Case Name: Bedolla v. Wang, et al.

Case No.: 18CV325918

This is an action for malicious prosecution. Defendant Adam Wang (“Adam”) represented defendant LIL, Inc. (“LIL”) until July 2013 as its counsel, as well as serving as a controlling officer and director. (See complaint, ¶¶ 2-3, 5.) Defendant Jennifer Wang (“Jennifer”) also served as a controlling officer and director. (See complaint, ¶ 4.) Starting in August 2013, plaintiff Kevin Bedolla (“Plaintiff”) represented LIL as its counsel until March 2015 in a case in Alameda County Superior Court (“Alameda case”). (See complaint, ¶ 5.) In March 2015, Plaintiff attempted to collect fees and costs owed him from LIL for representing it in the Alameda case, but Adam terminated Plaintiff and would not permit LIL to pay Plaintiff. (See complaint, ¶ 6.) On May 5, 2015, Plaintiff filed a collection lawsuit against LIL, seeking $96,050.50 plus interest. (See complaint, ¶ 7.) On November 19, 20015, the Court granted Plaintiff’s motion for prejudgment writ of attachment, which was unopposed. (See complaint, ¶ 8.) That day, LIL filed a cross-complaint, alleging causes of action for: breach of fiduciary duty; fraud; breach of contract; and, unjust enrichment. (See complaint, ¶ 9.) In this action, Plaintiff propounded form interrogatories on LIL, and Adam provided evasive responses to the discovery. (See complaint, ¶ 10.) During her deposition, Jennifer testified that she approved all actions taken by Adam by filing and pursuing the cross-complaint. (See complaint, ¶ 11.) At trial, Adam made a variety of assertions to support the cross-complaint; however, he completely failed to support the assertions. (See complaint, ¶¶ 12-16.) Judgment was entered for Plaintiff and against LIL. (See complaint, ¶ 17.) Defendants acted without probable cause in bringing and prosecuting the cross-complaint because they did not have an honest and reasonable belief that there were grounds for the cross-complaint and instead acted maliciously in bringing the cross-complaint because their sole purpose was to annoy and harass Plaintiff to pressure him to dismiss his complaint against them. (See complaint, ¶ 19.)

On April 2, 2018, Plaintiff filed a complaint against defendants LIL, Adam and Jennifer (collectively, “Defendants”), asserting a single cause of action for malicious prosecution. On July 10, 2018, Defendants filed a special motion to strike the complaint pursuant to Code of Civil Procedure section 425.16.

Defendants’ motion is untimely.

Section 425.16, subdivision (f) requires that “[t]he special motion may be filed within 60 days of the service of the complaint or, in the court’s discretion, at any later time upon terms it deems proper.” (Code Civ. Proc. § 425.16, subd.(f).) Prior to belatedly filing their motion, Defendants did not seek any extension or otherwise notify the Court regarding their delay, and Defendants do not address the timeliness issue in their memorandum in support of the special motion. Accordingly, Defendants’ special motion fails to suggest any reason why the Court should exercise its discretion to consider the motion as timely.

In their reply, Defendants acknowledge that their special motion is outside the 60 day time period, but instead argue for the first time that “this Court should exercise its discretion to hear Defendants’ Special Motion to Strike on the merits… [because] the initial delay in filing the Special Motion was related, in part, to the delay in obtaining the transcript from the post-trial hearing denying plaintiff’s 128.5 sanctions motion against LIL.” (Defs.’ reply brief, pp.3:8-27, 4:1-9, 5:2-5.) However, after a review of the evidence, the Court finds this excuse inadequate to support an extension, and the Court declines to exercise its discretion to consider the motion as timely. On this basis, Defendants’ special motion to strike the complaint is DENIED in its entirety.

Even if the Court were to consider the special motion on its merits, its premise is baseless.

