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Hilsenrath v. Nixon Peabody LLP

California Court of Appeals, First District, Fifth Division
Oct 30, 2009
No. A121271 (Cal. Ct. App. Oct. 30, 2009)

Opinion


HANA HILSENRATH et al., Plaintiffs and Appellants, v. NIXON PEABODY LLP, et al., Defendants and Respondents. A121271 California Court of Appeal, First District, Fifth Division October 30, 2009

NOT TO BE PUBLISHED

San Francisco County Super. Ct. No. CPF 07-507709

NEEDHAM, J.

Hana Hilsenrath and Oliver Hilsenrath appeal from orders sustaining respondents’ demurrer to causes of action in the Hilsenraths’ complaint, granting respondents’ anti-SLAPP motion to strike one of the causes of action, and awarding respondents attorney fees pursuant to the anti-SLAPP statute. (See Code Civ. Proc., § 425.16.) We will affirm the orders.

I. FACTS AND PROCEDURAL HISTORY

Respondents Nixon Peabody LLP and two attorneys with that firm, Glenn Westreich and Beth Mitchell (collectively Nixon Peabody), represented Janvrin Holdings Limited (Janvrin) in two federal court actions – Janvrin I and Janvrin II – against Oliver Hilsenrath and others. Mr. Hilsenrath and his wife Hana subsequently filed the instant lawsuit against Nixon Peabody, based on statements Nixon Peabody allegedly made during the negotiation of the settlement of Janvrin I and on Nixon Peabody’s filing and maintaining Janvrin II. The Hilsenraths’ lawsuit against Nixon Peabody is the subject of this appeal, but we begin with a brief review of Janvrin I and Janvrin II for context.

A. Janvrin I

In Janvrin Holdings Ltd. v. U.S. Wireless Corporation, Dr. Oliver Hilsenrath and David Klarman (Case No. C002334 WDB), filed in June 2000 in the United States District Court for the Northern District of California (Janvrin I), Nixon Peabody’s client Janvrin contended it had received restricted U.S. Wireless stock with the stipulation that the restrictions would be removed pursuant to the terms of the parties’ agreement. Janvrin further alleged that U.S. Wireless had failed to release the shares for public sale. On this basis, Janvrin asserted several causes of action against U.S. Wireless and against Mr. Hilsenrath, U.S. Wireless’ CEO and director.

Janvrin I was settled in March 2001. In addition to a cash payment, the consideration for the settlement included a renewed commitment to file a registration statement so Janvrin could freely trade its shares.

B. Janvrin II

In March 2002, after Mr. Hilsenrath and other defendants failed to perform under the settlement agreement, Janvrin and others, represented by Nixon Peabody, filed Janvrin, et al. v. Dr. Oliver Hilsenrath, et al., Case No. C021068 PJH (Janvrin II) in federal court.

In addition to a claim for breach of the settlement agreement, the Janvrin plaintiffs asserted a claim for fraud, including securities fraud, in the inducement of the agreement. The fraud allegations were purportedly based in part on the discovery that, before the settlement, Mr. Hilsenrath and an associate had engaged in illegal unregistered securities sales.

Nixon Peabody contends these sales were subsequently the subject of a July 2003 SEC enforcement case and a July 2003 federal indictment of Mr. Hilsenrath. (See United States v. Oliver Hilsenrath, Case No. CR03 00213 WJA, U.S.D.C. N.Cal.) In July 2007, Mr. Hilsenrath pled guilty to securities fraud and tax evasion and received five years probation and a monetary penalty of approximately $2 million.

In 2005, the Hilsenraths filed a counterclaim against the Janvrin plaintiffs (but not against Nixon Peabody) in Janvrin II. They based their claim on the contention that in 2005 they discovered tangible evidence that the Janvrin plaintiffs had used the Hilsenraths’ private financial information in negotiating the settlement of Janvrin I, more than four years earlier. The Hilsenraths filed an amended counterclaim against the Janvrin plaintiffs in March 2007.

Also in 2007, the court ordered representatives or trustees of Janvrin to appear or face dismissal of their complaint for non-prosecution. When they did not appear, the court dismissed the Janvrin plaintiffs’ claims due to their failure to prosecute and entered a default and default judgment against them on the Hilsenraths’ counterclaim in July 2007.

