Filed 11/26/19 Reese Law Group v. Crowley Law Group CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

REESE LAW GROUP,

Plaintiff and Appellant,

v.

CROWLEY LAW GROUP et al.,

Defendants and Respondents.

D074975

(Super. Ct. No.

37-2018-00020041-CU-NP-CTL)

APPEAL from a judgment of the Superior Court of San Diego County, Richard E.L. Strauss, Judge. Affirmed.

Reese Law Group and Joseph M. Pleasant for Plaintiff and Appellant.

California Anti-SLAPP Project, Mark Goldowitz and Paul Clifford for Defendants and Respondents.

In this appeal, we review an order granting a special motion to strike a malicious prosecution action. Litigation between the parties harkens back to a consumer debt collection matter.

Reese Law Group (Reese) is a debt collection law firm. In 2001, one of Reese’s clients obtained a default judgment against Sabrina Muhammad (Muhammad or debtor) in Orange County, and Reese began garnishing her wages to satisfy the judgment. Reese garnished her wages for many years, primarily through the Orange County Sheriff, and then at one point through the San Diego County Sheriff. The debtor came to believe that something was amiss in the manner and amount of Reese’s collections through the San Diego County Sheriff.

In 2016, Muhammad, represented by attorneys Andre Verdun and William Jarrell of Crowley Law Group (Crowley), sued Reese in federal district court, alleging violations of the Fair Debt Collection Practices Act (FDCPA, 15 U.S.C. § 1692 et seq.) and its state law analog, the Rosenthal Fair Debt Collection Practices Act (Rosenthal Act; Civ. Code, § 1788 et seq.). Although most of Muhammad’s claims under these statutes were dismissed with prejudice, some of them pertaining to improper accounting were dismissed without prejudice on jurisdictional grounds.

Subsequently, Reese sued Muhammad and her attorneys (collectively defendants) in state court for malicious prosecution. Defendants responded by filing an anti-SLAPP motion, which the trial court granted on the ground that Reese had not shown a probability of prevailing on its cause of action for malicious prosecution. We agree and affirm the judgment of dismissal entered after the order granting the anti-SLAPP motion.

FACTUAL AND PROCEDURAL BACKGROUND

Muhammad is not a lawyer. She resides in Orange County and works as a revenue officer for the Internal Revenue Service (IRS). In March 2001, Reese, on behalf of its client Ford Motor Credit Company (Ford), obtained a default judgment against Muhammad in Orange County Superior Court in the amount of $11,674, relating to a vehicle lease agreement (OC judgment). In 2003, Reese began garnishing the debtor’s wages through the Orange County Sheriff. In 2009, Reese renewed the OC judgment in Orange County.

In 2010, Muhammad went on a one-year leave of absence due to a medical condition, during which time she did not receive any wages. Garnishment of her wages stopped from that point through 2015. Unknown to Muhammad at the time, in late 2015, Reese submitted a writ of execution with a new interest calculation to the San Diego County Sheriff, who issued an earnings withholding order (garnishment order). The garnishment order stated that the judgment being collected on was entered on July 17, 2001. Neither Ford nor Reese had obtained a judgment bearing that date against Muhammad.

In 2016, Muhammad received a letter from her employer, the IRS, conveying that it would begin garnishing her wages again, this time pursuant to the garnishment order issued by the San Diego County Sheriff. The letter indicated that Muhammad’s employer was required to garnish 25 percent of her wages on a biweekly basis and that the total amount to be garnished, i.e., the amount owed on the OC judgment, was $17,986. For various reasons, Muhammad did not believe she owed this amount. She located Orange County records that showed she currently owed only $3,294; moreover, since 2003 she had had over $13,000 in wages garnished. Muhammad checked with one of her colleagues, a certified public accountant, who also thought something was wrong about Reese’s collections. She could not afford to have a quarter of her wages garnished and incurred travel and court costs to challenge and/or reduce the latest garnishments.

