PARRISH v. LATHAM & WATKINS

Appellants’ Response to Amicus Curiae Brief

Cal.August 11, 2016

S228277 | COPY SUPREME COURT IN THE SUPREME COURT FILER STATE OF CALIFORNIA AUG 11 2016 Frank A. McGuire Cl] Deputy CRC WILLIAM PARRISHand E. TIMOTHY FITZGIBBONS, 8.25 (b) Plaintiffs and Appellants, vs. LATHAM & WATKINS, LLP and DANIEL SCHECTER, Defendants and Respondents, AFTER A DECISION BY THE COURT OF APPEAL SECOND APPELLATEDISTRICT, DIVISION 3, CASE No. B244841 HON. JAMES R. DUNN, JUDGE, SUP. CT. No. BC482394 JOINT ANSWER TO AMICI BRIEFS EAGAN AVENATTI LLP PANISH, SHEA & BOYLE, LLP MICHAEL J. AVENATTI, SBN 206929 BRIAN J. PANISH, SBN 116060 520NEWPORTCENTERDRIVE., SUITE 1400 ADAM K.SHEA, SBN 166800 NEWPORT BEACH, CALIFORNIA 92660 KEVIN R. BOYLE, SBN 192718 ‘TELEPHONE: (949) 706-7000- 11111 SANTA MONICA BOULEVARD,SUITE 700 Los ANGELES, CALIFORNIA 90025 TELEPHONE: (310) 477-1700 ESNER, CHANG & BOYER STUARTB. ESNER, SBN 105666 234 EAST COLORADO BOULEVARD,SUITE 975 PASADENA, CALIFORNIA 91101 TELEPHONE: (626) 535-9860 Attorneysfor Plaintiffs and Appellants TABLE OF CONTENTS TABLE OF AUTHORITIES ...... 0.00...eeeee teen eens 3 INTRODUCTION 2.0.0... cece ee eee bene deen e tense nena eees 5 ARGUMENT.... 0...oecence tne cnet ene e teen ne nees 6 I. NOTHING AMICI ARGUE JUSTIFIES THE CONCLUSION THAT THE DENIAL OF SUMMARY JUDGMENTIN THE UNDERLYING ACTION CONCLUSIVELY ESTABLISHED THAT ACTION WAS INITIATED AND PROSECUTED WITH PROBABLE CAUSE....... 6 II. NOTHING AMICI ARGUE ESTABLISHES THAT CODE OF CIVIL PROCEDURE SECTION 340.6 APPLIES TO MALICIOUS PROSECUTION ACTIONS AGAINST LAWYERS. ............... 18 CONCLUSION .........000ceceeees Lecce cece eenvnseeeunueeteeeeenenens 28 CERTIFICATE OF WORD COUNT ........cccccccccccccccaeeceueunnnnuns 29 TABLE OF AUTHORITIES CASES Babb v. Superior Court (1971) 3 Cal.3d 841 0.00... cc ccc cece cece eee eee aes 17 Cole v. Patricia A. Meyer & Associates, APC (2012) 206 Cal.App.4th 1095 .......... 9 Cowles v. Carter (1981) 115 Cal.App.3d 350 2.0.0...ece nes 10 Crowley v. Katleman (1994) 8 Cal.4th 666 1.2.0.0... cccees 7, 20 Eagle Oil & Refining Co. v. Prentice (1942) 19 Cal.2d 553 2.0... eee eee 11 Flores v. Presbyterian Intercommunity Hosp. (2016) 63 Cal.4th 75 ...........+. , 25,26 Franklin Mint Co. v. Manatt, Phelps & Phillips, LLP (2010) 184 Cal.App.4th 313 .... 21 In Bertero v. National General Corp. (1974) 13 Cal.3d 43 .......... 00.0 cee eee eee 20 Jacques Interiors v. Petrak (1987) 188 Cal.App.3d 1363 .............. 0.02020 22 Lee v. Hanley (2015) 61 Cal.4th 1225 2.0...eee 5, 18, 19, 22, 23 Lujan v. Gordon (1977) 70 Cal.App.3d 260 2.0.0... ceeceeeee 22 Nunez v. Pennisi (2015) 241 Cal.App.4th 861 2... 0... eee eeeeee 9 Sangster v. Paetkau (1998) 68 Cal.App.4th 151 20.0.0... ccc cece eects 9 Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863 ..... eden nets 14 Slaney v. Ranger Insurance Co, (2004) 115 Cal.App.4th 306 .............. 16, 17, 22 Soukup v. Law Offices ofHerbert Hafif(2006) 39 Cal.4th 260 .................... 9 Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811 ............... 13, 14, 16 STATUTES Civ. Code, § 3426.4 20... cectee tenn e eee een e en enne 16 Code Civ. Proc., § 340.5 2...ceeteen n tent e nee 25, 26 Code Civ. Proc., § 340.6 2.0...ccccece nent ete nnes Passim Code Civ. Proc., § 425.16 2.0...cccteen n nee e tenn eens 28 INTRODUCTION Plaintiffs William Parrish and E. Timothy Fitzgibbons (“Plaintiffs”) submit this brief in response to the Amicusbriefs filed by the multiple Amici supporting the position taken by defendants Latham and Watkins and Daniel Schecter as to one or both of the issues under review by this Court. | The arguments contained in the Amicibriefs largely replicate the arguments made by Latham and Watkins in its answerbrief. Plaintiffs have already replied to those arguments andwill try to avoid undue repetition of the analysis contained in their opening brief on the merits andtheir reply brief. As explained, nothing the various Amici argue serve to justify a rule allowing a lawyerto avoid liability for malicious prosecution just because the trial court in the underlying action denied summary judgment based on materially false expert declarations on which the lawyer could not reasonably rely. This is especially true where, as here, in the aftermath of the summary judgment denial, the underlying trial court and the underlying Court of Appeal each concluded that the action had been prosecuted in subjective and objective bad faith and further concluded that the earlier summary judgmentdenial did not preclude the impositionof sanctions for the prosecution of that action. Asfurther explained, under this Court’s Lee v. Hanley (2015) 61 Cal.4th 1225, opinion, Code of Civil Procedure section 340.6 does not apply to a malicious prosecution 5 claim against an adverse lawyer because such a claim is not dependent upon proofthat the lawyer violated professional responsibilities owed as a lawyer. Just because the lawyer’s tortious conduct happenedto also violate such professional responsibilities in additionto violating common law tort duties does not bring the claim within the scope of section 340.6. In short, nothing Amici arguesjustifies affirming the Court of Appeal dismissing this malicious prosecution action under the anti-SLAPPstatute. ARGUMENT I. NOTHING AMICI ARGUE JUSTIFIES THE CONCLUSION THAT THE DENIAL OF SUMMARY JUDGMENTIN THE UNDERLYING ACTION CONCLUSIVELY ESTABLISHED THAT ACTION WASINITIATED AND PROSECUTED WITH PROBABLE CAUSE. Amici asserts that the Court should adopt their broad view of the adverse interim judgmentrule by reference to the so-called disfavored status of malicious prosecution claims. (Liability Assurance AC Brief 6; Association of Cal. Defense AC 14; LM AC Brief 23.) It appears to be Amici’s view that this status meansthat the Court should view . all legal issues in a way that makeit difficult to establish a malicious prosecution claim. But this Court has alreadyclearly rejected such a view. In Crowley v. Katleman (1994) 8 Cal.4th 666, 680, the Court explained: Unable to rely on either the facts or the law of Sheldon Appel, defendants quote from a preliminary policy statement with which we prefaced the body of the opinion. In that policy