Opinion
NOT TO BE PUBLISHED
Super. Ct. No. 70794
BLEASE, J.
From approximately 1997 to December 2004, plaintiffs Raina Teichmer and her minor children, Wreaf and Oshun Soderberg, lived in the Grass Valley Terrace Apartments, which were owned by defendant Grass Valley Terrace, LP (Grass Valley), and managed by defendant Professional Property Management, LLC. (PPM).
In December 2004, Teichmer notified PPM that there was mold inside her apartment and that it was making her and her children sick. She refused to pay rent until the problem was resolved. Thereafter, Grass Valley served her with a three day notice to pay rent or quit, and later filed an unlawful detainer action against her.
A few months later, plaintiffs sued defendants for negligence, private nuisance, negligent misrepresentation, retaliatory eviction, and breach of the warranty of habitability. Defendants cross-complained against Teichmer for breach of contract and negligence but dismissed the cross-complaint and an unlawful detainer action prior to trial. A jury found in plaintiffs’ favor on their negligence and breach of the warranty of habitability causes of action and awarded them $40,603.50 in damages. It found against them on the remaining claims. Judgment was entered on March 26, 2007. On May 29, 2007, plaintiffs filed a notice of appeal from the judgment.
The complaint also asserted causes of action for conversion, trespass, strict products liability, and fraudulent concealment/failure to disclose. Plaintiffs ultimately dismissed the conversion, trespass, and strict products liability causes of action; and the trial court dismissed the fraudulent concealment/failure to disclose cause of action.
In between the judgment and the notice of appeal, on April 12, 2007, plaintiffs moved for contractual attorney fees in the amount of $200,766 pursuant to Civil Code section 1717. On June 14, 2007, the trial court issued a postjudgment order awarding plaintiffs $46,446 in attorney fees. Plaintiffs did not file an appeal from the order.
On appeal from the judgment, plaintiffs contend the trial court abused its discretion by failing to impose termination sanctions after defendants engaged in “persistent discovery abuse,” by denying their motion for leave to file a first amended complaint, by excluding evidence that defendants had dismissed their cross-complaint, and by limiting their attorney fees. We shall affirm the judgment.
We shall not review the award of attorney fees because we lack jurisdiction to review the postjudgment order setting forth the award.
FACTUAL AND PROCEDURAL BACKGROUND
The issues raised on appeal render a detailed recitation of the facts adduced during the nearly month-long jury trial unnecessary. Suffice it to say that from approximately 1997 through December 2004, plaintiffs lived in apartment number 12 at the Grass Valley Terrace Apartments.
On December 10, 2004, Teichmer complained to Gerald Walters, Director of Property Management at PPM, about the mold in her apartment and advised him that it was making her and her children sick. She asked Walters to “fix” the problem and in the meantime to relocate her and her children and forgive her rent. Teichmer withheld her rent for December 2004, and on December 13, 2004, was served with a three-day notice to pay rent or quit the premises. Sometime thereafter, defendants initiated an unlawful detainer action against her.
On December 17, 2004, Walters caused the apartment to be inspected. Among other things, the inspection revealed that the apartment was filthy and extremely humid due to the presence of numerous aquariums.
In February 2005, Teichmer had the apartment tested for mold. The testing revealed that the air quality inside the apartment was “critical” due to the “high amount of fungus spores in general, and in particular this genus and species of Aspergillus and Penicillium.” Neither Teichmer nor her children were allergic to Aspergillus or Penicillium; however, Wreaf and Oshun were allergic to dust mites, which amplify when excessive moisture is present. Teichmer and her children were also diagnosed with chronic bronchitis as a result of exposure to the mixed molds inside the apartment. After the testing was completed, the apartment was remediated.
On June 13, 2005, plaintiffs filed a complaint against defendants for negligence, private nuisance, negligent misrepresentation, retaliatory eviction, and breach of the implied warranty of habitability.
Defendants cross-complained against Teichmer for breach of contract and negligence.
On September 26, 2006, defendants dismissed the unlawful detainer action and their cross-complaint.
