Tarsadia Hotels v. Severson

Full title: TARSADIA HOTELS, et al., Plaintiffs and Appellants, v. AGUIRRE & SEVERSON…

Court: COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA

Date published: Dec 30, 2016

No. D068887 (Cal. Ct. App. Dec. 30, 2016)

Opinion

D068887

12-30-2016

TARSADIA HOTELS, et al., Plaintiffs and Appellants, v. AGUIRRE & SEVERSON, et al., Defendants and Respondents.

Cox, Castle & Nicholson; Frederick H. Kranz and Lynn T. Galuppo for Plaintiffs and Appellants. Wingert Grebing Brubaker & Juskie LLP; Charles R. Grebing and Andrew A. Servais for Defendants and Respondents.

McCONNELL, P. J.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 37-2014-00033873-CU-BT-CTL) APPEAL from an order of the Superior Court of San Diego County, Judith F. Hayes, Judge. Affirmed. Cox, Castle & Nicholson; Frederick H. Kranz and Lynn T. Galuppo for Plaintiffs and Appellants. Wingert Grebing Brubaker & Juskie LLP; Charles R. Grebing and Andrew A. Servais for Defendants and Respondents.

Plaintiffs and appellants Tarsadia Hotels, Gregory Casserly, Tushar Patel, B.U. Patel, 5th Rock, LLC (5th Rock), MKP One, LLC (MKP), and Gaslamp Holdings, LLC (Gaslamp) (collectively, Tarsadia) filed a malicious prosecution complaint against defendants and respondents Michael Aguirre, Maria Severson, and their law firm Aguirre & Severson (collectively, A&S), as well as their clients, certain potential or actual purchasers of condominiums in the Hard Rock Hotel San Diego (Hotel), in connection with three lawsuits against Tarsadia (5th & K, Salameh, and Royalty, described post).¹ A&S filed a special motion to strike pursuant to Code of Civil Procedure section 425.16, the anti-SLAPP (strategic lawsuit against public participation) statute. The trial court found Tarsadia conceded 5th & K had not reached a favorable termination and had not met its burden on probable cause for Salameh and Royalty. The court granted the motion and dismissed the action.

1 Tarsadia also sued former Aguirre & Severson attorney Christopher Morris, attorney Mark Mazarella, and the law firm of Mazarella Lorenzana.

Tarsadia argues 5th & K can still be considered, A&S lacked probable cause to pursue the lawsuits, and the trial court erred by overruling authentication objections to an attorney declaration and dismissing the defendants who did not move under anti-SLAPP. We conclude the court properly granted the anti-SLAPP motion on favorable termination and probable cause grounds. We further conclude Tarsadia has not established reversible error based on the evidentiary rulings or dismissal of the non-moving defendants. The order is affirmed.

FACTUAL AND PROCEDURAL BACKGROUND²

2 This background is based on the record and documents we have judicially noticed. Unless otherwise noted, Casserly's input on the Hotel project was provided by declaration in opposition to the anti-SLAPP motion. We address additional facts as necessary below.

I. Background

A. The Hotel

The Hotel is comprised of 420 guest rooms (or units), as well as restaurants, meeting facilities, and other amenities. Casserly was president and chief operating officer of Tarsadia Hotels during the relevant period. According to Casserly, the Hotel is a condo-hotel project (which combines the condominium form of ownership with hotel use), 5th Rock was the Hotel developer, and Tarsadia Hotels was 5th Rock's agent for the project and managed a rental program for the units.³ Casserly explained that 5th Rock and Tarsadia Hotels retained the law firm of Greenberg Traurig LLP (Greenberg Traurig) to structure the marketing and sale of the units and development and management of the condo-hotel associations. He stated that "at all times" they followed Greenberg Traurig's advice as to "the structure, development and marketing of the Hotel." The units were sold in May and December 2006, and the Hotel opened in November 2007. The Hotel was organized into homeowners' subassociations, each of which belonged to a master association (collectively, HOAs). The HOAs assessed dues from unit owners.

3 Casserly provides little information on the other Tarsadia parties. From the record, it appears the Patels were Tarsadia Hotels officers, MKP was the controlling entity that managed 5th Rock, and Gaslamp owned the land on which the Hotel was situated.

B. Documents and Agreements

Prior to buying their units, purchasers received a copy of the Hotel's Final Subdivision Public Report (Public Report), issued in April 2006 by the California Department of Real Estate (DRE). The Public Report provides in Special Note 2, regarding occupancy limitations:

"AS REQUIRED BY THE CITY OF SAN DIEGO ZONING DESIGNATIONS, THE ROOM UNITS ARE DESIGNATED AS 'COMMERCIAL DWELLING UNITS,' AND AS SUCH, ARE SUBJECT TO OCCUPANCY LIMITATIONS. AN OWNER OF A ROOM UNIT SHALL BE ABLE TO OCCUPY HIS OR HER ROOM UNIT FOR A MAXIMUM OF TWENTY EIGHT (28) DAYS A YEAR . . . ."

Documents signed by the purchasers included the Purchase Contract and Escrow Instructions for Hard Rock Hotel & Condominiums (Purchase Contract) and the Unit Maintenance and Operation Agreement (UMA).

The Purchase Contract is between 5th & K as Seller and the purchaser as Buyer. Section 9(a) addresses liquidated damages, and states in part:

"IF BUYER DEFAULTS HEREUNDER, SELLER SHALL INSTRUCT ESCROW HOLDER . . . TO RETAIN BUYER'S ESCROW DEPOSIT IN ACCORDANCE WITH CIVIL CODE SECTION 1675-1678 ('LIQUIDATED DAMAGES') WHICH SHALL BE SELLER'S SOLE AND EXCLUSIVE REMEDY IN THE EVENT OF BUYER'S DEFAULT."

Section 19 contains acknowledgments and space for the purchaser's initials:

"19. PURCHASE NOT AN INVESTMENT. BY PLACING HIS, HER, THEIR INITIALS IN THE SPACE PROVIDED HEREIN BELOW, BUYER EXPRESSLY ACKNOWLEDGES THAT:

"(a) BUYER IS PURCHASING THE UNIT FOR ITS REAL ESTATE VALUE AND NOT AS AN INVESTMENT;
"(b) NEITHER SELLER NOR ANY OF ITS EMPLOYEES OR AGENTS HAVE REPRESENTED OR OFFERED THE PROPERTY AS AN INVESTMENT OPPORTUNITY FOR APPRECIATION OF VALUE OR AS A MEANS OF OBTAINING INCOME FROM THE RENTAL THEREOF; AND
"(c) NEITHER SELLER NOR ANY OF ITS EMPLOYEES OR AGENTS HAVE MADE ANY STATEMENTS OR REPRESENTATIONS AS TO RENTAL OR OTHER INCOME THAT MAY BE DERIVED FROM THE UNIT OR AS TO ANY OTHER ECONOMIC BENEFIT . . . TO BE DERIVED FROM THE PURCHASE AND/OR OWNERSHIP OF THE UNIT."

Section 20, subdivision (i), contains a further acknowledgment: "Buyer acknowledges and agrees that, except as specifically set forth in this Contract, Buyer is not relying upon any agreements, understandings, inducements, promises, representations or warranties, express or implied . . . made by [a] sales person, employee, or agent of Seller." Finally, Section 20, subdivision (f), provides that "[c]oncurrently with the execution of this Contract, Seller and Buyer shall enter into that certain [UMA] . . . ."

The UMA is between 5th Rock as Developer and the purchaser as Unit Owner. It provides the Unit Owner "is required to enter into this Agreement as a condition to acquiring the Unit in order for the Developer to (i) manage the Hotel and provide guests and invitees of Unit Owner and the Hotel . . . . with the level of services associated with an upscale hotel on a cost effective basis, (ii) monitor Unit Owner's compliance with applicable governmental occupancy/use restrictions and zoning designations, and [(iii)] provide the Services . . . ." Section 2.1 describes these Services and explains the Developer "shall have the exclusive authority and right to," among other things, "accept reservations by, from and through Unit Owner . . . for the use of the Unit." Section 2.1 further states: "Nothing in this Agreement is intended to authorize Developer to solicit, advertise, promote or rent Unit Owner's Unit, and Unit Owner has the exclusive authority to arrange for such use subject to the management duties and Services . . . and the other obligations and limitations of the parties set forth herein." Section 3.1 states the unit may be sold only as a "non-residential condominium unit" and occupancy by the owner "shall be limited to an aggregate maximum of twenty-eight (28) days during each calendar year." Section 3.6 provides that "[a]ll keys . . . shall be maintained by the Hotel, and Unit Owner shall not copy, retain or distribute the keys or any copies thereof."

Finally, pursuant to the Rental Management Agreement (RMA), a unit owner could retain Tarsadia Hotels as the unit's "exclusive rental management agent." Under Article III, Tarsadia Hotels agreed to use "commercially reasonable efforts to apportion reservations and Guests on a fair and equitable basis among Participating Units . . . ." Tarsadia Hotels reserved the right to set rental rates, use discounted rates under certain circumstances, keep forfeited room deposits and cancellation charges, and provide complimentary stays for up to five nights per year. The owner acknowledged its "use of the Unit may have an adverse impact on the allocation of reservations to the Unit." Article VII contains representations, including the following:

"(b) NO INDUCEMENTS OR REPRESENTATIONS OF ANY KIND WERE MADE, DIRECTLY OR INDIRECTLY, TO OWNER ON BEHALF OF OPERATOR, THE DEVELOPER, THE HOTEL OWNER, [OR] THE LICENSOR, . . . AS TO ANY TAX OR ECONOMIC BENEFITS OR IMPLICATIONS WHICH MAY OR MAY NOT BE REALIZED FROM OWNING AND/OR LEASING THE UNIT, OR THE INCLUSION OF THE UNIT IN THE PROGRAM.

"(c) OWNER HAS NOT BEEN REQUIRED BY ANYONE TO PLACE THE UNIT INTO THE PROGRAM OR RETAIN OPERATOR TO RENT THE UNIT, AND BUT FOR OWNER'S EXECUTION OF THIS AGREEMENT, OWNER WOULD BE FREE TO USE ANY OTHER AGENT FOR THAT PURPOSE SUBJECT TO THE REQUIREMENTS OF THE GOVERNING DOCUMENTS.

"(d) INCOME FROM PARTICIPATING UNITS IN THE PROGRAM IS NOT AND WILL NOT BE POOLED, AND OWNER WILL RECEIVE OWNER'S SHARE OF INCOME (IF ANY) ATTRIBUTABLE TO THE ACTUAL RENTAL OF THE UNIT AS SET FORTH IN THIS AGREEMENT, AND NOT FROM OTHER PARTICIPATING UNITS."

According to Casserly, "some of the purchasers" entered the RMA eight to ten months after the Purchase Contract. A&S contends all unit owners entered the RMA, citing deposition testimony reflecting there was a separate rental management statement for each room.

Finally, each agreement addresses attorneys' fees in the event of disputes.

