Judge Holly J. Fujie, Case Number: 24STCV24581, Date: 2025-03-18 Tentative Ruling

On September 20, 2024, Plaintiffs Pejman J. Sage and Tax Credit Group (“Plaintiffs”) filed the instant Complaint against Defendant Azadegan Law Group, A Professional Corporation (“Defendant”) and Does 1 to 10, inclusive, for a sole cause of action for malicious prosecution.

On December 6, 2024, Defendant filed this instant special motion (Anti-SLAPP) to strike. On March 5, 2025, Plaintiffs filed an opposition. On March 11, 2025, Defendant filed a reply.

In support of its motion, Defendant advances the declaration of Ramin Azadegan. Plaintiffs object to portions of this declaration. The Court rules as follows:

Defendant requests the Court take judicial notice of Exhibit 1 attached to the declaration Ramin Azadegan.

Plaintiffs request the Court take judicial notice of Exhibits A-J attached to the declaration of Mark L. Share.

The requests for judicial notice are GRANTED pursuant to Evidence Code sections 452, subdivision (d) and 453 (except as to the truth).

Under Code of Civil Procedure section 425.16, subdivision (b), “[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 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.” (Code Civ. Proc., § 425.16, subd. (b).)

Such a motion involves a two-step analysis in which the court must first determine whether a movant “has made a threshold showing that the challenged cause of action is one arising from protected activity . . .” (Taus v. Loftus (2007) 40 Cal.4th 683, 712, quoting Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67).) If the court so finds, it must then examine whether the respondent has demonstrated a probability of prevailing on the claim. (Id., at p. 712.) In determining whether the respondent has carried this burden, the trial court considers “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” (Code Civ. Proc., § 425.16, subd. (b)(2); Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291 (Soukup).)

Under Code of Civil Procedure section 425.16, subdivision (f), “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, subd. (f).)

The Court finds the instant motion is timely. Defendant was served with copies of the summons and Complaint through substitute service in Beverly Hills on September 24, 2024. (POS filed 09/30/2024.) Service was completed on October 7, 2024, ten (10) days after copies of the summons and Complaint were mailed to Defendant on September 27, 2024. (Code Civ. Proc., § 415.20, subd. (a).) Defendant filed the instant motion on December 6, 2024, which is sixty (60) days after service of the summons and Complaint were completed. Thus, the instant motion will be considered on the merits.

Defendant moves to specially strike Plaintiffs’ Complaint on the grounds that: (1) Plaintiffs’ cause of action arises from protected activity and (2) Plaintiffs cannot meet their burden of establishing the probability of prevailing on their claims as a matter of law.

An act in furtherance of a person’s right to petition or free speech under the United States Constitution and California Constitution includes “(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law, (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, subd. (e).)

Defendant argues the instant malicious prosecution action is per se subject to Code of Civil Procedure section 425.16. (Pasternack v. McCullough (2015) 235 Cal.App.4th 1347, 1355 [“A complaint for malicious prosecution is necessarily based on protected speech and petitioning activity.”].) In opposition, Plaintiffs do not contest this point and instead focus their arguments on whether they are likely to succeed on the merits in the instant action. Therefore, the Court finds Plaintiffs’ claims arise from protected activity and now turns to whether Plaintiffs have a reasonable probability of prevailing on their claims.

On the second component of the analysis, courts employ a “summary-judgment-like” procedure, “accepting as true the evidence favorable to the plaintiff and evaluating the defendant’s evidence only to determine whether the defendant has defeated the plaintiff’s evidence as a matter of law.” (Gerbosi v. Gaims, Weil, West & Epstein, LLP (2011) 193 Cal.App.4th 435, 444.) In other words, the court does not assess credibility, and the plaintiff is not required to meet the preponderance of the evidence standard. The court accepts as true the evidence favorable to the plaintiff, who need only establish that his or her claim has “minimal merit” to avoid being stricken as a SLAPP. (Soukup, supra, 39 Cal.4th at p. 291.)

To establish a cause of action for malicious prosecution, “[t]he underlying action must have been: (i) initiated or maintained by, or at the direction of, the defendant, and pursued to a legal termination in favor of the malicious prosecution plaintiff; (ii) initiated or maintained without probable cause; and (iii) initiated or maintained with malice.” (Parrish v. Latham & Watkins (2017) 3 Cal.5th 767, 775.)

