’s special motion to strike, Stiebinger presented evidence that Allen’s factual allegations were untrue. He submitted his own declaration that there was no agreement with Allen and that Allen’s allegations in the underlying complaint were false, as well as other evidence that cast doubt on Allen’s veracity, including the signed addendum. Allen presented no contrary evidence. As a matter of law, Allen’s evidence supporting the motion – his declaration consisting only of summary assertions and legal conclusions that he believed he had a “justifiable legal position” – did not defeat Stiebinger’s attempt to establish evidentiary support for his claim. (Zamos v. Stroud, supra, 32 Cal.4th at p. 965.) Accordingly, granting Allen’s motion to strike was error.
b. Malice.
Allen also contends that Stiebinger did not meet his burden of showing that the underlying action was filed with malice. The trial court did not reach this issue because it found that Stiebinger had not submitted sufficient evidence on the element of lack of probable cause. As noted above, that conclusion was erroneous. “Although lack of probable cause alone does not automatically equate to a finding of malice, it is a factor that may be considered. [Citation.] ‘[M]alice may still be inferred when a party knowingly brings an action without probable cause. [Citations.]’ [Citation.]” (Ross v. Kish (2006) 145 Cal.App.4th 188, 204.) Even apart from his showing that Allen filed suit knowing his allegations to be false, Stiebinger presented sufficient evidence of malice to defeat Allen’s anti-SLAPP motion: Allen first threatened to sue Stiebinger on a Marvin v. Marvin [(1976) 18 Cal.3d 660 (Marvin)]theory. Allen demanded $150,000. Allen then filed his complaint without the Marvin allegations. He then failed to answer interrogatories about his basis for the lawsuit. Through counsel, he then offered to dismiss his case with prejudice if Stiebinger agreed not to pursue him for malicious prosecution. This evidence was sufficient to establish a prima facie showing that Stiebinger probably would prevail on the element of malice in his lawsuit.
c. Regolo’s joinder.
Regolo – Allen’s former attorney – did not file a special motion to strike Stiebinger’s complaint. He filed only a “notice of joinder” in Allen’s motion. Although Regolo submitted a declaration asserting his belief in the merits of Allen’s claim and his own lack of malice, Regolo’s notice of joinder sought no affirmative relief on his own behalf. It only joined in Allen’s motion, and that motion sought relief only on behalf of Allen. Consequently, we are in some doubt whether Regolo’s joinder was sufficient to entitle him to relief. (See Decker v. U.D. Registry, Inc. (2003) 105 Cal.App.4th 1382, 1390-1391 [joinder that was not in form of motion and presented no evidence or argument was inadequate]; cf. Barak v. The Quisenberry Law Firm (2006) 135 Cal.App.4th 654, 660-661 [joinder seeking affirmative relief established necessary foundation for application of anti-SLAPP statute].) We need not decide the point, however. Even if Regolo’s joinder could be considered a special motion to strike, Stiebinger’s evidentiary presentation in response to the motion was sufficient to defeat Regolo as well.
Regolo prepared and sent first the Marvin version of the complaint and then the revised version, together with demands for payment. According to Stiebinger’s declaration, Regolo had known both Stiebinger and Allen personally for a number of years, so it is reasonable to infer that he had firsthand knowledge of the relationship between the two men. Regolo stated at the July 2006 hearing that he had never seen the addendum until Stiebinger’s attorney submitted it in response to Allen’s anti-SLAPP motion. (If true, that fact certainly calls into question Allen’s statement in his declaration that he “related to [Regolo] completely and fairly all of the facts that form the basis of the underlying action.”) Regolo never submitted a declaration to that effect, however, and he did not testify under oath at the hearing.
In short, Stiebinger’s evidentiary showing was sufficient as to Regolo, and the trial court should not have dismissed Stiebinger’s case against Regolo.
DISPOSITION
The order granting the special motion to strike the complaint is reversed and the cause is remanded to the trial court with instructions to vacate the order and subsequent judgment of dismissal and to enter a new order denying the motion. James Stiebinger is to recover his costs on appeal.
We concur: COOPER, P. J., FLIER, J.