Muhammad consulted with, and then retained, attorneys Jarrell and Verdun of Crowley on a contingency fee basis. She provided her attorneys with the facts, as they requested, and otherwise relied on their advice as to whether she possessed any legal claims. They advised her she had legitimate, meritorious claims against Reese. In bringing and maintaining a lawsuit against Reese, Muhammad relied on the advice of her attorneys.

For their part, after the initial consultation with the debtor, Jarrell and Verdun engaged in a prefiling investigation of and research pertaining to potential claims against Reese. Jarrell was the junior attorney of the two as a fifth-year lawyer, and he was more directly involved in the documents pertaining to the case, while Verdun oversaw legal strategy and research. In general, over the course of about eight months, the attorneys reviewed hundreds of pages of documents; performed legal research and analysis; were unable to reconcile the discrepancy in the amount of owed debt as reported by seemingly reliable sources (Sheriff departments); were aware of a Ninth Circuit case (and lack of contrary Ninth Circuit case law) that in their opinion supported an arguable claim that San Diego County was not a proper venue in which to initiate a wage garnishment action relating to the debtor; and communicated several times with a Reese attorney, who could not definitively explain why the Orange County and San Diego County Sheriffs’ records diverged on the amount of debt owed by the debtor. Based on their investigation, Jarrell and Verdun believed Reese was excessively collecting on the OC judgment and unfairly and/or improperly doing so through a San Diego County garnishment action.

The Federal Action

In October 2016, Muhammad, represented by Crowley’s attorneys, filed a complaint against Reese in the United States District Court for the Southern District of California, containing two causes of action. The first cause of action alleged violations of the FDCPA, including (a) harassing conduct (15 U.S.C. § 1692d); (b) false or misleading representations (15 U.S.C. § 1692e); (c) deceptive practices (15 U.S.C. § 1692e(10)); (d) unfair or unconscionable means (15 U.S.C. § 1692f); and (e) bringing legal action against the debtor in an improper venue (15 U.S.C. § 1692i). The second cause of action alleged violations of the Rosenthal Act, including (a) collecting debt through a judicial proceeding without valid service of process (Civ. Code, § 1788.15, subd. (a)); (b) collecting debt in an improper county (Civ. Code, § 1788.15, subd. (b)); and (c) debt collection practices in violation of provisions of the FDCPA (Civ. Code, § 1788.17). The federal action was premised on two core legal theories—one, that Reese’s wage garnishment action against the debtor in San Diego County was improper (venue theory), and two, that there were accounting mistakes or miscalculations leading to Reese’s overcollections and/or misrepresentations (accounting theory).

In November 2016, Reese filed an anti-SLAPP motion in the federal action to strike Muhammad’s Rosenthal Act cause of action. Reese argued that the Rosenthal Act claim was based on Reese’s protected litigation activity to collect on the OC judgment and that it was Muhammad’s burden to demonstrate a probability of prevailing on the claim, which incorporated provisions of the FDCPA.

Muhammad’s opposition to the anti-SLAPP motion, prepared by her attorneys, recounted the key factual allegations of her complaint and relied heavily on Komarova v. National Credit Acceptance, Inc. (2009) 175 Cal.App.4th 324, 337, which held that debt collection activity in violation of the Rosenthal Act is not shielded by the litigation privilege. Muhammad did not brief the merits of any alleged FDCPA violations or make any further showing of facts to support a probability of prevailing under the Rosenthal Act.

Following briefing, the district court granted Reese’s anti-SLAPP motion and dismissed the Rosenthal Act claim with prejudice. The court found that the claim arose from protected litigation activity. Further, it discussed that the Komarova decision may negate one of Reese’s possible affirmative defenses (litigation privilege) but did not obviate the need for a plaintiff to provide evidence of a Rosenthal Act violation to prevail on such a claim. Finally, the court analyzed the allegations of Muhammad’s complaint and found that the factual allegations were insufficient, alone, to demonstrate a probability of prevailing under the Rosenthal Act.

Thereafter, Reese filed a motion for sanctions against Muhammad and her counsel under rule 11 of the Federal Rules of Civil Procedure based on their allegations of FDCPA violations (Rule 11 motion). The district court denied the Rule 11 motion, finding it had not yet addressed the merits of the FDCPA claim and that the claim, including each subclaim relating to venue and accounting, was not “objectively baseless.” Furthermore, the district court found that Muhammad’s attorneys “conducted a reasonable pre-filing inquiry.”

