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Tentative Ruling
Judge Pauline Maxwell
Department 6 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION

David E. R. Woolley vs Timothy J Trager et al

Case No: 17CV04863
Hearing Date: Wed Jan 10, 2018 9:30

Nature of Proceedings: Special Motion to Strike

TENTATIVE RULING:

For the reasons set forth herein, the special motion of defendants Timothy J. Trager and Reicker, Pfau, Pyle & McRoy, LLP, to strike the complaint of plaintiff David E.R. Woolley is granted. The complaint is ordered stricken.

 

Background:

This action is a malicious prosecution action brought by attorney-plaintiff David E.R. Woolley against attorney-defendant Timothy J. Trager and his law firm, defendant Reicker, Pfau, Pyle & McRoy, LLP (RPPM). The underlying action is Paradigm Oil, Inc., et al., v. BakerHostetler, et al., Santa Barbara County Superior Court case number 1466617 (Underlying Action).

(1)        Events in the Underlying Action

Plaintiff Woolley acted as counsel of record for the plaintiffs in the Underlying Action until March 7, 2017, when Woolley was terminated. (Woolley decl., ¶¶ 2, 8.) The Underlying Action settled on March 2, 2017. (Woolley decl., ¶ 8.)

On March 14, 2017, Woolley filed a “Notice of Attorney Lien” in the Underlying Action. (Trager decl., ¶ 3 & exhibit 1; Woolley decl., ¶ 9.) The notice states: “Pursuant to letters dated September 18, 2015, David Woolley is entitled to a contingency fee of 12% of any and all proceeds generated by any resolution of the present litigation after deduction of allowable litigation costs and expenses. The letters further provide that, in the event of termination before resolution, David Woolley may assert an unpaid fee lien that amounts to the sum of $1,680,120 for professional services in the present case. [¶] Please do not advance or distribute settlement fund without ensuring that David Woolley’s lien claim of $1,680,120 will be satisfied in full upon distribution.” (Trager decl., exhibit 1.)

In later March 2017, after the settlement in the Underlying Action was reached and after the notice of lien was filed, Trager was retained by the plaintiffs in the Underlying Action to provide counsel to them relating to the issues of Woolley not signing the settlement agreement and the lien Woolley had filed. (Trager decl., ¶ 5.)

On March 30, 2017, Woolley filed a notice of withdrawal as counsel and the plaintiffs were thereafter represented by co-counsel Reich & Binstock LLC and The Buzzbee Law Firm. (Woolley decl., ¶ 9.)

Also on March 30, 2017, Trager sent Woolley a letter stating that he and RPPM had been retained to resolve the fee dispute. (Trager decl., ¶ 6 & exhibit 2.) In the letter, Trager asserted that the lien was invalid and demanded that the lien be withdrawn. (Ibid.) Otherwise, Trager stated that they would file an ex parte application for an order shortening time to hear a motion to terminate the lien. (Ibid.)

On April 5, 2017, Trager filed an ex parte application in the Underlying Action to shorten time for a hearing on a motion to terminate Woolley’s attorney fee lien. (Trager decl., ¶ 7 & exhibit 3; Woolley decl., ¶ 10.) The ex parte application is captioned as brought by Trager and RPPM as “attorneys for plaintiffs.” (Trager decl., exhibit 3.) At the time the ex parte application was filed, neither Trager nor RPPM was counsel of record for plaintiffs in the Underlying Action. (Woolley decl., ¶ 11.) Woolley alleges that neither Trager nor RPPM had obtained written consent signed by the plaintiffs in the Underlying Action prior to filing the ex parte application. (Complaint, ¶ 7.) The ex parte application was factually supported only by the declaration of Trager. (Trager decl., exhibit 3.) Woolley alleges that Trager was not a participant in any of the actions, activities, or documents described by him in his declaration and of which he had no personal knowledge. (Complaint, ¶¶ 10-15.)

The court granted the ex parte application on April 6, 2017, and permitted the plaintiffs in the Underlying Action to file a motion to terminate Woolley’s lien on shortened time. (Trager decl., ¶ 8; Woolley decl., ¶ 18.) The motion was filed on April 11, 2017. (Trager decl., ¶ 8 & exhibit 4.) The hearing on the motion was set for May 2, 2017. (Trager decl., ¶ 8.) At the time the motion was filed, Trager was not counsel of record for the plaintiffs in the Underlying Action and incorrectly stated that he was co-counsel of record in his declaration filed in support of the motion. (Woolley decl., ¶ 19.) Woolley alleges that Trager was not a participant in any of the actions, activities, or documents described by him in his declaration and of which he had no personal knowledge. (Complaint, ¶ 22.)

