Judge: Melvin D. Sandvig, Case: 23CHCV000546, Date: 2024-04-17 Tentative Ruling
Case Number: 23CHCV000546 Hearing Date: April 17, 2024 Dept: F47
Dept. F43
Date: 4-18-24
Case #23CHCV00546,
The Las Canoas Co. vs. Patrick C. McGarrigle, et al.
Trial Date: N/A
SPECIAL MOTION TO STRIKE COMPLAINT PURSUANT TO CCP § 425.16
MOVING PARTY: Defendants
McGarrigle, Kenney & Zampiello, APC and Patrick C. McGarrigle
RESPONDING
PARTY: Plaintiff The Las Canoas Co.
RELIEF
REQUESTED
Defendants are
requesting that the Court strike Plaintiff’s complaint
RULING:
The special motion to strike is granted.
SUMMARY OF
ACTION
On February 27,
2023, Plaintiff The Las Canoas Co. (Plaintiff) filed a complaint against Defendants
McGarrigle, Kenney & Zampiello, APC and Patrick C. McGarrigle (the
McGarrigle Defendants) and other defendants, including Annette Rubin and
Abraham Stuart Rubin (the Rubins), with a single cause of action for malicious
prosecution.
The cause of
action for malicious prosecution is based on the underlying case of McCoy
Electric Corporation vs. A. Stuart Rubin and Annette Rubin (and related
cross-actions), Santa Barbara Superior Court Case No. 16CV03591. In that case,
the Rubins were the owners of a home and had hired various construction
companies to do work on the home. The Rubins were represented by the McGarrigle
Defendants in that action. The Rubins filed a cross-complaint in that action
against Plaintiff The Las Canoas Co. The Rubins alleged two causes of action
for negligence and breach of contract against Plaintiff. The causes of action
were related to Plaintiff’s alleged defective installation of a radiant heating
system. The Rubins alleged that the heating system was not fully functioning
and lacked certain necessary components, including sensors in the floors.
While the
underlying case was pending, Plaintiff filed two summary judgment motions as to
the Rubin’s cross-complaint, both of which were denied. Plaintiff’s motions for
summary judgment and adjudication were denied in both instances because the
court found that there were numerous triable issues of material fact relating
to the sensors and any potential property damage. Plaintiff filed a third
motion for summary judgment that it withdrew.
Eventually, the
Rubins voluntarily dismissed their cross-complaint because they claim that they
had financial troubles and lost their home, meaning that they could no longer
pursue prosecution of the cross-complaint due to lack of funds. Plaintiff
successfully obtained attorney fees pursuant to Civ. Code § 1717 for defending
against the Rubins’ negligence cause of action.
The McGarrigle
Defendants’ Request for Judicial Notice: The McGarrigle Defendants have
requested that the Court take judicial notice of dozens of documents from the
underlying Santa Barbara case and judicial notice of the complaint in the
present case. Plaintiff objects to the request for judicial notice on the basis
that the Court can take judicial notice of the existence of the documents from
the underlying case, but that does not mean that the Court can notice the truth
of the contents of such pleadings or documents. (See Sosinsky v. Grant
(1992) 6 Cal.App.4th 1548.) The Court takes judicial notice of the existence of
these documents.
Plaintiff’s
Evidentiary Objections to the Declaration of Patrick C. McGarrigle:
Sustained: 7, 9, 10, 12, 14, 16, 17, 19,
20, 21, 22, 23, 24, 25, 26, 27, 30, 31, 32, 36, 37, 40, 41, 42, 43, 44, 46, 47
Overruled: 1, 2, 3, 4, 5, 6, 8, 11,
13, 15, 18, 28, 29, 33, 34, 35, 38, 39, 45, 48
Plaintiff’s
Request for Judicial Notice: Plaintiff requests that the Court take judicial
notice of several documents from the underlying case. The Court takes judicial
notice of the existence of these documents.
The McGarrigle
Defendants’ Evidentiary Objections to the Corrected Declaration of Daniel E.
