Opinion
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. CV109170
Duffy, J.
Respondent Amisha Chhipwadia entered into a relocation agreement in 2000 with a local hospital under which she agreed to set up a medical practice in the hospital’s service area in exchange for its guarantee to her of a fixed monthly collection amount for 12 months. At about the same time, Chhipwadia orally agreed with appellant Sheldon Zitman to join his medical practice; he agreed to pay her a fixed monthly salary, in exchange for which she assigned to him any payments she received from the hospital under the relocation agreement. Disputes arose later between the parties, resulting in a lawsuit by the hospital against Chhipwadia (the prior suit). Chhipwadia cross-complained against the hospital and Zitman, and he in turn cross-complained against her. That cross-complaint was based upon a purported written contract between Chhipwadia and Zitman that Chhipwadia contended was a sham. Zitman dismissed his cross-complaint without prejudice shortly before trial.
We acknowledge that Chhipwadia contends that she never signed the document attached to Zitman’s cross-complaint and that this contention is at the heart of her malicious prosecution claim herein. In the interests of expediency, however, we will use the term “Contract” to refer to the purported written agreement attached to Zitman’s cross-complaint.
Chhipwadia thereafter brought a malicious prosecution action against Zitman arising out of the prosecution of his cross-complaint in the prior suit. Zitman filed a motion to strike the complaint under the anti-SLAPP statute, Code of Civil Procedure section 425.16. The court denied the motion.
“SLAPP is an acronym for ‘strategic lawsuit against public participation.’ ” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 732 (Jarrow Formulas).) Further statutory references are to the Code of Civil Procedure unless otherwise stated.
Zitman on appeal challenges the order denying his anti-SLAPP motion. He claims that his motion to strike should have been granted because (1) he established the activity that was the subject of the complaint (i.e., initiation and prosecution of his cross-complaint in the prior suit) was protected activity under the anti-SLAPP statute, and (2) Chhipwadia failed to meet her burden of demonstrating a probability of prevailing.
The initiation and prosecution of the prior suit were unquestionably protected activities under the anti-SLAPP statute. But we conclude from our de novo review of the matter that Chhipwadia met her burden of showing a probability that she would prevail on her malicious prosecution claim. We therefore affirm the order denying Zitman’s motion to strike under section 425.16.
FACTS AND PROCEDURAL HISTORY
I. The Prior Suit
In August 2000, Chhipwadia and Tenet HealthSystem Hospitals, Inc., dba Community Hospital of Los Gatos entered into a written relocation agreement. Under that relocation agreement, Chhipwadia agreed to establish and maintain for at least three years a full-time family practice medical office within the service area of the hospital. In exchange, the hospital guaranteed Chhipwadia a monthly collection amount of $23,634 for a term of not more than 12 months. Also in August 2000, Chhipwadia orally agreed with Zitman to join his medical practice for one year. Zitman agreed to pay her $10,000 per month along with paying her share of all office overhead; she agreed to assign to Zitman any payments made by the hospital to her.
In 2003, after conducting an audit of the amounts paid to Chhipwadia under the relocation agreement, the hospital determined that it had overpaid her by approximately $103,600. She presented the hospital’s statement of account to Zitman and requested that he arrange to make payments under the terms of the relocation agreement, the benefits of which she had previously assigned to him pursuant to their oral agreement. Zitman made a partial payment to the hospital in July 2005.
In September 2005, the hospital initiated a complaint against Chhipwadia in the prior suit to recover alleged overpayments under the relocation agreement. She filed a cross-complaint against both the hospital and Zitman. The claims against Zitman consisted of causes of action for breach of oral contract, fraud, negligent misrepresentation, and indemnity.
On March 1, 2006, Zitman filed a cross-complaint for breach of contract against Chhipwadia. The Zitman cross-complaint was based on a purported written Contract between Chhipwadia and Zitman entered into in August 2000; an unsigned copy of that Contract was attached to the cross-complaint. The Contract provided that “beginning August 15, 2000, Dr. Chhipwadia will be considered a prospective partner and will participate as a partner” in Zitman’s practice. The Contract further stipulated that Chhipwadia “will be guaranteed a minimum income of $120,000 the first two years and $140,000 the third year. Her draw from the practice will be reconciled as either a draw if positive or a carried-over loan if negative.” It provided further that she “will be considered for partnership at the end of one year.” Zitman alleged in his cross-complaint that Chhipwadia breached the Contract in August 2003 because of “her failure to repay the loan that resulted from her draw from the practice.” Shortly before trial of the prior suit, and on or about January 12, 2007, Zitman dismissed the cross-complaint without prejudice.
The matter proceeded to trial on Chhipwadia’s cross-complaint against Zitman only, the disputes involving the hospital having been previously settled. After a court trial, the court found in favor of Chhipwadia on her breach of contract claim, awarded her $1 in damages, and further awarded her damages in the amount necessary to reimburse her for the attorney fees and costs required to defend against the claims of the hospital and to prosecute her oral contract claim against Zitman. The court found in favor of Zitman on the fraud and negligent misrepresentation claims.
II. The Current Action
On March 27, 2008, Chhipwadia filed an unverified complaint for damages for malicious prosecution against Zitman. Chhipwadia alleged in the complaint that Zitman’s cross-complaint in the prior suit was instituted at his direction, that the purported Contract on which that cross-complaint was based was a fake, and that her purported signature thereon was a forgery. She alleged further that Zitman at no time had probable cause to bring the cross-complaint and that he had acted maliciously. Chhipwadia alleged that “on the eve of trial, Zitman unilaterally, and without explanation dismissed without prejudice his cross-complaint against [her].” She claimed damages “[a]s a result of [Zitman’s] filing [of] such a frivolous and unfounded lawsuit.”
