Judge: Daniel S. Murphy, Case: 23STCV11085, Date: 2024-09-30 Tentative Ruling

Case Number: 23STCV11085    Hearing Date: September 30, 2024    Dept: 32

BACKGROUND

            On May 17, 2023, Plaintiff Paula M. Heil filed this action for malicious prosecution and slander of title against Defendants Andrei V. Serpik and Michael D. Anderson. The complaint arises from the following allegations.            

            Plaintiff was the owner of real property located in Pioneertown, California (the Property), which she sold to Tommie Moreau and Sandra Merkow in March 2017. (Compl. ¶¶ 4-5.) Moreau and Merkow took title to the Property subject to three deeds of trust, one of which was based on a seller-carry loan for the benefit of Plaintiff. (Id., ¶ 6.) Merkow and Moreau defaulted on the seller-carry loan, and Plaintiff recorded a notice of default against the Property. (Id., ¶ 7.) Plaintiff’s husband, Jeffrey Heil, a licensed contractor, also had a construction agreement with Moreau and Merkow related to the Property. (Id., ¶ 8.) When Moreau and Merkow defaulted on that payment as well, Jeffrey Heil filed an action in San Bernardino County for breach of contract and foreclosure of mechanics lien. (Id., ¶ 9.)

            Defendants, purporting to represent Merkow and Moreau, filed a cross-complaint against Plaintiff and Jeffrey Heil, seeking to preclude the foreclosure of the Property under the seller-carry loan and mechanics lien. (Compl. ¶ 10.) Defendants also recorded two lis pendens against the Property. (Id., ¶ 11.) Thereafter, Moreau and Merkow defaulted on their obligations to third-party lender Sheila Joseph, who foreclosed on her deed of trust against the Property. (Id., ¶ 12.) Plaintiff and Jeffrey Heil then foreclosed on their deed of trust, and Jeffrey Heil transferred his share to Plaintiff as her sole and separate property. (Id., ¶ 13.)

            After Plaintiff took title to the Property, Defendants filed an amended cross-complaint alleging that Joseph’s foreclosure was unlawful and that Joseph had conspired with Plaintiff and Jeffrey Heil to take title away from Moreau and Merkow. (Compl. ¶ 14.) In so doing, Defendants delayed Plaintiff’s foreclosure of the Property, clouded Plaintiff’s title, and entangled Plaintiff in litigation for three years until Plaintiff prevailed at trial. (Id., ¶ 15.) Defendants did not actually represent Merkow and did not have authority to do so, instead utilizing forged filings in their case against Plaintiff and Jeffrey Heil. (Id., ¶¶ 17-19.) Defendants also fabricated the allegations in their cross-complaint. (Id., ¶ 21-23.) Defendants continued to prosecute their false claims against Plaintiff even after Moreau withdrew authority for Defendants to represent him. (Id., ¶ 24.) Defendants engaged in this conduct for their own personal gain, specifically to satisfy their own lien for attorney’s fees from the proceeds of the Property. (Id., ¶ 25.)

            Plaintiff alleges that the cross-complaint constituted malicious prosecution and that the two lis pendens constituted slander of title.  

            On May 8, 2024, Defendant Serpik filed the instant special motion to strike. Plaintiff filed her opposition on September 16, 2024. Defendant filed his reply on September 20, 2024.

LEGAL STANDARD

A special motion to strike under Code of Civil Procedure section 425.16 allows a defendant to seek early dismissal of a lawsuit that qualifies as a strategic lawsuit against public participation. A SLAPP is “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.” (Code Civ. Proc., § 425.16(b)(1).)

Such acts include (1) any written or oral statement or writing made before a judicial proceeding, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a judicial body, (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest. (Code Civ. Proc., § 425.16(e).)

Evaluation of an anti-SLAPP motion requires a two-prong 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. Second, if the court finds such a showing has been made, the court must then consider whether the plaintiff has demonstrated a probability of prevailing on the claim. (Nygard, Inc. v. Uusi-Kerttula (2008) 159 Cal.App.4th 1027, 1035.) If both prongs are met—(1) the complaint targets protected activity, and (2) the plaintiff has no reasonable probability of success—then the lawsuit is subject to being stricken under the statute. (Dwight R. v. Christy B. (2013) 212 Cal.App.4th 697, 709-10.)

EVIDENTIARY OBJECTIONS

Plaintiff’s Objections

• Objection No. 4 is sustained.
• Objection Nos. 1-3 are overruled. 

Defendant’s Objections

• Defendant’s objections are overruled.