C. The Hilsenraths’ Attempt to Sue Nixon Peabody in Federal Court

In June 2007, the Hilsenraths filed a petition in federal court (case number CO73193 TEH) for leave to file a complaint against Nixon Peabody for malicious prosecution, civil conspiracy and extortion. (See Civ. Code, § 1714.10.) The case was dismissed for lack of subject matter jurisdiction in September 2007.

D. The Instant Action Against Nixon Peabody in State Court

On November 6, 2007, the Hilsenraths filed a motion in San Francisco Superior Court for leave to file their complaint against Nixon Peabody. (Civ. Code, § 1714.10.) Nixon Peabody did not oppose the motion, which was granted. The Hilsenraths’ complaint was filed on January 4, 2008.

The complaint asserted ten purported causes of action. In essence, the Hilsenraths contended that Nixon Peabody invaded the Hilsenraths’ privacy by obtaining their personal information, used it to blackmail Mr. Hilsenrath and U.S. Wireless into settling Janvrin I, and committed malicious prosecution in filing Janvrin II.

Specifically, causes of action one through three alleged that Nixon Peabody conspired in and aided and abetted a blackmail scheme in settling Janvrin I, and sought a constructive trust. According to the Hilsenraths’ allegations, in November 2000 Nixon Peabody and Janvrin coerced the settlement by threatening to disclose unlawfully obtained “use and trade private financial records of the Hilsenraths.” The Hilsenraths further alleged: “On several documented occasions between December 2000 and April 2001, defendants made specific threats to employees and advisors of U.S. Wireless stating that they will disturb the company by use of the stolen records if their demands are not met.” Further, the complaint asserted, the pressure of these threats led not only to U.S. Wireless settling Janvrin I, but also to an internal investigation, the termination of Mr. Hilsenrath’s employment in May 2001, and the collapse of U.S. Wireless.

Causes of action four and six claimed invasion of privacy, based on the use of the Hilsenraths’ personal information, and causes of action five and seven sought punitive damages for the alleged invasion of privacy. The eighth cause of action alleged malicious prosecution in Nixon Peabody’s filing of the Janvrin II complaint. The ninth cause of action sought a “Recommendation to Disbarment” of Westreich and Mitchell, the Nixon Peabody attorneys involved. The tenth cause of action sought to compel Nixon Peabody LLP to “introduce appropriate internal control systems targeted to prevent reoccurrence of events similar to those in the current case.”

In February 2008, Nixon Peabody filed a demurrer to the Hilsenraths’ complaint and, as to the eighth cause of action for malicious prosecution, filed a special motion to strike under the anti-SLAPP statute. (Code Civ. Proc., § 425.16.) In the demurrer, Nixon Peabody contended, among other things, that the allegations of the complaint failed to state any cognizable cause of action and that purported causes of action one through seven were barred by the litigation privilege and the applicable statute of limitations. The special motion to strike the eighth cause of action asserted that the Hilsenraths’ malicious prosecution claim was subject to the anti-SLAPP statute and the Hilsenraths had no probability of prevailing on the claim. In support of their motions, Nixon Peabody sought judicial notice of, among other things, certain pleadings in Janvrin I and Janvrin II.

The Hilsenraths opposed the demurrer and special motion to strike. Nixon Peabody filed reply papers and lodged objections to the Hilsenraths’ evidence. The motions were heard on March 5, 2008.

By written order filed on March 20, 2008, the court sustained the demurrer without leave to amend as to causes of action one through three for blackmail, because the alleged wrongful activity was subject to the litigation privilege (Civ. Code, § 47, subd. (b)). The demurrer as to causes of action four through seven for invasion of privacy was sustained without leave to amend, because the statute of limitations had run. As to the eighth cause of action for malicious prosecution, the demurrer was sustained without leave to amend as to Mrs. Hilsenrath, because she was not the prevailing party on any claims brought by Nixon Peabody. In addition, the court ruled that the ninth and tenth causes of action did not state a cause of action.