Zitman filed an anti-SLAPP motion to strike the complaint. The motion was accompanied by a memorandum of points and authorities, declaration of counsel, a declaration by Zitman, and a declaration by Zitman’s partner, Dr. B. Sofia Jalilie. Zitman contended that the cause of action asserted in the complaint arose out of an act that was in furtherance of constitutionally-protected rights—initiating the Zitman cross-complaint in the prior suit—and was therefore potentially subject to a motion to strike under the anti-SLAPP statute. He argued further that Chhipwadia bore the burden of showing through admissible evidence a reasonable probability that she would prevail on her malicious prosecution claim. He asserted that the claim was without merit because Chhipwadia could not prove that (1) the cross-complaint was terminated in her favor, (2) Zitman lacked probable cause to file the cross-complaint, and (3) he brought the cross-complaint with malice.
Chhipwadia filed opposition to the motion that included a legal memorandum, Chhipwadia’s declaration, a declaration of counsel in support of attorney fees, and a request for judicial notice. Zitman submitted a reply, along with a supplemental declaration of counsel and objections to evidence.
The joint appendix also includes a supplemental declaration of Chhipwadia that is unsigned and does not bear a stamp indicating that the original was filed with the court. We have determined from the superior court file that Chhipwadia’s signed supplemental declaration was fax-filed with the court on July 25, 2008. In order for us to have a complete appellate record, we take judicial notice of that document on our own motion pursuant to Evidence Code section 459.
After hearing argument on July 29, 2008, the court denied the motion to strike. Zitman filed a timely notice of appeal from the order denying the anti-SLAPP motion. An order denying an anti-SLAPP motion to strike is a proper subject for appeal, pursuant to sections 425.16, subdivision (i) and 904.1. (Chambers v. Miller (2006) 140 Cal.App.4th 821, 824; Navarro v. IHOP Properties, Inc. (2005) 134 Cal.App.4th 834, 839.)
DISCUSSION
I. Issues on Appeal
The overall issue on appeal is whether the trial court erred in denying Zitman’s motion to strike the complaint. Relevant questions to the disposition of this case include the following:
1. Whether the complaint arose out of activity that is protected by the anti-SLAPP statute.
2. Whether Chhipwadia presented evidence sufficient to support each element of her malicious prosecution claim—in particular, favorable termination, absence of probable cause, and malice—necessary to support a finding that there was a reasonable probability that she would prevail on that claim.
II. Anti-SLAPP Motions to Strike
A “SLAPP” suit “seeks to chill or punish a party’s exercise of constitutional rights to free speech and to petition the government for redress of grievances. [Citation.]” (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055.) Thus, a lawsuit arising from constitutionally protected speech or petitioning activity is a SLAPP if it “lacks even minimal merit.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 89 (Navellier).)
SLAPP suits may be disposed of summarily by a special motion to strike under section 425.16, commonly known as an “anti-SLAPP motion,” which is “a procedure where the trial court evaluates the merits of the lawsuit using a summary judgment-like procedure at an early stage of the litigation.” (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192.) The statute provides: “A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States or California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the [cross-complainant] has established that there is a probability that the plaintiff will prevail on the claim.” (§ 425.16, subd. (b)(1).)
A motion to strike under section 425.16 is analyzed and resolved by “the court... engag[ing] in a two-step process. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving defendant’s burden is to demonstrate that the act or acts of which the plaintiff complains were taken ‘in furtherance of the [defendant]’s right of petition or free speech under the United States or California Constitution in connection with a public issue,’ as defined in the statute. (§ 425.16, subd. (b)(1).) If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim.” (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67 (Equilon).) Thus, “[o]nly a cause of action that satisfies both prongs of the anti-SLAPP statute—i.e., that arises from protected speech or petitioning and lacks even minimal merit—is a SLAPP, subject to being stricken under the statute.” (Navellier, supra, 29 Cal.4th at p. 89.)
III. Appellate Review of Order Granting Anti-SLAPP Motion
We have previously summarized the standard for an appellate court’s review of the ruling on an anti-SLAPP motion: “We review de novo a trial court’s ruling on a motion to strike under section 425.16 by ‘conducting an independent review of the entire record. [Citations.]’ (HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212; see also Siam v. Kizilbash (2005) 130 Cal.App.4th 1563, 1569.) [¶] Thus, our review is conducted in the same manner as the trial court in considering an anti-SLAPP motion. In determining whether the defendant... has met its initial burden of establishing that the plaintiff’s... action arises from protected activity, we consider ‘the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.’ (§ 425.16, subd. (b)(2); see also City of Cotati v. Cashman [(2002)] 29 Cal.4th [69,] 79; Navellier, supra, 29 Cal.4th at p. 89.) The second prong—i.e., whether the plaintiff... has shown a probability of prevailing on the merits—is considered under a standard similar to that employed in determining nonsuit, directed verdict or summary judgment motions. (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1010 [(ComputerXpress)].) ‘[I]n order to establish the requisite probability of prevailing [citation], the plaintiff need only have “ ‘stated and substantiated a legally sufficient claim.’ ” [Citations.] “Put another way, 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.]’ (Navellier, supra, at pp. 88-89.) [¶] As is true with summary judgment motions, the issues in an anti-SLAPP motion are framed by the pleadings. (Church of Scientology v. Wollersheim (1996) 42 Cal.App.4th 628, 655, disapproved on other grounds in Equilon, supra, 29 Cal.4th at p. 68, fn. 5.) The plaintiff may not rely solely on its complaint, even if verified; instead, its proof must be made upon competent admissible evidence. ([ComputerXpress, ] supra, 93 Cal.App.4th at p. 1010.) In reviewing the plaintiff’s evidence, the court does not weigh it; rather, it simply determines whether the plaintiff has made a prima facie showing of facts necessary to establish its claim at trial. (Ibid.)” (Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 672-673 (Paulus).)
