Judge: Peter A. Hernandez, Case: 22STCV38707, Date: 2024-09-12 Tentative Ruling
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Case Number: 22STCV38707 Hearing Date: September 12, 2024 Dept: 34
Future Auto Sales, Inc. v. CDG Partnership, et al. (22STCV38707)
Defendants CDG
Partnership, Patricia Del George, Yolanda M. Kahawaii aka Lani Kahawaii, Maria
Franklin and Juli Damazo’s Motion for Summary Judgment is DENIED.
Background
Legal Standard
A motion for summary judgment or
adjudication provides “courts with a mechanism to cut through the parties’
pleadings in order to determine whether, despite their allegations, trial is in
fact necessary to resolve their dispute.”
(Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) It must be granted “if 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.”¿ (Adler v. Manor Healthcare Corp. (1992) 7
Cal.App.4th 1110, 1119 [quoting Code Civ. Proc., § 437c, subd. (c)].)
Where a defendant seeks summary
judgment or adjudication, he must show that either “one or more elements of the
cause of action, even if not separately pleaded, cannot be established, or that
there is a complete defense to that cause of action.” (Code of Civ. Pros., section 437c, subd.
(o)(2).) A defendant may satisfy this
burden by showing that the claim “cannot be established” because of the lack of
evidence on some essential element of the claim. (Union Bank v. Superior Court (1995)
31 Cal.App.4th 574, 590.) Once the
defendant meets this burden, the burden shifts to plaintiff to show that a
“triable issue of one or more material facts exists as to that cause of action
or defense thereto.” (Id.)
“A party is entitled to summary
judgment only if it meets its initial burden of showing there are no triable
issues of fact and the moving party is entitled to judgment as a matter of law.
This is true even if the opposing party fails to file any opposition. The court's assessment of whether the moving
party has carried its burden—and therefore caused a shift—occurs before the
court's evaluation of the opposing party's papers. Therefore, the burden on the motion does not
initially shift as a result of what is, or is not, contained in the opposing
papers.” (Mosley v. Pacific Specialty
Insurance Company (2020) 49 Cal.App.5th 417, 434–435 [landlord’s failure to
address issue of whether they were aware of their tenant’s marijuana growing
operation was not grounds to grant summary judgment where moving party failed
to satisfy its initial burden as to the issue]; Thatcher v. Lucky Stores,
Inc. (2000) 79 Cal.App.4th 1081, 1086-1087 [court cannot grant summary
judgment based merely on lack of opposition; court must first determine if the
moving party has satisfied its burden].)
In addition, the evidence and
affidavits of the moving party are construed strictly, while those of the
opponent are liberally read. (Government
Employees Ins. Co. v. Sup. Ct. (2000) 79 Cal.App.4th 95, 100.) “All doubts as to the propriety of granting
the motion (whether there is any issue of material fact [Code of Civil
Procedure] § 437c) are to be resolved in favor of the party opposing the motion
(i.e., a denial of summary judgment).” (Hamburg
v. Wal-Mart Stores, Inc. (2004) 116 Cal.App.4th 497, 502.)
Discussion
Request for Judicial Notice
Defendants’ Request for
Judicial Notice of Exhibits 1 to 4 is GRANTED.
Defendants’ Request for Judicial Notice of Exhibits 5 and 6 is
DENIED. Exhibits 1 to 4 are documents
filed in the Prior Action and are judicially noticeable under Evidence Code
§452(d). Exhibits 5 and 6 are the
complaint and answer filed in this action, which the Court may reference and
rely on without resort to judicial notice.
Plaintiff’s Request for
Judicial Notice of Exhibits A-O are DENIED.
Plaintiff’s Request for Judicial Notice of Exhibits P-S is GRANTED.
Exhibits A to M are
documents that were admitted into evidence at trial. Exhibits N and O are reporter’s
transcripts. These documents do not fall
within any category of judicially noticeable documents set forth in Evidence
Code §§452 or 453.
Exhibits P-S are court
orders issued in the prior action. They are therefore judicially noticeable as official
acts of the Court under Evidence Code §452(c).
Evidentiary Objections
Defendants’ evidentiary objections to the
declaration of Patricia Del George and Barry G. Florence are overruled.
Plaintiff’s objection
and request to strike the Wollman Declaration in support of Defendants’ reply
is overruled and denied.
Tort of Malicious Prosecution
“To establish a cause of
action for malicious prosecution, a plaintiff must prove that the prior action
(1) had been commenced 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.”
