Case Number: BC682388 Hearing Date: May 23, 2018 Dept: 47

Roberto Espino v. Morrison Residential Services, Inc.

ANTI-SLAPP SPECIAL MOTION TO STRIKE

MOVING PARTY: Plaintiff/Cross-Defendant Roberto Espino

RESPONDING PARTY(S): Defendant/Cross-Complainant Morrison Residential Services

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is an individual wage and hour claim.

Defendant filed a cross-complaint for malicious prosecution and declaratory relief that Plaintiff is a vexatious litigant.

Plaintiff/Cross-Defendant Roberto Espino brings an anti-SLAPP special motion to strike as to the cross-complaint.

TENTATIVE RULING:

Plaintiff/Cross-Defendant Roberto Espino’s anti-SLAPP special motion to strike is GRANTED as to the first and second causes of action in the Cross-Complaint. Since there are no more named parties in the Cross-Complaint (except DOES), the Cross-Complaint is hereby dismissed in its entirety with prejudice.

Moving party Cross-Defendant may bring a separately-noticed motion for attorney’s fees, as may be allowed by law.

DISCUSSION:

Special Motion To Strike—anti-SLAPP

In ruling on a defendant’s special motion to strike, the trial court uses a “summary-judgment-like procedure at an early stage of the litigation.” Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192. This is a two-step process. First, the defendant must show 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 California Constitution in connection with a public issue.” CCP § 425.16(b)(1). Second, if the defendant carries that burden, the burden shifts to the plaintiff to demonstrate a probability of prevailing on the claim. CCP § 425.16(b)(3). The defendant has the burden on the first issue, and the plaintiff on the second. Kajima Engineering & Construction, Inc. v. City of Los Angeles (2002) 95 Cal.App.4th 921, 928; Rivero v. American Federation of State, County and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913, 919. In making both determinations the trial court considers “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” CCP § 425.16(b)(2); Equilon Enterprises, LLC v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.

The Defendant’s act underlying the cause of action must itself have been in furtherance of the right of petition or free speech. City of Cotati v. Cashman (2002) 29 Cal. 4th 69, 76-78. The defendant’s acts are protected activity – that is, made in furtherance of protected petition or free speech in connection with a public issue – if they fit into one of the following categories under the section 425.16, subdivision (e) categories: (1) oral or written statements made before a legislative, executive, judicial or any other official proceeding; (2) oral or written statements made in connection with an issue under consideration or review by a legislative, executive, judicial body, or any other official proceeding authorized by law; (3) written or oral statements made in a place open to the public or in a public forum in connection with an issue of public interest; and (4) any other conduct in furtherance of the exercise of the constitutional rights of petition or free speech in connection with a public issue or an issue of public interest. CCP § 425.16(e); City of Cotati, supra, 29 Cal.4th at 78; see also Equilon Enterprises, LLC, supra, 29 Cal.4th at 67.

If such a showing is made, the burden shifts to Plaintiff to show a probability of prevailing on the claim. CCP § 425.16(b)(1). To establish a probability of prevailing on the merits, 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. Matson v. Dvorak (1995) 40 Cal.App.4th 539, 548. In making this assessment, the Court must accept as true the evidence favorable to the plaintiff. HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212. The plaintiff needs only to establish that his or her claim has minimal merit (Navellier v. Sletten (2002) 29 Cal.4th 82, 89) to avoid being stricken as a SLAPP. Jarrow Formulas, Inc. v. LaMarche, supra, 31 Cal.4th at 738.

“For purposes of this inquiry, ‘the trial court considers the pleadings and evidentiary submissions of both the plaintiff and the defendant (§ 425.16, subd. (b)(2)); though the court does not weigh the credibility or comparative probative strength of competing evidence, it should grant the motion if, as a matter of law, the defendant’s evidence supporting the motion defeats the plaintiff’s attempt to establish evidentiary support for the claim.’ (Citation omitted.)” Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291.

1. Re: Whether the Causes of Action Are Subject To Being Stricken Pursuant to CCP § 425.16.

The Cross-Complaint alleges a cause of action for malicious prosecution and a cause of action for declaratory relief that Plaintiff is a vexatious litigant.

As against moving Cross-Defendant, the Cross-Complaint alleges that: (1) Cross-Defendant submitted a malicious and fraudulent workers’ compensation claim to the Workers Compensation Appeal Board on May 23, 2016; (2) Cross-Defendant submitted a malicious and fraudulent disability claim to the Employment Development Department (“EDD”) on May 29, 2017; (3) Cross-Defendant filed a malicious and fraudulent Paid Family Leave claim to the EDD on July 1, 2017.

Cross-Complainant alleges that these claims constitute malicious prosecution (first cause of action) and render Cross-Defendant a vexatious litigant (second cause of action).

