Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Riverside County No. RIC450454. Craig Riemer, Judge. Affirmed.
Russo & Hale and Timothy C. Hale for Defendant and Appellant.
Stradling, Yocca, Carlson & Rauth, Jan P. Weir, Steven M. Hanle and Jennifer A. Trusso for Plaintiff and Respondent.
OPINION
MILLER J.
INTRODUCTION
This appeal involves two corporations, Ultratech, Inc., and Tamarack Scientific Co., Inc., both engaged in the design, manufacture, and sale of photolithography and laser processing equipment used to fabricate a wide range of electronic technology products. After prevailing in a federal patent infringement lawsuit brought by Ultratech, Tamarack sued Ultratech for malicious prosecution and abuse of process. Ultratech countered with a special motion to strike (Code Civ. Proc., § 425.16), which was granted as to abuse of process, but denied as to malicious prosecution. Ultratech appeals, insisting that the trial court misapplied applicable law in denying its motion to strike the malicious prosecution claim, and abused its discretion in awarding it attorney’s fees in an amount equal to a mere one-tenth of its actual fees as the prevailing defendant on its motion to strike the abuse of process claim. We affirm.
All further statutory references will be to the Code of Civil Procedure unless otherwise indicated.
Section 425.16 is commonly known as the “anti-SLAPP statute,” SLAPP being an acronym for “strategic lawsuit against public participation.” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 732, and fn. 1 (Jarrow).)
Our opinion therefore addresses only the propriety of the order denying Ultratech’s motion as to Tamarack’s cause of action for malicious prosecution.
FACTUAL AND PROCEDURAL BACKGROUND
In July 2003, Ultratech sued Tamarack in the United States District Court (the district court) for patent infringement (the federal action). The subject patent, entitled “Pattern Recognition Alignment System,” pertains to lithographic machines used in semiconductor manufacturing. During the course of the litigation, both parties filed various motions, several of which are particularly relevant here. In October 2004, the district court granted Ultratech’s motion for “literal [] infringe[ment]” with regard to certain of Tamarack’s equipment, and denied Tamarack’s motion for summary judgment on its inequitable conduct defense. In December 2004, the district court granted Ultratech’s motion for summary judgment as to infringement with regard to certain of its claims, and also granted Tamarack’s motion for summary judgment as to noninfringement with regard to another of Ultratech’s claims. Lastly, in May 2005, the district court granted Tamarack’s motion for summary judgment for patent invalidity, finding that Ultratech, before it applied for its patent and before it filed its lawsuit, was aware that another company was responsible for developing the novel idea underlying the patent. Judgment was entered in favor of Tamarack on the ground that the patent was invalid. The decision was affirmed on appeal, without opinion.
At oral argument, counsel for Ultratech challenged the accuracy of our assertion that Ultratech was aware, before filing its patent application, that another company was responsible for developing the concept underlying the patent. Counsel for Tamarack later assured us that the statement was correct, and another review of the appellate record has since confirmed its accuracy.
Tamarack thereafter filed a motion for attorney’s fees under 35 United States Code, section 285. The moving papers presented argument and evidence pertaining to Ultratech’s inequitable conduct and litigation misconduct. The district court found that Tamarack had established a prima facie case of unpatentability and intent to deceive, but denied the request for fees because Tamarack had not established that this was an “‘exceptional’” case within the meaning of the statute. Again, the decision was affirmed on appeal, without opinion.
Tamarack’s motion also sought attorney’s fees pursuant to 28 United States Code, section 1927, pursuant to which “[a]ny attorney . . . who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses and attorney’s fees reasonably incurred because of such conduct.” Tamarack’s request for fees on this basis was also denied.
The district court “recognize[d] that although Tamarack won this litigation (up to this point, anyway), it may never recover from the harm it suffered as a result of being sued by a larger direct competitor. It had to pay $2 million . . . to defend itself and has had the cloud of an infringement suit hanging over its head for two years.”
The statute provides: “The court in exceptional cases may award reasonable attorney fees to the prevailing party.” (35 U.S.C. § 285.)
In May 2006, Tamarack filed its lawsuit against Ultratech for malicious prosecution and abuse of process. The complaint alleged that in July 2003, Ultratech sued Tamarack in the district court, seeking damages for willful patent infringement. The complaint also alleged that in response to Ultratech’s underlying complaint, Tamarack had alleged that the patent was invalid and thus unenforceable, that in May 2005, the district court granted Tamarack’s motion for summary judgment finding the patent to be invalid, and entered judgment in Tamarack’s favor. As a first cause of action, Tamarack alleged that in bringing and pursuing the federal action, Ultratech acted without probable cause in that it knew or should have known that the patent was invalid. Tamarack further alleged that Ultratech acted maliciously in that its only motive was to harass and annoy Tamarack, to cause Tamarack to suffer undue burden and expense, to attempt to stifle Tamarack’s legitimate competition with Ultratech, and to bully Tamarack into a licensing agreement with Ultratech. As a second cause of action, Tamarack alleged that Ultratech filed its complaint for an improper purpose and, during litigation in the federal action, misused the discovery process, law and motion proceedings, and the appellate process for improper purposes.
In July 2006, Ultratech filed its special motion to strike. It alleged, in essence, that the same grievances asserted in Tamarack’s complaint were adjudicated in the federal action when the district court denied Tamarack’s motion for attorney’s fees, i.e., the basis for the fee motion was Tamarack’s position that, in light of the fact the patent was invalid, Ultratech filed a lawsuit known to be unmeritorious. According to Ultratech, in denying that motion the district court found that Tamarack had not carried its burden to prove that Ultratech knew the patent was invalid at the time it filed suit. Ultratech pointed to findings in the federal action “regarding the lack of Ultratech’s intent to deceive, the lack of Ultratech’s having believed that it was suing on an invalid patent, and the lack of litigation misconduct by Ultratech.”
