Lane v. Bell

• Decision Date: 31 January 2018
• Docket Number: D071312
• Citation: 228 Cal.Rptr.3d 605,20 Cal.App.5th 61
• Court: California Court of Appeals Court of Appeals
• Parties: John LANE et al., Plaintiffs and Appellants, v. Joan BELL et al., Defendants and Respondents.

20 Cal.App.5th 61

228 Cal.Rptr.3d 605

John LANE et al., Plaintiffs and Appellants,

v.Joan BELL et al., Defendants and Respondents.

D071312

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

Filed January 31, 2018

Certified for Partial Publication.^*

Veta & Veta and Ross Evan Veta, San Diego, for Plaintiffs and Appellants.

Suppa, Trucchi, and Henein and Samy S. Henein, San Diego, for Defendants and Respondents.

DATO, J.

To prevail in a malicious prosecution action under California law, a malicious prosecution plaintiff (the defendant in the underlying action) must show that (1) the plaintiff in the underlying action pursued a claim with subjective malice, (2) the claim was brought without objective probable cause, and (3) the underlying action was terminated on the merits in favor of the defendant. The issue in this case is a seemingly simple one. The plaintiff in the underlying action brought multiple claims and lost many, perhaps most of them, but prevailed on at least one. Can the defendant bring a malicious prosecution action by showing that some of the claims were malicious and lacked probable cause, but without showing a "favorable termination" of the entire underlying action?

In many respects, the answer likewise appears simple. In its most recent discussion of the issue, the California Supreme Court emphasized that "lack of probable cause" and "favorable termination" were distinct requirements in a malicious prosecution action: " ‘[T]hat a malicious prosecution suit may be maintained where only one of several claims in the prior action lacked probable cause [citation] does not alter the rule there must first be a favorable termination of the entire action.’ " ( Crowley v. Katleman (1994) 8 Cal.4th 666, 686, 34 Cal.Rptr.2d 386, 881 P.2d 1083 ( Crowley ).) Thus, if the defendant in the underlying action prevails on all of the plaintiff's claims, he or she may successfully sue for malicious prosecution if any one of those claims was subjectively malicious and objectively unreasonable. But if the underlying plaintiff succeeds on any of his or her claims, the favorable termination requirement is unsatisfied and the malicious prosecution action cannot be maintained.

In this case, John and Denise Lane jointly owned a piece of rural property together with Denise's mother, Joan Bell. In 2011, the Lanes filed a lawsuit (the property action) against Bell arising out of disputes over the property. (See Lane v. Bell (Jan. 8, 2015, D064651) 2015 WL 122178 ( Lane I ).) Bell cross-complained, seeking among other things a declaration of the extent of her interest in the property and an order for partition. The Lanes prevailed on most of Bell's claims, but a judgment was ultimately entered in Bell's favor valuing her interest in the property and granting her claim for partition. Because Bell prevailed on at least one of her claims, the seemingly simple answer—the conclusion reached by the trial court—is that the Lanes cannot demonstrate a "favorable termination" of the underlying action, which is fatal to their malicious prosecution action.

What appears to be simple becomes more complicated because the Crowley discussion is technically dicta; in Crowley there was no question that the underlying action in its entirety had terminated favorably to the defendant. ( Crowley , supra , 8 Cal.4th at p. 676, 34 Cal.Rptr.2d 386, 881 P.2d 1083.) Further muddying the waters is a 60-year-old Supreme Court opinion relied on heavily by the Lanes— Albertson v. Raboff (1956) 46 Cal.2d 375, 295 P.2d 405 ( Albertson )—which seems to hold that, at least in certain cases, a malicious prosecution plaintiff can satisfy the "favorable termination" element by succeeding on some causes of action in the underlying case, even though a partial judgment was entered against him or her on a different claim. ( Id. at p. 382, 295 P.2d 405.) The Lanes thus suggest we should decline to apply the dicta of Crowley in favor of their reading of Albertson 's holding.

To do so, however, would require that we ignore two relatively recent decisions by this court that follow Crowley on this very point, albeit without recognizing the potential conflict with Albertson . More importantly, the rule urged by the Lanes would conflate two separate elements in a malicious prosecution claim, effectively eliminating any requirement that the entire underlying action terminate in the defendant's favor.

