Opinion
B313357
09-20-2022
HENRY AGUILA, Plaintiff and Appellant, v. ERDM, INC. et al., Defendants and Respondents.
Henry Aguila, in pro. per., for Plaintiff and Appellant.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, No. 20NWCV00002 Paul Bruguera, Judge. Affirmed.
Henry Aguila, in pro. per., for Plaintiff and Appellant.
No appearance for Defendants and Respondents.
PERLUSS, P. J.
Henry Aguila, the sole shareholder of Thee Aguila, Inc. (TAI), on one hand, and ERDM, Inc. and its owners Edgar Fragoso and Eva Meneses (collectively ERDM parties), who operated a nightclub on property owned by and leased from TAI, on the other hand, engaged in protracted civil litigation related to allegations the ERDM parties were conducting criminal activities at the nightclub, including laundering money for a Mexican drug cartel. Following entry of judgment by the trial court in Los Angeles Superior Court No. BC482246, ERDM, Inc. v. Aguila (ERDM I), Aguila sued the ERDM parties for malicious prosecution, abuse of process and intentional infliction of emotional distress based, in part, on a lis pendens (pending action notice) filed by counsel for the ERDM parties in the action.
After the ERDM parties failed to answer, the court entered their default and then a default judgment in Aguila's favor for $900,000 on his cause of action for intentional infliction of emotional distress. The court denied relief on the other two causes of action, finding Aguila had not presented sufficient evidence to establish the ERDM parties' lawsuit had been initiated with malice and reliance on advice of counsel was a complete defense to the abuse of process cause of action. Aguila, representing himself, appeals the judgment, contending it was an abuse of discretion for the court to deny relief on those two causes of action. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Underlying Action
TAI owned real property on Washington Boulevard in Pico Rivera. In May 2000 TAI's predecessor in interest entered into a 15-year lease with Fragoso and Santiago Acuna for the property, including the building and improvements, for use as a nightclub, restaurant and banquet venue operating as "El Rodeo." In February 2006 the lease was amended to designate TAI as landlord and ERDM, Acuna, Fragoso and Meneses as tenants.
On April 5, 2012 the ERDM parties sued Aguila and TAI in ERDM I, alleging a cause of action for intentional interference with prospective economic advantage and several related tort claims, asserting Aguila and TAI were misrepresenting that they owned the El Rodeo nightclub, which created difficulties in booking entertainment and dealing with the club's vendors. A first amended complaint expanded the allegations to include efforts by Aguila and TAI to sell or lease the nightclub and added a cause of action for breach of the lease agreement. A second amended complaint, filed October 25, 2012, contained the same causes of action.
Aguila's five-page, double-spaced brief contains only a few vague references to ERDM I, the underlying lawsuit. However, his declaration in support of the application for default judgment attached as an exhibit Division Five's opinion reversing the order granting a special motion to strike TAI's cross-claim for slander of title in the litigation (Thee Aguila, Inc. v. ERDM, Inc. (May 9, 2016, B257987) [nonpub. opn.]). That opinion included a detailed description of the early phases of the case.
On July 30, 2013 the ERDM parties' counsel recorded a lis pendens with the Los Angeles County Recorder. Four weeks later, on August 26, 2013, the ERDM parties moved for leave to file a third amended complaint. Three days after that, Aguila and TAI moved to expunge the lis pendens. On September 17, 2013 the trial court granted the motion to file a third amended complaint and denied the motion to expunge. The court noted the ERDM parties' opposition to the motion to expunge had "essentially admitted" that their second amended complaint did not allege a real property claim as required for recording a lis pendens. However, the ERDM parties had requested, and the court agreed in ruling on the motion to expunge, to consider the third amended complaint, which included the necessary allegations. (The third amended complaint alleged the ERDM parties' lease gave them a right of first refusal for any new offer to lease the nightclub venue, thus affecting future title and possession of the premises.)
Ultimately, the trial court on June 4, 2019, as part of consolidated proceedings involving three other lawsuits, entered a final judgment in ERDM I in favor of Aguila and TAI on the ERDM parties' third amended complaint and in favor of the ERDM parties on Aguila and TAI's fourth amended cross-complaint.
Aguila and TAI's cross-complaint originally named as cross defendants the ERDM parties and their counsel and asserted causes of action for breach of contract, contractual indemnity and slander of title. Aguila and TAI have appealed the adverse aspects of the trial court's June 4, 2019 final judgment, including the court's failure to award any damages for slander of title. That appeal is pending in Division Five of this court, Thee Aguila, Inc. v. ERDM, Inc., B299725. The ERDM parties have not appealed, and the adverse judgment in ERDM I is final as to them.