Prior to the hearing on May 2, 2017, the court in the Underlying Action issued a tentative ruling granting the motion. (Trager decl., ¶¶ 9-10 & exhibit 5.) However, at the hearing on May 2, Trager admitted that he was not then associated in or substituted in as counsel for any or all of the plaintiffs in the Underlying Action. (Woolley decl., ¶ 22.) Trager advised the court that he would associate in by May 9, 2017. (Ibid.) The court continued the hearing on the motion to May 16, 2017, to give Trager time to associate in or substitute in as counsel. (Ibid.; Trager decl., ¶ 11.)

On May 10, 2017, Woolley filed a corrected notice of attorney fee lien increasing the amount claimed by the lien to $3,194,828.18. (Trager decl., ¶ 12 & exhibit 6.) Also on May 10, Woolley filed an objection to the motion on the grounds that the motion is void because Trager was not counsel of record for plaintiffs when the motion was filed and that the court in the Underlying Action did not have jurisdiction to determine the validity of Woolley’s attorney fee lien. (Trager decl., ¶ 12 & exhibit 7.)

On May 12, 2017, Trager substituted in as counsel of record for plaintiffs. (Woolley decl., ¶ 23.)

On May 16, 2017, the court heard the motion to terminate the attorney fee lien. (Trager decl., ¶ 14 & exhibit 10; Woolley decl., ¶ 29.) The court determined that subsequent substitutions demonstrate that plaintiffs intended that Trager represent them in the Underlying Action and that the prior filings by Trager were not void. (Trager decl., exhibit 10.) The court further ruled, on the basis of Woolley’s objection, that the court lacked jurisdiction to determine the validity of Woolley’s lien and therefore denied plaintiffs’ motion. (Ibid.)

During the following week, on behalf of all plaintiffs, Trager filed a dismissal of the Underlying Action. (Woolley decl., ¶ 30.)

(2)        Malicious Prosecution Action

On June 22, 2017, Woolley filed the instant action against Trager and RPPM in Los Angeles County Superior Court. The complaint asserts one cause of action for malicious prosecution. The malicious prosecution cause of action is based upon the filing and prosecution of the ex parte application to shorten time and of the motion to terminate the lien. (Complaint, ¶¶ 38, 39, 45, 61.)

Upon stipulation of the parties filed on September 12, 2017, this action was transferred to this court.

On September 15, 2017, defendants filed this special motion to strike (sometimes also referred to as the anti-SLAPP motion) pursuant to Code of Civil Procedure section 425.16 in the Los Angeles Superior Court while the transfer was in process. The case was active in this court as of October 27. An amended notice of hearing was filed and served setting this hearing.

The motion is opposed by Woolley. The arguments of the parties are discussed below.

Analysis:

“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 Constitution 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.” (Code Civ. Proc., § 425.16, subd. (b)(1).)

“Resolution of an anti-SLAPP motion involves two steps. First, the defendant must establish that the challenged claim arises from activity protected by section 425.16. [Citation.] If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success. We have described this second step as a ‘summary-judgment-like procedure.’ [Citation, fn. omitted.] The court does not weigh evidence or resolve conflicting factual claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment. It accepts the plaintiff’s evidence as true, and evaluates the defendant’s showing only to determine if it defeats the plaintiff’s claim as a matter of law.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 384-385.)

“ ‘[A]ct in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue’ includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law, (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.” (Code Civ. Proc., § 425.16, subd. (e).)

The complaint asserts one cause of action for malicious prosecution. Malicious prosecution actions are by their elements actions that arise from petitioning activity defined by statute as protected by section 425.15. “ ‘By definition, a malicious prosecution suit alleges that the defendant committed a tort by filing a lawsuit.’ [Citation.] The filing of lawsuits is an aspect of the First Amendment right of petition. [Citation.] Accordingly, defendants have fulfilled the required threshold showing.” (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291.) This action arises out of the filing of motions, both noticed and ex parte, which equally constitutes petitioning activity under the definition of section 425.15, subdivision (e). (See G.R. v. Intelligator (2010) 185 Cal.App.4th 606, 612 [improper filing of documents with court]; Cabral v. Martins (2009) 177 Cal.App.4th 471, 479-480 [lodging will and commencing probate proceedings].)

In Woolley’s opposition, Woolley argues that because Trager was not substituted in as counsel at the time of the filing of the ex parte application and motion, Trager’s conduct is not protected conduct, citing Johnson v. Ralphs Grocery Co. (2012) 204 Cal.App.4th 1097 (Johnson) for the proposition that “protected litigation activity is defined by reference to the litigation privilege.” (Opposition, p. 3.) Johnson states: “ ‘Communications “ ‘within the protection of the litigation privilege of Civil Code section 47, subdivision (b) [citation], ... are equally entitled to the benefits of [Code of Civil Procedure] section 425.16.’ ” ’ [Citation.] ‘Under the “usual formulation,” the litigation “privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action. [Citations.]” [Citation.] This includes prelitigation communications involving the subject matter of the ultimate litigation.’ [Citation.]” (Johnson, supra, 204 Cal.App.4th at p. 1104.)

