Opinion
A129700
08-31-2011
BRANDY MYCHALS RUCH et al., Plaintiffs and Respondents, v. MICHAEL GEORGE ACKERMAN et al., Defendants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Contra Costa County Super. Ct. No. C10-01277)
Defendant Attorneys Michael George Ackerman and Kevin Kevorkian and the law office of Ackerman and Kevorkian (appellants) appeal the denial of their special motion to strike the malicious prosecution complaint filed against them by plaintiffs Brandy Mychals Ruch and Phyllis Parsons (respondents) pursuant to the anti-SLAPP statute (Code Civ. Proc., § 425.16). Appellants contend that respondents failed to establish a probability of prevailing on their malicious prosecution claim. We agree and reverse.
SLAPP is an acronym for "strategic lawsuit against public participation." (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57, fn. 1.)
Respondents contend the appeal is frivolous and seek sanctions under Family Code section 271 or Code of Civil Procedure section 907. However, they failed to file a separate motion for sanctions that complies with the requirements of California Rules of Court, rule 8.276, and therefore are not entitled to be heard on the subject. (Kajima Engineering and Construction, Inc. v. Pacific Bell (2002) 103 Cal.App.4th 1397, 1402.) The request for sanctions is denied.
BACKGROUND
Preliminarily, we note that respondents' brief largely ignores the requirement in California Rules of Court, rule 8.204(a)(1)(C), that factual assertions must be supported by a citation to the appellate record. We disregard any factual assertions not supported by citation to the record before us.
Dissolution Action and Underlying RCI Action
Brandy Mychals Ruch is the former spouse of William J. Ruch IV; they married in 2001. Parsons is Brandy's mother. William, a chiropractor, practiced as a sole proprietor until October 2002, when his business incorporated as Ruch Chiropractic Inc. (RCI). Brandy and William equally owned RCI.
William J. Ruch IV is not a party to this appeal. Solely for the sake of convenience he is referred to as William, and Brandy Mychals Ruch is referred to as Brandy. No disrespect is intended.
In 2004, Brandy petitioned for dissolution of the marriage in the Alameda County Superior Court (dissolution action). In early 2007, William sought to wind up and dissolve RCI and continue his chiropractic practice as a the sole proprietorship North Oakland Chiropractic.
Parsons was not a party to the dissolution action.
In November 2007, Brandy and William entered into a settlement agreement regarding the terms of a stipulated judgment in the dissolution action. The related order states, "Both parties agreed that the [settlement agreement] reflects all the necessary terms of a [stipulated] judgment." RCI was dissolved at some point prior to the stipulated judgment.
In January 2008, the stipulated judgment was entered. In particular, it awarded North Oakland Chiropractic to William and stated he "shall assume all obligations associated with the business and indemnify and hold [Brandy] harmless therefrom." It also awarded William all existing IRA and 401k accounts, including those in Brandy's name and all funds held in attorney accounts. It further stated, "All claims for support arrears to November 30, 2007 are waived." It also stated, "Each party is awarded the personal property . . . bank accounts, . . . currently in his or her possession and disclosed without offset." The stipulated judgment's sole reference to RCI is contained within a paragraph entitled "Tax Returns" and states, "Any tax issue arising out of [RCI] is not addressed by this provision."
In March 2008, appellants, on behalf of RCI, filed a complaint in Contra Costa County Superior Court against respondents for breach of fiduciary duty, fraud, and conversion (RCI action) alleging the following: Respondents were agents of each other and at all relevant times acted within the scope of that agency. As of October 2002, Brandy was a shareholder, officer, and employee of RCI; and acted as its bookkeeper, collecting and depositing payments made to RCI and paying its debts. She had authority to draw checks on RCI's bank accounts and medical plan and had access to RCI's credit card accounts. Brandy abused her fiduciary duty as an officer and employee of RCI by withdrawing $28,520.43 from RCI's Cafe Trust medical plan account between January 2003 and February 2005, and $252,358.26 from RCI's Diablo Valley Bank (DVB) account No. 6871 between October 2002 and May 2005. These withdrawals were for Brandy's or respondents' own personal use. Brandy also concealed from RCI that on several occasions she transferred money to Parsons. On several occasions Brandy transferred $9,999.99 to Parsons, one cent less than the amount banks are required to report to accountholders. Brandy also withdrew sums from RCI's credit cards for her personal use, not connected with RCI's business. Parsons knew at the time she received sums from Brandy that the sums were withdrawn from RCI's business accounts and that Brandy had no authority to pay Parsons those sums. Respondents did these acts with the intent to conceal the transactions and induce RCI's reliance on Brandy's "continuing fidelity" as an officer and employee of RCI. RCI first discovered respondents' fraud in April 2005, after William hired attorneys who conducted discovery regarding RCI's accounts. The conversion cause of action alleges that between May 2004 and May 2005 respondents withdrew $252,358.26 from the DVB account No. 6871 and Brandy paid for her personal credit cards utilizing funds from the corporate account. RCI suffered damages in excess of $300,000 due to monies taken from its bank accounts and sums charged to its credit cards.