Contemporaneously with the motion, Ultratech filed a demurrer, alleging, among other things, that neither cause of action stated sufficient facts to state a cause of action against Ultratech; that Tamarack could not show the requisite lack of probable cause with respect to the cause of action for malicious prosecution; and that both causes of action fail under principles of res judicata and/or collateral estoppel.
The introduction to Ultratech’s memorandum of points and authorities sets forth a synopsis of Ultratech’s position: “It would be difficult to frame a malicious prosecution and abuse of process action that was more subject to be stricken under this State’s anti-SLAPP statute than the instant action. Knowing full well that the alleged bases for its claims were already presented to and rejected by the District Court, Tamarack has fashioned the instant complaint by repackaging precisely the same facts, now unjustifiably attacking Ultratech’s right to petition for redress of grievances, which right is protected by statute.”
Actually, the district court found that Tamarack had failed to meet its burden to produce clear and convincing evidence of either Ultratech’s inequitable conduct or its intent to deceive.
Ultratech further asserted, relying on Roberts v. Sentry Life Insurance (1999) 76 Cal.App.4th 375 (Roberts), that because the district court granted its motion for summary judgment for infringement as to several devices sold by Tamarack, any claim Tamarack may have is barred.
Tamarack opposed the motion, arguing that the district court’s prior rulings had no preclusive effect in that collateral estoppel does not apply where the burden of proof in the underlying action is not the same or less rigorous than in the present action. Tamarack further asserted that there was evidence sufficient to support a judgment in its favor. In particular, Tamarack pointed to the district court’s findings “that Tamarack had established by clear and convincing evidence that Ultratech’s prior offer for sale to IBM was highly material to patentability and that Tamarack had shown an intent to deceive by the preponderance of the evidence. The district court found that Ultratech improperly continued to pursue its infringement claims against the withdrawn models in violation of the Court’s local patent rules. [¶] The evidence further shows that Ultratech knowingly filed suit on an invalid patent. . . . [¶] . . . A classic case of bad faith exists where the patentee brings an infringement suit knowing the patent to be invalid or not infringed. Bringing suit on a patent despite knowledge of earlier sales that would invalidate it justifies a holding that Ultratech lacked probable cause in instituting its infringement action. By the same token, continuing with litigation after learning of invalidating sales further supports such a finding.”
Along with its opposition, Tamarack filed a document entitled “Notice of Omitted Exhibits,” indicating that it was not then filing with the court its supporting exhibits, which had been designated as confidential and were subject to a protective order in the federal action, as it was awaiting Ultratech’s consent to file them under seal. Tamarack did, however, serve upon Ultratech copies of the exhibits along with its opposition. The following month, Tamarack caused to be filed with the court, under seal, a total of 48 exhibits. These exhibits included pleadings, documents, and orders filed in the federal action, as well as related memoranda, correspondence, and deposition testimony.
In reply, Ultratech insisted that Tamarack’s reference to collateral estoppel was a “strawman” argument since Ultratech did not argue in its motion that collateral estoppel bars Tamarack’s cause of action. Furthermore, citing Roberts, supra, and Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811 (Wilson), Ultratech maintained that it had probable cause to pursue its patent infringement action. Ultratech put forth no objection, however, to any of the exhibits offered by Tamarack.
The matter was heard on August 30, 2006. At the outset of the hearing, the court indicated its belief that “Tamarack has offered evidence sufficient to support a prima facie showing of all of the elements of malicious prosecution[.]” After taking the matter under submission, the court issued a written ruling on December 5, 2006. However, on January 8, 2007, that ruling was superseded by another.
In its revised ruling, the court explained that its prior ruling did not accurately reflect its order and analysis. It now denied the motion and overruled the demurrer as to the cause of action for malicious prosecution, but granted the motion as to abuse of process, thereby rendering moot the demurrer as to that cause of action. The court also awarded attorney’s fees and costs to Ultratech in accordance with section 425.16, subdivision (c), in the amount of $1,500, without any further explanation. Additionally, the court expressly stated that, in light of the corrected ruling, either party could file amended papers if deemed necessary Ultratech filed a motion for reconsideration, which was followed by Tamarack’s opposition and Ultratech’s reply. Tamarack also filed a motion for reconsideration, but withdrew it after the court issued its corrected ruling. At a February 2007 hearing, the court denied Ultratech’s motion, finding that Ultratech had failed to present either new evidence or changed circumstances.
In its original ruling, the court indicated in a “Summary of Ruling” that the motion to strike was denied, but proceeded to present an analysis in which it purported to grant the motion. Moreover, in both versions of the ruling, the court awarded attorney’s fees of $1,500. Thus, it seems self-evident that after hearing argument the court’s intention was always to deny the motion with regard to the claim for malicious prosecution.
DISCUSSION
We begin by setting forth applicable legal principles governing our review of the order denying Ultratech’s anti-SLAPP motion. Section 425.16 authorizes the trial court to strike a cause of action against a person arising from that person’s exercise of the constitutional rights to free speech and petition for redress of grievances. (§ 425.16; see Flatley v. Mauro (2006) 39 Cal.4th 299, 311-312.) The statute was enacted “‘to prevent and deter “lawsuits . . . brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.” [Citation.] Because these meritless lawsuits seek to deplete “the defendant’s energy” and drain “his or her resources” [citation], the Legislature sought “‘to prevent SLAPPs by ending them early and without great cost to the SLAPP target.’” [Citation.] Section 425.16 therefore establishes 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.’ [Citations.]” (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 278 (Soukup).)
“Resolution of an anti-SLAPP motion ‘requires the court to engage 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.’” (Jarrow, supra, 31 Cal.4th at p. 733.) In the present case, there is no question that the first prong of the two-part test was met in that Tamarack’s malicious prosecution action arose out of the filing and prosecution of the patent infringement case. (Id. at p. 741.)
