Case Number: BC709545 Hearing Date: July 26, 2018 Dept: 37

CASE NAME: Wykowski v. Sosa, et al.

CASE NO.: BC709545

HEARING DATE: 7/26/18

DEPARTMENT: 37

CALENDAR NO.: 7

FILING DATE: 6/12/18

FSC/TRIAL DATE: None

NOTICE: OK

SUBJECT: Special Motion to Strike the Complaint (Code Civ. Proc., § 425.16)

MOVING PARTY: Defendant Frank Chimienti [1]

OPPOSING PARTY: Plaintiff Henry G. Wykowski, Esq.
COURT’S TENTATIVE RULING

The court DENIES the motion. Counsel for Plaintiff to give notice.
STATEMENT OF THE CASE

This case arises from allegations that Defendant Daniel Sosa (“Sosa”) instituted a legal malpractice case against his former counsel, Plaintiff Henry G. Wykowski (“Wykowski”), in bad faith and without probable cause, for the improper purpose of avoiding paying legal bills Wykowski accrued in representing Sosa and Sosa’s company Mid City Cannabis Club (“Mid City”) in a dispute with the Internal Revenue Service (“IRS”). Defendant Frank Chimienti (“Chimienti”) allegedly was business counsel for Sosa and Mid City.

In March 2011, the IRS commenced an audit of Sosa and Mid City for tax returns in the years 2007-2009. In January 2012, the IRS issued an Income Tax Discrepancy Adjustment (“IDTA”) listing a tax deficiency of approximately $35,000. In October 2012, the IRS issued a revised ITDA for approximately $135,000. In the underlying suit, Sosa argued that Plaintiff never disclosed this revised demand and that Plaintiff improperly proceeded to settle with the IRS for approximately $135,000. The court granted summary judgment in Plaintiff Wykowski’s favor, finding that Sosa’s claims were barred by the one-year statute of limitations and that Wykowski did not breach any duty to Sosa.

In the Complaint, Plaintiff alleges one cause of action for malicious prosecution. Defendant Chimienti now specially moves to strike the Complaint pursuant to Code of Civil Procedure, section 425.16 (“anti-SLAPP motion”). Plaintiff opposes the motion
EVIDENTIARY OBJECTIONS

Defendant’s Objection to the Declaration of Henry G. Wykowski (“Wykowski Decl.”)

Overruled:
Sustained: 1-6

Objections 1, 3, 5: Sustained. Speculative.

Objection 2: Sustained. The court did not make a finding as to Defendants’ probable cause in bringing the motion.

Objections 4, 6: Sustained. Speculative. This statement comprises argument, not evidence.
DISCUSSION
I. Legal Standard

Code of Civil Procedure section 425.16 sets forth the procedure governing anti-SLAPP motions.[2] In pertinent part, the statute provides, “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 (“anti-SLAPP motion”), 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).) The purpose of the statute is to identify and dispose of lawsuits brought to chill the valid exercise of a litigant’s constitutional right of petition or free speech. (§ 425.16, subd. (a); see Sylmar Air Conditioning v. Pueblo Contracting Servs., Inc. (2004) 122 Cal.App.4th 1049, 1055-1056.)

Courts employ a two-step process to evaluate anti-SLAPP motions. (Equilon Enters. v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67 (Equilon).) To invoke the protections of the statute, the defendant must first show that the challenged lawsuit arises from protected activity, such as an act in furtherance of the right of petition or free speech. (Ibid.) From this fact, courts “presume the purpose of the action was to chill the defendant’s exercise of First Amendment rights.” (Id. at p. 61.) “It is then up to the plaintiff to rebut the presumption by showing a reasonable probability of success on the merits.” (Ibid.) In determining whether the plaintiff has carried this burden, the trial court considers “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” (Code Civ. Proc., § 425.16, subd. (b)(2); see Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3.) “When assessing the plaintiff’s showing, the court must also consider evidence that the defendant presents.” (1-800 Contacts, Inc. v. Steinberg (2003) 107 Cal.App.4th 568, 585.) “The court does not, however, weigh that evidence against the plaintiff’s, in terms of either credibility or persuasiveness. Rather, the 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.]” (Ibid.)
II. Analysis
A. First Prong: Whether the Alleged Conduct Arises From Protected Activity

