Filed 6/26/20 Truong v. Philhower CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

DIANE AI-PHUONG TRUONG et al.,

Plaintiffs and Appellants,

v.

KRISTEN H. PHILHOWER, APLC, et al.,

Defendants and Respondents.

G055054, G055057, G055154,
G055155, G055566, G056272

(Super. Ct. No. 30-2016-00879877)

O P I N I O N

Appeal from a judgment and orders of the Superior Court of Orange County, Martha K. Gooding, Judge. Affirmed.

Christopher Campbell for Plaintiffs and Appellants.

Chapman, Glucksman, Dean, Roeb & Barger, Glenn T. Barger and Ashley H. Verdon for Defendant and Respondent Kristen H. Philhower, ALPC.

Hamilton Law Offices and John M. Hamilton for Defendants and Respondents Christopher Tran and Vitaland Group.

Kaufman Dolowich Voluck, Andrew J. Waxler and Jennifer E. Newcomb for Defendants and Respondents Michael R. White and White & Reed.

* * *

Diane Ai-Phuong Truong (Truong) and Amazeen International, Inc. (Amazeen) appeal from the trial court’s judgment and orders granting anti-SLAPP strike motions (Code Civ. Proc., § 425.16) regarding their malicious prosecution claims that they brought against (1) Christopher Tran (Tran) and his company, Vitaland Group, LLC (collectively Tran/Vitaland); (2) attorney, Kristen H. Philhower, APLC (Philhower); and (3) Philhower’s cocounsel, White & Reed, LLP and Michael R. White (collectively W&R). Truong and Amazeen also appeal the attorney fee awards the trial court entered on behalf of Tran/Vitaland, Philhower, and W&R; they further appeal the trial court’s denial of their ex parte application to vacate the judgment that the court entered after its anti-SLAPP and attorney fee rulings. As we explain, none of appellants’ contentions have merit. We therefore affirm the trial court’s judgment and orders.

FACTUAL AND PROCEDURAL BACKGROUND

The underlying action in which Tran/Vitaland sued Truong, Amazeen, and other defendants arose in 2011, when Tran sought to establish a home shopping network in a joint venture with Truong’s company, Saigon Communications, Inc. (Saigon TV). The goal of the proposed network was to cater to Vietnamese consumers in Southern California. Truong owned a 70 percent stake in Saigon TV and served as its vice president. Her brother, Nam Michael Nguyen, owned the remaining interest and was president. Truong also was Amazeen’s majority shareholder and a director and officer in the company, which she operated with her close friend, Michelle Lee.

In December 2011, Saigon TV agreed to Tran’s proposal and entered into a joint venture agreement with Vitaland. According to Tran, Truong was present when Tran disclosed two years of research that served as the foundation for the venture. That research involved home shopping product suppliers, distributors, vendors, the terms of agreements with those vendors for products, and other benefits of partnering together. Under the joint venture agreement, Vitaland was responsible for daily operations of the home shopping enterprise, including procuring products and overseeing sales and distribution, while Saigon TV would produce the television programming to promote sales. As part of the agreement, Vitaland subleased space on Saigon TV’s premises.

According to Tran in 2012, after Vitaland had moved into the subleased space and set up its operations, Saigon TV abruptly “pulled the plug” on the deal with no justification. Tran attempted to pursue the venture on his own, but with limited success.

In early 2013, Saigon TV permitted Amazeen to occupy space on its premises adjacent to Vitaland’s offices. According to Tran, he was told Truong was grooming Amazeen to take over the home shopping venture. Soon thereafter, Saigon TV initiated eviction proceedings against Vitaland.

In October 2013, Tran approached Philhower to discuss potential legal remedies. Philhower learned in her preliminary investigation that Truong and Nguyen had allegedly used similar tactics to seize Saigon TV from its founder, who won a judgment against them for fraud and breach of contract, among other claims, which was affirmed in Phan v. Nguyen (May 30, 2012, G045214) [nonpub. opn.].

Tran and Vitaland sued Truong, Nguyen, Saigon TV, Amazeen, and Lee in December 2013. That lawsuit resulted in a favorable judgment against Saigon TV and Nguyen, but not Truong, Amazeen, or Lee. Specifically, in April 2016, the jury returned verdicts against Saigon TV for breach of contract and breach of the covenant of good faith and fair dealing, and against Nguyen for intentional interference with a contract. While the jury found Truong and Amazeen knew of the underlying home shopping agreement between Tran/Vitaland and Saigon TV, the jury did not find Truong, Amazeen, or Lee liable on Vitaland’s claims. In May 2016, the trial court entered defense judgments accordingly and a judgment against Saigon TV and Nguyen in favor of Vitaland for $56,436.

During two years of litigation before the jury verdict, Tran and Vitaland’s claims survived Truong and Amazeen’s attempts to dispose of them by demurrer, by summary judgment or summary adjudication, by judgment on the pleadings, and by nonsuit. On the motions for judgment on the pleadings and nonsuit, the trial court concluded it was “not even a close call” as to whether there was sufficient evidence to impute Amazeen’s and Saigon TV’s alleged interference with the home shopping joint venture to Truong. The court observed “the conduct of the parties in this case leaves a lot to be questioned about on the use of a corporation frankly, and I’m just uncomfortable allowing defendant the protection afforded individuals by the laws [of] corporations [given] how [] they’ve been used in this case.”

The court focused on Truong’s role in Saigon TV, concluding a jury could find the corporate identity “to be a mere sham” based on “testimony from your own witnesses and from the plaintiff’s witnesses that there was a 70 percent shareholder who didn’t know the first thing about how it was operated and signed everything that was put in front of her. [¶] The defendant Nguyen was in fact the sole person running that company . . . [a]nd this Amazeen seems to be a spin-off of that . . . .” The court found Truong’s conduct at Saigon TV “leaves a lot—there’s a lot in question about it,” including her right to immunity under the incorporation shield when she allegedly acted in concert with her brother while disregarding the corporate form herself. The court ruled it was for the jury to evaluate Truong’s and Amazeen’s liability because their activities “from before they signed the articles of incorporation, before and after at least raises many questions about the propriety of their conduct.”