Under the second prong, the court determines whether the plaintiff has presented evidence sufficient to “establish[] that there is a probability that the plaintiff will prevail on the claim.” (§ 425.16, subd. (b)(1).) Thus, to defeat a special motion to strike, a 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.” (Matson v. Dvorak (1995) 40 Cal.App.4th 539, 548, italics added.) Moreover, a plaintiff “need only establish that his or her claim has ‘minimal’ merit [citation] to avoid being stricken as a SLAPP. [Citation.]” (Soukup, supra, 39 Cal.4th at p. 291.)
“To prevail on a malicious prosecution claim, the plaintiff must show that the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination favorable to the plaintiff; (2) was brought without probable cause; and (3) was initiated with malice. [Citation.]” (Soukup, supra, 39 Cal.4th at p. 292.) There being no issue here as to the first element, the burden is on Tamarack in its malicious prosecution action to establish that Ultratech lacked probable cause in initiating and pursuing its patent infringement lawsuit, and that it did so with malice. It follows that to defeat Ultratech’s motion to strike, Tamarack was required to make a prima facie showing that Ultratech acted without probable cause and with malice.
The dispositive issue in this appeal, then, is whether Tamarack, in opposing Ultratech’s motion to strike, met that burden. Finding that it did, the trial court denied relief. We review that ruling de novo, and in so doing “consider ‘the pleadings, and supporting and opposing affidavits . . . upon which the liability or defense is based.’ [Citation.] However, we neither ‘weigh credibility [nor] compare the weight of the evidence. Rather, [we] accept as true the evidence favorable to the plaintiff [citation] and evaluate the defendant’s evidence only to determine if it has defeated that submitted by the plaintiff as matter of law.’ [Citation.]” (Soukup, supra, 39 Cal.4th at p. 269, fn. 3.)
Although Ultratech acknowledges that our review is de novo, it argues extensively that the trial court improperly placed the burden on it rather than on Tamarack as to the existence of probable cause. In making this argument, Ultratech focuses on the trial court’s corrected ruling where the court rejected Ultratech’s position that Tamarack could not state a claim for malicious prosecution because probable cause is presumed, in that Ultratech obtained a partial summary judgment in the federal action. In making that ruling, the court stated the general rule that “if the plaintiff in the underlying action obtains a judgment in his or her favor after a trial on the merits in a court of competent jurisdiction, that judgment is presumed to establish that the plaintiff prosecuted the underlying action with probable cause, even though the judgment is subsequently set aside on motion or reversed on appeal. That presumption is conclusive unless the malicious-prosecution plaintiff can establish that the judgment was obtained by extrinsic or intrinsic fraud on the part of the opposing party. [Citations] That rule has more recently been expanded to give rise to that same presumption from rulings in the underlying action that, while not dispositive of the entire action, nevertheless suggest that the underlying action is not totally without merit. [Citations.]”
The court continued: “Although [Ultratech] relies upon Roberts, that reliance is misplaced, because Roberts is not controlling in this procedural circumstance. There, the plaintiff below defeated a motion for summary judgment by demonstrating that there was a triable issue of fact regarding every element of the cause of action. Here, by contrast, [Ultratech] merely demonstrated that there was merit to some but not all elements of its cause of action. Those two circumstances are not substantially the same. The latter ruling does not establish that the cause of action asserted below was not totally without merit, because it did not address all elements of that cause of action. [¶] In short, the Court does not believe that any presumption of probable cause arose from that pretrial ruling. In the absence of that presumption, [Ultratech’s] motion fails.”
See discussion of Roberts and its applicability to the instant case. (Post, pp. 16-19.)
Ultratech filed a motion for reconsideration, which was denied. It then filed an appeal from the denial of its motion, which was dismissed by this Court on its own motion on April 12, 2007.
Pointing to the court’s inference that it was Ultratech who failed to establish that the presumption held true, Ultratech contends the court improperly shifted the burden to it, when the burden was on Tamarack to provide admissible evidence that Ultratech lacked probable cause. Ultratech further contends it was not its burden to establish that all elements of its cause of action for patent infringement had merit, but rather, that the burden was on Tamarack to demonstrate that every element of Ultratech’s patent infringement claim lacked any merit whatsoever, i.e., that there was a reasonable probability of prevailing on every element of its cause of action.
In response, Tamarack maintains the trial court expressly stated at the August 30, 2006, hearing that Tamarack had offered evidence sufficient to support a prima facie showing of all of the elements of malicious prosecution. Then, in its January 8, 2007, order, the court, in addressing the abuse of process claim, indicated that it was the plaintiff’s burden to demonstrate that the complaint is legally sufficient and is supported by a sufficient prima facie showing of facts to sustain a favorable judgment. Tamarack argues there was no need for the court to restate the standard in its ruling.
Because our review is de novo, the standard applied by the trial court is not part of the equation; thus, we do not address Ultratech’s claim. We limit our inquiry to whether Tamarack stated and substantiated a legally sufficient claim for malicious prosecution. We conclude that it did.
A. Tamarack made a prima facie showing that Ultratech lacked probable cause in initiating and pursuing its patent infringement action, and that it did so with malice.
“[T]he existence or nonexistence of probable cause is a legal question to be resolved by the court in the malicious prosecution case; litigants are thus protected against the danger that a lay jury would mistake a merely unsuccessful claim for a legally untenable one. [Citation.] . . . [P]robable cause is determined objectively, i.e., without reference to whether the attorney bringing the prior action believed the case was tenable [citation], and that the standard of probable cause to bring a civil suit was equivalent to that for determining the frivolousness of an appeal [citation], i.e., probable cause exists if ‘any reasonable attorney would have thought the claim tenable.’ [Citation.] This rather lenient standard for bringing a civil action reflects ‘the important public policy of avoiding the chilling of novel or debatable legal claims.’ [Citation.] Attorneys and litigants, . . . ‘“have a right to present issues that are arguably correct, even if it is extremely unlikely that they will win . . . .”’ [Citation.]” (Wilson, supra, 28 Cal.4th at p. 817.)