In May 2009, respondents moved for nonsuit in the RCI action on the ground that RCI's claims against them were previously litigated in the dissolution action and resolved in the stipulated judgment; thus, the claims were barred by res judicata. Respondents also requested sanctions against appellants. At the hearing on the motion, the trial court (Judge Baskin) stated that the RCI action appeared to be "borderline frivolous," but stayed the RCI action to enable either party thereto to seek to litigate in the family court whether any claims by or regarding RCI were omitted in the dissolution action. (Fam. Code, § 2556) Thereafter, on behalf of William, Ackerman filed an omitted assets motion in the family court asserting that the issue of RCI's assets and liabilities and Brandy's liability for breach of fiduciary duty and misappropriation had not been decided in the stipulated judgment. Brandy opposed the motion.
Family Code section 2556 provides, in relevant part: "In a proceeding for dissolution of marriage . . . of the parties, the court has continuing jurisdiction to award community estate assets or community estate liabilities to the parties that have not been previously adjudicated by a judgment in the proceeding. A party may file a postjudgment motion . . . in the proceeding in order to obtain adjudication of any community estate asset or liability omitted or not adjudicated by the judgment. . . ."
On September 8, 2009, the trial court in the dissolution action (Judge Carvill) issued a written decision on William's omitted assets motion stating the following: During the dissolution action William asserted "tracing claims" against Brandy which were "identical" to the breach of fiduciary claim alleged against Brandy in the RCI action, and the settlement reflected an unequal division of community assets in William's favor to compensate him for that claim. The unequal division of assets did not fully compensate William for all of the allegedly diverted funds because the amount of such funds was disputed and because he chose to settle for "significantly less" than he argued he could prove, due to the cost of pursuing the claim and the limited assets available for recovery on it. For several reasons, it was too late for William to resurrect the tracing claim that Brandy misappropriated money from RCI under the guise that RCI was an omitted asset. First, RCI had been dissolved and its outstanding assets and debts had been adjudicated. Second, William's claim that Brandy misappropriated RCI funds was encompassed by the dissolution action and stipulated judgment. Third, the only identifiable debt of RCI (its potential outstanding federal tax liability) was addressed in the stipulated judgment, and William identified no other RCI asset or debt overlooked in the settlement. William's claim that Brandy misappropriated funds was "the overriding financial dispute in the dissolution action." The fact that RCI is not specified in the settlement agreement or stipulated judgment is not significant because "the scope of the prior settlement [agreement] and [stipulated] judgment is readily identifiable by examining the family law pleadings, which clearly indicate the scope of the claims asserted and resolve[d] by the settlement [agreement] and merged into the [stipulated] judgment." The stipulated judgment "was a judgment on all reserved issues and dispenses with all claims/assets/debts" except those expressly reserved or not disclosed, and William's tracing claims did not fall into either excepted category. Judge Carvill's decision did not mention Parsons.
William, represented by Ackerman, appealed the order denying his motion under Family Code section 2556.
On January 31, 2011, 10 days after appellants filed their opening brief in the instant appeal, Division Four of this court affirmed the trial court's denial of William's request for relief under Family Code section 2556, and granted Brandy's request for sanctions against William for filing a frivolous appeal (Fam. Code, § 271). (In re Marriage of Ruch (A126815, Jan. 31, 2011, as mod. Feb. 24, 2011) [nonpub. opn.].)