In denying nonsuit, the court observed that jurors could reject defense testimony that Truong supposedly “doesn’t know anything about how they operate, how they do business” when at the same time other evidence showed “she is a member of the board and an officer of the Amazeen corporation that all of a sudden sets up shop and starts to conduct business right next door but really doesn’t do any business. [¶] One wonders why that occurs. And as this litigation starts to unfold, I think there [are] reasonable inferences that the jury can draw from all of that. . . . [¶] They might not find out [whether the defendants actually met to plot against Tran/Vitaland] but they can easily infer from the conduct of all the parties and how these businesses were run and how this occurred” that “there was a conspiracy.”

In October 2016, six months after the jury’s verdict in the underlying action, Truong and Amazeen filed the malicious prosecution action leading to this appeal. The trial court initially transferred the case as a related matter to the trial judge who presided over the original action, but Truong and Amazeen filed a peremptory challenge and the matter was returned to Judge Martha K. Gooding. In December 2016, Tran/Vitaland, Philhower, and W&R filed motions to strike the complaint as a strategic lawsuit against public participation (SLAPP suit) chilling court access and thereby violating state public policy (Code Civ. Proc., § 425.16).

The parties briefed the issue, and after a hearing in March 2017, the court granted the strike motions in a detailed ruling in May 2017. Truong and Amazeen alleged the defendants maliciously prosecuted 10 of Tran/Vitaland’s 12 causes of action in the underlying lawsuit, and the trial court in granting the anti-SLAPP motions succinctly resolved these claims, some individually and some in categories of claims.

Defendants had dismissed in the underlying action their first and second causes of action in their original complaint against Truong for breach of contract and breach of the implied covenant of good faith and fair dealing, respectively, after the court sustained Truong’s demurrer on grounds she was not a party to the joint venture or sublease agreements. At the anti-SLAPP hearing, however, the trial court found the underlying plaintiffs’ claims to be “at a minimum ‘tenable,’ given her close relationship to the corporation and resulting potential for liability” on alter ego grounds. The court therefore found that anti-SLAPP protection applied to Tran/Vitaland’s first and second causes of action.

The trial court in the underlying action had sustained demurrers to the seventh and tenth causes of action for negligent interference with contract and abuse of process (based on filing the unlawful detainer action to evict Vitaland). The court concluded in the underlying action that California did not recognize a cause of action for negligent interference with contract, and observed that the filing of an action cannot support an abuse of process claim, even if it is malicious.

The court in the ensuing anti-SLAPP proceedings concluded Plaintiffs’ malicious prosecution claim was barred based on these dismissed causes of action because “[e]ven if there were no probable cause to allege [them], Plaintiffs have not met their burden to show they were initiated with malice.” The court based its ruling on authority that “‘less than thorough’” pre-filing research does not necessarily amount to “‘overt malice . . . or . . . malicious purpose in filing the [] claim. . . .’” The court also found that Defendants’ reference to the eviction “through closing arguments” did not constitute improperly “prosecuting” the dismissed cause of action, as Plaintiffs claimed, because the alleged eviction related to Defendants’ fraud and other claims against Plaintiffs. Nor did the court find Tran/Vitaland’s “vigorous advocacy” in the underlying case amounted to malice.

The court in the anti-SLAPP proceeding similarly found no basis for a malicious prosecution action in Tran/Vitaland’s dismissal in the underlying proceeding of their fourth cause of action for misappropriation of trade secrets. The court found the fact that Plaintiffs cited testimony by their experts that “a Vietnamese home shopping network” was not a novel idea, and therefore Plaintiffs contended it was not proprietary, did not mean “no reasonable person on the other side could offer a contrary view.” The court also noted Defendants’ explanation that Tran withdrew the claim during trial “for strategic reasons to eliminate the need for additional jury instructions (when there ultimately were 69 [on other claims]) and the need and cost for an expert.”

The court also concluded there had been no termination on the merits in Tran’s voluntary dismissal of his claims when the underlying defendants had opposed them based on an alleged ‘“jurisdictional defect.”’ Specifically, defendants had contested jurisdiction because Tran, as opposed to Vitaland, lacked standing to assert claims for which he “was not a party to the agreements at issue.” The court observed that the defendants in the underlying matter had asserted standing in a jurisdictional sense. The court correspondingly relied on authority that dismissal for lack of jurisdiction does not support a malicious prosecution claim.

Having issued its ruling in early May 2017 granting the anti-SLAPP strike motions filed by Tran/Vitaland, Philhower, and W&R, the trial court after a hearing, subsequently granted their motions for attorney fees. Truong and Amazeen appealed the trial court’s orders entering its anti-SLAPP rulings and its attorney fee order. When the trial court subsequently entered a judgment of dismissal on Truong and Amazeen’s malicious prosecution claim, they also appealed the judgment. We have consolidated these appeals to hear them together in this matter.

DISCUSSION

1. Jurisdiction

As a preliminary matter, appellants contend the trial court lacked jurisdiction to enter judgment on their malicious prosecution complaint after the court struck the complaint as a SLAPP suit. They argue that their pending appeals of the trial court’s anti-SLAPP ruling and attorney fees order deprived the court of jurisdiction to enter judgment. The trial court received briefing on the issue. After a hearing, the court entered judgment, from which Truong and Amazeen also appealed.