In June 2017, Reese filed a motion for summary judgment on the remaining FDCPA cause of action on the grounds that it was barred by the Rooker-Feldman doctrine, there were no genuine issues of material fact, and that the FDCPA venue provision did not apply to wage garnishment actions in California. Muhammad opposed the motion. She submitted her declaration and documentary evidence, and pointed to her expert’s opinion that Reese was improperly collecting compound interest. The district court granted Reese’s motion for summary judgment as follows: (a) the venue subclaim was dismissed with prejudice because the court found that garnishment actions in California are fundamentally directed toward employers, not “against any consumer” (15 U.S.C. § 1692i); and (b) the accounting subclaims (15 U.S.C. §§ 1692d, 1692e, 1692e(10), 1692f) were dismissed without prejudice on jurisdictional grounds pursuant to the Rooker-Feldman doctrine. Muhammad did not appeal any of the district court’s orders.

Malicious Prosecution Action

In April 2018, Reese filed a complaint against defendants in superior court alleging one cause of action for malicious prosecution based on the debtor’s federal action. Reese alleged the Rosenthal Act claim and FDCPA venue subclaim had been maliciously brought and maintained, without probable cause, and that Reese obtained a favorable and final termination on the merits as to those claims. Reese admitted that the FDCPA accounting subclaims were dismissed on jurisdictional grounds.

Defendants filed a special motion to strike the complaint (§ 425.16), which the trial court granted in August 2018. The court decided Reese had not demonstrated a probability of prevailing on its sole cause of action for malicious prosecution. In particular, the court found that Reese had failed to make a prima facie showing that the prior action had been initiated with malice, noting a “dearth of facts from which an inference of malice [can] be made.” Judgment was entered in defendants’ favor, and Reese’s appeal followed.

DISCUSSION

The parties agree on the method of analyzing an anti-SLAPP motion. “Section 425.16, subdivision (b)(1) requires the court to engage in a two-step process. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving defendant’s burden is to demonstrate 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,’ as defined in the statute. (§ 425.16, subd. (b)(1).) If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim.” (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67 (Equilon Enterprises).) The defendants have the burden to show protected activity; the burden then shifts to the plaintiff to show a probability of prevailing on the merits. We review an order granting or denying an anti-SLAPP motion de novo, using the same procedure as the trial court. (Kenne v. Stennis (2014) 230 Cal.App.4th 953, 962-963.)

I. Protected Activity

Reese concedes its malicious prosecution action arose from constitutionally protected activity. Indeed, “[b]y definition, a malicious prosecution suit alleges that the defendant committed a tort by filing a lawsuit.” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 735 (Jarrow); Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291 (Soukup).) We are left with the question of whether Reese demonstrated a probability of prevailing.

II. Probability of Prevailing

” ‘In deciding the question of potential merit, 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.]’ ” (Taus v. Loftus (2007) 40 Cal.4th 683, 714.) We look to see whether ” ‘the plaintiff has stated and substantiated a legally sufficient claim.’ ” (Equilon Enterprises, supra, 29 Cal.4th at p. 63.) Although the plaintiff does not have to prove its case at this juncture, it must present a prima facie case that could sustain a favorable judgment if its evidence were believed. (Navellier v. Sletten (2002) 29 Cal.4th 82, 88-89.) When evaluating the plaintiff’s probability of prevailing for purposes of an anti-SLAPP motion, the court can consider the defendant’s evidence in determining whether it defeats a plaintiff’s case as a matter of law. (Traditional Cat Assn., Inc. v. Gilbreath (2004) 118 Cal.App.4th 392, 398.)

Malicious prosecution actions are traditionally disfavored and, as a result, subject to stringent conditions. (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 872 (Sheldon Appel).) A malicious prosecution plaintiff must plead and prove (1) legal termination of the previous action in his or her favor, (2) subjective malice, that is, improper purpose or ill-will as an underlying motivation for the action, and (3) lack of probable cause to file or maintain it. (Crowley v. Katleman (1994) 8 Cal.4th 666, 676; Sycamore Ridge Apartments LLC v. Naumann (2007) 157 Cal.App.4th 1385, 1398 (Sycamore Ridge).)