“A necessary element of a cause of action for malicious prosecution is that the underlying proceeding terminated favorably to the malicious prosecution plaintiff. [Citation.] A termination is ‘favorable’ if it was based on a determination of the merits of the action—that is, relating to the fault of the defendant, rather than on a technical or procedural ground. [Citation.] Favorable termination is a necessary element because the very essence of a malicious prosecution action is the bringing of an unwarranted or unjustifiable action against the defendant. [Citation.]” (Padres L.P. v. Henderson (2003) 114 Cal.App.4th 495, 514.)

Plaintiffs’ malicious prosecution claims are based on two actions brought against them by parties represented by Defendant including Doustkam v. Sage (Super. Ct. L.A. County, 2022, No. 19SMCV00394) (“Doustkam”) and Masjedi v. Tax Credit Group, Inc. (Super. Ct. L.A. County, 2023, No. 21STCV07444) (“Masjedi”). (Compl. ¶¶ 7, 18.) The Doustkam case was commenced on February 26, 2019, and Defendant became counsel of record for Plaintiff Adrienne Doustkam (“Plaintiff Doustkam”) on September 11, 2019. (Compl. ¶¶ 7-8.) On June 4, 2021, Defendant filed a Second Amended Complaint that alleged causes of action for: (1) breach of contract, (2) fraud and deceit, (3) quantum meruit, (4) unjust enrichment, (6) failure to pay wages, (7) statutory penalties, (8) failure to pay overtime wages, (9) failure to provide meal and rest periods, (10) failure to provide accurate itemized wage statements, (11) failure to pay wages when due, (12) misclassification of employee as independent contractor, (13) failure to reimburse business-related expenses and (14) unfair business practices against Plaintiffs. (Compl. ¶ 10, Ex. A.)

The Masjedi action commenced on February 24, 2021, when Defendant filed a complaint against Plaintiffs on behalf of Plaintiff Sherry Talia Masjedi (“Plaintiff Masjedi”). (Compl. ¶ 18, Ex. E.) On June 25, 2021, Defendant filed a Second Amended Complaint in the Masjedi action that alleged causes of action for (1) failure to pay overtime wages, (2) failure to pay final wages, (3) failure to timely provide rest and meal breaks, (4) failure to provide accurate itemized wage statements, (5) failure to pay wages when due, (6) misclassification of employee as independent contractor, (7) failure to reimburse business-related expenses, (8) breach of written contract, (9) breach of implied covenant of good faith and fair dealing, (10) unfair business practices, (11) unjust enrichment, (12) quantum meruit and (13) fraud and deceit. (Compl. ¶ 19, Ex. F.)

On December 13, 2021, in the Doustkam action, the Court granted Plaintiffs’ motion for summary adjudication as to Plaintiff Doustkam’s first, third, fourth, sixth and seventh causes of action. (Compl. ¶ 12, Ex. B.) The Court found Plaintiffs were entitled to summary adjudication of the first cause of action for breach of contract because the undisputed evidence established they had made all required payments. (Compl. ¶ 12, Ex. B, p. 6-7.) The Court also found Plaintiffs were entitled to summary adjudication of the sixth and seventh causes of action as Plaintiff Doustkam failed to establish the existence of unpaid wages as a matter of law. (Compl., Ex. B, p. 7-8.) Last, the Court found the third and fourth causes of action were time-barred. (Compl., Ex. B, p. 3-5.) On March 15, 2022, Plaintiff Doustkam and Plaintiffs stipulated to the Court’s entry of a judgment of dismissal with prejudice. (Compl. ¶ 13; Share Decl., Ex. J.) The stated purpose of the dismissal was to allow Plaintiff Doustkam to proceed with an appeal of the Court’s prior rulings. (Share Decl., Ex. J.) Following their success in the Doustkam action, Plaintiffs filed a motion for summary adjudication in the Masjedi action on February 1, 2023. (Compl. ¶ 23.) On August 14, 2023, Defendant successfully withdrew from the Masjedi action after the Court granted their motion to be relieved as Plaintiff Masjedi’s counsel. (Compl. ¶ 24.) Plaintiff Masjedi then dismissed the action with prejudice on September 21, 2023. (Compl. ¶ 24.) On July 1, 2024, the Court of Appeal affirmed the Court’s summary adjudication ruling in Doustkam. (Compl. ¶ 16, Ex. D.)