The court did not lack jurisdiction to enter the judgment. “An order granting or denying a special motion to strike [under the anti-SLAPP statute] shall be appealable under Section 904.1.” (§ 425.16, subd. (i).) Under section 904.1, “An appeal . . . may be taken . . . [¶] . . . [¶] . . . [f]rom an order granting or denying a special motion to strike under Section 425.16.” (§ 904.1, subd. (a)(13).) But appellants do not dispute the trial court’s authority to consider and enter an attorney fee award in favor of a defendant prevailing on an anti-SLAPP motion, though an appeal is pending. Perfecting an appeal does not automatically stay proceedings in the trial court on ancillary matters, including an award of fees and costs under section 425.16, subdivision (c). (Barry v. State Bar of California (2017) 2 Cal.5th 318, 326; Carpenter v. Jack in the Box Corp. (2007) 151 Cal.App.4th 454, 463.)

Instead, appellants rely on inapposite authority for the proposition that the trial court was precluded from entering a judgment of dismissal which included an order for attorney fees based on its respective anti-SLAPP and attorney fee rulings. (Citing Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180 (Varian). In Varian, the high court considered “whether the perfecting of an appeal from the denial of a special motion to strike automatically stays all further trial court proceedings on the merits upon the causes of action affected by the motion.” (Id. at p. 186, italics added.) There, following denial of the defendants’ anti-SLAPP motion, the plaintiff’s claims proceeded to trial and a jury verdict against the defendants. (Id. at pp. 186-188.) Varian reversed the entry of judgment on the jury’s verdict, concluding that a full-blown jury trial following the trial court’s anti-SLAPP ruling was not merely collateral or ancillary to the court’s ruling. (Id. at pp. 191-193.)

Varian, however, said nothing about the circumstances which are present here. In particular, it did not overrule authority permitting entry of judgment and enforcement of an attorney fee award in anti-SLAPP proceedings, pending appeal. (Dowling v. Zimmerman (2001) 85 Cal.App.4th 1400 (Dowling).) In Dowling, the plaintiff “appeal[ed] from a judgment dismissing his complaint against [the] defendant and respondent . . . under the provisions of section 425.16, and awarding her, under subdivision (c) of that section, reasonable attorney fees.” (Id. at p. 1405, fn. omitted.)

Dowling held that the automatic stay rule pending appeal (§ 916, subd. (a)) did not apply. As Dowling explained, “The purpose of the automatic stay rule is ‘to protect the appellate court’s jurisdiction by preserving the status quo until the appeal is decided. The rule prevents the trial court from rendering an appeal futile by altering the appealed judgment or order by conducting other proceedings that may affect it.”’ (Dowling, supra, 85 Cal.App.4th at p. 1428, italics added.) As Dowling explained, the court’s attorney fee order and entry of judgment did not alter the court’s anti-SLAPP or attorney fees ruling; to the contrary, it effectuated the court’s rulings. The same is true here.

At oral argument, appellants suggested entry of the judgment harmed their interests because, by incorporating the anti-SLAPP attorney fee order into the judgment, the trial court now made it necessary for them to obtain a substantial undertaking to stay enforcement of the judgment pending appeal. Their appeal of the attorney fee order, however, independently required an undertaking, regardless of the subsequent judgment.

The perfecting of an appeal ordinarily stays the enforcement of the appealed judgment or order (§ 916, subd. (a)), except when the appeal is from a judgment or order for “[m]oney or the payment of money” (§ 917.1, subd. (a)(1)). Such an appeal does not stay enforcement of the appealed judgment or order unless an undertaking is given. (Ibid.) Appellants therefore suffered no prejudice from entry of the judgment, and their challenge to entry of the judgment is therefore moot.

2. Anti-SLAPP Ruling

Turning now to the primary issue on appeal, we must determine whether the trial court correctly granted the Defendants’ anti-SLAPP strike motions. After discussing the standard of review and governing anti-SLAPP principles, we will consider the individual claims or categories of claims in Tran/Vitaland’s original complaint or first amended complaint in the underlying action. We then evaluate Plaintiffs’ contention that the trial court erred in granting Defendants’ respective anti-SLAPP motions to strike Plaintiffs’ malicious prosecution complaint based on those claims or categories of claims.

A. Standard of Review and Governing Anti-SLAPP Law

“A special motion to strike under section 425.16, the so-called anti-SLAPP statute, allows a defendant to gain early dismissal of a lawsuit that qualifies as a SLAPP.” (Siam v. Kizilbash (2005) 130 Cal.App.4th 1563, 1568.) “SLAPP is an acronym for ‘strategic lawsuit against public participation.’” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 732, fn. 1 (Jarrow).)

This court has recently set out the governing standard of review. “Section 425.16, subdivision (b)(1) provides that a cause of action against a person arising from an act in furtherance of a constitutionally protected right of free speech may be stricken unless the plaintiff establishes the probability she will prevail on the claim. There is a two-step analysis under this section. First, we must determine whether the defendant has met the burden to show “‘the challenged cause of action is one arising from protected activity.’” [Citation.] Second, we must decide whether the plaintiff has met the burden to show the likelihood of prevailing on the claim. [Citation.] We review an order denying an anti-SLAPP motion de novo.” (Mobile Medical Services, etc. v. Rajaram (2015) 241 Cal.App.4th 164, 170.)

On the first prong, there is no dispute that the conduct targeted by a claim of malicious prosecution is entitled to anti-SLAPP protection, namely, the constitutional right to petition a court in the underlying lawsuit for the redress of alleged harms. (§ 425.16, subds. (b)(1) & (e)(1), (2); Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056.) Every court “that has addressed the question has concluded that malicious prosecution causes of action fall within the purview of the anti-SLAPP statute.” (Jarrow, supra, 31 Cal.4th at p. 735.)

On the second prong, any cause of action “against a person arising from any act . . . in furtherance of the person’s right of petition or free speech” must be stricken, upon a special motion to strike, “unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” (§ 425.16, subd. (b)(1).)