statement wereiterated the traditional view that malicious prosecution is a “disfavored cause of action” becauseofits potentially chilling effect on the public’s willingnessto resort to the courts for settlement of disputes. (47 Cal.3d at p. 872.) We adhereto that view. (See, e.g., Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1131 [270 Cal.Rptr. 1, 791 P.2d 587].) But we were also fully cognizant of the same view in Bertero, where the defendants expressly reminded usthat “malicious prosecutionis not a tort ‘favored by the law (13 Cal.3d at p. 53). Nevertheless we warned, “This convenient phrase should not be employed to defeat a legitimate cause of action. We responded to an argumentsimilar to defendants’ over 30 years ago, reasoning, ‘... we should not be led so astray by the notion of a ’disfavored“ action as to defeat the established rights of the plaintiff by indirection; for example, by inventing new limitations on the substantive right, which are without support in principle or authority ....’ ” Wbid., quoting Jaffe v. Stone (1941) 18 Cal.2d 146, 159 [114 P.2d 335, 135 A.L.R. 775]; accord, Leonardini v. Shell Oil Co. (1989) 216 Cal.App.3d 547, 566-567 [264 Cal.Rptr. 883].) 30399 Thus, the policy statement on which Amici relies provides no basis to conclude that the adverse interim judgmentrule should apply under the circumstances here. Rather, that determination should be based on the foundational reasons whythatrule exists in the first place. When viewed throughthis lens, it is evident that Amici’s position is as flawed as Latham’s position and the Court ofAppeal’s analysis before it. There is no basis to concludethatthe ruling in the underlying action denying the summary judgment motion based on materially false facts conclusively established that there was probable cause to initiate and maintain that action as a matter of law. Amici next launches into a discussion of probable cause asserting that standard is an objective one and is based on “facts on which the defendant acted.’” (Liability Assurance AC 7.) Amici then cautionsthat it is not relevant “whetherthe plaintiff or his or attorney was unawareofother evidence that weighed against their claim... .” (dd. at p. 8.) Based on these principles, according to Amici, the interim judgmentrule applies asa matter of law regardless whetherthe facts submitted in opposition to a summary judgment motion were materially false. A closer examination of Amici’s position, however, demonstrates that it actually supports plaintiffs’ position rather than Latham’s position. Plaintiffs agree with Amici that the adverse interim judgment rule concerns the probable cause element of the malicious prosecution standard. Plaintiffs also agree that because ofthis limited purpose, the scope of the adverse interim judgmentrule should be construed in a way thatis consistent with the standard for determining probable cause. However,plaintiffs disagree with Amici’s position that it necessarily follows that, for purposes of determining whetherthere is probable cause, a litigant or lawyer can simply bury his or her head in the sandas to the facts on whichtheyrely in pressing a claim and assert that no matter how implausible those facts are, probable cause is established. The determination whetherthere is probable cause requires an evaluation of both the applicable legal principles and the evidence supporting the plaintiff's claim. Contrary to what Amici seem to argue, in addition to the fact that, in determining probable cause, the particular legal theory being pursued should be examined to determine whether it was sufficiently viable, there must also be an examination of the knownfacts to determine whether the lawyeror client could reasonably rely upon them. Asthis Court explained in Soukup v. Law Offices ofHerbert Hafif(2006) 39 Cal.4th 260, 292: “A litigant will lack probable cause for his action eitherif herelies upon facts which he has no reasonable cause to believe to be true, or if he seeks recovery upon a legal theory which is untenable under the facts known to him.’” (Italics added.) “Probable cause exists when a lawsuit is based on facts reasonably believedto be true, andall asserted theories are legally tenable underthe knownfacts. [citation] Thus,[the plaintiff] may prevail by making a prima facie showing that any one ofthe theories in [the underlying action] was legally untenable or based on facts not reasonably believed to be true. (See ibid.) This objective standard of review is similar to the standard for determining whether a lawsuitis frivolous: whether ‘any reasonable attorney would have thought the claim tenable.’ [citation]” (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 885-886, 254 Cal.Rptr. 336, 765 P.2d 498 (Sheldon Appel).)” (Cole v. Patricia A. Meyer & Associates, APC (2012) 206 Cal.App.4th 1095, 1106; see also Nunez v. Pennisi (2015) 241 Cal.App.4th 861, 875 [“A litigant lacks probable cause “‘if he [or she] relies upon facts which he [or she] has no reasonable causeto believeto betrue, orif he [or she] seeks recovery upon a legal theory which is untenable underthe facts known to him [or her].’ ”]; Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 164-65 [“A litigant will lack probable cause for his action either ifhe relies upon facts which he has no reasonable causeto believe to be true, or if he seeks recovery upon a legal theory which 9 is untenable under the facts knownto him. In making its determination whethertheprior action waslegally tenable,the trial court must construetheallegations of the underlying complaint liberally in a light most favorable to the malicious prosecution defendant.”].) Viewedin this light, the issue here is whether an attorney who submits materially false expert declarations in opposition to a summary judgment motionis nevertheless entitled to a conclusive presumption of probable cause becausethetrial court, relying on those false declarations, denies the summary judgment motion — even though the court later concludes the declarations were false and that the action was prosecuted with subjective and objective bad faith. The answer to this inquiry must be “no.” At the very — least, under these circumstances, a factual question is raised