While the litigation privilege of section Civil Code 47 may under some circumstances be useful to determine whether conduct is or is not protected under the anti-SLAPP statute, “the litigation privilege and the anti-SLAPP statute are substantively different statutes that serve quite different purposes ….” (Flatley v. Mauro (2006) 39 Cal.4th 299, 322.) The litigation privilege does not, for example, apply to bar malicious prosecution actions. (See Hagberg v. California Federal Bank FSB (2004) 32 Cal.4th 350, 360.) Any defect that may have existed in defendants’ authority to represent plaintiffs at the time of filing does not affect the application of the anti-SLAPP statute to court filings. (See Miller v. Filter (2007) 150 Cal.App.4th 652, 661 [first prong met notwithstanding failure to complete formalities of appointment as deputy district attorney].) The malicious prosecution claim arises directly from writings filed in a judicial proceeding. The court finds that defendants have met their burden of establishing that Woolley’s malicious prosecution claim arises from protected activity under section 425.16.

The burden then shifts to Woolley to present a prima facie factual showing. “To prevail on a malicious prosecution claim, the plaintiff must show that the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination favorable to the plaintiff; (2) was brought without probable cause; and (3) was initiated with malice.” (Soukup v. Law Offices of Herbert Hafif, supra, 39 Cal.4th at p. 292.)

Defendants argue that Woolley cannot establish his malicious prosecution action as a matter of law because the motions in the Underlying Action do not constitute an “action” meeting the elements of malicious prosecution and that there was no favorable termination of the “action” if the motion practice constituted an “action.” Both of these arguments have merit.

“The tort of malicious prosecution requires the initiation of a full blown action as well as its favorable termination for the malicious prosecution plaintiff; subsidiary procedural actions within a lawsuit such as an application for a restraining order or for a lien will not support a claim of malicious prosecution. [Citations.] The reason the courts have held that a malicious prosecution action cannot be grounded upon actions taken within pending litigation is that permitting such a cause of action would disrupt the ongoing lawsuit by injecting tort claims against the parties’ lawyers and because the appropriate remedy for actions taken within a lawsuit lies in the invocation of the court’s broad powers to control judicial proceedings.” (Adams v. Superior Court (1992) 2 Cal.App.4th 521, 528; accord, Zamos v. Stroud (2004) 32 Cal.4th 958, 969, fn 8. [“subsidiary procedural actions cannot be the basis for malicious prosecution claims”].)

Woolley appears to attempt to avoid this limitation on malicious prosecution actions by emphasizing that, prior to formal substitution as counsel of record, Trager was in effect a stranger to the action (see People v. Merkouris (1956) 46 Cal.2d 540, 554-555 [attorney of record has exclusive right to appear in court for the client]) and that Woolley was no longer counsel for plaintiffs and himself essentially a stranger to the action. This juxtaposition of attorneys does not alter the subsidiary nature of the proceedings at issue. Woolley filed a notice of lien as against the settlement proceeds in the Underlying Action. Trager, ostensibly on behalf of the plaintiffs, filed a motion to terminate this lien. The proceedings were themselves motions related to and actually made within the Underlying Action. The motion and associated ex parte application do not constitute an “action” within the meaning of malicious prosecution law.

Moreover, the motion was essentially defensive in nature. As the underlying proceedings are argued as a basis for malicious prosecution by Woolley, Woolley is in the position of a plaintiff asserted his own claim of lien against the Underlying Action plaintiffs, with Trager’s motion acting defensively to terminate the claim on the asserted grounds that the claim is invalid. There is no malicious prosecution action for malicious defense. (See Coleman v. Gulf Ins. Group (1986) 41 Cal.3d 782, 801; see also Idell v. Goodman (1990) 224 Cal.App.3d 262, 272 [filing of adversary proceedings in bankruptcy court alleging that debts should not be discharged is defensive pleading that does not support claim for malicious prosecution].) Again, the motion and associated ex parte application do not constitute an “action” within the meaning of malicious prosecution law.

Alternatively, if the ex parte application or motion are “actions” within the meaning of malicious prosecution law, neither terminated favorably to Woolley as a matter of law. The ex parte application, which sought only to shorten time, was granted and the relief sought by Trager was approved—not a favorable termination as to Woolley. The motion itself was denied on the grounds of Woolley’s jurisdictional objection.

