Opinion
NOT TO BE PUBLISHED
Alameda County Super. Ct. No. RG09451643.
Siggins, J.
This appeal is from a judgment dismissing a complaint on the ground that it was a Strategic Lawsuit Against Public Participation (SLAPP) as described in Code of Civil Procedure section 425.16. Plaintiff and appellant Pamela Turner sued Debt Buyers, Inc., doing business as Freedom Capital (Debt Buyers), over its abortive attempt to collect from Turner $223.21 she allegedly owed on a credit card account. Debt Buyers successfully moved under section 425.16 to dismiss Turner’s suit as a SLAPP. Because the record shows that Turner made a prima facie showing she could prevail on her malicious prosecution claim, we reverse the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
In January 2008, Debt Buyers sued Turner to collect a $223.21 debt that Turner allegedly owed Citibank based on her failure to make payments on a credit card account. The complaint alleged Debt Buyers was also entitled to recover interest and attorney fees as provided in the contract between Citibank and Turner. In her answer to the complaint, Turner stated the Citibank bill was paid in full on her behalf as of August 2004, by Consumer Credit Counseling Service of San Francisco (Consumer Credit Counseling), and that Turner had no contact with Debt Buyers before she was served.
Debt Buyers intended to prove its claim against Turner with a declaration in lieu of live testimony at trial by vice president Ron Proto, the employee responsible for the collection of past due debts and its custodian of records. Proto’s declaration stated that Turner “applied for and entered into a credit agreement with [Debt Buyers], ” but Proto was “unable to find the original or copy of the application, ” and it “was simply deemed to have been misplaced in the regular course of business.” Proto also declared that Debt Buyers maintained a computerized billing statement for Turner and mailed her monthly statements without her objection to the amounts stated. When Turner failed to make the prescribed payments when due and breached the contract, Debt Buyers declared the entire $223.21 balance due on her account payable. Proto also said the credit agreement provided that Turner was obligated to pay Debt Buyers’ attorney fees to collect the debt.
Proto’s declaration states: “A true and correct copy of the Billing Statements is attached hereto as Exhibit ‘A’, ” although no such exhibit is attached to the copy of the declaration in the clerk’s transcript on this appeal. Turner also objected in the trial court that the documents referred to in that paragraph were not attached to the declaration or otherwise supplied to the court.
Turner objected to Proto’s declaration, noting the absence of documents to support its allegations, and denied that she had any agreement with Debt Buyers. In August 2008, Turner requested that Debt Buyers produce documents to support the claims made in its complaint. When Turner’s counsel did not receive responsive documents, he sent Debt Buyers a letter stating the documents requested in discovery were crucial to Turner’s defense, and commented in closing, “Surely [Debt Buyers] has the documents requested to support the complaint’s allegations.” Turner’s counsel also noticed Proto’s deposition for October 15, 2008. The day scheduled for Proto’s deposition, Debt Buyers dismissed its complaint without prejudice.
A few months later, Turner filed the complaint in this case. She sued Debt Buyers for malicious prosecution, negligent and intentional infliction of emotional distress, and violations of California’s unfair competition law (Bus. & Prof. Code, §§ 17200 et seq.) Debt Buyers moved to strike the complaint under Code of Civil Procedure section 425.16, and argued Turner could not meet her burden to demonstrate a probability she would prevail on her claims. Turner opposed the anti-SLAPP motion, pointing out that Debt Buyers filed no support for the factual assertions in its memorandum of points and authorities, and she contended her declarations in opposition made a prima facie showing of a reasonable probability she would prevail.
Turner’s complaint also named Citibank as a defendant. Citibank apparently settled with Turner and is not a party to this appeal.
Turner’s declaration stated she paid the approximately $250 she owed Citibank through Consumer Credit Counseling between June 2002 and August 2004. Consumer Credit Counseling informed Turner she had successfully completed their credit counseling program, and she never heard from Citibank again, nor was she contacted by Debt Buyers before they filed the collection lawsuit. Debt Buyers was unresponsive when she tried to explain she had paid the bill, and demanded approximately $1,500 to settle its action, but dismissed the lawsuit after she retained an attorney. Turner suffered anxiety and anger, had trouble sleeping, and could not afford to pay the amount Debt Buyers demanded. Turner also submitted a declaration from her counsel, which detailed the history of Turner’s attempts to obtain discovery in Debt Buyers’ lawsuit and stated: “At no time did Debt Buyers produce or refer to any documentation or any effort to verify whether there was a debt owing to Citibank.”