Pertinent to the second prong, “claims for malicious prosecution are viewed with disfavor due to their potential to exert an ‘undue “chilling effect” on the ordinary citizen’s willingness to report criminal conduct or to bring a civil dispute to court.’ [Citations.] It is for this reason, as our Supreme Court has observed, that ‘the elements of the tort have historically been carefully circumscribed so that litigants with potentially valid claims will not be deterred from bringing their claims to court by the prospect of a subsequent malicious prosecution claim.”’ (Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 674.) Thus, to show a probability of prevailing on their claim, malicious prosecution plaintiffs bear the burden to produce admissible evidence establishing three distinct elements: (1) the underlying action was pursued to a legal termination in their favor; (2) the defendants lacked probable cause in bringing the underlying claims; and (3) the defendants initiated or continued to pursue the underlying action with malice. (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 871 (Sheldon Appel).)

As to the probable cause element in particular, a lenient standard applies to avoid chilling the right of petition. (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 817 (Wilson).) “[P]robable cause to bring an action does not depend upon it being meritorious, as such, but upon it being arguably tenable, i.e., not so completely lacking in apparent merit that no reasonable attorney would have thought the claim tenable.” (Id. at p. 824.) As the Supreme Court has explained: “[T]he probable cause element calls on the trial court to make an objective determination of the “reasonableness” of the defendant’s conduct, i.e., to determine whether, on the basis of the facts known to the defendant, the institution of the prior action was legally tenable. The resolution of that question of law calls for the application of an objective standard to the facts on which the defendant acted.” (Sheldon Appel, supra, 47 Cal.3d at p. 878.) “The standard safeguards the right of both attorneys and their clients ““to present issues that are arguably correct, even if it is extremely unlikely that they will win.””” (Parrish v. Latham & Watkins (2017) 3 Cal.5th 767, 776.)

With these principles in mind, we turn to the categories of claims or individual claims in Tran/Vitaland’s underlying lawsuit.

B. Sustained Demurrer to Causes of Action, without Leave to Amend

Appellants argue the trial court could not reasonably dismiss two of their malicious prosecution claims—based on, respectively, Tran/Vitaland’s seventh cause of action for negligent interference with a contract and tenth cause of action for abuse of process—given the court’s earlier demurrer ruling. Specifically, they claim dismissal on anti-SLAPP grounds was improper because, in the underlying action, the court sustained appellants’ demurrer to these causes of action in the original complaint without leave to amend. As we explain, the trial court’s demurrer ruling illustrates that its subsequent malicious prosecution ruling as to these two causes of action was correct. We address the underlying seventh and tenth causes of action in turn.

The court sustained appellants’ demurrer to the seventh cause of action because, under established case law, “‘[i]n California there is no cause of action for negligent interference with contractual relations.’” (Davis v. Nadrich (2009) 174 Cal.App.4th 1, 9.) Appellants assert this finding established in one stroke all the elements of malicious prosecution by demonstrating not only a favorable termination of this claim on the merits, but also a lack of probable cause and the existence of malice because, with “minimal research,” respondents “would have discovered there is no tort for negligent interference with contract.”

As Philhower correctly points out, however, each element in a malicious prosecution claim must be separately established. For example, “a lack of probable cause in the underlying action, by itself, is insufficient to show malice” (Daniels v. Robbins (2010) 182 Cal.App.4th 204, 225), because probable cause is measured by an objective yardstick, which, “without more, would not logically or reasonably [prove] . . . the actor’s subjective malicious state of mind.” (Downey Venture v. LMI Ins. Co. (1998) 66 Cal.App.4th 478, 498.) Instead, “the presence of malice must be established by other, additional evidence.” (Ibid.)

Here, appellants’ premise regarding a lack of probable cause is faulty. While it is true, as Davis v. Nadrich explained, that “the California Supreme Court . . . [citation] has rejected a cause of action for negligent interference with contract,” there is a similar “cause of action for negligent interference with prospective economic advantage . . . .” (Davis v. Nadrich, supra, 174 Cal.App.4th at p. 9.) Indeed, the trial court in the underlying action expressly overruled appellants’ demurrer to Tran/Vitaland’s ninth cause of action for negligent interference with prospective economic advantage.

Appellants ignore the ninth cause of action. They categorize Tran/Vitaland’s pleading strategy as a “shotgun tactic” that courts condemn when plaintiffs “proceed[] on counts and theories which they know or should know to be groundless.” (Citing Crowley v. Katleman (1994) 8 Cal.4th 666, 678.) But this characterization is inapt here because the trial court specifically overruled the demurrer to the ninth cause of action for negligent interference with prospective economic advantage, thereby demonstrating that Tran/Vitaland’s interference theory was not wholly groundless. The close relationship between the seventh and ninth causes of action persuades us the trial court was correct in concluding that the survival of Tran/Vitaland’s interference claim barred the subsequent malicious prosecution claim.

This overlap between two similar causes of action is exemplified in the trial court’s demurrer ruling on Tran/Vitaland’s abuse of process cause of action. Tran/Vitaland did not allege this cause of action against Amazeen, only Saigon TV, Nguyen, and Truong. While the court in the underlying action sustained the defendants’ demurrer without leave for Tran/Vitaland to reallege abuse of process—which Truong again cites as the tripartite basis showing favorable termination, untenability, and malice to support her malicious prosecution claim—the court’s order explaining its demurrer ruling dispels her argument.

The court explained that the eviction proceedings initiated against Tran/Vitaland could not support Tran/Vitaland’s abuse of process claim because, under well-established law, “[t]he filing or maintaining of a lawsuit cannot form the basis of an abuse of process action.” (Italics added; see Oren Royal Oaks Venture v. Greenberg, Bernhard, Weiss & Karma, Inc. (1986) 42 Cal.3d 1157 (Oren).) This is because expansive grounds for an abuse of process claim would chill “the freedom of an individual to seek redress in the courts.” (Id. at p. 1169.)