II. Salameh

In December 2009, A&S filed a putative class action in federal court on behalf of certain purchasers. After a first amended complaint in March 2010, the defendants included the Tarsadia parties here, Playground Destination Properties (Playground), and various banks. The plaintiffs identified Playground as the broker-dealer for the sales and alleged Playground assisted in the sale process.⁴ Playground and the banks moved to dismiss, and their motions were granted without prejudice. In September 2010, the plaintiffs filed a second amended complaint.

4 We use A&S and plaintiffs interchangeably in discussing pleadings and arguments in Salameh, Royalty, and 5th & K. A&S was counsel during all relevant periods.

Relevant here, the plaintiffs sued Tarsadia for federal and state securities law violations (the securities claims) and common law fraudulent misrepresentation and concealment (the fraud claims). They sued Playground on these grounds as well. The gravamen of the securities claims was that the transactions constituted investment contracts (and, therefore, securities), because the unit sale and rental program comprised a common enterprise and because economic realities (including the RMA being essentially mandatory and lack of owner control) led purchasers to expect profits from the common enterprise. The fraud claims were based on purported misrepresentations and omissions in connection with the alleged securities. All defendants moved to dismiss.

Before addressing the plaintiffs' opposition and the Salameh court rulings, it is helpful to provide context by reviewing the applicable law here. In SEC v. W.J. Howey Co. (1946) 328 U.S. 293 (Howey), the Supreme Court held the sale of citrus grove units, coupled with a contract for cultivation and remittal of profits, "clearly involve[d] investment contracts." (Id. at pp. 298-299.) The court explained the investment contract concept is "a flexible rather than a static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits." (Id. at p. 299; id. at p. 298 [noting "emphasis was placed upon economic reality" by state courts assessing investment contracts, before federal securities laws were in place].) The Ninth Circuit has identified the three prongs of the investment contract test under Howey as "(1) an investment of money, (2) in a common enterprise, (3) with an expectation of profits produced by the efforts of others." (Hocking v. Dubois (9th Cir. 1989) 885 F.2d 1449, 1455 (Hocking).) In Hocking, the buyer purchased a condominium in a resort complex and entered a rent-pooling arrangement within the following week. (Id. at pp. 1452-1453.) The buyer later sued his real estate brokers for securities fraud and the district court granted summary judgment to the brokers. (Id. at p. 1451.) The Ninth Circuit reversed, concluding there was a material issue of fact as to whether the rental program and other agreements were "part of one scheme or transaction." (Id. at p. 1458.)

In opposing the motions to dismiss, the Salameh plaintiffs relied on both Howey and Hocking. In March 2011, the district court granted the motions without leave to amend. The court found Hocking distinguishable, because there was no agreement to pool rental income and the RMA was signed at least eight months after the Purchase Contract. The court ultimately concluded the plaintiffs failed to allege sufficient facts that the unit sale and RMA formed a single transaction or to support an expectation of profits from others (noting, among other things, the agreement disclaimers). The court also found that even if plaintiffs sufficiently alleged the existence of securities, many claims would be time-barred. Finally, as to the fraud claims, the court held the plaintiffs had not pled the claims with sufficient particularity and did not sufficiently allege reasonable reliance, given the disclaimers.

The plaintiffs appealed, and the Securities and Exchange Commission (SEC) filed an amicus brief in support. The SEC contended the district court "failed to give effect to the economic and practical realities" of the transactions. Rather, the program "should be analyzed as a single package," because the "sales agreements left the plaintiffs with so little use or control that it was obvious . . . the defendants would exercise exclusive control to rent and operate the rooms;" "the practical reality of the . . . plan to operate a functioning hotel made it obvious . . . that these rooms would be necessary to serve as the hotel's guest rooms;" and "the hotel was under construction . . . , thereby making the time gap between the room sales and rental program inconsequential." The SEC explained the rental program "was at all times here a necessary and essential component of the room sales, making the two a single transaction or package." The SEC further explained the agreement disclaimers "should not be given any weight here because the economic and practical reality demonstrates that the transactions were investments." In support of its position, the SEC cited a 1973 SEC Release, which addressed investment contracts in the context of real estate projects involving rental programs. The SEC also discussed Hocking, noting the Ninth Circuit had "recognized that condominium sales offered in conjunction with rent pooling or rental management agreements can constitute an investment contract."

In August 2013, the Ninth Circuit affirmed dismissal. (Salameh v. Tarsadia Hotels (9th Cir. 2013) 726 F.3d 1124.) The court explained the plaintiffs failed to allege facts showing the Purchase Contract and RMA "were offered as a package," the RMA was promoted at the time of sale, or defendants told them the RMA would be forthcoming or "result in investment-like profits," and that Hocking "rested on facts supporting these types of allegations." (Id. at p. 1131.) The court noted the plaintiffs did not allege when the agreements were signed, and it was defendants who provided this information. (Ibid.) The court acknowledged their strongest argument was that "the two transactions are part and parcel of one scheme," and that this argument had "some force." (Id. at p. 1132.) However, it concluded the "economic reality" was that the transactions were distinct, citing the time gap, execution with different entities, and the absence of allegations that the plaintiffs were induced to buy units by the RMA. (Ibid.) The court found the SEC's brief unpersuasive, explaining that it was based, in part, on an SEC Release, while the court's "conclusion . . . rest[ed] squarely on Hocking, which was decided after the Release," and that it overlooked the absence of inducement allegations. (Id. at p. 1332, fn. 6.)⁵ On the fraud claims, the Ninth Circuit held the absence of a security was fatal (given the claims were based on concealment of alleged securities) and that plaintiffs failed to satisfy pleading standards. (Id. at pp. 1132-1133.)

5 The court noted, but did not address, the district court's alternative holding that the securities claims were time-barred. (Id. at p. 1129.)

After unsuccessfully seeking rehearing from the Ninth Circuit, plaintiffs filed a petition for writ of certiorari to the United States Supreme Court. The Supreme Court denied review in February 2014.

Tarsadia and Playground both sought attorneys' fees in district court. Relevant here, Tarsadia initially sought fees under section 11, subdivision (e), of the Securities Act of 1933 (Section 11(e)), but withdrew the request. Playground did seek fees under Section 11(e), which the district court denied. The court explained Section 11(e) fees may only be awarded "if the claim or defense borders on the frivolous or is brought in bad faith," that "interestingly" Playground argued only that the case was without merit (not that it was in bad faith or bordered on frivolous), and that "[w]hile Plaintiffs were ultimately unsuccessful, the Court does not find that the action bordered on the frivolous or [was] brought in bad faith." Tarsadia sought contract-based fees in the Ninth Circuit. The Ninth Circuit granted this request as to the fraud claims, but not the securities claims, without explaining the basis for its decision.⁶

6 The Ninth Circuit order reflects Playground sought fees as well, and that the Ninth Circuit denied them, but Playground's request does not appear to be in the record.

III. Royalty

In April 2010, A&S filed a putative class action in California state court, on behalf of certain potential purchasers who had not closed escrow and forfeited their deposits. The defendants were the Tarsadia parties here (other than Gaslamp) and Playground. We infer from the trial court's anti-SLAPP order (described post) that Royalty was removed to federal court and then remanded.

Relevant here, the plaintiffs alleged securities violations, unfair competition (the UCL claim), and invalid forfeiture. In September 2010, A&S filed a second amended complaint and defendants demurred on certain grounds. In October 2011, the trial court overruled the demurrer as to invalid forfeiture, finding that "for purposes of the pleading stage, the SAC alleges sufficient facts to support these causes of action." In November 2011, the plaintiffs filed a third amended complaint. Plaintiffs alleged generally that, among other things, defendants failed to comply with securities laws, the DRE had not received a copy of the UMA, the purchasers should have received the RMA under Business & Professions Code section 11018.6, and Tarsadia made false statements in a Questionnaire submitted to the DRE in connection with obtaining the final report (DRE Questionnaire).

The UCL cause of action alleged, in relevant part, that defendants "engaged in fraudulent and unfair business practices[,] including the plan and scheme to operate a hotel fraudulently disguised and offered as real estate transactions, the fraudulent misrepresentations as to the true nature of the investment and real estate, the manipulation of the common interest development laws and procedures in California, and the concealment of facts that were meant to and did induce reliance by Plaintiffs." Plaintiffs sought "return of the money provided" and an "injunction prohibiting defendants from engaging in further unfair business practices, including the taking of money for the units." The forfeiture claim alleged, also in relevant part, that "retention of deposits for units that did not close was unreasonable under the circumstances" at the time the Purchase Agreement was entered.

The parties engaged in discovery, and we briefly describe some of evidence obtained by A&S. In May 2012, A&S deposed Jim Luce, vice president of business development for Tarsadia Hotels. He indicated the rental program was the "primary responsibility" initially and involved coming up with terms for the RMA. His testimony reflected he met with Tarsadia Hotels' general counsel regarding the RMA, but not Greenberg Traurig. Luce explained purchasers "want[] to know how is the hotel going to create demand and rate occupancy" and how Tarsadia was going to "[w]ork to maximize the revenue." In May 2012, A&S deposed Ron Adelhelm, chief financial officer for Tarsadia Hotels. When asked about a document containing handwritten notes and titled "Owner Economics," he acknowledged the notes were his and explained they reflected a model he prepared at Casserly's request, to capture what an owner could earn. Adelhelm agreed the idea of "owner economics" was "owner economics under the rental management agreement."

Defendants moved for summary judgment and summary adjudication. Following hearings in June 2012, the trial court granted the motions (while denying certain issues as moot) and dismissed the action. The court found the securities claims were time-barred and that defendants established no material issues of fact existed on the UCL and forfeiture claims. On the UCL claim, the court held A&S could not predicate the claim on securities violations, defendants established the purchasers received the UMA (and the DRE Final Report referenced it), the RMA does not fall within Business & Professions Code section 11018.6, and the plaintiffs never received the DRE Questionnaire. On forfeiture, the court held defendants established the liquidated damage provision at issue was valid, the burden shifted to plaintiffs to demonstrate it was unreasonable under the circumstances, and they failed to do so. The court also sustained objections to a declaration submitted by Severson, which it found inadequate on authentication, hearsay, and other grounds.

Plaintiffs appealed, and in May 2014, we affirmed the judgment. (Royalty Alliance, Inc., et. al., v. Tarsadia Hotels, et al. (May 29, 2014, D062537) [nonpub. opn.].) After affirming the statute of limitation rulings, we affirmed the UCL claim on reliance grounds (noting, among other things, that plaintiffs did not receive the DRE Questionnaire). (Id. at pp. 31-32.) We upheld the forfeiture ruling as well, concluding the liquidated damages provision complied with applicable statutory requirements, the burden shifted to plaintiffs to show it was unreasonable, and they failed to raise a triable issue. (Id. at pp. 35-37.)⁷ A&S filed a petition for review in the California Supreme Court, which was denied in August 2014.

7 Tarsadia contends Aguirre "falsely claime[ed]" at oral argument that "the judge below found a security was sold," and the court made no such finding. Assuming the court had not made this finding and Aguirre had not misspoken, the statement is still immaterial; the securities claims in Royalty were decided and affirmed on statute of limitations grounds.