whether the lawyer could reasonably rely upon the expert declarations submitted in opposition to the summary judgment motion. Accordingly, it was improper for the Court of Appeal to conclude that as a matter of law the summary judgment denial conclusively established probable cause and justified grantingthe anti-SLAPP motion. This is supported by the policy justification for the interim adverse judgmentrule. In Cowles v. Carter (1981) 115 Cal.App.3d 350, 357, the Court adopted the following policy explanation for the adverse interim judgment rule: “‘Surely, it would be hard law which would rendera plaintiff liable in damages for instituting an action, wherein he madea truthful and honest statementofthe facts, in the event that, notwithstanding a judge of the superior court wassatisfied that upon those facts the plaintiff had a meritorious case, a ruling to that effect should afterwardsbeset aside. It cannot matter 10 that the same judge reversed the judgment rendered by him in sanctioningthe petition. This should count for neither more norless than if the judgment of reversal had emanated from a higher court; for the reason that the inquiry, in either event, would be, not whether the plaintiff had in fact a good and valid cause of action, but whether this was apparently true, and it was accordingly the right of the plaintiff to invoke a judicial decision concerning the merits of the case presented for determination....’” In other words, the reason for the adverse interim judgmentruleis that if a neutral third party (the trial judge), after viewing a truthful recitation of the facts, concludesthat there is a sufficient basis to submit a claim to the jury, then the underlying plaintiff and his or her counsel should not be second-guessed as to whether there was probable cause to initiate that claim. But the key to this justification is that the trial judge is presented with a “truthful and honest statement of the facts.” This is particularly the case whenthe adverse interim ruling is a summary judgment denial because the facts submitted in opposition to summary judgment must be accepted as true. As this Court has long held, in ruling on a summary judgment motion, “the facts alleged in the affidavits of the party against whom the motion is made mustbe accepted as true... .” (Hagle Oil & Refining Co. v. Prentice (1942) 19 Cal.2d 553, 556.) Thus,if it is later determined (as here) that the facts which were acceptedastrue bythetrial court were in fact false, the summary judgmentdenial should not be conclusive evidence of probable cause. Underthese circumstancesthe finding by the underlyingtrial judge that there was evidence sufficient to prosecute the action wastainted by fact that the evidence submitted 11 in opposition to the summary judgment motion wasfalse. Where the lawyer submitting that false evidence did not have a reasonable basis to believe it was true, then there is no reason to insulate that lawyer from liability for malicious prosecution just because the summary judgment motion was denied. Nevertheless, according to Amici “if a lawyer in an underlying action relies unknowingly on a false fact, the falsity of that fact is irrelevant in assessing whetherthe lawyer had probable causeto bring the action.” (Liability Assurance AC Brief 11.) In other words, according to Amici, so long as the lawyer subjectively does not know that the facts are false then it does not matter whether the lawyer was unreasonable in submitting those facts in opposing a summary judgment. Under Amici’s view, once those false facts were relied upon bythetrial court to deny the summary judgment, then the lawyeris absolutely insulated from liability for malicious prosecution. Amici would thus convert probable cause from an objective standard and into a subjective standard -- just the opposite of what they urge elsewhere in their briefs. The question would become whetherthe lawyerorlitigant subjectively believed the truth of the facts submitted regardless whether a reasonable litigant or lawyer would not have believed they were true. This is precisely why Amici struggle for this Court to recognize that fraud and perjury are the only exceptions to the adverse interim judgmentrule. According to them so longasthere is an absence ofproofthat the lawyer subjectively knewthat the evidence submitted in opposition to the summary judgment motion was false (and therefore there was fraud or perjury) the fact that a judge relied on that false 12 evidence and denied the summary judgment motion conclusively establishes probable cause. Under such a rule, a lawyer is rewarded for not diligently examining the evidence submitted in opposition to a summary judgment motion. Indeed,the less the lawyer knowsthe better. On the other hand, the underlying defendant whois victimized bya malicious prosecution action will be reluctant to even file a summary judgment motion (and thus cut off his or her damages) knowingthat if such a motion werefiled, then the underlying plaintiff could simply file a false declaration, claim ignorancethatit was false and inoculate itself from liability for malicious prosecution when the motion is denied due to the false evidence. Takento its logical extreme, under Amici’s position, it is hard to understand why there should even be a fraud or perjury exception to the adverse interim judgmentrule. After all, even if fraud or perjury were committed thenit is still the case that the underlying trial court viewed the evidence and determined that it was sufficient to present the case to the jury. However, apparently recognizing the horrible optics of such rule, even Amici does not seek to dispense with the fraud or perjury exceptions to the adverse interim judgment rule. Yet they never explain why,if it’s the case that fraud or perjury are exceptions,it is not the case that there should also be an exception for materially false facts on which the lawyerorlitigant could not reasonablyrely. Next, Amici latch onto an out-of-context passage from Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, to argue that fraud and perjury are the only exceptions 13 to the adverse interim judgmentrule. (Liability Assurance AC Brief 11.) As explained in the opening andreply