In its reply, Debt Buyers for the first time produced a short affidavit from Unifund, claimed to be a previous owner of Turner’s debt, that stated she owed $223.21 as of August 13, 2004. The interest rate under Turner’s agreement with Citibank was 20.15 percent, and the account was assigned to Debt Buyers in October 2006. The Unifund affidavit was an exhibit to a declaration from Proto that stated he reviewed Debt Buyers’ records for Turner’s account and summarized the information from the Unifund affidavit, but did not state that Debt Buyers relied on Unifund’s information when it filed the collection suit. Debt Buyers produced no other documentation of the underlying debt. Proto stated Debt Buyers dismissed the collection litigation without prejudice “[b]ecause it was taking quite some time to confirm that neither Unifund nor Citibank could find any evidence that the debt was considered paid in full, ” and Unifund subsequently “instructed Debt Buyers that it was recalling the account from Debt Buyers, indicating that Citibank was recalling the account from Unifund.” Also attached to Debt Buyers’ reply was a declaration by its counsel stating he sent a letter to Turner in January 2007 that stated the debt would be assumed valid unless Turner disputed it within 30 days, and counsel received no reply.
Proto’s declaration also stated it was Debt Buyers’ practice to advise the debtor by letter that if the debt was not disputed within 30 days, Debt Buyers would assume it was valid. Proto attached a template of such a letter to his declaration, but the trial court concluded that did not prove it was sent to Turner.
The copy of counsel’s letter attached to the reply brief inexplicably lists $331.05 as the amount due.
The trial court granted Debt Buyers’ anti-SLAPP motion to strike Turner’s complaint on the basis that Turner failed to make a prima facie showing of facts to support a judgment in her favor. Once Debt Buyers was dismissed from the action, it moved to recover its attorney fees and costs for the anti-SLAPP motion in the amount of $19,553.35. Turner objected to the number of hours billed and the hourly rate, and argued that approximately $4,000 of the claimed fees were unrelated to the motion to strike. The court awarded Debt Buyers $14,500 for its attorney fees and costs under the anti-SLAPP statute. (Code Civ. Proc., § 425.16, subd. (c)(1).) Turner timely appealed.
DISCUSSION
A. Legal Standards Governing Anti-SLAPP Motions
“A SLAPP suit-a strategic lawsuit against public participation-seeks to chill or punish a party’s exercise of constitutional rights to free speech and to petition the government for redress of grievances. [Citation.] The Legislature enacted Code of Civil Procedure section 425.16-known as the anti-SLAPP statute-to provide a procedural remedy to dispose of lawsuits that are brought to chill the valid exercise of constitutional rights.” (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055-1056.) Section 425.16, subdivision (b)(1) 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 Constitution or the 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.” Section 425.16, subdivision (e)(1) defines an “ ‘act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue’ ” to include statements or writings made before a judicial proceeding.
Determination of an anti-SLAPP motion requires 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.... If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim.” (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.)
“For purposes of an anti-SLAPP motion, ‘[t]he court considers the pleadings and evidence submitted by both sides, but does not weigh credibility or compare the weight of the evidence. Rather, the court’s responsibility is to accept as true the evidence favorable to the plaintiff....’ ” (Sycamore Ridge Apartments LLC v. Naumann (2007) 157 Cal.App.4th 1385, 1397 (Sycamore Ridge); see also Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219, 1238-1239 [the court must “indulge in every legitimate favorable inference that may be drawn” from the admissible evidence].) “An anti-SLAPP motion must be denied ‘ “if the plaintiff presents evidence establishing a prima facie case which, if believed by the trier of fact, will result in a judgment for the plaintiff. [Citation].” ’ [Citation.] Only a minimal showing of merit is required.” (Robinzine v. Vicory (2006) 143 Cal.App.4th 1416, 1421.)
An order granting or denying an anti-SLAPP motion is appealable under Code of Civil Procedure sections 425.16, subdivision (i), and 904.1, subdivision (a)(13). We review the trial court’s ruling de novo. (Flatley v. Mauro (2006) 39 Cal.4th 299, 325.) Because a malicious prosecution action arises from protected activity and is not exempt from scrutiny under the anti-SLAPP statute (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 732), the issue to be determined in this appeal is whether Turner established a prima facie case in support of her complaint. (See Ross v. Kish (2006)145 Cal.App.4th 188, 197; Robinzine v. Vicory, supra, 143 Cal.App.4th at pp. 1421-1422.)