Code of Civil Procedure, section 425.16, subdivision (e) provides in relevant part that “act[s] 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” include: “(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 proceeding, or any other official proceeding authorized by law . . . .” (Code Civ. Proc. § 425.16, subds. (e)(1)-(2).) This provision “broadly encompasses participation in official proceedings, generally, whether or not such participation remains strictly focused on ‘public’ issues,” and is to be construed broadly. (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1118; see also Code Civ. Proc., § 425.16, subd. (a).)

As the party bringing the anti-SLAPP motion, Defendant Chimienti bears the initial burden to demonstrate that the challenged claims arise from protected activity. (Code Civ. Proc, § 425.16, subd. (b).) The court independently reviews the allegations of the Complaint to determine whether the challenged claims arise from protected activity. “[T]he anti-SLAPP statute’s definitional focus is not the form of the plaintiff’s cause of action but, rather, the defendant’s activity that gives rise to his or her asserted liability—and whether that activity constitutes protected speech or petitioning.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 393 (Baral).) Malicious prosecution claims are not exempt from the anti-SLAPP statute. (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 741 (Jarrow).)

Defendant Chimienti does not specifically identify which portion of section 425.16, subdivision (e) on which he relies in the subject motion. The Complaint, however, alleges that Chimienti wrote to Plaintiff claiming that Sosa was dissatisfied with the settlement he had previously authorized Plaintiff to enter into on Sosa’s behalf. (Compl. ¶ 12.) The Complaint further alleges that Chimienti wrote an e-mail to Plaintiff, on February 6, 2015, stating: “[S]hould collection efforts continue concerning this matter I am advising the client to retain counsel to file a malpractice claim. If Henry would like to send over a mutual release – my client forgoing (sic) his claims and the firm forgiving any amounts it claims are due and owing for work done on this matter, I will pass it on to the client for review.” (Compl. ¶ 13.)

It is undisputed that Plaintiff’s claims against Defendant Chimienti arise from Defendant’s statements made on behalf of and legal advice given to Defendant Sosa. California Courts have held that communications preparatory to or in anticipation of bringing an action or other official proceeding are entitled to the benefits of section 425.16. (Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47 Cal.App.4th 777, 784 (Dove).) Accordingly, the court finds that Defendant Chimienti meets his initial burden to demonstrate that the challenged claim arises from protected activity.
B. Second Prong: Whether There Is a Probability that Plaintiff Will Prevail on the Merits

Once a defendant has met its initial burden, “[i]t is then up to the plaintiff to rebut the presumption by showing a reasonable probability of success on the merits.” (Equilon, supra, 29 Cal.4th at p. 61.) In determining whether the plaintiff has carried this burden, the trial court considers “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” (Code Civ. Proc., § 425.16, subd. (b)(2); see Soukup v. Law Offices of Herbert Hafif, supra, 39 Cal.4th at 269, fn. 3.)

The test for showing a probability of success under section 425.16 is similar to the standard applied to evidentiary showings in summary judgment motions, and the plaintiff must make a prima facie showing by competent admissible evidence within the personal knowledge of the declarant. (Ludwig v. Superior Court (1995) 37 Cal.App.4th at 15-16.) “To show a likelihood of success, ‘[t]he plaintiff’s showing of facts must consist of evidence that would be admissible at trial.’ [Citation.] The plaintiff may not rely on the allegations in the complaint or assertions in a declaration based on information and belief.” (Wong, supra, 189 Cal.App.4th at p. 1368.) The court bears the responsibility to accept as true the evidence favorable to the plaintiff, and the plaintiff need only establish that his or her claim has “minimal merit” to avoid being stricken as a SLAPP. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291 (Soukup).)