A. Favorable Termination

The parties agree Reese obtained a favorable termination on the merits as to the Rosenthal Act claim and FDCPA venue subclaim. However, defendants contend Reese did not obtain a favorable termination of the entire action because the FDCPA accounting subclaims (15 U.S.C. §§ 1692d, 1692e, 1692e(10), 1692f), were dismissed on jurisdictional grounds.

Reese concedes the dismissal on jurisdictional grounds, but nevertheless argues that it obtained a favorable termination of the entire action because the district court’s anti-SLAPP ruling reflected on the merits of the entire action. Reese points out that the alleged FDCPA violations were incorporated in the Rosenthal Act (Civ. Code, § 1788.17), and when defendants had the opportunity to make an evidentiary showing on the probability of prevailing under the Rosenthal Act, they did not produce any evidence. The superior court did not address the favorable termination issue in its order granting defendants’ anti-SLAPP motion.

A malicious prosecution plaintiff must show there was a favorable termination of the ” ‘entire’ ” underlying action in the plaintiff’s favor. (Lane v. Bell (2018) 20 Cal.App.5th 61, 75.) “The theory underlying the requirement of favorable termination is that it tends to indicate the innocence of the accused, and coupled with the other elements of lack of probable cause and malice, establishes the tort [of malicious prosecution].” (Jaffe v. Stone (1941) 18 Cal.2d 146, 150.)

A ” ‘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.” (Lackner v. LaCroix (1979) 25 Cal.3d 747, 751 (Lackner).) ” ‘[W]hen the underlying action is terminated in some manner other than by a judgment on the merits, the court examines the record “to see if the disposition reflects the opinion of the court or the prosecuting party that the action would not succeed.” ‘ ” (Ross v. Kish (2006) 145 Cal.App.4th 188, 198.) “Should a conflict arise as to the circumstances of the termination, the determination of the reasons underlying the dismissal is a question of fact.” (Ibid.)

A ” ‘dismissal . . . for lack of jurisdiction [citation omitted] not only is not on the merits, it is unreflective of the merits; neither the judgment of the court nor that of the prosecuting party on the merits is implicated in the dismissal.’ ” (Lackner, supra, 25 Cal.3d at p. 750.) If the resolution of the underlying litigation leaves some doubt as to the underlying defendant’s innocence or liability, it is not a favorable termination. (Eells v. Rosenblum (1995) 36 Cal.App.4th 1848, 1855.) A termination by dismissal is favorable only when it reflects the opinion of the dismissing party or court that the action lacked merit. (Ibid.)

Based on our review of the record, the district court’s anti-SLAPP ruling did not reflect a ruling on the merits of the entire underlying action. Anti-SLAPP motions do not apply to federal causes of action in federal court (Hilton v. Hallmark Cards (9th Cir. 2010) 599 F.3d 894, 901), and thus Muhammad’s independent FDCPA claim was preserved for adjudication irrespective of her state law claim. When ruling on the anti-SLAPP motion, the district court primarily conducted a review of the pleadings; it did not make any factual findings or evaluate evidence in a manner that established Reese’s innocence of the underlying accounting issues. In fact, the FDCPA claim was litigated at the summary judgment stage, which would have been unnecessary had the claim already been decided. At the summary judgment stage, Muhammad produced evidence in support of her assertion that Reese miscalculated the amount of her outstanding debt. Ultimately, the district court dismissed the misrepresentation and overcollection subclaims “without prejudice” on Rooker-Feldman jurisdictional grounds. No decision on the merits was ever rendered on these subclaims.

Accordingly, we are not persuaded Reese obtained a favorable termination of the entire federal action. The inability to establish this element is sufficient by itself to defeat a cause of action for malicious prosecution. Nevertheless, we proceed to review the malice element of Reese’s malicious prosecution action.