On January 17, 2007, plaintiffs sought leave to file a first amended complaint, which added a cause of action for malicious prosecution based upon defendants’ dismissal of their cross-complaint. The trial court denied the motion.
The jury found in plaintiffs’ favor on the negligence and breach of the warranty of habitability causes of action and against them on their false representation, private nuisance, and retaliatory eviction causes of action. With respect to the negligence cause of action, the jury calculated plaintiffs’ total damages at $64,450, but concluded Teichmer was 37 percent contributorily negligent, thereby reducing plaintiffs’ damages to $40,603.50. With respect to the breach of the warranty of habitability cause of action, the jury determined the monthly rental value of the apartment was reduced $100 for a 36-month period and awarded defendants $3,600.
Judgment was entered on March 26, 2007, and notice of entry of judgment was mailed to the parties on March 28, 2007.
On April 12, 2007, plaintiffs filed a motion for contractual attorney fees in the amount of $200,766 pursuant to Civil Code section 1717.
On May 29, 2007, plaintiffs filed their sole notice of appeal in this case.
On June 14, 2007, the trial court awarded plaintiffs attorney fees in the amount of $46,446.
Additional facts relevant to plaintiffs’ contentions are set forth in our discussion of the same.
I
The Trial Court did not Abuse its Discretion in Denying the Requests for Terminating Sanctions
Plaintiffs contend the trial court abused its discretion by failing “to impose termination sanctions after defendants engaged in a persistent pattern of discovery abuse.” We disagree.
A. Background
1. First Request for Terminating Sanctions
On March 9, 2006, Teichmer served defendants with Form Interrogatories (Set One), Request for Production and Inspection of Documents (Set Two), First Supplemental Request for Production of Documents (Set One), and First Supplemental Interrogatories (Set One). A week later, on March 16, 2006, Teichmer served defendants with Form Interrogatories (Set Two) and Request for Admissions (Set One); and Oshun and Wreaf each served defendants with Form Interrogatories (Set Two) and Request for Admissions (Set One).
Defendants failed to respond to the discovery requests, and on April 27, 2006, plaintiffs moved to strike defendants’ answer and cross-complaint; or alternatively, for an order compelling defendants to provide responses to the various discovery requests, imposing monetary sanctions, reopening discovery, and continuing the May 16, 2006 trial date. In their motion plaintiffs also noted that defendants had failed to pay a $375 discovery sanction imposed on January 17, 2006.
In response to the motion, defendants’ counsel, Melvin Visger, filed a declaration disputing plaintiffs’ assertion that defendants had engaged in persistent discovery abuse. Among other things, he noted that defendants had already responded to form interrogatories and had provided other “significant and considerable discovery responses, including but not limited to, documents, extensive photographs, tenant files, maintenance records, vendor invoices, letters, correspondence and reports and physical inspection of the property.” He acknowledged that he failed to respond to the outstanding discovery requests “through [his] own fault” and indicated that “[a]ll discovery responses currently due shall be served upon [plaintiffs’ counsel] on or before our hearing on May 5, 2006.”
The trial court declined to strike defendants’ answer and cross-complaint, but continued the trial to September 12, 2006, imposed monetary sanctions in the amount of $750, and ordered defendants to pay the $375 monetary sanction imposed on January 17, 2006.
We assume defendants provided responses to the outstanding discovery on or before the May 5, 2006, hearing since the trial court’s minute order does not order defendants to provide responses, and plaintiffs do not suggest otherwise.
2. Second Request for Terminating Sanctions
On May 11, 2006, plaintiffs served defendants each with Special Interrogatories (Set Two).
Defendants failed to respond, and on July 12, 2006, plaintiffs filed a second motion to strike defendants’ answer and cross-complaint, or alternatively, for an order imposing evidentiary sanctions “in the form of an order striking defendants’ denials to admissions and limiting the trial to the issue of plaintiffs’ damages.” Plaintiffs also sought monetary sanctions.