On October 19, 2009, respondents moved for sanctions in the RCI action (Code Civ. Proc., § 128.7) against appellants and against William, as the sole principal of RCI, on the grounds that the RCI action was barred because identical claims were adjudicated in the stipulated judgment in the dissolution action and the RCI action was filed for the purpose of harassing respondents.
On October 29, 2009, appellants, on behalf of RCI, requested dismissal with prejudice of the RCI action and the next day the dismissal was entered. Ackerman's declaration opposing the sanctions motions stated he filed the dismissal request in order to avoid the imposition of sanctions against him or his client. On December 10, 2009, respondents' sanctions motion was denied without prejudice on the ground it was procedurally defective.
The Malicious Prosecution Action and Anti-SLAPP Motion
On May 3, 2010, respondents filed the instant malicious prosecution action against appellants and William in Contra Costa County Superior Court. The complaint alleged the following: Appellants maliciously filed the groundless, meritless RCI action against respondents, on behalf of RCI, a defunct and dissolved corporation, to cause respondents distress and force them to pay unjustified sums of money. The stipulated judgment in the dissolution action resolved all claims by RCI against Brandy and/or any claims which could have existed, as a matter of law, against Parsons. Appellants knew the same claims had been previously adjudicated and were false, and no reasonable attorney would find the claims alleged in the RCI action legally meritorious or tenable. There was no factual or legal basis for RCI's fraud and conversion claims against respondents. Appellants used the defunct RCI to assert the same previously decided and settled claims against respondents.
On June 7, 2010, appellants filed their anti-SLAPP motion to strike the malicious prosecution cause of action in respondents' complaint.
Ackerman's declaration in support of the anti-SLAPP motion stated the following: In early 2008, he was informed by transactions Attorney Kathryn Gutierrez that during the course of the dissolution action William discovered respondents had intentionally misappropriated RCI funds. Gutierrez advised Ackerman that RCI could pursue its misappropriation claim as part of RCI's winding up process. In reviewing RCI's potential claims, Ackerman reviewed bank records and a declaration and documents submitted by William's counsel in the dissolution action, Elizabeth Principato-Phipps, which explained the basis for William's assertion that Brandy had misappropriated RCI funds. Based on these documents, Ackerman opined that RCI had a cognizable claim against respondents based on misappropriation of corporate funds. Gary Strutz, an accountant Ackerman retained as an expert in connection with the misappropriation claims, reviewed the same documents and determined that more than $200,000 had been transferred from RCI's bank accounts to either Brandy or Parsons personally.
Attached to Ackerman's declaration is an October 2007 declaration by Principato-Phipps, submitted on behalf of William in the dissolution action in support of a retroactive modification of child/spousal support. The declaration summarizes the numerous spreadsheet documents Principato-Phipps prepared regarding the tracing claims. Among other things, it specifically refers to: Brandy's postseparation "fraud[ulent]" withdrawal of funds from DVB account No. 6871 and Café Trust account in the same amounts alleged in RCI's complaint; subsequent numerous transfers of funds by Brandy to Parsons; and deposits of those funds to accounts in the names of Brandy, Parsons or Brandy's sister in "nonreportable" amounts. The declaration also asserts the same claim raised in the RCI action that on several occasions Brandy transferred funds to Parsons in an amount one cent less than the amounts banks are required to report.
Strutz's declaration submitted in support of appellants' anti-SLAPP motion stated that RCI requested that he review certain financial records of RCI and determine the nature and extent of the financial transactions undertaken by Brandy as well as what funds, if any, were transferred from RCI to Parsons. After reviewing the documents, Strutz opined that approximately $221,329.50 was removed from RCI accounts by Brandy and deposited into accounts not owned by RCI, and on which William was not a signatory. A "relatively small" portion of the total sum taken by Brandy from RCI accounts was deposited into accounts owned by Parsons.