Abuse of process and malicious prosecution are nonetheless related. The former requires misuse of court processes for an ulterior motive; it does not require that the plaintiff allege the defendant lacked probable cause in the underlying proceedings. (Ramona Unified School Dist. v. Tsiknas (2005) 135 Cal.App.4th 510, 520.) In contrast, malicious prosecution requires a lack of probable cause in instituting or maintaining the underlying lawsuit. This “lack-of-probable-cause requirement in the malicious prosecution tort plays a crucial role in protecting [plaintiffs’ general] right to seek judicial relief” (Oren, supra, 42 Cal.3d at p. 1170), while also proving a means for defendants subjected to groundless claims to vindicate “the interest . . . in being free from unjustified litigation.” (Id. at p. 1169.)

Here, the trial court’s demurrer ruling did not preclude Tran/Vitaland from amending their abuse of process claim to one for malicious prosecution based on the absence of probable cause to support the eviction proceedings. Indeed, the court in its demurrer ruling specifically noted that while Tran/Vitaland alleged the underlying eviction action against them had been groundless because Tran/Vitaland “did not owe rent as alleged and that defendants had no right to collect rent,” Tran/Vitaland only alleged abuse of process, which does not lie for filing an unlawful detainer or other action. (Italics added.)

The fact that Tran/Vitaland may have made a technical pleading error in alleging a lesser tort (abuse of process)—when their claims essentially stated the greater one—does not, in our view, support Truong’s subsequent malicious prosecution claim. To the contrary, standing down in litigation can be a virtue. After all, ‘“[t]he law favors the resolution of disputes. “This policy would be ill-served by a rule which would virtually compel the plaintiff to continue his litigation in order to place himself in the best posture for defense [against a] malicious prosecution action.”’” (Contemporary Services Corp. v. Staff Pro Inc. (2007) 152 Cal.App.4th 1043, 1057.) Thus, even assuming “minimal research” would have shown abuse of process’s nonviability, we agree with the trial court’s ruling that initially pursuing the claim did not support a finding of malice necessary to support Truong’s subsequent malicious prosecution action.

Truong also argues the fact she did not sign the agreement between Saigon TV and Vitaland establishes a lack of probable cause—and therefore also malice—in Tran/Vitaland’s abuse of process claim against her. But as the trial court observed in its demurrer ruling, while contract claims against Truong were not viable given that she was not a party to the alleged lease, tort claims were fair game under Truong’s theory of co-conspirator vicarious liability. Abuse of process and malicious prosecution are tort causes of action, and thus properly the subject of conspiracy claims. The court’s subsequent anti-SLAPP ruling against Truong was therefore proper.

C. Sustained Demurrer to Causes of Action, with Leave to Amend

Truong also challenges the trial court’s anti-SLAPP ruling concerning the first and second causes of action that Tran/Vitaland alleged against her and the other defendants, but not against Amazeen. Truong again claims that because the trial court sustained the underlying defendants’ joint demurrer to these two causes of action, albeit with leave to amend, she established the elements of her ensuing malicious prosecution claim. We address these underlying claims in Tran/Vitaland’s original complaint together: the first cause of action for breach of contract and the second cause of action for breach of the covenant of good faith and fair dealing (GFF covenant).

The trial court sustained the underlying defendants’ demurrer to these claims in part because Tran/Vitaland failed to specify an amount of damages from the alleged breaches, other than to state that “their business was decimated.” Tran/Vitaland filed a first amended complaint correcting this defect. Tran dismissed his individual claims just as trial began; Vitaland then obtained jury verdicts against Saigon TV for these contract claims and against Nguyen for the related cause of action of intentional interference with contractual relations. Back at the demurrer stage, however, the trial court sustained Truong’s demurrer to Tran/Vitaland’s contract and GFF covenant claims because “no contract between plaintiff[s] and . . . Ai-Phuong [Truong] has been pleaded.” Tran/Vitaland omitted these claims against Truong in their first amended complaint.

Truong refers to Vitaland and Saigon TV’s joint venture as the Cooperation Agreement. She insists on appeal that “[t]here was no probable cause for Vitaland, Tran and Philhower to file and maintain the causes of action against [her] for Breach of the Cooperation and Sublease Agreements and/or for Breach of the Covenant of Good Faith” because she “was not a party to either agreement.” In other words, Tran, Vitaland, and Philhower “knew or should have known from the contents of the very agreements upon which these causes of action were based, that [Truong] was not a party to the same and, thus, [they] lacked probable cause to file and prosecute these claims as against [Truong].”

In granting Tran/Vitaland’s anti-SLAPP motion concerning these contractual claims, the trial court relied on the alter ego doctrine, which Truong fails to address on appeal. Based on alter ego principles, the court found “probable cause for the initial inclusion of these claims” against Truong “given her close relationship to the corporation and resulting potential for liability.” In other words, although Saigon TV signed the underlying contract and lease agreement with Vitaland, the court found that Saigon TV’s corporate veil was vulnerable, thereby “show[ing] that the claims against Truong were at a minimum ‘tenable.’”

The record supports the court’s finding. An alter ego determination is an equitable finding that rests in the trial court’s discretion as a question of fact. (Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220, 1248.) The doctrine pierces a corporation’s ordinary status as a legal entity separate and apart from its shareholders, officers, and directors “where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538.)

The essence of the alter ego doctrine “‘is that justice be done.’ [Citation.] Before the alter ego doctrine will be invoked in California, two conditions generally must be met. [¶] ‘First, there must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result if the acts in question are treated as those of the corporation alone.’” (Curci Investments, LLC v. Baldwin (2017) 14 Cal.App.5th 214, 221.)

Here, as the trial court observed, the unity of interest prong was met where “the evidence (not disputed by Plaintff[]) showed that Truong was 1 of 2 board members of Saigon, and a 70% owner.” In addition, and relevant to both prongs, the court in denying the defendants’ motions for nonsuit and judgment on the pleadings in the underlying lawsuit had characterized Saigon TV’s corporate form as “a mere sham.”