The motion was heard on August 11, 2006. Defendants’ attorney Visger did not appear at the hearing; however, Thomas Nielsen specially appeared on behalf of PPM. The court denied plaintiffs’ motion to strike, ordered defendants to provide responses to the special interrogatories by August 18, 2006, and imposed monetary sanctions in the amount of $100 against defendants.
On August 14, 2006, Visger failed to appear for a mandatory settlement conference, and the trial court continued the trial date to February 21, 2007, and ordered Visger to appear on September 11, 2006, and show cause why sanctions should not be imposed against him and why he should not be held in contempt. When he failed to appear on September 11, 2006, the court issued a bench warrant for his arrest. On September 18, 2006, Visger was suspended from the practice of law for failing to pay his bar dues. On September 28, 2006, Thomas Nielsen and the law firm Lewis Brisbois Bisgaard & Smith were associated in as attorney of record for defendants, and were later substituted in as defendants’ attorney of record.
3. Third Request for Terminating Sanctions
On December 11, 2006, plaintiffs served defendants with Request for Production of Documents (Set Four). Among the items requested were defendants’ safety manual, operations manual, and letters from tenants complaining about mold from 2000 to 2005. Defendants objected to producing those items on relevancy grounds.
On February 1, 2007, plaintiffs filed a motion to strike defendants’ answer, or alternatively for an order “deeming liability admitted and... compelling [defendants] to each provide verified responses to plaintiffs’ discovery requests.” Plaintiffs also requested monetary sanctions. In support of their motion, plaintiffs cited defendants’ “persistent discovery abuse.”
In a declaration filed in opposition to plaintiffs’ motion, defendants’ counsel Nielsen stated that he had been unable to locate defendants’ former counsel, Visger, or Visger’s file regarding this litigation. Having obtained and reviewed plaintiffs’ file, however, it appeared to Nielsen that defendants had responded to all discovery propounded by plaintiffs.
Following a hearing on February 9, 2007, the trial court denied plaintiffs’ motion to strike defendants’ answer as well as their request for evidentiary sanctions. The court did, however, order defendants to produce any letters from tenants complaining about mold.
4. Fourth Request for Terminating Sanctions
Prior to trial, plaintiffs moved in limine for an order striking defendants’ answer to the complaint and entering judgment in plaintiffs’ favor for persistent discovery abuse. In support of the motion, plaintiffs cited defendants’ failure to timely respond to the discovery propounded on March 6 and 15, 2006, defendants’ failure to pay a monetary sanction imposed on September 26, 2006, and the loss of Walters’ file.
Walters was unable to produce documents at his deposition because he had given the documents to Visger, who disappeared along with Walters’ file. Among the documents Walters gave to Visger were “numerous memos,” notes from telephone conversations, and photographs. Plaintiffs argued that the loss of Walters’ file was “highly prejudicial” to their case because Walters “was unable to answer many key deposition questions because he could not recall events in the absence of his file.”
Defendants opposed the motion, arguing it was a duplication of plaintiffs’ prior motions which the court denied and was not the proper subject of a motion in limine. With respect to Walters’ file, defendants argued that they should not be punished for the acts of their prior counsel of which they had no knowledge and over which they had no control.
Following a hearing on February 9, 2007, the trial court denied the motion. With respect to the loss of Walters’ file, the court observed that “a motion to strike an answer due to discovery abuse.... is a severe, severe sanction [which] is just not warranted by this particular unfortunate occurrence.”
B. Applicable Law
The trial court has broad discretion in deciding whether to impose discovery sanctions and is subject to reversal only for arbitrary, capricious, or whimsical action. (Parker v. Wolters Kluwer United States, Inc. (2007) 149 Cal.App.4th 285, 297.) “Discovery sanctions are intended to remedy discovery abuse, not to punish the offending party. Accordingly, sanctions should be tailored to serve that remedial purpose, should not put the moving party in a better position than he would otherwise have been had he obtained the requested discovery, and should be proportionate to the offending party’s misconduct.” (Williams v. Russ (2008) 167 Cal.App.4th 1215, 1223.)