Ackerman also declared that neither the settlement agreement nor the stipulated judgment in the dissolution action mentioned RCI's assets or any potential claims of RCI against Brandy or Parsons. William advised Ackerman that Judge Carvill excepted RCI's potential claims against Brandy and Parson from the dissolution action judgment and advised William during the November 2007 settlement conference that William "would have to bring a separate claim in the name of [RCI] in order to pursue [RCI's] potential misappropriation claims." Ackerman concluded that "even to the extent the [s]tipulated] [j]udgment addressed the claims of [William's] sole proprietorship that absorbed the corporation's chiropractic practice," Ackerman's understanding of the stipulated judgment was that it did not relate to any "surviving claims the business had against [Brandy] or [Parsons] for intentional torts." Ackerman concluded that RCI's misappropriation claims against Brandy and Parsons were not addressed or disposed of in the dissolution action and therefore it was "appropriate and tenable" to file the RCI action.
Ackerman further declared he litigated the RCI action "to the point of trial preparation." Throughout the action he rejected contentions by respondents' counsel, Christopher Lucas, that RCI's claims had been disposed of in the dissolution action because the stipulated judgment did not mention RCI and its claims against respondents. Ackerman said he brought the omitted assets motion in reliance on declarations by William and Principato-Phipps stating that at the settlement conference Judge Carvill said the issue of RCI's misappropriation claims would not be dealt with in the dissolution action and would require a separate civil action, such as the RCI action.
Principato-Phipps's declaration submitted in support of appellants' anti-SLAPP motion stated, during the November 29, 2007 settlement conference in the dissolution action, each side caucused separately with Judge Carvill. She also stated that she and William discussed with Judge Carvill the issue of Brandy's breach of fiduciary duty vis-à-vis RCI and the diminished value of RCI as a result of Brandy's misappropriation of funds, and she showed Judge Carvill her binder of documents supporting William's claims. Judge Carvill told Principato-Phipps "the whole issue being raised was a corporate matter that needed to be taken up elsewhere, and that he would not be reading the binder." Judge Carvill also said Brandy would only agree to settlement language regarding personal tax issues regarding her and William's ownership of RCI.
The trial court denied the motion on the ground that respondents had "offered evidence sufficient to demonstrate the existence of a potentially valid claim for malicious prosecution." Appellants filed this timely appeal.
DISCUSSION
I. Standard of Review
Pursuant to Code of Civil Procedure section 425.16, subdivision (b)(1), "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 the 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."
"Resolution of an anti-SLAPP motion 'requires the court to engage in a two-step process. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving defendant's burden is to demonstrate that the act or acts of which the plaintiff complains were taken "in furtherance of the [defendant]'s right of petition or free speech under the United States or [the] California Constitution in connection with a public issue," as defined in the statute. [Citation.] If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim.' [Citation.]" (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 733 (Jarrow).)
The first step in the anti-SLAPP analysis is not at issue here. "[B]y its terms, [Code of Civil Procedure] section 425.16 potentially may apply to every malicious prosecution action, because every such action arises from an underlying lawsuit, or petition to the judicial branch. By definition, a malicious prosecution suit alleges that the defendant committed a tort by filing a lawsuit. [Citation.]" (Jarrow, supra, 31 Cal.4th at pp. 734-735, fn. omitted; accord, Mendoza v. Wichmann (2011) 194 Cal.App.4th 1430, 1447 (Mendoza).)
Thus, we focus on the second step in the anti-SLAPP analysis, whether respondents have shown a probability of prevailing on their malicious prosecution claim. That is, "whether [the] plaintiffs presented evidence in opposition to [the] defendants' anti-SLAPP motion that, if believed by the trier of fact, was sufficient to support a judgment in [the] plaintiffs' favor." (Zamos v. Stroud (2004) 32 Cal.4th 958, 965 (Zamos).) To satisfy this step, the plaintiff " 'must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.' [Citations.]" (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821 (Wilson).)
In deciding whether the plaintiff has demonstrated a probability of prevailing on the merits, the trial court considers the pleadings and evidentiary submissions of both parties, but does not weigh the credibility or comparative probative strength of competing evidence. (Wilson, supra, 28 Cal.4th at p. 821.) "The showing must be made through 'competent and admissible evidence.' [Citations.] Thus, declarations that lack foundation or personal knowledge, or that are argumentative, speculative, impermissible opinion, hearsay, or conclusory are to be disregarded. [Citation.]" (Gilbert v. Sykes (2007) 147 Cal.App.4th 13, 26.) If the plaintiffs have substantiated a legally tenable claim through a facially sufficient evidentiary showing, and the defendants' contrary showing does not defeat the plaintiffs' showing as a matter of law, the motion to strike must be denied. (Wilson, at p. 821 .)