IV. 5th & K

The HOAs sued certain unit owners for failure to pay assessments, including some Salameh plaintiffs. In 2011, A&S filed putative class action cross-complaints on behalf of 5th & K defendants, against the HOAs, some of the Tarsadia parties here, and other parties. The cross-complaints focused on the HOAs. Judge Steven Denton consolidated the cases and certified the action as a class action, and the cross-defendants filed demurrers. Judge Denton overruled the demurrers.

The parties again engaged in discovery, and we again briefly discuss some of the evidence obtained by A&S. In February and June 2012, A&S deposed Casserly. He addressed group rentals: "If you don't have control over the room inventory, you can't go out and sell group rooms. Group rooms drive revenue to the hotel. Without group rooms, nobody makes any money." The record reflects a document bearing a Casserly deposition exhibit stamp, consisting of a February 2005 memorandum from Richard Davis at Greenberg Traurig to Tarsadia Hotels, regarding "whether the offering of a rental arrangement together with the offering [of condo-hotel units] can be structured to avoid securities registration or regulation under the applicable federal and state securities laws."⁸ The memorandum stated that if there was "strict compliance" with various principles, such a rental program would not be considered a security.

8 The record does not contain Casserly testimony regarding the memorandum.

The cross-complainants filed a first amended cross-complaint and the cross-defendants again demurred. Judge Denton overruled the demurrers. The case was transferred to Judge Joel Pressman, the cross-complainants eventually filed a third amended cross-complaint, and, in March 2014, Judge Pressman granted the cross-defendants' motion for judgment on the pleadings. The cross-complainants appealed in June 2014.

V. Tarsadia's Malpractice Action

In 2011, another action had been filed against Tarsadia and other parties regarding the Hotel. We infer from the record that the case was removed to federal court.

In June 2012, Tarsadia filed a third party complaint for malpractice against Greenberg Traurig, with allegations regarding the various Hotel lawsuits. Relevant here, Tarsadia contended the firm "advised . . . that the proposed structure did not present any risk of litigation on the basis of securities laws," and that had it been aware of the risk, it would have structured the project differently or abandoned it. Among other things, Tarsadia alleged the "sales documentation was so poorly drafted . . . it has given rise to numerous claims" and that the firm breached its duty of care, including by "failing to adequately advise . . . of the consequences of marketing the Hotel" in a manner that could subject Tarsadia to allegations of securities violations.

In February 2013, the Beaver plaintiffs deposed Greenberg Traurig attorney Davis. When they asked Davis whether the firm was "tasked . . . with addressing all legal issues related to registration of the project with various governmental entities," he responded: "The answer is no to your question. I guess that's the answer." He testified the firm provided "documents relating to the design and creation of [the] subdivision and condominium program," but he had no independent recollection if the firm had "any involvement in the creation of marketing documents." He explained: "We were involved in the preparation of many documents, so . . . I don't have an independent recollection of every document that we did." Davis also testified he was aware Playground was the marketing company for the Hotel, but did not recall having any discussions with them.

VI. Proceedings Below

On October 3, 2014, Tarsadia filed this malicious prosecution action. In December 2014, Aguirre & Severson and Aguirre filed a special motion to strike the complaint under anti-SLAPP, and Severson filed her own motion (collectively, A&S's anti-SLAPP motion). A&S provided declarations from their counsel Andrew Servais to authenticate exhibits (the Servais Declaration). Tarsadia opposed the motion, and objected to the Servais Declaration. In its opposition, Tarsadia acknowledged A&S's appeal in 5th & K meant it "cannot presently allege a favorable termination" and the "malicious prosecution claims with respect to [5th & K] may be premature." Tarsadia indicated it "therefore filed a First Amended Complaint to account for that" and that "[a]lternatively, the Court may abate . . . malicious prosecution claim predicated upon [5th & K] pending the appeal." A&S agreed there was no favorable termination in 5th & K.

In June 2015, the trial court held a hearing on the anti-SLAPP motion. Tarsadia did not offer further input on 5th & K. In August 2015, the trial court granted the motion. With respect to Salameh and Royalty, the court found the cases favorably terminated in favor of Tarsadia, but Tarsadia failed to demonstrate a likelihood of success as to whether A&S acted without probable cause.

Focusing first on Salameh, the trial court found the SEC's decision to file an amicus brief persuasive, and specifically noted the SEC's argument that "the district court . . . failed to give effect to the economic and practical realities of the transaction." The trial court next referenced the fee rulings, observing the district court did "not find that the action bordered on the frivolous or [was] brought in bad faith" (a finding the trial court found "compelling in the instant analysis of probable cause") and the Ninth Circuit declined to award discretionary fees based on any finding that the action was meritless. The court also cited Tarsadia's malpractice action, observing Tarsadia alleged its attorneys failed to "counsel [them] as to the applicability of the securities laws which formed the basis of [A&S's] action."

Turning to the remaining litigation, the trial court found it "essential to consider the time line . . . ." The court noted Royalty was filed four months after Salameh, at which point there had been no finding by any court regarding the securities claims. The court further noted that when summary judgment was granted in Royalty in 2012, there had not been a final determination in Salameh (which did not occur until the Supreme Court denied review in 2014). The trial court identified additional factors supporting probable cause, including the "fact that the parties in Salameh and Royalty are different . . . ." The court noted Royalty was initially removed to federal court, defendants moved to consolidate with Salameh, and the district court denied the request and remanded, finding there was "a colorable basis for dividing up the lawsuits as plaintiffs" did.⁹ The trial court explained that "[e]ven with some overlap in theory of prosecution, the actions differ in the parties and causes of action alleged." Finally, the court found the "allegations . . . incorporated the evolving state of discovery during the time periods these cases were active."

9 The remand order is not in the record, but neither party disputes its existence or the trial court's description. On our own motion, we take judicial notice of district court records reflecting the order. (Evid. Code, §§ 452, subd. (d), 459.)

As for 5th & K, the trial court noted "the parties concede that because there is no final determination," the case "cannot be considered in the subject analysis."¹⁰ The trial court did not address malice in light of its other rulings, overruled Tarsadia's objections to the Servais Declaration, and dismissed the action in its entirety. Tarsadia timely appealed.

10 The court referred to 5th & K as the "Knox action." We assume this was a typographical error.

DISCUSSION

I. Requests for Judicial Notice

Statutory references here are to the Evidence Code. Tarsadia requests we take notice of this court's unpublished opinion in 5th & K in September 2015 and the California Supreme Court's denial of review in December 2015, contending we are required to take notice of the 5th & K opinion and should take notice of both decisions. (§ 451, subd. (a) [requiring notice of decisional law]; § 452, subd. (c) [permitting notice of judicial acts]; id. at subd. (d) [permitting notice of court records].)

Tarsadia does not establish the unpublished 5th & K opinion is decisional law. (Cf. Schmier v. Supreme Court (2000) 78 Cal.App.4th 703, 710 [noting the "Supreme Court appropriately determines by selective publication the evolution and scope of this state's decisional law"].) Even if it were, we would not take notice because the document is irrelevant. (Mozetti v. City of Brisbane (1977) 67 Cal.App.3d 565, 578 [provisions of § 451, subd. (a) "are subject to the qualification that the matter to be judicially noticed must be relevant"].) The threshold question for 5th & K is whether the case had reached a favorable termination when Tarsadia filed its malicious prosecution action. These documents do not illuminate that question, and because we conclude Tarsadia did not meet its burden on favorable termination for 5th & K (see discussion post), there is no probable cause analysis for which they might otherwise be relevant. We reject the request under section 452 for the same reasons. (People v. Rowland (1992) 4 Cal.4th 238, 268, fn. 6 (Rowland) [declining to take judicial notice of irrelevant court records].)

A&S makes multiple requests. First, they seek notice of Royalty documents that purportedly reflect efforts by Tarsadia to delay discovery. We decline to take notice, as these documents are unnecessary to resolution of this appeal. (Rowland, supra, 4 Cal.4th at p. 268, fn. 6.) Second, A&S asks us to take notice of the second amended complaint in Royalty and the order overruling a demurrer to this pleading, to support arguments under the interim ruling doctrine. Tarsadia opposes the request, contending the doctrine was not raised below and is inapplicable, and A&S inexcusably failed to provide the documents to the trial court. We grant this request. (§ 452, subd. (d).) Judicial notice of underlying court records in malicious prosecution cases is both permitted and routine. (See, e.g., Pasternack v. McCullough (2015) 235 Cal.App.4th 1347, 1354, fn. 6 (Pasternack) [granting judicial notice of court records in underlying action]; Robbins v. Blecher (1997) 52 Cal.App.4th 886, 890, fn. 1 [accord].) Tarsadia's specific concerns are unfounded. The doctrine was raised below and is relevant (see discussion post), and A&S has adequately explained the omission of the documents. Finally, A&S requests we take notice of a Ninth Circuit decision in Beaver. (Beaver v. Tarsadia Hotels (9th Cir. 2016) 816 F.3d 1170.) We will take notice of this decision. (§ 451, subd. (a).)

II. Burden of Proof and Standard of Review

"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 Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 733 (Jarrow).) A malicious prosecution action satisfies this step. (Id. at pp. 733-741.)

Second, the "burden shifts to the plaintiff to demonstrate, by admissible and competent evidence, a reasonable probability that it will prevail on the merits at trial." (Padres L.P. v. Henderson (2003) 114 Cal.App.4th 495, 508-509 (Padres).) "In reviewing an anti-SLAPP motion, a court must consider the pleadings and the evidence submitted by the parties (§ 425.16, subd. (b)(2)); however, it cannot weigh the evidence, but instead must simply determine whether the respective party's evidence is sufficient to meet its burden of proof." (Padres, at p. 509.) The trial court "should grant the motion if, as a matter of law, the defendant's evidence supporting the motion defeats the plaintiff's attempt to establish evidentiary support for the claim." (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821 (Chidester), superseded by statute on other grounds as noted in Hutton v. Hafif (2007) 150 Cal.App.4th 527, 547.)

On appeal, we independently review the trial court's ruling on the motion to strike. (Padres, supra, 114 Cal.App.4th at pp. 508-509.) " 'The burden of affirmatively demonstrating error is on the appellant.' " (State Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal.App.4th 600, 610 (Pietak).) Only prejudicial error is grounds for reversal. (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 573-574; Cal. Const., art. VI, § 13.). " 'Prejudice is not presumed and the burden is on the appellant to show its existence.' " (Candelaria v. Avitia (1990) 219 Cal.App.3d 1436, 1444 (Candelaria).)

In appellate briefing, all points must be supported by legal argument and authority, as well as record support, or we may deem them forfeited. (People v. Stanley (1995) 10 Cal.4th 764, 793 (Stanley); ibid. [" '[E]very brief should contain a legal argument with citation of authorities on the points made. If none is furnished on a particular point, the court may treat it as waived.' "]; Del Real v. City of Riverside (2002) 95 Cal.App.4th 761, 768 (Del Real) ["[I]t is counsel's duty to point out portions of the record that support the position taken on appeal."]; ibid. ["[A]ny point raised that lacks citation may, in this court's discretion, be deemed waived."].) Further, an appellant must raise any points it wishes to address in its opening brief. (Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 894, fn. 10 (Shade Foods) [" ' "Points raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before." ' "].)

