Filed 2/26/18 Anderson v. Miscall CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS

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COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA



IVY ANDERSON et al.,

Plaintiffs and Respondents,

v.

LAURENCE MISCALL, JR.,

Defendant and Appellant.
D071997



(Super. Ct. No.
37-2016-00019863-CU-NP-NC)


APPEAL from an order of the Superior Court of San Diego County, Jacqueline M. Stern, Judge. Affirmed in part, and reversed in part.
Lepiscopo & Associates, Peter D. Lepiscopo, William P. Morrow, James M. Griffiths, Jude A. Cisneros and Marshall R. Lurtz for Defendant and Appellant.
Pagano & Kass, James L. Pagano and Ian A. Kass for Plaintiffs and Respondents.

Ivy Anderson and Edward Moran filed a malicious prosecution complaint against Laurence Miscall, Jr., claiming Miscall brought three unsuccessful actions against them without probable cause and with malice. Miscall moved to strike the complaint under California's anti-SLAPP statute. (Code Civ. Proc., § 425.16.) The trial court denied the motion, finding Anderson and Moran met their burden to show a probability of prevailing on the cause of action with respect to at least one of the prior actions.
To successfully oppose an anti-SLAPP motion on a malicious prosecution claim, the plaintiff must make a prima facie showing on each element of the tort, including that the prior action was brought without probable cause and with malice. (See Parrish v. Latham & Watkins (2017) 3 Cal.5th 767, 774, 775-776 (Parrish).) On appeal, Miscall does not challenge the court's finding that Anderson and Moran met their anti-SLAPP burden to show the lack-of-probable-cause element. But he contends the order must be reversed because (1) they did not meet their burden to factually substantiate the malice element; (2) the malicious prosecution cause of action was barred by the statute of limitations; and (3) the court prejudicially erred in refusing to consider Miscall's supplemental declaration and exhibits.
Because Anderson and Moran sought relief based on three discrete malicious prosecution claims, they were required to show a probability of prevailing with respect to each claim. (See Baral v. Schnitt (2016) 1 Cal.5th 376, 396 (Baral).) We determine the court properly denied Miscall's anti-SLAPP motion on the malicious prosecution claim challenging one of his prior legal actions, but the court erred in denying his motion as to the malicious prosecution claims challenging the other two prior actions because those claims are time-barred. In the Disposition section, we specify the precise words of the complaint that must be struck. In reaching these conclusions, we have considered Miscall's supplemental declaration and exhibits and find they do not affect the result in this case. We thus need not reach the issue whether the court erred in failing to consider these reply materials.
FACTUAL AND PROCEDURAL SUMMARY
Background
Miscall's three legal actions against Anderson and Moran arose from their status as officers of a now-dissolved entity, Financial Title Company (FTC), and Miscall's claims that they were personally liable for the wrongful actions of an FTC employee. In 2007, FTC provided title insurance and escrow services, and had offices in California and Arizona. At the time, Anderson was FTC's president and chief executive officer, and Moran was the controller and vice-president of finance. Miscall was the attorney for a licensed mortgage broker, New World Mortgage, Inc. (World Mortgage), that used FTC's services.
In 2007, Bianca G., an FTC employee, allegedly took $41,683.75 held for World Mortgage in FTC escrow accounts, and wrongfully transferred the funds to third parties. FTC filed for bankruptcy the next year. Two years later, in July 2010, World Mortgage (represented by Miscall) filed an adversary proceeding against FTC in bankruptcy court, seeking the $41,683.75.
In March 2011 World Mortgage (represented by Miscall) petitioned the bankruptcy court to allow it to amend its adversary proceeding to add Anderson and Moran (and FTC's parent company, Mercury Companies, Inc.) as parties. World Mortgage alleged Anderson and Moran (in their roles as FTC officers) breached their fiduciary duties to maintain and protect the funds, and violated Financial Code section 17414. Anderson and Moran objected that the proposed amendment had no " 'facial plausibility' " and was untimely. The bankruptcy court granted World Mortgage's motion with the proviso that Miscall must sign the amended petition, and if the court later grants a motion to dismiss the amended petition, "the Court will consider the applicability of Fed[eral] R[ule] [of] Bankr[uptcy] 9011." This rule requires attorneys to certify that bankruptcy papers are true, not presented for an improper purpose, and the claims and defenses are factually and legally supported; and provides courts with the authority to award sanctions for violations of the rule. (See Fed. R. Bank. P. 9011(b), (c).)
After this order, Miscall decided against filing an amended petition to add Anderson or Moran. Instead, World Mortgage (represented by Miscall) moved to dismiss its adversary proceeding against FTC with prejudice under a settlement with FTC. In December 2011, the court granted the motion and dismissed World Mortgage's bankruptcy proceeding against FTC.
At about this same time, Miscall sent letters to Anderson and Moran suggesting they could be criminally charged with felonies, and requesting compensation for the loss of the wrongfully converted funds. Anderson and Moran's attorney, James Pagano, responded by sending Miscall a lengthy letter explaining that Miscall's attempts to hold Anderson and Moran liable for the FTC employee's wrongdoing had no legal or factual basis. Pagano cited legal authorities and explained in detail why each of Miscall's theories was allegedly frivolous and without merit.
Three months after receiving this letter, in June 2012, Miscall filed a complaint in San Diego County Superior Court against Anderson, Moran, and Bianca G. (and several others), seeking to hold these parties personally liable for the loss of the funds from the escrow account (San Diego action). Miscall alleged he was the "Real Party In Interest" as he had had purchased from World Mortgage "then known, and unknown future claims for the recovery of funds . . . stolen or otherwise mis-appropriated from [World Mortgage]."
In September 2012, Anderson moved to change venue, stating she lived and worked in Santa Cruz County, and the alleged wrongful conduct took place in Los Angeles County, and not San Diego County. In November 2012, the court granted the motion, and dismissed the case without prejudice. The court said it had the discretion to award Anderson attorney fees for the successful venue motion, but it "appears that Miscall acted in good faith in filing the action in San Diego County and in declining Anderson's invitation to stipulate to transfer the case to Santa Cruz County." The court said Miscall would remain responsible "for any filing and/or transfer fees associated with the transfer of this case from San Diego County . . . ."