In order to establish a cause of action for malicious prosecution in either a criminal or civil proceeding, a plaintiff must demonstrate that the prior action (1) “was commenced by or at the direction of the defendant”; (2) “was pursued to a legal termination in his, plaintiff’s, favor”; (3) “was brought without probable cause”; and (4) “was initiated with malice.” (Robbins v. Blecher (1997) 52 Cal.App.4th 886, 892-893 (Robbins).) It is undisputed that the underlying lawsuit was terminated in Plaintiff’s favor. The court will address the parties’ arguments on the remaining elements below.
1. Litigation Privilege

As an initial matter, Defendant Chimienti contends that the statements he made are protected under the litigation privilege. (Mot. 3-4.) The moving papers do not claim the litigation privilege in connection with the second prong of the anti-SLAPP statute and only mention the privilege in discussing the Dove decision in connection with the question of whether Chimienti’s conduct constituted protected activity under section 425.16. (See Mot. 3-4.) Plaintiff, in turn, cites cases including Ribas v. Clark (1985) 38 Cal.3d 355, 364 (Ribas) for the proposition that the litigation privilege does not apply to malicious prosecution claims. Accordingly, for purposes of the subject motion, the court finds that the litigation privilege does not bar Plaintiff’s claim for malicious prosecution.
2. Whether the Prior Lawsuit Was Brought at the Direction of Defendant Chimienti

Chimienti contends that Plaintiff’s claim fails because he is unable to demonstrate that Defendant brought the action at Chimienti’s “direction.” (Mot. 4.) Defendant cites Cole v. Patricia A. Meyer & Associates, APC (2012) 206 Cal.App.4th 1095, 1105 (Cole) to argue that an attorney that does not sign the pleadings nor make an appearance in an underlying case may not be held liable for malicious prosecution. (Mot. 4-5.) Cole does not support the asserted proposition. In Cole, the Court of Appeal denied an anti-SLAPP motion against defendant attorneys, holding that the attorneys could not avoid liability on a malicious prosecution claim by claiming that they had learned nothing or close to nothing about and had little involvement in a case in which they allowed themselves to be consistently identified as counsel of record for the plaintiffs. (Id. at p. 1115-116.) Cole did not involve consideration of whether a malicious prosecution claim may only be asserted against counsel who signs the pleadings or makes an appearance in the underlying case. Cole is inapposite to the case at hand.

California Courts have held that liability for malicious prosecution is not limited to one who initiates an action and that “[a] person who did not file a complaint may be liable for malicious prosecution if he or she ‘instigated’ the suit or ‘participated in it at a later time.’ ” (Nunez v. Pennisi (2015) 241 Cal.App.4th 861, 873.) Plaintiff presents evidence that Defendant Chimienti wrote that he was advising Sosa to retain litigation counsel to bring the underlying malpractice claim if Plaintiff continued his collection efforts. (Wykowski Decl. Ex. B.) This evidence is sufficient to demonstrate the existence of a triable issue of fact as to whether Chimienti “instigated” the suit and for Plaintiff to demonstrate a reasonable probability of success on this element of his claim.
3. Probable Cause

“The question of probable cause is ‘whether, as an objective matter, the prior action was legally tenable or not.’ [Citation.] ‘A litigant will lack probable cause for his action either if he relies upon facts which he has no reasonable cause to believe to be true, or if he seeks recovery upon a legal theory which is untenable under the facts known to him.’ [Citation.] ‘In a situation of complete absence of supporting evidence, it cannot be adjudged reasonable to prosecute a claim.’ ” (Soukup, supra, 39 Cal.4th at p. 292.) “[T]here is probable cause if, at the time the claim was filed, ‘any reasonable attorney would have thought the claim tenable.’ ” (Jarrow, supra, 31 Cal.4th at p. 742.)

