Judge Bruce G. Iwasaki, Case Number: 22STCV31919, Date: 2024-12-12 Tentative Ruling

Tentative Ruling: The Motion for Summary Judgment is granted.

This is a malicious prosecution action. The allegation in the Complaints arise from the trial court’s termination of the Underlying Action entitled In re The David and Rose Markowitz 1998 Trust, Dated June 2, 1998 (Case No. 17STPB08890). The Complaints contain a single cause of action for malicious prosecution.

Defendant Joseph Raymond Markowitz (Joseph or Defendant) now moves for summary judgment as to both consolidated Complaints. Plaintiffs Philip Markowitz and Saul Markowitz (Plaintiffs) filed an opposition.

A party may move for summary judgment “if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc., § 437c,¿subd. (a).) “[I]f all the evidence submitted, and all inferences reasonably deducible from the evidence and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law,” the moving party will be entitled to summary judgment. (Adler v. Manor Healthcare Corp.¿(1992) 7 Cal.App.4th 1110, 1119.)

The moving party has the initial burden of production to make¿a prima facie¿showing of the nonexistence of any triable issue of material fact, and if he does so, the burden shifts to the opposing party to make¿a prima facie¿showing of the existence of a triable issue of material fact. (Aguilar v. Atlantic Richfield Co.¿(2001) 25 Cal.4th 826, 850; accord Code Civ. Proc., § 437c,¿subd. (p)(2).) A Defendant moving for summary judgment may meet its initial burden by proving that for each cause of action alleged, plaintiff cannot establish at least one element of the cause of action. (Code Civ. Proc., § 437c(p)(2).)

Defendant moves for summary judgment on the two consolidated Complaints on the grounds that the sole cause of action for malicious prosecution is without merit because the termination of the underlying action was based on statute of limitations and, therefore, does not constitute a “favorable termination.”

To prevail on a claim for malicious prosecution, “[a] plaintiff must plead and prove three elements to establish the tort of malicious prosecution: a lawsuit ‘(1) was commenced by or at the direction of the defendant and was pursued to a legal termination favorable to the plaintiff; (2) was brought without probable cause; and (3) was initiated with malice.’ [Citation.]” (Nunez v. Pennisi (2015) 241 Cal.App.4th 861, 872–873.)

Here, Defendant Joseph argues that Plaintiffs cannot prevail on a malicious prosecution claim because the underlying action did not terminate in Plaintiffs favor.

To determine “whether there was a favorable termination” for purposes of malicious prosecution, courts “look at the judgment as a whole in the prior action....” (Sagonowsky v. More (1998) 64 Cal.App.4th 122, 129.) “It is not essential to maintenance of an action for malicious prosecution that the prior proceeding was favorably terminated following trial on the merits.” (Lackner v. LaCroix (1979) 25 Cal.3d 747, 750 (Lackner).) Rather, “[i]n order for the termination of a lawsuit to be considered favorable to the malicious prosecution plaintiff, the termination must reflect the merits of the action and the plaintiff's innocence of the misconduct alleged in the lawsuit.” (Pender v. Radin (1994) 23 Cal.App.4th 1807, 1814.)

Here, Defendant’s evidence shows that on October 3, 2017, Defendant Joseph filed a verified petition in the underlying probate action in the Superior Court of California, County of Los Angeles (Case No. 17STPB08890), against his brothers Philip Markowitz (Plaintiff Philip) and Saul Markowitz (Plaintiff Saul) (hereinafter, the “Underlying Action”). (DSS 1.)

On January 23, 2018, Defendant Joseph filed a verified first amended petition (FAP) in the Underlying Action seeking to (1) quiet title against Saul’s claims of ownership of the Burbank Property; (2) compel Plaintiff Saul to return unspecified cash, stocks, bonds, and other personal property; (3) compel Plaintiff Philip to deliver unspecified cash, stocks, bonds, and other personal property; and (4) obtain reimbursement for attorneys’ fees and costs incurred in connection with the FAP. (DSS 2.) The trial court in the Underlying Action overruled Plaintiffs Saul and Philip’s demurrers to the FAP. (DSS 3.)