We review the court’s order here denying Zitman’s motion to strike with the above standard of review in mind.
IV. Protected Activity
Under 425.16, subdivision (e)(1), protected activity includes “any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law.” The initiation and prosecution of the cross-complaint in the prior suit here was unquestionably activity protected under the anti-SLAPP statute. (Paiva v. Nichols (2008) 168 Cal.App.4th 1007, 1017 (Paiva).) Chhipwadia concedes the issue. Furthermore, the Supreme Court has held that malicious prosecution claims that arise out of underlying civil lawsuits are not exempt from anti-SLAPP motions. (Jarrow Formulas, supra, 31 Cal.4th at p. 741; see also Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291 (Soukup).) We therefore proceed to the second prong in evaluating the anti-SLAPP motion, namely, whether Chhipwadia made a prima facie showing of the probable validity of her malicious prosecution claim.
V. Prima Facie Showing of Valid Claim
A. Malicious Prosecution Claims Generally
The tort of malicious prosecution “originated as a remedy for an individual who had been subjected to a maliciously instituted criminal charge, but in California, as in most common law jurisdictions, the tort was long ago extended to afford a remedy for the malicious prosecution of a civil action.” (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 871 (Sheldon Appel).) In the context of redressing wrongs resulting from both wrongful criminal prosecutions and civil proceedings, the elements are the same: “a plaintiff must demonstrate ‘that the prior action (1) was commenced by or at the direction of the defendant... [; 2] was pursued to a legal termination in his, plaintiff’s, favor [citations]; [3] was brought without probable cause [citations]; and [4] was initiated with malice [citations].’ [Citations.]” (Id. at pp. 871-872, quoting Bertero v. National General Corp. (1974) 13 Cal.3d 43, 50 (Bertero).) A claim for malicious prosecution will also lie for a cross-complaint where each element of the tort is satisfied. (Bertero, at pp. 50-53.)
Malicious prosecution has long been considered a disfavored tort (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 817 (Wilson)), and “the elements of the tort have historically been carefully circumscribed [in California] so that litigants with potentially valid claims will not be deterred from bringing their claims to court by the prospect of a subsequent malicious prosecution claim.” (Sheldon Appel, supra, 47 Cal.3d at p. 872.) This principle notwithstanding, a malicious prosecution claim will not be barred simply because of the tort’s disfavored status. (Casa Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, 349 (Casa Herrera); Bertero, supra, 13 Cal.3d at p. 53 [“convenient [disfavored tort] phrase should not be employed to defeat a legitimate cause of action”].)
B. Whether Prima Facie Case Was Presented by Chhipwadia
Chhipwadia, in order to defeat Zitman’s anti-SLAPP motion, was required to plead and present a prima facie evidentiary showing satisfying each element of her malicious prosecution claim. (Soukup, supra, 39 Cal.4th at pp. 291-297; Jarrow Formulas, supra, 31 Cal.4th at p. 741.) Zitman makes no challenge to Chhipwadia’s pleading, and our review of her complaint confirms that she adequately pleaded each of the elements of a malicious prosecution claim. Rather, Zitman contends that Chhipwadia failed to make a sufficient evidentiary showing in support of her claim.
Zitman clearly initiated the cross-complaint in the prior suit; there is no dispute that Chhipwadia satisfied the first element of the malicious prosecution claim. And while Zitman observes that he satisfied the judgment rendered in Chhipwadia’s favor in the underlying prior suit and that she “has essentially been made whole already,” he makes no argument that his motion to strike should have been granted because of an absence of proof of any damages. Thus, our focus in reviewing the court’s order denying the motion to strike is on whether Chhipwadia made a prima facie showing of the remaining elements of her malicious prosecution claim, namely, that the cross-complaint in the prior suit (1) terminated in her favor, (2) was initiated or maintained by Zitman without probable cause, and (3) was brought by Zitman with malice.
1. Favorable termination
As noted, a malicious prosecution plaintiff must plead and prove that the prior proceeding that is the subject of the complaint terminated in his or her favor. (Sheldon Appel, supra, 47 Cal.3d at p. 871; Lackner v. LaCroix (1979) 25 Cal.3d 747, 749 (Lackner).) Favorable termination is not the equivalent of a final determination on the merits; “it is sufficient to show that the former proceeding had been legally terminated.” (Hurgren v. Union Mutual Life Ins. Co. (1904) 141 Cal. 585, 587 (Hurgren).) The prior case need not have terminated after a trial on the merits in which the malicious prosecution plaintiff prevailed. (Lackner, at p. 750.) Thus, “[t]he fact that such legal termination would not be a bar to another civil suit or criminal prosecution founded on the same alleged cause [of action] is no defense to the action for malicious prosecution.” (Hurgren, at p. 587.)