Ordinarily, nonmonetary sanctions, such as terminating sanctions, may not be imposed for misuse of the discovery process absent a failure to obey an order compelling discovery. (Code Civ. Proc., §§ 2030.290, subd (c); 2031.320, subd. (c); New Albertsons, Inc. v. Superior Court (2008) 168 Cal.App.4th 1403, 1422-1424; see also Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2008) ¶¶ 8:1184, 8:1187.10-1187.11, 8.1488-1489, pp. 8F-73-75, 8H-31.) Some courts, however, have held that nonmonetary sanctions may be imposed absent an order compelling discovery where the misconduct committed in connection with the failure to produce evidence in discovery is “sufficiently egregious” or “where it is reasonably clear that obtaining such an order would be futile.” (New Albertsons, Inc. v. Superior Court, supra, 168 Cal.App.4th at pp. 1424-1426 and cases cited therein.) Moreover, at least one court has held that “[a] terminating sanction is appropriate in the first instance without a violation of prior court orders in egregious cases of intentional spoliation of evidence.” (Williams v. Russ, supra, 167 Cal.App.4th at p. 1223 [dismissal of malpractice action upheld where the plaintiff allowed destruction of most of his client files after obtaining them from the defendant.)
C. Analysis
Plaintiffs do not contend and there is no indication in the record that defendants failed to obey any order compelling discovery. To the contrary, the record reflects that defendants responded to plaintiffs’ discovery requests when ordered to do so by the trial court. While plaintiffs argue defendants’ failure to respond to various discovery requests until compelled to do so was sufficiently egregious to justify the imposition of terminating sanctions, the trial court acted well within its discretion in concluding otherwise.
With respect to the loss of Walters’ file, there is no indication in the record that defendants or their agents contributed to its loss. While an attorney’s misconduct during discovery generally is imputed to his client, a client is relieved from the consequences of his attorney’s mistakes when “the attorney’s positive misconduct... effectively obliterates the existence of the attorney-client relationship ....” (Sauer v. Superior Court (1987) 195 Cal.App.3d 213, 231 .)
Here, Visger failed to appear at the hearing on plaintiffs’ second motion for terminating sanctions on August 11, 2006, failed to appear for a mandatory settlement conference on August 14, 2006, failed to appear in response to the court’s order to show cause on September 11, 2006, failed to respond to voice mails or written correspondence, failed to return client files, and was suspended from the practice of law on September 18, 2006. This conduct plainly obliterated the attorney-client relationship. Meanwhile, defendants did what they could to rectify the situation by timely obtaining new counsel who unsuccessfully sought to contact Visger and obtain defendants’ client files.
Moreover, plaintiffs failed to establish they were prejudiced by its loss. While they asserted Walters “was unable to answer many key deposition questions because he could not recall events in the absence of his file,” they failed to specify which questions he purportedly could not answer, much less how his inability to do so impacted their case.
On this record, the trial court did not abuse its discretion in denying plaintiffs’ various requests for terminating sanctions.
Plaintiffs’ reliance on defendants’ purported failure to timely designate experts as evidence the trial court abused its discretion in failing to impose termination sanction is misplaced because plaintiffs never cited defendants’ purported failure to do so as a basis for any of their requests for terminating sanctions in the trial court.
II
The Appellate Court Lacks Jurisdiction to Review the Award of Attorney Fees
Plaintiffs contend “[t]he trial court abused its discretion when it limited [their] recovery of attorney’s fees to an amount equal to [their] recovery.” Defendants respond that “[p]laintiffs failed to file a notice of appeal from the trial court’s post-judgment order awarding attorney fees and costs, and [thus,] their appeal [of that order] must be dismissed.” We agree with defendants that we lack jurisdiction to review the order awarding attorney fees and shall dismiss that portion of the appeal.