These causes of action arise out of an “act 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” under either or both CCP § 425.16(e)(1)(“ any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law”)(bold emphasis added) or § 425.16(e)(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”)(bold emphasis added).

Here, filing a workers’ compensation claim is a written statement or writing made in connection with an issue under consideration or review by an official proceeding authorized by law. See Premier Medical Management Systems, Inc. v. California Ins. Guarantee Assn. (2006) 136 Cal.App.4th 464, 474-77. Also, filing claims with the WDD are written statements or writings made in connection with an issue under consideration or review by an official proceeding authorized by law. See Kurz v. Syrus Systems, LLC (2013) 221 Cal.App.4th 748, 759-60.

Thus, the first and seconds causes of action are subject to being stricken pursuant to CCP § 425.16.

As such, the Court proceeds to examine the second prong of the SLAPP analysis.

The burden shifts to Cross-Complainant to demonstrate a probability of prevailing on the claims.

2. Re: Whether Plaintiff Has Established That There Is A Probability They Will Prevail On The Claims – CCP ¶ 425.16(b)(1).

Plaintiff has the burden on the second prong of a SLAPP analysis to establish that there is a probability Plaintiff will prevail on the claims. CCP § 425.16(b)(1); Kajima Engineering & Construction, Inc. v. City of Los Angeles (2002) 95 Cal.App.4th 921, 928.

“[A] SLAPP motion, like a summary judgment motion, pierces the pleadings and requires an evidentiary showing.” (Simmons v. Allstate Ins. Co. (2001) 92 Cal.App.4th 1068, 1073 [112 Cal. Rptr. 2d 397].) “ ‘[A]lthough by its terms [Code of Civil Procedure] section 425.16, subdivision (b)(1) calls upon a court to determine whether “the plaintiff has established that there is a probability that the plaintiff will prevail on the claim” … , past cases interpreting this provision establish that the Legislature did not intend that a court, in ruling on a motion to strike under this statute, would weigh conflicting evidence to determine whether it is more probable than not that plaintiff will prevail on the claim, but rather intended to establish a summary-judgment-like procedure available at an early stage of litigation that poses a potential chilling effect on speech-related activities.’ [Citation.] ‘[T]he court’s responsibility is to accept as true the evidence favorable to the plaintiff … .’ [Citation.] ‘[T]he defendant’s evidence is considered with a view toward whether it defeats the plaintiff’s showing as a matter of law, such as by establishing a defense or the absence of a necessary element.’ [Citation.]” (Daniels v. Robbins (2010) 182 Cal.App.4th 204, 215 [105 Cal. Rptr. 3d 683].)

Mission Springs Water Dist. v. Verjil (2013) 218 Cal.App.4th 892, 908-09.

A. First Cause of Action (Malicious Prosecution)

“To 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 his, plaintiff’s, favor [citations]; (2) was brought without probable cause [citations]; and (3) was initiated with malice [citations].” (Citation omitted.)

Crowley v. Katleman (1994) 8 Cal.4th 666, 676.

1. Re: Legal Termination in Plaintiffs’ Favor

Re: Cross-Defendant submitted a malicious and fraudulent workers’ compensation claim to the Workers Compensation Appeal Board on May 23, 2016.

Because both parties gave up something of value in compromise of Plaintiff’s/Cross-Defendant’s claim with the Workers Compensation Appeals Board, there is no favorable termination in Defendant/Cross-Complainant’s favor relative to Espino’s workers compensation claim. See Plaintiff’s Exh. 2 (Order Approving Compromise and Release and Award – Award was made in favor of Espino against Morrison Residential Services in the net sum of $21,250.00, in consideration of Espino’s release of dependents’ rights to death benefits:

We recognize that cases are settled for a variety of reasons; however, where both sides give up anything of value in order to end the litigation, a party cannot later claim he received a favorable termination. (Ibid.; see also Pender v. Radin (1994) 23 Cal. App. 4th 1807, 1814 [29 Cal. Rptr. 2d 36] [settlement involving waiver of costs and fees precludes a later action for malicious prosecution].) It is not necessary to analyze the particular circumstances of the settlement or to examine the motivations of the parties–a negotiated settlement not only creates an ambiguity as to the merits of the underlying action, it is entirely inconsistent with bringing a further lawsuit for malicious prosecution. (See Ludwig v. Superior Court, supra, 37 Cal. App. 4th at p. 29.)

Ferreira v. Gray (2001) 87 Cal.App.4th 409, 413-414 (bold emphasis and underlining added).

As such, the element of favorable termination is not met for purposes of the malicious prosecution cause of action based upon Espino’s submission of a workers’ compensation claim to the Workers Compensation Appeal Board on May 23, 2016.

Re: Cross-Defendant submitted a malicious and fraudulent disability claim to the Employment Development Department (“EDD”) on May 29, 2017.