The mere fact that the malicious prosecution plaintiff prevailed in the underlying action does not mean there has been a “ ‘favorable’ termination” sufficient to satisfy the element of the tort. (Lackner, supra, 25 Cal.3d at p. 751.) Rather, in order to constitute a favorable termination to support a subsequent malicious prosecution claim, “termination must reflect on the merits of the underlying action. [Citation.]” (Id. at p. 750.) Thus, certain dismissals—where they reflect on the merits—will constitute favorable terminations. As the Supreme Court explained in Jaffe v. Stone (1941) 18 Cal.2d 146, 150 (Jaffe), “It is not enough, however, merely to show that the proceeding was dismissed. The theory underlying the requirement of favorable termination is that it tends to indicate the innocence of the accused, and coupled with the other elements of lack of probable cause and malice, establishes the tort, that is, the malicious and unfounded charge of crime against an innocent person.... If [a dismissal or other termination without a trial] is of such a nature as to indicate the innocence of the accused, it is a favorable termination sufficient to satisfy the requirement. If, however, the dismissal is on technical grounds, for procedural reasons, or for any other reason not inconsistent with his guilt, it does not constitute a favorable termination.”
The high court observed later in reference to the above-quoted passage that while the underlying proceeding in Jaffe that was the subject of the malicious prosecution claim was a criminal prosecution, “the gist of the statement is equally applicable to cases, like the one at bench, where the main action is civil.” (Babb v. Superior Court (1971) 3 Cal.3d 841, 846; see also Lackner, supra, 25 Cal.3d at p. 750, fn. 1.)
Thus, “[t]o determine ‘whether there was a favorable termination,’ we ‘look at the judgment as a whole in the prior action....’ [Citation.]” (Casa Herrera, supra, 32 Cal.4th at p. 341.) “When the proceeding terminates other than on the merits, the court must examine the reasons for termination to see if the disposition reflects the opinion of the court or the prosecuting party that the action would not succeed.” (Sierra Club Foundation v. Graham (1999) 72 Cal.App.4th 1135, 1149.) For instance, a dismissal that results from a negotiation, settlement or consent is generally considered not to be a favorable termination, because such a dismissal “reflects ambiguously on the merits of the action....” (Minasian v. Sapse (1978) 80 Cal.App.3d 823, 827, fn. 4 (Minasian).) Likewise, a voluntary dismissal based upon the complaining party being unable to afford to prosecute the claim, where the record does not otherwise show that the complaining party had reason to believe that he or she would be unsuccessful, is not a favorable termination. (Contemporary Services Corp. v. Staff Pro Inc. (2007) 152 Cal.App.4th 1043, 1057-1058 (Contemporary Services).) Further, a dismissal based upon the statute of limitations is not a favorable termination, because it is technical or procedural termination rather than one on the merits. (Lackner, supra, 25 Cal.3d at pp. 751-752; cf. Casa Herrera, at p. 349 [judicial finding that parol evidence rule barred plaintiff’s introduction of evidence to vary terms of written contract and consequent finding that breach of contract claim lacked merit was favorable termination].)
By contrast, a dismissal for failure to prosecute is “not a dismissal on technical grounds within the meaning of the Jaffe opinion”; rather, it is a termination that reflects on the merits, based upon “the natural assumption that one does not simply abandon a meritorious action once instituted.” (Minasian, supra, 80 Cal.App.3d at p. 827.) A voluntary dismissal not based upon the parties’ settlement or consent, even where it is made without prejudice, is generally considered to be a favorable termination to support a malicious prosecution action. (Fuentes v. Berry (1995) 38 Cal.App.4th 1800, 1808; Villa v. Cole (1992) 4 Cal.App.4th 1327, 1335; MacDonald v. Joslyn (1969) 275 Cal.App.2d 282, 289 [voluntary dismissal, even without prejudice, generally not considered to be termination on technical grounds].) And at least one court has held that a voluntary dismissal is presumed to be a favorable termination, unless proved to the contrary by the party who prosecuted the underlying action and dismissed it. (Sycamore Ridge Apartments, LLC v. Naumann (2007) 157 Cal.App.4th 1385, 1400 (Sycamore Ridge).)
In this instance, Zitman voluntarily dismissed his cross-complaint without prejudice shortly before trial of the prior suit. There is no evidence that the dismissal occurred as a result of a settlement between the parties or was based upon consent given by Chhipwadia. Accordingly, generally speaking, such a voluntary, unilateral dismissal would be regarded as a favorable termination of the cross complaint. (Fuentes v. Berry, supra, 38 Cal.App.4th at p. 1808.)
Zitman, however, attempted to refute this conclusion in his motion to strike with evidence that his motivation for dismissing the cross-complaint was a pragmatic one having nothing to do with his view of the merits of his claim. His attorney declared that at the time the cross-complaint was pending, she determined that she would be required to retain two experts—a forensic document examiner and an information technology expert—to respond to Chhipwadia’s contention that the purported Contract was bogus and that her signature had been forged. Zitman’s attorney had concluded that the projected cost of prosecuting the cross-complaint would likely have been equal to, if not greater than, the maximum recovery of $40,000 her client stood to gain by bringing the cross-complaint to trial. Zitman declared that “[a]s a result [of the anticipated cost of bringing his cross-complaint to trial], it no longer made sense from an economic perspective to pursue the cross-complaint and [he] dismissed it for that reason.”