Whether respondents have established a probability of prevailing on their malicious prosecution claim is a question of law which we review de novo, applying the same standard as that of the trial court. (Mendoza, supra, 194 Cal.App.4th at p. 1447; Terry v. Davis Community Church (2005) 131 Cal.App.4th 1534, 1544; HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212 (HMS Capital))
In order " ' "[t]o establish a cause of action for the malicious prosecution of a civil proceeding, a plaintiff must plead and prove that the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination in [the plaintiff's] favor [citations]; (2) was brought without probable cause [citations]; and (3) was initiated with malice [citations]." [Citation.]' [Citation.]" (Zamos, 32 Cal.4th at pp. 965-966, italics omitted.) "Malicious prosecution . . . includes continuing to prosecute a lawsuit discovered to lack probable cause." (Id. at p. 973.) " 'Malicious prosecution is a disfavored action. [Citations.] This is due to the principles that favor open access to the courts for the redress of grievances.' " (Downey Venture v. LMI Ins. Co. (1998) 66 Cal.App.4th 478, 493.)
Appellants contend the trial court erroneously denied their anti-SLAPP motion because respondents failed to produce sufficient evidence that the RCI action was brought without probable cause and was initiated with malice. "The question of probable cause is 'whether, as an objective matter, the prior action was legally tenable or not.' [Citation.]" (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 292 (Soukup).)Even if we assume appellants lacked probable cause to file and prosecute the RCI action against respondents, we conclude malice has not been established. II. Malice
The element of termination of the RCI action in favor of respondents is not disputed here. "[A] voluntary dismissal is presumed to be a favorable termination on the merits, unless otherwise proved to a jury.' [Citation.]" (Daniels v. Robbins (2010) 182 Cal.App.4th 204, 218 (Daniels).)
The malice element in a malicious prosecution claim " '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.' [Citations.] Malice 'may range anywhere from open hostility to indifference. [Citations.] . . .' [Citation.]" (Soukup, supra, 39 Cal.4th at p. 292, italics omitted.) "Suits with the hallmark of an improper purpose" include, but are not limited to "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." ' [Citation.]" (Sierra Club Foundation v. Graham (1999) 72 Cal.App.4th 1135, 1157.)
Malice is usually proven by circumstantial evidence and inferences drawn from the evidence. (HMS Capital, supra, 118 Cal.App.4th at p. 218.) A lack of probable cause, standing alone, is not sufficient to establish the malicious intent element. " '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.' [Citation.]" (Jarrow, supra, 31 Cal.4th at p. 743.) The lack of probable cause must be supplemented by other, additional evidence.
Proof of malice can be inferred from evidence that a party "knowingly brings an action without probable cause." (Daniels, supra, 182 Cal.App.4th at p. 226.) And, "malice can be inferred when a party continues to prosecute an action after becoming aware that the action lacks probable cause." (Ibid.)If the prior action was not supported by probable cause, "the extent of a defendant's attorney's investigation and research may be relevant to the further question of whether . . . the attorney acted with malice. [Citation.]" (Id. at pp. 224-225.)
Respondents' opposition to the anti-SLAPP motion erroneously argued that Ackerman's malice may be inferred solely from lack of probable cause, and provided no evidence or argument apart therefrom. Because their respondents' brief on appeal is less than clear on the issue of malice, we address what appear to be their arguments on that issue.
First, respondents argue that appellants' malice is established by Ackerman's "willful ignorance of what was 'readily apparent' from the [dissolution action] court file." In particular, they cite Judge Carvill's ruling on the omitted assets motion filed by appellants: "the scope of the prior settlement [agreement] and [stipulated] judgment is readily identifiable by examining the family law pleadings, which clearly indicate the scope of the claims asserted and resolve[d] by the settlement [agreement] and merged into the [stipulated] judgment." The essence of respondents' claim is that appellants' inadequate factual research and investigation of the dissolution action constitutes malice. Respondents do not identify or provide the particular pleadings referred to by Judge Carvill. In addition, Judge Carvill's ruling was silent as to Parsons. No evidence was presented that appellants failed to review or willfully ignored such pleadings with knowledge that such pleadings would render the RCI action legally untenable. Even assuming appellants failed to satisfactorily review the dissolution action file and/or investigate the facts before filing the RCI action, that alone will not suffice to establish a prima facie case of malice. (Jarrow, supra, 31 Cal.4th at p. 743; Daniels, supra, 182 Cal.App.4th at p. 225 [evidence of an attorney's possible negligence in conducting factual research is insufficient to show malice].)