Engel:
Sustained: 1 (entire declaration), 3, 4,
5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25,
26, 27, 28, 29, 30, 31, 32, 33, 34, 355, 36, 37, 38, 39, 40, 41, 42, 43, 44,
45, 46, 47, 48, 49, 50, 51, 52 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64,
65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 78, 79, 80, 81, 82, 83, 84, 85, 86,
87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98
If the Court had not sustained the
objection to the entire declaration, the Court would have overruled the
following: 2, 76, 77
ANALYSIS
CCP § 425.16
(b)(1), the anti-SLAPP statute, 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 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.”
The protected
conduct is defined under CCP § 425.16 (e) (1) –(4) which states: “As used in
this section, ‘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’ 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.”
Therefore,
regardless of the label assigned to a cause of action, “[i]f the supporting
allegations include conduct furthering the defendant's exercise of the
constitutional rights of free speech or petition, the pleaded cause of action
‘arises from’ protected activity, at least in part, and is subject to [a]
special motion to strike.” (Baral v. Schnitt (2016) 1 Cal.5th 376 at
381- 382 (Baral) quote marks omitted.)
“Resolution of
an anti-SLAPP motion involves two steps. First, the defendant must establish
that the challenged claim arises from activity protected by section 425.16. If
the defendant makes the required showing, the burden shifts to the plaintiff to
demonstrate the merit of the claim by establishing a probability of success. We
have described this second step as a “summary-judgment-like procedure.” The
court does not weigh evidence or resolve conflicting factual claims. Its
inquiry is limited to whether the plaintiff has stated a legally sufficient
claim and made a prima facie factual showing sufficient to sustain a favorable
judgment. It accepts the plaintiff’s evidence as true, and evaluates the
defendant’s showing only to determine if it defeats the plaintiff’s claim as a
matter of law. Claims with the requisite minimal merit may proceed.” (Baral
at 384-85, citations omitted.)
First
Step
“To prevail on
an anti-SLAPP motion, the movant must first make ‘a threshold showing the
challenged cause of action’ arises from an act in furtherance of the right of petition
or free speech in connection with a public issue.” (Varian Medical Systems,
Inc. v. Delfino (2005) 35 Cal.4th 180, 192.) “A claim arises from protected
activity when that activity underlies or forms the basis for the claim.” (Park
v. Board of Trustees of California State University (2017) 2 Cal.5th 1057,
1062.)
The Supreme
Court has noted:¿¿
Critically, “the defendant’s act
underlying the plaintiff’s cause of action must itself have been an act in
furtherance of the right of petition or free speech.” [Citations.] “[T]he mere
fact that an action was filed after protected activity took place does not mean
the action arose from that activity for the purposes of the anti-SLAPP
statute.” [Citations.] Instead, the focus is on determining what “the
defendant’s activity [is] that gives rise to his or her asserted liability—and
whether that activity constitutes protected speech or petitioning.” [Citation.]
“The only means specified in section 425.16 by which a moving defendant can
satisfy the [‘arising from’] requirement is to demonstrate that the defendant’s
conduct by which plaintiff claims to have been injured falls within one of the
four categories described in subdivision (e)....” [Citation.] In short, in
ruling on an anti-SLAPP motion, courts should consider the elements of the
challenged claim and what actions by the defendant supply those elements and
consequently form the basis for liability.¿
(Id. at
p. 1063.)¿
In this case,
prior litigation would undoubtedly be protected speech as contemplated by CCP §
425.16. Filing a claim for relief in court and the “basic act of filing
litigation” are a “statement or writing made before a ... judicial proceeding.”
(Navellier v. Sletten (2002) 29 Cal.4th 82, 90.)
Furthermore,
Plaintiff has not provided any argument in opposition that the McGarrigle
Defendants failed to make a threshold showing that the filing of the underlying
cross-complaint was a statement or writing made before a judicial proceeding.
