Sycamore Ridge Apartments LLC v. Naumann

• Decision Date: 17 December 2007
• Docket Number: No. D047796.,D047796.
• Citation: 157 Cal.App.4th 1385,69 Cal.Rptr.3d 561
• Court: California Court of Appeals Court of Appeals
• Parties: SYCAMORE RIDGE APARTMENTS LLC, Plaintiff and Appellant, v. William H. NAUMANN et al., Defendants and Appellants, Jeffrey LaFave et al., Defendants and Respondents.

69 Cal.Rptr.3d 561

157 Cal.App.4th 1385

SYCAMORE RIDGE APARTMENTS LLC, Plaintiff and Appellant, v. William H. NAUMANN et al., Defendants and Appellants, Jeffrey LaFave et al., Defendants and Respondents.

No. D047796.

Court of Appeal, Fourth District, Division 1.

December 17, 2007.

David A. Kay and John E. Thickstun, La Jolla, for Plaintiff and Appellant.

Lewis Brisbois Bisgaard & Smith, Jeffry A. Miller, Russell M. Mortyn and Kenneth C. Feldman, Los Angeles, for Defendants and Appellants.

Coughlan, Semmer & Lipman, Robert F. Semmer and Daniel A. Kaplan for Defendants and Respondents.

AARON, J.

I. INTRODUCTION

This appeal arises out of a malicious prosecution action filed by plaintiff Sycamore Ridge Apartments, LLC (Sycamore Ridge) against defendants Shirley Powell, William H. Naumann, Christopher H. Hagen, Lisa D. Stepp, Steven M. Nunoz, and Naumann & Levine LLP (collectively Naumann defendants), and Jeffrey LaFave and LaFave & Rice (jointly LaFave defendants). The malicious prosecution action arises from Powell's participation as a plaintiff in Gonzalez, et al. v. Sycamore Ridge Apartments LLC, et al. (Case No. GIC812933) (Gonzalez).

The Naumann attorneys filed the complaint in Gonzalez on behalf of 45 individual plaintiffs, including Powell, who had lived and/or worked at Sycamore Ridge. The complaint set forth 18 causes of action alleging that Sycamore Ridge failed to maintain the apartments in a habitable condition, and that Sycamore Ridge engaged in unfair business practices pertaining both to tenants and to former Sycamore Ridge employees. Through discovery it became apparent that Powell's main contention involved Sycamore Ridge's failure to return her security deposit when she moved out of the complex. After Sycamore Ridge noticed a deposition date for Powell, she requested that the date be changed and that the deposition take place at her home, due to her advanced age and poor health. Powell maintains that she later sought to end her participation in the litigation because she became confined to bed and believed it would be difficult for her to continue to prosecute the case in view of her deteriorating health. Powell ultimately voluntarily dismissed her portion of the lawsuit, without prejudice. Sycamore Ridge later offered to waive costs if Powell would agree that the dismissal of her claims would be with prejudice. Powell accepted Sycamore Ridge's offer.

Sycamore Ridge subsequently filed a malicious prosecution action against Powell and her attorneys. In response to the malicious prosecution action, the Naumann defendants and the LaFave defendants filed motions to strike under the anti-SLAPP law. The trial court denied the motion to strike as to the Naumann defendants, but granted it as to the LaFave defendants.

The Naumann defendants appeal from the order of the trial court denying their motion to strike under the anti-SLAPP law. Sycamore Ridge appeals from the trial court's order granting the LaFave defendants' motions to strike under the anti-SLAPP law.

In their appeal, the Naumann defendants contend that the trial court erred in denying their anti-SLAPP motion because Sycamore Ridge failed to establish a probability of succeeding on its malicious prosecution claim. In its appeal, Sycamore Ridge contends that the trial court erred in granting the LaFave defendants' anti-SLAPP motion because Sycamore Ridge sufficiently established a probability of succeeding on its malicious prosecution claim against the LaFave defendants, despite the LaFave defendants' late entry into the case.

We conclude that Sycamore Ridge demonstrated a probability of prevailing on its malicious prosecution claim as to both groups of defendants.¹ We therefore affirm the trial court's order denying the Naumann defendants' anti-SLAPP motion, and reverse the trial court's order granting the LaFave defendants' anti-SLAPP motions.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. The underlying lawsuit against Sycamore Ridge

In 2002, a Sycamore Ridge tenant contacted the Naumann attorneys, complaining about conditions at the apartment complex. An investigation into the complaints allegedly revealed high airborne readings of aspergillus/penicillium spores, maintenance deficiencies, roof leaks, vermin infestations, and flying termites at Sycamore Ridge.