By written order of the same date, the court also granted the anti-SLAPP motion to strike the eighth cause of action, ruling that Mr. Hilsenrath failed to show by admissible evidence a probability of prevailing on the malicious prosecution claim. In so ruling, the court sustained Nixon Peabody’s objections to much of the Hilsenraths’ evidence.

On April 8, 2008, the Hilsenraths appealed from the order sustaining the demurrer without leave to amend and the order granting the anti-SLAPP motion to strike. (Appeal No. A121271.)

Nixon Peabody thereafter brought a motion for an award of attorney fees under the anti-SLAPP statute. Counsel for Nixon Peabody presented evidence of $76,632 in attorney fees and $1,308.76 in costs purportedly attributable to the motion to strike. The Hilsenraths opposed the motion, asserting their complaint against Nixon Peabody was in actuality a “SLAPPback” action and thus not subject to mandatory attorney fees. (See Code Civ. Proc., § 425.18.) The court reduced counsel’s compensable hours and issued an attorney fees award of $45,434.

On June 3, 2008, the Hilsenraths filed a notice of appeal from the attorney fees award. (Appeal No. A121978.)

The Hilsenraths filed a motion to reconsider the attorney fees award on June 16, 2008. Nixon Peabody opposed the motion. The court denied the motion for lack of jurisdiction, since the Hilsenraths had already appealed from the award.

Upon the parties’ stipulation, we consolidated appeal numbers A121271 and A121978.

II. DISCUSSION

The Hilsenraths contend the court erred in sustaining Nixon Peabody’s demurrer, granting the anti-SLAPP motion to strike as to Mr. Hilsenrath in regard to the eighth cause of action, and awarding attorney fees under the anti-SLAPP statute. We address each issue in turn.

The grant of an anti-SLAPP motion to strike is an appealable order. (Code Civ. Proc., § 904.1, subd. (a)(13).) An order sustaining a demurrer is not. (See Code Civ. Proc., § 904.1.) However, because the order sustains the demurrer without leave to amend and directs that all of the causes of action be dismissed (with the exception of the eighth cause of action as to Mr. Hilsenrath, dismissed by the grant of the anti-SLAPP motion), there is nothing further for the trial court to do to resolve the parties’ claims. The parties do not contend we lack jurisdiction, and the appeal has been fully briefed. Therefore, in the interest of justice and judicial efficiency, we will treat the order sustaining the demurrer as an appealable judgment of dismissal. (See Hinman v. Department of Personnel Administration (1985) 167 Cal.App.3d 516, 520; Zipperer v. County of Santa Clara (2005) 133 Cal.App.4th 1013, 1019.) We also have jurisdiction to review the order awarding attorney fees. (Code Civ. Proc., § 904.1, subd. (a)(2).)

A. Demurrer to Causes of Action 1-3 (“Blackmail” or Extortion)

The first and second causes of action allege liability for conspiring in and aiding and abetting a scheme to commit “blackmail,” also known as extortion. (See Flatley v. Mauro (2006) 39 Cal.4th 299, 326, fn. 13 (Flatley).) The third cause of action is based on the same allegations, seeking a constructive trust “re Second Cause of Action.” According to the complaint, the purported blackmail occurred between 2000 and April 2001, when Nixon Peabody allegedly “made specific threats to employees and advisors of U.S. Wireless... that they [would] disturb the company by use of the stolen records if their demands [were] not met.”

1. Litigation Privilege

The litigation privilege protects statements made in any “judicial proceeding.” (Civ. Code, § 47, subd. (b).) The privilege is absolute, whether or not the statement was made with malice. (Kashian v. Harriman (2002) 98 Cal.App.4th 892, 913.) It bars all tort actions other than malicious prosecution. (Silberg v. Anderson (1990) 50 Cal.3d 205, 212.)

The threats allegedly made by Nixon Peabody occurred during the pendency of Janvrin I and were related to the settlement of that action. They were therefore made in a judicial proceeding. The fact the threats were allegedly extortionary or illegal does not exempt them from the privilege. (Blanchard v. DIRECTV, Inc. (2004) 123 Cal.App.4th 903, 911, 921-922.) The first, second and third causes of action are barred by the litigation privilege.