That same month, Miscall filed the identical complaint against Anderson, Moran, and Bianca G. (and others) in the Los Angeles Superior Court (Los Angeles action). Miscall repeated his allegation that he was the real party in interest, again claiming he had purchased all of World Mortgage's "then known, and unknown future claims for the recovery of funds . . . stolen or otherwise mis-appropriated from" World Mortgage. Miscall alleged a conversion claim against Bianca G., claiming she secretly "embezzl[ed]" $41,683.75 of World Mortgage's funds from FTC's escrow accounts, and conspired with specified third parties in doing so. With respect to Anderson and Moran, Miscall sought to hold them liable for Bianca G.'s wrongful conduct under four separate legal theories: (1) "breach of fiduciary duty and loyalty by corporate officers" (capitalization omitted); (2) violation of Financial Code section 17414; (3) violation of Business and Professions Code section 17200 (UCL claim); and (4) breach of implied covenant of good faith and fair dealing. Miscall sought $41,683.75 plus punitive damages.
In April 2013, Miscall (representing himself) moved for a protective order in the Los Angeles action, arguing that Anderson and Moran's interrogatories and document production requests were oppressive and would cause undue burden and expense. Anderson and Moran's counsel responded that the discovery requests merely asked Miscall to identify facts supporting the allegations in his complaint, and to produce related documents. The Los Angeles court denied Miscall's motion, and imposed sanctions on him.
After Miscall served limited discovery responses that failed to specify factual grounds for his claims, Anderson and Moran moved for summary judgment, asserting the undisputed facts established that Miscall's claims had no merit. They argued his claims were premised on the theory that they were personally liable for Bianca G.'s alleged wrongful conduct based on their "employment as officers and directors" of FTC, and this theory had no legal or factual validity.
Specifically on the liability-of-corporate-officers claim, Anderson and Moran argued that to maintain a tort action against an officer or director for the torts of an employee, the moving party must show the officer/director authorized, directed or actively participated in the wrongful conduct (see Armato v. Baden (1999) 71 Cal.App.4th 885, 894), and there was no evidence that either party authorized, directed, or participated in Bianca G.'s tortious conduct (or even had knowledge of the conduct until Miscall asserted the claim in the bankruptcy proceedings). Anderson and Moran additionally argued that to the extent the claim was based on a "trust fund doctrine" theory, this theory was without merit because that doctrine applies only where officers or directors of an insolvent (or soon to be insolvent) corporation " 'diverted, dissipated, or unduly risked the insolvent corporation's assets' " (Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1040-1041), and there was no evidence that either Anderson or Moran engaged in this conduct.
On the Financial Code section 17414 claim, Anderson and Moran argued this statute was inapplicable to FTC (a title insurance entity) and, even if the statute did apply, the code section expressly requires knowledge or participation in the claimed wrongful conduct. On the UCL claim, Anderson and Moran argued that the UCL " 'borrows' violations from other laws" and there is no evidence that Anderson or Moran violated any law or otherwise acted in an improper manner regarding World Mortgage's claimed loss. On the breach of good faith and fair dealing claim, Anderson and Moran argued (and presented supporting authority) that this claim arises only as a result of a contract, and it is uncontroverted that they were not parties to any contract with World Mortgage or Miscall.
Based on these arguments and their submitted evidence, Anderson and Moran requested the court grant summary judgment on all causes of action. Miscall did not file an opposition to the motion. Instead, he waited until after the time his opposition was due, and then requested the court to dismiss the matter without prejudice. The court declined to dismiss the matter, noting the dismissal request was untimely.
On June 10, 2014, the Los Angeles Superior Court granted the summary judgment motion on its merits, and entered judgment in favor of Anderson and Moran.
Current Complaint
Almost two years later, on June 8, 2016, Anderson and Moran filed a malicious prosecution complaint against Miscall. They alleged that Miscall brought the bankruptcy proceeding, the San Diego action, and the Los Angeles action with malice and without probable cause. They claimed that Miscall brought the actions not with a belief in their merits, but "in the hope of receiving . . . a significant payout" triggered by Anderson's and Moran's concerns about the high cost of defense, particularly in venues far from their residences and work locations. Anderson and Moran sought their "attorneys' fees and litigation costs defending against the frivolous claims prosecuted against them in the Bankruptcy Case, San Diego Case and Los Angeles Case . . . . " They also sought punitive damages.
Miscall's Anti-SLAPP Motion
Miscall moved to strike the complaint under the anti-SLAPP statute. He argued that a malicious prosecution claim triggers anti-SLAPP protection, and therefore the burden shifted to Anderson and Moran "to demonstrate that they have a reasonable probability of prevailing on their malicious prosecution cause of action." In support, Miscall submitted numerous exhibits, including: (1) a state bar report showing he has been a licensed California attorney since 1976 and his license remains valid; (2) information showing Miscall was World Mortgage's attorney in the underlying bankruptcy action; (3) the various bankruptcy filings, including Miscall's assertions (on behalf of World Mortgage) in the proceedings that Anderson and Moran were liable for the converted funds because they "are, or were 'on the inside' of the Debtor's operation [and had] the managerial and fiduciary duties to protect and maintain [escrow] funds"; (4) filings and rulings in the underlying San Diego and Los Angeles actions; and (5) an Arizona Consent Order.
The Arizona Consent Order, dated November 13, 2007, arose from an action brought by the Arizona Department of Financial Institutions (Arizona Department) against FTC and Anderson. The order states that based on an examination of FTC's Arizona business affairs on March 5, 2007, the Arizona Department found FTC and Anderson had violated Arizona law in numerous ways, including by failing to adopt appropriate procedures to ensure proper reconciliation of Arizona escrow trust bank accounts, failing to follow up on various outstanding escrow balances and outstanding checks, and failing to properly account for Arizona escrow property and to label escrow accounts. Based on its findings, the Arizona Department ordered FTC and Anderson to "immediately stop the [identified] violations," and pay a civil penalty of $17,500 for which FTC and Anderson would be jointly and severally liable. On October 30, 2007, Anderson signed this Consent Order as FTC's president, waiving the right to an administrative hearing on the factual and legal findings.
Opposition to Anti-SLAPP Motion