“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. Reasonable lawyers can differ, some seeing as meritless suits which others believe have merit, and some seeing as totally and completely without merit suits which others see as only marginally meritless. Suits which all reasonable lawyers agree totally lack merit—that is, those which lack probable cause—are the least meritorious of all meritless suits. Only this subgroup of meritless suits present no probable cause. [Citation.]” (Roberts, supra, 76 Cal.App.4th at p. 382.) Furthermore, “an 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.)
“‘“The ‘malice’ element of the malicious prosecution tort relates to the subjective intent or purpose with which the defendant acted in initiating the prior action . . . .” “The malice required in an action for malicious prosecution is not limited to actual hostility or ill will toward [the] plaintiff but exists when the proceedings are instituted primarily for an improper purpose. [Citations.]” [Citation.]’ [Citation.] Although lack of probable cause alone does not automatically equate to a finding of malice, it is a factor that may be considered. [Citation.] ‘[M]alice may still be inferred when a party knowingly brings an action without probable cause. [Citations.]’ [Citation.]” (Ross v. Kish (2006) 145 Cal.App.4th 188, 204 (Ross); Soukup, supra, 39 Cal.4th at p. 292.)
In opposing Ultratech’s motion, Tamarack pointed to various district court findings to substantiate its position that Ultratech knew before filing the federal action that the subject patent was invalid. For example, Tamarack asserted that Ultratech had offered its claimed invention for sale in the United States, thereby invalidating its patent, and that even after Ultratech learned of this, it continued with its litigation. In short, it is Tamarack’s position that filing a patent infringement suit on an invalid patent “establishes the requisite lack of probable cause because . . . there can be no infringement of an invalid patent.”
Ultratech did not object to this evidence below, instead relying solely on its position that because it prevailed on one of its summary judgment motions in the federal action, it was conclusively established that it had probable cause to bring the lawsuit. As we shall explain below—and as the trial court recognized—Ultratech’s position was erroneous.
Now, Ultratech insists that Tamarack failed to cite to any proper evidence to support either lack of probable cause or malice. We disagree. Tamarack made it perfectly clear that it was relying on facts set forth in documents, orders, and rulings in the federal action to establish its position that Ultratech’s patent infringement lawsuit was not tenable. Without objecting to the evidence favorable to Tamarack, which is therefore accepted as true (Soukup, supra, 39 Cal.4th at p. 269, fn. 3), Ultratech confined its argument to its erroneous position that probable cause had been conclusively established as a matter of law. Thus, and notwithstanding Ultratech’s contrary stance, which we address in the section which follows, Tamarack had presented enough to allow its malicious prosecution action to proceed to trial.
As for malice, Tamarack maintains that Ultratech is raising the issue of malice for the first time on appeal. As Tamarack points out, Ultratech asserted below that “[a]n examination of the second element alone, lack of probable cause, defeats this cause of action.” Ultratech disagrees, contending it “asserted the very issue in the briefing submitted in support of its anti-SLAPP motion to strike.” However, Ultratech points only to the memorandum it filed in reply to Tamarack’s opposition; nowhere in its initial motion to strike is the element of malice mentioned. In any event, as Tamarack points out, malice can be inferred from an absence of probable cause. (Soukup, supra, 39 Cal.4th at p. 292; Ross, supra, 145 Cal.App.4th at p. 204.)
In light of the entire record, we conclude that Tamarack, in opposing Ultratech’s motion, offered evidence sufficient to support a prima facie case as to every element of its malicious prosecution cause of action, i.e., that Ultratech lacked probable cause in bringing its patent infringement action, and that it brought the action with malice.
B. Ultratech failed in its efforts to refute Tamarack’s evidence.
As indicated above, at the core of Ultratech’s motion, Tamarack’s opposition, and the trial court’s ruling, was the issue of whether the holdings in Roberts and Wilson supported Ultratech’s position. Indeed, even if the plaintiff’s evidence is sufficient to substantiate its claim, the court must “‘evaluate the defendant’s evidence [] to determine if it has defeated that submitted by the plaintiff as a matter of law.’ [Citation.]” (Soukup, supra, 39 Cal.4th at p. 269, fn. 3.) Here, in an effort to refute Tamarack’s position as a matter of law, Ultratech took two alternative positions, i.e., that (1) pursuant to holdings in Roberts and Wilson, the granting of summary judgment in its favor in the federal action conclusively established that it had probable cause to bring that action, and (2) the district court’s factual findings in denying Tamarack’s motion for attorney’s fees collaterally estop Tamarack from proceeding with its malicious prosecution action. As we now explain, neither position has merit.
1. Roberts, Wilson, and other appellate decisions:
First, relying on Roberts, supra, Ultratech insists that because it obtained a partial summary judgment in its patent infringement action, there is a conclusive presumption that it had probable cause to file its lawsuit—regardless of whether the district court subsequently found the patent to be invalid. Ultratech misconstrues the holding in Roberts.