The Hilsenraths argue, and alleged in their complaint, that in 2007 the federal court in Janvrin II determined that the Janvrin plaintiffs invaded the Hilsenraths’ privacy and blackmailed Mr. Hilsenrath and his company. From the documents Nixon Peabody provided with its request for judicial notice, it is apparent the Hilsenraths are referring to the default judgment entered against the Janvrin plaintiffs in Janvrin II. That is not a determination on the merits as to Nixon Peabody, who was not named as a counter-defendant. Furthermore, in entering the default judgment, the federal court did not have before it the materials presented to the trial court in this case by Nixon Peabody. The federal court order in Janvrin II as to Nixon Peabody’s clients did not preclude the state court from ruling that the Hilsenraths’ claims as to Nixon Peabody in this case are barred by the litigation privilege.

2. Statute of Limitations

Causes of action for extortion must be brought within three years of the extortion. (Code Civ. Proc., § 338; see Gallo v. Superior Court (1988) 200 Cal.App.3d 1375, 1383.)

The Hilsenraths’ complaint asserts generally that Nixon Peabody threatened to reveal the information to extort a settlement in Janvrin I, which was reached in March 2001. The Hilsenraths specifically allege that threats were made “between December 2000 and April 2001.” Their complaint was filed in superior court much more than three years later, in January 2008.

To the extent the Hilsenraths argue that their claims are not time-barred because the “current complaint was in fact filed in June 2007 in District Court and subsequently transferred to California Superior Court,” they are mistaken. No complaint was filed in June 2007. They filed a petition in federal court in June 2007 for leave to file a complaint, but the petition was dismissed for lack of jurisdiction. Neither the petition nor any complaint was transferred from federal court to the superior court. In any event, June 2007 is more than three years after April 2001.

The Hilsenraths further argue that no limitations period elapsed because there was a continuous conspiracy from 2000 to 2007 and until the present day. Their allegations, however, establish the contrary. According to the complaint, the object of the blackmail conspiracy was the settlement of Janvrin I, which occurred in March 2001. On that basis, the conspiracy ended in March 2001. To the extent they now argue there was a continuous conspiracy to conceal Nixon Peabody’s part in the extortion so as to toll the limitations period, there is no such allegation in the complaint.

The Hilsenraths may also be arguing that the conspiracy continued through 2007 because Nixon Peabody represented the Janvrin plaintiffs in Janvrin II until 2007. We need not decide this issue, however, because causes of action one through three are barred by the litigation privilege regardless of the statute of limitations.

The court did not err in sustaining the demurrer as to the first, second, and third causes of action.

B. Demurrer to Causes of Action 4-7 (Invasion of Privacy)

The fourth and sixth causes of action asserted invasion of privacy in obtaining their private financial information. The fifth and seventh causes of action sought punitive damages for the invasion of privacy; because they merely seek a remedy, they are not independent causes of action and are barred if the underlying claims for invasion of privacy are barred.

1. Statute of Limitations

The limitations period for invasion of privacy claims is two years from the discovery of the tort. (Code Civ. Proc., § 335.1.)

The Hilsenraths’ complaint alleges that in 2005 they discovered “tangible evidence” of the use of their private financial information during the settlement of Janvrin I, leading them to file their counterclaim in Janvrin II. They filed that counterclaim on October 14, 2005. Furthermore, in a declaration Mr. Hilsenrath signed under penalty of perjury in Janvrin II (of which Nixon Peabody requested judicial notice), Mr. Hilsenrath stated: “In June 2005, I discovered for the first time that in late 2000 Equity Trust had betrayed my and Hana’s trust by delivering our confidential financial and trust information to Plaintiffs, Mr. Westreich and his colleague [the Nixon Peabody attorneys].” (Italics added.) From the face of the Hilsenraths’ complaint and matters subject to judicial notice, the Hilsenraths discovered the alleged invasion of privacy by June 2005, more than two years before filing their complaint in this action in January 2008. Their invasion of privacy claims are therefore time-barred.