In opposing the anti-SLAPP motion, Anderson and Moran did not dispute their malicious prosecution complaint was subject to section 425.16, but urged the court to deny the motion because their pleading alleged the requisite elements of a malicious prosecution claim, and their evidence established a probability of prevailing on each element. In support, they submitted their own declarations asserting they had no knowledge of, involvement with, or control over, the wrongful disbursement of funds by employee Bianca G. They explained that FTC's parent corporation (Mercury Companies) was responsible for overseeing the reconciliation of escrow trust fund accounts for FTC, and that the regional and branch managers in the individual escrow offices had control over the escrow disbursements "in compliance with the policies of, and direction from, . . . Mercury." They said they were unaware of the alleged 2007 improper transfer of World Mortgage escrow funds until Miscall raised the issue in the 2010 FTC bankruptcy proceedings. Moran additionally said: "Each year that I worked for FTC, the external auditors for the Company . . . reviewed and tested escrow transaction details and would report its findings to me. Not once did [the auditor] express any concerns about FTC's trust account documentation or reconciliation practices. [¶] Throughout its operations, including through the date it closed in 2008, the trust funds held by FTC were maintained in separate accounts, segregated from its operating funds."
Anderson and Moran also submitted numerous written communications from Miscall pertaining to his attempt to settle his claims against them. The letters began in November 2010 and ended in March 2014. As detailed below, in the settlement letters Miscall made numerous suggestions that if the matter did not settle, he (or other parties) would make disclosures to state and federal agencies that could result in Anderson and/or Moran becoming targets of administrative and criminal investigations unrelated to World Mortgage's missing escrow funds. Anderson and Moran also produced various documents from the underlying actions, including the interrogatories asking for Miscall to identify all facts and documents that support the allegations of the complaint, and his responses showing a lack of evidentiary basis for the claims.
Reply Brief and Supplemental Submissions
Four days before the scheduled hearing, Miscall filed a reply brief, arguing that Anderson and Moran could not prevail on the malicious prosecution cause of action because the undisputed facts showed he did not act with malice and the claims were time-barred.
In his supporting declaration, Miscall described his 55 years of corporate law experience and his stellar and "blemish-free" reputation. He claimed the evidence showed he had good faith reasons for bringing the underlying actions, including the 2007 Arizona Consent Order; the San Diego court's reference to his good faith in bringing the action in the wrong venue; the fact he had settled other cases with other defendants; and Anderson's "evasive" discovery responses in the Los Angeles action.
He attached 16 exhibits to his declaration. Ten of these exhibits pertained to settlements in other cases against other defendants (mostly business entities, not individuals). The other exhibits were: (1) evidence already in the record regarding the missing $41,683.75; (2) FTC's 2010 statement in its bankruptcy action that Anderson and Moran were "likely to have discoverable information that the Debtor [FTC] may use to support its claims and defenses"; (3) the order granting World Mortgage's motion to amend the bankruptcy petition to add Anderson and Moran as defendants (with the statement that Miscall would be subject to sanctions if the court found the amendment was frivolous or brought for an improper purpose); and (4) Anderson's responses to Miscall's requests for admissions in the Los Angeles action in which she states that she does not "recall" information responsive to various questions.
With respect to his statute of limitations argument, Miscall asserted the two-year limitations statute generally applicable to malicious prosecution claims (§ 335.1) did not govern the action, and instead the one-year limitations period applicable to actions against attorneys (§ 340.6, subd. (a)) applied because he was acting as an attorney rather than a party in the underlying San Diego and Los Angeles actions. In support, Miscall stated in his declaration that his former clients (World Mortgage and its president) retained "full control over the disbursement of the funds" in the prior actions. Miscall also presented evidence of unrelated third-party settlements, and claimed the settlement funds in those cases were paid to his former clients. Miscall also argued that even assuming the two-year limitations period applied, the malicious prosecution claims based on the San Diego and bankruptcy actions were barred because they were filed more than two years after their dismissal.
Anderson and Moran objected to the reply submissions, arguing: (1) they were untimely filed; (2) the new evidence was inadmissible because a moving party on an anti-SLAPP motion is prohibited from presenting new evidence for the first time in reply; and (3) the evidence was irrelevant because it failed to show they could not recover on their claim as a matter of law.
Court's Rulings
In its tentative ruling, the court stated it would not consider Miscall's reply brief or reply submissions because they were untimely. But the court said it intended to grant the anti-SLAPP motion because Anderson and Moran had not submitted the evidence referred to in their opposition brief and declarations.
Counsel for Anderson and Moran responded by immediately filing a declaration stating he had electronically filed the supporting evidence and had received confirmation of this fact. At the initial hearing, the court accepted this explanation and said it would continue the hearing so it could review this evidence. In response to Miscall's counsel's arguments, the court also agreed to reconsider the issue of whether Miscall's reply brief and supporting papers were timely.
After the court reevaluated the parties' evidence and contentions, the court issued a new order denying Miscall's anti-SLAPP motion. The court found the malicious prosecution claim was governed by the anti-SLAPP statute, but Anderson and Moran met their burden to show the complaint was legally sufficient and they had a probability of prevailing on the claim. The court stated in part: "Plaintiffs have made a sufficient prima facie showing that Defendant was actively involved in bringing and continuing the underlying Los Angeles action; that the Los Angeles litigation ended in Plaintiffs' favor; that the Los Angeles action was brought without probable cause; that it was initiated with malice; and it caused Plaintiffs to suffer damages. . . . Defendant's evidence in support of this motion does not defeat Plaintiffs' showing as a matter of law."
In reaching these conclusions, the court did not repeat its untimeliness finding pertaining to the reply papers, and instead declined to consider the supplemental declaration and attached exhibits on the ground that new evidence is generally not permitted with a reply brief, citing Jay v. Mahaffey (2013) 218 Cal.App.4th 1522 (Jay).
DISCUSSION