III. Whether Tarsadia established a probability of prevailing at trial

A. Applicable law

"To establish a cause of action for the malicious prosecution of a civil proceeding, a plaintiff must plead and prove that the underlying action was (1) commenced by or at the direction of the defendant and pursued to a legal termination in the plaintiff's favor; (2) brought without probable cause; and (3) initiated with malice." (Padres, supra, 114 Cal.App.4th at pp. 513-514.)

B. Analysis

1. Favorable Termination

There is no dispute Salameh and Royalty terminated in Tarsadia's favor, and we thus focus on 5th & K. "A termination is 'favorable' if it was based on a determination of the merits of the action—that is, relating to the fault of the defendant, rather than on a technical or procedural ground." (Padres, supra, 114 Cal.App.4th at p. 514.) A " 'malicious prosecution action will not lie while an appeal from the judgment in the underlying action is pending.' " (Drummond v. Desmarais (2009) 176 Cal.App.4th 439, 457 (Drummond); ibid. ["So long as the appeal is pending, the plaintiff cannot truthfully allege a termination of the action, and a malicious prosecution action is 'premature.' "].) Here, A&S's appeal in 5th & K was pending when Tarsadia filed this malicious prosecution lawsuit, meaning the lawsuit was premature as to 5th & K. Indeed, as the trial court observed, Tarsadia conceded that this portion of the lawsuit may be premature. We conclude Tarsadia has not established a reasonable probability of prevailing on this element.

Tarsadia contends we should still reverse. First, Tarsadia argues that because 5th & K later concluded in its favor, it is "ripe for determination." Tarsadia does not explain its reasoning or cite any authority for this argument, and we conclude it has forfeited it. (Stanley, supra, 10 Cal.4th at p. 793.) Second, Tarsadia argues the trial court should have stayed the 5th & K portion of the case while the 5th & K appeal was pending, but failed to provide any analysis or authority on this issue in its opening brief. We need not consider Tarsadia's discussion on reply. (Shade Foods, supra, 78 Cal.App.4th at p. 894, fn. 10.) Even if we did, its position would not be persuasive. Tarsadia does not explain why it pursued an action that was premature when filed, or why it should be entitled to relief under those circumstances. (See Drummond, supra, 176 Cal.App.4th at p. 458 [noting an appeal filing "render[s] the malicious prosecution claim premature" and explaining "the proper remedy is to stay the action"]; Pasternack, supra, 235 Cal.App.4th at pp. 1357-1358 [affirming dismissal of malicious prosecution action where plaintiff was still pursuing cross-complaint in underlying action; distinguishing Drummond and explaining the present case "was not rendered premature by the filing of an appeal . . . ; it was premature when it was filed and was still premature when the special motions to strike were heard."].)¹¹

11 We question whether the purported stay request was sufficient to put the trial court on notice that Tarsadia even desired this relief, given Tarsadia only mentioned it in the alternative, in an opposition brief, and did not address the issue at the motion hearing. We note Tarsadia does not discuss the first alternative it offered the court (i.e., a first amended complaint to "account for" 5th & K), and we need not address it.

We need not address 5th & K further. (Contemporary Services Corp. v. Staff Pro Inc. (2007) 152 Cal.App.4th 1043, 1058 [no prima facie showing on favorable termination, so court "[did] not need to determine whether defendants demonstrated a probability of establishing the remaining elements of malicious prosecution"].)

2. Lack of probable cause

We now turn to Salameh and Royalty, and the issue of probable cause. "[T]he plaintiff must demonstrate . . . the prior action was commenced . . . without probable cause. [Citation.] One has probable cause to bring a civil action if his claim is legally tenable, as determined on an objective basis. [Citation.] The issue of whether probable cause exists presents a question of law for the court and requires a determination of whether any reasonable attorney would have considered the action legally tenable in light of the facts known to the underlying plaintiff (or, in this case, the lawyer) at the time the suit was filed." (Padres, supra, 114 Cal.App.4th at pp. 516-517.)

"If any reasonable attorney would have considered the action legally tenable, probable cause is established." (Padres, supra, 114 Cal.App.4th, p. 517.) "Only those actions that ' "any reasonable attorney would agree [are] totally and completely without merit" ' may form the basis for a malicious prosecution suit." (Ibid; Jarrow, supra, 31 Cal.4th at p. 743 [only "[s]uits which all reasonable lawyers agree totally lack merit" present "no probable cause"].)

"This 'lenient standard' for bringing a civil action reflects 'the important public policy of avoiding the chilling of novel or debatable legal claims' and allows attorneys and litigants ' "to present issues that are arguably correct, even if it is extremely unlikely that they will win." ' " (Padres, supra, 114 Cal.App.4th at p. 517; Chidester, supra, 28 Cal.4th at p. 822 [plaintiffs and their attorneys "have the right to bring a claim they think unlikely to succeed, so long as it is arguably meritorious"]; Chidester, at p. 824 ["probable cause to bring an action does not depend on it being meritorious, as such, but upon it being arguably tenable"].)

In determining "whether the action was supported by probable cause, the court is to construe the allegations of the underlying complaint liberally, in a light most favorable to the malicious prosecution defendant." (Yee v. Cheung (2013) 220 Cal.App.4th 184, 200 (Yee).) A court must also "take into account the evolutionary potential of legal principles." (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 886 (Sheldon Appel). An action is legally tenable if "it is supported by existing authority or the reasonable extension of that authority." (Arcaro v. Silva & Silva Enterprises Corp. (1999) 77 Cal.App.4th 152, 156 (Arcaro), citing Sheldon Appel, at p. 886.)

a. Salameh

i. Securities Claims

Tarsadia contends A&S lacked probable cause to pursue the securities claims, on the grounds its investment contract theory was meritless and due to applicable statutes of limitations.¹² We address each issue in turn, and conclude Tarsadia has not established a reasonable likelihood of establishing an absence of probable cause.

12 We note Tarsadia does not focus on the merits of particular securities causes of action. We construe Tarsadia's challenge to the securities claims as limited to these general challenges.

1. Investment Contract Theory

a. Underlying Rulings and A&S Arguments

Tarsadia begins by arguing that various court rulings and A&S arguments reflect a lack of probable cause. We disagree.

First, Tarsadia contends the district court and Ninth Circuit rejected A&S's investment contract argument and its reliance on Hocking. But probable cause requires that a claim be tenable, not successful; indeed, there can be probable cause for a claim that is " ' "extremely unlikely" ' " to prevail. (Padres, supra, 114 Cal.App.4th at pp. 517-518.) Here, A&S relied on Supreme Court and Ninth Circuit authority to support its position that, given economic realities, the unit sale and rental program were an investment contract. (Howey, supra, 328 U.S. 293; Hocking, supra, 885 F.2d 1449.) The SEC agreed with A&S's application of these authorities. Although the Ninth Circuit did not agree, it acknowledged one of A&S's arguments had "some force" and never suggested the lawsuit was untenable or frivolous. (Salameh, supra, 726 F.3d at p. 1132.)

Along similar lines, Tarsadia argues A&S is trying to "re-litigate" the underlying actions, and that Plumley v. Mockett (2008) 164 Cal.App.4th 1031 prohibits them from making the "identical arguments" on which they did not succeed below. Plumley actually rejected a similar contention. There, the plaintiff argued certain findings conclusively established a lack of probable cause. (Id. at p. 1048.) The Court of Appeal disagreed, explaining the claims were "facially distinguishable: The issue in the [underlying] action was whether [plaintiff] misappropriated [defendant's] invention; the issue here is whether [defendant] had reasonable cause to believe he did so." (Id. at p. 1049.) The language referenced by Tarsadia is inapposite. Plumley was addressing the fraud exception to the interim ruling doctrine, and held "one cannot relitigate adversely decided factual matters" for that purpose. (Id. at pp. 1055-1056.) Neither this exception, nor disputed factual matters in the underlying actions, are at issue here.

Second, Tarsadia focuses directly on the factual record, contending the gap between the unit sale and RMA and the absence of a rental pool renders Hocking distinguishable. Tarsadia does not establish the existence of these factual distinctions, without more, undermines A&S's reliance on Hocking to support its economic realities argument. Hocking involved a similar, though not identical, real estate venture, and Howey (on which A&S also relies) makes clear the investment contract concept is "flexible" and "capable of adaptation." (Howey, supra, 328 U.S. at p. 299.) In turn, and critically, Tarsadia does not show all reasonable attorneys would consider the factual differences fatal to A&S's securities claims. Indeed, the SEC itself did not: it viewed the gap as inconsequential, given the Hotel was under construction, and maintained the transactions constituted an investment contract, after acknowledging there was no rental pool.¹³

13 On reply, Tarsadia contends A&S does not state the facts they knew when they filed Salameh. We need not address this point, raised on reply, but note Tarsadia does not explain why A&S, as respondent, would have a burden in this regard or the impact of this purported omission (particularly as the key facts for Salameh—the basic terms of the unit sales, the rental program, and when the Hotel opened—were in the Salameh pleadings and are not in dispute).

Third, Tarsadia suggests A&S made "unfounded arguments" to the district court to rely on Hocking, including failing to indicate when the agreements were signed and "misrepresenting" that a rental pool existed. But A&S was focused on the economic realities of the transactions, which were completed before the Hotel opened, so the omission of agreement dates does not reflect an absence of probable cause. As for the rental pool, Tarsadia bases this argument on Aguirre's comments at an August 2010 Salameh hearing. As Tarsadia acknowledges, what Aguirre actually stated was that, given the program's operation, it "comes fairly close to a pool . . . ." This contention is consistent with A&S's economic realities position and, again, does not undermine probable cause.

Fourth, Tarsadia focuses on the agreement provisions disclaiming investment and profit expectations and contends the Salameh district court relied on existing cases to conclude the purchasers could not have asserted reliance on the agreements or expected profits. Those cases were Garcia v. Santa Maria Resort, Inc. (S.D. Fla. 2007) 528 F.Supp.2d 1283 and Demarco v. LaPay (D. Utah 2009) 2009 WL 3855704. They did address disclaimers in rejecting real estate related securities claims (Garcia, at pp. 1292-1293, Demarco, at p. 8), but are of limited value here, where A&S's argument turned on the economic realities of this Hotel project. (See Davis v. Metro Productions, Inc. (9th Cir. 1989) 885 F.2d 515, 524-525 ["It is well established that courts look beyond contractual language to economic realities in determining whether a transaction is an investment contract."].) The SEC felt the district court placed "undue emphasis" on these cases, explaining: "[i]t is essential . . . that written representations or warranties not trump the economic and practical realities of a transaction that otherwise qualifies as an investment contract." Tarsadia also cites In re Mona Lisa at Celebration, LLC (M.D. Fla. 2010) 436 B.R. 179, 199-200 [no reasonable expectation of profits where agreements contained disclaimers].) This case fails to provide guidance here, for the same reasons.¹⁴

14 On reply, Tarsadia contends that, given the disclaimers, A&S "stretch[ed] the facts" by claiming their clients purchased the units as an investment. Whether buyers could have investment expectations, in light of the disclaimers, is a legal issue.