In Roberts, supra, 76 Cal.App.4th 375 the appellate court affirmed the trial court’s order granting summary judgment and dismissed the plaintiff’s malicious prosecution suit, finding that denial of summary judgment in the prior suit provided persuasive evidence that the lawsuit did not totally lack merit. The court explained: “California courts have held that victory at trial, though reversed on appeal, conclusively establishes probable cause. [Citations.] The rationale is that approval by the trier of fact, after a full adversary hearing, sufficiently demonstrates that an action was legally tenable. [Citation.] To put it differently, success at trial shows that the suit was not among the least meritorious of meritless suits, those which are totally meritless and thus lack probable cause. [¶] Denial of a defendant’s summary judgment motion provides similarly persuasive evidence that a suit does not totally lack merit. A federal judge denies summary judgment if there are ‘genuine issues of material fact’ for trial, and the moving party is not ‘entitled to judgment as a matter of law.’ [Citation.] A California judge must reach similar conclusions to deny summary judgment. [Citation.] These conclusions necessarily imply that the judge finds at least some merit in the claim. The claimant may win, if certain material facts are decided favorably. This finding (unless disregarded) compels conclusion that there is probable cause, because probable cause is lacking only in the total absence of merit.” (Roberts, supra, 76 Cal.App.4th at p. 383.)
The Roberts court continued: “We conclude that denial of defendant’s summary judgment in an earlier case normally establishes there was probable cause to sue, thus barring a later malicious prosecution suit. [¶] We say ‘normally’ rather than ‘conclusively’ because there may be situations where denial of summary judgment should not irrefutably establish probable cause. For example, if denial of summary judgment was induced by materially false facts submitted in opposition, equating denial with probable cause might be wrong.” (Roberts, supra, 76 Cal.App.4th at p. 384.)
Relying on the foregoing language, Ultratech maintains that if probable cause is lacking only in the total absence of merit, then where there is some merit, it follows that there must be probable cause. Stated another way, Ultratech contends “[i]f denial of a summary judgment motion by a defendant below was sufficient to find probable cause according to Roberts, then Ultratech’s having prevailed on its own affirmative summary judgment motion for patent infringement certainly warrants the requisite finding that the underlying suit had ‘some merit.’” We cannot agree.
Roberts stands for the proposition that any determination on the merits, even if later reversed, can constitute a conclusive showing of probable cause, without a final judgment on the merits having been entered. We agree with Tamarack that Roberts does not say, as Ultratech contends, that probable cause is presumed to exist for a claim if one element of the claim can be established.
Ultratech’s argument goes something like this: For Tamarack’s malicious prosecution cause of action to survive Ultratech’s motion, the trial court was required to find that (1) not one single reasonable attorney would have filed the underlying suit, and (2) every element of the underlying suit lacked merit. Thus, if it could be established that there was some merit to the underlying suit, malicious prosecution could not lie. In other words, if a claim has “some” merit, it cannot be one that “totally lacks merit” for purposes of malicious prosecution, where “total absence of merit” means the party opposing a special motion to strike must prove that every element of the underlying action lacked merit. Without disputing the fact that the district court found the patent to be invalid and that Ultratech therefore had no right to sue for patent infringement, Ultratech contends the trial court’s finding that there was some merit to the underlying patent suit establishes a finding of probable cause to bring the suit in the first place. Ultratech’s argument is flawed. Ultratech speaks of an “all elements” rule and argues the court erroneously applied such a rule in deciding whether Ultratech had probable cause to bring its patent infringement action. We reject Ultratech’s contention that the court created a new rule for determining probable cause when it found the Roberts rule not to be controlling. The court did nothing of the kind. Indeed, for purposes of determining probable cause based upon a prior ruling, what matters is whether the claim was adjudicated, not an underlying fact or an element of the claim. Here, Ultratech’s summary judgment motion in district court pertained to only one fact or element of its claim. Thus, the trial court was not advocating an “all elements” rule, but rather, was distinguishing Roberts on the ground that Roberts did not involve a circumstance where the plaintiff established there was merit to some part of its claim as opposed to establishing the entire claim had merit.
Ultratech is referring to the trial court’s January 9, 2006, ruling: “Here, by contrast [to Roberts], the plaintiff below merely demonstrated that there was merit to some but not all elements of its cause of action. Those two circumstances are not substantially the same. The latter ruling does not establish that the cause of action asserted below was not totally without merit, because it did not address all elements of that cause of action.”
Ultratech contends that to find lack of probable cause, the trial court was required to find that not a single reasonable attorney would have filed the patent infringement suit, and that every element to the underlying claim lacked merit. The converse is: one reasonable attorney would have filed the suit, and there is some merit to the underlying suit. Here, the court found that Ultratech had “demonstrated that there was merit to some but not all elements of its cause of action.”
Ultratech nonetheless contends that “where a party . . . prevails on summary judgment for patent infringement, it has more than shown that its lawsuit had probable cause, and any finding thereafter of patent invalidity—especially where the court finds that the party did not sue upon a patent it knew to be invalid, as here—does nothing to vitiate probable cause.” According to Tamarack, Ultratech’s appeal is based on the proposition that a malicious prosecution action must fail if the underlying plaintiff can prevail on any single issue or establish any single fact. In Tamarack’s words, a plaintiff could bring a completely frivolous case knowing that it cannot prevail, but avoid a later malicious prosecution action either by moving for partial summary judgment on a nondispositive, menial fact, or if the plaintiff later repudiates or abandons the one issue on which it prevailed.
Ultratech also relies on Wilson, supra, 28 Cal.4th 811, where the court recognized that “decisions in California and elsewhere established that a trial court judgment or verdict in favor of the plaintiff . . . establishes probable cause to bring the underlying action, even though the judgment or verdict is overturned on appeal or by later ruling of the trial court.” (Id. at p. 817, fn. omitted.) Pointing to that language, Ultratech insists that because it obtained a favorable judgment in the district court, this establishes that it had probable cause to bring its patent infringement action. However, Ultratech did not obtain a judgment against Tamarack. It merely prevailed on a motion for summary judgment; no judgment was entered.