In response to the motion to strike, Chhipwadia declared that during her three-year tenure in Zitman’s office, she always considered herself an employee, it was always understood that her compensation would be salary, and no one ever discussed the concept that her compensation would be considered a “ ‘draw’ ”; she never entered into a written agreement with Zitman; she did not sign the Contract attached to the Zitman cross-complaint; no person on Zitman’s staff ever presented her with a partnership agreement; and she first saw the Contract after Zitman filed his cross-complaint. She declared further that she never had any discussions with Zitman, Zitman’s partner, Jalilie, or anyone else about being considered a partner, a prospective partner, or one participating as a partner in Zitman’s practice. Chhipwadia also declared that Zitman never made a demand on her prior to the March 2006 filing of the cross-complaint.
On this record, we conclude that Chhipwadia made a prima facie showing that there was a favorable termination of the prior proceeding (i.e., the Zitman cross-complaint). As observed, a voluntary, unilateral dismissal is generally considered to be a favorable termination. (Fuentes v. Berry, supra, 38 Cal.App.4th at p. 1808.) Zitman, to be sure, presented evidence from which it might ultimately be concluded that his cross-complaint was dismissed to avoid litigation costs, and that the dismissal had nothing to do with the merits of his claims, thereby yielding the finding that there was no favorable termination. (See Contemporary Services, supra, 152 Cal.App.4th at pp. 1057-1058.) However, there was also evidence that the Contract on which the cross-complaint was founded was unenforceable because it was not signed by Chhipwadia. At minimum, it could be inferred from the evidence submitted by Chhipwadia that she never executed the Contract; under the worst case scenario (from Zitman’s perspective), the Contract was a bogus document created after the dispute arose and Chhipwadia’s purported signature thereon was a forgery. Crediting Chhipwadia’s evidence as we must (Navellier, supra, 29 Cal.4th at pp. 88-89), it might be reasonably inferred that Zitman dismissed his cross-complaint because he had reason to believe that he would not prevail on his claim. Thus, since there is “a conflict... as to the circumstances of the termination, the determination of the reasons underlying the dismissal is a question of fact. [Citation.]” (Ross v. Kish (2006) 145 Cal.App.4th 188, 198; see also Leonardini v. Shell Oil Co. (1989) 216 Cal.App.3d 547, 583.) At this stage of the proceedings, we cannot assess credibility or evaluate the weight of the evidence submitted by the respective parties on the question of favorable termination. (Soukup, supra, 39 Cal.4th at p. 291; Overstock.com, Inc. v. Gradient Analytics, Inc. (2007) 151 Cal.App.4th 688, 699-700.)
Sycamore Ridge, supra, 157 Cal.App.4th 1385, is helpful in reaching our conclusion that Chhipwadia made a sufficient showing that the dismissal of the Zitman cross-complaint constituted a favorable termination. There, the underlying suit was dismissed without prejudice after the tenant-plaintiff, Powell, had answered interrogatories admitting that she had suffered no physical injuries arising from mold contamination of the premises alleged in the suit, and she had failed to appear for her deposition. (Id. at pp. 1393-1394.) The appellate court rejected the argument of the defendants in the subsequent malicious prosecution (Powell and her attorneys) that the plaintiff-landlord, in opposition to the defendants’ anti-SLAPP motion, had made no showing of favorable termination because it had not rebutted the defendants’ explanation that the underlying suit had been dismissed because of Powell’s ill health and advanced age. (Id. at p. 1400.) The court found that the evidence gave rise to “the reasonable inference that the allegations of mold contamination and personal injuries brought on behalf of Powell were groundless, and that the voluntary dismissal was motivated by a recognition that most of the claims made on Powell’s behalf in the complaint were meritless. [Citation.]” (Id. at pp. 1400-1401, fn. omitted.) Here, as was true in Sycamore Ridge, it could be reasonably inferred from the evidence presented in opposition to the motion to strike that Zitman dismissed his cross-complaint because he lacked confidence in the merits of his claim, not because of economic considerations.
Zitman argues at length that the conclusion by the court in Sycamore Ridge, supra, 157 Cal.App.4th at page 1400, that a voluntary dismissal is presumed to be a favorable termination is an erroneous and unsupported proposition of law. We rely on the principle that a voluntary, unilateral dismissal usually constitutes a favorable termination. (Fuentes v. Berry, supra, 38 Cal.App.4th at p. 1808.) And we find that the record here shows an evidentiary conflict on the issue of favorable termination that must be resolved by the trier of fact. (Ross v. Kish, supra, 145 Cal.App.4th at p. 198.) Accordingly, our conclusion that Chhipwadia made a prima facie showing of favorable termination is not tethered to the holding in Sycamore Ridge that there is a presumption that a voluntary dismissal is a favorable termination. Therefore, although the Sycamore Ridge court’s discussion of drawing reasonable evidentiary inferences relating to the favorable termination element is useful to us here, we do not address whether that court correctly held that a voluntary dismissal is presumed to be a favorable termination.
Relying on Oprian v. Goldrich, Kest and Associates (1990) 220 Cal.App.3d 337 (Oprian), and Contemporary Services, supra, 152 Cal.App.4th 1043, Zitman argues that there was no favorable termination because the voluntary dismissal of his cross-complaint was motivated by economic concerns having nothing to do with the merits of his underlying claims. Neither case is persuasive.