Although the trial court could take judicial notice of Mr. Hilsenrath’s declaration, it is less obvious the court could take judicial notice of the facts contained in his declaration. A court may take judicial notice of the existence of a document, but not the truth of statements contained in the document, at least if the statements are subject to reasonable dispute. (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113.) This is a matter of no significance to the instant appeal, however. First, even if the court could not take judicial notice that Mr. Hilsenrath discovered the delivery of personal information to Nixon Peabody in June 2005, it could take judicial notice that Mr. Hilsenrath made such a claim under penalty of perjury. The fact of the discovery in June 2005 was therefore not subject to reasonable dispute. Second, even if Mr. Hilsenrath’s statement concerning his discovery of the facts in June 2005 was not subject to judicial notice, the propriety of taking judicial notice was not challenged on that ground and was thus waived. Third, even without Mr. Hilsenrath’s declaration, there was sufficient evidence that the Hilsenraths’ complaint was not timely filed. According to documents filed in the trial court, the Hilsenraths filed their counterclaim in Janvrin II on October 14, 2005, thereby confirming they knew by then of the alleged acquisition and misuse of their personal information. The complaint in this case was filed more than two years after October 14, 2005. Indeed, the filing of the complaint on January 4, 2008, would be untimely even if the limitations period had been tolled for the approximately two months during the pendency of the Civil Code section 1714.10 proceedings in state court. (See Civ. Code, § 1714.10, subd. (a), and discussion post.)

Contrary to the Hilsenraths’ suggestion, the limitations period was not tolled by their attempt to file a complaint against Nixon Peabody in federal court. The court dismissed the petition to file the complaint on the ground it lacked subject matter jurisdiction. Neither the filing of a case that is subsequently dismissed (Wood v. Elling Corp. (1977) 20 Cal.3d 353, 357, 359 [failure to timely serve summons and complaint]) nor the filing of an action in a forum that lacks jurisdiction (Shofer v. Hack Co. (4th Cir. 1992) 970 F.2d 1316, 1319 [under federal law]), tolls the statute of limitations. Thus, although Civil Code section 1714.10 provides for a tolling of the limitations period during the pendency of the petition for leave to file the complaint, it would not apply here because the petition was made to a court that lacked jurisdiction in a proceeding that was dismissed.

Nor can the Hilsenraths avoid the effect of the statute of limitations based on their Civil Code section 1714.10 petition in superior court. Civil Code section 1714.10, subdivision (a) provides in part: “The filing of the petition, proposed pleading, and accompanying affidavits shall toll the running of any applicable statute of limitations until the final determination of the matter, which ruling, if favorable to the petitioning party, shall permit the proposed pleading to be filed.” In the matter before us, the Hilsenraths filed their petition on November 6, 2007, and the order permitting the filing of the complaint was issued on January 4, 2008. The limitations period was therefore tolled for only about two months, and they still did not file their complaint within the requisite period.

2. Litigation Privilege

The litigation privilege bars causes of action for invasion of privacy. (Jacob B. v. County of Shasta (2007) 40 Cal.4th 948, 960-961.)

Here, the thrust of the invasion of privacy claims involved communicative conduct (alleged threats to disclose the Hilsenraths’ personal information) during settlement negotiations in Janvrin I. The litigation privilege plainly bars the fourth through seventh purported causes of action.

The Hilsenraths argue that the federal court in Janvrin II previously found that their allegations were sufficient to state invasion of privacy claims. As we discussed ante, however, those rulings were in the context of determining whether a default judgment should be entered against Nixon Peabody’s clients on the Hilsenrath’s counterclaims, which did not name Nixon Peabody as a counter defendant. The federal court’s ruling in Janvrin II does not compel the conclusion that the Hilsenraths’ allegations in this case against Nixon Peabody are sufficient.

The Hilsenraths also point out that the superior court granted their Civil Code section 1714.10 petition to sue Nixon Peabody. However, Civil Code section 1714.10 merely requires the court to determine whether there is a reasonable probability the plaintiff will prevail, based on the allegations of the proposed pleading and the affidavits submitted. Nixon Peabody did not submit and was not obligated to submit affidavits in opposition to the Hilsenraths’ petition; nor was the court provided the material for which Nixon Peabody later sought judicial notice in connection with its demurrer. The Hilsenraths fail to demonstrate that the Civil Code section 1714.10 determination precluded the trial court from ruling causes of action four through seven barred by the litigation privilege.

The court did not err in sustaining the demurrer as to the fourth through seventh causes of action.

