Judge Holly J. Fujie, Case 22STCV09969 2023-03-29 Tentative Ruling

RESPONDING PARTIES: (1) Defendant Steven T. Lowe (“Lowe”); (2) Defendants Beach Cities Law Group, Inc., Frank Sandelmann, and Brennan Mitch (collectively, the “BCLGI Defendants”)

This matter arises out of an ongoing probate dispute. On March 22, 2022, Plaintiff filed a complaint (the “Complaint”) alleging legal malpractice. The currently operative first amended complaint (the “FAC”), filed on November 23, 2022, alleges: (1) legal malpractice; and (2) malicious prosecution. The FAC identifies Lowe and the BCLGI Defendants as parties to the malicious prosecution claim.

On March 6, 2023, Plaintiff filed a motion to stay the entire action (the “Motion”) pending the Second District Court of Appeal’s decision on the consolidated appeals that were filed in the qui tam action entitled Robert Green v. Paula R. Green, LASC Case No. 20STCV05251 (the “Underlying Action”).[1]

A court ordinarily has inherent power, in its discretion, to stay proceedings when such a stay will accommodate the ends of justice. (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 141.) The power to stay proceedings is incidental to the power inherent in every court to control the disposition of the cause on its docket with the economy of time and effort for itself, for counsel, and for litigants. (Id.) Even when the statutes do not call for an automatic stay on appeal, the trial and appellate courts both have the power to issue discretionary stays. (Daly v. San Bernardino County Bd. of Supervisors (2021) 11 Cal.5th 1030, 1039.)

To state a cause of action for malicious prosecution, a plaintiff must allege: (1) the defendant initiated or maintained a prior action without probable cause; (2) the defendant acted with malice in doing so; and (3) the prior action was terminated in the plaintiff’s favor on the merits. (Gruber v. Gruber (2020) 48 Cal.App.5th 529, 537.)

A cause of action for malicious prosecution accrues, and the statute of limitations begins to run, upon entry of judgment in the underlying action. (Drummond v. Desmarais (2009) 176 Cal.App.4th 439, 457 (“Drummond”).) The accrual of a cause of action presupposes that all of the elements necessary to that cause of action have come into existence. (Id. at 457-58.) The law thus necessarily views the plaintiff as able to plead and prove, at the moment judgment is entered, a favorable termination of the underlying action, despite the pendency, or potential pendency, of an appeal. (Id. at 458.) However, the filing of an appeal tolls the statute until the appeal is concluded. (Id.) A malicious prosecution action will not lie, and is deemed premature, while an appeal from the judgment in the underlying action is pending. (Pasternack v. McCullough (2015) 235 Cal.App.4th 1347, 1356 (“Pasternack”).) This is because the appeal suspends the plaintiff’s ability to plead and prove a favorable termination. (Drummond, supra, 176 Cal.App.4th at 458.) While early cases indicated that the correct remedy was to dismiss the malicious prosecution complaint in the expectation that the Plaintiff could refile it—as a new action—upon a favorable conclusion of the appeal, it has since been held that the proper remedy is to stay the action. (Id.) A stay permits the court to reserve jurisdiction and spares the plaintiff the hazards of correctly calculating the tolling period, and perhaps recalculating it every time an arguable break in tolling occurs. (Id. at 459.)

Judgment was entered for Plaintiff in the Underlying Action on April 19, 2022. (Declaration of Larry J. Caldwell (“Caldwell Decl.”) ¶ 3, Exhibit 1.) Defendant Robert Green (“Robert”), the qui tam plaintiff in the Underlying Action, filed a Notice of Appeal on June 15, 2022. (Caldwell Decl. ¶ 4, Exhibit 2.)[2] Plaintiff was awarded attorney’s fees in the Underlying Action on July 18, 2022; Robert filed a Notice of Appeal of the order granting attorney’s fees on September 15, 2022. (Caldwell Dec. ¶¶ 6-7, Exhibits 4-5.) On February 27, 2023, the Second District Court of Appeal issued an order consolidating the two appeals. (Caldwell Decl. ¶ 8, Exhibit 6.)

The Court finds that staying the entire action pending the resolution of the appeals in the Underlying Case is in the interest of judicial efficiency and the ends of justice. The two causes of action in the FAC arise out of largely the same set of operative facts. Neither Lowe nor the BCLGI Defendants have demonstrated that they would be prejudiced by a stay. Further, the Court is not convinced by the BCLGI Defendants’ argument that under Pasternack, a stay is inappropriate because Plaintiff filed the malicious prosecution claim after Green initiated the appeals of the Underlying Matter and her claim was thus not “rendered” premature. Pasternack involved a malicious prosecution cause of action based on claims asserted against the plaintiff in an earlier lawsuit where the plaintiff’s cross-complaint in the underlying action remained pending. (See Pasternack, supra, 235 Cal.App.4th at 1356-57.) The Pasternack court found that the malicious prosecution claim was properly disposed of via anti-SLAPP motions and that a stay was not required because the claim was premature when it was filed and when the anti-SLAPP motions were heard. (Id. at 1358.) Notably, in Pasternack, no judgment had been entered in the underlying action, and the concerns articulated by the Drummond court were thus inapposite. (See id. at 1357-58.)[3]

The Court therefore GRANTS the Motion and orders that this matter be stayed pending the resolution of the appeals in the Underlying Matter. The Court sets a status conference on August 1, 2023 at 8:30 a.m. in this department. The parties are ordered to file a joint status report by July 25, 2023. Should the appeal in the Underlying Matter be resolved before the status conference date, either party may request an earlier date by ex parte application. The forthcoming hearing dates are VACATED and may be re-set after the stay is lifted.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative. If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org stating your intention to appear in person. The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date. This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

[1] Plaintiff was the defendant in the Underlying Action.

[2] The Court uses first names to distinguish persons with the same last name and intends no disrespect in so doing.

[3] The Court further notes that the malicious prosecution claim discussed in Drummond was initiated after the underlying judgment was already on appeal. (See Drummond, supra, 176 Cal.App.4th at 445.)