In Oprian, supra, 220 Cal.App.3d 337, the underlying suit from which the malicious prosecution claim arose was procedurally complex. After a verdict in the underlying suit that was adverse to the malicious prosecution defendant (Stern) both on his complaint and on a cross-complaint asserted against him by the malicious prosecution plaintiff (Oprian), and after a six-figure judgment was entered against Stern, he successfully appealed from the judgment. (Id. at pp. 341-342.) In reversing the judgment, the appellate court in an unpublished decision directed that judgment be entered in favor of the cross-defendants on Oprian’s cross-complaint and “that Stern’s complaint be dismissed, ‘based on representations of counsel at oral argument.’ ” (Id. at p. 342.) This direction of dismissal came about as a result of a query during oral argument as to whether Stern would retry the complaint if the matter were reversed and the response of Stern’s counsel that Stern “would probably be willing to forego further prosecution of the complaint rather than incur additional attorney's fees and the inconvenience of pursuing a second trial.” (Ibid.) After Oprian’s subsequent action for malicious prosecution was resolved against him by summary judgment, Oprian appealed, claiming, inter alia, that he established favorable termination of the prior proceeding. (Id. at p. 343.) The appellate court rejected that claim, concluding—based upon the uncontradicted declaration of Stern’s counsel in which he stated that the complaint’s dismissal was based on the aforementioned representation during oral argument, and that he believed the action was nonetheless meritorious (id. at p. 344)—that “[c]learly the dismissal was not on the merits and resulted from a practical decision that further litigation was too expensive to pursue.” (Id. at p. 345.)
Oprian is distinguishable. There, unlike here, there was no evidence contradicting the malicious prosecution defendant’s assertion that the dismissal of the underlying proceeding was solely motivated by “a practical decision that further litigation was too expensive to pursue.” (Oprian, supra, 220 Cal.App.3d at p. 345.) Here, as noted, while there is evidence from which a trier of fact may ultimately conclude that Zitman’s decision to dismiss the cross-complaint was based upon economics, rather than a reflection of his lack of confidence in the merits of his claim, there is contrary evidence which would support a favorable termination finding. Further, the dismissal in Oprian arose out of a rather complex and unusual set of circumstances, including a prior trial on the merits, not presented here. Thus—contrary to Zitman’s assertion that “[t]he circumstances at issue in the Oprian case... were virtually identical to those [here]”—the facts and procedural posture of Oprian make it readily distinguishable and not supportive of Zitman’s claim that the dismissal of the cross-complaint was not a favorable termination.
In Contemporary Services, supra, 152 Cal.App.4th 1043, two competing companies that provided event staffing and audience management services were embroiled in multiple acrimonious lawsuits over a several year period. (Id. at pp. 1047-1051.) One of the companies, Staff Pro Inc., and its president ultimately dismissed their complaint without prejudice against Contemporary Services Corporation (CSC) and its president because of the anticipated cost of pursuing it and in order to conserve resources for the defense of another suit by CSC. (Id. at p. 1049.) CSC and its president brought a subsequent action against Staff Pro and its president that included a malicious prosecution claim. (Id. at pp. 1050-1051.) In an appeal by CSC and its president from an order granting an anti-SLAPP motion, the appellate court held that they had failed to present a prima facie case of malicious prosecution because they had not shown favorable termination of the underlying proceeding. (Id. at pp. 1056-1058.) The court observed that “the record shows [the] defendants could not afford to pursue the matter, not because they lost faith in the merit of their claims. The record does not show [the] defendants sustained any adverse rulings in the case, or otherwise had reason to believe their claims would be unsuccessful.” (Id. at p. 1057.) In so holding, the court considered the contention of CSC and its president that the underlying complaint was dismissed because Staff Pro’s president “wanted to avoid being deposed because his deposition testimony would necessarily reveal [the] defendants’ claims lacked merit.” (Ibid.) Since Staff Pro made an evidentiary showing, through declarations of both its president and the president’s physician, that the president’s deposition had been postponed because of his illness, the court rejected CSC’s and its president’s assertion as mere “speculation,” holding that it did not “constitute a prima facie showing of facts demonstrating that [the] plaintiffs sustained a favorable termination on the merits of the underlying action.” (Id. at p. 1058.)
Contemporary Services, supra, 152 Cal.App.4th 1043,does not support Zitman’s favorable termination argument. In Contemporary Services, as was the case in Oprian, supra, 220 Cal.App.3d 337, there was undisputed evidence that the sole motivation for the malicious prosecution defendants’ dismissal of the underlying proceeding was cost-avoidance, rather than a concern about the claim’s lack of merit. Here, Chhipwadia’s evidence, while not directly contradicting Zitman’s claim that he dismissed the cross-complaint for economic reasons, gave rise to a reasonable inference that the dismissal reflected on the merits of Zitman’s claim.
Accordingly, we conclude that Chhipwadia made a sufficient showing as to the favorable termination element of her malicious prosecution claim.
2. Absence of probable cause
The third element, whether there was an absence of probable cause in bringing the prior case, is a question of law to be determined by the court. (Sheldon Appel, supra, 47 Cal.3d at pp. 874-875.) The presence or absence of probable cause is viewed under an objective standard applied to the facts upon which the defendant acted in prosecuting the prior case. (Id. at pp. 878, 881.) The test of determining probable cause is a “less stringent” standard (id. at p. 885) of whether any reasonable attorney would have thought the claim to be tenable. (Id. at p. 886.) Thus, “probable cause to bring an action does not depend upon it being meritorious, as such, but upon it being arguably tenable, i.e., not so completely lacking in apparent merit that no reasonable attorney would have thought the claim tenable. [Citation.]” (Wilson, supra, 28 Cal.4th at p. 824; see also Jarrow Formulas, supra, 31 Cal.4th at p. 743, fn. 13: “ ‘Probable cause may be present even where a suit lacks merit. Favorable termination of the suit often establishes lack of merit, yet the plaintiff in a malicious prosecution action must separately show lack of probable cause.”) As noted, although probable cause is a question of law based upon the facts presented to the court, “[i]f there is a dispute concerning the facts or beliefs on which the former plaintiff acted, that question must be resolved by a trier of fact. [Citation.]” (Drummond v. Desmarais (2009) 176 Cal.App.4th 439, 453.)