Turner has abandoned her emotional distress claims on appeal, and bases her unfair competition law claims on Debt Buyers’ alleged malicious prosecution of its earlier suit against her. Because we conclude the order granting the anti-SLAPP motion must be reversed, we do not address the parties’ arguments regarding Turner’s discovery request and Debt Buyers’ attorney fees.
B. Turner’s Malicious Prosecution Claim
To prove malicious prosecution, Turner must show that Debt Buyers’ lawsuit against her (1) terminated in her favor, (2) was brought or maintained without probable cause, and (3) was initiated with malice. (Zamos v. Stroud (2004) 32 Cal.4th 958, 965.) “[C]ontinuing to prosecute a lawsuit discovered to lack probable cause” may also support a claim of malicious prosecution, as it “harms the defendant and burdens the court system just as much as initiating an action known to be baseless from the outset.” (Id. at pp. 969, 973.)
1. Favorable Termination
Debt Buyers voluntarily dismissed the action against Turner without prejudice on the day set for the deposition of Ron Proto, its vice president and principal witness. “ ‘[W]hen the underlying action is terminated in some manner other than by a judgment on the merits, the court examines the record “to see if the disposition reflects the opinion of the court or the prosecuting party that the action would not succeed.” ’ ” (Ross v. Kish, supra, 145 Cal.App.4th at p. 198.) “A voluntary dismissal is presumed to be a favorable termination on the merits, unless otherwise proved to a jury.” (Sycamore Ridge, supra, 157 Cal.App.4th at p. 1400; see also Fuentes v. Berry (1995) 38 Cal.App.4th 1800, 1808; MacDonald v. Joslyn (1969) 275 Cal.App.2d 282, 289.) The presumption arises from “ ‘ “the natural assumption that one does not simply abandon a meritorious action once instituted.” ’ ” (Sycamore Ridge, supra, at p. 1400.) In Sycamore Ridge, the court concluded that a party’s failure to appear for two depositions supported an inference the underlying suit was dismissed because its claims lacked merit. (Id. at p. 1400; see also Ross v. Kish, supra, at p. 200 [reasonable to conclude that “refusal to submit to a deposition was a concession the claims... lacked merit”]; cf. Contemporary Services Corp. v. Staff Pro Inc. (2007) 152 Cal.App.4th 1043, 1057 [record showed defendants in malicious prosecution case dismissed underlying complaint because they “could not afford to pursue the matter, not that they lost faith in the merit of their claims”].)
Debt Buyers offers no explanation that it dismissed the case against Turner due to practical considerations, such as inconvenience of witnesses or cost of litigation. Instead, it claims that it dismissed the suit because it was unable to confirm Turner’s claim that she had fully paid her debt to Citibank or that the bank agreed to accept less than payment in full. But the burden of proof on payment or such an accord was Turner’s, and it strikes us as odd, to say the least, that a complaining creditor would voluntarily dismiss an action due to a lack of evidence favorable to the defendant debtor. (See Evid. Code, § 500; Wolf v. Superior Court (2003) 107 Cal.App.4th 25, 36; BII Finance Co. v. U-States Forwarding Services Corp. (2002) 95 Cal.App.4th 111, 126.) In light of Debt Buyers’ failure to respond to Turner’s document demands, the dismissal filed on the day set for Proto’s deposition seems more likely related to its inability to prove its case rather than its concern that Turner may not prove her defenses or due to some extrinsic consideration. Such an inference is supported by the fact that shortly after Debt Buyers dismissed its lawsuit, the assignment of the claim for collection was recalled by Citibank and Unifund. In the circumstances, there is no basis to conclude Turner would be unable to establish the element of a favorable termination. (Drummond v. Desmarais (2009) 176 Cal.App.4th 439, 457.) Instead, we conclude that Turner made a sufficient prima facie showing that Debt Buyers v. Turner terminated in her favor. (See Sycamore Ridge, supra, 157 Cal.App.4th at p. 1401; see also Weaver v. Superior Court (1979) 95 Cal.App.3d 166, 185 [conflict regarding circumstances of dismissal of underlying suit presented question of fact for jury].)
