Gerber v. Colegrove

Filed 8/23/07 Gerber v. Colegrove CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SECOND APPELLATE DISTRICT

DIVISION SIX

Appellant David A. Gerber and respondent Gary C. Colegrove are attorneys. Gerber filed a breach of contract action on behalf of his client. Colegrove, representing the opposing party, filed a cross-complaint and named Gerber as a co-defendant. Colegrove subsequently dismissed the cross-complaint against Gerber, and Gerber filed an action against Colegrove for malicious prosecution. Colegrove responded by filing a special motion to strike the complaint under Code of Civil Procedure section 425.16, the anti-SLAPP (strategic lawsuit against public participation) statute.^[1] Colegrove argued that the malicious prosecution action was an attempt to abridge his right of free speech.

The trial court found that Colegrove's filing of a cross-complaint was an exercise of his right to petition, a protected activity. Because Gerber was unable to meet his burden to show a probability of prevailing on his claim for malicious prosecution, the trial court struck Gerber's complaint. It issued a judgment in Colegrove's favor and awarded him attorneys fees. We reverse Colegrove's award of attorneys fees, but otherwise affirm.

FACTS

Underlying Action - Breach of Contract

The underlying litigation arose out of a contractual dispute between Starcrest Products of California, Inc. (Starcrest) and Henry Ostberg doing business as Admar Group, Inc. (Admar). Gerber represented Starcrest and Colegrove represented Admar.

Starcrest and Admar had entered into a contractual relationship in which Admar was to design and administer a consumer survey for Starcrest and possibly provide the services of an expert witness in a federal lawsuit. Admar and Starcrest had agreed that Starcrest would pay Admar to serve as a marketing research expert and conduct a study for Starcrest to use as evidence in a trade dress infringement action in federal court.

A dispute arose when Gerber requested that a certain question be included in the survey. Admar refused, claiming the question was "meaningless, even ridiculous." Starcrest filed a breach of contract action demanding the return of $25,000 that Starcrest had paid to Admar, plus $10,000 allegedly expended by Starcrest to obtain research design and implementation services from another source.

Admar filed an answer and cross-complaint for breach of contract and fraud, naming Gerber as a co-defendant. The cross-complaint alleged causes of action against Gerber for tortious interference with contractual relations and tortious interference with prospective economic advantage.

Admar attempted to personally serve the cross-complaint on Gerber, who allegedly evaded service by hiding in his office when the process server arrived. Admar insisted that Gerber had been served and obtained a default when Gerber failed to respond to the cross-complaint. The court granted Gerber's motion for relief from default, but sanctioned him $1,200.^[2]

In its cross-complaint, Admar alleged that Gerber knew that insertion of the question in the survey was inappropriate and that Starcrest used Admar's refusal as the basis for breaching the contract. It further alleged that, at the time Starcrest made this demand, Starcrest had already engaged others to conduct the same survey. Admar asserted that Gerber caused Starcrest to cancel its contract with Admar and had intentionally and negligently interfered with Admar's contractual relationship.

Gerber moved for summary judgment against Admar. Prior to the hearing, Admar voluntarily dismissed the claims against Gerber. Admar and Starcrest settled their claims and their action was dismissed.

Malicious Prosecution Action against Colegrove

After the matter was settled, Gerber filed a malicious prosecution action against Colegrove. In his first amended complaint, Gerber alleged that Colegrove's dismissal of the cross-complaint reflected Colegrove's opinion that Gerber bore no culpability and, if maintained, the cross-complaint would have resulted in a decision in favor of Gerber.

Gerber alleged that Colegrove had acted without probable cause in bringing the cross-complaint because 1) the claims asserted against Gerber were false; 2) Colegrove had no information that Gerber interfered with the parties' relationship in the underlying action; and 3) Gerber's communications with Starcrest were protected by the attorney-client privilege.

Gerber further asserted that Colegrove acted maliciously in filing the cross-complaint because 1) Colegrove knew the causes of action asserted against Gerber were false; 2) Colegrove unreasonably neglected to investigate the facts and law before proceeding against Gerber; and 3) Colegrove sought to create a conflict to induce Gerber to disqualify himself and force a settlement. Gerber asserted that, as a result of defending against the cross-complaint, he incurred attorney's fees, court costs and other expenses.

Special Motion to Strike

Colegrove filed a special motion to strike Gerber's first amended complaint under section 425.16. He contended that his filing of the cross-complaint was the exercise of free speech, a protected activity, and Gerber could not establish the probability that he would prevail on his claim for malicious prosecution.

The trial court found that Colegrove had conclusively established that his filing of the cross-complaint in the underlying action was a protected activity. It further found Gerber unable to meet his burden to demonstrate a probability of prevailing on his claim. Based upon these findings, the trial court granted the motion and struck Gerber's complaint, issued a judgment in Colegrove's favor, and awarded him fees and costs of $1,683.