briefs, however,that is not at all what Wilson held. The issue in Wilson was whetherthe denial of an anti-SLAPP motion in the underlying action could support invoking the interim adverse ruling doctrine in the first place. There, this Court answered that question “yes,” but that holding is irrelevant in this instance because the court did not consider whether there was evidencein that case sufficient to fit within an exception to that doctrine. In fact, there was not even argument in Wilson that an exception to the interim adverse judgmentrule applied. Plaintiffs will not repeat their argumenthere as to why Wilson is not controlling. Noris it correct that Wilson or Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863 held that “if a lawyer in an underlying action relies unknowingly on a false fact, the falsity of the fact is irrelevant in assessing whether the lawyer had probable cause to bring the action.” (Liability Assurance AC Brief 11; ASCDC 15.) Nothingin either case cited stands for this proposition. Rather, at most those cases stand for the principle that probable cause is not based on whetherthe lawyer has performed sufficient research to test whether the underlying claims are tenable. (See Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 882-883.) They do not holdthat a lawyer need not have a reasonable basis in the truth of the facts on which heorsherelies in order for there to be probable cause based on those facts. Such a rule would be contrary to whatthis Court in Soukup, supra, as well as a numberofthe cases have held. It is one thing to say that a lawyer need not conduct an investigation as to the facts or legal theories pursued, and 14 quite another thing to say that the lawyer need not even have a reasonable basisto believe the truth of expert declarations submitted in opposition to a summary judgment motion. Thus, Amici Lawyers Mutual’s argumentthat “‘[a] lawyer hasthe right to accept as true the evidence supporting a claim, even if there is abundant contrary evidence” misses the point. (LM AC Brief 15.) Plaintiffs are not proposing a rule under which a lawyer could be foundto lack probable cause even if he or she reasonably believed thetruth of the evidence supporting their client’s claim. Rather, plaintiffs are proposing a rule under which a lawyer cannot escapeliability for malicious prosecution simply becausethetrial court in the underlying case denied summary judgment due to a materially false expert declaration submitted by the lawyer when heor she did not have a reasonable basis to believe it was true. Amici’s argumentis at odds with the standard for determining probable cause. A lawyer anda litigant alike cannot establish probable causeby reliance on facts which they have no reasonable basis to believe are true. Since that is the case, the fact that they used thosetainted facts to overcome a summary judgment motion should not entitle them to a conclusive presumption of probable cause. Next Amici arguesthat there is no support in case law for a “material false facts” exception to the adverse interim judgmentrule. (Liability Assurance AC Brief 13-16.) This argumentis largely an exercise in semantics as to whether languagerelied upon by plaintiffs from appellate decisions referencing “materially false facts” or “other unfair conduct” as exceptions to the adverse judgment rule means whatthose courts stated. The bottom line of what Amici arguesis that this language on whichplaintiffs rely is 15 inconsistent with this Court’s opinion in Wilson supposedly holding that fraud and perjury are the only exceptionsto the adverse interim judgment rule. But as explainedin detail in plaintiffs’ principal briefs, in Wilson this Court held no such things. Simply repeating the same argument over and over does not makeit so. Amici next curiously spend several pages attempting to support the expert declarations that were submitted in opposition to the summary judgment motion in the underlying action. (Liability Assurance AC Brief 16.) We say curiously becauseit is difficult to understand whatinstitutional interest these Amici have in makingthis very fact specific argument. In any event, plaintiffs have already addressed these very arguments and will not repeat their responses here. Next Amici argue that the finding of objective and subjective bad faith bythetrial court and the Court of Appeal in the underlying action under Civil Code section 3426.4 does not support a finding that the action was initiated and maintained without probable cause. (Liability assurance AC Brief 21.) Amici use this argument as a platform to criticize Slaney v. Ranger Insurance Co. (2004) 115 Cal.App.4th 306, and to arguethat it cannot be reconciled with Wilson, supra. Plaintiffs havealso already addressedthis argument and will not repeat it here. Of note, however, what Amici and Latham refuse to understandis that if in the very sameaction the summary judgment motion was denied, the trial court and the Court of Appeal each conclude that (1) the action wasinitiated and prosecuted with subjective and objective bad faith and (2) the earlier denial of summary judgment doesnot preclude imposition of sanctions because the evidence submitted in 16 S E S E AG ES B y e s ‘ opposition to that motion was materially false, then that at least would allow a conclusion that the lawyer submitting that false expert evidence did not have a reasonable basis to believe it was true. So long as this is the case, then at the very least under Slaney these post-summary judgment denial events are sufficient to overcome an anti-SLAPP motion based on the adverse interim judgmentrule. It is not the casethatit would be “contrary to public policy to create a ‘bad faith’ exception to the existing test of probable cause. ..” as Amici argues. (LM ACBrief 23.) Rather, as explained above, such a rule already exists — as it should. Ifa litigant or attorney has no basis to reasonably believe the facts they use to assert probable cause, then they should not be able to rely upon those facts any more than they would be able to rely upon facts that were fraudulently submitted or facts which constituted perjury. Nothing in Babb v. Superior Court (1971) 3 Cal.3d 841, 847, on which