“ ‘It is hornbook law that the plaintiff in a malicious prosecution action must plead and prove that the prior judicial proceeding of which he complains terminated in his favor.’ [Citation.]” (Lackner v. LaCroix (1979) 25 Cal.3d 747, 749.) It is not essential to maintenance of an action for malicious prosecution that the prior proceeding was favorably terminated following trial on the merits. However, termination must reflect on the merits of the underlying action.” (Id. at p. 750.) “It is apparent ‘favorable’ termination does not occur merely because a party complained against has prevailed in an underlying action. While the fact he has prevailed is an ingredient of a favorable termination, such termination must further reflect on his innocence of the alleged wrongful conduct. If the termination does not relate to the merits reflecting on neither innocence of nor responsibility for the alleged misconduct the termination is not favorable in the sense it would support a subsequent action for malicious prosecution.” (Id. at p. 751.) “Thus, a ‘technical or procedural [termination] as distinguished from a substantive termination’ is not favorable for purposes of a malicious prosecution claim. [Citation.]” (Casa Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, 342.)

“ ‘[A] dismissal for lack of jurisdiction does not involve the merits and cannot constitute a favorable termination.’ [Citations.]” (Hudis v. Crawford (2005) 125 Cal.App.4th 1586, 1592.) The motion was expressly denied by the court in the Underlying Action based upon lack of jurisdiction, citing Carroll v. Interstate Brands Corp. (2002) 99 Cal.App.4th 1168, 1173: “Appellate courts have consistently held that the trial court in the underlying action has no jurisdiction to determine the existence or validity of an attorney’s lien on the judgment. [Citations.] The trial court does have fundamental jurisdiction over the subject matter and over the parties. Nevertheless, because the attorney is not a party to the underlying action and has no right to intervene, the trial court acts in excess of its jurisdiction when it purports to determine whether the attorney is entitled to foreclose a lien on the judgment. [Citations.] Nor can the court entertain a motion to terminate the lien. [Citation.] After the client obtains a judgment, the attorney must bring a separate, independent action against the client to establish the existence of the lien, to determine the amount of the lien, and to enforce it. [Citations.] An order within the underlying action purporting to affect an attorney’s lien is void.”

In opposition, Woolley argues that the denial for lack of jurisdiction does not fall within the rule by which a dismissal for lack of jurisdiction does not constitute a favorable termination because the court in the Underlying Action did not lack fundamental jurisdiction. “But in its ordinary usage the phrase ‘lack of jurisdiction’ is not limited to these fundamental situations. For the purpose of determining the right to review by certiorari, restraint by prohibition, or dismissal of an action, a much broader meaning is recognized. Here it may be applied to a case where, though the court has jurisdiction over the subject matter and the parties in the fundamental sense, it has no ‘jurisdiction’ (or power) to act except in a particular manner, or to give certain kinds of relief, or to act without the occurrence of certain procedural prerequisites.” (Abelleira v. District Court of Appeal, Third District (1941) 17 Cal.2d 280, 288.) Lack of jurisdiction to act, rather than lack of fundamental jurisdiction, was the basis for the denial of the motion in the Underlying Action. Even so, this distinction does not make any difference to the favorable termination analysis.

The court in the Underlying Action determined, based upon Woolley’s objections, that it did not have jurisdiction to determine the merits of the motion filed by Trager. In the most basic sense, this is not a determination on the merits. (Cf. DisputeSuite.com, LLC v. Scoreinc.com (2017) 2 Cal.5th 968, 974 [attorney fees not awardable to party as a prevailing party by succeeding in dismissal based upon forum selection clause where merits are to be decided in alternate forum].) The court ruled that it had no power to determine the merits of the motion; the merits of the motion, i.e., the validity of Woolley’s lien, remain for determination in another action as explained in Carroll v. Interstate Brands Corp., supra. Even if the motion that is the basis for this action for malicious prosecution could be deemed an “action” for purposes of a malicious prosecution claim, as a matter of law, the motion was not terminated in Woolley’s favor under malicious prosecution law.

The court finds that Woolley cannot, and does not, meet his burden on the second prong of the anti-SLAPP analysis to show a probable success on the merits. Accordingly, the special motion of defendants to strike the complaint of Woolley will be granted.

Defendants do not claim attorney fees by this motion. (See Code Civ. Proc., § 425.16, subd. (c)(1).) The determination of fees is reserved for further appropriate proceedings.

In reaching this ruling, the court has relied only upon admissible evidence. The court denies defendants’ requests for judicial notice filed with the reply papers as irrelevant to the determination of this motion.(See Mangini v. R. J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063.)

 
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