DISCUSSION

I. Late-Filed Motion

            “The special motion may be filed within 60 days of the service of the complaint or, in the court’s discretion, at any later time upon terms it deems proper.” (Code Civ. Proc., § 425.16(f).) “[S]ubdivision (f) authorizes the court, in its discretion, to consider an untimely motion without restriction as to whether or when the moving defendant so requests.” (Chitsazzadeh v. Kramer & Kaslow (2011) 199 Cal.App.4th 676, 684.) “In determining whether to permit a late motion, the most important consideration is whether the filing advances the anti-SLAPP statute's purpose of examining the merits of covered lawsuits in the early stages of the proceedings.” (San Diegans for Open Government v. Har Construction, Inc. (2015) 240 Cal.App.4th 611, 624.) “Other relevant factors include the length of the delay, the reasons for the late filing, and any undue prejudice to the plaintiff.” (Ibid.)

            Here, the Court’s personal jurisdiction over Defendant Serpik was not resolved until April 26, 2024, when the Court denied Defendant’s motion to quash service of summons. Defendant filed this motion on May 8, 2024, shortly after the Court’s ruling. No discovery has taken place thus far. (Ilia Serpik Decl. ¶ 25.) Therefore, in terms of the merits, the case is in its infancy. Hearing the motion now advances the anti-SLAPP statute’s purpose of testing the merits early in litigation. Although the complaint was filed back in May 2023, issues of default, service, and jurisdiction were not resolved until recently. (Id., ¶¶ 19-24.)

The Court does not find that Plaintiff would be unduly prejudiced by the motion being heard at this time. Plaintiff expresses no objection to the motion being heard despite the late filing. Therefore, the Court proceeds with the motion.  

II. Protected Activity

            To satisfy the first prong, a moving defendant must identify the activity each challenged claim rests on and demonstrate that that activity is protected by the anti-SLAPP statute. (Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 884.) A “claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted.” (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1060.)

            “[A]ll communicative acts performed by attorneys as part of their representation of a client in a judicial proceeding or other petitioning context are per se protected as petitioning activity by the anti-SLAPP statute.” (Cabral v. Martins (2009) 177 Cal.App.4th 471, 480.) “[C]ommunications that are intimately intertwined with, and preparatory to, the filing of judicial proceedings qualify as petitioning activity for the purpose of the anti-SLAPP statute.” (Id. at p. 482.) “[E]very claim of malicious prosecution is a cause of action arising from protected activity because every such claim necessarily depends upon written and oral statements in a prior judicial proceeding.” (Area 55, LLC v. Nicholas & Tomasevic, LLP (2021) 61 Cal.App.5th 136, 151.)

Here, both the malicious prosecution and slander of title claims are premised on Defendants’ filing of the cross-complaint and related litigation activity such as recording the lis pendens. Thus, the complaint targets protected activity. (See Code Civ. Proc., § 425.16(e).)

Plaintiff argues that the alleged false filings and forgeries are not protected because they constitute violations of the Rules of Professional Conduct and Business and Professions Code. However, at the first prong, “the question is only whether a defendant has made out a prima facie case that activity underlying a plaintiff's claims is statutorily protected . . . not whether it has shown its acts are ultimately lawful.” (Wilson, supra, 7 Cal.5th at p. 888.) “[A]ny ‘claimed illegitimacy of the defendant's acts is an issue which the plaintiff must raise and support in the context of the discharge of the plaintiff's [secondary] burden to provide a prima facie showing of the merits of the plaintiff's case.’” (Ibid., quoting Navellier v. Sletten (2002) 29 Cal.4th 82, 94.)

As established above, Plaintiff’s allegations target the protected activity of filing a cross-complaint and recording lis pendens. Plaintiff’s contention that these acts were unlawful goes to the second prong. The first prong is satisfied.  

III. Probability of Success

            a. General Principles

Because the first prong is met, the burden shifts to Plaintiff to show a probability of success. A plaintiff establishes a probability of prevailing on the claim by showing that the complaint is legally sufficient and supported by a prima facie showing of facts that, if proved at trial, would support a judgment in the plaintiff's favor. (Taus v. Loftus (2007) 40 Cal.4th 683, 713-14.) Rather than weighing the evidence, the court must “accept as true the evidence favorable to the plaintiff . . . The plaintiff need only establish that his or her claim has ‘minimal merit’ to avoid being stricken as a SLAPP . . . .” (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291.¿) The defendant’s showing is only analyzed “to determine if it defeats the plaintiff’s claim as a matter of law.” (Area 55, supra, 61 Cal.App.5th at p. 151.)

b. Malicious Prosecution

To prevail on a claim of malicious prosecution, the plaintiff must show that the underlying action: (1) was commenced by or at the direction of the defendant and was pursued to a legal termination in the plaintiff's favor; (2) was brought without probable cause; and (3) was initiated with malice. (Area 55, supra, 61 Cal.App.5th at p. 153.)      