Amici relies (LM AC Brief 23-24) is to the contrary. There, this Court simply held that a defendantin a civil action maynotfile a cross-complaint therein seeking a declaratory judgmentthat the action is being maliciously prosecuted. The Court based this conclusion on the fact the requirement that the underlying action be favorably terminated before the malicious prosecution actionis filed. (/d. at pp. 847-849.) That issue has nothing whatsoeverto do with the issue presently under review. Finally, Amici argue that there is no basis to concludethat, if the summary judgment denial established probable causeat that point, it would still be the case that Latham lacked probable cause to continue to prosecute the action after that time. 17 (Liability Assurance AC Brief 24-25.) Amici simply give short shrift to the fact that the - trial court and the Court of Appeal in the underlying action each concludedthat the action wasinitiated and prosecuted with subjective and objective bad faith. Ifit is the case that the denial of a summary judgmentestablishes probable causeat that point(it is plaintiffs’ position here that it does not), then it is necessarily the case that such findings in the underlying action at least are sufficient to allow the malicious prosecution plaintiffs to withstand an anti-SLAPP motion as to the continued prosecution of the action in the aftermath of that summary judgment denial. II. NOTHING AMICI ARGUE ESTABLISHES THAT CODE OF CIVIL PROCEDURE SECTION340.6 APPLIES TO MALICIOUS PROSECUTION ACTIONS AGAINST LAWYERS. Amici argue that this Court’s opinion in Lee v. Hanley (2015) 61 Cal.4th 1225 establishes Code of Civil Procedure § 340.6 governs malicious prosecution claims against lawyers. (LACBA 13; Liability Assurance 26.) They are mistaken. This Court wasvery clear in Lee that section 340.6 applies when attorneys are sued due to the fact they violated a “professional obligation” which this Court defined as being “an obligation that an attorney has by virtue of being an attorney, such as fiduciary obligations, the obligation to perform competently, the obligation to perform the services contemplated in a legal services contract into which an attorney has entered, and the 18 obligations embodied in the Rules of Professional Conduct.” (/d. at p. 1237.) However, this Court expressly held that the mere fact that a lawyer’s conduct happensto also violate a rule of professional conduct in addition to violating general standardsoftort law, does not render section 340.6 applicable. This Court explained: - By contrast, as the Court of Appeal observed, section 340.6(a) does not bar a claim for wrongdoing—for example, garden-variety theft—that does not require proofthat the attorney has violated a professional obligation, even if the theft occurs while the attorney and the victim are discussing the victim’s legal affairs. Section 340.6(a) also does not bar a claim arising from an attorney’s performance ofservices that are not “professional services,” meaning “services performed by an attorney which can be judged against the skill, prudence and diligence commonly possessed by other attorneys.” (Quintilliani v. Mannerino (1998) 62 Cal.App.4th 54, 64, 72 Cal.Rptr.2d 359 (Quintilliani).) (id. at pp. 1236-1237.) Accordingly, and belied by the volumeofbriefing submitted on this issue, the question hereis very straight forward. Is a cause of action for malicious prosecution against a lawyer based on the lawyer’s violation ofhis or her professional obligations or is it based on a violation of a general duty of care that applies to lawyers and nonlawyers alike? Viewedfrom this perspective,it is evident that section 340.6 does not apply to malicious prosecution causes of action under this Court’s analysis in Lee. Whileit is true, ~as Amici argues, that a lawyer’s conduct in maliciously prosecuting an action mayviolate several cannonsofprofessional responsibility, that is not the reason why the lawyer’s conductis actionable in thefirst place. 19 Asthis Court has explained on several occasions, malicious prosecution actions serve twin purposes. ““The malicious commencementof a civil proceedingis actionable because it harms the individual against whom the claim is made, and also becauseit threatens the efficient administration ofjustice.’ [Citation.]” (Crowley v. Katleman (1994) 8 Cal.4th 666, 677.) In Bertero v. National General Corp. (1974) 13 Cal.3d 43, 50-5 1, this Court elaborated: The malicious commencementofa civil proceeding is actionable becauseit harmsthe individual against whom the claim is made, and also becauseit threatens the efficient administration ofjustice. The individual is harmed because he is compelled to defend against a fabricated claim which not only subjects him to the panoply of psychological pressures most civil defendants suffer, but also to the additional stress of attempting to resist a suit commenced outofspiteorill will, often magnified by slanderous allegations in the pleadings. In recognition of the wrong donethe victim of such tort, settled law permits him to recover the cost of defending the prior action including reasonable attorney’s fees (Stevens v. Chisholm (1919) 179 Cal. 557, 564 [178 P. 128]; Eastin v. Bank ofStockton (1884) 66 Cal. 123, 125-126 [4 P. 1106]), compensation for injury to his reputation or impairmentofhis social and business standing in the community (Ray Wong v. Earle C. Anthony, Inc. (1926) 199 Cal. 15, 18 [247 P. 894]; Lerner v. Glickfeld (1960) 187 Cal.App.2d 514, 526 [9 Cal.Rptr. 686]), and for mental or emotional distress (Singleton v. Perry (1955) 45 Cal.2d 489, 495 [289 P.2d 794]). The judicial process is adversely affected by a maliciously prosecuted cause not only by the clogging of already crowded dockets, but by the unscrupuloususe of the courts by individuals “... as instruments with which to maliciously injure their fellow men.” (Teesdale v. Liebschwageretal. (1919) 42 S.D. 323, 325 [174 N.W.620].) Although these twin policy goals may also be furthered by rules of professional conduct, they are not dependent on such rules. As Justice Mosk explainedin his 20 dissenting opinion in Franklin Mint Co. v. Manatt, Phelps & Phillips, LLP (2010) 184 Cal.App.4th 313, 354—55: The tort of