Nixon Peabody further contends the Hilsenraths’ statutory basis for seeking punitive damages in the fifth and seventh causes of action—Civil Code section 1708.8, subdivision (d) and Civil Code section 48a, subdivision (2)—do not apply. In light of our conclusion that the demurrer was properly sustained as to the fifth and seventh causes of action on other grounds, we need not address this issue.

C. Demurrer to Cause of Action 8 (Malicious Prosecution as to Mrs. Hilsenrath)

The eighth cause of action asserted a malicious prosecution claim against Nixon Peabody for filing Janvrin II, which had sought relief for Mr. Hilsenrath’s alleged breach and fraud in connection with the settlement agreement in Janvrin I, and which was dismissed for failure to prosecute.

To establish a cause of action for malicious prosecution, the plaintiff must prove the prior action was (1) brought by or at the direction of the defendant, without probable cause, and with malice, and (2) pursued to a legal termination in favor of the plaintiff in the malicious prosecution action. (Bertero v. National General Corp. (1974) 13 Cal.3d 43, 50 (Bertero).)

As a matter of law, Mrs. Hilsenrath cannot assert a cause of action for malicious prosecution, because Nixon Peabody never brought a legal proceeding against her: she was not a named defendant in Janvrin I or Janvrin II. Although she was a party to her own counterclaim against Nixon Peabody’s clients in Janvrin II, and she obtained a default judgment on those claims, prevailing on a counterclaim against the Janvrin plaintiffs does not give rise to a cause of action for malicious prosecution against Nixon Peabody. (See Bertero, supra, 13 Cal.3d at p. 50.)

The court did not err in sustaining the demurrer to the eighth cause of action as to Mrs. Hilsenrath.

D. Demurrer to Causes of Action 9-10

The ninth cause of action sought disbarment of Nixon Peabody attorneys Westreich and Mitchell. The Hilsenraths fail to establish there is a private right of action for disbarment. (Cf. Mirabito v. Liccardo (1992) 4 Cal.App.4th 41, 46 [noting there is no independent cause of action for breach of a disciplinary rule].)

The tenth cause of action sought to compel “controls” on Nixon Peabody LLP. Viewed broadly, the claim may seek injunctive relief. However, injunctive relief is a remedy, not an independent cause of action. (See Olsen v. Breeze, Inc. (1996) 48 Cal.App.4th 608, 625-626.)

The court did not err in ruling that the purported ninth and tenth causes of action failed to state a cognizable cause of action. Nor have the Hilsenraths demonstrated that leave to amend should have been granted.

E. Anti-SLAPP Striking of Cause of Action 8 as to Mr. Hilsenrath

Code of Civil Procedure section 425.16 authorizes a defendant to file a special motion to strike any cause of action arising from an act in furtherance of the defendant's constitutional right of petition or free speech in connection with a public issue. It establishes a procedure by which the trial court evaluates the merits of the lawsuit using a summary-judgment-like procedure at an early stage of the litigation. (Flatley, supra, 39 Cal.4th at p. 312; Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192.) The purpose is to curtail the chilling effect meritless lawsuits may have on the exercise of free speech and petition rights, and the statute is to be interpreted broadly to accomplish that goal. (§ 425.16, subd. (a).)

In the motion, the defendant must make a prima facie showing that the plaintiff's cause of action arises from the defendant’s free speech or petition activity, as specified in the statute. (§ 425.16, subds. (b), (e).) The burden then shifts to the plaintiff to establish a probability of prevailing on the claim. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) If the plaintiff fails to do so, the motion to strike is granted and the defendant is entitled to recover its attorney fees and costs. (§ 425.16, subd. (c).)

We review an order granting a motion to strike under section 425.16 de novo. (Flatley, supra, 39 Cal.4th at p. 325.)

1. Protected Activity

The first prong of the relevant analysis required Nixon Peabody to show that Mr. Hilsenrath’s malicious prosecution cause of action arose from Nixon Peabody’s acts “in furtherance of [its] right of petition or free speech under the United States or California Constitution in connection with a public issue.” (§ 425.16, subd. (b)(1).) By statutory definition, “[a]n ‘act in furtherance of a person's right of petition or free speech... in connection with a public issue’ includes: (1) any written or oral statement or writing made before a... judicial proceeding.” (§ 425.16, subd. (e).)