In the absence of further guidance from the Supreme Court, we believe Crowley correctly addresses the issue, and the trial court properly relied on Crowley in granting summary judgment. Accordingly, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

1. The Underlying Dispute and the Property Action

In 1987, John Lane acquired the property and ultimately conveyed an undivided one-half interest to Bell. Concurrently with that transfer, the Lanes and Bell entered into a Joint Venture Agreement (JVA) defining the parties' anticipated rights and responsibilities. Under the JVA, the parties would seek approval for a lot split which, if successful, would leave Bell with the upper lot and the Lanes with the lower lot. The Lanes were responsible for processing the lot split application, and the parties would equally divide the associated costs and common expenses for the land. The parties also agreed that if the lot split was denied, each would have a right of first refusal to purchase the other's interest in the land.

Bell moved onto the upper lot in 1989 and lived on the land in a recreational vehicle through 2010. Although they did everything required of them under the JVA, the Lanes were ultimately unable to accomplish a lot split because of intervening legislation. They also failed to obtain county approval for a "granny flat" for Bell—with a separate kitchen—attached to the vacation home they were preparing to build on the property.

Shortly thereafter, Bell sought the help of a friend, Jerry Michael Suppa, who was of counsel to a law firm that ultimately represented Bell in the property action. Suppa told John Lane that Bell was entitled to the house and wanted a quarter of a million dollars. He threatened Lane with elder abuse charges and financial ruin if he did not capitulate.

Meanwhile, based on a revised set of plans, the Lanes began construction of a home without a granny flat. By late October 2010, the residence had been sufficiently completed to permit the Lanes to obtain a certificate of occupancy. During this same period, the parties negotiated a buy-out agreement under which they would dissolve the JVA, hire an appraiser to value the land, and have the Lanes purchase Bell's interest. When negotiations on the buy-out stalled, the Lanes filed the property action against Bell. They alleged claims for breach of contract, negligent misrepresentation, breach of the promissory note, and three causes of action seeking to quiet their title as against Bell's claims. In response, Bell filed her cross-complaint, upon which the Lanes' current action for malicious prosecution is predicated, which alleged claims for breach of contract, violation of the implied covenant of good faith, elder abuse, fraud, intentional infliction of emotional distress, and declaratory relief/partition.

At trial in the property action, the claims raised by Bell's cross-complaint against the Lanes resulted in a judgment granting some of the relief sought by Bell. On Bell's claim for declaratory relief/partition, the court concluded that Bell and the Lanes each had an interest in the property; it valued Bell's gross share in the property at $177,500 and the Lanes' gross share at $382,500. Granting Bell's claim for partition, the court determined her net share¹ to be $44,787, and ordered that the Lanes had the right to acquire Bell's interest in the property upon payment to her of that amount. The Lanes prevailed on all of the remaining claims in Bell's cross-complaint, including her causes of action for elder abuse and intentional infliction of emotional distress.²

2. The Malicious Prosecution Action

Following judgment in the property action, the Lanes filed this action for malicious prosecution based on the portion of Bell's cross-complaint that asserted claims for elder abuse and intentional infliction of emotional distress. Bell initially defended by moving to strike the complaint pursuant to the anti-SLAPP (Strategic Lawsuit Against Public Participation) statute ( Code Civ. Proc., § 425.16 ), but the trial court denied the motion and this court in Lane I affirmed that order on appeal. Bell thereafter moved for summary judgment, asserting (among other things) that under the rationale of this court's decision in StaffPro, Inc. v. Elite Show Services, Inc. (2006) 136 Cal.App.4th 1392, 39 Cal.Rptr.3d 682 ( StaffPro ) the Lanes could not demonstrate the "favorable termination" element for a malicious prosecution claim. In this regard, Bell contended the Lanes were required to show they prevailed on all —and not just some—of the claims asserted against them. Because Bell prevailed on her causes of action for declaratory relief and partition, she urged that the property action did not terminate in favor of the Lanes. Opposing the motion, the Lanes argued it was sufficient that they prevailed on a discreet portion of the underlying action.³

The trial court granted Bell's motion for summary judgment. It noted that the judgment in the property action showed Bell prevailed on part of her cross-complaint (as well as on many claims interposed by the Lanes' complaint). Under StaffPro , Bell's partial success precluded the Lanes from establishing "favorable termination" of the underlying action.

DISCUSSION

A claim for malicious prosecution requires that the plaintiff demonstrate (1) the defendant brought (or continued to pursue) a claim in the underlying action without objective probable cause, (2) the claim was pursued by the defendant with subjective malice, and (3) the underlying action was ultimately resolved in the plaintiff's...