Fleishman v. Superior Court

• Decision Date: 23 September 2002
• Docket Number: No. B159487.,B159487.
• Parties: David M. FLEISHMAN, Petitioner, v. The SUPERIOR COURT of San Luis Obispo County, Respondent, Chester Salisbury, Real Party in Interest.
• Court: California Court of Appeals Court of Appeals

125 Cal.Rptr.2d 383

102 Cal.App.4th 350

David M. FLEISHMAN, Petitioner, v. The SUPERIOR COURT of San Luis Obispo County, Respondent Chester Salisbury, Real Party in Interest.

No. B159487.

Court of Appeal, Second District, Division 6.

September 23, 2002.

Review Denied December 18, 2002.

Lewis D'Amato, Brisbois & Bisgaard; Bruce L. Shaffer, Sacramento, and Andreas C. Rockas, for Petitioner.

No appearance for Respondent.

Thomas M. Morlan, Atascadero, for Real Party in Interest.

YEGAN, J.

David Fleishman (petitioner), an attorney for Sunterra Corporation (hereafter Sunterra), seeks extraordinary writ review of the trial court's order denying his motion for judgment on the pleadings in a malicious prosecution action filed against him. Chester Salisbury (Salisbury), a former Sunterra employee, alleges that petitioner maliciously prosecuted an earlier action (hereafter Sunterra's action) against him. In that action, the trial court granted Sunterra's application for a preliminary injunction. Petitioner contends that the issuance of the preliminary injunction conclusively establishes that Sunterra's entire action was brought with probable cause. We agree and order the issuance of a peremptory writ of mandate.

Facts And Procedural History

Petitioner filed the Sunterra action in July 1999. The complaint alleged as follows: Salisbury was employed by Sunterra to sell timeshare interests in the San Luis Bay Inn (hereafter the Inn). In April 1999 Sunterra terminated his employment. Salisbury thereafter "solicited owners of timeshare interests [in] the [ ] Inn ... to sell their timeshare interests using [Salisbury] as broker[ ] and salesperson[ ] in the transaction." He induced Craig and Anne Swanson (hereafter the Swansons) to terminate a contract with Sunterra for the purchase of a timeshare interest in the Inn. In addition, Salisbury misappropriated Sunterra's trade secrets, falsely advertised that he was affiliated with the Inn, and conducted his brokerage activities under unlicensed fictitious business names.

The Sunterra complaint contained six causes of action: (1) intentional interference with Sunterra's contractual relationship with the Swansons; (2) unfair competition; (3) false advertising; (4) conducting real estate brokerage activities under unlicensed fictitious business names (Cal.Code Regs., tit. 10, § 2731); (5) misappropriation of trade secrets in violation of the Uniform Trade Secrets Act (Civ.Code, § 3426 et seq.); (6) common law misappropriation of trade secrets. Sunterra sought damages under the first and sixth causes of action, injunctive relief under the second, third, and fourth causes of action, and both damages and injunctive relief under the fifth cause of action.

The trial court granted Sunterra's application for a temporary restraining order. It subsequently issued a preliminary injunction prohibiting Salisbury from: (1) destroying documents memorializing Sunterra's trade secrets; (2) disclosing or using Sunterra's trade secrets; (3) "soliciting any customers of [Sunterra] whose identities or product preferences became known to Salisbury during his employment with [Sunterra];" (4) making false or misleading statements concerning his affiliation with Sunterra, the Inn, or his provision of real estate sales services; and (5) "conducting real estate sales and brokerage activities under [fictitious] business names without possession of a real estate license for such fictitious business names, unless working under a licensed brokerf.]"

In November 2000 Sunterra voluntarily dismissed its action without prejudice. In November 2001 Salisbury filed the within malicious prosecution action against petitioner. The complaint consisted of a single cause of action. The trial court overruled petitioner's demurrer and denied his motion for judgment on the pleadings.

Standard Of Review

"A motion for judgment on the pleadings performs the same function as a general demurrer, and hence attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed. [Citations.]" (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999, 79 Cal.Rptr.2d 544.) "`[W]e are not bound by the determination of the trial court, but are required to render our independent judgment on whether a cause of action has been stated.' [Citation.]" (Lance Camper Manufacturing Corp. v. Republic Indemnity Co. (1996) 44 Cal. App.4th 194, 198, 51 Cal.Rptr.2d 622.)

Issuance Of Preliminary Injunction Conclusively Establishes Probable Cause For Bringing Action

"[T]o establish a cause of action for malicious prosecution of either a criminal or civil proceeding, a plaintiff must demonstrate 'that the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination in his, plaintiffs, favor [citations]; (2) was brought without probable cause [citations]; and (3) was initiated with malice [citations].' [Citations.]" (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 871-872, 254 Cal.Rptr. 336, 765 P.2d 498.)