Malicious prosecution causes of action are subject to the anti-SLAPP statute since, “[b]y definition, a malicious prosecution suit alleges that the defendant committed a tort by filing a lawsuit.” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 735 (Jarrow Formulas).) The burden thus shifted to Mr. Hilsenrath to produce admissible evidence indicating a probability that he would prevail on the cause of action.

2. Probability of Prevailing

Mr. Hilsenrath had the burden of showing a probability of prevailing with respect to the elements of his malicious prosecution claim; in other words, that the Janvrin II case (1) resulted in a favorable determination for Mr. Hilsenrath, (2) lacked probable cause, and (3) was initiated by Nixon Peabody with malice.

As to the element regarding the termination of Janvrin II, the Janvrin plaintiffs’ complaint was dismissed by the federal district court in March 2007 for failure to prosecute. In Minasian v. Sapse (1978) 80 Cal.App.3d 823, it was held that a dismissal for failure to prosecute was a favorable determination for malicious prosecution cases. However, Nixon Peabody disputes Minasian’s application to this case and refers us to Contemporary Services Corp. v. Staff Pro Inc. (2007) 152 Cal.App.4th 1043, 1056-1057, which held that a termination of dismissal is only favorable when it reflects the trial court’s or plaintiff’s opinion that the action lacked merit. Nixon Peabody urges that the dismissal of Janvrin II was due to the relationship between Nixon Peabody and its clients (the Janvrin plaintiffs), not the merits of the claims. We need not resolve this issue, because as explained next, the Hilsenraths did not produce admissible evidence of another necessary element of a malicious prosecution claim: lack of probable cause.

Probable cause to initiate litigation occurs if, at the time the claim was filed, any reasonable attorney would have thought the claim tenable. (Jarrow Formulas, supra, 31 Cal.4th at p. 742.) As of the time Janvrin II was filed, Mr. Hilsenrath had not performed as allegedly required under the Janvrin I settlement agreement. The Hilsenraths fail to show that the Janvrin II claims were untenable.

In arguing to the contrary in the trial court, Mr. Hilsenrath relied on an unsigned and unfiled tentative ruling from United States Magistrate Judge Bernard Zimmerman, which had recommended setting aside a default judgment entered against Mr. Hilsenrath on the Janvrin plaintiffs’ breach of contract claim in Janvrin II. This evidence, however, is unavailing. In the first place, the trial court, in ruling on Nixon Peabody’s objections to the evidence, did not abuse its discretion in excluding the document as irrelevant and inadmissible. Only admissible evidence can establish a probability of prevailing on the merits. Second, the federal court’s tentative ruling did not show that Nixon Peabody lacked probable cause to file Janvrin II. Magistrate Judge Zimmerman did not determine the merits of the contract claim against Mr. Hilsenrath, but merely whether the default against him should be set aside: “It is thus not clear that Mr. Hilsenrath breached the settlement agreement. However, in view of my report and recommendation on the adequacy of service, I need not resolve this issue.” (Italics added.) In any event, the question is not whether the Janvrin II complaint was ultimately viewed by a court to lack merit, but whether any reasonable attorney would have thought the claim was untenable. (Jarrow Formulas, supra, 31 Cal.4th at p. 742.) As our Supreme Court has explained: “ ‘ “Counsel and their clients have a right to present issues that are arguably correct, even if it is extremely unlikely that they will win....” ’ ” (Ibid.) From the admissible evidence presented, no reasonable trier of fact would conclude that Nixon Peabody lacked probable cause to file the complaint in Janvrin II. Nor have the Hilsenraths established that Nixon Peabody thereafter prosecuted the Janvrin II claims at any point when they became untenable.

The Hilsenraths urge that the court erred in ruling much of their evidence inadmissible. First, they contend they did not have an adequate opportunity to respond to Nixon Peabody’s objections or to cure their evidentiary deficiencies. However, Nixon Peabody lodged its objections with its reply brief (see Cal. Rules of Court, rule 3.1354), and the Hilsenraths could have responded to those objections at the hearing five days later. The Hilsenraths also complain that the court struck evidence by an “[indiscriminate] wholesale process,” yet also singled out critical evidence as “hearsay, inadmissible or lacking foundation.” They fail to establish the court prejudicially abused its discretion in ruling on Nixon Peabody’s objections.