B. Malice

1. The parties’ contentions

From Reese’s briefs, we distill the following arguments pertaining to evidence of malice on the part of Muhammad, the debtor:

• Muhammad knew Ford held a default judgment against her. Thus, she must have known her claim under the Rosenthal Act’s venue provision (Civ. Code, § 1788.15, subd. (b)) lacked merit because the statute applies only to debt collection efforts that do not involve a judgment.
•
• Muhammad’s malice can be inferred from her attorneys’ malice, that is, we may assume her attorneys advised her that her claims lacked merit and yet she still authorized their litigation and settlement demands.
•
• Her declaration, which explained how she relied on her attorneys for legal advice, is not sufficiently detailed and should be viewed with distrust.
•
• She is an IRS officer who knows how to calculate tax obligations.
•
Further, Reese argues the following general acts or events support an inference of Jarrell and Verdun’s (attorneys) malice:

• They failed to conduct an adequate prefiling investigation to support all the alleged claims.
•
• There was no legal or factual basis to institute the Rosenthal Act venue claims (Civ. Code, § 1788.15, subds. (a) & (b)).
•
• There is evidence the attorneys did not believe in the legal tenability of the venue claims.
•
• As to the accounting claims (Civ. Code, § 1788.17; 15 U.S.C. §§ 1692d, 1692e, 1692f), the attorneys understood at some point that the claims lacked merit.
•
Defendants respond that Reese has not presented sufficient facts from which an inference of malice can be made and that Reese’s “evidence” of malice is essentially duplicative of its argument for why the action lacked probable cause. Defendants contend that Muhammad established her reliance on the advice of counsel, and that the attorneys established their good faith belief in the legal tenability of their claims.

2. The law of malice

The malice element of the malicious prosecution tort goes to the defendant’s subjective intent in initiating or maintaining the prior action. (Sheldon Appel, supra, 47 Cal.3d at p. 874.) For purposes of a malicious prosecution claim, malice “is not limited to actual hostility or ill will toward the plaintiff. Rather, malice is present when proceedings are instituted primarily for an improper purpose.” (Sierra Club Foundation v. Graham (1999) 72 Cal.App.4th 1135, 1157 (Sierra Club).) “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.” ‘ ” (Id. at p. 1157.)

Evidence of malice “must include proof of either actual hostility or ill will on the part of the defendant or a subjective intent to deliberately misuse the legal system for personal gain or satisfaction at the expense of the wrongfully sued defendant.” (Downey Venture v. LMI Ins. Co. (1998) 66 Cal.App.4th 478, 498-499.) A lack of probable cause, standing alone, does not support an inference of malice. ” ‘Merely because the prior action lacked legal tenability, as measured objectively . . . without more, [does] not logically or reasonably permit the inference that such lack of probable cause was accompanied by the actor’s subjective malicious state of mind.’ ” (Jarrow, supra, 31 Cal.4th at p. 743.) However, “[e]vidence tending to show that the defendants did not subjectively believe that the action was tenable is relevant to whether an action was instituted or maintained with malice.” (Sycamore Ridge, supra, 157 Cal.App.4th at p. 1407.)

Because the malice element is subjective, our analysis is necessarily fact-intensive. Prior cases illustrate the types of facts that support a finding of malice, but the specific facts of one case are likely to be of limited application to a different case. For example, in Sierra Club, a developer sued the Sierra Club Foundation in federal court in California for fraud and breach of contract after he became involved in a dispute with the foundation over land in New Mexico, a dispute unrelated to the lawsuit. (Sierra Club, supra, 72 Cal.App.4th at pp. 1143-1144.) The developer intended the federal lawsuit to draw media attention against the foundation and thereby pressure a settlement in the land dispute. (Id. at pp. 1146-1147.) He was found to have filed and maintained the suit out of malice. (Id. at p. 1157.)