Plaintiff/Cross-Defendant indicates that his disability benefits had been exhausted, but there was no determination on the factual allegations of his claim. Espiono Decl., ¶ 5. Defendant/Cross-Complainant does not submit any evidence to rebut this assert by Espino. As such, there was no favorable termination which could accrue to Cross-Complainant because there was no determination that Espino’s disability benefits claim was without merit, i.e, that his claim was fraudulent. Ambiguity as to a determination of innocence or liability precludes a finding of favorable termination:

We applied these principles in Dalany to preclude a malicious prosecution claim where the plaintiff similarly attempted to separate the causes of action in the underlying action for purposes of establishing favorable termination. In Dalany, the plaintiff had obtained summary judgment on “some, but not all” of the causes of action alleged against him in an underlying suit brought by his former employer, and eventually settled the remainder (in addition to his own claims against the employer) in return for a payment of $ 105,000. (Dalany, supra, 42 Cal.App.4th at pp. 825–826.) Despite the settlement, in a subsequent malicious prosecution, Dalany contended that he could establish favorable termination by focusing solely on the causes of action for which he obtained summary judgment. Relying on Crowley, we disagreed, holding that “separate consideration” of the claims asserted in the underlying lawsuit was “not appropriate with respect to the element of favorable termination.” (Dalany, at pp. 829–830, citing Crowley, supra, 8 Cal.4th at p. 686.) Instead, because Crowley required us to “consider the prior judgment ‘as a whole,’ ” and not as separable components, we determined that Dalany’s settlement of some of the claims against him created “ambiguity” as to his innocence, thus precluding the requisite showing of a “ ‘favorable termination of the entire action.’ ” (Dalany, at pp. 828–830 & fn. 2, quoting Crowley, at p. 686.)

Similarly, here, Elite’s success in obtaining some relief on its first cause of action precludes a showing of favorable termination. The trial court’s order in the underlying action required StaffPro to take remedial action with respect to many of the core allegations against it, and the order further states that a number of Elite’s other requests for remedial action were rendered moot by StaffPro’s voluntary compliance and/or regulatory developments. In light of this order, we must conclude that the resolution of the underlying action, viewed as a whole, “ ‘leaves some doubt as to [StaffPro’s] innocence or liability’ ” and consequently “ ‘is not a favorable termination.’ ” (Eells, supra, 36 Cal.App.4th at p. 1855; Murdock v. Gerth (1944) 65 Cal. App. 2d 170, 177–178 [150 P.2d 489] [termination not favorable to defendant even though “only a small part of the amount sued for” was recovered and on a different theory than that advanced because “[t]he fact remains that the judgment, framed upon the pleadings filed and the issues raised thereby, was not in favor of the defendant therein”], criticized on other grounds in Sheldon Appel, supra, 47 Cal.3d at p. 878, fn. 7; cf. Padres L.P. v. Henderson (2003) 114 Cal.App.4th 495, 514 [8 Cal. Rptr. 3d 584] [dismissal based on mootness does “not constitute a favorable termination for purposes of a malicious prosecution action”].) n15

FOOTNOTES

n15 Our conclusion is supported by analogous case law regarding the effect of a settlement on the favorable termination element of a subsequent malicious prosecution action. There is no question that had the result reached in the underlying litigation here—a requirement that StaffPro modify its future behavior—been reached as part of a settlement between the parties, it would preclude a subsequent finding of favorable termination. (Ferreira, supra, 87 Cal.App.4th at pp. 413–414; Pender, supra, 23 Cal.App.4th at p. 1817.) In our view, the vehicle by which termination occurs should not change the determination of whether that termination was “favorable.” (Brennan, supra, 25 Cal.4th at p. 317 [“it is the nature of the termination that matters, not exactly how it came about or who agreed to it”]; cf. Crowley, supra, 8 Cal.4th at pp. 684–685 [it is “ ‘the decree or judgment itself in the former action [that] is the criterion by which to determine who was the successful party in such proceeding’ ”]; Dalany, supra, 42 Cal.App.4th at pp. 828–829 [holding that “[t]he ambiguity which arises when parties enter into a settlement is not resolved because instead of a dismissal the parties enter into a stipulated judgment”].)

In sum, we conclude that the judgment in the underlying action was partially in Elite’s favor, precluding StaffPro from demonstrating the requisite favorable termination of the entire action. Consequently, we affirm the trial court’s ruling on the section 425.16 motion, striking StaffPro’s malicious prosecution cause of action. StaffPro failed to establish a probability of prevailing on the claim.

Staffpro, Inc. v. Elite Show Services, Inc. (2006) 136 Cal.App.4th 1392, 1406-07 (italics omitted, bold emphasis and underlining added).