2. Aguila's Lawsuit for Malicious Prosecution, Abuse of Process and Intentional Infliction of Emotional Distress
On January 2, 2020 Aguila, representing himself, filed a complaint, and on January 13, 2020 a first amended complaint, against the ERDM parties for malicious prosecution, abuse of process and intentional infliction of emotional distress. Aguila alleged judgment was entered in his favor on June 4, 2019 in ERDM I following a trial at which the ERDM parties had no witnesses or records to support any of the allegations in their complaint. That lawsuit, Aguila averred, was part of a campaign of retaliation against him after he refused to extend the lease on the property because of ongoing criminal activity at the site and was initiated without belief in the validity of the claims and out of hostility and ill will.
Aguila's lawsuit also named Acuna as a defendant. Acuna was dismissed at Aguila's request prior to entry of the default judgment.
Aguila alleged the ERDM parties had been using the property to distribute drugs for a Mexican drug cartel and that the Drug Enforcement Agency permanently closed down the property in February 2015.
The abuse of process cause of action alleged the ERDM parties had suppressed evidence, obstructed justice and assassinated Aguila's reputation to retaliate against him and had "committed willful acts of intimidation, threats, and submission of false and confidential documents not authorized by the process of litigation, and not proper in the regular conduct of litigation." Neither the abuse of process cause of action nor any other portion of the amended complaint referred to the lis pendens.
Aguila sought $5 million in general and compensatory damages, as well as punitive damages according to proof.
3. The Default Judgment
The ERDM parties' default was entered on December 29, 2020. On the same day Aguila submitted a six-page declaration and multiple exhibits in support of his application for a default judgment including excerpts from Fragoso's deposition, which Aguila took in October 2020. Aguila subsequently submitted a supplemental declaration and then a second supplemental declaration in support of the application, which included a copy of Fragoso's agreement to plead guilty to one count in a federal indictment charging him with money laundering.
In his declarations Aguila explained, as a result of the lis pendens recorded on the property, TAI was unable to obtain refinancing and defaulted on loans secured by the property, which was then lost in foreclosure, resulting in a multi-million dollar loss to TAI and to Aguila personally, TAI's alter ego. Attaching and incorporating by reference the opinion in Thee Aguila, Inc. v. ERDM, Inc. (May 9, 2016, B257987) [nonpub. opn.], which reversed the order granting a special motion to strike the slander of title cause of action in TAI's cross-complaint in ERDM I, Aguila stated (incorrectly) that TAI had appealed the trial court's refusal to expunge the lis pendens; the court of appeal had concluded the lis pendens had not been supported, when recorded, by the operative complaint; and the court of appeal had ruled the lis pendens was therefore not privileged 5 under Civil Code section 47, subdivision (b)(4).
In fact, the court of appeal held only that TAI had carried its burden of showing its slander of title claim had "minimal merit" within the meaning of Code of Civil Procedure section 425.16. In addition to misstating the court of appeal's holding, Aguila's attempt to use the appellate ruling as evidence in support of entry of a default judgment was inconsistent with section 425.16, subdivision (b)(3), which provides, "If the court determines that the plaintiff has established a probability that the plaintiff will prevail on the claim, neither that determination nor the fact of that determination shall be admissible in evidence at any later stage of the case, or in any subsequent action, and no burden of proof or degree of proof otherwise applicable shall be affected by that determination in any later stage of the case or in any subsequent proceeding." When the slander of title action was tried, the court found in favor of the ERDM parties. In its amended statement of decision filed August 9, 2018 the trial court ruled, "If the court assumes that a slander of title action is proven up [limited to the period from July 30, 2013 to September 17, 2013], TAI has not proven any damages." As noted, Aguila's appeal of the rulings adverse to him in ERDM I is pending in another division of this court. (See fn. 2.)
Citing and attaching Fragoso's deposition testimony, Aguila also stated Fragoso had admitted the allegations in ERDM I of damage caused by Aguila and TAI's marketing efforts were untrue and the lawsuit was intended to create pressure on TAI to agree to an extension of the lease for the property. Aguila acknowledged the lis pendens had been filed by the ERDM parties' attorney without their prior approval, but cited Fragoso's testimony that, after learning Aguila wanted the notice expunged, Fragoso was indifferent to whether the notice created financial and emotional difficulties for Aguila.
In addition, Aguila declared the financial strain caused by the legal fees incurred in challenging the lis pendens and Aguila's inability to access the equity in the Pico Rivera property caused him "severe emotional distress and to entertain suicidal thoughts which eventually caused [Aguila] to seek the assistance of a psychiatrist." Aguila requested $7,285,414 in compensatory damages for economic loss due to the abuse of process, $5 million for intentional infliction of emotional distress, and $300,000 in punitive damages separately against Fragoso and Meneses. None of Aguila's three declarations requested entry of a judgment awarding damages for malicious prosecution.