malicious prosecution serves twodistinct purposes.First, the tort is one aspect of a body of law intendedto deter frivolous or malicious lawsuits. (See generally, Note, Groundless Litigation and the Malicious Prosecution Debate: A Historical Analysis (1979) 88 Yale L.J. 1218, 1221-1232, cited in Sheldon Appel, supra, 47 Cal.3d at p. 873, 254 Cal.Rptr. 336, 765 P.2d 498.) Similar objectives are also served by court rules and statutes that authorize court-imposed sanctions against parties and their attorneys for asserting frivolous or vexatious claims, and by ethics rules that subject attorneys to professional discipline for advocating such claims on behalf of their clients. (See Brennan v. Tremco, Inc. (2001) 25 Cal.4th 310, 314-315, 105 Cal.Rptr.2d 790, 20 P.3d 1086; Sheldon Appel, supra, 47 Cal.3d at pp. 873-874, 254 Cal.Rptr. 336, 765 P.2d 498; see generally, Wade, supra, 14 Hofstra L.Rev. at pp. 433-436; 1 Mallen & Smith, Legal Malpractice (2010 ed.) § 6:17, p. 804 (Mallen & Smith) [“the most useful and meaningful tests [of probable cause in a malicious prosecution action] derive from an examination of an attorney’s ethical and professional obligations to a client”].) Second, the tort action for malicious prosecution is “intended to protect an individual’s interest ‘in freedom from unjustifiable and unreasonable litigation’ [citation]....” (Sheldon Appel, supra, 47 Cal.3d at p. 878, 254 Cal.Rptr. 336, 765 P.2d 498; see also Siebel v. Mittlesteadt (2007) 41 Cal.4th 735, 740, 62 Cal.Rptr.3d 155, 161 P.3d 527; Bertero v. National General Corp. (1974) 13 Cal.3d 43, 50-51, 118 Cal.Rptr. 184, 529 P.2d 608 (Bertero); Hufstedler, supra, 42 Cal.App.4th at p. 65, 49 Cal.Rptr.2d 551.) “Frivolous lawsuits cause appreciable harm to many persons, and in many ways. The person against whom the groundless suit is broughtis subjected to serious harassment and inconvenience, pecuniary loss through necessary attorney’s fees, deprival of time from his business or profession, and, in some cases, harm to reputation and even physical damage to person or property.” (Wade, supra, 14 Hofstra L.Rev.at p. 433.) The tort remedy permits the party so injured to obtain compensation from thelitigants or attorneys who investigate frivolous claims with malice. (Sheldon Appel, supra, 47 Cal.3d at p. 871, 254 Cal.Rptr. 336, 765 P.2d 498.) 21 But just because a malicious prosecution action may serve a similar object as those served by the Rules of Professional conduct does not mean that the action is dependent on proofthat the lawyer violated a Rule of Professional Conduct(as this Court in Lee held wasnecessary). | Asexplainedin plaintiffs’ merits briefs, the obligation not to maliciously bring a claim without probable causeis not limited to attorneys and is therefore not reliant on the professional rules applicable solely to lawyers. (Slaney v. Ranger Ins. Co. (2004) 115 Cal.App.4th 306, 318 [elements of tort].) Lawyers and nonlawyers alike can beliable for malicious prosecution: attorneys, parties to litigation, or even an “aider and abetter”ofthe malicious prosecution can be potentially liable. (Lujan v. Gordon (1977) 70 Cal.App.3d 260, 264 [“There does not appear to be any good reason not to imposeliability upon a person whoinflicts harm by aiding or abetting a malicious prosecution which someone else has instituted.”]; see also Jacques Interiors v. Petrak (1987) 188 Cal.App.3d 1363, 1371-1372 [“One may becivilly liable for malicious prosecution without personally signing the complaintinitiating the . . . proceeding.”].) In responseto this truth, Amici asserts that a malicious prosecution claim is “worlds apart” from the claims for theft and sexual assault referenced by this Court in Lee as examplesof claimsthat are outside the reach of section 340.6 even though they also involve violations of professional duties when committed by lawyers onclients. (LACBA17-18.) According to Amici this is the case because “malicious prosecution goes to the very heart of what attorneysare trained to do... .” (LACBA 17.) In other 22 words, it seems to be Amici’s position that a lawyer’s ethical responsibilities owed to adverse parties concerning the prosecution of meritless claims somehow deservesa higher place in the pantheon of lawyer responsibilities then the lawyer’s ethical responsibility not to steal money from a client and not to take sexual advantage of a client. Needless to say, no authority is cited for this startling proposition. Indeed, this Court’s concluding discussion in Lee directly undermines Amici’s claim. There, this Court explained: Lee’s complaint may be construedto allege that Hanleyis liable for conversion for simply refusing to return an identifiable sum of Lee’s money. Thus,at least one of Lee’s claims does not necessarily depend on proof that Hanley violated a professional obligation in the course of providing professional services. Of course, Lee’s allegations, if true, may also establish that Hanley has violated certain professional obligations, such as the duty to refund unearned fees at the termination of the representation (Cal. Rules of Prof. Conduct, rule 3—700(D)(2)), just as an allegation of garden-variety theft, if true, may also establish a violation of an attorney’s duty to act with loyalty and good faith toward a client. But because Lee’s claim of conversion does not necessarily depend on proof that Hanley violated a professional obligation, her suit is not barred by section 340.6(a). (Lee, supra, 61 Cal.4th at p. 1240.) A lawyer’s duty to return an unearned fee concerns core obligations owedby a lawyer every bit as muchasthe duty not to prosecute a meritless action. Yet, this Court directly concluded that fact was not sufficient to bring the claim with section 340.6. Ifa client’s claim against his or her own lawyerbased on facts that fit within the Rules of Professional Conduct does notfall within section 340.6 then it is also the case that a claim by an adverse party against the lawyer doesnot fall with that statute just becausethat 23 conduct also happensto violate Rules of Professional Conduct as well as violating commonlaw tort duties. Moreover,it is not the case that simply because malicious prosecution actions have been foundto arise