Defendant argues Plaintiffs cannot establish favorable termination of the entire Doustkam action because part of the action was dismissed pursuant to the parties’ agreement for procedural reasons. Defendant’s argument relies on language from Citizens of Humanity, LLC v. Ramirez (2021) 63 Cal.App.5th 117 (“Citizens of Humanity”), wherein the Second District Court of Appeal held that: “favorable termination requires favorable resolution of the underlying action in its entirety, not merely a single cause of action.” (Id., at p. 128.) In opposition, Plaintiffs point to Maleti v. Wickers (2022) 82 Cal.App.5th 181 (“Maleti”), wherein the Sixth District Court of Appeal held “a malicious prosecution plaintiff, who has succeeded in all respects in defending a multiple-claim case, need not show that all such claims were resolved on the merits as long as at least one claim was terminated on the merits.” (Id., at p. 195.) Defendant responds that Maleti conflicts with long-settled precedent. Although this Court is generally bound to follow the decisions of the District Courts of Appeal, this Court must decide which authority to follow when appellate decisions are in conflict. (Auto Equity Sales, Inc. v. Superior Court of Santa Clara County (1962) 57 Cal.2d 450, 456.)

Initially, the Court notes that it is bound to follow the decisions of its own District Court of Appeal, the Second. In Citizens of Humanity, the 2d DCA noted favorable termination involved “two elements: termination of the entire action, and termination on the merits, reflecting innocence of the underlying defendants.” (Citizens of Humanity, supra, 63 Cal.App.5th at p. 128.) The language relied on by Defendant and cited in the previous paragraph came from the Court of Appeal’s discussion of the first element, not the Court of Appeal’s subsequent discussion of whether an action is terminated on the merits. (Ibid.) The Court of Appeal not only used “first” to establish this discussion referred to the first element but also quoted the following: “[I]f the defendant in the underlying action prevails on all of the plaintiff's claims, he or she may successfully sue for malicious prosecution if any one of those claims was subjectively malicious and objectively unreasonable. But if the underlying plaintiff succeeds on any of his or her claims, the favorable termination requirement is unsatisfied and the malicious prosecution action cannot be maintained.” (Ibid, quoting Lane v. Bell (2018) 20 Cal.App.5th 61, 64 (Lane).) This context suggests the statement “favorable termination requires favorable resolution of the underlying action in its entirety” is referring to whether the malicious prosecution plaintiff prevailed on the entire underlying action, not whether the plaintiff prevailed entirely on the merits. (Ibid.) The ultimate holding in Citizens of Humanity also did not deal with whether a malicious prosecution plaintiff prevailed on the merits. Instead, the Court of Appeal held the plaintiff could not establish the underlying action was favorably terminated as the plaintiff in the underlying action was partially successful. (Id., at p. 130.)

In contrast, Maleti explicitly holds “that where the prior-suit defendant prevailed unequivocally on all claims in the lawsuit and at least one claim was disposed of substantively in the defendant’s favor, there has been a ‘termination [that] reflect[s] on the merits of the underlying action’ [Citation] supporting a malicious prosecution action.” (Maleti, supra, 82 Cal.App.5th at p. 208, quoting Lackner v. LaCroix (1979) 25 Cal.3d 747, 750.) While Maleti cites Citizens of Humanity and acknowledges that a malicious prosecution plaintiff must prevail on the entire underlying action, Maleti rejected the argument “that favorable termination requires that the malicious prosecution plaintiff show that all claims in the underlying action were unsuccessful and that each of them was terminated on the merits.” (Id., at p. 207-208.) Instead, the Court of Appeal noted “[t]he mere fact that an entirely unsuccessful claimant . . . joins claims that are disposed of for “technical or procedural” reasons [Citation] with claims that are disposed of on substantive grounds should not preclude a favorable termination finding.” (Id., at p. 208.)