On April 29, 2021 the court entered a judgment by default in Aguila's favor for $900,000. The accompanying minute order stated, "While the matter [ERDM I] was terminated in plaintiff's favor on June 4, 2019, plaintiff presented insufficient evidence to establish that defendants initiated the civil proceeding with malice. [Citation.] Defendants are therefore not liable to plaintiff for malicious prosecution."
With respect to the cause of action for abuse of process, the court noted Aguila's argument that, for the period July 30, 2013 to September 17, 2013, the lis pendens was based on the second amended complaint, which did not contain a real estate cause of action, and, as such, was not privileged. However, the court ruled "defendants' reliance on advice from their attorney who filed the lis pendens is a complete defense. [Citation.] Consequently, defendants are not liable to Plaintiff for abuse of process."
As to intentional infliction of emotional distress, the court found the ERDM parties engaged in extreme and outrageous conduct directed at Aguila causing him to become "distressed, suicidal, and sleepless, requiring him to seek psychiatric help and take medication for years." The court awarded $900,000 against all defendants. Finally, the court denied the request for punitive damages because Aguila failed to present sufficient evidence of the ERDM parties' financial condition.
Aguila filed a timely notice of appeal.
DISCUSSION
1. Governing Law and Standard of Review
A cause of action for malicious prosecution consists of three elements. "The 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.) The trial court found Aguila had failed to carry his burden of proof with respect to the third element, malice. Accordingly, the question on appeal is "'whether the appellant's evidence was (1) "uncontradicted and unimpeached" and (2) "of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding."'" (Dreyer's Grand Ice Cream, Inc. v. County of Kern (2013) 218 Cal.App.4th 828, 838; accord, Phipps v. Copeland Corp. LLC (2021) 64 Cal.App.5th 319, 333; Juen v. Alain Pinel Realtors, Inc. (2019) 32 Cal.App.5th 972, 978-979; see In re R.V. (2015) 61 Cal.4th 181, 201 [where party fails to meet its burden on an issue in the trial court, "the inquiry on appeal is whether the weight and character of the evidence . . . was such that the [trial] court could not reasonably reject it"].)
"The common law tort of abuse of process arises when one uses the court's process for a purpose other than that for which the process was designed." (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056.) "To establish a cause of action for abuse of process, a plaintiff must plead two essential elements: that the defendant (1) entertained an ulterior motive in using the process and (2) committed a willful act in a wrongful manner." (Coleman v. Gulf Ins. Group (1986) 41 Cal.3d 782, 792; see generally SA. v. Maiden (2014) 229 Cal.App.4th 27, 42 ["'Malicious prosecution and abuse of process are distinct. The former concerns a meritless lawsuit (and all the damage it inflicted). The latter concerns the misuse of the tools the law affords litigants once they are in a lawsuit (regardless of whether there was probable cause to commence that lawsuit in the first place)'"].)
To the extent reliance on the advice of counsel constitutes an affirmative defense to a cause of action for abuse of process, the plaintiff does not have the burden of proof. Consequently, we review the trial court's factual finding s supporting the defense for substantial evidence. Under this deferential standard of review, "'[A]ll factual matters will be viewed most favorably to the prevailing party [citations] and in support of the judgment. . . . "In brief, the appellate court ordinarily looks only at the evidence supporting the successful party, and disregards the contrary showing." [Citation.] All conflicts, therefore, must be resolved in favor of the respondent.'" (Campbell v. Southern Pacific Co. (1978) 22 Cal.3d 51, 60, italics omitted; accord, Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 571; see Nissan Motor Acceptance Cases (2021) 63 Cal.App.5th 793, 818 ["We must not review the evidence to determine whether substantial evidence supports the losing party's version of the evidence. Instead, we must determine if there is any substantial evidence, contradicted or uncontradicted, to support the trial court's findings"].)
2. Aguila Has Failed To Demonstrate the Evidence Compelled a Finding in His Favor on His Cause of Action for Malicious Prosecution
In his brief in this court Aguila does not address the trial court's finding that he presented insufficient evidence to prove the ERDM parties initiated ERDM I with malice. Instead, he argues only that, when they filed the lawsuit, the ERDM parties could not have been acting on the good faith advice of counsel following full disclosure of all pertinent facts. Aguila has thus failed to demonstrate the record before the trial court required a finding in his favor as to malice. Indeed, by omitting any discussion of the ground upon which the trial court ruled, Aguila forfeited any argument the court erred in entering judgment in favor of the ERDM parties on this cause of action. (See Tiernan v. Trustees of Cal. State University &Colleges (1982) 33 Cal.3d 211, 216, fn. 4 ["[p]laintiff has not raised this issue on appeal, however, and it may therefore be deemed waived"]; Sierra Palms Homeowners Assn. v. Metro Gold Line Foothill Extension Construction Authority (2018) 19 Cal.App.5th 1127, 1136 [appellant forfeited challenge to issue not raised on appeal].)