Section 1717, subdivision (a) states, in pertinent part: “In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs. [¶]...[¶] Reasonable attorney’s fees shall be fixed by the court, and shall be an element of the costs of suit." Section 1717, subdivision (b)(1) defines prevailing party as “the party who recovered a greater relief in the action on the contract.” Here, the lease agreement provided that “[i]n the event of any legal action to enforce any provisions of this Lease, the prevailing party shall be awarded court costs and reasonable attorney’s fees.”
A. Background
On April 12, 2007, plaintiffs filed a motion for contractual attorney fees in the amount of $200,766 pursuant to Civil Code section 1717. Prior to the May 25, 2007, hearing on the motion, the trial court (Judge Darlington) issued a tentative ruling. At the hearing, Judge Darlington indicated that his “contact with th[e] case consisted of taking the verdict” and asked the parties if they would object to him contacting the trial judge (Judge Burby) concerning his “thoughts” and “impressions” of the case. Both parties indicated they had no objection to him doing so. Following oral argument, the court took the matter under submission. Four days later, on May 29, 2007, the trial court vacated the “submitted matters” and re-calendared plaintiffs’ motion for attorney fees before Judge Burby.
That same day, May 29, 2007, plaintiffs filed their notice of appeal, which stated that plaintiffs were appealing from the March 26, 2007, judgment. The last ground for appeal listed in the notice was “[e]rrors in reduction of attorneys’ fees as costs.”
Following a hearing on June 14, 2007, the trial court awarded plaintiffs attorney fees in the amount of $46,446. An order was filed that same day. No appeal was taken from that order.
B. Applicable Law
“An appellate court has no jurisdiction to review an award of attorney fees made after entry of the judgment, unless the order is separately appealed.” (Allen v. Smith (2002) 94 Cal.App.4th 1270, 1284.) “‘[W]here several judgments and/or orders occurring close in time are separately appealable (e.g., judgment and order awarding attorney fees), each appealable judgment and order must be expressly specified — in either a single notice of appeal or multiple notices of appeal — in order to be reviewable on appeal.’” (DeZerega v. Meggs (2000) 83 Cal.App.4th 28, 43 (DeZerega).)
C. Analysis
While plaintiffs did not appeal from the June 14, 2007, order awarding attorney fees, they advance several theories in support of their assertion that the matter is still properly before us. We shall address each of plaintiffs’ theories in turn.
Plaintiffs first assert that we “may construe the May 29, 2007, notice of appeal as a premature notice of appeal as to the June 14, 2007 order” awarding attorney fees pursuant to California Rules of Court, rule 8.104(e)(2).
California Rules of Court, rule 8.104(e)(2) provides: “The reviewing court may treat a notice of appeal filed after the superior court has announced its intended ruling, but before it has rendered judgment, as filed immediately after entry of judgment.” As used in subdivision (e), “‘judgment’ includes an appealable order if the appeal is from an appealable order.” (Cal. Rules of Court, rule 8.104(f).)
Plaintiffs argue this case falls within the ambit of rule 8.104(e)(2) because they filed their notice of appeal “after the only tentative ruling on attorney’s fees was issued on May 24, 2007” and “sought to include the subsequent order as part of their notice of appeal by specifically including in their notice ‘errors in the reduction of attorney’s fees as costs.’” The problem with this argument is that the tentative ruling upon which they rely is wholly unrelated to the June 14, 2007, order awarding attorney fees. After issuing the tentative ruling and taking the matter under submission, the trial court vacated “submitted matters” and re-calendared the motion before a different judge. That judge held another hearing on the motion and issued his own decision. Thus, California Rules of Court, rule 8.104(e)(2) is inapplicable.
Relying on Grant v. List & Lathrop (1992) 2 Cal.App.4th 993 (Grant), plaintiffs next assert that the notice of appeal subsumed the subsequent order awarding attorney fees. In Grant, the judgment declared the prevailing party was entitled to attorney fees, while leaving the amount of fees blank. (Id. at p. 996.) The court held that “when a judgment awards costs and fees to a prevailing party and provides for the later determination of the amounts, the notice of appeal subsumes any later order setting the amounts of the award.” (Id. at p. 998.) In doing so, the court emphasized that the judgment expressly made an award of costs and fees. (Id. at p. 997.)