                        1. Favorable Termination

“‘[F]avorable’ 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. 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 v. LaCroix (1979) 25 Cal.3d 747, 751.) There does not need to have been a trial on the merits in the underlying action, but “termination must reflect on the merits of the underlying action.” (Id. at p. 750, emphasis in original.) Therefore, a termination is not favorable if it is based on “technical or procedural” grounds. (Id. at p. 751.)

“A ‘lack of standing’ is a jurisdictional defect . . . [which] does not involve the merits and cannot constitute a favorable termination.” (Hudis v. Crawford (2005) 125 Cal.App.4th 1586, 1592.) Defendant argues that the cross-complaint from the underlying lawsuit was dismissed on demurrer purely for lack of standing. However, a plain reading of the demurrer shows that it was based on substantive grounds in addition to standing. (See Def.’s RJN, Ex. 20.) The court’s ruling sustaining the demurrer does not show its reasoning and therefore does not prove that the demurrer was sustained purely for lack of standing. (See id., Ex. 21.)

The sustaining of Plaintiff’s demurrer and subsequent judgment in Plaintiff’s favor sufficiently show that the underlying litigation terminated in Plaintiff’s favor for purposes of establishing the minimal merit of Plaintiff’s malicious prosecution claim.  

            2. 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 . . . Only those actions that any reasonable attorney would agree are totally and completely without merit may form the basis for a malicious prosecution suit.” (Area 55, supra, 61 Cal.App.5th at p. 165, internal citations omitted.) “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.” (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 292.) “If there is ‘no dispute as to the facts upon which an attorney acted in filing the prior action, the question of whether there was probable cause to institute that action is purely legal.’” (Citizens of Humanity, LLC v. Hass (2020) 46 Cal.App.5th 589, 599.)

Defendant had reason to believe the underlying action had merit because the court denied Plaintiff’s motion to expunge lis pendens, which necessarily involved a finding that the cross-complaint had a reasonable probability of success. (See Code Civ. Proc., §§ 405.30, 405.32.) Because the cross-claim was found to have a reasonable probability of success, it cannot constitute malicious prosecution as a matter of law. Plaintiff has no response to this argument.

            3. Malice

Malice for purposes of malicious prosecution means “actual ill will or some improper ulterior motive.” (Daniels v. Robbins (2010) 182 Cal.App.4th 204, 224.) “Since parties rarely admit an improper motive, malice is usually proven by circumstantial evidence and inferences drawn from the evidence.” (Id. at p. 225.)

Defendant honestly believed that “both of Plaintiff’s foreclosure attempts were premature, that the loan had not come due yet, and that quiet title and other claims were appropriate.” (Andre Serpik Decl. ¶¶ 4-5.) Defendant denies harboring any ill will against Plaintiff and only intended to prevent what he believed was an unlawful foreclosure. (Id., ¶¶ 7-8.) Defendant believed he had authority from Moreau and Merkow and did not forge their signatures. (Id., ¶¶ 9-10.) Defendant denies having any lien for attorney’s fees attached to the Property. (Id., ¶ 11.)

These facts establish as a matter of law that Defendant did not act with malice. The malicious prosecution claim fails for this independent reason.

            c. Slander of Title

Civil Code section 47(b) makes privileged a publication made “[i]n any (1) legislative proceeding, (2) judicial proceeding, (3) in any other official proceeding authorized by law, or (4) in the initiation or course of any other proceeding authorized by law.” (Civ. Code, § 47(b).) The privilege “applies to any publication required or permitted by law in the course of a judicial proceeding to achieve the objects of the litigation, even though the publication is made outside the courtroom and no function of the court or its officers is involved.” (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1057.) “A recorded lis pendens is not a privileged publication unless it identifies an action previously filed with a court of competent jurisdiction which affects the title or right of possession of real property, as authorized or required by law.” (Civ. Code, § 47(b)(4).)

