P6 LA MF Holdings SPE, LLC v. NMS Capital Partners I, LLC
2:19-cv-01150
C.D. Cal.Sep 4, 2019Background
- AEW and NMS entered a 2010 joint venture agreement (JVA) for nine LA properties; the parties negotiated a Buy/Sell provision that the record shows was to run for five years.
- In 2013 NMS produced an altered version of the JVA ("Version 2") changing the Buy/Sell term from five to three years and altering capital-contribution language; AEW alleges NMS forged Version 2.
- NMS sued AEW in the Lincoln Studios litigation relying on Version 2; state court proceedings later found Version 2, a cover letter, and a PMA were forgeries, imposed terminating sanctions, entered judgment for AEW, and a court of appeal affirmed.
- Despite discovery and evidence (including contemporaneous emails) indicating forgery and spoliation, several law firms (the Genga, Miller, and Zelig defendants) continued to litigate or associate into the state case.
- AEW filed this federal suit alleging malicious prosecution against NMS and its counsel; defendants moved to strike under California’s anti‑SLAPP statute (Cal. Code Civ. Proc. § 425.16).
- The district court denied the special motions to strike, holding AEW made a prima facie showing of favorable termination, lack of probable cause for at least some claims, and malice sufficient to survive anti‑SLAPP dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Favorable termination of prior action | Lincoln Studios terminated on the merits in AEW’s favor (judgment and sanctions) | Some defendants withdrew earlier or argue dismissals were not unfavorable to them | Court: Termination was favorable as to all defendants given judgments and voluntary dismissals tied to meritlessness |
| Probable cause to file/maintain Lincoln Studios | Counsel lacked probable cause because claims depended on forged Version 2 and discovery showed forgery; many theories were untenable | Counsel relied on client allegations and alternate theories (e.g., Article 6); litigation choices were strategic | Court: AEW showed a likelihood that counsel lacked probable cause for at least some claims; defendants failed to identify competent evidence justifying lawsuit |
| Malice (improper motive) | Counsel prosecuted case despite clear indicia of forgery, inconsistent testimony, and spoliation; motive to force sale/settlement | Defendants acted as zealous advocates and associated appropriately; any continued prosecution was defensible litigation | Court: Circumstantial evidence permits an inference of malice where defendants persisted after notice of lack of probable cause; AEW pleaded malice adequately |
| Anti‑SLAPP applicability / burden shifting | Anti‑SLAPP applies only if suit arises from protected petitioning and plaintiff cannot show probability of prevailing | Defendants argued their litigation activity is protected petitioning under anti‑SLAPP | Court: Even accepting petitioning character, AEW met its burden to show probability of prevailing on malicious prosecution, so motions to strike denied |
Key Cases Cited
- Zamos v. Stroud, 32 Cal.4th 958 (California Supreme Court) (malicious prosecution elements and disfavored nature of the tort)
- Oasis W. Realty, LLC v. Goldman, 51 Cal.4th 811 (California Supreme Court) (anti‑SLAPP: plaintiff need only show probability of prevailing on any theory)
- Seibel v. Mittlesteadt, 41 Cal.4th 735 (California Supreme Court) (elements of malicious prosecution)
- Casa Herrera, Inc. v. Beydoun, 32 Cal.App.4th 336 (California Court of Appeal) (favorable termination requires reflection on merits/innocence)
- Cole v. Patricia A. Meyer & Associates, APC, 206 Cal.App.4th 1095 (California Court of Appeal) (probable cause and legal tenability standard)
- Antounian v. Louis Vuitton Malletier, 189 Cal.App.4th 438 (California Court of Appeal) (probable cause requires claims be legally sufficient and supported by competent evidence)
- Arcaro v. Silva & Silva Enterprises Corp., 77 Cal.App.4th 152 (California Court of Appeal) (malice inferred where litigation continued after evidence of forgery)
- Planned Parenthood Fed'n of Am., Inc. v. Ctr. for Med. Progress, 890 F.3d 828 (9th Cir.) (discovery entitlement when anti‑SLAPP prima facie showing not established)