On April 11, 2018, Defendant Joseph filed a verified second amended petition (SAP) in the Underlying Action. (DSS 4.) Plaintiffs Saul and Philip filed demurrers, arguing that Defendant’s Joseph’s claims for conversion and restitution were time-barred because of the three-year statute of limitations. (DSS 5.) The trial court in the Underlying Action sustained the demurrers to the SAP with leave to amend to allow Defendant Joseph an opportunity to allege facts to avoid the statute of limitations. (DSS 6.) Specifically, the trial court in the Underlying Action concluded that if Defendant Joseph could demonstrate that his claims were not time-barred and prevailed in the Underlying Action, the Trusts at issue would be funded. (DSS 7.)

On September 18, 2018, Defendant Joseph filed the operative verified third amended petition (TAP). (DSS 8.) Along with their demurrers to the TAP, Plaintiffs Saul and Philip each filed Motions for Sanctions pursuant to Code of Civil Procedure section 128.7. (DSS 9.) On February 7, 2019, the trial court in the Underlying Action overruled the demurrer but granted Plaintiffs Saul and Philip’s motions for terminating and monetary sanctions. (DSS 10.) The trial court awarded $5,685 to Plaintiff Philip and $6,460 to Plaintiff Saul as reasonable attorneys’ fees and costs for bringing the motions. (DSS 11.)

These materials facts are undisputed. The only disputed fact is Defendant’s material fact that “trial court in the Underlying Action acknowledged that without the allegations of delayed discovery, Joseph’s entire case fails based on the three-year statute of limitations.” (DSS 12.)

A “ ‘favorable’ termination does not occur merely because a party complained against has prevailed in an underlying action.... If the termination does not relate to the merits—reflecting on neither innocence of nor responsibility for the alleged misconduct—the termination is not favorable in the sense it would support a subsequent action for malicious prosecution.” (Lackner, supra, 25 Cal.3d at p. 751.) Thus, a “technical or procedural [termination] as distinguished from a substantive termination” will not support a claim for malicious prosecution. (Ibid.)

In Casa Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, the California Supreme Court specifically identified a dismissal based on statute of limitations grounds as technical termination not on the merits. (Id. at p. 342 [citing Lackner, supra, 25 Cal.3d at pp. 751-752].)

Based the above case authority, a termination based on the statute of limitations cannot constitute a favorable termination. Plaintiffs do not dispute this position.

Here, admittedly, the facts are somewhat more complicated than a clear dismissal based on the statute of limitations. That is, the Underlying Action was not the trial court’s determination on demurrer that the claims were barred by the statute of limitations. Rather, the trial court determined pursuant to Code of Civil Procedure section 128.7 that Defendant’s TAP contained untrue allegations and must be dismissed. (DSS 12-14.) This circumastance, however, does not substantively change the fact that the termination was based on the statute of limitations.

Crucially, however, the trial court also had before it a motion for sanctions pursuant to Code of Civil Procedure section 128.7. This motion requested that the trial court in the Underlying Action “dismiss this action based on Petitioner’s [Joseph’s] allegations that ‘[t]he first time Petitioner discovered or reasonably could have discovered that Rose had not acted to fully segregate her Trust assets in the Survivor's 'A' Trust from the Trust funds of David Markowitz in his irrevocable Decedent's 'B' & 'C' Trusts was in or about May, 2018 when the parties received the subpoenaed records of the Albience Law Firm….’” DSS 12 [Ex. A, Trial Court Order, p. 5-6].) The trial court determined that Joseph’s allegation of delayed discovery in the TAP was demonstrably false. This was based, in part, on evidence submitted in support of the section 128.7 sanctions motion -- specifically, Rose’s January 6, 2014 declaration filed with Joseph’s petition in the Initial Probate Action filed in November 2014 and deposition testimony in the case Saul Markowitz v. Joseph Markowitz, et al. LASC Case No. BC560982 proceeding. (DSS 12 [Ex. A, Trial Court Order, p. 6-7]; see also DSS 13-14 [Ex. B, Court of Appeal Opinion, dated August 25, 2021, p. 13].)