Defendant argues Maleti conflicts with long-settled precedent that holds the favorable termination element is not severable and points to Crowley v. Katleman (1994) 8 Cal.4th 666 (Crowley), where the California Supreme Court held “there must first be a favorable termination of the entire action.” (Id., at p. 686.) This statement was made after acknowledging the probable cause requirement for malicious prosecution does not require a lack of probable cause for every claim asserted in the underlying action. (Ibid.) Defendant also points subsequent Court of Appeal decisions that have applied this holding. In Dalany v. American Pacific Holding Corp. (1996) 42 Cal.App.4th 822 (Dalany), the malicious prosecution plaintiff obtained summary adjudication of certain claims by the defendant while other claims were subjected to a stipulated judgment following a settlement between the parties. (Id., at p. 825-826.) Citing Crowley, the Fourth District Court of Appeal rejected the argument that “success in achieving summary adjudication as to some of the causes of action in the cross-complaint prior to entry of the stipulated judgment gave rise to a favorable termination, at least as to those claims.” (Id., at p. 829.) The other decisions cited by Defendant are inapposite as they do not involve the question of whether the malicious prosecution plaintiff’s partial success on the merits constitutes favorable termination; instead, they involve the situation where the malicious prosecution defendant obtained success on certain claims. (Staffpro, Inc. v. Elite Show Services, Inc. (2006) 136 Cal.App.4th 1392, 1401-1402 [two causes of action were terminated in malicious prosecution plaintiff’s favor while one cause of action was terminated in defendant's favor]; Lane v. Bell (2018) 20 Cal.App.5th 61, 76 [both plaintiff and defendant each obtained partial success on their claims].)

Although Maleti references Crowley and Dalany, the Court of Appeal does little to distinguish these cases beyond conclusively stating they do not support the position that a malicious prosecution plaintiff must show that each claim was terminated on the merits. (Maleti, supra, 82 Cal.App.5th at p. 207-208 & fn. 7.) The Court is not, however, able to ascertain what else did Crowley might mean when it stated the entire action must be terminated in favor of the malicious prosecution plaintiff. In the paragraph prior to this statement, Crowley distinguished favorable termination from the element of probable cause by noting this requirement “tends to show the innocence of the defendant in the prior action [citations], and is not affected by the objective tenability of the claim.” (Crowley, supra, 8 Cal.4th at p. 686, quoting Warren. V. Wasserman, Comden & Casselman (1990) 220 Cal.App.3d 1297, 1303.) By defining favorable termination in the prior paragraph, the statement that “there must first be a favorable termination of the entire action” necessarily requires that each claim be terminated on the merits in a manner that shows the malicious prosecution plaintiff’s innocence. (Id., at p. 686.) And Dalany supports this interpretation of Crowley as discussed in the previous paragraph. In light of Maleti’s failure to distinguish Crowley and Dalany, the Court finds these authorities to be controlling and declines to follow Maleti.

Having established favorable termination requires success on the merits as to the entire action, the Court now turns to whether Plaintiffs can establish so here. Neither Defendant nor Plaintiffs dispute that Plaintiffs obtained a favorable termination of Doustkam’s first, third, fourth, sixth, and seventh causes of action through summary adjudication. (Compl., Ex. B.) Both parties, however, appear to overlook the fact that the Court’s summary adjudication of Doustkam’s claims was not entirely on the merits. In granting summary adjudication of Doustkam’s third cause of action for quantum meruit and fourth cause of action for unjust enrichment, the Court found they were barred by the applicable statute of limitations and that Doustkam could not establish the applicability of equitable tolling, waiver, or latches. (Compl., Ex. B, p. 4-5.) Specifically, while Doustkam claimed Plaintiffs failed to make payments for sixty accounts, the Court found allegations as to fifty of the accounts were untimely and barred by the two-year statute of limitations for quantum meruit or unjust enrichment actions. (Compl., Ex. B, p. 3-4.) Because “[a] bar raised by the statute of limitations does not reflect on the merits of the action and thus is not a favorable termination for purposes of a subsequent malicious prosecution action,” the Court’s ruling on these two causes of action prevents Defendant from establishing favorable termination of the entire Doustkam action. (Lackner v. LaCroix (1979) 25 Cal.3d 747, 752.)

In addition to the deficiency noted by the Court, Defendant argues Doustkam’s voluntary dismissal of Doustkam’s remaining claims is also not a favorable termination. “The dismissal of an action does not necessarily mean that there has been a favorable termination for purposes of a malicious prosecution action.” (JSJ Limited Partnership v. Mehrban (2012) 205 Cal.App.4th 1512, 1524.) “If the voluntary dismissal is an implicit concession that the dismissing party cannot maintain the action, it may constitute a dismissal on the merits which is a favorable termination.” (Citizens of Humanity, supra, 63 Cal.App.5th at p. 129.) “In contrast, a dismissal on technical or procedural, rather than substantive, grounds is not considered favorable for purposes of malicious prosecution. These include dismissals for lack of jurisdiction, for lack of standing, to avoid litigation expenses, or pursuant to settlement.” (Ibid.) In the instant case, the stipulation between Doustkam and Plaintiffs explicitly states the purpose of the stipulated dismissal was Doustkam’s desire to promptly appeal the Court’s previous rulings “without the delay of waiting until the Court issues a judgment after trial.” (Share Decl., Ex. J.) Defendant argues this stipulation establishes the dismissal was based on procedural grounds and not the merits of Doustkam’s claims.