Fifth, Tarsadia contends the courts rejected A&S's reliance on the 28-day occupancy limitation, because it was imposed by the city. Both the Salameh district court and Ninth Circuit noted A&S acknowledged the limitation was based on a zoning ordinance, but neither court focused on the relevance of this source.¹⁵ In any event, A&S's position was that the unit sale and rental program were a common enterprise, due to, among other things, the RMA being necessary and lack of owner control. Tarsadia does not explain how the source of one particular limitation on owner usage—of many—undermines that theory.

15 The district court did indicate (without analysis) that Tarsadia cited two SEC no-action letters, which provided zoning restrictions do not turn a condominium into a security. The SEC disagreed with this characterization in its amicus brief, explaining that neither letter "addresse[d] the zoning issue; rather, both . . . rest on the fact that, under the totality of the circumstances, the condominium units in question were arguably being offered and sold for personal use."

Finally, Tarsadia cites another lawsuit related to the Hotel, Bell v. Tarsadia Hotels, et al. According to Tarsadia, Bell "alleged [Tarsadia] had failed to comply with securities laws when selling the condo-hotel" and was voluntarily dismissed after the Salameh district court dismissal. Tarsadia contends dismissal there reflects a lack of probable cause here. But the record is silent as to why Bell was dismissed, and Tarsadia cites no authority that a voluntary dismissal in a different case, for unknown reasons, undermines probable cause. Not all dismissals reflect on the merits. (See, e.g., Ludwig v. Superior Court (1995) 37 Cal.App.4th 8, 27 [dismissal based on settlement generally does not reflect on the merits].)

b. Trial court's anti-SLAPP order

Tarsadia next focuses on the trial court's order, contending the court erred by relying on the SEC brief, fee orders, and malpractice action in reaching its conclusions on probable cause. We again disagree.

We start with the SEC brief. Neither party directs us to authority regarding the relevance of amicus briefs to probable cause. But we observe the brief is, at minimum, a legal brief prepared and filed by counsel, and conclude it reflects that at least one "reasonable attorney would have considered the action legally tenable." (Padres, supra, 114 Cal.App.4th at p. 517.)

Tarsadia's arguments to the contrary are not persuasive. First, they suggest that, as the Ninth Circuit stated, "the brief was not based on the relevant authority, (Hocking)." However, as discussed ante, the brief did address Hocking. Second, they contend the Ninth Circuit rejected the SEC's arguments, focusing on the court's concern that the SEC did not consider the absence of inducement allegations. However, the SEC noted courts must ascertain the scheme that was "explicitly or implicitly offered to induce the purchase." Given that the SEC supported A&S's position, it presumably viewed A&S's allegations as sufficient for at least implied inducement. Regardless, the Ninth Circuit did not state the SEC's position or its view of A&S's allegations were unreasonable; it simply found them unpersuasive. Third, Tarsadia argues the SEC brief is argument, not "law." Probable cause focuses on what reasonable attorneys would do, not what courts would hold. Tarsadia's reliance on McKesson HBOC Inc. v. Superior Court (2004) 115 Cal.App.4th 1229, is misplaced. McKesson was a work product dispute; the sole connection appears to be that the SEC filed an amicus brief there, too. (Id. at pp. 1234-1235.) McKesson reached a holding contrary to the SEC's view, but never suggested its input was irrelevant or inappropriate. (Id. at p. 1241.) Finally, Tarsadia claims the trial court "placed dispositive weight" on the SEC's view, noting the Ninth Circuit declined to give its brief special weight. But the issue is whether any reasonable attorney would view A&S's position as tenable. Regardless of whether the courts did or did not give the brief special weight (or the propriety of doing so), SEC counsel are still attorneys and their view is relevant here.¹⁶

16 Tarsadia adds arguments about the SEC brief in its reply brief. We will not address them. (Shade Foods, supra, 78 Cal.App.4th at p. 894, fn. 10.)

As for fee orders, they can be relevant to probable cause, to the extent they bear on the merits. (See Franklin Mint, supra, 184 Cal.App.4th at pp. 332-333 [addressing underlying fee award, which found certain claims " 'groundless and unreasonable,' " and explaining such rulings "can be considered as evidence relevant to the issue of probable cause."].) We conclude the district court fee order is relevant to probable cause. Both Tarsadia and Playground were sued for securities violations. Both sought Section 11(e) fees under the Securities Act of 1933 (although Tarsadia dropped the request). In the Ninth Circuit, a court has discretion to award Section 11(e) fees "only if the claim or defense borders on the frivolous or is brought in bad faith." (Western Federal Corp. v. Erickson (9th Cir. 1984) 739 F.2d 1439, 1444.) The district court denied Playground's request, explaining that it did "not find that the action bordered on the frivolous or brought in bad faith." This fee order provides some support that the securities claims were not frivolous or lacking in probable cause. (See Chidester, supra, 28 Cal.4th at p. 817 [" 'standard of probable cause to bring a civil suit [is] equivalent to that for determining the frivolousness of an appeal' "].)¹⁷

17 The Ninth Circuit did not explain its reasoning for granting Tarsadia fees on fraud claims, but not securities claims. Given we cannot discern if the order reflects on the merits, we cannot say it supports probable cause (but it does not undermine probable cause, either.)

Tarsadia's counterarguments again lack force. First, they contend the fee order pertained only to Playground. But Playground and Tarsadia were both sued for securities violations, and the order addressed whether the action was frivolous. Second, Tarsadia argues that because Playground never argued the claims were frivolous or in bad faith, the argument was "undeveloped." Regardless of Playground's arguments, the issue was before the court, as Playground was seeking fees that require frivolous or bad faith claims. Finally, Tarsadia argues courts "refuse to apply the outcome of sanctions motions" (citing Wright v. Ripley (1998) 65 Cal.App.4th 1189), so the fee orders "cannot be utilized as binding precedent against Tarsadia." Even assuming fee and sanctions orders implicate similar issues, the argument is unpersuasive. Wright addressed a collateral estoppel argument. (Wright, at pp. 1194-1195 [declining to give estoppel effect to sanctions ruling in probable cause analysis].) Neither party argues collateral estoppel here, so the issue is not whether an order is binding, but whether it is relevant—and the case law reflects it can be. (See, e.g., Mattel, Inc. v. Luce, Forward Hamilton & Scripps (2002) 99 Cal.App.4th 1179, 1184, 1191 [sanctions award found action had been filed " ' "without factual foundation;" ' " findings were "evidence that the underlying action was filed without probable cause"].) As for Wright's observation that most sanctions motions can be resolved summarily (Wright, at p. 1194), that concern does not apply here, given the district court explained the basis for its order and that explanation pertained to the merits.¹⁸

18 A&S suggests the fee order supports probable cause under the interim ruling doctrine, citing Bergman v. Drum (2005) 129 Cal.App.4th 11, 21-22. Bergman does not appear to address fees, but because we conclude the fee order supports probable cause for other reasons, we need not address the issue.

Turning to the malpractice action, neither party identifies cases addressing the relevance of such actions to probable cause. Based on our own analysis, we conclude the malpractice action reflects there was probable cause here. There is no dispute Greenberg Traurig advised Tarsadia on the Hotel, to minimize legal risk under securities statutes and other laws. Tarsadia argued in the malpractice action that the firm did not provide sufficient advice on the project's legal risks and prepared poorly drafted documents. Meanwhile, A&S suggests the firm's advice may not have encompassed all legal issues related to the project (citing Davis's testimony) and contends Tarsadia departed from the firm's advice (citing the Greenberg Traurig memo, which required "strict compliance" with various principles, and evidence regarding purported departures). Tarsadia disagrees, but resolution of those factual issues is not before us. For purposes of this probable cause analysis, we need only observe that the malpractice action and related evidence could lead a reasonable attorney to conclude the Hotel project implicated risk and that, if the firm's advice did not encompass the entire project or Tarsadia departed from the firm's advice, Tarsadia could be liable.

Tarsadia disagrees, suggesting the malpractice action is irrelevant because it extended beyond securities issues. But we do not see (and Tarsadia does not explain) why the presence of other issues would undermine the action's relevance to the securities claims. Tarsadia argues the only application of the malpractice action is to undermine probable cause for the fraud claims. We address that argument, post.

2. Statutes of Limitations

Tarsadia also contends A&S lacked probable cause, because a termination on statutory grounds can be considered for probable cause and A&S knowingly pursued time-barred claims. This argument is unpersuasive. As an initial matter, the Ninth Circuit affirmed the district court without addressing its statute of limitations rulings, so it is not clear that Tarsadia could characterize those claims as terminating on statutory grounds. More importantly, Tarsadia does not establish time-barred claims are relevant to probable cause. Tarsadia cites Lackner v. LaCroix (1979) 25 Cal.3d 747 (Lackner) for the proposition that statutory terminations can support probable cause, but Lackner actually affirmed dismissal of a malicious prosecution suit in which the underlying action terminated on statute of limitations grounds. (Id. at p. 752.) Tarsadia's suggestion that A&S intentionally pursued time-barred claims finds no support in Lackner, either, as the court declined to address knowingly defective claims: "[W]e do not confront the question of a defendant's right to relief when a knowingly ill-founded suit brought only to harass or vex the defendant fails for procedural reasons." (Id. at p. 752, fn. 3.) Subsequently, Warren v. Wasserman, Comden & Casselman (1990) 220 Cal.App.3d 1297 rejected a plaintiff's claim that a knowingly time-barred action was even favorably terminated, because "it [did] not reflect on the merits of the prior action." (Id. at p. 1302.)¹⁹

19 A&S contends individual claims resolved on statutory grounds have not even favorably terminated, citing Warren, supra, 220 Cal.App.3d 1297 and Hudis v. Crawford (2005) 125 Cal.App.4th 1586. These cases confirm dismissal of an action on procedural grounds is not a favorable termination, but neither case involved a situation where, as here, fewer than all claims could be resolved on such grounds. (See Warren, at pp. 1299-1300; Hudis, at pp. 1589, 1592 [action dismissed on standing grounds not a favorable termination].) Further, it is the "entire action" that must be favorably terminated for malicious prosecution purposes. (Dalany v. American Pacific Holding Corp. (1996) 42 Cal.App.4th 822, 829.) We need not resolve the issue, but note that if a disposition does not support favorable termination because it does not bear on the merits, it is unclear how it could bear on the merits for purposes of probable cause.

ii. Fraud Claims

Tarsadia argues reversal is warranted because any ground brought without probable cause (and with malice) can support a malicious prosecution claim, and the trial court did not specifically address the other claims. However, the need for all grounds to be supported by probable cause is not in dispute, and we review the trial court's ruling, not its reasoning. (City of Santa Monica v. Stewart (2005) 126 Cal.App.4th 43, 80 (Stewart).) Tarsadia does not contend this principle is inapplicable in the anti-SLAPP context. Thus, we reach the other Salameh claims, but given Tarsadia's burden to establish reversible error, we only address those specifically challenged by Tarsadia: the claims relating to fraud.