On December 12, 2002, the Naumann attorneys sent unsolicited letters to present and former tenants of Sycamore Ridge informing them about complaints of health problems that some of the tenants had suffered. Included with the letter were contingency fee agreements to be signed and returned by those tenants who wished to be represented by the Naumann attorneys in future litigation against Sycamore Ridge.

Powell signed and returned the retainer agreement, and subsequently discussed her complaints with Naumann attorneys. Powell apparently discussed with the attorneys symptoms she suffered while living at Sycamore Ridge, including sinus congestion, watery and itchy eyes, headaches and fatigue, heating problems she had encountered in her apartment, and the fact that she believed Sycamore Ridge had unfairly retained her security deposit.

In June 2003, the Naumann attorneys filed a complaint against Sycamore Ridge on behalf of 45 individual plaintiffs, including Powell. The complaint set forth 18 causes of action arising out of allegations of poor living conditions at Sycamore Ridge and unfair business practices on the part of Sycamore Ridge management. From the complaint, it appears that all plaintiffs were named as complainants in all 18 counts.² A letter Naumann sent to Powell in August 2003 indicates that the Naumann attorneys had filed a complaint alleging 18 causes of action against Sycamore Ridge on her behalf. The total damages alleged in the complaint on behalf of the plaintiffs, as a group, exceeded $4,000,000.

Sycamore Ridge propounded form interrogatories to Powell. Powell verified her responses on September 7, 2003. In her responses, Powell indicated that she was not claiming to have suffered physical injuries, property damage, lost earnings or lost future earnings. In response to the question, "Do you attribute any physical, mental, or emotional injuries to the INCIDENT?" Powell answered, "Yes." Despite having indicated in her response to the solicitation letter that she had suffered from various physical ailments as a result of living at Sycamore Ridge, when Powell was asked to identify each injury she attributed to Sycamore Ridge's conduct, Powell answered, "The owner and staff have caused me mental and emotional distress because of their dishonesty." Powell identified no past or present physical injuries that she attributed to living at Sycamore Ridge. When asked "Do you still have any complaints that you attribute to the INCIDENT," Powell answered "No." Powell stated that she had not received any consultation, examination or treatment from a health care provider, had not taken any medications, and had not required any other medical services related to her tenancy at Sycamore Ridge.

In response to the question, "Do you attribute any loss of or damage to a vehicle or other property to the INCIDENT?" Powell answered, "No." In response to the question, "Do you attribute any loss of income or earning capacity to the INCIDENT?" Powell answered "No." In fact, Powell answered "No" or "Not that I know of to the great majority of the interrogatories that inquired about the substance of her claims. However, in response to the question "Was there a breach of any agreement alleged in the pleadings? If so, for each breach describe and give the date of every act or omission that you claim is the breach of the agreement," Powell answered, "I feel that the apartment at 2425 Hibiscus Ave, #270 Dr. is unsuitable to live in." (Sic.)

On December 9, 2003, the Naumann attorneys filed a statement of damages on behalf of Powell. The statement of damages asserted that Powell had incurred $20,000 in emotional distress damages, $2,000 in property damage, and $50,000 in punitive damages.

Sycamore Ridge noticed Powell's deposition for April 23, 2004. Naumann arranged for Powell to appear for her deposition on April 29. Powell subsequently requested to change the date of her deposition, and it was rescheduled for September 21. Powell failed to appear on September 21, and was never deposed.

The LaFave defendants became involved in the plaintiffs' case on September 16, 2004. On October 5, the LaFave defendants appeared in the case on the plaintiffs' behalf after having filed an association of counsel form with the court.

On October 22, 2004, Naumann wrote to Powell, "I understand from our previous conversation you have instructed this office to dismiss you ... although the dismissal will be without prejudice, you may nonetheless be barred from bringing another suit for the damages you incurred at Sycamore Ridge Apartments."

Powell voluntarily dismissed her claims without prejudice on November 19, 2004. After receiving a letter from Sycamore Ridge's counsel offering to waive costs if Powell would agree that the dismissal be with prejudice, the Naumann attorneys filed a dismissal with prejudice on Powell's behalf on January 20, 2005.³

2. Powell's complaints against Sycamore Ridge

Powell lived at Sycamore Ridge from February 15, 2002 to August 31, 2002. On July 12, 2002, Powell wrote a letter to Sycamore Ridge management in which she stated, "I have enjoyed my stay here at Sycamore Ridge and knowing all of you."

On October 16, 2002, Powell filed a small claims action against Sycamore Ridge alleging that Sycamore Ridge had failed to return her security deposit after she moved out of the complex. Powell sought to recover $900. A trial was held in small claims court on November 18, 2002. The court entered judgment in favor of Sycamore Ridge.

Naumann received a signed retainer agreement from Powell on December 30, 2002. Powell had checked several of the problems listed in the...