I. Legal Principles Applicable to Anti-SLAPP Motions
California's anti-SLAPP statute, section 425.16, provides that a "cause of action against a person arising from any act of that person in furtherance of the person's [constitutional] right of petition or free speech . . . in connection with a public issue shall be subject to 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."
Courts apply a two-step analysis in ruling on an anti-SLAPP motion. First, the court determines whether the moving party met its burden to show the challenged cause of action is one arising from protected activity. (Navellier v. Sletten (2002) 29 Cal.4th 82, 88.) Second, if that showing is made, the court evaluates whether the opposing party has demonstrated a probability of prevailing on the claim. (Ibid.) The plaintiff's claim need only have " 'minimal merit' " to satisfy this burden and survive an anti-SLAPP motion. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291; Grewal v. Jammu (2011) 191 Cal.App.4th 977, 989.)
In this case, it is undisputed Anderson and Moran's malicious prosecution claims arise from protected activity and thus come within the first step of the anti-SLAPP analysis. (See Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 734-735; Daniels v. Robbins (2010) 182 Cal.App.4th 204, 215 (Daniels).) Thus, the sole issue is whether the court properly found they met their burden to show a probability of prevailing on the merits.
In considering this issue, we evaluate "the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based." (§ 425.16, subd. (b)(2).) "We do not weigh credibility, nor do we evaluate the weight of the evidence. Instead, we accept as true all evidence favorable to the plaintiff and assess the defendant's evidence only to determine if it defeats the plaintiff's submission as a matter of law." (Overstock.com, Inc. v. Gradient Analytics, Inc. (2007) 151 Cal.App.4th 688, 699-700.) " 'The defendant can defeat the plaintiff's evidentiary showing by presenting evidence that establishes as a matter of law that the plaintiff cannot prevail. [Citation.] The defendant cannot defeat the plaintiff's evidentiary showing, however, by presenting evidence that merely contradicts that evidence but does not establish as a matter of law that the plaintiff cannot prevail. [Citation.]' " (Ulkarim v. Westfield LLC (2014) 227 Cal.App.4th 1266, 1274-1275.)
On appeal, we review de novo a trial court's order denying an anti-SLAPP motion. (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1067.) We therefore analyze the issues independent of the trial court's reasoning. (Ibid.) "If the trial court's decision is correct on any theory . . . , we affirm the order regardless of the correctness of the grounds on which the lower court reached its conclusion." (Robles v. Chalilpoyil (2010) 181 Cal.App.4th 566, 573.)
II. Malicious Prosecution Law
To establish a cause of action for malicious prosecution, the plaintiff must show that the prior action—the underlying action—was: "(i) initiated or maintained by, or at the direction of, the defendant, and pursued to a legal termination in favor of the malicious prosecution plaintiff; (ii) initiated or maintained without probable cause; and (iii) initiated or maintained with malice." (Parrish, supra, 3 Cal.5th at pp. 775-776; accord Bertero v. National General Corp. (1974) 13 Cal.3d 43, 50; Siebel v. Mittlesteadt (2007) 41 Cal.4th 735, 740.)
In considering whether Anderson and Moran met their anti-SLAPP burden to satisfy these elements, we separately examine their three malicious prosecution claims against Miscall (based on the Los Angeles action, the San Diego action, and the bankruptcy action). In their complaint, Anderson and Moran sought distinct relief based on each of these underlying actions. Thus, each is a separate "claim" for anti-SLAPP purposes, and Anderson and Moran had the burden to demonstrate that each claim was legally and factually substantiated. (See Baral, supra, 1 Cal.5th at p. 396.)
In evaluating the merits of these claims, we decline to reach Miscall's arguments about whether the court erred in refusing to consider his supplemental declaration and attached exhibits. Even assuming the court erred in concluding these submissions were new rather than supplemental materials (see Jay, supra, 218 Cal.App.4th at p. 1536), any such error was not prejudicial. Under the California Constitution and applicable statutes, a judgment or order may not be reversed absent prejudice to the complaining party. (F.P. v. Monier (2017) 3 Cal.5th 1099, 1107-1108.) As explained below, we have thoroughly examined the supplemental materials, and find they do not change the conclusion that Anderson and Moran met their anti-SLAPP burden on the Los Angeles action.
III. Analysis
A. The Los Angeles Action
1. Favorable Outcome Element
Miscall does not dispute that Anderson and Moran satisfied this element by showing they obtained a judgment in their favor on the merits of Miscall's action after the court granted their summary judgment motion. (See Casa Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, 341-342 (Casa Herrera).)
2. Probable Cause
To establish the prior action was brought without probable cause, a malicious prosecution plaintiff must prove that, based on the facts known to the malicious prosecution defendant, at least one claim in the prior action was not "legally tenable." (Parrish, supra, 3 Cal.5th at p. 776; Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 878 (Sheldon Appel).) A claim is not " 'legally tenable' " if " ' " 'any reasonable attorney would agree [the claim is] totally and completely without merit.' " ' " (Parrish, at p. 776.)
The trial court found Anderson and Moran met their burden to show Miscall brought the Los Angeles action without probable cause, i.e., that the Los Angeles action was objectively totally and completely without merit. (See Parrish, supra, 3 Cal.5th at p. 776.) Miscall does not challenge this conclusion on appeal. Thus, for purposes of this appeal only, we assume that Miscall had no probable cause (no reasonable basis) to bring the Los Angeles action against Anderson and Moran.
3. Malice
The malice element of a malicious prosecution cause of action requires the malicious prosecution plaintiff to show the malicious prosecution defendant brought the underlying action primarily for an improper purpose. (Sycamore Ridge Apartments LLC v. Naumann (2007) 157 Cal.App.4th 1385, 1407.) This showing differs from the probable cause element in that it concerns the defendant's subjective intent, and thus generally raises a factual, rather than a legal, question. (Parrish, supra, 3 Cal.5th at p. 776; Sheldon Appel, supra, 47 Cal.3d at p. 874.) Malice is not " 'limited to actual hostility or ill will toward the plaintiff,' " and includes circumstances when (1) " ' " 'the person initiating [the action] does not believe that his claim may be held valid' " ' "; or (2) " ' " 'the proceedings are initiated for the purpose of forcing a settlement which has no relation to the merits of the claim.' " ' " (Sycamore Ridge, at p. 1407; accord Daniels, supra, 182 Cal.App.4th at p. 224.)
Because "parties rarely admit an improper motive, malice is usually proven by circumstantial evidence and inferences drawn from the evidence." (HMS Capital, supra, 118 Cal.App.4th at p. 218.) A lack of probable cause alone does not automatically equate to a finding of malice, but it is an important factor in the analysis. (See Ross v. Kish (2006) 145 Cal.App.4th 188, 204; Downey Venture v. LMI Ins. Co. (1998) 66 Cal.App.4th 478, 498-499, fn. 29.) "While . . . a lack of probable cause, standing alone, does not support an inference of malice, malice may still be inferred when a party knowingly brings an action without probable cause." (Swat Fame, Inc. v. Goldstein (2002) 101 Cal.App.4th 613, 634, disapproved on other grounds in Reid v. Google, Inc. (2010) 50 Cal.4th 512, 532, fn. 7.)
In this case, Anderson and Moran presented evidence from which reasonable inferences could be drawn showing Miscall brought the Los Angeles action primarily for an improper purpose. These facts include: (1) before bringing the action Miscall was given written information showing the absence of a legal basis to hold Anderson or Moran personally liable for the loss of the $41,683.75 in funds (e.g., in attorney Pagano's April 2012 letter); (2) Miscall's action in seeking to dismiss the action, rather than attempting to oppose the summary judgment; (3) the length of time Miscall had to investigate the issues to determine whether Anderson or Moran had any legal responsibility for the alleged losses (the Los Angeles action was filed seven years after the escrow funds were allegedly taken); and (4) facts showing Miscall attempted to pressure Anderson and Moran into paying his claim to avoid his threat of "disclosures" to regulatory agencies involving matters that had nothing to do with Bianca G.'s wrongful actions.
On this latter point, we summarize some of the evidence presented by Anderson and Moran in opposition to the anti-SLAPP motion. First, in February 2010 and November 2010, Miscall wrote letters to Anderson and Moran suggesting they could "be looking at felony charges" under Financial Code section 17414 for an "escrow officer's . . . 'stealing' Trust Funds." After dismissing the bankruptcy action against FTC (and deciding not to file against the individuals), Miscall wrote to attorney Pagano, stating that Miscall intended to file state court actions against Anderson and Moran, but that he was willing to settle the matters for $10,000 for each party. In proposing this settlement, Miscall stated in relevant part:
"Given [Anderson's] new [employment] position . . . , it would seem to me, and some financial friends, that to keep the matters with AZ and the CA Insurance Dept. a private matter, a stepping out of view could be a good idea. However that is your call.