First, Tarsadia contends that reliance on advice of counsel is an "absolute defense" to fraud claims. Even assuming this were true, Tarsadia does not establish that claiming reliance on advice of counsel is sufficient to undermine probable cause, particularly where, as here, there is a question as to whether that advice encompassed all aspects of the project and whether the advice was followed. (See S.E.C. v. Goldfield Deep Mines Co. of Nevada (9th Cir. 1985) 758 F.2d 429, 467 [requiring, for advice of counsel defense, "rel[iance] in good faith" on counsel's advice].) The cases cited by Tarsadia are inapposite. (See State Farm Mutual Auto Ins. Co. v. Superior Ct. (1991) 228 Cal.App.3d 721, 725 [malicious prosecution defendant can rely on advice of counsel defense, without including defense in its answer]; Bains v. Moores (2009) 172 Cal.App.4th 445, 452 [affirming summary judgment in corporate fraud case where, among other things, directors relied on outside counsel; Court of Appeal did not address advice of counsel]; Zamos v. Stroud (2004) 32 Cal.4th 958, 960 (Zamos) [holding generally that "an attorney may be held liable for continuing to prosecute a lawsuit discovered to lack probable cause;" advice of counsel not at issue].)²⁰

20 On reply, Tarsadia suggests Cole v. Patricia A. Meyer & Associates, APC (2012) 206 Cal.App.4th 1095 reflects a "comparable" case, where Aguirre allegedly disregarded a law firm investigation exonerating defendants. Cole does not appear to address Aguirre's consideration of the firm's findings (or lack thereof), but the comparison fails regardless. (Id. at p. 1106.) Legal advice on a future project, that the client may or may not have followed, differs from an investigation finding no wrongdoing in past conduct.

Second, Tarsadia argues that common law fraud requires justifiable reliance and the agreement disclaimers precluded A&S from meeting this element. However, the cases cited by Tarsadia here simply establish the necessity of justifiable reliance for fraud claims; they do not address disclaimers like those at issue, much less in the probable cause context. (See, e.g., Mirkin v. Wasserman (1993) 5 Cal.4th 1082 [shareholder suit; holding fraudulent misrepresentation requires justifiable reliance].)²¹ A&S offers reasons the disclaimers may not control (including the economic realities of the situation and purported representations by Tarsadia that were inconsistent with the disclaimers), and the case law suggest these reasons are not frivolous. (See, e.g., Blankenheim v. E.F. Hutton & Co. (1990) 217 Cal.App.3d 1463, 1471-1472 ["party may not contract away liability for fraudulent or intentional acts"]; Ron Greenspan Volkswagen, Inc. v. Ford Motor Land Development Corp. (1995) 32 Cal.App.4th 985, 992-993 [discussing "California authority holding that a contract provision stating that all representations are contained therein does not bar an action for fraud"].) We conclude Tarsadia has not established the disclaimers undermined probable cause.

21 Garcia, supra, 528 F.Supp.2d 1283, cited by Tarsadia in its Salameh discussion, did find similar disclaimers dispositive on fraud, but under Florida law and in response to claimed reliance on oral statements (not an economic-realities argument). Tarsadia does not contend Garcia should guide our fraud analysis and we do not consider it further.

b. Royalty

The trial court did not specifically address the Royalty claims, but as explained ante, this does not preclude review. (Stewart, supra, 126 Cal.App.4th at p. 80.) We limit our discussion to the issues challenged by Tarsadia: whether there was probable cause to pursue Royalty generally or to support the UCL or forfeiture claims specifically. We again address each issue in turn, and again Tarsadia has not established a reasonable likelihood of prevailing on probable cause.

i. Probable Cause to Bring and Maintain Royalty

The first issue is whether A&S had probable cause to bring and maintain Royalty. (Zamos, supra, 32 Cal.4th at p. 960 [attorney can be liable for continuing action discovered to lack probable cause].) The trial court found the timeline, differences in parties and claims, and evolving state of discovery supported probable cause.

First, the timeline supports probable cause. Royalty concluded in the trial court in 2012, well before Salameh reached final disposition in 2014 (when the Supreme Court denied review). Even if that disposition would have led A&S to conclude that claims in Royalty lacked probable cause, it did not occur while Royalty was pending below and could not have supported liability for continuing a case without probable cause. (Cf. Zamos, supra, 32 Cal.4th at p. 960.) As for prosecution of Royalty through appeal, differences between the cases and discovery (addressed post) supported probable cause, regardless of when Salameh ended.

Tarsadia disagrees, contending a federal judgment is final until overturned on appeal and that A&S's pursuit of the investment contract theory in Royalty was improper after the Salameh district court dismissal. This argument is not persuasive. For one thing, the authorities cited by Tarsadia are inapposite. Zamos simply prohibits continuing an action discovered to lack probable cause, and does not address the effect of federal court judgments. (Zamos, supra, 32 Cal.4th at p. 960.) Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101 does hold that a federal judgment has res judicata effect in a subsequent state court action, even if an appeal is pending. (Id. at p. 1110.) But Tarsadia is not arguing res judicata, and Abdallah does not address the role of federal judgments in the probable cause context. Further, as discussed ante, once an appeal is filed, a favorable termination cannot exist until it concludes. (Drummond, supra, 176 Cal.App.4th at p. 457.) The conclusion on appeal may be relevant to the probable cause analysis. Finally, Salameh and Royalty were resolved at different stages of litigation and, as we discuss next, are not identical. Even if the Salameh district court order were some evidence that certain claims lacked merit in Salameh, it would not necessarily foreclose the viability of those claims in Royalty.

Second, the trial court found the different parties and claims in Salameh and Royalty supported probable cause. We understand the court to mean these factors supported A&S's decision to pursue Royalty separately, and we agree. Probable cause simply requires that some attorney would find the action reasonable. Here, as the trial court observed, the district court found there was a "colorable basis for dividing up the lawsuits," when it denied a motion to consolidate Royalty with Salameh and remanded Royalty to state court. The record further reflects differences between the actions. Some Royalty claims did not overlap at all. Even with respect to the securities and fraud theories, Royalty involved different plaintiffs (i.e. purchasers who had not closed escrow). Different plaintiffs may reasonably implicate distinct issues and outcomes. (See, e.g., Thibodeau v. Crum (1992) 4 Cal.App.4th 749, 757 [cases were "readily distinguishable," where "different plaintiffs focused on different matters, resulting in the disposition of different issues"].)

Tarsadia again disagrees, but provides no legal authority for its view. (Stanley, supra, 10 Cal.4th at p. 793.) We nevertheless briefly address its concerns. First, Tarsadia contends, without elaboration, that the difference in parties does not support probable cause because "[a] court's decision on an Anti-SLAPP Motion is not based upon the applicability of res judicata principals [sic]." We do not see how the court's consideration of the parties at issue in different actions constitutes "applic[ation] of res judicata." Second, Tarsadia argues the trial court's reliance on the remand order was erroneous, because Royalty involved issues beyond those in Salameh and the trial court failed to evaluate them. But the only point here is that Royalty was different from Salameh, which the remand order recognizes and which this argument by Tarsadia appears to concede.²²

22 Despite elsewhere contending Royalty involved identical claims, Tarsadia states it was "even more tenuous" for Royalty plaintiffs to assert the investment contract theory, because (according to Tarsadia) they never entered RMAs. But Tarsadia does not explain or provide authority for this assertion, so we need not consider whether an investment contract requires an investor to close on all elements of the relevant transaction (or transactions).

Finally, the trial court found that "allegations of the two actions incorporated the evolving state of discovery during the time periods these cases were active." Tarsadia never specifically addresses this finding, and challenges what it describes as A&S's "subsequent discovery" argument only on reply. We deem the issue forfeited (Shade Foods, supra, 78 Cal.App.4th at p. 894, fn. 10), but note Salameh was resolved at the pleading stage, before discovery, and A&S does identify evidence later elicited in state court discovery that a reasonable attorney could view as lending factual support to its position (or at least warranting an inference such support exists), including the deposition testimony of Luce and Adelhelm, described ante. (See Puryear v. Golden Bear Ins. Co. (1998) 66 Cal.App.4th 1188, 1195.)²³

23 Tarsadia disputes some of this evidence. We elect to comment on one issue: A&S's contention that all owners signed RMAs. The testimony on which A&S relies reflects there was a "separate RMA report for each room," and close to 1,000 monthly reports due to units with multiple owners. Even if this testimony only reflects many or most owners signed RMAs, this could lend support to A&S's position. (See Hocking, supra, 885 F.2d at p. 1456 ["In Howey, as here, the investors were not obligated to purchase the service contracts, and in fact some decided to purchase the land without a service contract."].)

ii. UCL claim

Tarsadia challenges several theories on which A&S purportedly pursued the UCL claim. Statutory references are to the Business and Professions Code. As a preliminary matter, Tarsadia's showing here is deficient. We recognize plaintiffs may not "proceed[] on . . . theories which they know or should know to be groundless." (Bertero v. National General Corp. (1974) 13 Cal.3d 43, 57.) But probable cause takes account of the evolution of legal principles (Sheldon Appel, supra, 47 Cal.3d at p. 886), and can be based on existing law or its reasonable extension. (Arcaro, supra, 77 Cal.App.4th at p. 156.) If Tarsadia seeks to establish a lack of probable cause by attacking particular theories, we must know what A&S actually argued—and it is Tarsadia's burden to direct us to portions of the record reflecting A&S made those arguments. (Del Real, supra, 95 Cal.App.4th at p. 768.) Here, Tarsadia relies solely on the Royalty pleadings, where the UCL cause of action is pled only in general terms and does not reflect A&S specifically based the claim on the various theories it challenges.²⁴

24 We recognize the UCL cause of action incorporated by reference preceding allegations, but Tarsadia directs us to no authority that we are required to interpret every statement in a complaint as potentially applicable to every legal claim, for purposes of probable cause. (Cf. Yee, supra, 220 Cal.App.4th at p. 200 [court must construe underlying complaint in light most favorable to malicious prosecution defendant].) Nor does Tarsadia establish the Royalty summary adjudication order is dispositive of what A&S argued, particularly as it does not describe A&S's purported arguments on the theories at issue in any detail or address the authority relied upon by A&S.

We nevertheless elect to address certain aspects of Tarsadia's arguments. First, Tarsadia contends A&S predicated the UCL claim on securities violations, which is impermissible under Bowen v. Ziasun Tech, Inc. (2004) 116 Cal.App.4th 777 (Bowen). (Id. at p. 790 [stock sale dispute, concluding § 17200 does not apply to securities transactions].) Even assuming Bowen applies here (given Tarsadia disputes the transactions involved securities), the decision has been narrowed and is not without disagreement—meaning a UCL claim related to securities would not necessarily be devoid of probable cause. (See, e.g., Betz v. Trainer Wortham & Co., Inc. (N.D. Cal. 2011) 829 F.Supp.2d 860, 866 ["[C]ourts have narrowed Bowen's broad language and have allowed Section 17200 claims to proceed where the claims were tangentially related to securities transactions."]; Siegel v. Gamble (N.D. Cal. 2016) 2016 WL 1085787, at *7 ["since Bowen, some courts have questioned the validity of its conclusion"].)