Second, respondents argue that in reviewing the anti-SLAPP motion we should consider Division Four's decision in In re Marriage of Ruch, which affirmed the family court's denial of William's omitted assets motion and granted Brandy's request for sanctions against William for filing a frivolous appeal (Fam. Code, § 271). We conclude it would be inappropriate to conduct a de novo review of the motion based on evidence not before the trial court. (See Daniels, supra, 182 Cal.App.4th at pp. 227-228.) However, even if the Division Four decision is considered, it does not provide evidence of appellants' malice. Although Division Four concluded the appeal was frivolous, it awarded sanctions solely against William, not against Ackerman. Any malice on the part of William may not be imputed to appellants. (Id. at p. 225, citing Zeavin v. Lee (1982) 136 Cal.App.3d 766, 773 ["the attorney is not the insurer of his client's conduct, and the law wisely places no such burden on that party's attorney solely by reason of his client's conduct . . ."].)
Third, respondents assert, "the frivolous [RCI action] is evidence itself of malice. It lacks any probable cause and it is frivolous." " '[T]he standard of probable cause to bring a civil suit [is] equivalent to that for determining the frivolousness of an appeal' [Citation.]" (Mendoza, supra, 194 Cal.App.4th at p. 1449.) Referring to the RCI action as frivolous and lacking in probable cause is merely an assertion of lack of probable cause. As we noted previously, lack of probable cause, alone, is insufficient to establish the malicious intent element of a cause of action for malicious prosecution.
Fourth, respondents argue "[t]he way he drafted the [c]omplaint shows Ackerman's consciousness that he knew RCI had no case." They point to the RCI complaint's allegation that Brandy "had authority to draw checks on [RCI's] bank accounts at [DVB] as well as to withdraw funds from the Café Trust Account," and argue it contradicts the complaint's assertions regarding respondents' "wrongful use of funds." This argument lacks merit. That Brandy had authority to draw checks on RCI's accounts presupposes the checks were to be used for authorized purposes. The complaint alleges that Brandy withdrew funds from RCI accounts for respondents' own personal use rather than for an authorized purpose connected with RCI's business. The allegation does not establish that appellants filed the RCI complaint with knowledge that they lacked probable cause.
Fifth, respondents also appear to argue that malice may be inferred from the lack of any "articulated grounds" for naming Parsons as a defendant in the RCI action. Respondents assert that although the RCI complaint alleges fraud, it does not allege any misrepresentation, false promise or concealment by Parsons. Again the assertion lacks merit. The RCI complaint alleged that Parsons was Brandy's agent, Parsons knew at the time she received funds from Brandy that the funds were withdrawn from RCI's accounts, and Brandy had neither the right nor the authority to pay Parsons such funds. It alleged that on several occasions the transfers to Parsons were one cent less than the amount which banks are required to report to accountholders, essentially asserting fraudulent concealment. It also alleged that respondents did these acts to conceal these transactions and thereby induce RCI's reliance on Brandy's "continuing fidelity" to RCI and that respondents' fraud caused RCI damages in excess of $300,000. Contrary to respondents' assertion, the complaint adequately pled fraudulent concealment against Parsons.
Sixth, respondents appear to argue that malice may be inferred from appellants' dismissal of the RCI action in response to respondents' motion for sanctions following Judge Carvill's ruling on the omitted asset claim. They argue that, rather than assert a good faith belief in the merits of the RCI action, appellants chose to dismiss the action. It is undisputed that appellants dismissed the RCI action without attempting to extract a settlement. Appellants' decision to file a dismissal of the RCI action to avoid sanctions suggests that appellants discontinued the action after realizing that it lacked merit. Thus, it undermines an inference of malice. (See Grindle v. Lorbeer (1987) 196 Cal.App.3d 1461, 1467.) Judge Carvill's ruling issued on September 8, 2009. Respondents filed their sanctions motion on October 19 and appellants filed their dismissal request on October 29. Aside from the filing of respondents' sanctions motion on October 19, the record does not establish any action taken by the parties between Judge Carvill's September 8 ruling and appellants' October 29 dismissal of the RCI action. Respondents do not argue, and we cannot conclude, that the seven-week delay between Judge Carvill's ruling and appellants' dismissal of the action is evidence of appellants' malice.