2. Lack of Probable Cause
“An action is deemed to have been pursued without probable cause if it was not legally tenable when viewed in an objective manner as of the time the action was initiated or while it was being prosecuted. The court must ‘determine whether, on the basis of the facts known to the defendant, the institution of the prior action was legally tenable.’... The test the court is to apply is whether ‘any reasonable attorney would have thought the claim tenable....’ The tort of malicious prosecution also includes the act of ‘continuing to prosecute a lawsuit discovered to lack probable cause.’ [Citation.] In determining the probable cause issue, the same standard applies ‘to the continuation as to the initiation of a suit.’ [Citation.] [¶] ‘... A litigant will lack probable cause for his action either if he relies upon facts which he has no reasonable cause to believe to be true, or if he seeks recovery upon a legal theory which is untenable under the facts known to him.’ ” (Sycamore Ridge, supra, 157 Cal.App.4th at p. 1402; see also Bergman v. Drum (2005) 129 Cal.App.4th 11, 19 [anti-SLAPP motion properly denied when defendant “ ‘had no evidence from which he reasonably could have inferred’ ” factual predicate to plaintiff’s liability]; Mabie v. Hyatt (1998) 61 Cal.App.4th 581, 596-597 [“In a situation of complete absence of supporting evidence, it cannot be adjudged reasonable to prosecute a claim”].)
Debt Buyers claims it had probable cause to sue Turner because its attorney sent her a letter in January 2007 saying she owed Debt Buyers $331.05, and the letter went unanswered. Aside from Turner’s denial that she received it, even if the letter could justify Debt Buyers’ filing suit, there are three factors that bear upon whether the letter provided probable cause for Debt Buyers to continue prosecution of its claim. First of all, the letter claimed an amount due from Turner that is different from the amount sought in Debt Buyers’ suit. Second, the fact that Turner did not respond to the letter cannot be an admission of her liability as a matter of law. (See 15 U.S.C. § 1692g(c) [federal Fair Debt Collection Practices Act].) Third, Turner’s answer to the complaint denied any amount was owing to Debt Buyers, and there does not appear to be any evidence other than the letter to demonstrate she owed the amount claimed to be due. Taken together, these three factors negate Debt Buyers’ claim that it can use Turner’s failure to dispute the letter “as a basis for probable cause.”
Debt Buyers failed to respond to Turner’s discovery requests, produced no documentation of the debt, and voluntarily dismissed the action on the day set for Proto’s deposition. Approximately a year later, Debt Buyers attached to its reply brief in support of its anti-SLAPP motion a half-page document that it said was the assignment to it of the underlying debt. But Debt Buyers never claimed to have relied upon, or even possessed, the assignment when it initiated or maintained the collection action against Turner.
Debt Buyers’ failure to produce any documentation of Turner’s underlying debt, other than Proto’s declaration, supports her claim that it was filed without probable cause. Debt Buyers first provided the evidence of indebtedness when it filed its reply brief in support of the anti-SLAPP motion. Even then, Debt Buyers did not produce any document signed by Turner that evidenced the terms of her agreement with Citibank, or demonstrated the $223.21 debt was outstanding approximately three and a half years after the date specified in the assignment. While Debt Buyers contends Turner failed to prove her debt to Citibank was paid in full before the collection action was filed, Debt Buyers has not established it had a basis for maintaining its action against Turner. Turner was not required to conduct Debt Buyers’ factual investigation on its behalf, and Debt Buyers’ “asserted basis for suing [Turner] is not the question; the probable cause question in a malicious prosecution suit is whether any reasonable attorney would have thought the suit against plaintiff tenable, based on the facts known to the defendant.” (Bergman v. Drum, supra, 129 Cal.App.4th at pp. 18-19.) Accepting as true the evidence favorable to Turner and drawing every reasonable inference in her favor, we conclude Turner has made a sufficient prima facie showing that Debt Buyers lacked probable cause to file or maintain the Debt Buyers v. Turner lawsuit.
While Debt Buyers states in a footnote that continuation of the lawsuit without probable cause was not specifically pled in Turner’s complaint, the malicious prosecution claim in fact included an allegation that Debt Buyers “had no probable cause to file the above described complaint for money or to continue the lawsuit to the time of dismissal.”
3. Malice
“The malice element of the malicious prosecution tort goes to the defendant’s subjective intent in initiating the prior action. [Citation.] For purposes of a malicious prosecution claim, [malice] ‘is not limited to actual hostility or ill will toward the plaintiff. Rather, malice is present when proceedings are instituted primarily for an improper purpose.’ ” (Sycamore Ridge, supra, 157 Cal.App.4th at p. 1407.) Such an improper purpose may exist when “ ‘ “ ‘the proceedings are initiated for the purpose of forcing a settlement which has no relation to the merits of the claim.’ ” ’ ” (Ibid.; see also HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 218 [malice could be inferred from evidence defendant “was simply trying to squeeze a settlement from [plaintiff] on a baseless case”].)