Further, Ultratech cites Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659 (Paulus) and Sheldon Appel Co. v. Oliker (1989) 47 Cal.3d 863 (Sheldon) to support its position the “all elements” test adopted by the trial court is contrary to law. In Paulus, after filing a series of demurrers, the plaintiff ultimately prevailed in the prior suit after the trial court sustained his demurrer without leave to amend and dismissed his lawsuit for unfair competition. The defendant then sued for malicious prosecution, and the trial court granted the plaintiff’s anti-SLAPP motion, which was affirmed on appeal. Ultratech argues the Paulus court “found probable cause where the underlying plaintiff did not prevail on the merits as to any element of its claim, let alone all elements, and where it had its entire lawsuit dismissed on the pleadings, without a finding of merit as to any element therein.” And in Sheldon, the plaintiff in the underlying action filed a lis pendens against certain real property. The defendant successfully moved to expunge the lis pendens, and the lawsuit was resolved in favor of the defendant, who then filed a malicious prosecution action against the plaintiff. Reversing both the trial court and the appellate court, the California Supreme Court found that the underlying plaintiff had probable cause in filing its action for equitable lien based on the fact that “[a]t the time the lien claim was filed, there was at least one prior California decision which had suggested that a vendor’s lien . . . might well be available to protect the interests of a seller of real property under facts somewhat comparable to the circumstances in this case . . . .” (Sheldon, supra, 47 Cal.3d. at p. 886.)
We fail to see Ultratech’s point. Both Paulus and Sheldon are factually and procedurally unlike our case. That a determination of probable cause was made in both cases despite the fact the underlying plaintiffs did not prevail on an “‘entire claim,’” does nothing to bolster Ultratech’s position.
Tamarack cites Ross, supra, 145 Cal.App.4th 188 for the proposition that “simply obtaining a favorable ruling in the underlying action does not automatically establish the existence of probable cause.” In that case, Ross sued Kish for $4,000 in unpaid legal fees, after which Kish sued Ross for breach of contract and legal malpractice arising out of a real estate matter. Kish refused to be deposed and the lawsuit was dismissed as a discovery sanction. Ross then sued Kish for malicious prosecution. Kish countered with a special motion to strike, which was denied. On appeal, the court rejected Kish’s argument that his success in defending his first amended complaint against Ross’s demurrer established the case was filed with probable cause. The court distinguished Swat-Fame, Inc. v. Goldstein (2002) 101 Cal.App.4th 613, upon which Kish relied: “Swat-Fame addressed whether a false statement was actionable as fraud or merely constituted a statement of opinion. In overruling a demurrer to the complaint, the trial court found the allegations of the complaint were true to the best of the attorneys’ knowledge at the time the complaint was filed. Thus, the attorneys had probable cause to bring the claim for fraud. No similar finding of fact was made in connection with the order overruling Ross’s demurrer. Thus, Kish’s ability to plead causes of action for breach of contract and legal malpractice that survived Ross’s demurrer does not indicate he had probable cause to file the action in the first instance.” (Ross, at p. 203.)
We note that Swat-Fame cites Roberts, supra, 76 Cal.App.4th at p. 384 for the proposition the denial of a summary judgment motion normally establishes there was probable cause to sue, thus barring a later malicious prosecution suit. (Swat-Fame, at p. 626.)
Ultratech contends Ross is inapposite because there is no fact in this case, which corresponds to the fact that “Kish’s conduct in litigation . . . implied a lack of probable cause.” While that may be true, the case does stand for the proposition that obtaining a favorable ruling in the underlying case—as Ultratech did in this case—does not necessarily establish probable cause, but rather, there must be an examination of the merits of the entire claim.
2. Request for judicial notice, and collateral estoppel:
In its motion to strike, Ultratech relied almost exclusively on factual findings made by the district court in denying Tamarack’s motion for attorney’s fees. In particular, Ultratech relied on the district court’s finding that it “does not find that Ultratech believed its patent was invalid when it filed this lawsuit.” Asserting that the district court’s findings collaterally estop any claim made by Tamarack as to the merits of its action for malicious prosecution and undermines any evidence submitted on either probable cause or malice, Ultratech asked the court to take judicial notice of the findings. The court refused. On appeal, Ultratech contends the denial of its request was reversible error. Ultratech posits that the denial of attorney’s fees to Tamarack in the federal action is inconsistent with Tamarack’s position that Ultratech sued on what it knew to be an invalid patent.
In denying Ultratech’s request for judicial notice, the trial court explained: “I take judicial notice of the fact that the order was made. I take judicial notice of any factual findings or rulings as a matter of law in the order. But just as if I take judicial notice that a declaration has been filed in a particular case making certain contentions, I can’t take judicial notice of the truth of those contentions. So I don’t believe I can take judicial notice of the truth of factual recitals being made in an order.” The court’s ruling was right on the mark.
Factual findings made by another court are not the proper subject of judicial notice. As explained in Sosinsky v. Grant (1992) 6 Cal.App.4th 1548: “It is the consequence of judicial notice that the ‘fact’ noticed is, in effect, treated as true for purposes of proof. ‘Under the doctrine of judicial notice, certain matters are assumed to be indisputably true, and the introduction of evidence to prove them will not be required. Judicial notice is thus a substitute for formal proof. [Citation.]’ [Citation.] Therefore, a finding of fact that was judicially noticed would be removed as a subject of dispute and would be accepted for evidentiary purposes as true. The effect would be that without resort to concepts of collateral estoppel or res judicata that would litigate whether the issue was fully addressed and resolved, a finding of fact would be removed from dispute in the other action in which it was judicially noticed.” (Id. at p. 1564.) The Sosinsky court concluded that “neither a finding of fact made after a contested adversary hearing nor a finding of fact made after any other type of hearing can be indisputably deemed to have been a correct finding. . . . Taking judicial notice of the truth of a judge’s factual finding would appear to us to be tantamount to taking judicial notice that the judge’s factual finding must necessarily have been correct and that the judge is therefore infallible. We resist the temptation to do so.” (Id. at p. 1568.) As do we.