In opposition, Plaintiffs argue a voluntary dismissal with prejudice constitutes a final determination on the merits. But the authority cited by Plaintiffs is inapplicable. In Adler v. Vaicius (1993) 21 Cal.App.4th 1770 (Adler), the Second District Court of Appeal noted “[a] voluntary dismissal with prejudice is a final determination on the merits” in making its determination that a plaintiff was not deprived of due process in a temporary restraining order process. (Id., at p. 1776.) The Court of Appeal in Adler did not discuss whether a voluntary dismissal is a favorable termination for purposes of a malicious prosecution action. In Alpha Mechanical, Heating & Air Conditioning, Inc. v. Travelers Casualty & Surety Company of America (2005) 133 Cal.App.4th 1319, the Fourth District Court of Appeal discussed whether dismissal with prejudice was a judgment on the merits for the purposes of res judicata. (Id., at p. 1330-1331.) Plaintiffs also argue that cases like Citizens of Humanity dealt with a dismissal without prejudice. But Plaintiffs focus on whether a dismissal is with or without prejudice is a red herring. As noted above, the Court’s analysis is not focused on the form of the dismissal but rather whether the dismissal involved a consideration of the merits.

Ultimately, the express language of Doustkam’s stipulation establishes the purpose of the dismissal was procedural and not a determination of the merits. Even if Doustkam’s dismissal were on the merits, Plaintiffs still fail to establish favorable termination of the entire Doustkam action in light of the summary adjudication ruling for the third and fourth causes of action. Thus, Plaintiffs cannot establish they have a likelihood of prevailing on this malicious prosecution claim. As to the Masjedi action, Defendant declines to address whether the Masjedi was favorably terminated on the merits and instead argues malice is lacking, which the Court addresses below.

“The ‘malice’ element, which is the one with which we are concerned in this matter, relates to the subjective intent or purpose with which the defendant acted in initiating the prior action. [Citation.] The motive of the defendant must have been something other than that of bringing a perceived guilty person to justice or the satisfaction in a civil action of some personal or financial purpose. [Citation.] The plaintiff must plead and prove actual ill will or some improper ulterior motive. [Citation.] It may range anywhere from open hostility to indifference. [Citation.]” (Downey Venture v. LMI Ins. Co. (1998) 66 Cal.App.4th 478, 494.)

In the instant action, the Complaint alleges Defendant acted with malice when they pursued claims against Plaintiffs without evidence and for the allegedly improper purpose of extracting a settlement and obtaining attorney’s fees. (Compl. ¶ 26.) “[P]roof of malice can consist of evidence a party knowingly brings an action without probable cause.” (Daniels v. Robbins (2010) 182 Cal.App.4th 204, 226.) Moreover, “malice can be inferred when a party continues to prosecute an action after becoming aware that the action lacks probable cause.” (Ibid.) As to the Masjedi action, Plaintiffs argue the evidence cited in their separate statement for their motion for summary adjudication establishes that Plaintiff Masjedi and Defendant knew there was no evidence to support Plaintiff Masjedi’s claims. (Share Decl., Ex. L.) Specifically, Plaintiffs claim Plaintiff Masjedi testified in a deposition that Plaintiff Masjedi did not have any evidence, and subpoenas to Plaintiffs’ clients established they did not owe commissions. While Plaintiffs refer to their separate statement, however, they do not provide any copies of the supporting evidence to which they refer. In light of Plaintiffs’ burden to establish that they have a probability of prevailing on the merits, their failure to establish that they have evidence supporting claims of malice against Defendant in the Masjedi action prevents them from avoiding the striking of their action.

Therefore, Defendant Azadegan Law Group, A Professional Corporation’s special motion to strike is GRANTED.

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.

Hon. Holly J. Fujie

Judge of the Superior Court