Second, Tarsadia argues A&S based the UCL claim on the purchasers and DRE not receiving the UMA, and lacked factual support to do so (because the record reflects the purchasers executed the UMA and the DRE Final Report referenced it). But the operative Royalty complaint does not appear to contain any allegations regarding purchasers not receiving the UMA (and actually includes the UMA in a list of documents binding purchasers). The complaint does address DRE receipt, but, again, there was no indication this allegation was intended to relate to the UCL claim.

Third, Tarsadia contends A&S argued the RMA should have been provided to purchasers under Section 11018.6, neither the statute nor case law require this, and A&S thus proceeded without legal support. But the absence of existing authority is not fatal to probable cause, without more. (Sheldon Appel, supra, 47 Cal.3d at p. 886; Arcaro, supra, 77 Cal.App.4th at p. 156.) This principle has particular force in the UCL context, where " '[v]irtually any law or regulation—federal or state, statutory or common law—can serve as [a] predicate' " for such an action. (Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 681.)

Finally, according to Tarsadia, A&S contended Tarsadia made false statements in the DRE Questionnaire, even though they knew their clients never saw it and could not plead reliance. A UCL claim based on a fraudulent business practice does require reliance. (In re Tobacco II Cases (2009) 46 Cal.4th 298, 325-326.) But a UCL claim also can be based on an unfair business practice (id. at p. 311), the UCL claim here alleges both "fraudulent and unfair business practices," and, again, Tarsadia does not establish what A&S actually argued.²⁵

25 A&S suggests Tarsadia engaged in conduct it indicated in the DRE Questionnaire it would not pursue, thus changing the nature of the offering without notice to the DRE (in violation of section 11012 and a related regulation). Tarsadia contends A&S did not raise this argument below. We need not resolve this issue, but mention it because it reflects an unfair competition claim could encompass issues unrelated to reliance.

iii. Forfeiture

A&S based the forfeiture claim on Tarsadia's retention of purchaser deposits upon failure to close, on the grounds this liquidated damages provision was unreasonable under the circumstances at the time the Purchase Contract was entered.

First, Tarsadia contends the Royalty courts concluded this claim was "never supported" by the evidence and dismissed the action on this ground, suggesting the claim was deficient from the outset. The cited portion of the record reflects the trial court granted summary adjudication after concluding A&S did not have evidence to support the claim, and this court affirmed on similar grounds. That plaintiffs were unable to marshal sufficient evidence to survive summary adjudication is not dispositive of probable cause, particularly where, as here, the claim already survived demurrer. (Chidester, supra, 28 Cal.4th at p. 811 [noting Court of Appeal held evidence was insufficient to proceed, but "did not hold or imply that a reasonable attorney could not have believed the case had potential merit"]; see interim ruling discussion, post.)

Second, Tarsadia argues both the trial court and this court held the liquidated damages provision complied with applicable Civil Code sections, and that no reasonable attorney would have brought the claim after reviewing the liquidated damages provision here and those statute sections. But both courts made clear that compliance with these provisions shifted the burden to the plaintiffs to show the provision was "unreasonable under the circumstances existing at the time the contract was made"—as plaintiffs were claiming. The cases cited by Tarsadia do not support its argument. In HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, the Court of Appeal affirmed denial of an anti-SLAPP motion in a malicious prosecution case based on an action for failure to return cancellation fees. (Id. at p. 217.) The court found there was no dispute cancellation fees had never been discussed, so there was no basis on which fees could be claimed. (Ibid.) Here, there was a provision at issue, and even if it complied with statutory requirements, there remained a question as to whether it was unreasonable under the circumstances. Mabie v. Hyatt (1998) 61 Cal.App.4th 581 simply confirms the general principle that it is unreasonable to pursue a case in the absence of supporting evidence. (Id. at p. 597.)

Finally, the parties disagree as to whether the interim ruling doctrine supports probable cause here. We conclude it does. "[C]ertain nonfinal rulings on the merits may serve as the basis for concluding that there was probable cause for prosecuting the underlying case . . . ." (Paiva v. Nichols (2008) 168 Cal.App.4th 1007, 1020 (Paiva) [grant of preliminary injunction established probable cause to initiate lawsuit].) This doctrine rests on the principle that "[c]laims that have succeeded at a hearing on the merits, even if that result is subsequently reversed by the trial or appellate court, are not so lacking in potential merit that a reasonable attorney or litigant would necessarily have recognized their frivolousness." (Chidester, supra, 28 Cal.4th at p. 818.)

As noted ante, the Royalty trial court overruled a demurrer to the forfeiture claim, finding that "for purposes of the pleading stage, the SAC alleges sufficient facts . . . ." A&S relies on Swat-Fame, Inc. v. Goldstein (2002) 101 Cal.App.4th 613 (Swat-Fame), disapproved on another point in Zamos, supra, 32 Cal.4th at page 973, to contend the interim ruling doctrine applies here. Swat-Fame was sued for fraud by a former employee and demurred, contending certain allegedly false statements were opinions. (Swat -Fame, at pp. 620-621.) The trial court found a particular statement was one of fact, and overruled the demurrer. (Ibid.) The employee admitted at deposition the statement was true, and the court granted summary adjudication. (Id. at pp. 621-622.) In the later malicious prosecution action, the employee's lawyer prevailed on summary judgment. (Id. at p. 622.) The Court of Appeal affirmed: "Because the allegations in the complaint were true to the best of the lawyers' knowledge . . . , and because the trial court overruled Swat-Fame's demurrer to the fraud claim, the lawyers necessarily had probable cause to bring the claim for fraud." (Id. at p. 626.) Here, as in Swat-Fame, the demurrer ruling was based on the plaintiffs pleading sufficient facts and, impliedly, the legal tenability of the claim. As in Swat-Fame, the demurrer ruling supports probable cause.²⁶

26 We recognize Zamos disapproved of Swat-Fame, to the extent Swat-Fame was inconsistent with its holding that a malicious prosecution case can be based on continuing an action. (Zamos, supra, 32 Cal.4th at p. 973.) But we read Zamos to apply to a portion of Swat-Fame that is not at issue here. (Swat-Fame, at pp. 627-628 [concluding attorney cannot be liable for continuing action, where probable cause existed at outset]. Zamos does not address the relevance of a demurrer ruling to probable cause. (See Paiva, supra, 168 Cal.App.4th at p. 1023 [rejecting argument that Zamos impacted analysis of probable cause to commence suit]; Franklin Mint, supra, 184 Cal.App.4th at p. 365 (dissenting opn. of J. Mosk) [postZamos opinion; observing Swat-Fame "is a sound rule," with respect to motion to dismiss in federal court].)

Tarsadia disagrees, contending as an initial matter that A&S did not make this interim ruling argument below. But the record reflects A&S did address the doctrine in the trial court (just as to the fee orders, rather than the demurrer ruling). Further, as Tarsadia notes, we can consider new legal arguments on appeal. (See City of Colton v. Singletary (2012) 206 Cal.App.4th 751, 775.) Here, A&S at least raised the legal issue below, if not the specific ruling, and Tarsadia has had an opportunity to address both the doctrine and specific ruling on reply here.

Tarsadia's substantive arguments are not persuasive, either. First, Tarsadia contends the rule is actually the "Interim Adverse Judgment Rule," citing Roberts v. Sentry Life Ins. (1999) 76 Cal.App.4th 375, and "typically arises when there has been a victory at trial and a reversal on appeal or a denial of a defendant's summary judgment . . . ." Roberts did involve a summary judgment denial (id. at p. 384), but Paiva and Swat-Fame followed Roberts and reflect that other types of interim rulings may be relevant to probable cause. Second, Tarsadia argues A&S extends Swat-Fame beyond its holding by contending a demurrer overruling "always" establishes probable cause. We do not view that to be A&S's position but, either way, the ruling here does support probable cause. Third, Tarsadia argues Swat-Fame is distinguishable, because the Swat-Fame ruling that a statement at issue was one of fact (so could support a fraud claim) reflected the merits, but the Royalty ruling that plaintiffs pled sufficient facts did not. We disagree. Regardless of phrasing, each court concluded there were adequate facts to plead the claim at issue. Finally, Tarsadia states the interim ruling doctrine would only apply if Royalty ruled on demurrer that the liquidated damages provision failed to comply with governing statutes. But, as explained ante, a forfeiture claim can be tenable if the provision is unreasonable under the circumstances. The demurrer ruling reflects A&S pled sufficient facts to pursue the claim.

3. Malice

Because Tarsadia has not met its burden on probable cause, we need not address malice. (See Padres, supra, 114 Cal.App.4th at p. 522.)

IV. Admission of evidence authenticated by counsel

Tarsadia contends the trial court erred in denying its authentication objections to the Servais Declaration. Tarsadia fails to establish prejudicial error.

Under the Evidence Code, writings must be authenticated, and witnesses must have personal knowledge. (See Evid. Code, § 1401, subd. (a) ["Authentication of a writing is required before it may be received in evidence."]; § 702 [witness testimony is "inadmissible unless [witness] has personal knowledge of the matter"].) An appellant challenging an evidentiary ruling must provide analysis as to the evidentiary objections at issue. (See Uhrich v. State Farm Fire & Casualty Co. (2003) 109 Cal.App.4th 598, 612 (Uhrich).) As with any issue, an appellant also must establish prejudicial error. (Candelaria, supra, 219 Cal.App.3d at p. 1444.) We review evidentiary rulings in an anti-SLAPP proceeding for abuse of discretion. (Morrow v. Los Angeles Unified School Dist. (2007) 149 Cal.App.4th 1424, 1444 [addressing anti-SLAPP motion; "We review the trial court's evidentiary rulings for an abuse of discretion."]; Hall v. Time Warner, Inc. (2007) 153 Cal.App.4th 1337, 1348, fn. 3 (Hall) [accord].)²⁷

27 Tarsadia suggests, but does not establish, there is a split of authority as to the standard of review, citing Reid v. Google (2010) 50 Cal.4th 512, 535. In Reid, the California Supreme Court noted it "need not decide generally whether . . . rulings on evidentiary objections based on papers alone in summary judgment proceedings are reviewed for abuse of discretion or . . . de novo." (Id. at p. 535.) Even assuming summary judgment standards apply to anti-SLAPP cases (and we recognize courts addressing anti-SLAPP evidentiary objections have relied on summary judgment cases; e.g., Morrow, at p. 1445), postReid summary judgment cases have still held abuse of discretion review applies to evidentiary rulings. (See, e.g., Serri v. Santa Clara University (2014) 226 Cal.App.4th 830, 852.)