Accordingly, the
McGarrigle Defendants have made a threshold showing that the filing of the
underlying lawsuit was a statement or writing made before a judicial
proceeding. In Kinsella v. Kinsella, the Court of Appeal considered the
cause of action for malicious prosecution in light of the previous civil action
filed. ((2020) 45 Cal.App.5th 422.) The Court held that on a claim for
malicious prosecution, the opposition to an anti-SLAPP motion must demonstrate
the claim is “supported by a sufficient prima facie showing of facts to sustain
a favorable judgment if the evidence submitted by the Plaintiff is credited.” (Id.
at 450-53.) As such, the Court must address the second step and determine
whether Plaintiff has made a prima facie showing of facts that it could prevail
on the malicious prosecution claim.
Second
Step
Because the
McGarrigle Defendants met their burden for the first step, it is necessary to
determine the probability of Plaintiff’s success on the merits.
The second step
requires a prima facie showing of facts which, if proven at trial, would
support a judgment in favor of the Plaintiffs. As the Court in Navellier v.
Sletton (2002) 29 Cal.4th 82, 94, noted, claims must have only “minimal
merit” to avoid dismissal. (See also Equilon Enterprises v. Consumer Cause,
Inc. (2002) 29 Cal.4th 53, 64 (“the proponent of a speech-burdening claim
may avoid an anti-SLAPP dismissal by submitting an affidavit substantiating the
claim’s legal sufficiency”).)
The elements need
to show a malicious prosecution cause of action are “(1) the defendant brought
(or continued to pursue) a claim in the underlying action without objective
probable cause; (2) the defendant pursued the claim with subjective malice; and
(3) the court resolved the underlying action in plaintiff’s favor.” (Citizens
of Humanity, LLC v. Hass (2020) 46 Cal.App.5th 589, 598–599.) Each of
these element must be proved by Plaintiff. (Bertero v. National General
Corp. (1974) 13 Cal.3d 43, 50.)
Favorable
Determination
First, the
McGarrigle Defendants argue that there was no favorable termination for
Plaintiff. The California Supreme Court has explained the “favorable
termination” element of a malicious prosecution claim as follows:
“It is apparent ‘favorable’ 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.)
In this case,
the Rubins, through their counsel the McGarrigle Defendants, voluntarily
dismissed their cross-complaint against Plaintiff. The McGarrigle Defendants
argue that dismissal of an action does not automatically mean that there has
been a favorable termination for purposes of a malicious prosecution action. “It
is not enough…to show that the proceeding was dismissed. The reasons for the
dismissal of the action must be examined to determine whether the termination
reflected on the merits.” (Robbins v. Blecher (1997) 52 Cal.App.4th 886,
893–94; see also Alston v. Dawe (2020) 52 Cal.App.5th 706, 722 (“Other
examples of technical or procedural terminations that would not support a
malicious prosecution claim include dismissals…for avoiding litigation
expenses”).)
The McGarrigle
Defendants represent that the Rubins’ cross-complaint against Plaintiff was
dismissed because the Rubins were having financial problems and could no longer
continue their litigation against Plaintiff.
Next, the
McGarrigle Defendants also argue that it does not matter that Plaintiff was
allowed to recover attorney fees on the negligence claim following dismissal. Being
the “prevailing party” for a fee determination is not tantamount to prevailing
on the merits for purposes of a malicious prosecution claim. (See, e.g., Antounian
v. Louis Vuitton Malletier (2010) 189 Cal.App.4th 438, 457 (the district
court’s award of attorney’s fees following a voluntary dismissal in the
underlying action was “not a favorable termination” on the merits); State of
California ex rel. Standard Elevator Co., Inc. v. West Bay Builders, Inc.
(2011) 197 Cal.App.4th 963, 981 (“One may be a prevailing party for attorney
fee purposes yet not have obtained a favorable termination for malicious
prosecution purposes.”).) Additionally, Plaintiff did not prevail on the
Rubins’ breach of contract claim or recover any attorney fees for that cause of
action.
In its
complaint, Plaintiff alleges that the Rubins dismissed their cross-complaint
because they knew their claims were barred by the statute of limitations.