We note at this juncture that, although the trial court was correct in denying Ultratech’s request for judicial notice of the district court’s findings, it was not precluded from considering those findings in support of Tamarack’s opposition to Ultratech’s motion to strike. Indeed, it is Ultratech’s position the findings conclusively established that it had probable cause to bring the patent infringement action, whereas Tamarack offered those findings as prima facie evidence that Ultratech did not have probable cause.
Ultratech cites Day v. Sharp (1975) 50 Cal.App.3d 904, 914 (Day), a case which relied on Jefferson, California Evidence Benchbook (1972) Judicial Notice, section 47.3, at page 840, for the proposition that a court should take judicial notice of the truth of the facts asserted or recited in an order or judgment of another court. The language from Jefferson which was quoted in Day was criticized in Sosinsky: “But that portion of the Jefferson text which states that judicial notice may be taken of the truth of findings of fact does not appear to have been critically analyzed in [the cases citing it]. We find no sound legal basis for that particular portion of the rule, and we decline to follow it here. While we have no quarrel with the fact that a judge, after hearing a factual dispute between litigants A and B, may choose to believe A, and make a finding of fact in A’s favor, and while we have no quarrel that at some subsequent time it may be proper to take judicial notice that the judge did in fact make that particular finding in favor of A, the taking of judicial notice that the judge made a particular factual finding is a far cry from the taking of judicial notice that the ‘facts’ found by the judge must necessarily be the true facts, i.e., must necessarily be ‘the truth.’” (Sosinsky, supra, 6 Cal.App.4th at pp. 1564-1565.)
The language quoted is as follows: “A court may take judicial notice of the existence of each document in a court file, but can only take judicial notice of the truth of facts asserted in documents such as orders, findings of fact and conclusions of law, and judgments.” (Day, at p. 914.)
As indicated in Kilroy v. State of California (2004) 119 Cal.App.4th 140: “In the third edition of his treatise, Justice Jefferson has not included the [subject] statement . . . . Rather on the question of judicial notice of facts recited in orders and judgments, the treatise states: ‘Can the court take judicial notice of the truth of the facts asserted in documents such as orders, findings of fact, conclusions of law, and judgments? By making an order establishing the law of the case, it seems that the facts are no longer in dispute and can therefore be considered true as set forth in an order, findings of fact, or conclusions of law.’ [Citation] Thus, only where the order or judgment establishes a fact for purposes of law of the case or . . . res judicata or collateral estoppel, would the fact so determined be a proper subject of judicial notice.” (Id. at p. 147.)
Nonetheless, without addressing Ultratech’s contention the trial court erred in refusing to take judicial notice, Tamarack contends that because the burden of proof in the district court was higher, i.e., the decision denying Tamarack’s request for attorney’s fees was made on the basis of clear and convincing evidence, that court’s findings are not collateral estoppel. Tamarack cites One Lot Emerald Cut Stones v. United States (1972) 409 U.S. 232, 235, for this proposition. In response, Ultratech asserts the issue in that case “was whether a prior criminal acquittal barred a subsequent civil action for forfeiture over certain goods. The court found that since the elements of the criminal charge were different from those in the civil action, there was no collateral estoppel effect. [Citation.]” In any event, the rationale of In re Nathaniel P. (1989) 211 Cal.App.3dd 660, 668 is applicable. That case stands for the proposition that where the standard of proof in the current proceeding is higher than in the prior proceeding, there can be no collateral estoppel as to the prior proceeding.
Applying the foregoing principle here, but with a twist, the fact the district court found by clear and convincing evidence that Tamarack had not established that Ultratech knew the patent was invalid at the time it filed its lawsuit, would not be collateral estoppel for purposes of establishing by a preponderance of the evidence that Ultratech affirmatively knew before filing the underlying action that its patent was invalid. Indeed, the standard of proof is lower now. In other words, in finding Ultratech did not believe the patent was invalid when it filed its lawsuit, the district court was essentially saying there was no clear and convincing evidence that Ultratech had such knowledge—not that there was clear and convincing evidence that Ultratech did not have such knowledge. We believe this distinction is important and that it justifies the trial court’s conclusion that Tamarack had substantiated its position by presenting a prima facie case that Ultratech knew its patent was invalid when it filed its lawsuit. It will be for the trier of fact in the malicious prosecution action to determine if Ultratech in fact had that knowledge.
C. The trial court did not abuse its discretion in awarding Ultratech a fraction of the total amount of attorney’s fees requested.
In connection with its order striking the abuse of process cause of action, the court awarded attorney’s fees to Ultratech in the amount of $1,500. On appeal Ultratech challenges the award, contending the court abused its discretion in that the amount is unreasonably low. Moreover, anticipating a reversal of the order denying its motion to strike the malicious prosecution cause of action, Ultratech contends it should receive the entirety of its actual fees, together with the attorney’s fees it incurred in prosecuting its appeal.
In requesting fees, Ultratech’s counsel alleged that he and a paralegal did the work in researching and preparing the motion papers. The paralegal was billed out at $100 per hour for 13.5 hours; the attorney’s rate of $400 per hour was applied to 16.1 hours to date, and he anticipated an additional six hours for the hearing and travel, for a total of $10,400. He requested no less than $10,230. Tamarack offered no reply on this issue.
Section 425.16, subdivision (c), provides that attorney’s fees shall be awarded to a prevailing defendant on a special motion to strike. The award should be reasonable and in an amount which will adequately compensate the defendant for the expense of responding to a baseless lawsuit. (Robertson v. Rodriguez (1995) 36 Cal.App.4th 347.) Clearly the trial court is not bound by the amount requested and has discretion to award fees in a lesser amount. (Id. at p. 362.)