from constitutionally protected petitioning activity and therefore fall within the anti-SLAPPstatute thatit is necessarily the case that a malicious prosecution action against a lawyerarises from the performance ofprofessional services under section 340.6. (See ASCDC AmicusBrief 12.) As already explained, lawyers and nonlawyers alike could be liable for malicious prosecution and a malicious prosecution action against a nonlawyerfits within the anti-SLAPP statute every bit as much as an action against a lawyer. Even Amici does not argue that a malicious prosecution action against a nonlawyertherefore arises out of the performance of professional services. Accordingly, the mere fact that the anti-SLAPPstatute has been held to apply to malicious prosecution actions does not prove that section 340.6 necessarily applies. Next, Amici asserts that somehow lawyersare treated differently than nonlawyers when it comes to malicious prosecution, referencing the fact that clients may be able to rely upon an advice of counsel defense. (LACBA 18) Amici’s point is less than clear. The merefact that a client may be able to assert advice of counsel as a defense, has nothing to do with the issue whether a lawyer’s potential liability for malicious prosecution arises out of his or her professional responsibilities or whetherthat potential liability is dependent upon a general duty of care. 24 W S N Met ie nt oi ei ti ra te S i h e k oe Contrary to what Amici argues, this Court’s recent opinion in Floresv. Presbyterian Intercommunity Hosp. (2016) 63 Cal.4th 75, serves to demonstrate why section 340.6 does not apply here. (ASCDC ACBrief8.) In Flores, this Court held that Code of Civil Procedure section 340.5 which applies to actions “against a health care provider based upon such person’s alleged professional negligence” applied to an action against a Hospital brought by a patient who wasinjured when a Hospital employee failed to follow physician ordersto raise the rails on her bed. In concludingthat the plaintiff's claim wasfor “professional negligence,” this Court explained that “if the act or omission that led to the plaintiff's injuries was negligence in the maintenance of equipmentthat, under the prevailing standard of care, was reasonably required to treat or accommodate a physical or mental condition of the patient, the plaintiff's claim is one ofprofessional negligence under section 340.5.” (dd. at p. 458.) However, this Court continued that “section 340.5 does not extend to negligence in the maintenance of equipment and premises that are merely convenientfor, or incidental to, the provision of medicalcare to a patient. Arguably every part of a hospital’s plant would satisfy such a standard, since the medical care of patientsis, after all, the central purpose for which any hospitalis built. (See Murillo, supra, 99 Cal.App.3d at p. 57, 160 Cal.Rptr. 33.) Even those parts of a hospital dedicated primarily to patient care typically contain numerousitems of furniture and equipment—tables, televisions,toilets, and so on—thatare provided primarily for the comfort and convenience ofpatients andvisitors, but generally play no part in the patient’s medical diagnosis or treatment. Although a 25 defect in such equipment may injure patients as well as visitors or staff, a hospital’s general duty to keep such items in good repair generally overlaps with the ‘obligations that all persons subject to California’s laws have’ (Lee, supra, 61 Cal.4th at p. 1238, 191 Cal.Rptr. 3d 536, 354 P.3d 334), and thus will not give rise to a claimfor professional negligence.” (Id. at pp. 458-59, italics added.) Underthis same analysis, section 340.6 has no application to malicious prosecution claims such the one brought here. Under Flores, if it was a Hospital visitor that fell off the bed becausethe rails were not up (and not a patient), then section 340.5 would not apply because the Hospital’s duty of care would not be based uponits professional obligations. Applied here, the issue is whether an attorney’s liability for malicious prosecution exists only because ofthe lawyer’s professional responsibilities as reflected in the Rules of Professional Conduct, or whether that potential liability exists because of a general duty of care that applies to lawyers and nonlawyers alike. As already explained, the latter is the case. Finally, Amici argues that there are policy justifications for treating a lawyer more favorably than a client for purposesofthe statute of limitations as to malicious prosecution claims making arguments such as “attorneys bear a greater share of malicious prosecutionrisk than their clients.” (LACBA 23.) Amici overlook thatthere is absolutely nothing in the Legislative history of section 340.6 indicating that the Legislature weighed these supposed policy justifications and determined that lawyers should be treated more favorably when it comes to malicious prosecution claims. 26 Moreover, this argument ignoresthe fact that the issue here does not concern a rule makingit harder to prove that a lawyer maliciously prosecuted an action. The issue here concerns whetherthere should be a significantly shorter statute of limitations as to lawyers than asto their clients for the very same conduct. Under such a rule, the potential liability for lawyers for malicious prosecution will remain the same. The only thing that would be different would be that the victims of their tortious conduct might not be able to successfully recover because they erroneously believed they had the same amountoftime to sue both the adverse party andthat party’s lawyer. Nothing Amici arguesjustifies such disparate treatment. 