61 Cal.App.5th 136
Cal. Ct. App.2021Background
- Area 55, LLC and SAB Holdings (Appellants) sued Nicholas & Tomasevic, LLP and attorneys Nicholas and Tomasevic (Respondents) for malicious prosecution arising from a multi-year class action (Roehrig/Ector) over "Made in USA" advertising for the Vinturi aerator.
- Respondents’ firms prosecuted the class action from 2010 through its dismissal in April 2015; judgment dismissed the class for delay in prosecution under CCP § 583.410 after the court found lack of diligence and prejudice to defendants.
- Key factual points: original plaintiff Roehrig filed bankruptcy in 2010 and did not schedule his claims (effectively abandoning them); a later named plaintiff, Ector, had limited contact with counsel and no receipts; class counsel cancelled a court-ordered deposition of Ector.
- Appellants filed the present malicious prosecution claim in 2018; Respondents moved to strike under the anti‑SLAPP statute § 425.16.
- The trial court granted the anti‑SLAPP motion, finding the prior dismissal was not on the merits; the Court of Appeal reversed, holding Appellants made a prima facie showing on favorable termination, lack of probable cause, and malice, and that Respondents waived a limitations defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1) Does the malicious‑prosecution claim arise from protected petitioning activity under § 425.16 prong one? | Malicious‑prosecution necessarily depends on judicial‑proceeding statements but claim still may proceed if prong two met. | The claim arises from statements in a judicial proceeding and thus is protected. | Yes — the claim arises from protected petitioning activity; defendants met prong one. |
| 2) Was dismissal of the class action a "favorable termination" for malicious prosecution? | Dismissal for delay reflected on the merits because counsel abandoned prosecution, failed to notify class, cancelled depositions, and the original plaintiff had abandoned claims in bankruptcy. | Dismissal was technical for lack of readiness to try and not a merits determination; trial judge’s recollection supports non‑merits dismissal. | The appellate court held dismissal reflected on the merits and was favorable to defendants (crediting Appellants’ evidence; trial judge’s memory is not evidence). |
| 3) Did Respondents prosecute the class action without probable cause? | Respondents knew (or should have known) by June 2011 that Roehrig’s bankruptcy abandoned his claims and nonetheless continued prosecution; interim rulings did not constitute a merits victory sufficient to establish probable cause. | Interim procedural rulings (demurrer overruled, class certification, denial of decertification) showed objective tenability and provide probable cause under the interim‑adverse‑judgment reasoning. | Appellants made a prima facie showing of lack of probable cause; the interim adverse‑judgment rule did not defeat that showing as a matter of law. |
| 4) Was malice established? | Malice can be inferred from continued prosecution after discovery of lack of probable cause and from the Class Action court’s findings of bad faith by plaintiff; counsel’s investigation was minimal. | Lack of probable cause alone is insufficient to prove subjective malice. | Appellants made a prima facie showing of malice (inferred from lack of probable cause plus the record of bad‑faith findings). |
| 5) Did Respondents successfully raise statute of limitations as a bar? | Appellants argued Respondents waived the defense by failing to plead the specific statutory section as required by CCP § 458. | Respondents pointed to their anti‑SLAPP filings and briefing as putting Appellants on notice and argued one‑year § 340.6 applied. | Defendants waived the statute‑of‑limitations defense by not specifying the statute/subdivision in their answer under § 458, so the defense was unavailable at the anti‑SLAPP stage. |
Key Cases Cited
- Sweetwater Union High Sch. Dist. v. Gilbane Bldg. Co., 6 Cal.5th 931 (Cal. 2019) (explains anti‑SLAPP two‑step framework and de novo review)
- Zamos v. Stroud, 32 Cal.4th 958 (Cal. 2004) (elements of malicious prosecution)
- Baral v. Schnitt, 1 Cal.5th 376 (Cal. 2016) (anti‑SLAPP prong‑two standards; plaintiff must show probability of prevailing)
- Bertero v. Nat’l Gen. Corp., 13 Cal.3d 43 (Cal. 1974) (malicious prosecution principles)
- Lackner v. LaCroix, 25 Cal.3d 747 (Cal. 1979) (dismissal not on the merits must reflect on innocence to be "favorable")
- Minasian v. Sapse, 80 Cal.App.3d 823 (Cal. Ct. App. 1978) (discretionary dismissal for failure to prosecute reflects on merits)
- Parrish v. Latham & Watkins, 3 Cal.5th 767 (Cal. 2017) (interim‑adverse‑judgment rule and its limits)
- Lanz v. Goldstone, 243 Cal.App.4th 441 (Cal. Ct. App. 2015) (bankruptcy abandonment can produce a favorable termination for malicious prosecution)
- Soukup v. Law Offices of Herbert Hafif, 39 Cal.4th 260 (Cal. 2006) (plaintiff’s evidence accepted as true at prong two; summary‑judgment–like review)