Plaintiffs do not dispute that the March 26, 2007, judgment was silent on the issue of attorney fees. They “submit[, however,] that when a judgment permits attorney’s fees as costs as a matter of right, and there is no dispute that attorney’s fees are permitted as costs, then all that is left for the court to do is determine the amount of fees, thus the Grant holding must apply.”
While it is true that a trial court lacks discretion to deny a party reasonable attorney fees under Civil Code section 1717 when that party is “unquestionably the sole victor” on the only contract claim in the action (Hsu v. Abbara (1995) 9 Cal.4th 863, 865-866 [“defendant, who is unquestionably the sole victor, is the party prevailing on the contract as a matter of law and therefore entitled to reasonable attorney fees under section 1717”]), it does not follow that all that is left for the court to do is determine the amount of fees. The trial court still must exercise its discretion and determine the “prevailing party.”
The court rejected an argument similar to plaintiffs in DeZerega. There, the appellants “suggested that the judgment effectively awarded attorneys’ fees because it expressly allowed costs to defendants, and fees were ultimately recovered as costs....” In rejecting this argument, the court explained that “[t]he issue... is not whether fees were ultimately recovered ‘as costs’ but whether the entitlement to fees was adjudicated by the original judgment, leaving only the issue of amount for further adjudication.” (83 Cal.App.4th at p. 44.) Here, plaintiffs’ entitlement to fees was not adjudicated by the original judgment. Accordingly, the exception adopted in Grant cannot be held to apply.
Plaintiffs next invoke the doctrine that “‘notices of appeal are to be liberally construed so as to protect the right of appeal if it is reasonably clear what [the] appellant was trying to appeal from....’” (In re Joshua S. (2007) 41 Cal.4th 261, 272.) That doctrine applies primarily, as in In re Joshua S., where the notice of appeal has failed to accurately describe the judgment or order sought to be appealed from. (Ibid.; see also Luz v. Lopes (1960) 55 Cal.2d 54, 59.) That is not what happened here.
In this case, neither plaintiffs’ entitlement to nor the amount of attorney fees had been determined when plaintiffs filed their notice of appeal. Accordingly, the notice was premature. We cannot liberally construe a premature notice of appeal as timely filed. Premature appeals are governed by California Rules of Court, rule 8.104(e), which provides: “(1) A notice of appeal filed after judgment is rendered but before it is entered is valid and is treated as filed immediately after entry of judgment. [¶] (2) The reviewing court may treat a notice of appeal filed after the superior court has announced its intended ruling, but before it has rendered judgment, as filed immediately after entry of judgment.” Subdivision (1) does not apply because the notice of appeal was filed before the decision awarding attorney fees was made. As previously discussed, subdivision (2) is also inapplicable.
Finally, plaintiffs appear to suggest that their notice of appeal was not premature because this court “moved the notice of appeal filing date... to July 25, 2007, a date after the attorney’s fees issue was heard.”
On July 25, 2007, this court issued an order determining that this case was not suitable for mediation. That same day, the appellate mediation coordinator sent a letter to the parties stating that “[p]ursuant to this court’s order dated July 25, 2007, and Miscellaneous Order No. 2007-001, all proceedings in the appeal are to recommence as if the notice of appeal had been filed on July 25, 2007.”
As plaintiffs are well aware, upon the filing of the notice of appeal, the provisions of rules 8.120, 8.124, 8.128, 8.130, 8.134, and 8.137 of the California Rules of Court requiring designation of the record and payment of estimated costs for preparation of the record were suspended, pending the court’s decision to select or not select the appeal for mediation. (Third District Local Rule 1(d); Miscellaneous Order No. 2007-001.) The suspension remained in effect until the court determined the case was not suitable for mediation. At that point, “[t]he parties’ obligation to comply with the requirements of rules [requiring designation of the record and payment of estimated costs for preparation of the record] commence[d] as if notice of appeal was filed on the date specified in the notification,” i.e. July 25, 2007.