In light of this evidence, and Truong’s failure to address the trial court’s alter ego analysis, there is no basis to overturn the court’s probable cause finding. “Appealed judgments and orders are presumed correct, and error must be affirmatively shown.” (Hernandez v. California Hospital Medical Center (2000) 78 Cal.App.4th 498, 502.) “‘This is not only a general principle of appellate practice but an ingredient of the constitutional doctrine of reversible error.’” (Denham v. Superior Court (1970) 2 Cal.3d 557, 564 (Denham).)

D. Misappropriation of Trade Secrets

Appellants contend the trial court erred in concluding their expert’s deposition testimony undercutting the novelty of a “Vietnamese home shopping network” failed to establish that Tran and Vitaland lacked probable cause to assert their trade secrets claim in their first amended complaint. As appellants phrase their argument on appeal, Tran/Vitaland’s so-called ‘“business plan”’ targeting this demographic “was simply a rip-off of the ‘QVC’ model” of televised home shopping programming, rather than something original and worthy of protection as a trade secret.

Appellants further argue that Tran/Vitaland’s voluntary dismissal of the cause of action demonstrates respondents, including attorneys Philhower and W&R, knew it was untenable. Appellants also cite as support for their lack of probable cause argument respondents’ failure to identify in discovery the specific contours of their trade secret claim under section 2019.210. We are not persuaded.

Section 2019.210 governs discovery procedures regarding trade secret claims; it is not a gatekeeping device for probable cause or the tenability of claims. The statute merely provides that, if a plaintiff seeks to conduct discovery regarding his or her trade secret claims, “the party alleging the misappropriation shall identify the trade secret with reasonable particularity subject to any orders that may be appropriate.” (§ 2019.210.) As a discovery mechanism, it is not a vehicle “to determine as a matter of law on the basis of evidence presented whether the trade secret actually exists.” (Brescia v. Angelin (2009) 172 Cal.App.4th 133, 149.) In other words, this discovery procedure—or its absence—does not serve as a “‘miniature trial on the merits of a misappropriation claim . . . .’”  (Perlan Therapeutics, Inc. v. Superior Court (2009) 178 Cal.App.4th 1333, 1346.)

Tran/Vitaland’s decision not to file a section 2019.210 disclosure to conduct discovery did not establish, as appellants claim, that the trade secrets cause of action lacked probable cause. Respondents reasonably could conclude that because Tran/Vitaland believed they already knew how appellants came into possession of their claimed trade secrets, additional discovery on these points was not necessary. Respondents could reasonably conclude appellants would deny the conspiracy and that the issue would simply become a credibility contest at trial. Who would the jury believe? Philhower also points out that the parties had been conferring about the scope of a potential protective order, as permitted by section 2019.210, which became moot with dismissal of the trade secrets claim.

Consequently, whether measured at the outset of the case or at the time of dismissal, no section 2019.210 disclosure was necessary. Additionally, the strategic reason respondents provided for dismissing their trade secrets claim as trial began—to streamline a matter that had ballooned to 69 separate jury instructions on the other matters tried—also justified the trial court’s conclusion it was not likely appellants would meet their burden to establish malice.

In any event, respondents’ reasons for dismissing the claim—whatever they were—do not bear on probable cause, which is evaluated objectively. (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 817.) Trade secrets include not only business plans (Parrish v. Latham & Watkins, supra, 3 Cal.5th at p. 772), but also ‘“know how”’ and customer lists. (Components for Research, Inc. v. Isolation Products, Inc. (1966) 241 Cal.App.2d 726, 729; Courtesy Temporary Service, Inc. v. Camacho (1990) 222 Cal.App.3d 1278, 1287.) An objective basis supported Tran/Vitaland’s trade secrets claim based on Tran’s ready-to-execute plans, including product sourcing and pricing agreements, along with prescreened vendor lists, that he had compiled in two years of research. Appellants’ claim that they were likely to succeed in proving malicious prosecution of the trade secrets cause of action therefore fails.

E. Remaining Causes of Action

Appellants argue, as to the remaining causes of action for which they asserted malicious prosecution, that respondents “lacked probable cause to file and/or continue to prosecute Tran’s individual claims.” We briefly summarize those five tort causes of action as asserted by both Tran and Vitaland in their first amended complaint. First, intentional interference with contract was based on appellants’ alleged conspiracy to subvert and displace Tran/Vitaland’s home shopping joint venture agreement with Saigon TV. Second, intentional interference with prospective economic advantage stemmed from appellants’ alleged conspiracy to insert themselves as substitutes with certain vendors and suppliers or, third, negligently interfering with prospective economic advantage in the same manner. Finally, appellants’ alleged participation in fraudulent or negligent misrepresentations, concealments, and promises to Tran/Vitaland regarding the joint venture and sublease agreements formed the basis for their fourth and fifth causes of action.

As the trial court observed in its anti-SLAPP ruling, Truong and Amazeen did not allege Vitaland “lacked probable cause with respect to these claims.” The court therefore found that “[p]laintiffs have not met their burden to demonstrate that these causes of action are subject to the[ir] malicious prosecution claim.”

All five causes of action that Truong and Amazeen now challenge survived the underlying defendants’ attempts to dispose of them by demurrers, a motion for summary judgment or summary adjudication, a motion for judgment on the pleadings, and a nonsuit motion. Vitaland proceeded to trial on these claims while Tran dismissed all of his individual claims as trial began. In the anti-SLAPP proceedings, Tran submitted evidence that the motions for dismissal were made for strategic reasons to streamline the case given that the issues destined for the jury generated not only 69 jury instructions, but also a verdict form spanning 25 pages with 70 special verdict questions.

The jury did return defense verdicts on these claims as to Truong and Amazeen, but case law is uniform that “[p]robable cause may be present even where a suit lacks merit. Favorable termination [on behalf of an underlying defendant] often establishes lack of merit, yet the plaintiff in a malicious prosecution action must separately show lack of probable cause.” (Roberts v. Sentry Life Insurance (1999) 76 Cal.App.4th 375, 382 (Roberts); accord, e.g., Sheldon Appel, supra, 47 Cal.3d at p. 872.)