"Probable cause, for purposes of a malicious prosecution action, is a legal issue, not a factual one. [Citation.]" (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 825, 123 Cal.Rptr .2d 19, 50 P.3d 733 (hereafter Wilson).) "[P]robable cause exists if `any reasonable attorney would have thought the claim tenable.' [Citation.] .. . Only those actions that '"any reasonable attorney would agree [are] totally and completely without merit" ' may form the basis for a malicious prosecution suit. [Citation.]" (Id., at p. 817,123 Cal.Rptr.2d 19, 50 P.3d 733.)

"Claims that have succeeded at a hearing on the merits, even if that result is subsequently reversed by the trial or appellate court, are not so lacking in potential merit that a reasonable attorney or litigant would necessarily have recognized their frivolousness." (Id., at p. 818, 123 Cal.Rptr.2d 19, 50 P.3d 733.)¹ Such claims include those that have withstood a special motion to strike under California's anti-SLAPP (strategic lawsuit against public participation) statute (Code Civ. Proc, § 425.16). In Wilson our Supreme Court held: "[A] trial court's denial of a motion to strike under section 425.16, on the ground that the plaintiff has established the requisite probability of success, establishes probable cause to bring the action, and precludes the maintenance of a subsequent malicious prosecution action, unless the prior ruling is shown to have been obtained by fraud or perjury." (Id., at p. 820, 123 Cal.Rptr .2d 19, 50 P.3d 733.) The court reasoned: "The rights of litigants and attorneys to bring nonfrivolous civil actions, `"even if it is extremely unlikely that they will win"` [citation], would be unduly burdened were they exposed to tort liability for malicious prosecution for actions that had been found potentially meritorious under section 425.16." (Ibid.) On the other hand, "denial of the motion solely on technical or procedural grounds, ... rather than because the plaintiff has shown a probability of success, would say nothing about the action's potential merit and would not establish probable cause." (Id., at pp. 823-824, 123 Cal.Rptr.2d 19, 50 P.3d 733.)

To defeat an anti-SLAPP motion by establishing a probability of success on the merits, "the plaintiff `must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.' [Citations.]" (Wilson, supra, 28 Cal.4th at p. 821, 123 Cal.Rptr.2d 19, 50 P.3d 733.) "A claim that is legally sufficient and can be substantiated by competent evidence is ... one that a `reasonable attorney would have thought ... tenable.' [Citation.]" (Ibid.)

If the denial of an anti-SLAPP motion based on the action's potential merit conclusively establishes probable cause for the action, the issuance of a preliminary injunction must have the same effect. "`"To issue an injunction is the exercise of a delicate power, requiring great caution and sound discretion, and rarely, if ever, should [it] be exercised in a doubtful case...."' [Citations.]" (Ancora-Citronelle Corp. v. Green (1974) 41 Cal.App.3d 146, 148, 115 Cal.Rptr. 879.) "In deciding whether to issue a preliminary injunction, a trial court must evaluate two interrelated factors: (i) the likelihood that the party seeking the injunction will ultimately prevail on the merits of his claim, and (ii) the balance of harm presented, i.e the comparative consequences of the issuance and nonissuance of the injunction. [Citations.]" (Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 441-442, 261 Cal.Rptr. 574, 777 P.2d 610.) "[A]n injunction pendente lite must not issue unless it is reasonably probable that the moving party will prevail on the merits [citations]...." (San Francisco Newspaper Printing Co. v. Superior Court (1985) 170 Cal.App.3d 438, 442, 216 Cal.Rptr. 462; accord, Weingand v. Atlantic Sav. & Loan Assn. (1970) 1 Cal.3d 806, 820, 83 Cal.Rptr. 650, 464 P.2d 106; Trader Joe's Co. v. Progressive Campaigns (1999) 73 Cal. App.4th 425, 429, 86 Cal.Rptr.2d 442; see also College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 715, 34 Cal. Rptr.2d 898, 882 P.2d 894 ["the trial court may indeed have to predict a `reasonable probability' of success on the merits before granting the extraordinary remedy of a preliminary injunction."].) The plaintiff bears the burden of presenting facts establishing the requisite reasonable probability: "[T]he drastic remedy of an injunction pendente lite may not be permitted except upon a sufficient factual showing, by someone having knowledge thereof, made under oath or by declaration under penalty of perjury." (Ancora-Citronelle Corp. v Green, supra, 41 Cal.App.3d at p. 150, 115 Cal.Rptr. 879.)

Before issuing a preliminary injunction, the trial court must "carefully weigh the evidence and decide...