Thus, to the extent the filing date for the notice of appeal was “moved” to July 25, 2007, as plaintiffs contend, it was done so for the limited purpose of allowing the parties to timely comply with the California Rules of Court requiring designation of the record and payment of estimated costs for preparation of the record. Accordingly, this court’s July 25, 2007, order did not relieve plaintiffs of their obligation to separately appeal from the June 14, 2007, order awarding attorney fees. Because plaintiffs did not separately appeal that order, we lack jurisdiction to review it, and therefore dismiss that portion of the appeal.
III
The Trial Court did not Abuse Its Discretion in Denying Leave to File an Amended Complaint
Plaintiffs next contend the trial court abused its discretion in denying their motion for leave to file a first amended complaint which added a tenth cause of action for malicious prosecution. As we shall explain, the malicious prosecution action was barred as a matter of law because the action upon which it was based -- defendants’ cross-complaint -- had not been resolved in plaintiffs’ favor. Accordingly, the trial court did not abuse its discretion in denying plaintiffs leave to file their amended complaint.
A. Background
In August 2005, defendants filed an answer to the complaint, which included a general denial and various affirmative defenses. Among other things, defendants alleged plaintiffs “failed to perform all obligations which may have been required under any agreements as alleged in the [c]omplaint,” and “were careless and negligent with respect to the matters alleged therein,” thereby contributing to plaintiffs’ damages, if any.
Along with their answer, defendants filed a cross-complaint against Teichmer, alleging that she breached the lease agreement and was negligent by failing to keep her apartment in a “clean and sanitary condition” and causing or allowing water to condense or intrude into her apartment. Defendants further alleged that Teichmer’s apartment was damaged and required extensive repairs and remediation as a result of her negligence.
On September 26, 2006, defendants dismissed their cross-complaint with prejudice.
On January 17, 2007, plaintiffs sought leave to file their first amended complaint, which added a tenth cause of action for malicious prosecution. In their tenth cause of action, plaintiffs’ alleged inter alia that defendants’ cross-complaint “was brought without probable cause to believe that... Teichmer had caused [defendants] damages as alleged.... [A]t the time they filed their cross-complaint, defendants had full knowledge... that the mold problem throughout the building ... and the remediation of [Teichmer’s apartment] was caused by defects in the apartment building construction and water seepage into the building and had nothing to do with the manner in which... Teichmer kept her apartment. [¶]... [¶] Defendants... acted maliciously and for an improper purpose ... by filing a cross-complaint for damages against [Teichmer]. [¶] On September 26, 2006, [d]efendants... file[d] a voluntary dismissal, with prejudice, of their cross complaint.”
Defendants opposed the motion, arguing that plaintiffs were dilatory in bringing it, and that defendants would be prejudiced in their ability to “fairly and complet[ely] defend against this cause of action” if the motion was granted.
The trial court denied the motion, finding “there ha[d] been no favorable termination” of the cross-complaint, a necessary element of a malicious prosecution cause of action. The court reasoned that “[t]he fact that the cross-complaint ... has been dismissed does not preclude defendants from raising the same issues in response to the allegations of the complaint. For instance, defendants raise the defense of comparative negligence in their answer.... Until all the issues in the entire action or proceeding are determined there has been no favorable termination....”
B. Applicable Law
We review for abuse of discretion the trial court's denial of plaintiffs’ motion for leave to file a first amended complaint. (Record v. Reason (1999) 73 Cal.App.4th 472, 486.) Generally, motions for leave to amend are liberally granted. (Mabie v. Hyatt (1998) 61 Cal.App.4th 581, 596; Berman v. Bromberg (1997) 56 Cal.App.4th 936, 945.) The court, however, has discretion to deny leave to amend where a proposed amendment fails to state a cause of action. (See California Casualty General Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274, 280-281, disapproved on other grounds in Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390, 407.)
To establish a cause of action for malicious prosecution, a plaintiff must demonstrate that the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination in his favor, (2) was brought without probable cause, and (3) was initiated with malice. (Zamos v. Stroud (2004) 32 Cal.4th 958, 965.)