On appeal, appellants do not argue Vitaland lacked probable cause to bring or prosecute these five causes of action. Instead, appellants attempt to refute the force of the “interim adverse judgment” rule, which Roberts summarized regarding denial of an underlying defendant’s summary judgment motion. (Roberts, supra, 76 Cal.App.4th at p. 383.) As Roberts explained, “Because denial of summary judgment is a sound indicator of probable cause, it is sensible to accept it as establishing probable cause defeating a later malicious prosecution suit. Doing so serves the policy expressed in Sheldon Appel to discourage dubious malicious prosecution suits.” (Id. at p. 384.)

In addition to summary judgment, the interim adverse judgment rule extends to rulings against the underlying defendant on demurrer, motions for judgment on the pleadings, and nonsuit motions. (Swat-Fame, Inc. v. Goldstein (2002) 101 Cal.App.4th 613, 626, disapproved on another ground by Reid v. Google, Inc. (2010) 50 Cal.4th 512, 524; Smiley v. Citibank N.A. (1995) 11 Cal.4th 138, 145-146; Hufstedler, Kaus & Ettinger v. Superior Court (1996) 42 Cal.App.4th 55, 69.)

On appeal, appellants argue again that “Judge Horn’s rulings on motions in the underlying Tran/Vitaland Action do not establish probable cause” for various reasons, including that the court’s rulings were based in some instances “on procedural grounds,” including that appellants in their underlying motions failed to comply with the rules of court or did not meet their “burden of production” to require dismissal of the underlying claims. Appellants argue that denial of their respective motions below based on such technical defects did not amount to a ruling that the underlying plaintiffs’ claims had legal or factual merit for purposes of determining probable cause.

Even assuming arguendo that this characterization accurately represents the record, appellants’ effort to prove a negative—namely, that the trial court’s underlying rulings did not pass on the merits of the underlying plaintiffs’ claims—does not suffice to meet appellants’ burden in their malicious prosecution action to show an absence of probable cause supporting Tran or Vitaland’s underlying claims. The absence of an underlying trial court ruling is not evidence of an absence of underlying probable cause.

Appellants’ failure to specify why Vitaland allegedly lacked probable cause to assert the five tort claims forfeits their appellate challenge. Appellants have only argued favorable termination; they have not “separately show[n] lack of probable cause.” (Roberts, supra, 76 Cal.App.4th at p. 382.)

In any event, the trial court’s observations regarding conspiracy, which appellants do not address, supported all of Vitaland’s tort claims. In denying nonsuit on the same five tort claims now at issue on appeal, the trial court noted the jury could “easily infer from the conduct of all the parties and how these businesses were run and how this occurred” that “there was a conspiracy.” The court correctly observed, “You don’t have to have [witnesses] A, B and C testify there was a conspiracy. The jury can draw that inference from all the testimony that’s presented.”

As courts have long explained, “since such participation, cooperation or unity of action is difficult to prove by direct evidence, it can be inferred from the nature of the act done, the relation of the parties, the interests of the alleged conspirators, and other circumstances.” (Black v. Sullivan (1975) 48 Cal.App.3d 557, 566.) Here, Vitaland presented evidence from which the jury could infer a conspiracy, including, as Philhower summarizes on appeal, “a web of intimately-related individuals and entities, engaged in a series of suspicious acts, whose interests were clearly aligned and best served by Vitaland’s demise, thus creating, at the very least, an inference of conspiracy.” The suspicious acts included the abrupt termination of Vitaland’s joint venture agreement with Saigon TV, installation of Amazeen on the premises, Truong’s alleged statements that Amazeen would take over the home shopping enterprise, and the allegedly unfounded eviction proceedings against Vitaland. The trial court’s stated reasons for denying the underlying nonsuit amply support application of the interim adverse judgment rule regarding probable cause.

As to Tran and these same remaining five tort claims, appellants again rely on the fact he did not sign the “Cooperation Agreement and Sublease Agreement” between Vitaland and Saigon TV. In an argument regarding malice that it appears appellants may have intended to also apply to establishing a lack of probable cause, appellants invoke the disputed agreements. They contend that because “Tran was not a party thereto,” he, “in his individual capacity,” “could not establish the causation necessary to sustain his damage claims based on” the five tort claims.

Appellants make no effort to address the specifics of the five tort claims. Their probable cause challenge fails as to Tran’s alleged interference with prospective economic advantage claims because Tran’s alleged interference arose out of his relationships with those vendors he had identified and cultivated over the course of two years of research, and from whom he hoped to gain an economic advantage. Appellants’ reference to the joint venture agreement and sublease between Vitaland and Saigon TV is therefore a red herring. Tran did not sign either agreement, but he could reasonably expect to have benefited from the work he put into his vendor relationships, if appellants had not conspired to interfere with them.

Additionally, appellants fail to address the trial court’s anti-SLAPP ruling in favor of Tran on both of these claims and the three other remaining tort claims, including interference with the joint venture agreement, and fraud and misrepresentation in relation to the joint venture and sublease agreements. The court found appellants did not establish termination on the merits in their favor of these claims because, while appellants had aimed their motions for judgment on the pleadings and nonsuit against these claims, they did so on the procedural ground that Tran lacked standing to assert them.

The trial court’s anti-SLAPP ruling explained that “‘lack of standing’ is not a favorable termination on the merits pursuant to Hudis v. Crawford (2005) 125 Cal.App.4th 1586, 1592 [Hudis], but rather a ‘jurisdictional defect.’” Hudis noted that lack of standing may be “‘a technical or procedural defense’” in a particular case, and therefore “unrelated to the merits” of the action. (Ibid.) A plaintiff’s dismissal based on a standing issue therefore may not operate as “‘a concession that [the defendants] had done nothing wrong, but merely . . . that [he or she was] no longer in a position to complain of their wrongdoing.’” (Id. at p. 1591.) Such a concession does not reflect on the merits of the underlying action. (Ibid.)