Even if the Court were to consider the special motion as timely, the motion would similarly fail. Defendants’ primary argument in its special motion to strike the complaint is that “the doctrines of res judicata and collateral estoppel bar relitigation of the same issues determined in the Underlying Action” because “the Court’s denial of the 128.5 motion demonstrates as a matter of law that the Cross-Complaint in the Underlying Action had probable cause.” (Defs.’ memo in support of special motion to strike the complaint (“Defs.’ memo”), pp.1:13-25, 2:1-25, 3:1-25, 4:1-26, 5:1-27, 6:1-27, 7:1-27, 8:1-20, 10:25-27, 11:1-25, 12:1-25, 13:1- 6.) However, as Plaintiff states in opposition, this position is contrary to law. In Wright v. Ripley (1998) 65 Cal.App.4th 1189, the court plainly stated that “Section 128.5 was not intended to replace suits for malicious prosecution.” (Id. at p. 1195.) “It serves a different purpose.” (Id.) “Whereas a malicious prosecution action is intended to compensate the wronged litigant, section 128.5 was enacted to broaden the courts’ power to manage their calendars and expedite litigation.” (Id.) Here, it is clear that an order on a section 128.5 sanctions motion cannot be a basis to bar a subsequent action for malicious prosecution.

Defendants also tersely argue that a ruling on a motion to strike the cross-complaint also somehow establishes probable cause. Defendants apparently did not read the January 19, 2017 tentative ruling of which they seek judicial notice and cite in their supporting memorandum. (See Defs.’ memo, p.13:6-16.) First, a tentative ruling is not a proper basis for judicial notice. Second, the tentative ruling plainly states that the Court interpreted the motion as a discovery motion for sanctions for Defendant’s failure to comply with a Court order to provide responses to form interrogatories. The tentative ruling does not make any finding regarding probable cause of the cross-complaint; rather, it details the subject discovery dispute. In fact, Defendants’ memorandum notes that “[t]he grounds for the Motion to Strike were Defendants’ discovery responses.” (Defs.’ memo, p.12, fn.5.) This argument is plainly without merit. Finally, a tentative ruling cannot be a basis for res judicata or collateral estoppel as a tentative ruling is not a final determination. (See Wright, supra, 65 Cal.App.4th at p. 1193 (requiring a final determination for the application of both res judicata and collateral estoppel).) This brief argument lacks any merit. Thus, even if the Court were to consider the special motion as timely, Defendants’ motion is DENIED.

The Court declines to rule on the objections to the Declaration of Kevin Bedolla as the Court did not consider the declaration in the denial of this motion.

The Court declines to make a finding of bad faith

In opposition, “Plaintiff requests a finding that Defendants’ anti-SLAPP Motion was filed in bad faith,” seeking attorney fees. (Opposition, p.17:21-23.) Presumably, Plaintiff is seeking attorney fees pursuant to section 425.16, subdivision (c)(1), which states: “[i]f the court finds that a special motion to strike is frivolous or is solely intended to cause unnecessary delay, the court shall award costs and reasonable attorney fees to a plaintiff prevailing on the motion, pursuant to Section 128.5.” (Code Civ. Proc. § 425.16, subd. (c)(1).) Although the Court has previously noted that Defendants’ arguments regarding collateral estoppel are without basis, the Court declines to make a finding of bad faith, or that the motion was frivolous or solely intended to cause unnecessary delay. The Court also notes that Plaintiff, acting in propria persona, cannot be awarded attorney fees. (See Trope v. Katz (1995) 11 Cal.4th 274, 292 (stating that “we hold that an attorney who chooses to litigate in propria persona and therefore does not pay or become liable to pay consideration in exchange for legal representation cannot recover ‘reasonable attorney’s fees’”); see also Musaelian v. Adams (2009) 45 Cal.4th 512, 520 (stating that “[w]e hold therefore that an attorney who responds in pro se to a filing abuse may not recover sanctions under section 128.7 in the form of an award of attorney fees”); see also Sands & Associates v. Juknavorian (2012) 209 Cal.App.4th 1269, 1284-1299 (stating that “[w]hen a law firm holds an attorney out to the public as ‘of counsel,’ the firm cannot recover attorney fees under a prevailing party clause when, as a successful litigant, it is represented by ‘of counsel’”).)

The Court will prepare the Order.