“‘“The theory underlying the requirement of favorable termination is that it tends to indicate the innocence of the accused, and coupled with the other elements of lack of probable cause and malice, establishes the tort [of malicious prosecution].” [Citations.] [¶] It is not essential to maintenance of an action for malicious prosecution that the prior proceeding was favorably terminated following trial on the merits. However, termination must reflect on the merits of the underlying action. [¶] It is apparent “favorable” termination does not occur merely because a party complained against has prevailed in an underlying action. While the fact he has prevailed is an ingredient of a favorable termination, such termination must further reflect on his innocence of the alleged wrongful conduct.... [¶] The key is whether the termination reflects on the underlying defendant’s innocence. [Citations.] If the resolution of the underlying litigation ‘leaves some doubt as to the defendant’s innocence or liability[, it] is not a favorable termination, and bars that party from bringing a malicious prosecution action against the underlying plaintiff.’ [Citation.]... ‘The test is whether or not the termination tends to indicate the innocence of the defendant or simply involves technical, procedural or other reasons that are not inconsistent with the defendant’s guilt.’ [Citations.]
“A voluntary dismissal may be an implicit concession that the dismissing party cannot maintain the action and may constitute a decision on the merits. [Citations.] ‘It is not enough, however, merely to show that the proceeding was dismissed.’ [Citation.] The reasons for the dismissal of the action must be examined to determine whether the termination reflected on the merits.” (Eells v. Rosenblum (1995) 36 Cal.App.4th 1848, 1854-1855.)
C. Analysis
The affirmative defenses raised by defendants in their answer were essentially the same as the allegations in their cross-complaint, i.e. that plaintiffs’ damages, if any, were the result of Teichmer’s own negligence, and Teichmer breached the lease agreement. There is no indication in the record that defendants intended to abandon their affirmative defenses when they dismissed their cross-complaint. Because defendants continued to litigate the issues raised in their cross-complaint in defending against plaintiffs’ action, their voluntary dismissal of the cross-complaint did not constitute a legal termination in plaintiffs’ favor.
Contrary to plaintiffs’ assertion, defendants’ counsel did not suggest otherwise at the hearing on plaintiffs’ motion. At the hearing, defendants’ counsel stated that “when [he] got into the case [he] decided it wasn’t prudent to... prosecute [the cross-complaint] and felt it just confused the case.” If anything, counsel’s statement suggests the decision to dismiss the cross-complaint was made for strategic reasons, not because defendants believed Teichmer was innocent of any wrongdoing.
Because plaintiffs could not satisfy the first element of a malicious prosecution cause of action as a matter of law, the trial court did not abuse its discretion when it denied their motion for leave to file a first amended complaint.
IV
Plaintiffs contend the trial court abused its discretion “when it refused to allow [them] to present evidence that defendants’ dismissal of their cross-complaint was an admission that the allegation[s] therein lacked merit.” We disagree.
During the defense, plaintiffs sought to introduce evidence defendants dismissed their cross-complaint and to argue that the dismissal constituted an admission that the allegations in the cross-complaint lacked merit. The trial court denied the motion, finding “under Evidence Code [section] 352 it’s not relevant.”
“‘Relevant evidence’ means evidence... having any tendency in reason to prove or disprove any disputed fact that is of consequence to the determination of the action.” (Evid. Code, § 210.) Evidence defendants dismissed their cross-complaint alone does not constitute an admission that the cross-complaint lacked merit. (See Eells v. Rosenblum, supra, 36 Cal.App.4th at pp. 1854-1855.) Rather, “[t]he reasons for the dismissal... must be examined to determine whether the termination reflected on the merits.” (Ibid.) Plaintiffs, however, failed to tender any evidence other than the dismissal itself. Accordingly, the trial court did not abuse its discretion in excluding evidence defendants dismissed their cross-complaint.
DISPOSITION
The judgment is affirmed. Defendants shall recover their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
We concur: SCOTLAND, P. J., BUTZ, J.