In Sycamore Ridge, supra, 157 Cal.App.4th 1385, plaintiffs’ attorneys in the underlying suit filed a “shotgun”-type complaint on behalf of tenants and employees of an apartment complex, without even meeting or speaking to some of their clients. (Id. at pp. 1392-1393, 1409.) The complaint alleged personal injuries and property damage based on poor living conditions in the complex. (Id. at pp. 1402-1403.) One plaintiff (Powell) later responded to interrogatories denying that she had any personal injuries, property damage, or loss of income; her only complaint was unspecified mental distress. (Id. at pp. 1393, 1394, 1404.) Nevertheless, her attorneys did not dismiss her from the action, and instead filed a statement of damages on her behalf. (Id. at p. 1404.) The Court of Appeal affirmed the trial court’s ruling that Sycamore Ridge had established a probability of prevailing on the malice element of a malicious prosecution action against the attorneys. (Id. at pp. 1408-1409.)

In HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204 (HMS), the title company sued HMS Capital for cancellation fees despite written escrow instructions explicitly stating that cancellation fees would not be paid. (Id. at p. 209.) HMS Capital showed a probability of prevailing on the malice element of its subsequent malicious prosecution action because of this statement in the escrow instructions and because the title company took no depositions, propounded only one set of interrogatories, and demanded $25,000 to dismiss the case. “These facts could support a conclusion that Lawyers Title was simply trying to squeeze a settlement from HMS on a baseless case, and hence evidence of malice.” (Id. at p. 218; see Soukup, supra, 39 Cal.4th at p. 296 [threats of physical violence, lack of witnesses, threats against opposing counsel evidence of malice]; Bertero v. National General Corp. (1974) 13 Cal.3d 43, 54 [attorney held deep feelings against plaintiff and admitted in a letter that he argued weak point on appeal because he wanted to show court ” ‘what a bastard’ ” plaintiff was].)

These and other courts have evaluated the whole factual scenario, not isolated facts that may have isolated counterparts from a different case, to arrive at a conclusion about a defendant’s subjective intent.

3. Analysis

We agree with the trial court that Reese failed to make a prima facie showing that the federal action was instituted or maintained with malice. There is no evidence in the record from which we can reasonably infer malice on the part of the debtor. As to the debtor’s attorneys, Reese’s purported evidence of their malice consists almost entirely of pointing out the legal infirmities in their legal theories, which we find insufficient to infer a subjectively malicious state of mind. Finally, Crowley’s liability, if any, is derivative of that of Jarrell and Verdun. We analyze the defendants separately below.

Muhammad, the debtor

“Good faith reliance on the advice of counsel, after truthful disclosure of all the relevant facts, is a complete defense to a malicious prosecution claim.” (Bisno v. Douglas Emmett Realty Fund 1988 (2009) 174 Cal.App.4th 1534, 1544 (Bisno).) Here, the facts stated in Muhammad’s declaration are uncontradicted, are fully supported by her lawyers, and establish her actions were based on the advice of counsel. The following evidence is uncontroverted: Reese had no direct communications with Muhammad about the federal action, she had no separate dealings with Reese (that is, outside of Reese’s collections on the OC judgment), she is not a lawyer, she relayed the facts as she knew them to her attorneys, she relied on her counsel for legal advice, and was advised that her claims were meritorious.

Contrary to Reese’s argument, we may not reasonably infer Muhammad knew her claims lacked merit, either due to a statute’s language or her employment with the IRS. (See, e.g., Bisno, supra, 174 Cal.App.4th at pp. 1545-1546 [client not required to understand his or her rights and obligations under a contract when he or she has engaged counsel to review the contract].) Further, no negative inferences against Muhammad may be drawn based on the settlement offers exchanged during the federal action. She believed her claims were meritorious, and costs and attorney’s fees are recoverable under the FDCPA. (15 U.S.C. § 1692k(a).) Around case inception, Reese was willing to pay Muhammad $1,000 (or even a bit more) in exchange for her dismissal of the complaint. During settlement negotiations, Ford agreed to complete debt forgiveness (alleged to be over $18,000). Muhammad’s $45,000 settlement demand, which could include her attorney’s fees and costs, was rationally related to the perceived merits of her suit.

Reese has failed to establish a probability of prevailing on the issue of malice to support a malicious prosecution claim against Muhammad, the debtor.