In the Servais Declaration, Servais stated that since being retained by A&S, he had been "responsible for review and maintenance of the voluminous files underlying Plaintiffs' malicious prosecution Complaint." Referencing Notice of Lodgment exhibits, he explained they were "true and correct copies from the underlying file maintained by Mr. Aguirre's office or true and correct copies of pleadings in the court proceeding indicated." Relevant here, Tarsadia objected below on authentication grounds to exhibits that included materials obtained by A&S in discovery regarding the Hotel project and marketing, the Greenberg Traurig memorandum, and Salameh's copy of the UMA. In its opening brief, Tarsadia objects generally to the trial court's overruling of the authentication objections, but does not focus on specific rulings or raise other evidentiary issues.²⁸ Tarsadia also does not contend or establish the evidentiary rulings were prejudicial. We conclude Tarsadia does not meet its burden here. (Uhrich, supra, 109 Cal.App.4th at p. 612; Candelaria, supra, 219 Cal.App.3d at p. 1444.)

28 Tarsadia does focus on particular exhibits in the reply brief. We will not address these points. (Shade Foods, supra, 78 Cal.App.4th at p. 894, fn. 10.)

Even if we were to consider Tarsadia's position, it lacks merit. The parties appear to agree the issue is whether attorneys can authenticate evidence. A&S directs us to cases accepting this practice. (See, e.g., Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486, 523 [describing attorney authentication as "routine in law and motion practice"]; Landale-Cameron Court, Inc. v. Ahonen (2007) 155 Cal.App.4th 1401, 1409 (Landale) ["[C]ounsel . . . sufficiently authenticated the documents when he declared that they were true and correct copies of documents sent by and received from prior counsel"]; ibid. ["This is not a case . . . where the record is silent as to the authorship of the letters." ].) On reply, Tarsadia attempts to distinguish Landale on the grounds it did not involve a hearsay issue (and did have a party admission), as well as to present other hearsay arguments. But Tarsadia did not raise hearsay in its opening brief, thus forfeiting the issue, and party admissions are not at issue here. (Stanley, supra, 10 Cal.4th at p. 793.) The cases cited by Tarsadia do not address authentication objections to attorney declarations. (See Maltby v. Shook (1955) 131 Cal.App.2d 349, 354 [addressing attorney declaration in opposition to summary judgment; declaration was "replete with hearsay, conclusions and personal opinion" and failed to controvert evidence]; DiCola v. White Bros. Perf Products, Inc. (2008) 158 Cal.App.4th 666, 681 [addressing hearsay objections to attorney declaration]; In re Marriage of Heggie (2002) 99 Cal.App.4th 28, 30, fn. 3 [criticizing counsel for including substantive argument in declarations].) Even if some courts sustained authentication objections to attorney declarations (and we recognize the Royalty trial court did so), others have not.

Finally, we note any error here would have been harmless. This is a malicious prosecution action focused on probable cause; the key documents are court filings and rulings, and they do not implicate authentication issues. Most of the materials Tarsadia deems objectionable on authentication grounds relate to the "continuing discovery" issue, which Tarsadia has forfeited, or otherwise are not dispositive. For example, even if the Greenberg Traurig memorandum were excluded (and we note Tarsadia acknowledges elsewhere that it provided this document as an exhibit in Royalty), the malpractice complaint and Davis's testimony still would raise questions as to whether Tarsadia was advised on all aspects of the project and whether Tarsadia followed that advice. Tarsadia's objection to Salameh's copy of the UMA is simply puzzling, given the record contains other copies of the UMA (at least some of which were provided by Tarsadia) and Tarsadia discusses the UMA in its briefing.²⁹

29 We reject Tarsadia's suggestion that this court upheld evidentiary rulings as to the same documents in Royalty, on authentication grounds. We affirmed the rulings because the plaintiffs did not meet their burden to show the "specific evidentiary rulings were incorrect and prejudicial" (and because their "general approach. . . preclude[d] any meaningful discussion or analysis of those rulings.") Tarsadia fails to meet its burden here for similar reasons.

V. Dismissal of non-moving defendants

The defendants other than A&S were plaintiffs or cross-complainants in the underlying actions, attorney Morris, attorney Mazarella, and the law firm of Mazarella Lorenzana (collectively, the Non-Moving Defendants). In its opening brief, Tarsadia contends the trial court erred by dismissing the Non-Moving Defendants, because most had never been served and they did not move under anti-SLAPP.³⁰ On reply, Tarsadia argues the trial court lacked jurisdiction to dismiss these defendants. Tarsadia's arguments are not persuasive.

30 We note the case docket in the record reflects Tarsadia filed proofs of service for serving Morris and Mazarella, but it is unclear whether they appeared.

A. Jurisdiction

Tarsadia provides no relevant authority or record support for its belated jurisdiction argument. Tarsadia also fails to explain what, if anything, it told the trial court regarding service of the Non-Moving Defendants. Given this showing, we could deem the argument forfeited. (Stanley, supra, 10 Cal.4th at p. 793; Del Real, supra, 95 Cal.App.4th at p. 768.) However, because Tarsadia purports to raise a jurisdictional question, we will address its concerns. (See Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 196 [court must have fundamental jurisdiction to hear and determine a case].)

Rule 3.110, subdivision (b) of the California Rules of Court provides "[t]he complaint must be served on all named defendants and proofs of service on those defendants must be filed with the court within 60 days after the filing of the complaint." In addition, under rule 3.725, subdivision (c), parties are required to complete "[a]ll applicable items" on the Case Management Statement.

Tarsadia filed this malicious prosecution action in October 2014. On our own motion, we take notice of Tarsadia's case management statement, filed May 20, 2015. (Evid. Code. § 452, subd. (d).) In response to item three, "Service," Tarsadia checked the box stating "All parties named in the complaint and cross-complaint have been served, have appeared, or have been dismissed." Tarsadia then also checked the box stating "The following parties . . . have not been served (specify names and explain why not): See Attachment 3." In Attachment 3(1), Tarsadia identified additional defendants, but did not explain why they were not served. The trial court issued its anti-SLAPP order in August 2015.

We conclude that on the record before us, Tarsadia has not established there is a jurisdictional issue to resolve. Tarsadia was required to serve all defendants within sixty days of filing its complaint in October 2014, and does not explain its failure to do so (or to serve them at all, for that matter). Tarsadia also was required to fill out all items in its May 2015 Case Management Statement, including an explanation as to why identified defendants had not been served, yet failed to provide that explanation. Meanwhile, Tarsadia had indicated that "all parties had been served"—and then proceeded to not serve the remaining defendants (or address its claims regarding those defendants in the anti-SLAPP proceedings). By the time the trial court issued its anti-SLAPP ruling in August 2015, the court could reasonably have relied on Tarsadia's Case Management Statement and actions to conclude Tarsadia had served any defendants it was planning to serve. Once the court decided to grant the anti-SLAPP motion, it could reasonably dismiss the entire action.

B. Anti-SLAPP Rulings on Non-Moving Defendants

Turning now to the substance of Tarsadia's position, presented in its opening brief, Tarsadia relies on Mallard v. Progressive Choice Ins. Co. (2010) 188 Cal.App.4th 531 (Mallard) to contend reversal is warranted. There, a policyholder sued Progressive and its attorney for abuse of process. (Id. at p. 536.) The attorney filed an anti-SLAPP motion, and, although Progressive had not been served or appeared in the case, the trial court dismissed both defendants. (Ibid.) The Court of Appeal reversed as to Progressive: "[T]he trial court dismissed Mallard's claims against defendants, even though Progressive had not been served in the case, much less filed an anti-SLAPP motion on its own behalf. Thus, the trial court erred by dismissing Mallard's claims against Progressive, solely based on [the attorney's] successful anti-SLAPP motion." (Id. at p. 544.) Although Mallard involved a similar procedural posture, the opinion contained no analysis or legal authority to support its conclusion and thus offers little guidance here.

A&S directs us to Barak v. Quisenberry Law Firm (2006) 135 Cal.App.4th 654 (Barak).) Barak and an earlier case, Decker v. U.D. Registry, Inc. (2003) 105 Cal.App.4th 1382 (Decker), superseded by statute on other grounds as noted in Hall, supra, 153 Cal.App.4th at page 1349, reflect two approaches to anti-SLAPP rulings for non-moving defendants. In Decker, tenants sued a credit reporting agency (UDR) and its president (Saltz). (Id. at p. 1386.) UDR moved under anti-SLAPP; Saltz did not file a motion, "but filed notices that he joined in UDR's motions, which asked for relief only in favor of UDR." (Ibid.) The trial court denied the motion and the Court of Appeal affirmed. (Ibid.) The court rejected Saltz's attempted joinder, on the grounds that joinder would not be sufficient in the analogous summary judgment context, and further observed Saltz had no standing to appeal. (Id. at p. 1391.)

In Barak, the plaintiff sued a law firm and its client. (Barak, supra, 135 Cal.App.4th at p. 656.) The firm filed an anti-SLAPP motion, and the client filed a document joining the motion. (Ibid.) The trial court granted the motion as to both parties, and the Court of Appeal affirmed. (Id. at pp. 660-662.) The court disagreed with Decker's summary judgment analogy and viewed the issue there as one of standing. (Id. at p. 660.) Barak further observed: "Nor is any prejudice demonstrated. Appellant failed to provide any opposition to the special motion to strike and presents no argument on appeal to demonstrate why the same result would not have been obtained had [the client] filed a similar motion instead of a joinder." (Ibid.)

We conclude Tarsadia has not established reversible error. First, the Non-Moving Defendants are respondents, not appellants, so there is no standing issue. Further, our review is de novo and we can reach issues not expressly addressed by the trial court. (Padres, supra, 114 Cal.App.4th at pp. 508-509; Stewart, supra, 126 Cal.App.4th at p. 80.) Second, and critically, Tarsadia has not demonstrated prejudice. (Barak, supra, 135 Cal.App.4th at p. 661; Candelaria, supra, 219 Cal.App.3d, at p. 1444.) Tarsadia contends (on reply) that it had "no opportunity . . . to argue the merits of the Anti-SLAPP Motion" as to the Non-Moving Defendants and "advice of counsel . . . should be litigated before the Trial Court on a developed record." For Non-Moving Defendants who were 5th & K cross-complainants, there was no favorable termination and Tarsadia could not proceed anyway. For those who were Salameh and Royalty plaintiffs, Tarsadia does not dispute the only unique issue is advice of counsel. But Tarsadia fails to establish that the advice of counsel issue precludes this court from addressing dismissal of these defendants. We conclude it does not. If we were to reverse due to lack of probable cause, Tarsadia could pursue its lawsuit against them and address any relevant issues, including advice of counsel (assuming Tarsadia ever elected to serve them). If we were to affirm on the grounds that there was probable cause for Salameh and Royalty—as we do—Tarsadia does not explain why defendants who were Salameh and Royalty plaintiffs would need to rely on advice of counsel. Finally, Tarsadia does not address Morris, Mazarella, or Mazarella Lorenzana and has forfeited any argument regarding them.

DISPOSITION

The order is affirmed. Respondents shall receive their costs on appeal.

McCONNELL, P. J. WE CONCUR: BENKE, J. IRION, J.