DISCUSSION

Anti-SLAPP Statute

The anti-SLAPP statute was enacted "to provide a procedural remedy to dispose of lawsuits that are brought to chill the valid exercise of constitutional rights." (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055-1056.) When a lawsuit is filed arising from a person's exercise of free speech, the trial court may strike any cause of action arising from any act of that person in furtherance of the person's right of petition for the redress of grievances or free speech. ( 425.16, subds. (a) & (b)(1).)

Acts in furtherance of free speech or the right of petition include "communicative conduct such as the filing, funding, and prosecution of a civil action." (Rusheen v. Cohen, supra, 37 Cal.4th at p. 1056; Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 734-735.) The motion to strike must be denied if the trial court finds that there is a probability that the plaintiff will prevail on the claim. ( 425.16, subd. (b)(1).) Review of an order granting or denying a motion to strike is de novo. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3; Rusheen, at p. 1055.)

Ruling on an anti-SLAPP motion to strike is a two-step process. "First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. . . . If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim." (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.)

The trial court found that the first prong of the anti-SLAPP statute was met: Colegrove's filing of the cross-complaint in the underlying action was a protected activity. The burden shifted to Gerber to demonstrate a probability of prevailing on his claim for malicious prosecution.

Malicious Prosecution

To establish a cause of action for malicious prosecution, the plaintiff must show that the underlying action (1) was commenced by or at the direction of the defendant and was terminated in favor of plaintiff; (2) was brought without probable cause; and (3) was initiated with malice. (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 871.) The existence or absence of probable cause is a question of law to be determined by the court. (Zamos v. Stroud (2004) 32 Cal.4th 958, 965; Sheldon Appel, at p. 875.) We must determine whether any reasonable attorney would have thought the underlying action legally tenable. (Zamos, at p. 971; Marijanovic v. Gray, York & Duffy (2006) 137 Cal.App.4th 1262, 1271.)

The trial court found that Colegrove brought the cross-complaint and that Admar's dismissal of the counts against Gerber, even without prejudice, was a legal termination in Gerber's favor. It also found that Gerber failed to show that Colegrove's filing of the cross-complaint was without probable cause or that it was initiated with malice.

We conclude that any reasonable attorney would have believed the filing of the cross-complaint was legally tenable. Starcrest alleged that Admar had breached the contract by refusing to tailor the survey to Starcrest's satisfaction. In its cross-complaint, Admar alleged that it was Starcrest who breached the contract, and it had also committed fraud. These were reasonable responses to Starcrest's allegations. Admar's causes of action against Gerber for interference with contract were likewise reasonable, given Gerber's insistence that Admar insert a specific question in the survey which Admar found objectionable. Colegrove had probable cause to file the cross-complaint, thus Gerber's claim for malicious prosecution fails.

Applicability of Civil Code Section 1714.10

Gerber alleges that the cross-complaint was invalid or unlawful under Civil Code section 1714.10, subdivision (a) which provides, "No cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute, and which is based upon the attorney's representation of the client, shall be included in a complaint . . . unless the court enters an order allowing the pleading . . . to be filed after the court determines that the party seeking to file the pleading has established that there is a reasonable probability that the party will prevail in the action."

Gerber contends that the allegation in Colegrove's cross-complaint that Gerber caused Starcrest to cancel its contract with Admar is "materially the same as" conspiring with Starcrest. His argument is meritless. As we explained above, Colegrove's allegations against Gerber in the cross-complaint were legally tenable because they arose from Gerber's dispute with Admar as to the wording of the survey. Colegrove's general assertion that Gerber caused Starcrest to cancel the contract falls short of alleging a conspiracy with Starcrest.

Because section 1714.10 is inapplicable, we reject Gerber's contention that Colegrove was required to obtain court approval before filing the cross-complaint.

Award of Attorneys Fees

The trial court awarded Colegrove attorneys pursuant to section 425.16, subdivision (c). The parties agree that Colegrove is not entitled to attorneys fees because he successfully represented himself in his anti-SLAPP motion. (See Witte v. Kaufman (2006) 141 Cal.App.4th 1201, 1211.)

We reverse the award to Colegrove of $1,683 in attorneys fees, but otherwise affirm the judgment. Costs on appeal are awarded to Colegrove.

NOT TO BE PUBLISHED.

COFFEE, J.

We concur:

YEGAN, Acting P.J.

PERREN, J.

Steven Hintz, Judge

Superior Court County of Ventura

______________________________

D. Gerber Law Offices and David A. Gerber for Plaintiff and Appellant.

Law Office of Herb Fox and Herb Fox for Defendant and Respondent.

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^[1]All statutory references are to the Code of Civil Procedure unless otherwise stated.

^[2]We grant Colegrove's request for judicial notice of pleadings in the underlying litigation, Starcrest Products of California, Inc. v. Admar Group, Inc., et al. (Super. Ct. Ventura County, 2004, No. CIV 227877).