27 CONCLUSION For the foregoing reasons and for the reasons explained in the opening brief on the merits and in the reply brief, plaintiffs respectfully urge this Court to conclude that plaintiffs have a probability of prevailing on their malicious prosecution claim andthat the Court of Appeal therefore erroneously affirmedthe trial court’s order dismissing plaintiffs’ action under Code of Civil Procedure section 425.16. Plaintiffs further request that the Court overturn the decision bythe trial court and remandthis case for further proceedings consistent with this Court’s opinion. Dated: August 10, 2016 EAGAN AVENATTI, LLP PANISH, SHEA & BOYLE, LLP ESNER, CHANG & BOYER By: \ Stuart B. Esner Attorneysfor'Plaintiffs and Appellants William Parrish and E. Timothy Fitzgibbons 28 CERTIFICATE OF WORD COUNT This Joint Answer to Amici Briefs contains 6,615 words per a computer generated word count. Stuart B. Eyner 29 PROOF OF SERVICE I am employed in the County of Los Angeles, State of California and overthe age of eighteen years. I am not a party to the within action. My business address is 234 East Colorado Boulevard, Suite 975, Pasadena, California 91101. I am readily familiar with the practice of Esner, Chang & Boyerfor collection and processing of correspondence for mailing with the United States Postal Service. In the ordinary course of business, such correspondence wouldbe deposited with the United States Postal Service, with postage thereon fully prepaid, the same day I submit it for collection and processing for mailing. I served the document(s)listed below by placing a true copy thereof in a sealed envelope with postage thereon fully prepaid, addressed as follows: Date Served: August 10, 2016 Document Served: Joint Answer to Amici Briefs Parties Served: See attached Service List (BY MAIL) I caused such envelope with postage thereon fully prepaid to be placed in the United States mail at Pasadena, California. Executed on August 10, 2016, at Pasadena, California. (State) I declare under penalty ofperjury under the laws ofthe State of California that the aboveis true and correct. (Vee 5Pola Carol Miyake 30 SERVICE LIST J. Michael Hennigan, Esq. Michael H. Swartz, Esq. McKool Smith Hennigan,P.C. 300 S. Grand Avenue,Suite 2900 - Los Angeles, CA 90071 E: hennigan@mckoolsmithhennigan.com Mswartz@mckoolsmithhennigan.com (Attorneys for Defendants and Respondents Latham & Watkins, LLP and Daniel Schechter) Harry W.R. Chamberlain, I, Esq. Buchalter Nemer, P.C. 1000 Wilshire Blvd., Suite 1500 Los Angeles, CA 90017 E: hchamberlain@buchalter.com (Attorneys for Amicus Curiae The Association of Southern California Defense Counsel) Peter J. Engstrom, Esq. Baker & McKenzie LLP 2 Embarcadero Center, 11Floor San Francsico, CA 94111 E: peter.engsrom@bakermckenzie.com (Attorneys for Amicus Curiae Baker & McKenzie) Charles L.Deem, Esq. DLA Piper US LLP 401 B Street, Suite 170 San Diego, CA 92101 E: charles.deem@dlapiper.com (Attorneys for Amicus Curiae DLA Piper LLP) Roy G. Weatherup, Esq. Lewis Brisbois Bisgaard & Smith, LLP 633 W. 5" Street, Suite 4000 Los Angeles, CA 90071 E: weatherup@lbbslaw.com (Attorneys for Amicus Curiae Lawyers Mutual Insurance Company) John F. Muller, Esq. Munger, Tolles & Olson, LLP 365 S. Grand Avenue, 35" Floor Los Angeles, CA 90071 E: john.muller@mto.com (Attorneys for Amicus Curiae Attorney’s Liability Assurance Society, Inc.) John W. Amberg,Esq. Bryan Cave LLP 120 Broadway, Suite 300 Santa Monica, CA 90401-2305 E: jwamberg@bryancave.com (Attorneys for Amicus Curiae Bryan Cave LLP) . John W. Thornburgh, Esq. Fish & Richardson 12390 El Camino Real San Diego, CA 92130 E: thornburgh@fr.com (Attorneys for Amicus Curiae Fish & Richardson P.C.) 31 Kevin S. Rosen, Esq. Gibson Dunn & Crutcher 333 S. Grand Ave. Los Angeles, CA 90071-3197 E: krosen@gibsondunn.com (Attorneys for Amicus Curiae Gibson Dunn & Crutcher LLP) Harry A. Mittleman, Esq. Trell & Manella 1800 Avenueofthe Stars, Suite 900 Los Angeles, CA 90067-4276 e: hmittlemen@irell.com (Attorneys for Amicus Curiae Irell & Manella, LLP) Douglas L. Hendricks, Esq. Morrison & Foerster LLP 425 MarketSt. San Francisco, CA 94105 E: dhendricks@mofo.com (Attorneys for Amicus Curiae Morrison & Foerster LLP) Eve M. Coddon,Esq. Paul, Hastings, Janofsky & Walker, LLP 515 South FlowerStreet, 25" Floor Los Angeles, CA 90071-2228 E: evecoddon@paulhastings.com (Attorneys for Amicus Curiae Paul Hastings LLP) Adam R.Fox, Esq. Squire Patton Boggs (US) LLP 555 S. FlowerStreet, 31° Floor Los Angeles, CA 90071 E: adam.fox@squirepb.com (Attorneys for Amicus Curiae Squire Patton Boggs LLP) Jeff E. Scott, Esq. Greenberg Traurig LLP 1840 Century Park East, Suite 1900 ~ Los Angeles, CA 90067 E: scotti@gtlaw.com (Attorneys for Amicus Curiae Greenberg Traurig, LLP) Leslie M. Werlin, Esq. McGuirewoods LLP 1800 Century Park East, 8" Floor Los Angeles, CA 90067 E: lwerlin@mcguirewoods.com (Attorneys for Amicus Curiae McGuirewoods LLP) Martin S. Checov, Esq. O’Melveny & Myers LLP 2 Embarcadero Center, 28" Floor San Francisco, CA 94111 E: mchecov@omm.com (Attorneys for Amicus Curiae O’Melveny & Myers LLP) Kurt C. Peterson, Esq. Reed Smith LLP 1901 Avenue of the Stars, Suite 700 Los Angeles, CA 90067 E: kpeterson@reedsmith.com (Attorneys for Amicus Curiae Reed Smith LLP) Rena E. Kreitenberg, Esq. Mesisca Riley & Kreitenberg, LLP 644 S. Figueroa Street, Suite 200 Los Angeles, CA 90017 E: rek@mrklawyers.com (Attorneys for Amicus Curiae Mesisca Riley & Kreitenberg, LLP) 32 Benjamin G. Shatz, Esq. Sarah E. Gettings, Esq. Manatt, Phelps & Phillips, LLP 11355 W. Olympic Blvd. Los Angeles, CA 90064-1614 E: bshatz@manatt.com (Attorneys for Amicus Curiae The Los Angeles County Bar Association) Hon. James R. Dunn Los Angeles County Superior Court 111 N.Hill Street, Dept. 26 Los Angeles, CA 90012 (Trial Judge) Clerk, Court of Appeal Second Appellate District, Division 3 300 S. Spring Street Second Floor, North Tower Los Angeles, CA 90013 Michael J. Avenatti, Esq. Eagan Avenatti, LLP 520 Newport Center Drive., Suite 1400 Newport Beach, CA 92660 E: mavenatti@eoalaw.com (Attorneys for Plaintiff and Appellant William Parrish and E. Timothy Fitzgibbons) Alana H.Rotter, Esq. Cynthia E. Tobisman, Esq. Greines, Martin, Stein & Richland, LLP 5900 Wilshire Blvd., 12" Floor Los Angeles, CA 90036 E: arotter@gmsr.com ctobisman@gmsr.com (Attorneys for Amicus Curiae Beverly Hills Bar Association) Frederick R. Bennett III Los Angeles County Superior Court 111 N. Hill Street, Rm. 546 Los Angeles, CA 90012 (Court Counsel) Brian J. Panish, Esq. Adam K.Shea, Esq. Kevin R. Boyle, Esq. Panish, Shea & Boyle LLP 11111 Santa Monica Blvd., Suite 700 Los Angeles, CA 90025 E: panish@psblaw.com shea@psblaw.com boyle@psblaw.com (Attorneys for Plaintiff and Appellant William Parrish and E. Timothy Fitzgibbons) 33