(George F. Hillenbrand, Inc. v. Insurance Co. of North America
(2002) 104 Cal.App.4th 784, 799.) A
person who continues a civil proceeding that was properly begun, or takes an
active part in continuing it, for an improper purpose after learning that there
is no probable cause for the proceeding becomes liable for malicious
prosecution as if he or she had initiated the proceeding. (Zamos v. Stroud (2004) 32 Cal.4th
958, 973 (emphasis added); see also 5 Witkin, Summary of California
Law (11th ed. 2020), Torts, §597.)
“Probable cause is
present unless any reasonable attorney would agree that the action is totally
and completely without merit. This
permissive standard for bringing suits, and corresponding high threshold for
malicious prosecution claims, assures that litigants with potentially valid
claims won't be deterred by threat of liability for malicious
prosecution.” (Roberts v. Sentry Life
Ins. (1999) 76 Cal.App.4th 375, 382 (emphasis added).) “If the court determines that there was
probable cause to institute the prior action, the malicious prosecution action
fails, whether or not there is evidence that the prior suit was maliciously
motivated.” (Sheldon Appel Co. v.
Albert & Oliker (1989) 47 Cal.3d 863, 886.) The probable cause determination depends on
what was known by the litigant or attorney at the relevant time, either when
the action was filed or when the malicious prosecution plaintiff asserts
prosecution of the action became ‘malicious.’”
(Sheldon Appel Co., supra, 47 Cal.3d at 868; Zamos,
supra, 32 Cal.4th 958, 973 (malicious prosecution action includes
continuing to prosecute a lawsuit discovered to lack probable cause).)
There are two distinct
methods of demonstrating that an action lacked probable cause. Lack of probable cause may be established by
demonstrating that (1) the action was legally untenable based on the facts
known to the defendant, a pure question of law for the Court; or (2) the action
was legally untenable because the defendant did not have a good faith,
reasonable belief in the facts upon which the case was based, defendant’s good
faith belief being a question of fact for the jury and the ultimate determination
of lack of probable cause based on that jury finding being a question of law
for the Court. (Sheldon Appel, supra,
47 Cal.3d at 880; Bertero v. National General Corp. (1974) 13 Cal.3d 43,
50; Sierra Club Foundation v Graham (1999) 72 Cal.App.4th 1135, 1154; Sangster
v. Paetkau (1998) 68 Cal.App.4th 151, 164-165 (litigant lacks probable
cause where 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”); Hufstedler, Kaus & Ettinger v. Supr. Ct.
(1996) 42 Cal.App.4th 55, 63-64 (distinguishing between allegation that
probable cause did not exist to sue for defamation because statements were
nonactionable opinions and allegation that probable cause did not exist because
defendant knew claims was false or untrue).
Probable cause does not
require that the plaintiff have prima facie evidence establishing the
essential elements of the plaintiff’s claim.
(Mendoza v. Wichmann (2011) 194 Cal.App.4th 1430, 1451.) “That is not the standard of determining
probable cause.” (Id.) Instead, the issue is whether there was
“sufficient undisputed circumstantial evidence” on which any reasonable
attorney could suspect the allegation was true.
(Id. (probable cause to file underlying defamation action did not
require defendant in malicious prosecution to “establish that [plaintiff in
malicious prosecution action] made the defamatory statements or took a
responsible part in the publication of statements”; probable cause only
required that there was “sufficient undisputed circumstantial evidence at the
time [defendant] filed and prosecuted his complaint on which any reasonable
attorney could suspect that [plaintiff] made the defamatory remarks or took a
responsible part in their publication).)
Triable issues of fact remain as to Defendants’ advice of counsel defense
“Reliance on the advice
of counsel may be a good defense, provided there was a full disclosure of the
facts to the attorney, and a resulting honest belief in the guilt of the
injured party. The defendant must have
disclosed all pertinent and material facts within his or her knowledge.” (5 Witkin, Summary of California Law
(11th ed. 2020), §567.) The
defense is not available if the plaintiff “acts in bad faith or withholds from
counsel facts he knew or should have known would defeat a cause of action
otherwise appearing from the information supplied....” (Bertero v. National General Corp.
(1974) 13 Cal.3d 43, 53–54.) The burden
of proving this affirmative defense is on the party seeking to benefit by
it. (Id. at 54.) Whether there was a full and fair disclosure
of all of the facts to counsel is a question of fact. (Weber v. Leuschner (1966) 240
Cal.App.2d 829, 838.)