Here, the two lis pendens at issue identify the underlying litigation, and the underlying litigation did affect title to or possession of real property. (See Def.’s RJN, Ex. 2, 3, 8.) Thus, the recording of the lis pendens is privileged as a matter of law. Plaintiff has no response to this argument. As a result, Plaintiff cannot show a probability of success on the slander of title claim.

d. Plaintiff’s Evidence

            1. Burden of Proof

First, Plaintiff applies the wrong legal standard by arguing that Defendant failed to rebut the complaint’s allegations. Once a defendant has satisfied the first prong, the burden shifts to the plaintiff to demonstrate a probability of success. (Swanson v. County of Riverside (2019) 36 Cal.App.5th 361, 369.) Because the first prong has been satisfied here, the burden lies with Plaintiff to show that the claims are supported by evidence. It is not Defendant’s burden to rebut the allegations in the complaint. 

            2. Forgery

Plaintiff argues that Merkow’s signature was forged on the original cross-complaint because the verification pages for both Merkow’s and Moreau’s signatures were sent to Defendant from the same fax number, which Plaintiff contends was Moreau’s. (See Berokim Decl., Ex. 1, pp. 29-30.) Plaintiff also argues that Merkow’s signature is not a signature, but merely Merkow’s name spelled out. (Ibid.) Lastly, Plaintiff points out that Merkow’s signature on the verification does not match Merkow’s signature on the construction contract attached to the cross-complaint. (Id. at p. 37.) Plaintiff concludes from this that Moreau must have forged Merkow’s signature and then faxed both verifications to Defendant.

Plaintiff’s evidence does not demonstrate that Merkow’s signature was forged. The fact that both verifications were faxed from the same number does not mean Moreau forged Merkow’s signature. Plaintiff does not explain why Moreau and Merkow could not have independently signed their respective verifications and then faxed them from the same number.

The signature on Merkow’s verification appears to be a signature on its face. Plaintiff has no foundation to conclude that the signature is simply Merkow’s name spelled out. Although the signature on the verification does not match the one on the construction contract, Plaintiff has no foundation to conclude that the signature on the verification was forged. Lastly, none of this is evidence that Defendant participated in or was even aware of any forgery.

In sum, Plaintiff has failed to present any evidence supporting an inference that Defendant knowingly filed a forged cross-complaint. Plaintiff’s evidence and argument regarding forgery do not demonstrate that Defendant lacked probable cause or acted with malice.  

            3. Discovery Responses and Withdrawal

Plaintiff argues that Defendant fabricated discovery responses from Merkow because the responses were never verified by Merkow. (See Berokim Decl. ¶ 7.) Plaintiff filed a motion to compel, and in Defendant’s opposing declaration, he averred that if he and his firm could not get ahold of Merkow, they would withdraw as her counsel. (Id., Ex. 7, p. 12.) The firm did in fact withdraw as Merkow’s counsel, citing unsuccessful efforts to contact the client. (Id., Ex. 8.) Plaintiff concludes that if Defendant never had any contact with Merkow, he must have fabricated Merkow’s discovery responses. 

However, the failure to obtain Merkow’s verification for the discovery responses, and subsequent withdrawal, do not prove that Defendant never had any contact with Merkow or fabricated the responses. The cited filings do not support any such inference. Attorneys regularly withdraw due to a breakdown in communications with their clients. No malice can be implied from this alone, nor does it demonstrate a lack of probable cause for filing the cross-complaint.  

Plaintiff’s counsel also claims that during a prelitigation conversation with Defendant, Defendant stated that he had “never had any contact or communications with either Merkow, nor Moreau” because “direct communications with clients was not his responsibility.” (Berokim Decl. ¶ 17.) This does not refute the fact that Moreau and Merkow retained the firm Anderson & Associates to represent them, and Defendant worked on the underlying litigation as an associate of the firm. (See Andre Serpik Decl. ¶ 2.) Thus, Defendant understood that he had authority from Moreau and Merkow. (Id., ¶ 9.) Again, the cross-complaint was verified by Moreau and Merkow, and Plaintiff has no evidence that those signatures were forged. The signatures are additional evidence that Moreau and Merkow authorized the filings. Thus, the dispute over communications with Moreau and Merkow does not prove that Defendant lacked authority or falsified court filings.

Ultimately, Plaintiff presents no evidence from which it may be inferred that Defendant lacked probable cause or acted with malice in filing the cross-complaint. Therefore, Plaintiff has failed to show a probability of prevailing on the malicious prosecution claim. Plaintiff also has no response to Defendant’s argument that the slander of title claim is barred by the litigation privilege, thus failing to demonstrate a probability of success on that claim as well.

Because the complaint targets protected activity, and Plaintiff has failed to demonstrate a probability of success for either cause of action, the complaint must be stricken under Code of Civil Procedure section 425.16.     

CONCLUSION

            Defendant Andrei Serpik’s special motion to strike is GRANTED.