Attorneys Jarrell and Verdun

We separately address the attorneys’ prefiling investigation, prosecution of claims based on the venue theory, and prosecution of claims based on the accounting theory. We conclude none of the circumstances are sufficient to support a finding that the attorneys acted with a malicious state of mind.

Prefiling investigation

Jarrell and Verdun’s prefiling investigation is detailed in the record. Consistent with the district court’s denial of Reese’s Rule 11 motion, we conclude the attorneys’ prefiling investigation of the federal action was reasonable.

Prior to initiating the federal action, the attorneys met with their client to discuss the facts, and they continued to communicate with her for several months, requesting more information. They reviewed the documents in her possession and various publicly available documents. They performed legal research and analysis. They communicated with Reese to try and understand the discrepancies in the amounts of debt being reported by the Orange County and San Diego County Sheriff departments. Reese did not have a definitive answer for the discrepancy, and the attorneys developed a good faith belief that Reese was overcollecting on the OC judgment by enforcing it through the San Diego County Sheriff. They found legal support for the claim that San Diego County was not a proper venue in which to initiate a wage garnishment action relating to the debtor, or at minimum, that the law on venue was unsettled and/or should be modified. Malice cannot be inferred from the attorneys’ prefiling investigation.

Claims based on venue theory

Reese argues the attorneys’ prosecution of claims based on the theory that San Diego County was not a proper venue to initiate a wage garnishment action against the debtor (e.g., Civ. Code, § 1788.15, subds. (a), (b)) supported an inference of malice.

To infer malice from the evidence supporting lack of probable cause, a party’s behavior must have been “clearly unreasonable.” (Grindle v. Lorbeer (1987) 196 Cal.App.3d 1461, 1466 (Grindle).) The ” ‘quantum of culpable conduct which must be proved to prevail as a plaintiff in a malicious prosecution case is significantly greater than that required to prevail in a case alleging only negligence.’ ” (Ibid.)

In this case, defendants alleged in the federal complaint that the San Diego County garnishment order was flawed in that it failed to identify a valid judgment date. Instead of identifying the OC judgment entered in March 2001, the garnishment order identified a nonexistent judgment entered on July 17, 2001. If the judgment against Muhammad was invalid, defendants maintained that it was improper for Reese to obtain the garnishment order in San Diego County, where Muhammad did not reside, and the debt was not incurred. (Civ. Code, § 1788.15, subd. (b).) Moreover, defendants explained that their claim under subdivision (a) of Civil Code section 1788.15 was an extension of their claim under subdivision (b) of the same section, i.e., if the garnishment order was knowingly obtained in an improper venue (San Diego County), then service of the order was also improper. (Civ. Code, § 1788.15, subd. (a).) We cannot say the attorneys’ basis for prosecuting these claims was clearly unreasonable.

By discussing these claims, we do not mean to suggest that they are meritorious. The issue before us is whether any reasonable attorney would agree that the claims were ” ‘totally and completely’ ” devoid of merit such that their prosecution could support an inference of malice. (Sheldon Appel, supra, 47 Cal.3d at p. 885.) We conclude that an inference of malice under the circumstances is not appropriate.

Similarly, defendants’ prosecution of the federal venue claim (15 U.S.C. § 1692i) does not support an inference of malice. Section 1692i of Title 15 of the United States Code provides, in pertinent part: “Any debt collector who brings any legal action on a debt against any consumer shall— [¶] . . . [¶] . . . bring such action only in the judicial district or similar legal entity— [¶] (A) in which such consumer signed the contract sued upon; or [¶] (B) in which such consumer resides at the commencement of the action.” (Italics added.) Defendants argued that Reese’s initiation of a wage garnishment action in San Diego County was a “legal action on a debt against any consumer,” brought in an improper venue, while Reese asserted that a wage garnishment action is not a legal action “against [a] consumer.”

Reese contends that defendants’ maintaining the federal venue claim supports an inference of malice, particularly after the district court ruled against them on the anti-SLAPP motion. However, during the anti-SLAPP motion proceedings, defendants did not brief or argue the legal merits of the FDCPA. As we have noted, the district court’s ruling on Reese’s anti-SLAPP motion did not foreclose Muhammad’s independent federal claim. There is nothing in the record to suggest that defendants stopped believing in the viability of their federal claim.