Triable issues of fact
remain as to whether Defendant Patricia Del George acted in bad faith or
withheld facts that would have defeated her declaratory relief claim from
counsel Barry Florence when she consulted him in 2018. (Patricia Del George Declaration (“Del George
Dec.”), ¶15; Barry G. Florence Declaration (“Florence Dec.”), ¶3.) According to
Florence, Del George informed him that she prepared form leases purchased from
Staples for execution by Plaintiff and that she did not fill out the
information in Section 5 of the Lease Agreement. (Florence Dec., ¶3(i).) Del George also informed Florence that she
wrote her husband’s names on the leases due to his incapacity and thereafter
met Plaintiff’s president, Artur Tavmazian, at the premises, so that he could
sign the lease. (Id. at
¶3(j).) Del George informed Florence
that Plaintiff’s president signed the agreement, made copies and then returned
a copy to Del George for her records. (Id.
at ¶3(k).) Del George informed Florence
that she discovered that the lease had been altered and Section 5 governing
options had been filled in, contrary to her and her husband’s intent. (Id.)
Del George only discovered the unauthorized alteration after she decided
to sell the property. (Id.) After reviewing the lease and based on Del
George’s version of what occurred, Florence advised Del George to file a
lawsuit on behalf of Defendant CDG Partnership and assert a single cause of
action for declaratory relief regarding the enforceability of the allegedly
unauthorized option to renew. (Id.
at ¶¶4 and 5.)
Defendants’ evidence satisfies their initial burden on
the defense of advice of counsel.
Defendants’ evidence establishes that Del George sought in good faith Florence’s
advice on the dispute over the option and that she conveyed facts supporting a
claim of declaratory relief, i.e. a justiciable controversy regarding the
parties’ rights and obligations under the July 2017 lease.
However, Plaintiff submits evidence in opposition that raises
a triable issue of fact as to whether Del George failed to disclose the true
facts regarding Section 5 of the July 2017 Lease or withheld facts. The Court in the Prior Action found that Del
George’s testimony regarding what occurred was not credible. (Plaintiff’s Compendium of Evidence, Ex. N,
pp. 12-16.)
Artur Tovmasian’s testimony regarding how Section 5 of
the July 2017 Lease came to be completed entirely contradicts Del George’s
version of what occurred. Tovmasian
testifies that the July 2017 meeting was a meeting between Defendants and
Plaintiff to “negotiate” the lease, not to merely sign the lease. (Tovmasian Dec., ¶8.) Tovmasian testifies that he specifically
raised the fact that Section 5 was incomplete during the meeting and informed
the Del Georges that he wanted Section 5 to provide CDG Partnership with an
option to renew the lease for five additional years. (Id. at ¶13.) Tovmasian testifies that (1) the Del Georges
expressly approved his request for an option to renew for 5 years, (2) Patricia
Del George wrote in the number 5 in Section of the 2017 Lease, (3) Tovmasian
wrote in “60 days before” with the Del Georges’ permission, (4) Tovmasian
signed the lease and (5) the Del Georges read the entire signed lease during
the meeting. (Id.)
Tovmasian also testifies that Patricia came to his office
in May 2018, acknowledged that she provided for inclusion of the 5-year option
and informed him that her family was unhappy with her for it. (Id. at ¶17.) Tovmasian testifies that Patricia asked him
to “help her out” by simply signing an amendment that removed the option. (Id.)
Defendants argue the Court must disregard Tovmasian’s
testimony regarding how section 5 of the July 2017 Lease came to be
completed. Defendants maintain
Tovmasian’s discovery responses in the Prior Action indicated that John Del
George filled in the renewal period of 5 years, contradicting Tovmasian’s declaration
in this action that it was Patricia Del George who filled it in. (Wollman Dec. ISO Reply, Exs. A and B.)
At best, this creates a triable issue of fact as to who
filled in the period of renewal. Such a
triable issue of fact would not be material for purposes of this motion for
summary judgment. Regardless of whether
it was John or Patricia who filled it in, Tovmasian’s version of events is
completely irreconcilable with any claim that Plaintiff unilaterally filled in
Section 5 without Defendants’ knowledge or consent.
Plaintiff’s evidence raises a triable issue of fact as to
whether the advice of counsel defense bars its claims against Defendants. The trier of fact must determine whether Patricia
Del George withheld the true from Florence when she consulted him for legal
advice. The motion for summary judgment
based on advice of counsel is denied.
Triable issues of fact
remain as to probable cause
Defendants’ good
faith belief in the facts that formed the basis of the Prior Action is a
question of fact for the jury, while the Court must determine the legal
question of whether those facts could reasonably form the basis for legal
action. (Sheldon Appel, supra, 47
Cal.3d at 880; Bertero v. National General Corp. (1974) 13 Cal.3d 43,
50; Sierra Club Foundation v Graham (1999) 72 Cal.App.4th 1135, 1154; Sangster
v. Paetkau (1998) 68 Cal.App.4th 151, 164-165 (litigant lacks probable
cause where 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”); Hufstedler, Kaus & Ettinger v. Supr. Ct.