The determination as to whether there was probable cause to initiate an action “depends on the facts known to the litigant or attorney at the time the action is brought. [Citation.]” (Wilson, supra, 28 Cal.4th at p. 822, fn. 6, citing Sheldon Appel, supra, 47 Cal.3d at pp. 880-884.) However, the tort of malicious prosecution is not limited to instances in which the litigant or attorney lacks probable cause to initiate the action. “[A]n attorney may be held liable for malicious prosecution for continuing to prosecute a lawsuit discovered to lack probable cause.” (Zamos v. Stroud (2004) 32 Cal.4th 958, 970 (Zamos).) This is so because “[c]ontinuing an action one discovers to be baseless harms the defendant and burdens the court system just as much as initiating an action known to be baseless from the outset.” (Id. at p. 969.) In an appropriate case, a nonattorney litigant may likewise incur liability for malicious prosecution where he or she continues to prosecute an action which he or she discovers lacks probable cause. (Paiva, supra, 168 Cal.App.4th at pp. 1029-1031; see also Mitchell Land and Imp. Co. v. Ristorante Ferrantelli, Inc. (2007) 158 Cal.App.4th 479, 490 [dictum].)
Zitman argues that “[b]ecause [he] had a reasonable belief in the possibility of success on his cross-complaint at the time he filed it, Chhipwadia cannot demonstrate lack of probable cause.” He bases this assertion on the fact that at the time he filed the cross-complaint, “he had a written employment agreement with Chhipwadia in which she had agreed to repay her salary to the extent the revenue generated from her patients was less than the amount Zitman paid to her.” (Fn. omitted.) Zitman dismisses the evidence Chhipwadia claims showed a lack of probable cause because (1) even were her claim of forgery credited, it is nonetheless inadequate because Zitman was not aware of the assertion until six months after the cross-complaint’s filing, and the probable cause determination is made based upon information known to the litigant at the time the action is filed; (2) Chhipwadia’s statement in her declaration that she was never Zitman’s partner is irrelevant because he has never claimed otherwise; and (3) Chhipwadia’s other evidence (i.e., that there was no discussion about her becoming a partner, her compensation was wages, she received W-2 forms from Zitman, he never gave her a reconciliation or a partnership accounting, and he never made a demand for payment) is likewise irrelevant to the probable cause determination. We disagree with Zitman’s characterization of the evidence and conclude that Chhipwadia satisfied the absence of probable cause element—based upon the evidence discussed above that similarly established the favorable termination element.
On numerous occasions in his opening and reply briefs, Zitman argues that the malicious prosecution claim is not viable because he had probable cause at the time the cross-complaint was filed on his behalf. Of course, this argument ignores the possibility that under Zamos, supra, 32 Cal.4th 958, a party who has probable cause to initiate an action may nonetheless face liability for its continued prosecution, where he or she learns of facts while the action is pending that makes the action not objectively tenable.
Zitman declared that shortly after Chhipwadia began working in his office in August 2000, a group administering a health maintenance organization, Santa Clara County Individual Practice Association (SCCIPA), requested documentation of Chhipwadia’s employment. Zitman responded to this request by drafting an agreement for Chhipwadia and him to sign “that documented various terms of [their] relationship.” He declared that the document he prepared (the Contract) described the parties’ relationship “as [he] understood it at the time [he] drafted it....” After drafting it, Zitman “gave it to one of [his] staff people to obtain Chhipwadia’s signature and send the signed document to SCCIPA.” He later saw a signed version of the Contract and believed that Chhipwadia had executed it. Zitman declared further that he anticipated that Chhipwadia, like other people who had worked for him, would work towards becoming a partner. He stated that “Chhipwadia did not develop a patient base as quickly as [he] had anticipated... [and a]s a result, she did not bring in enough revenue to support her salary draw.” Zitman estimated that he had therefore overpaid Chhipwadia $40,000 under the terms of the Contract. Zitman did not seek repayment of that amount from Chhipwadia after she left his practice because he “believed she did not have the funds to pay it.” He declared that “[i]n mid-August 2006,... [he] learned for the first time that Chhipwadia claimed not to have signed the [Contract].”
Chhipwadia responded to this evidence with her own declaration in which she stated that she never entered into a written agreement with Zitman, never signed the Contract, and was never presented with a written agreement by any member of Zitman’s staff. She first saw the Contract after Zitman filed the cross-complaint. Chhipwadia declared further that she always understood that she was an employee, and that during the three years she worked at Zitman’s office, no one ever suggested that her compensation was a “ ‘draw’ ” She never had any discussion with Zitman or anyone else about being a partner or being a prospective partner. Chhipwadia declared further that she always received W-2 forms from Zitman reflecting the amount she earned in wages, and that she “never received a Form K-1, ‘Partner’s Share of Income’ or other year-end tax statement from Dr. Zitman.” She never received a reconciliation or accounting showing Zitman’s payments to her and the amount of her patient fees, and before the filing of the cross-complaint, Zitman never made a demand on her for reimbursement of any money. Chhipwadia stated that she had obtained a copy of her file with the SCCIPA; it neither contained a request from the organization to Zitman for verification of Chhipwadia’s employment, nor a copy of the Contract.