The federal venue claim was not decided on the merits until the court’s order on summary judgment. The parties agree that the disputed issue—whether a wage garnishment action is a legal action “against [a] consumer” in California—has not been resolved by the Ninth Circuit Court of Appeals. Several other federal circuit courts have reviewed the statutory language, determined that they should look to the wage garnishment statutes of a given state, and decided whether in that state wage garnishment actions are directed against a consumer. The Court of Appeals for the Ninth Circuit, however, has not conducted the relevant analysis of California’s wage garnishment statutes, and the parties have identified arguably conflicting district court opinions on the matter.

Furthermore, defendants cited Fox v. Citicorp Credit Services, Inc. (9th Cir. 1994) 15 F.3d 1507, in which the court of appeals appeared to approve a venue claim similar to the one asserted by Muhammad, though defendants acknowledge the Fox decision does not address the “against any consumer” language. Defendants argued that the Ninth Circuit has shown itself to be a more debtor-protective federal circuit than its sister circuits and might be persuaded to adopt an alternative construction of the statute.

Based on the foregoing, we conclude no inference of malice can be drawn from the attorneys’ maintenance of the federal venue claim. Malicious prosecution actions must be “carefully circumscribed so that litigants with potentially valid claims will not be deterred from bringing their claims to court . . . .” (Sheldon Appel, supra, 47 Cal.3d at p. 872.) Litigants have the right to present issues that are arguably correct ” ‘even if it is extremely unlikely that they will win . . . .’ ” (Id. at p. 885.) Reese has not sufficiently shown that the venue-based claims were brought or maintained for an improper purpose.

Claims based on accounting theory

Reese also contends the attorneys had no factual or legal basis to institute or maintain their claims of misrepresentation and overcollection, and their continued prosecution of these claims supports an inference of malice. We do not agree.

To date, there have been no factual findings on the accounting-based claims. As we have discussed, the attorneys conducted a reasonable prefiling inquiry to support their allegations. The attorneys rationalized that the Orange County Sheriff, as a levying officer, is under a legal duty to compute and collect accruing interest (§ 685.050), which conflicted with Reese’s explanation that the discrepancy in debt amounts was due to the Orange County Sheriff’s omission of interest from its calculation. During litigation, defendants hired a forensic accountant, who opined that “RLG was erroneously collecting compound interest from Ms. Muhammad” based on the expert’s review of Reese’s ledgers. The attorneys were not required to accept Reese’s explanations at face value and, instead, were under a duty to advocate on behalf of their client. (Litinsky v. Kaplan (2019) 40 Cal.App.5th 970, 981 [“Unless a lawyer discovers that his or her client has provided false information, the lawyer is generally entitled to rely on information from his or her client in filing or prosecuting a lawsuit.”].)

Even if the accounting claims were objectively untenable—and there has been no such finding—subjective malice may not be inferred solely from a lack of legal tenability (Jarrow, supra, 31 Cal.4th at p. 743). In summary, we find no basis to infer that the accounting-related claims were brought or maintained for a malicious purpose. (Grindle, supra, 196 Cal.App.3d at p. 1467.)

Crowley

Crowley is Jarrell and Verdun’s employer. Crowley’s alleged liability for malicious prosecution is based on the doctrine of respondeat superior. (E.g., Clark Equipment Co. v. Wheat (1979) 92 Cal.App.3d 503, 520-521.) Because Reese failed to demonstrate a probability of prevailing on its malicious prosecution action against attorneys Jarrell and Verdun, it likewise failed to demonstrate a probability of prevailing against Crowley.

C. Probable Cause

We need not separately address the issue of probable cause because we are affirming the trial court’s ruling on the issue of malice. An inability to prevail on the element of malice is sufficient to defeat a cause of action for malicious prosecution and to support the granting of Muhammad’s anti-SLAPP motion.

DISPOSITION

The judgment is affirmed. Costs on appeal are awarded to defendants.

HALLER, Acting P. J.

WE CONCUR:

O’ROURKE, J.

AARON, J.