(1996) 42 Cal.App.4th 55, 63-64 (distinguishing between allegation that
probable cause did not exist to sue for defamation because statements were
nonactionable opinions and allegation that probable cause did not exist because
defendant knew claims was false or untrue).
“[W]hen…there is evidence that the defendant may have known that the
factual allegations on which his action depended were untrue, the jury must
determine what facts the defendant knew before the trial court can determine
the legal question whether such facts constituted probable cause to institute
the challenged proceeding.” (Sheldon
Appel Co., supra, 47 Cal.3d at 881.)
For the same reasons stated in connection with the advice
of counsel defense, triable issues of fact remain as to whether Defendants had
a good faith, reasonable belief in the facts alleged in the Prior Action for
declaratory relief. Defendants’ motion
for summary judgment based on lack of probable cause is therefore denied.
Triable issues of fact
remain as to malice
“The malice element of the malicious prosecution tort
relates to the subjective intent or purpose with which the defendant acted in
initiating the prior action. The malice required in an action for malicious
prosecution is not limited to actual hostility or ill will toward the plaintiff
but exists when the proceedings are instituted primarily for an improper
purpose. Although lack of probable cause alone does not automatically equate to
a finding of malice, it is a factor that may be considered. Malice may still be
inferred when a party knowingly brings an action without probable cause.” (Ross v. Kish (2006) 145 Cal.App.4th
188, 204 (SLAPP motion to malicious prosecution action properly denied where
plaintiff presented evidence that defendant instituted prior action knowing
claims asserted lacked factual and legal support and defendant was unhappy that
plaintiff was attempting to collect fees).)
“Merely because the prior action lacked legal tenability,
as measured objectively without more, would not logically or reasonably permit
the inference that such lack of probable cause was accompanied by the actor's
subjective malicious state of mind.” (Jarrow Formulas, Inc. v. LaMarche
(2003) 31 Cal.4th 728, 743.)
“The ‘malice’ element of the malicious prosecution tort
relates to the subjective intent or purpose with which the defendant acted in
initiating the prior action, and past cases establish that the defendant's
motivation is a question of fact to be determined by the jury.” (Sheldon Appel, supra, at 874. Thus,
malice is “always a question for the jury.” (Id. at 875.) “Because direct evidence of malice is rarely
available, malice is usually proven by circumstantial evidence and inferences
drawn from the evidence.” (Jay v.
Mahaffey (2013) 218 Cal.App.4th 1522, 1543.)
“Malice may range anywhere from open hostility to
indifference; it is not limited to ill will toward plaintiff but exists when
the proceedings are prosecuted primarily for an improper purpose.” (Medley
Capital Corp. v. Security National Guaranty, Inc. (2017) 17 Cal.App.5th 33,
48.)
“Suits with the hallmark of an improper purpose are those
in which: (1) the person initiating them does not believe that his claim may be
held valid; (2) the proceedings are begun primarily because of hostility or ill
will; (3) the proceedings are initiated solely for the purpose of depriving the
person against whom they are initiated of a beneficial use of his property; (4)
the proceedings are initiated for the purpose of forcing a settlement which has
no relation to the merits of the claim.”
(Sierra Club Foundation v. Graham (1999) 72 Cal.App.4th 1135,
1157 (quoting Albertson v. Raboff (1956) 46 Cal.2d 375, 383).)
Triable issues of fact remain as to whether Patricia Del
George initiated the Prior Action based on facts that she knew to be false or
in which she did not have a good faith belief.
For these same reasons, triable issues of fact remain as to whether she
acted with malice, i.e. she brought the Prior Action with indifference to the
existence of probable cause, knowledge that the case lacked probable cause because
it was based on false facts and/or for an improper purpose. Plaintiff also submits evidence that
Defendants wanted to nullify Plaintiff’s option to renew, because it was an
obstacle to selling the Property and the marketing materials for the Property
indicated that the existing tenants did not have options to renew, not because the
option was invalid for lack of consent.
(Plaintiff’s Compendium of Evidence, Exs. E, F, N (64:20-65:5,
94:16-95:14) and U (154:15-155:2).) The
motion for summary judgment based on lack of malice is denied.
Defendants fail to
establish that a malicious prosecution claim may not be based on a declaratory
relief claim as an issue of law
Defendants fail to present any authority holding that a
malicious prosecution cannot be based on a declaratory relief claim. Defendants’ contention that there was a
legitimate dispute between the parties regarding the enforceability of the
option begs the question of whether there was probable cause. As discussed above, triable issues of fact
remain as to whether Defendants’ lacked probable cause in filing the Prior
Action. Defendants’ motion for summary
judgment on that ground is denied.
Conclusion
Defendants’ Motion for
Summary Judgment is DENIED.