Defendant Chimienti cites Jarrow to argue that the court’s grant of summary judgment in the underlying case is insufficient to establish lack of probable cause or malice. (Mot. 4, citing Jarrow, supra, 31 Cal.App.4th at p. 743.) In Jarrow, the Supreme Court held that a grant of summary judgment on an underlying claim does not establish lack of probable cause or malice sufficient to defeat a subsequent anti-SLAPP motion that is brought against a malicious prosecution claim in a subsequent action, as a matter of law. (Id. at pp. 742-743.) However, Jarrow does not speak as to whether the evidence and the reasoning underlying the prior court’s grant of the prior summary judgment can be sufficient to demonstrate a reasonable probability of success on a plaintiff’s claim. It only states that the fact that summary judgment was granted, standing alone, is insufficient to demonstrate lack of probable cause or malice. (Jarrow, 31 Cal.4th at p. 743 [“[E]very case litigated to a conclusion has a losing party, but that does not mean the losing position was not arguably meritorious when it was pled. . . . Merely because the prior action lacked legal tenability, as measured objectively . . . without more, would not logically or reasonably permit the inference that such lack of probable cause was accompanied by the actor’s subjective malicious state of mind.”].)

Plaintiff contends that he has a reasonable probability of demonstrating probable cause based on the same reasons identified by the court in its grant of summary judgment in the underlying action: 1) the operative statute of limitations and 2) because there was no breach of duty. (Opp. 11.) In the underlying case, the court recognized that the US Tax Court entered a stipulated decision as to the amount of the tax deficiency on July 10, 2014, and that this was the date Sosa’s actual alleged injury occurred. (Wykowski Decl. Ex. F, at p. 5-6.) The court further found that the one-year statute of limitations on Sosa’s claim clearly began to accrue by August 25, 2014, which was the date on which Sosa received an updated bill from the IRS for his personal income tax for the years in question, reflecting that he owed approximately $135,000. (Id. at p. 6.) According to the court, Sosa could have checked the US Tax Court website and viewed an electronic copy of the July 10, 2014 decision or reviewed the October 2012 ITDA (that he and Chimienti had in their possession) to realize that Wykowski had agreed on his behalf to settle for approximately $135,000 and not $35,000. (Ibid.) Sosa filed suit in the underlying matter on March 9, 2016. (Ibid.) Based on the evidence presented, the court found that Sosa’s claims against Plaintiff were barred by the one-year statute of limitations, as a matter of law. (Ibid.)

On the question of duty, the court in the underlying action found that Wykowski was not provided a copy of the January 2012 ITDA and that he had demonstrated that he had no way of knowing that Sosa held the subjective impression that his tax liability was $35,000. (Wykowski Decl. Ex. F, at pp. 6-7.) Sosa admitted that he received the October 2012 ITDA and brought it to Chimienti who then conveyed it to Plaintiff Wykowski. (Id. at p. 3.) Chimienti, in turn, admitted that he received the IRS’s revised demand from Plaintiff during the course of the underlying litigation. (Ibid.) Based on this evidence, the court found that Sosa failed to adduce any evidence that would show that Plaintiff knew or should have known that Plaintiff was operating under the misapprehension that his tax liability would be $35,000, and the court found that Plaintiff did not breach any legal duty owed to Sosa. (Id. at p. 7.)

All of the evidence at issue was available to Defendants or in their possession (in the case of the October 2012 ITDA) prior to the date they filed suit on March 9, 2016. Accordingly, this evidence is sufficient for Plaintiff Wykowski to demonstrate the existence of a triable issue of fact as to whether Defendants, objectively, lacked probable cause to file the underlying malicious prosecution claim. Plaintiff thus meets his burden to demonstrate a reasonable probability of success on this element.
4. Malice

“The ‘malice’ element . . . relates to the subjective intent or purpose with which the defendant acted in initiating the prior action. [Citation.] The motive of the defendant must have been something other than that of bringing a perceived guilty person to justice or the satisfaction in a civil action of some personal or financial purpose. [Citation.] The plaintiff must plead and prove actual ill will or some improper ulterior motive. [Citations.] Malice ‘may range anywhere from open hostility to indifference. [Citations.] Malice may also be inferred from the facts establishing lack of probable cause.’ ” (Soukup, supra, 39 Cal.4th at p. 292.)