Because Mr. Hilsenrath failed to present admissible evidence supporting the probable cause element of his malicious prosecution claim, he failed to demonstrate any probability of prevailing on the claim, and we need not consider whether he submitted sufficient evidence to satisfy any other element. The trial court did not err in granting Nixon Peabody’s anti-SLAPP motion to strike the eighth cause of action as to Mr. Hilsenrath.

F. Attorney Fees

An award of attorney fees to a party who successfully brings an anti-SLAPP motion is mandatory. (§ 425.16, subd. (c); Ketchum v. Moses (2001)24 Cal.4th 1122, 1141-1142 (Ketchum).) The award of fees may include not only the fees incurred with respect to the underlying claim, but also the fees incurred in enforcing the right to the mandatory attorney fees. (Ketchum, at p. 1141.) We review the trial court’s determination of the amount of the award for an abuse of discretion. (Id. at p. 1132; Brochtrup v. INTEP (1987) 190 Cal.App.3d 323, 329.)

Nixon Peabody presented the trial court with evidence of $76,632 in attorney fees and $1308.76 in costs. Included in this documentation was an itemized record of the time spent and the amounts invoiced for the legal work. The court observed: “I understand that it was a complicated motion and that there was a good deal of work to do, but I still think that more than 200 hours of work was not necessary for this motion. I ended up concluding that 120 hours was a reasonable amount.” On that basis, the court granted the motion in the reduced amount of $45,434.

On the record presented to us, the Hilsenraths have not established that the trial court acted so arbitrarily or irrationally as to constitute an abuse of discretion. (Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219, 1248 [argument that billing is unreasonable and duplicative, unsupported by citation to the record or explanation of which fees were inappropriate, provides no basis for disturbing the trial court’s ruling].)

The Hilsenraths argue, as they did in the trial court, that an award of attorney fees is inappropriate because their complaint was a SLAPPback action under Code of Civil Procedure section 425.18. Section 425.18, however, defines a SLAPPback claim as “any cause of action for malicious prosecution or abuse of process arising from the filing or maintenance of a prior cause of action that has been dismissed pursuant to a special motion to strike under Section 425.16.” (§ 425.18, subd. (b)(1), italics added.) The Hilsenraths’ malicious prosecution cause of action was not based on a complaint that was dismissed pursuant to a special motion to strike, but on the Janvrin II complaint, which was dismissed for failure to prosecute. (See Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 279 [“A SLAPPback suit is an action, typically for malicious prosecution ‘filed by the target of a SLAPP suit against the SLAPP filer after the dismissal of the SLAPP suit as a result of the target’s appropriate use of the SLAPP statute.’ ”].)

The Hilsenraths proclaim their suspicion that Nixon Peabody obtained from the judge, who ruled on the demurrer and motion to strike, a commitment to dismiss their case. They present nothing that supports this accusation. In any event, there has been no showing of error in the judge’s rulings.

The Hilsenraths fail to demonstrate reversible error.

Shortly before oral argument, the Hilsenraths submitted to this court two documents purportedly reflecting a recent threat against them by a former Nixon Peabody employee. To the extent the submission may be considered a request for judicial notice, we deny the request for failure to comply with applicable procedural requirements. We have considered similar representations made by Mrs. Hilsenrath at oral argument.

III. DISPOSITION

The orders are affirmed.

We concur. SIMONS, Acting P. J., BRUINIERS, J.


Summaries of

Hilsenrath v. Nixon Peabody LLP

California Court of Appeals, First District, Fifth Division
Oct 30, 2009
No. A121271 (Cal. Ct. App. Oct. 30, 2009)
Case details for

Hilsenrath v. Nixon Peabody LLP

Case Details

Full title:HANA HILSENRATH et al., Plaintiffs and Appellants, v. NIXON PEABODY LLP…

Court:California Court of Appeals, First District, Fifth Division

Date published: Oct 30, 2009

Citations

No. A121271 (Cal. Ct. App. Oct. 30, 2009)