"I have been in contact with the AZ people, [and] with [Comerica Bank], since I do have the funds transfer records, and with our Dept. of Insurance, and will have the cooperation of all. . . . [Anderson and Moran] may . . . be looking at another AZ type investigation. I don't really know. Something else again came out of the blue. FTC is a defined financial institution . . . and therefore the BSA[ ] [s]ection 326 monitoring etc provisions for funds transfers would be applicable. Who knows on that one, but it would track."

About four months later, in April 2012, Pagano wrote a lengthy letter to Miscall, rejecting the settlement offers as made "in bad faith," and stating that "you proceed at your peril in any future litigation against either or both Ms. Anderson and Mr. Moran." Pagano explained in great detail the basis for his conclusion that Miscall's claimed grounds for imposing individual liability on Anderson or Moran were without any factual or legal merit. Pagano cited legal authorities and asserted that there was no evidence that either party had any knowledge of or responsibility over the particular escrow accounts at issue.
Two months later, in June 2012, Miscall filed the San Diego County action against Anderson and Moran seeking to hold them individually liable for Bianca G.'s alleged theft. In February 2013, after the venue motion was granted and Miscall filed the Los Angeles action, Miscall wrote to attorney Pagano stating:
"So, I have had some of my people in the business of analysis etc look at what was reasonable, and could be done. As for [Anderson and Moran,] quit[e] a bit of pieces of information have been dropped in my lap from sources in Denver, and regulatory folks. Let me put it this way; given my allegations, discovery is not in their best interests, and we leave it there.

"All of my previous suggestions are off the table, and we start again. . . . [¶] Thus, for $12,000, both Ivy [Anderson] and Ed [Moran] walk. We both eat our costs and fees, and there is a [mutual release] with a mandatory secrecy clause as to all matters, which they need. . . ."

Two months later, Miscall again wrote to Pagano, stating the "allegations against [Anderson and Moran] are for their failures . . . to protect the beneficiaries (the creditors) of the FTC Escrow Trust Account under their mandatory fiduciary obligations as Trustees for the Escrow Trust Account and its funds." He said: "I really have to believe that you are aware of corporate Officer/Director fiduciary obligations, and as such, I have no problem with us getting together in some way to really make your life easier and to see just what a potential disaster [Anderson and Moran] could face if someone, or some regulatory agency, wanted to go forward. If they might get tangled up in felony matters, there is nothing either you or I can do about it."
The next month, Miscall offered to settle for $15,000 (against both defendants), stating the "terms are totally confidential." He also said: "In my early days, the firm represented a couple of huge Title Companies. Some of those confidential contacts still remain. In addition, I am still going after several banks, and the thieves who also stole [World Mortgage] commissions and fees checks, for money laundering. Except for two . . . with settlements, they all have been concerned about the same secrecy obligation on both sides. My obligation is iron-clad, and no one has succeeded (even with strong threats) in forcing my hand. With a couple of phone calls, it becomes back-off time."
After the Los Angeles court ordered Miscall to respond to the written discovery and imposed sanctions on him for failing to do so, Miscall sent another settlement letter to Pagano. At the end of the letter, Miscall said in relevant part:
"It is obvious, and [Anderson and Moran] have confirmed it, that they were way out of their league in the positions they held at FTC . . . . [¶] Neither of them have had any real first line and critical experience in the requirements and obligations of an Officer or a Director in that sort of a complex corporate setting. . . . With neither of them having had any significant operational time, in house, in a multi[-]million, let alone multi-billion corporate setting, the outright violations of the Financial Code provisions, are child's play when measured against what lurks on the horizon.