Seventh, respondents assert that malice by appellants is established by the following portions of respondents' declarations submitted in support of their motion for sanctions against appellants and William:
Brandy's declaration stated in relevant part, "Despite the endless 'tracing claims' he asserted throughout the family law case, and what I hoped was the only way out, to give up and settle and have the final judgment in family law, William . . . nevertheless filed this lawsuit for the identical claims through the legal system's backdoor even though[] the actual corporation [RCI] was long gone and had been dissolved even prior to our family law settlement and judgment." Brandy's declaration solely addresses conduct by William, and therefore does not establish malice against appellants. As we noted previously, any malice on the part of William may not be imputed to appellants. (Daniels, supra, 182 Cal.App.4th at p. 225.)
Parsons's declaration stated in relevant part: "Prior to [the RCI action], I endured years of false allegations made by William . . . and his attorneys to exhaust [Brandy] and myself with an avalanche of paper. The claims were identical to what [William] later alleged in [the RCI] action as [RCI]. . . . [¶] . . . Never once have I been sued, until now. Both William . . . and his attorneys recklessly harm my reputation with fraud accusations that I misappropriated money from [RCI], to intimidate [Brandy] and me. The accusations were false and without any basis or likelihood as I had nothing to do with [RCI] and only gave the spouses money [and] never took any." Parsons's declaration also fails to provide evidence of malice against appellants. Its allegations against William may not be imputed against appellants. In addition, its references to allegations made by William's attorneys for years "prior to" the RCI action are irrelevant against appellants. Finally, the uncorroborated, self-serving statement "Both William . . . and his attorneys recklessly harm my reputation with fraud accusations that I misappropriated money from [RCI], to intimidate [Brandy] and me," is not expressly directed at appellants and, even it if were, is not evidence upon which a finding of appellants' malicious conduct could be based.
Finally, respondents argue that malice may be inferred from the letters written by Lucas to appellants between November 4, 2008, and May 6, 2009, conveying that the RCI action lacked merit, demanding appellants' dismissal of the action, and threatening sanctions and a malicious prosecution action against appellants. The thrust of the letters is that RCI lacked probable cause because its claims were decided in the stipulated dissolution judgment and were, therefore, barred by res judicata. The letters disparage William and Principato-Phipps and threaten that, unless appellants dismiss the RCI action, respondents will seek sanctions against them and sue them for malicious prosecution. The letters merely discuss the proceedings in the dissolution action but attach no evidence therefrom.
The letters are attached to Lucas's declaration in support of respondents' 2009 sanctions motion.
Lucas's letters put appellants on notice of his and respondents' adversarial position regarding the merits of the RCI action. However, they were not sufficient to put appellants on notice of the falsity of RCI's position. (See Daniels, supra, 182 Cal.App.4th at p. 223, see also Swat-Fame, Inc. v. Goldstein (2002) 101 Cal.App.4th 613, 627, overruled on other grounds in Zamos, supra, 32 Cal.4th at p. 973.) Although the letters threatened appellants with the possibility of a malicious prosecution action, they do not establish that appellants' filing or continued prosecution of the RCI action was malicious.
On the record before us, we conclude respondents failed to make a sufficient prima facie showing in support of the malice element of their malicious prosecution claim. Thus, respondents failed to demonstrate their likelihood of success on the merits of the claim. Because they have failed to demonstrate that they can succeed on the merits, appellants' anti-SLAPP motion should have been granted.
DISPOSITION
The trial court's order denying appellants' anti-SLAPP motion is reversed. We direct the trial court to grant the motion and dismiss the malicious prosecution complaint with prejudice. Appellants are entitled to costs on appeal.
SIMONS, J. We concur. JONES, P.J. BRUINIERS, J.