The opposition argues that the trial court also identified another allegation in the TAP as false, and this allegation goes to the merits of the Defendant’s case in the Underlying Action. (Opp., 12:8-26.) Whether this allegation does go to the merits of the case or not, the trial court only considered the falsity of this allegation in the context of its statute of limitations analysis; that is, finding this allegation was also untrue only bolstered the trial court’s determination that the delayed discovery allegations were false such that the TAP must be dismissed as time barred. (DSS 12 [Ex. A, Trial Court Order, pp. 7:14 - 8:5.) Thus, the Underlying Action was dismissed based on the trial court’s determination that Defendant had alleged false facts in the TAP to circumvent the statute of limitations.

The trial court in the Underlying Action found that Joseph’s false statements were egregious and dismissed his case. This Court takes a dim view of Joseph’s perjurious testimony. Joseph’s TAP was factually and legally frivolous, but it does not follow that its dismissal was a ruling on the merits.

The legal analysis in the context of a motion for terminating sanctions is instructive in determining how to analyze the termination based on section 128.7. There is no bright light rule as to whether dismissal of an action resulting from terminating sanctions meets the requirement of a favorable termination reflecting on the merits of the action. Although a few cases have examined the issue, none is dispositive.

For example, in Zeavin v. Lee (1982) 136 Cal.App.3d 766, the underlying action was dismissed because the plaintiff refused to answer discovery or cooperate with her lawyer. The defendant in that case, Zeavin, then sued Lee, the attorney for the underlying plaintiff, for malicious prosecution. The court held dismissal of the first action for failure to respond to discovery was not a favorable termination because it did not reflect the innocence of Zeavin or the lack of merit of the underlying action. (Id. at p. 771.)

Similarly, in Pattiz v. Minye (1998) 61 Cal.App.4th 822, the court affirmed summary judgment in favor of three malicious prosecution defendants—Minye and her two attorneys from the underlying action. (Pattiz, supra, 61 Cal.App.4th at p. 824.) The underlying action was dismissed as a sanction for discovery abuses, namely Minye's incomplete and disorderly production of documents and the failure of Minye's daughter to appear for a deposition; Minye herself appeared for her deposition and participated in the document production, however deficient. (Id. at p. 825.) The Pattiz court held that the undisputed facts did not support an inference that the dismissal of the underlying case reflected on the merits because “Minye did not abandon the action or refuse to cooperate in discovery. Moreover, it would be unfair to ascribe a lack of cooperation by Minye to her daughter's act of refusing further deposition due to illness.” (Id. at pp. 827–828, 71 Cal.Rptr.2d 802.)

The Pattiz court continued: “We disagree that the municipal court expressly found or reasonably inferred that Minye destroyed documents to prevent Pattiz's defense to the cross-complaint. The discovery ruling stated only that Minye misused the discovery process and ‘egregious[ly]’ failed to comply with court-ordered discovery. The ruling made no express findings concerning the merits of the cross-complaint.” (Id. at p. 828.)

Based on these cases, a court’s determination that the motion for terminating sanctions did not constitute a “favorable termination” turns on whether the discovery misconduct related to whether the underlying action lacked merit.

Here, as the Court has explained above, the trial court in the Underlying Action, determined that Joseph’s untrue allegations were intended to overcome a statute of limitations defense. As noted above, a dismissal based on the statute of limitations defense does not constitute an action on the merits. A dismissal based on actions to thwart the statute of limitations defense is effectively the same. The trial court in the Underlying Action found Joseph’s conduct was egregious, but did not make a determination on the merits of the claim. For purposes of determining malicious prosecution therefore, there was no “favorable termination.”

Department 58