The extent of defendants’ investigation before filing or maintaining an action that was not objectively tenable may be relevant to show malice. (Sycamore Ridge, supra, 157 Cal.App.4th at p. 1407.) “ ‘Malice “may range anywhere from open hostility to indifference.” [Citations.]’ [Citation.] While the mere absence of probable cause, without more, ‘is not sufficient to demonstrate malice’ [citation], ‘ “[m]alice may also be inferred from the facts establishing lack of probable cause.” ’ ” (Id. at p. 1409; see also Baker v. Gawthorne (1947) 82 Cal.App.2d 496, 500-501 [malice may be inferred from “paucity of proof” to support underlying complaint and accuser’s failure to investigate facts before filing suit].) “Since parties rarely admit an improper motive, malice is usually proven by circumstantial evidence and inferences drawn from the evidence.” (HMS Capital, Inc. v. Lawyers Title Co., supra, 118 Cal.App.4th at p. 218.)
Debt Buyers does not specifically dispute Turner’s showing of malice. We conclude Turner made a sufficient prima facie showing from which a jury could infer that the collection action was initiated or maintained for the improper purpose of leveraging a settlement from Turner. Our conclusion is based on Debt Buyers’ failure to produce any documentation to support its claims of Turner’s indebtedness other than Proto’s inaccurate March 2008 declaration, its repeated demands for settlement amounts that substantially exceeded the alleged debt, and its submission of limited supporting documentation only with the reply brief on its motion to strike. (See Sycamore Ridge, supra, 157 Cal.App.4th at p. 1408 [failure of discovery responses to support damages claimed in underlying action would support conclusion that proceedings were initiated and maintained to force plaintiff to enter into settlement unrelated to merits of underlying claims].) Because Turner met her burden to establish a prima facie case which, if believed by the trier of fact, will establish her malicious prosecution claim, the anti-SLAPP motion should have been denied.
We express no opinion as to whether Turner’s malicious prosecution claim will ultimately succeed. Our holding is a limited one. She met her burden to show her action had the merit required to survive an anti-SLAPP motion.
C. Turner’s Unfair Competition Law Claims
Turner also claims the trial court was wrong to strike her claims for unfair competition filed pursuant to Business and Professions Code section 17200. Debt Buyers argues Turner cannot demonstrate a possibility of prevailing on these claims for two reasons. They are barred by the litigation privilege provided Debt Buyers under Civil Code section 47, and Turner can make no showing she is entitled to the relief afforded a plaintiff in an unfair competition action. We need not address whether the litigation privilege would apply to shield Debt Buyers from Turner’s claims because we agree with Debt Buyers that Turner can make no showing she is entitled to the relief available to a private plaintiff under Business and Professions Code section 17200.
Prevailing plaintiffs in an action brought under the unfair competition law are generally limited to injunctive relief and restitution. (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179.) Damages and attorney fees are not available. (Ibid.) Turner claims she could secure injunctive relief to preclude Debt Buyers from suing on this claim again, and she is entitled to restitution of the filing fee she paid to answer the Debt Buyers’ complaint in the collection case.
However, while the fee paid by Turner to file her answer in the collection case may be an item of her malicious prosecution damages, it is not a proper subject of restitution. (See Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 173-178 [discussion comparing restitution remedy and damages].) There also does not appear to be a need for injunctive relief. Turner does not dispute Debt Buyers’ claim that the assignment of Turner’s account for collection was recalled by Citibank. In her opening brief, Turner merely defends her request for an injunction by stating that it was proper “until then.” She makes no showing that Debt Buyers’ efforts are ongoing or that they are part of a custom and practice affecting debtors generally. Thus, there does not appear to be an ongoing threat of meritless collection litigation that may be enjoined.
Accordingly, we conclude Turner has not shown she is likely to prevail against Debt Buyers on her claims for unfair competition brought pursuant to Business and Professions Code section 17200.
DISPOSITION
The order granting Debt Buyers’ anti-SLAPP motion is reversed as to the cause of action for malicious prosecution. The award of attorney fees to Debt Buyers as the prevailing party on the anti-SLAPP motion is also reversed.
We concur: McGuiness, P.J., Pollak, J.