The appropriate test for assessing the reasonableness of a fee award is whether the trial court exceeded the bounds of reason in making the award. (Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47 Cal.App.4th 777, 785.) In challenging the fee award here, Ultratech contends only that an award of $1,500 exceeded the bounds of reason in that “it is not close to one-tenth of what Ultratech had to expend even before the instant appeal.”
When a defendant is only partially successful in bringing a special motion to strike, a different rule obtains. A fee award to a partially prevailing defendant “involves competing public policies: (1) the public policy to discourage meritless SLAPP claims by compelling a SLAPP plaintiff to bear a defendant’s litigation costs incurred to eliminate the claim from the lawsuit; and (2) the public policy to provide a plaintiff who has facially valid claims to exercise his or her constitutional petition rights by filing a complaint and litigating those claims in court. [Citations.] In balancing these policies, we conclude a defendant should not be entitled to obtain as a matter of right his or her entire attorney fees incurred on successful and unsuccessful claims merely because the attorney work on those claims was overlapping.” (Mann v. Quality Old Time Service, Inc. (2006) 139 Cal.App.4th 328, 344-345 (Mann).)
As the court observed in Mann, supra, 139 Cal.App.4th 328: “The fee-shifting provisions of section 425.16, subdivision (c) were enacted to impose litigation costs on those who assert meritless claims burdening the exercise of the defendant’s constitutional free speech and petition rights. [Citation.] The Legislature also sought to encourage private representation for defendants who might not otherwise have the financial resources to retain an attorney. [Citation.] However, when a defendant is only partially successful in challenging portions of the complaint, these policies to ensure prompt and meaningful redress for defendants subject to SLAPP suits must be balanced with the plaintiff’s constitutional right to petition for redress of his or her claims. If, after a court rules on an anti-SLAPP motion, a partially successful plaintiff is required to bear the entire cost of the anti-SLAPP litigation even though the defendant achieved only a relatively minor benefit and the essential thrust of the plaintiff’s complaint remains viable, this could impose a potential financial barrier to the plaintiff continuing with the lawsuit, burdening the plaintiff’s right to exercise his or her right to petition for the redress of grievances. The Legislature recently declared that ‘there has been a disturbing abuse of Section 425.16 . . . which has undermined the exercise of the constitutional rights of freedom of speech and petition for the redresses of grievances,’ and that it is ‘contrary to the purpose and intent of Section 425.16’ to ‘chill[ ]’ a plaintiff’s petitioning rights through the use of the anti-SLAPP procedure. [Citation.]” (Id. at p. 344.)
In making this determination, factors to be considered include “the extent to which the defendant’s litigation posture was advanced by the motion, whether the same factual allegations remain to be litigated, whether discovery and motion practice have been narrowed, and the extent to which future litigation expenses and strategy were impacted by the motion. The fees awarded to a defendant who was only partially successful on an anti-SLAPP motion should be commensurate with the extent to which the motion changed the nature and character of the lawsuit in a practical way. The court should also consider any other applicable relevant factors, such as the experience and abilities of the attorney and the novelty and difficulty of the issues, to adjust the lodestar amount as appropriate. [Citation.]” (Mann, supra, 139 Cal.App.4th at p. 345.)
The Mann court continued: “In our view, allowing partially successful defendants to recover virtually all of their fees because the facts and legal theories are so intertwined that they cannot be segregated underestimates the ability of attorneys and experienced trial judges to evaluate the value of legal services associated with limited success. By contrast, an approach that concentrates on the practical impact of a partially successful motion on the overall litigation advances the objectives of the anti-SLAPP statute and minimizes abuses.” (Mann, supra, 139 Cal.App.4th at p. 347.)
Attorney’s fees are mandatory where a defendant prevails in a special motion to strike. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1141-1142.) However, “when a defendant cannot in any realistic sense be said to have been successful, fees need not be awarded.” (Moran v. Endres (2006) 135 Cal.App.4th 952, 956 [defendants sought to dismiss case against them, but instead obtained ruling eliminating only one of many causes of action, which essentially meant nothing].) We disagree with Ultratech’s contention that Moran is inapposite in that here, after the dismissal of the abuse of process claim, Tamarack’s case is very different than before, as the two claims have very different elements to prove. Although the elements to be proven are not the same, it appears that both claims were predicated upon virtually the same set of facts, i.e., Ultratech filing and pursuing a patent infringement case despite knowledge that the underlying patent was invalid.
Applying the foregoing principles, we conclude that Ultratech has failed to carry its burden to demonstrate that the trial court’s award was an abuse of discretion. In making this determination, we are mindful of Tamarack’s position that the award of attorney’s fees was not based upon arguments made by Ultratech, but rather, on the manner in which Tamarack’s evidence was presented.
Citing Moran, Tamarack contends that Ultratech’s arguments in support of its motion to strike the abuse of process claim had no bearing on the ruling granting that motion. Rather, “[t]he vast majority of Ultratech’s arguments were a parroting of the same arguments made in support of its motion to strike the malicious prosecution claim.” Tamarack asserts that the court, on its own motion, asked Tamarack to identify the specific evidence it relied on to support its claim, and that the court’s finding that Tamarack failed to do so was the basis for granting the motion.
DISPOSITION
The order denying Tamarack’s special motion to strike Ultratech’s cause of action for malicious prosecution is affirmed, as is that portion of the order awarding Ultratech attorney’s fees of $1,500 for prevailing on its special motion to strike Tamarack’s cause of action for abuse of process. Tamarack is awarded its costs on appeal.
We concur: GAUT Acting P.J. KING J.
At oral argument, counsel for Ultratech raised for the first time the notion that, inasmuch as the standard of review under United States Code, section 1927 is preponderance of the evidence, whereas United States Code, section 285 requires clear and convincing evidence, this is a factor which should be considered in deciding the appeal. Because Ultratech did not raise this issue in its briefs, we do not consider it.