"I am making a guess that you also do not have anyone in your shop who has had, in terms of years, extensive in-house time either as a GC, or Corporate Secretary, and thus responsible for, and to, a high power Board of a multi-national. [¶] [Anderson and Moran] were treated as sacrificial pawns by the parent. I doubt that they . . . have [any] idea of the absolute requirements of officers and directors spawned from the Delaware (and CA) Statutes. They had no way to comprehend the extent of their obligations, especially in the face of insolvency, but worse, they did nothing to correct that, and were just very comfortable with their 'status'. [¶] . . . [¶]

"So throughout [the discovery] responses, what I have purposely done is to very carefully lay out the road map as to what was required of [Anderson and Moran] when serving as FTC senior officers and Board members. Maybe more to the point is 'what not to do'. The one thing they do not need is to become further entangled with incidents which lead down a path of conduct to the likes of a potential Enron, Indymac, Global, and other disasters for Senior Officers and Directors, especially where, with the apparent Trust Account failures, they were setting themselves to end up with huge liabilities imposed upon, and required of financial institutions under the BSA.

"What I read into the judge's ruling is do what I can to find applicable corporate records/documents. [¶] Thus the plan is to go to each of those above mentioned entities, and have them review our docs, which I will provide to them. They will then reopen their files and records in order to locate and acquire the in house records of the Boards, and the officers, and the other financial institution and Trust account matters which involve both [Anderson and Moran]. I pretty well know the form of the requisite matters, where they could, or should be, and probably, in many cases, are simply Unanimous Written Consents. The question as to whether the Bank filed SARs, we will never know, but the question still is who now has those records which would be subject to subpoena certainly by the Dept. of Insurance, First American, COMERICA, and possibly the BK Court. All of that would be outside of this case."

The next month, in October 2013, Miscall wrote another letter to Pagano requesting that he respond to Miscall's settlement offers and stating he has plans to meet (regarding his claims against Anderson and Moran) with bank officers and various state and federal officials "at a pay grade much higher than I had anticipated." The letter also stated:
"What has now begun to surface is the apparent use of the FTC Escrow Trust Fund Account for inter corporate money (possibly others) transfers through that COMERICA trust account, and which money movements do not appear to be escrow funds as required by [Financial Code] § 17409. If you cannot convince them that they have the Trustee fiduciary duty obligations for that entire account, I guess we both have to watch them walk into the hornets nest.

"I assume that you have had to do battle with financial fiduciary obligations in the area of financial institution regulation, and you thus understand how they are looking at a whole hell of a lot of cans of worms being opened. With their Admissions, they confirm, and verified, that they, in their capacity as Trustees of the Escrow Trust Fund Account, did nothing to protect the funds in that Trust Account. When you also have Federal regulatory agencies looking at a multitude of real and potential BSA financial institution violations which could result in complicity to launder funds, that is not something you want to encounter.

" . . . Remember the "reckless" term and its consequences, but I can tell you from my experiences with other similar claims which I own, and which have involved many mammoth financial institutions, it could become far more than a nightmare for both of them. Now, to close off the possibility of doubt, I have enclosed a partial loan list of banks, (others have been redacted), all with stolen or misappropriated funds having also been laundered through their financial accounts system, and for me to recover. [¶] . . . [¶]

"There is a good chance that, because a major bank is involved with the FTC operational accounts, you might receive contacts from the Comptroller of Currency, or the Federal Reserve Examiners. I doubt that you will hear from the Federal Trade Commission, but with only two months showing the movement of those size sums through the Trust Account, who knows when it comes to the rest. Keep in mind that the Arizona mess was also in the same two months being looked at by these folks.

"The remaining contacts will soon follow, and I will let you know their schedules. [¶] This still boils down to if I can avoid these investigative meetings etc, I would rather have that be the way to go. You are aware that I hide nothing, and thus again, have given you a ridiculous number. I hope you are not viewing that as a sign of weakness, for believe me, that is not even close. If they want to take it, I will fill you in on just why, right now, I supplied an escape route for such a small sum. . . ."

In November 2013, Miscall wrote to Ian Kass (one of Anderson/Moran's) attorneys, noting that Kass had not responded to his settlement officers, and "wondered what your response would be, if any, if I had offered, say an absolutely legit $100, and both walk." Miscall also stated:
"I did advise [you] that I was very aware of the results which can befall corporate senior officers of financial institutions with violations of the BSA and the laundering of funds. Again, it is my custom, to merely advise any counsel of problems which could explode at any time, and thus being out of our control. That is no joke.

"I mentioned that my experiences in house at a Fortune 500, and GC and Secretary of another huge manufacturing operation, allow me to pretty well know where and how such records are kept. The question is who has them, and what is in them.

"At least you now know what is set to be examined and the huge amount of time to do that job, and that is another reason why I sent along the partial list of financial institutions and theft/launder numbers which I had also obtained.

"We are dealing here with a multi-million dollar mandatory Trust Account, and what a manipulation or fostering illegal laundering of non trust funds through the FTC trust fund account, could hit [Anderson and Moran]. I cannot change that but I have no problem with looking to reducing 'the pain' for them. . . . "

On March 25, 2014, Miscall sent an email to Pagano with "Settlement" in the subject line. The email stated in part:
"I have had discussions with the Comptroller of Currency staff, and since I already have two other investigations with them, they want these particulars. That package is being compiled. . . . The Comptroller's office is interested in the conduct of the Bank, and the Commissioner is now also interested, among other things, in the conduct of the members of the FTC Board and the turn over. So, with me thrown out of the picture, it is all now in your lap. You know my individual position in the outcome of these investigations."

