Area 55, LLC v. Nicholas & Tomasevic, LLP

• Decision Date: 29 January 2021
• Docket Number: D075648
• Citation: 61 Cal.App.5th 136,275 Cal.Rptr.3d 519
• Court: California Court of Appeals Court of Appeals
• Parties: AREA 55, LLC, et al., Plaintiffs and Appellants, v. NICHOLAS & TOMASEVIC, LLP, et al., Defendants and Respondents.

61 Cal.App.5th 136

275 Cal.Rptr.3d 519

AREA 55, LLC, et al., Plaintiffs and Appellants,

v.NICHOLAS & TOMASEVIC, LLP, et al., Defendants and Respondents.

D075648

Court of Appeal, Fourth District, Division 1, California.

Filed January 29, 2021

The Office of Michael Tenenbaum, Michael Tenenbaum ; Law Office of Aryeh Kaufman and Aryeh Kaufman for Plaintiffs and Appellants.

Pettit Kohn Ingrassia Lutz & Dolin, Douglas A. Pettit and Jocelyn D. Hannah for Defendants and Respondents.

IRION, J.

Area 55, LLC, and SAB Holdings, LLC (together, Appellants) appeal from an order of the trial court granting the special motion to strike their first amended complaint for malicious prosecution (complaint) and the related judgment of dismissal in favor of Nicholas & Tomasevic, LLP (N & T), Craig Nicholas, and Alex Tomasevic (together, Respondents). The trial court ruled that the complaint was a "SLAPP" and struck it pursuant to Code of Civil Procedure section 425.16 ( section 425.16 ; at times, anti-SLAPP statute; further unidentified statutory references are to the Code of Civil Procedure).¹

The prior action, in which Appellants were named as defendants, was dismissed for failure to prosecute. As we explain, the trial court erred in ruling that Appellants cannot establish that the prior action was not terminated on its merits. Thus, for purposes of the anti-SLAPP statute, the court erred in ruling that Appellants did not demonstrate a probability of prevailing on the merits of their malicious prosecution claim.

In addition, in our de novo review, we exercise our discretion to reach the additional issues raised by the parties in the motion and opposition, rather than to remand the matter for trial court consideration in the first instance. In doing so, as we explain, we will conclude that Appellants made a sufficient prima facie showing of the remaining elements of their claim and that Respondents, in their showing, did not defeat Appellants' claim as a matter of law.

Accordingly, we will vacate the order granting Respondents' special motion to strike the complaint and reverse the judgment. On remand, we will direct the court to enter a new and different order denying Respondents' special motion.

I. STATEMENT OF THE CASE

In the complaint in this action, Appellants named Respondents in one cause of action for malicious prosecution. Respondents include California attorneys Nicholas and Tomasevic and, as alleged in the complaint, the "purported California limited liability partnership" N & T, which is the successor to Nicholas & Butler, LLP (N & B), "also a purported California limited liability partnership." Appellants include the successors to Vinturi, Inc. (Vinturi), which, according to the complaint, are responsible for the development and sales of the " ‘Vinturi Essential Wine Aerator’ (the ‘Vinturi Aerator’) for wine-lovers who want to enhance their experience of drinking wine." The United States Patent and Trademark Office issued four patents for the Vinturi Aerator.

Underlying and forming the factual basis for the present malicious prosecution lawsuit is a class action lawsuit in San Diego County Superior Court, case No. 37-2010-00050074-CU-BT-NC, originally entitled Roehrig v. Exica, Inc. (Class Action). Beginning in January 2010 and continuing through the final judgment of dismissal of the Class Action in June 2015, Respondents and N & B were counsel of record for the plaintiff and plaintiff class, and Appellants were the defendants.

A. The Prior Action (the Class Action)²

1. The Vinturi Aerator

Rio Sabadicci invented a red wine aerator. Vinturi, which was wholly owned by Area 55, Inc., produced the aerator for sale. Sabadicci was the chief executive officer of these corporations.

Vinturi started selling the Vinturi Aerator in 2006. Retail stores, wineries, restaurants, and bars carried the product. A company located in Pomona, California, manufactured the body of the Vinturi Aerator. As sold to the public, the box contained the Vinturi body with a decorative black silicone band, a rubber stand, and a filter screen. The silicone band, stand, and packaging were made in China, transported to the United States, and attached to the Vinturi body in the United States. Vinturi then placed the final aerator product into the stand and reclosed the box.

From 2006 until 2010, Vinturi sold its aerator in the United States with the statement " ‘ VINTURI IS MANUFACTURED IN THE USA ’ " printed on the bottom panel of the box, which measured approximately 3.1 inches square. Prior to making this representation, Sabadicci reviewed the Federal Trade Commission Web site, from which he concluded that Vinturi could accurately represent that the Vinturi Aerator was made in the United States because the body, which is 95 percent of the product, was made in the United States.

