Marijanovic v. Gray, York & Duffy

• Citation: 137 Cal.App.4th 1262,40 Cal.Rptr.3d 867
• Decision Date: 27 March 2006
• Docket Number: No. B179868.,No. B182058.,B179868.,B182058.
• Court: California Court of Appeals
• Parties: Ante MARIJANOVIC et al., Plaintiffs and Respondents, v. GRAY, YORK & DUFFY, Defendants and Appellants. Ante Marijanovic et al., Plaintiffs and Respondents, v. R.C. Sehnert, Inc., et al., Defendants and Appellants.

40 Cal.Rptr.3d 867

137 Cal.App.4th 1262

Ante MARIJANOVIC et al., Plaintiffs and Respondents, v. GRAY, YORK & DUFFY, Defendants and Appellants.

Ante Marijanovic et al., Plaintiffs and Respondents, v. R.C. Sehnert, Inc., et al., Defendants and Appellants.

No. B179868.

No. B182058.

Court of Appeal, Second District, Division 3.

March 27, 2006.

Flahavan Law Offices and William F. Flahavan, Los Angeles, on behalf of Defendant and Appellant Gray, York & Duffy.

Maxie Rheinheimer Stephens & Vrevich and Darin L. Wessel, Los Angeles, for Defendants and Appellants R.C. Sehnert, Inc. and Ron Sehnert.

Cameron, Pearlson & Foster and Richard J. Foster, Long Beach, for Ante Marijanovic, aka Tony Marijanovic for Defendants and Respondents.

CROSKEY, J.

A general contractor was sued by a condominium owners association for latent defects in the construction of the condominium complex. The general contractor cross-complained against the painting subcontractor for indemnity. Ultimately, the entire action settled without contribution from the painter, and the painter was voluntarily dismissed without prejudice. The painter then brought the instant malicious prosecution action against the general contractor and its counsel.

The general contractor and its counsel each filed anti-SLAPP (Code Civ. Proc., § 425.16) motions, which were denied on the basis that the painter had established a prima facie case of malicious prosecution. We disagree, concluding the evidence presented on the anti-SLAPP motions fails to establish an absence of probable cause to bring the underlying cross-complaint against the painter. That painter's counsel had represented to the general contractor's counsel that the painter was not liable for the defects alleged is insufficient, as a matter of law, to establish a lack of probable cause to pursue the cross-complaint. Similarly, the fact that the painter introduced his own declaration of non-liability in opposition to the anti-SLAPP motion is also insufficient. The general contractor and its counsel possessed evidence that painter was liable; that painter may not, in fact, have been liable cannot defeat probable cause.

FACTUAL AND PROCEDURAL BACKGROUND

The pertinent facts are set forth in the complaint in the instant action, and the exhibits thereto. On March 12, 1999, Oakridge Condominium Association ("Condominium") brought suit against its builder/developer for latent defects in the construction of the complex. Construction had been completed, and a notice of completion filed, in 1990. Condominium's complaint alleged numerous latent defects, including that "water-exposed exterior surfaces ... including ... walls, ... decks, [and] patios ... have failed, thereby allowing ponding and water entry into the walls and common areas, and causing damage...."

At some point, the general contractor on the Condominium complex, R.C. Sehnert, Inc. ("General Contractor"¹), was named as a defendant by Condominium.

On July 3, 2001, General Contractor filed a cross-complaint against several subcontractors who had worked on the Condominium complex. At this point, General Contractor was represented solely by Maxie Rheinheimer Stephens & Vrevich, LLP ("General Contractor's First Attorney"). On September 7, 2001, General Contractor amended its cross-complaint to name the painter on the project, Ante Marijanovic aka Tony Marijanovic dba Tony's Painting ("Painter"), as a previously-named Roe cross-defendant. By this point, a second law firm, Gray, York & Duffy, LLP ("General Contractor's Second Attorney") had been associated in to assist in General Contractor's representation. On January 23, 2002, Painter answered the cross-complaint with a general denial.

On February 26, 2002, Attorney Richard J. Foster ("Painter's Counsel") wrote a letter on behalf of Painter to General Contractor's Second Attorney. The letter stated, in pertinent part: "I have reviewed the defect report, and there is absolutely no basis to maintain this lawsuit against [Painter]. The only reference to painting is a reference to chipped paint on the wood trim. As you know, the paint was applied eleven years prior to the report. Paint is not expected to last that long; wood is normally repainted every five years. Thus, this is no reason to subject my client to the expense of this litigation. [Painter] does not have insurance coverage for this claim. As a result, this lawsuit is a hardship. We respectfully request that you voluntarily dismiss [Painter]."