In Hudis, the appellate court upheld the trial court’s order sustaining a demurrer to the plaintiff’s malicious prosecution action where the defendants had, as the plaintiffs in the underlying action, voluntarily dismissed their wrongful death suit because they had not been appointed as the decedent’s personal representatives, nor established they were successors in interest to that role. The reviewing court found their dismissal related to a lack of standing and constituted a jurisdictional defect in that case. (Hudis, supra, 125 Cal.App.4th at pp. 1591-1592.) The court concluded, “‘[A] dismissal for lack of jurisdiction does not involve the merits and cannot constitute a favorable termination.’” (Id. at p. 1592.)

Here, appellants fail to mention Hudis or the fact that they sought dismissal of Tran’s individual claims for “lack of standing.” Instead, they quote authority stating that a voluntary dismissal may be ‘“considered a termination in favor of the defendant . . . .”’ (Fuentes v. Berry (1995) 38 Cal.App.4th 1800, 1808.) We must presume the trial court’s rulings are correct, unless and until the appellant meets his or her burden to demonstrate error. (Denham, supra, 2 Cal.3d at p. 564.) Appellants’ bare claim that the trial court erred as to Tran’s claims is without merit.

3. Attorney Fees

Appellants do not challenge respondents’ compulsory right to attorney fees when they demonstrated that dozens of claims of malicious prosecution Truong and Amazeen asserted against them constituted a prohibited SLAPP claim. Instead, appellants challenge the amount awarded to each respondent for attorney fees. In effect, with up to 10 claims asserted separately by two plaintiffs against each of three defendants, plaintiffs together brought nearly 60 claims of malicious prosecution. The trial court did not abuse its discretion in awarding each defendant appropriate fees.

Under the anti-SLAPP law, “any SLAPP defendant who brings a successful motion to strike is entitled to mandatory attorney fees.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131; § 425.16, subd. (c)(1).) “[F]ee awards should be fully compensatory” and “should ordinarily include compensation for all the hours reasonably spent, including those relating solely to the fee.” (Ketchum at p. 1133.) The fees are to be determined according to the customary lodestar method, which entails multiplying each attorney’s reasonable hourly rate by the number of hours each expended. (Ibid.) A further multiplier may be calculated when attorneys take the case with the added risk of prosecuting or defending it for a contingency fee (id. at p. 1132), as the trial court noted Tran and Vitaland’s attorneys did here, for which the court added $25 per hour compared to the W&R attorneys’ rates.

In an anti-SLAPP proceeding, as is the case generally, “[t]he amount of attorney fees to be awarded is within the trial court’s sound discretion.” (Foundation for Taxpayer & Consumer Rights v. Garamendi (2005) 132 Cal.App.4th 1375, 1394.) Under that standard, appellants must show ‘“the trial court exceeded the bounds of reason”’ (Dove Audio, Inc. v. Rosenfield, Meyer & Susman (1996) 47 Cal.App.4th 777, 785); in other words, that “viewed most favorably in support of the trial court’s action, no judge could have reasonably reached the same result” (Mendoza v. Club Car, Inc. (2000) 81 Cal.App.4th 287, 301). Appellants have not meet that standard.

Appellants claim generally that the amounts awarded were duplicative; they also assert they were entitled to what they characterize as the cheaper “insurance defense” rates charged by Philhower’s counsel, compared to the much higher hourly rates for W&R’s and Tran/Vitaland’s attorneys. Appellants also suggest that their opponents’ legal work could have been performed more efficiently.

These claims fail. The trial court scrutinized the attorneys’ billing records. The trial court reduced the Philhower attorneys’ requested award by about $25,000—from almost $120,000 to just over $94,000, but the attorneys who did the bulk of the work for Philhower were much less experienced (roughly six or seven years each) compared to the combined 57 years’ experience of W&R’s two attorneys and Tran/Vitaland’s experienced attorneys. In the fee award, appellants effectively received the benefit of the “blended” billing rate of $339/hour for Philhower’s attorneys—a blend of the partner’s rate with the much lower rate for the junior attorneys—but that did not undermine the rate charged by more experienced counsel for the other defendants. The trial court’s determination that the $650 and $625 hourly rates for Tran/Vitaland’s and W&R’s attorneys, respectively, were well “within the range of relevant community billing rates” rested on ample evidence.

The record also does not support appellants’ claim of duplicative work. To the contrary, it shows that while Philhower’s attorneys took the lead in several respects, including preparing nearly 500 pages of documents in the supporting appendix used by all the attorneys, those hours were not duplicated or charged by the other attorneys. An additional example includes the time billed for Philhower’s lengthy 20-page declaration, which appears to have been used as a template in relevant respects for other declarations, for which the Philhower attorneys did not charge when preparing those declarations.

The differing legal and factual issues alleged against each defendant required each set of attorneys to respond separately as to their own client. And each had to do so for an underlying action with an extensive procedural history over several years, a docket of more than 600 filings, numerous potentially dispositive motions, significant discovery, a jury trial record including voluminous instructions on the submitted claims, a 25-page verdict form, and numerous posttrial motions. This work had to be reviewed and analyzed with a view to each client’s distinct role and interests at stake, and on as many as 10 claims for malicious prosecution on underlying causes of action for each client. In addition to Philhower’s fees, the evidence supported the $107,575 in fees for Tran/Vitaland’s attorneys and $65,000 for W&R’s attorneys. Appellants have not met their burden for reversal under the “highly deferential” abuse of discretion yardstick. (Nichols v. City of Taft (2007) 155 Cal.App.4th 1233, 1239.)

DISPOSITION

The trial court’s judgment and underlying orders are affirmed. Respondents are entitled to their costs on appeal.

GOETHALS, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

THOMPSON, J.