2. Roehrig Files the Class Action

In November 2009, Tom Roehrig purchased a Vinturi Aerator for $39.99 at a retail store. Roehrig saw the product at a friend's house, and after learning that it was made in the United States, he decided to buy the aerator even before going to the store.

A little over a month later, in January 2010, the firm of N & B, including attorney Nicholas, filed the Class Action against Appellants (as the defendants). Named plaintiff Roehrig alleged various consumer fraud claims in four causes of action based on alleged violations of: Civil Code section 1750 et seq. (Consumer Legal Remedies Act; CLRA); Business and Professions Code section 17200 et seq. (unfair competition); Business and Professions Code section 17500 et seq. (false advertising); and, specifically, Business and Professions Code former section 17533.7 (sale of goods produced outside the United States bearing words "Made in U.S.A."). Under the various statutes, the Class Action complaint sought relief for the basic violation of Business and Professions Code former section 17533.7, which at the time of the filing of the Class Action provided: "It is unlawful for any person, firm, corporation or association to sell or offer for sale in this State any merchandise on which merchandise or on its container there appears the words ‘Made in U.S.A.,’ ‘Made in America,’ ‘U.S.A.,’ or similar words when the merchandise or any article, unit, or part thereof, has been entirely or substantially made, manufactured, or produced outside of the United States."³ (Stats. 1961, ch. 676, § 1.)

By May of 2010, N & B, including attorney Nicholas, had filed a first and second amended complaint on behalf of Roehrig, alleging the same four causes of action against the same defendants.

Representing the named plaintiff, in September 2011 N & B, including attorneys Nicholas and Tomasevic, moved for class certification and for appointment as class counsel. In support of the motion, Roehrig submitted a declaration in which he testified that, when he purchased his Vinturi Aerator, he believed and relied on the representation that it was made or manufactured in the United States, and that, if he had known otherwise, he would have considered competing aerators, especially if any were manufactured in the United States. Following full briefing and oral argument, the court granted the motion, certifying the plaintiff class and appointing N & B as class counsel.

In July 2013, Appellants (as the defendants) moved to dismiss the case. Appellants presented evidence that Roehrig had abandoned his claims against Appellants in 2010 , nine months after filing the Class Action and almost a year before moving for class certification, when he filed bankruptcy and did not list his claims in the Class Action lawsuit on his bankruptcy schedules. Treating the motion as a motion for judgment on the pleadings, the court granted the motion with 20 days leave to amend to add a new class representative.

Appellants (as the defendants) brought a motion for prevailing party attorney fees against Roehrig. Relying on Civil Code section 1780, subdivision (e),⁴ Appellants argued that they were the prevailing defendants in Roehrig's claim under the CLRA and that Roehrig did not prosecute the Class Action in good faith. Finding that Roehrig acted in both subjective and objective bad faith in filing the Class Action, the trial court granted Appellants' motion for attorney fees against Roehrig.⁵

Roehrig appealed, and in April 2016 this court affirmed the order granting the motion, concluding in relevant part: "The record supports the trial court's finding ‘Roehrig was interested in buying a lawsuit to make money, or [to] help his friend [Sean Rones].’ " ( Roehrig , supra , D066790.)

3. Drew Ector Prosecutes the Class Action

In late November 2013, Respondents filed a third amended complaint against Appellants (as defendants).⁶ This iteration of the complaint alleged the same four causes of action against the same defendants, but with a different named plaintiff, Drew Ector.

More than a year later, in early 2015, Appellants and N & T entered into an agreement to toll the statute of limitations for Appellants' "desire to bring a claim against N & T for malicious prosecution of the [Class Action]." The parties (Appellants and N & T) entered into a number of amendments extending the expiration of the tolling period.

A few months later, in April 2015, Appellants (as defendants) moved to dismiss the Class Action for delay in prosecution pursuant to section 583.410 and California Rules of Court, rules 3.1340 and 3.1342.⁷ The court granted the motion and dismissed the Class Action, ruling in relevant part that the named plaintiff did not diligently prepare for trial, the defendants (Appellants here) were prejudiced by the delay, and the named plaintiff "w[ould] not be able to begin trial before the expiration of the 5[-]year statute ( CCP 583.360^{[8 ]})."

In June 2015, the court entered a judgment in favor of the defendants (Appellants here) and against Ector and dismissed the claims of the previously certified class. In post-judgment proceedings, as with Roehrig, Appellants brought ...