Miscall also stated that a first amended complaint "has been revised on some new matters which have come up, and will be filed very soon." However, he never proposed or filed an amended complaint, nor did he submit any new facts arising from the many "investigations" identified in his settlement letters.
Taken together, the evidence was sufficient to meet Anderson and Moran's burden to substantiate the malice element of their malpractice claim. This evidence included the state of Miscall's actual knowledge when he filed the Los Angeles action, the lack of any asserted defense to the summary judgment motion, the length of time between the claimed wrongful act and the filing of the Los Angeles complaint, the fact the settlement offers appeared to be based on factors wholly unrelated to the merits of the action, and the admitted lack of probable cause (for purposes of the anti-SLAPP proceeding) to bring the Los Angeles action.
Miscall's appellate response to this evidence is to argue that he acted in "good faith" by "engaging in due diligence through investigation and pursuing his clients' claims and interests through negotiation and/or litigation." In support, he points to (1) the 2007 Arizona Consent Order; (2) the court's statement in the San Diego action that Miscall filed in the wrong venue "in good faith"; and (3) evidence submitted with his reply brief that he was successful in obtaining settlements against other third party entities in favor of his former clients. This evidence does not negate as a matter of law the evidence presented by Anderson and Moran showing Miscall acted with an improper purpose in bringing the Los Angeles action. At most, the evidence creates a factual dispute for resolution by a factfinder and does not establish plaintiffs cannot prevail on the malice element of their claim.
First, the Consent Order shows Anderson did not challenge the administrative findings of Arizona law violations with respect to FTC's escrow practices in March 2007. However, there is no definitive showing that these violations were related to, or caused, Bianca G.'s wrongful transfer of the funds in a California branch office in September or October 2007; that Anderson knew or should have known of Bianca G.'s conduct based on these violations; or that Miscall in fact relied in good faith on the Consent Order to bring these claims. Although a factfinder could find Miscall subjectively relied in good faith on the Consent Order in deciding to institute and maintain the Los Angeles action against Anderson, this finding is not the only reasonable conclusion. It is equally reasonable to find he did not in fact subjectively believe the information in the Consent Order provided a legal basis to bring the claims against Anderson. This inference could be drawn based on Miscall's knowledge (including information contained in Pagano's April 2012 letter) and his later actions (including his failure to make any effort to oppose the summary judgment motion and the nature of his statements in the settlement letters). Moreover, it is significant that Miscall does not argue that the Consent Order provided an objective "legally tenable" basis to bring the Los Angeles action to satisfy the probable cause element.
Second, the record makes clear the San Diego court's reference to Miscall's "good faith" pertained solely to Miscall's decision to file the action in San Diego, rather than in a county with proper venue, such as Santa Cruz County (where Anderson and Moran lived and worked) or Los Angeles County, where the loss allegedly occurred. There is no reasonable basis to read the court's "good faith" statement as referring to the court's view of the merits of the action.
Third, regarding the information in Miscall's reply declaration and reply exhibits, Miscall produced evidence showing he had settled with other defendants in other cases, and suggests that, based on these third-party settlements, he subjectively believed the claims against Anderson and Moran had merit. Putting aside the obvious logical gaps with respect to any such belief (there is no showing that the underlying facts in those cases were similar to Miscall's claims against Anderson and Moran), the evidence does not conclusively defeat the inferences that Miscall acted with malice in instituting and maintaining the Los Angeles action. Although a factfinder (after evaluating his credibility) could arguably credit Miscall's assertion that he relied on the prior settlements to believe his claims against Anderson and Moran had merit, the assertion does not establish a lack of malice as a matter of law.
We have carefully reviewed the additional statements in Miscall's lengthy reply declaration and the attached exhibits, and find there is nothing in the declaration or exhibits that conclusively negates Anderson and Moran's evidence that Miscall instituted and maintained the Los Angeles action primarily for the alleged improper purpose (to obtain a settlement unrelated to the merits of the action). Most of Miscall's declaration contains arguments (unsupported by legal authority), rather than facts. And the portions of the declaration that are factual depend on an evaluation of Miscall's credibility and inferences to be made from his assertions. These factual assertions do not, as a matter of law, provide the conclusive showing necessary to defeat the plaintiffs' evidence on an anti-SLAPP motion.
4. Statute of Limitations
Miscall alternatively contends the malpractice claim pertaining to the Los Angeles action was barred because Anderson and Moran filed the complaint on June 8, 2016, more than one year (but less than two years) after entry of judgment in that case (June 10, 2014). Miscall contends the one-year limitations period (§ 340.6) applies to malicious prosecution actions against the attorney for the opposing party rather than the two-year statute governing malicious prosecution actions (§ 335.1).
Even if we accept this legal contention, Anderson and Moran presented evidence that Miscall did not act as an attorney for an opposing party in the Los Angeles case, and that he brought the case as the real party in interest. This evidence consisted of Miscall's admissions in the Los Angeles complaint that he was the "Real Party in Interest (RPI)" based on his purchasing from World Mortgage all "known, and unknown future claims for the recovery of funds . . . stolen or otherwise mis-appropriated . . . ." Miscall also repeated this assertion in his letters to counsel for Anderson and Moran. For example, in his February 2013 letter, Miscall said that from the beginning, he "was the RPI" and "could do whatever I wanted, and no one could complain." In his November 2013 letter, Miscall likewise stated that he can make his own settlement decisions "as I am the Plaintiff/victim and can pretty well do as I please." The record also contains a January 2006 agreement between Miscall and his former client (the president of World Mortgage), stating that World Mortgage assigned all claims to Miscall in "consideration of [Miscall] canceling his invoices for professional fees to [World Mortgage] in the sum of at least $200,000 . . . ." Supporting letters show that this assignment applied to any past or future claims by World Mortgage for lost or stolen funds.
This evidence met Anderson and Moran's burden to show that the two-year limitations period generally applicable to malicious prosecution actions (§ 335.1), rather than the one-year limitations period (§ 340.6) applied.