“Suits with the hallmark of an improper purpose include those in which: (1) the person initiating them does not believe that his claim may be held valid; (2) the proceedings are begun primarily because of hostility or ill will; (3) the proceedings are initiated solely for the purpose of depriving the person against whom they are initiated of a beneficial use of his property; (4) the proceedings are initiated for the purpose of forcing a settlement which has no relation to the merits of the claim.” (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1543, internal quotation marks and ellipses omitted (Jay).)

Plaintiff presents evidence that Chimienti sent an e-mail to Plaintiff’s office on February 7, 2015, stating that Sosa was not going to pay the remainder of the bill from the underlying action and suggesting that they begin with a fee arbitration procedure if Plaintiff wished to take action to collect the bill. (Wykowski Decl. Ex. B.) The e-mail further stated: “Further, should collection efforts continue concerning this matter I am advising the client to retain counsel to file a malpractice claim. If [Wykowski] would like to send over a mutual release – my client forgoing [sic] his claims and the firm forgiving any amounts it claims are due and owing for work done on this matter, I will pass it on to the client for review.” (Ibid.) Sosa subsequently filed suit against Plaintiff alleging professional negligence and seeking damages for Plaintiff’s alleged failure to inform Sosa of the total extent of his deficiency liability to the IRS when Plaintiff continued to attempt to collect on his bill. (Wykowski Decl. Ex. C.) This letter demonstrates the existence of a triable issue of fact as to whether Defendant Chimienti recommended Sosa file the underlying action against Plaintiff in order to force a settlement as to Plaintiff’s bill. This evidence is sufficient to demonstrate the existence of a triable issue on the question of malice. (See Jay, supra, 218 Cal.App.4th at p. 1543.) [3]

On reply, Defendant Chimienti contends that this evidence constitutes protected speech under the litigation privilege. (See Reply 4-8.) Chimienti, however, does not address Plaintiff’s cited legal authority which establishes that the litigation privilege does not apply to a malicious prosecution claim. (See Ribas, supra, 38 Cal.3d at p. 364.) Accordingly, Defendant’s argument fails. [4]

Plaintiff therefore demonstrates a reasonable probability of success as to the malice element of his claim.

III. Conclusion

For these reasons, the court finds that Defendant Chimienti meets his initial burden to demonstrate that Plaintiff’s claims arise from protected activity under section 425.16, but that Plaintiff meets his responsive burden to demonstrate a reasonable probability of success on the merits of his malicious prosecution claim. The court therefore DENIES the subject motion.

[1] Defendant Chimienti’s reply was late-filed and served by one day. (See Code Civ. Proc., § 1005.) The court expects the parties to comply with all statutory requirements and court rules.

[2] All subsequent statutory references will be to the Code of Civil Procedure, unless otherwise specified.

[3] Chimienti contends that Plaintiff’s evidence consists of speculative inferences as to Chimienti’s intent. The court disagrees. Chimienti’s own statements in his letter to Plaintiff’s firm regarding his advice to Sosa does not constitute improper speculation as to Chimienti’s motives. (See Wykowski Decl. Ex. B [“should collection efforts continue concerning this matter I am advising the client to retain counsel to file a malpractice claim”], emphasis added.) As this evidence is sufficient for Plaintiff to meet his burden on the malice element of his claim, the court need not address the parties’ remaining arguments regarding malice.

[4] Chimienti argues that Plaintiff “seeks to hold every person in the world who may have uttered the words ‘I will advise the client to sue’ liable for malicious prosecution if such a lawsuit is dismissed on summary judgment.” (Reply 5.) California law makes clear, however, that an attorney may be held liable for such counsel if it is proven that such advice was given for an improper purpose. (See Jay, supra, 218 Cal.App.4th at p. 1543; see also Cole, supra, 206 Cal.App.4th at pp. 1119-1120.)