In addition, Aguila never requested entry of a judgment awarding damages for malicious prosecution. Accordingly, any error by the trial court in ruling the ERDM parties were not liable to Aguila for malicious prosecution was necessarily harmless. (Code Civ. Proc., § 475 [no judgment may be reversed by reason of any error unless it appears from the record that the error was prejudicial and that, as a result, the appealing party suffered substantial injury and that a deferent result would have been probable if the error had not occurred]; see Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 801-802 [errors in civil trials require examination to determine whether prejudice actually occurred in light of the entire record].)
3. Aguila Forfeited His Challenge to the Trial Court's Adverse Finding on His Cause of Action for Abuse of Process
When the issue on appeal is whether substantial evidence supports the judgment, "the appellant has the duty to fairly summarize all of the facts in the light most favorable to the judgment." (Boeken v. Philip Morris, Inc. (2005) 127 Cal.App.4th 1640, 1658; accord, LA Investments, LLC v. Spix (2022) 75 Cal.App.5th 1044, 1061 ["[o]n appeal challenging sufficiency of the evidence, appellant's opening brief must set forth all the material evidence on point, not merely state facts favorable to appellant"]; Doe v. Roman Catholic Archbishop of Cashel &Emly (2009) 177 Cal.App.4th 209, 218 ["[a] party who challenges the sufficiency of the evidence to support a finding must set forth, discuss, and analyze all the evidence on that point, both favorable and unfavorable"]; see Cal. Rules of Court, rule 8.204(a)(2)(C) [appellant in the opening brief must provide a summary of significant facts].) The failure to comply with this requirement forfeits the issue. (LA Investments, at p. 1062; Doe, at p. 218.)
In his declaration in support of entry of the default judgment, Aguila conceded, based on Fragoso's deposition testimony, the lis pendens had been filed by counsel for the ERDM parties without the clients' knowledge. Yet that significant fact relating to the abuse of process cause of action was omitted from Aguila's appellate brief.
In addition, Aguila failed to address with any meaningful legal analysis why that fact did not support the trial court's finding the ERDM parties were not liable for abuse of process because they had relied on their counsel or its implied finding it was counsel, not her clients, who had committed "a willful act in a wrongful manner"-that is, who arguably committed the tort.(See Palmer v. Ted Stevens Honda (1987) 193 Cal.App.3d 530, 539 ["[t]he client is insulated from tort liability for the attorney's litigation conduct on his behalf where '[there] is no showing . . . of ratification or any other act by [the client] endorsing or approving the attorney's actions'"]; Lynn v. Superior Court (1986) 180 Cal.App.3d 346, 349 ["[independent counsel retained to conduct litigation in the courts act in the capacity of independent contractors, responsible for the results of their conduct and not subject to the control and direction of their employer over the details and manner of their performance. . . . Absent compelling reasons of public policy [citations] an employer is not liable for the negligence of an independent contractor"]; see generally Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 58 ["[t]he doctrine of implied findings requires the appellate court to infer the trial court made all factual findings necessary to support the judgment"].)
Generally a defendant's default admits the well-pleaded allegations of the complaint, and the evidence offered at the prove-up hearing concerns damages, not liability. (See Steven M. Garber & Associates v. Eskandarian (2007) 150 Cal.App.4th 813, 823; Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1303.) As discussed, however, Aguila did not refer to the lis pendens in the abuse of process cause of action or anywhere else in his amended complaint. Thus, the trial court's evaluation of the sufficiency of the evidence of liability included in Aguila's declarations was understandable. Although Aguila challenges the trial court's findings, he does not question the court's right to make them.
By failing to include all material facts and provide legal analysis, Aguila has forfeited his challenge to the judgment in favor of the ERDM parties on his claim for abuse of process. (See WFG National Title Ins. Co. v. Wells Fargo Bank, N.A. (2020) 51 Cal.App.5th 881, 894 ["In order to demonstrate error, an appellant must supply the reviewing court with some cogent argument supported by legal analysis and citation to the record. . . . [W]e may disregard conclusory arguments that are not supported by pertinent legal authority"]; City of Santa Maria v. Adam (2012) 211 Cal.App.4th 266, 287 [same].)
DISPOSITION
The judgment is affirmed. Aguila is to bear his own costs on appeal.
WE CONCUR: FEUER, J., WISE, J. [*]
[*] Judge of the Alameda County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.