Miscall argues that he presented evidence showing he remained the attorney for World Mortgage because "I made an agreement with [World Mortgage's] president, . . . which provided, for purposes of my satisfying standing to sue, that I could prosecute [World Mortgage's] claims as the real party in interest and others such as [World Mortgage] but [the president] would retain full control over disbursement of the funds." In support of this claim, Miscall submitted "examples" of payments to World Mortgage arising from other settlements against other parties in different actions. This argument is unavailing.
First, the validity of Miscall's claim that he had made this side agreement with his former client presents a factual question for the jury's consideration. It does not, as a matter of law, negate the evidence showing that Miscall was in fact the real party in interest. Moreover, recent California Supreme Court authority casts doubt on a blanket rule that the one-year limitations period applies to a malicious prosecution action against the attorney who represented the opposing party in the underlying action. (See Lee v. Hanley (2015) 61 Cal.4th 1225, 1236-1237.) In Lee, the high court held section 340.6 applies only if the claim "necessarily depend[s] on proof that an attorney violated a professional obligation in the course of providing professional services unless the claim is for actual fraud." (Id. at p. 1239.) Anderson and Moran's claim that Miscall brought the Los Angeles action without probable cause and with malice does not appear to come within this rule as it does not depend on proof that Miscall violated his professional obligation owed to his former clients. Rather, it depends on proof of Miscall's objective and subjective reasons for bringing the former action.
B. The San Diego Action and The Bankruptcy Filings
Unlike their showing on the malicious prosecution claim based on the Los Angeles action, Anderson and Moran did not meet their anti-SLAPP burden to show a probability of prevailing on their claims for damages resulting from the San Diego action or the bankruptcy case.
With respect to the San Diego action, Anderson and Moran obtained a dismissal of this action (on venue grounds) more than two years before filing the malicious prosecution complaint. Thus, the malicious prosecution claim is time-barred to the extent it seeks to recover for injuries resulting from the filing of the San Diego action. (§ 335.1) Additionally, the record does not support that the dismissal was based on the merits, and therefore Anderson and Moran did not meet their burden on the favorable termination element. (See Casa Herrera, supra, 32 Cal.4th at p. 342; De La Pena v. Wolfe (1986) 177 Cal.App.3d 481, 484.)
On the bankruptcy case, the undisputed evidence shows that Miscall never filed an action against these parties in the bankruptcy court. Although Miscall (on behalf of World Mortgage) successfully moved for permission to file an amendment to his adversary proceeding claim against FTC, Miscall ultimately decided not to file the amendment. Because there was no action brought, there was no favorable termination on the merits. (See Casa Herrera, supra, 32 Cal.4th at p. 342.) Additionally, the bankruptcy action was terminated in December 2011, more than four years before Anderson and Moran filed their malicious prosecution complaint in June 2016.
The high court's recent Baral decision provides guidance in determining the proper result based on our conclusion that Anderson and Moran met their anti-SLAPP burden with respect to only one discrete "claim" within their malicious prosecution cause of action. In Baral, the California Supreme Court held that a "motion to strike" under section 425.16 "may be used to attack parts of a [single cause of action] as pleaded." (Baral, supra, 1 Cal.5th at pp. 381-382, 393, 384-396.) In defining a claim properly subject to a motion to strike, the Baral court stated the Legislature "had in mind allegations of protected activity that are asserted as grounds for relief. The targeted claim must amount to a 'cause of action' in the sense that it is alleged to justify a remedy." (Id. at p. 395.) On each protected claim, "[t]he court, without resolving evidentiary conflicts, must determine whether the plaintiff's showing, if accepted by the trier of fact, would be sufficient to sustain a favorable judgment. If not, the claim is stricken. Allegations of protected activity supporting the stricken claim are eliminated from the complaint, unless they also support a distinct claim on which the plaintiff has shown a probability of prevailing." (Id. at p. 396, italics added.)
In their complaint, Anderson and Moran alleged a single malicious prosecution cause of action, but alleged distinct harm and sought separate damages based on the three underlying actions (the bankruptcy action, the San Diego action, and the Los Angeles action). Thus, each of these claims are subject to an anti-SLAPP motion to strike. (Baral, supra, 1 Cal.5th at p. 396.) Anderson and Moran have shown a probability of prevailing on their malicious prosecution claim based on Miscall's initiating and maintaining the Los Angeles action, but not the portions of their cause of action seeking damages based solely on Miscall's initiating and/or maintaining the San Diego action or the bankruptcy filings. However, many of the complaint's allegations pertaining to the San Diego action and the bankruptcy case are relevant to proving the Los Angeles claim, such as the allegations that provide context for the claim and/or pertain to Miscall's prior investigation, knowledge and alleged malice.
Applying the Baral principles to these conclusions, we determine that the only portions of the complaint that must be stricken are contained in Paragraph 39.
Paragraph 39 originally read:
"As a direct and legal consequence of the wrongful conduct of Defendants, and each of them, as is more fully alleged hereinabove, Plaintiffs have suffered damages and losses, including through their incurring attorneys' fees and litigation costs defending against the frivolous claims prosecuted against them in the Bankruptcy Case, San Diego Case and Los Angeles Case, which Plaintiffs are informed and believe and, thereupon, allege will exceed the jurisdictional minimum of the Unlimited Division of this Court, in a sum that exceeds $100,000, the precise amount of which must be ascertained according to proof." (Italics added.)

After striking the words "Bankruptcy Case, San Diego Case and" and "in a sum that exceeds $100,000," this paragraph of the complaint will now read:
"As a direct and legal consequence of the wrongful conduct of Defendants, and each of them, as is more fully alleged hereinabove, Plaintiffs have suffered damages and losses, including through their incurring attorneys' fees and litigation costs defending against the frivolous claims prosecuted against them in the Los Angeles Case, which Plaintiffs are informed and believe and, thereupon, allege will exceed the jurisdictional minimum of the Unlimited Division of this Court, the precise amount of which must be ascertained according to proof."

DISPOSITION
The court is ordered to vacate its order denying the anti-SLAPP motion, and enter a new order that (1) strikes the words "Bankruptcy Case, San Diego Case and" and "in a sum that exceeds $100,000" from Paragraph 39 of the Complaint; and (2) denies the anti-SLAPP motion as to all other portions of the complaint. Appellant to bear respondents' costs on appeal.



HALLER, J.

WE CONCUR:



NARES, Acting P. J.



AARON, J.