As such, the element of favorable termination is not met for purposes of the malicious prosecution cause of action based upon Espino’s submission of disability claim to the EDD on May 29, 2017.

Re: Cross-Defendant filed a malicious and fraudulent Paid Family Leave claim to the EDD on July 1, 2017.

Plaintiff/Cross-Defendant Espino indicates that his EDD claim for family leave benefits was granted in the amount of $1,338.00. Espino Declaration, ¶ 6; Exh. 3.Defendant/Cross-Complainant does not submit any evidence to rebut this assert by Espino. As such, there was no favorable termination which could accrue to Cross-Complainant because Cross-Defendant actually obtained family leave benefits.

As such, the element of favorable termination is not met for purposes of the malicious prosecution cause of action based upon Espino’s submission of a family benefits claim to the EDD on July 1, 2017.

For the foregoing reasons, Defendant/Cross-Complainant has not demonstrated the element of favorable termination, and thus has not established a probability of prevailing on the malicious prosecution cause of action against Plaintiff/Cross-Defendant Espino based upon: (1) Cross-Defendant submitted a malicious and fraudulent workers’ compensation claim to the Workers Compensation Appeal Board on May 23, 2016; (2) Cross-Defendant submitted a malicious and fraudulent disability claim to the Employment Development Department (“EDD”) on May 29, 2017; (3) Cross-Defendant filed a malicious and fraudulent Paid Family Leave claim to the EDD on July 1, 2017. The Court need not address the other elements of lack of probable cause and malice.

Defendant/Cross-Complainant’s argument that the above-referenced claims were, in essence, obtained by fraud by Plaintiff/Cross-Defendant is of no consequence at this point. The critical fact is that as of this date, those claims were not resolved in favor of the Defendant/Cross-Complainant for purposes of a malicious prosecution case. The remedy, if any, for Defendant/Cross-Complainant is to directly attack these allegedly “fraudulently-obtained” claims in either each specific forum or vis-à-vis an independent action to vacate such recoveries. If those awards or recoveries are vacated, then perhaps the “favorable determination” element would then be met.

As such, the special motion to strike the first cause of action is GRANTED.

B. Re: Second Cause of Action (Declaratory Relief to Declare Cross-Defendant a Vexatious Litigant).

On its face, the second cause of action fails because it seeks to have Plaintiff/Cross-Defendant declared to be a vexatious litigant with respect to the three aforementioned administrative claims filed with the Workers Compensation Appeal Board and EDD. Cross-Complaint, ¶¶ 28, 29. These administrative claims do not come within the definition of “litigation” for purposes of CCP § 391, and thus Cross-Defendant cannot demonstrate the probability of prevailing on this cause of action:

(a) “Litigation” means any civil action or proceeding, commenced, maintained or pending in any state or federal court.

(b) “Vexatious litigant” means a person who does any of the following:

(1) In the immediately preceding seven–year period has commenced, prosecuted, or maintained in propria persona at least five litigations other than in a small claims court that have been (i) finally determined adversely to the person or (ii) unjustifiably permitted to remain pending at least two years without having been brought to trial or hearing.

(2) After a litigation has been finally determined against the person, repeatedly relitigates or attempts to relitigate, in propria persona, either (i) the validity of the determination against the same defendant or defendants as to whom the litigation was finally determined or (ii) the cause of action, claim, controversy, or any of the issues of fact or law, determined or concluded by the final determination against the same defendant or defendants as to whom the litigation was finally determined.

(3) In any litigation while acting in propria persona, repeatedly files unmeritorious motions, pleadings, or other papers, conducts unnecessary discovery, or engages in other tactics that are frivolous or solely intended to cause unnecessary delay.

(4) Has previously been declared to be a vexatious litigant by any state or federal court of record in any action or proceeding based upon the same or substantially similar facts, transaction, or occurrence.

CCP § 391 (a) & (b)(bold emphasis and underlining added).

To the extent the second cause of action is based upon Espino filing the Complaint in this action for Labor Code violations (see Cross-Complaint, ¶¶ 30, 31), Espino was not acting in propria persona in filing the Complaint—he was represented by counsel. As such, the vexatious litigant statute does not apply to him.

Additionally, it is not clear that a party can be declared a “vexatious litigant” by the filing of an independent complaint (or cross-complaint) or a cause of action therein. The applicable statute requires a “motion,” not a lawsuit. CCP § 391.1.

Accordingly, Cross-Complainant cannot demonstrate a probability of prevailing on the second cause of action.

As such, the special motion to strike is GRANTED as to the second cause of action.

Attorney’s Fees

Moving party Cross-Defendant may bring a separately-noticed motion for attorney’s fees.

Moving party to give notice, unless waived.

IT IS SO ORDERED.

Dated: May 23, 2018 ___________________________________

Randolph M. Hammock

Judge of the Superior Court