The evidence submitted by Chhipwadia was sufficient to present a prima facie case that Zitman instituted the cross-complaint without probable cause. Although Zitman presented evidence from which it might ultimately be concluded that he had probable cause to file his cross-complaint, there was also evidence that the Contract on which the cross-complaint was founded contained a purported signature of Chhipwadia that had been forged. Coupled with this evidence that Chhipwadia’s signature on the Contract may have been forged was, inter alia, evidence that (1) she never saw the Contract; (2) she never discussed signing an agreement; (3) she never even discussed with Zitman or anyone in his office the concept of being paid a draw that she might be required to repay in part; (4) Zitman never gave her an accounting reflecting amounts he claimed to have overpaid her; (5) Zitman never made demand on Chhipwadia for repayment; and (6) there was no copy of the Contract in Chhipwadia’s file with the SCCIPA. A reasonable inference that could be derived from this evidence, considered collectively, is that Zitman had no reasonable basis for believing that his cross-complaint was tenable because it was based upon recovery for breach of a Contract that was bogus and not executed by the party to be charged, Chhipwadia.
Further, even were we to find that Chhipwadia had failed to make a prima facie showing that Zitman lacked probable cause to file the cross-complaint—a finding that we expressly do not make here—it would nonetheless be improper to conclude that her malicious prosecution claim was not viable. As noted, a party may be liable for malicious prosecution even when he or she had probable cause to initiate the suit, if he or she later became aware of facts that made its continued prosecution not objectively tenable. (Zamos, supra, 32 Cal.4th at p. 970; Paiva, supra, 168 Cal.App.4th at pp. 1029-1031.) In this instance, even were we to assume, based upon the record before us, that Zitman had probable cause to file the cross-complaint, by his own admission he learned in August 2006—five months before he dismissed the cross-complaint—that Chhipwadia claimed not to have signed the Contract. Thus, there are facts in the record that would support the conclusion that, even if Zitman had an objectively tenable claim when he filed the cross-complaint (based on the assumption that he did not know that the Contract had not been signed by Chhipwadia), the continued prosecution of that claim after August 2006 was without probable cause.
Therefore, crediting her evidence (Navellier, supra, 29 Cal.4th at pp. 88-89), Chhipwadia presented a prima facie showing satisfying the third element of her malicious prosecution claim, i.e., that Zitman lacked probable cause to initiate and/or continue to prosecute his breach of Contract claim asserted in his cross-complaint.
3. Malice
The fourth element is whether the defendant acted with malice in initiating the underlying civil or criminal proceedings. Unlike probable cause, which is a legal determination, malice is a question of fact typically decided by the jury. (Sheldon Appel¸ supra, 47 Cal.3d at pp. 874-875.) “Malice may not only consist of ill will or hostility toward the malicious prosecution plaintiff, but may also result where the prior suit was ‘instituted primarily for an improper purpose.’ (Albertson v. Raboff (1956) 46 Cal.2d 375, 383; [citation].) Typically—since it is rare that there will be a ‘smoking gun’ admission of improper motive—malice is established ‘by circumstantial evidence and inferences drawn from the evidence.’ [Citation.]” (Paulus, supra, 139 Cal.App.4th at p. 675, fn. omitted.) Further, although some courts have held that the absence of probable cause alone does not yield the automatic conclusion of malice (Ross v. Kish, supra, 145 Cal.App.4th at p. 204; Swat-Fame, Inc. v. Goldstein (2002) 101 Cal.App.4th 613, 634, disapproved on another ground in Zamos, supra, 32 Cal.4th at p. 973), “ ‘[m]alice may also be inferred from the facts establishing lack of probable cause.’ [Citation.]” (Soukup, supra, 39 Cal.4th at p. 292.)
In this instance, the same evidence presented by Chhipwadia concerning the absence of probable cause is relevant to the element of malice. From the evidence that Chhipwadia submitted—including her denial of having signed, seen, or even discussed the Contract and the absence of any demand from Zitman until years after the alleged debt accrued—it could be inferred that her purported signature on the Contract was forged, and that the Contract was in fact created after the dispute arose that led to the hospital suing Chhipwadia and her cross-complaining against Zitman. Under these circumstances, a trier of fact could conclude that Zitman acted with malice in knowingly asserting a claim based upon a fraudulent Contract that Chhipwadia did not sign. “[A] plaintiff acts with malice when he asserts a claim with knowledge of its falsity, because one who seeks to establish such a claim ‘can only be motivated by an improper purpose.’ [Citation.]” (Drummond v. Desmarais, supra, 176 Cal.App.4th at p. 452.)
We therefore conclude that Chhipwadia made a prima facie showing of malice. This showing, coupled with evidence supporting the remaining elements of her claim, including favorable termination and absence of probable cause, compels our conclusion that Chhipwadia met her burden in opposing the anti-SLAPP motion of stating and substantiating a legally sufficient claim. (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1123.) Accordingly, the court properly denied Zitman’s motion to strike under section 425.16.
Our conclusion that Chhipwadia met her burden in opposing the anti-SLAPP motion is not an expression of an opinion on the merits of her claim. It means only that we have found—consistently with the trial court’s decision—that her suit is not one that “lacks even minimal merit” and thus is one that survives the anti-SLAPP motion to strike. (Navellier, supra, 29 Cal.4th at p. 89.)
DISPOSITION
The order denying Zitman’s special motion to strike the complaint under the anti-SLAPP statute is affirmed.
WE CONCUR: Bamattre-Manoukian, Acting P.J., Mihara, J.