(Comp., ¶ 62.) However, the McGarrigle Defendants point out in their motion
that Plaintiff never sought adjudication in the underlying action on statute of
limitations grounds, nor was there a court determination that any claims were
time-barred. In any event, even if the Rubins’ claims were time-barred, a
dismissal or termination based on statute of limitations grounds does not
support a cause of action for malicious prosecution. (See, e.g., Lackner,
25 Cal.3d at 751-52 (termination of an action on statute of limitations grounds
is not a termination on the merits for purposes of a malicious prosecution
claim); Stanley v. Super. Ct. (1982) 130 Cal.App.3d 460, 465 (“[A]
judgment of dismissal on the ground of the statute of limitations is not a
favorable termination for the defendant within the context of a malicious
prosecution action because it does not reflect at all upon the substantive
merit of the alleged claim.”).)
Plaintiff cites
to Sycamore Ridge Apartments LLC v. Naumann (2007) 157 Cal.App.4th 1385,
1400 in support of its argument in opposition that there is presumption that a
voluntary dismissal is a favorable termination on the merits unless otherwise
proven to a jury because the natural assumption is that one does not abandon a
meritorious action. However, there is more recent case law, cited by the
McGarrigle Defendants in their reply, that a procedural termination that would
not support a malicious prosecution cause of action includes one that is done
to avoid litigation expenses. (See, e.g., Alston v. Dawe (2020) 52
Cal.App.5th 706, 722 (2020) (“Other examples of technical or procedural
terminations that would not support a malicious prosecution claim include
dismissals … for avoiding litigation expenses.”).) The McGarrigle Defendants
have clearly demonstrated that the Rubins dismissed their action against
Plaintiff because they were facing financial difficulties and therefore could
not continue to pursue their cross-complaint. Therefore, their dismissal was
not a favorable termination on the merits.
Based on the
foregoing, Plaintiff has failed to demonstrate that the underlying action was
resolved in its favor.
Probable
Cause
Next, the
McGarrigle Defendants argue that there was probable cause for the Rubins to
maintain the underlying action. Whether there was probable cause is purely a
legal question, to be determined by the court on the basis of whether, as an
objective matter, the prior action was legally tenable. (See, e.g., Sheldon
Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 868.) In other words:
“Probable cause may be present even where
a suit lacks merit. Favorable termination of the suit often establishes lack of
merit, yet the plaintiff in a malicious prosecution action must separately show
lack of probable cause. Reasonable lawyers can differ, some seeing as meritless
suits which others believe have merit, and some seeing as totally and
completely without merit suits which others see as only marginally meritless.
Suits which all reasonable lawyers agree totally lack merit – that is, those which
lack probable cause – are the least meritorious of all meritless suits. Only
this subgroup of meritless cases present no probable cause.” (Roberts v.
Sentry Life Ins. (1999) 76 Cal.App.4th 375, 382 (citations omitted).)
In the
underlying case, two motions for summary judgment and adjudication filed by
Plaintiff were denied because the Court found that there were triable issues of
material fact. In Roberts, Sentry Life Insurance sued Alan Roberts for
various causes of action including fraud, and Roberts filed a motion for
summary judgment on the fraud claim and the court denied the motion. (76
Cal.App.4th at 375.) Thereafter, the court tried the fraud and bad faith
claims, and found in favor of Roberts, after which Roberts then filed a
malicious prosecution action against Sentry Life and their attorneys. (Id.)
The court dismissed that action, concluding that denial of the underlying
summary judgment motion established probable cause as a matter of law. (Id.
at 383.) The court reasoned that denial of a defendant’s summary judgment
motion provides “persuasive evidence that a suit does not totally lack merit.” (Id.)
Roberts observed that a trial court on summary judgment must find there is
a triable issue of material fact and the defendant is not entitled to judgment
as a matter of law, and that these conclusions “necessarily imply that the
judge finds at least some merit in the claim.” (Id.)
The McGarrigle
Defendants argue that this case present even more favorable facts than Roberts
because the defendant in Roberts ultimately prevailed after a bench
trial on the merits, and the court still found that there was probable cause.
Here, the Santa Barbara court never found in Plaintiff’s favor or reached a
decision on the merits of the Rubins’ case.