On February 27, 2002, General Contractor's Second Attorney responded as follows: "While I am sympathetic to your client's uninsured status, there are issues raised by [Condominium] which preclude dismissal. I do not know if you attended the site inspection on January 30, 2002, or the defect presentation on February 7, 2002, but these two events made it clear that [Condominium] is claiming serious problems with the exterior finishes at this project. Certainly there are other parties who bear potential liability as well as your client. Additionally, lack of maintenance and upkeep are valid defenses for all of us. However, the allegations regarding painting seem to go beyond normal wear and tear, and directly to the original workmanship. [Condominium] alleges that, in connection with the horizontal siding, there was no painting or sealing of cut edges, and no back-priming. Wood trim and privacy fences, likewise, were not back primed. These inadequacies have contributed to the overall deterioration of the exterior surfaces, dry rot, split wood, water intrusion, etc. [¶] Based on the allegations, I am not in a position to dismiss [Painter]."

On March 8, 2002, Condominium created a "Preliminary Defect List and Cost of Repair Estimate." Condominium's expert attached a cost number to each defect category. General Contractor retained its own expert to allocate responsibility for those expenses among the different trades (and subcontractors) involved in the construction of the Condominium complex. On July 3, 2002, General Contractor's Second Counsel wrote Painter's Counsel, conveying a settlement demand in excess of $100,000, based on General Contractor's expert's allocation (the relevant portion of which was attached to the letter).

Ultimately, the Condominium's suit was settled without a contribution from Painter. Nonetheless, General Contractor voluntarily dismissed its entire cross-complaint, with prejudice, on June 18, 2003.

On March 1, 2004, Painter brought the instant malicious prosecution action against General Contractor, General Contractor's First Attorney, and General Contractor's Second Attorney. Painter alleged malicious prosecution in both the initiation and the maintenance of General Contractor's cross-action against him.

General Contractor's First Attorney filed an anti-SLAPP motion, arguing that a malicious prosecution action is the proper subject of an anti-SLAPP motion, and that Painter would be unable to establish a prima facie case of malicious prosecution. Specifically, General Contractor's First Attorney argued that Painter would be unable to establish General Contractor's First Attorney lacked probable cause or acted with malice. Indeed, General Contractor's First Attorney took the position that Painter's complaint and the exhibits thereto established probable cause as a matter of law, in that they established that Painter was the painting subcontractor on the Condominium complex; and that Condominium had made allegations against General Contractor "relating to the painting work."

Painter opposed the anti-SLAPP motion by arguing that his job on the Condominium complex had been restricted to painting the exterior surfaces; he had no obligation to waterproof or back prime any surface. Painter's opposition argued General Contractor's First Attorney "knows these facts are true." Yet, painter provided no evidence that General Contractor's First Attorney knew this at the time it pursued the cross-complaint against Painter. The only evidence submitted in opposition to the anti-SLAPP motion was a declaration from Painter's Counsel stating that he made that representation to General Contractor's attorneys. Painter's Counsel stated, "On numerous occasions, I complained to [General Contractor's] attorneys that [Painter] merely painted exposed surfaces eleven years before the cross-complaint was filed. I further explained that [Painter] was not responsible for installing any of the `systems' which the [Condominium] alleged were defective. [General Contractor's] attorneys first argued that they filed the cross-complaint against [Painter] because the complaint in the [Condominium's action] alleged defective `watertight systems[.'] I explained that [Painter] did not install any of those systems and that he wasn't responsible for any waterproofing or back priming." Painter's Counsel also represented that General Contractor's attorneys had relied on certain alleged defects identified in Condominium's defect report in order to keep Painter in the action, but that Painter's Counsel had repeatedly informed them that Painter was not responsible for those defects.

A hearing on the motion was held on August 10, 2004. At the hearing, Painter's Counsel conceded that it had been appropriate to initiate suit against Painter, but argued there was no probable cause to maintain the suit. When a question was raised as to the sufficiency of Painter's Counsel's declaration to defeat the anti-SLAPP motion, Painter's Counsel argued that his declaration was sufficient because he was the one who informed General Contractor's attorneys that Painter had not been responsible for the defects.² The trial court granted General Contractor's First Attorney's anti-SLAPP motion, concluding that Painter's malicious prosecution complaint, on its face, established the existence of probable cause for General Contractor's cross-complaint against Painter. Painter did not appeal the grant of General Contractor's First Attorney's ...