Plaintiff
argues in its opposition the Rubins never had the opinion of an expert to
support their third cause of action for Professional Negligence. However, the
relevance of this is unclear at this stage given that Plaintiff’s motions for
summary judgment in the underlying case were denied because their were triable
issues of material fact. The same thing applies to Plaintiff’s argument that
there was no evidence of actual property damage. Plaintiff makes a similar
argument for the breach of contract cause of action. The Court rejects this
argument, as well.
Plaintiff also argues
extensively that a Mark Process Declaration used in the motion for summary
judgment was fraudulent and false. At the very least, that appears to be an
issue that should have been decided by the Santa Barbara court in the
underlying action. This Court will not address Plaintiff’s arguments concerning
the Process Declaration. However, it is worth noting that Plaintiff failed to
show that the trial court would not have granted the motion for summary
judgment but for the Process Declaration, which is a requirement when
attempting to use the fraud exception to the interim adverse judgment rule. (Antounian
v. Louis Vuitton Malletier (2010) 189 Cal.App.4th 438, 451-452 (where the
MSJ denial was based on several investigative reports and declarations,
including but not limited to one that was later disavowed in part, the “fraud
exception” to the interim adverse judgment rule did not apply because there was
no showing that the MSJ would have been granted but for the one report that was
partially disavowed); Wilson, 28 Cal.4th at 820 (for the fraud exception
to the interim adverse judgment rule to apply, the prior ruling must have been
“obtained by fraud or perjury”).)
Plaintiff also
argues in opposition that the summary judgment motions were denied on
procedural or technical grounds and never addressed the merits of the case
because the court found that Plaintiff’s separate statement of undisputed facts
failed to separate out each material fact by the cause of action it pertained
to, so the court deemed all the facts as applying to each requested
adjudication and to the request for summary judgment. The McGarrigle Defendants
argue in their reply that this is false and does not give a complete picture of
the court’s rulings because the Court found that there were triable issues of
material on the causes of action. The California Supreme Court has held that denying
a motion for summary judgment because there are triable issues of material fact
is the type of interim adverse judgment that establishes probable cause to
defeat a malicious prosecution action. (See Wilson v. Parker, Covert &
Chidester (2002) 28 Cal.4th 811, 824.)
Based on the
foregoing, the Court finds that there was probable cause to maintain the
underlying action.
Malice
Finally, the
McGarrigle Defendants argue that the underlying action was not brought nor
maintained with malice. The “malice” element “relates to the subjective intent
or purpose with which the defendant acted in initiating the prior action…The
plaintiff must plead and prove actual ill will or some improper ulterior
motive.” (Downey Venture v. LMI Ins. Co. (1998) 66 Cal.App.4th 478, 494.)
The McGarrigle
Defendants argue that the fact that they served a subpoena on Plaintiff and
reviewed the documents obtained from the subpoena before seeking leave to file
the cross-complaint demonstrates that they held no malice. They also argue that
the fact that Plaintiff’s summary judgment motions were denied is indicative of
there being no malice. Next, they argue that the cross-complaint was prosecuted
solely to seek a civil recovery and was not filed in order to “trigger
insurance coverage” or “extract settlements from those insurers.” (Comp., ¶
64.) Finally, they argue that they had no ulterior motive and that it was a
legitimate cross-complaint.
Plaintiff
argues in opposition that there was malice because the causes of action were
not objectively tenable. But as the Court has already found, the causes of
action were tenable based on the court in the underlying action finding that
there were triable issues of material fact upon denying Plaintiff’s motions for
summary judgment.
The Court does
not find that the McGarrigle Defendants acted with malice.
CONCLUSION
The McGarrigle
Defendants met both prongs for the anti-SLAPP motion. They made the threshold
showing that the underlying action was a judicial proceeding. Next, the Court
found that Plaintiff failed to make a prima facie showing that it would succeed
on the merits of its malicious prosecution cause of action.
Accordingly,
the McGarrigle Defendants’ special motion to strike Plaintiff’s complaint
pursuant to CCP § 425.16 is granted.
Moving party to
give notice.