PARRISH v. LATHAM & WATKINS (To be called and continued to the June 2017 calendar.)

Respondents’ Answer Brief on the Merits

Cal.March 15, 2016

SUPREME COURT hE rey Fiteio Case No. 8228277 2d Civ. No. B244841 Frank A. McGuire Clerk IN THE SUPREME COURT OF THE STATE OF CALIFORNIA Deputy WILLIAM PARRISHand E. TIMOTHY FITZGIBBONS, Plaintiffs and Appellants, Vv. LATHAM & WATKINS LLP AND DANIEL SCHECTER, Defendants and Respondents, ON REVIEW OF THE COURT OF APPEAL’S JUNE 26, 2015 DECISION CASE No. B244841 SECOND APPELLATEDISTRICT, DIVISION THREE FOLLOWING AN APPEAL FROM LOS ANGELES SUPERIOR COURT CASE No. BC482394 Hon. JAMES R. DUNN RESPONDENTS’ ANSWERBRIEF ON THE MERITS MCKOOL SMITH HENNIGAN,P.C. J. Michael Hennigan, SBN 59491 Michael Swartz, SBN 163590 300 South Grand Avenue, Suite 2900 Los Angeles, California 90071 (213) 694-1200 / Fax (213) 694-1234 Attorneys for Defendants and Respondents LATHAM & WATKINS LLP and DANIEL SCHECTER HBS Be Case No. 8228277 2d Civ. No. B244841 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA WILLIAM PARRISHand E. TIMOTHY FITZGIBBONS, Plaintiffs and Appellants, LATHAM & WATKINS LLP AND DANIEL SCHECTER, Defendants and Respondents, ON REVIEW OF THE COURT OF APPEAL’S JUNE 26, 2015 DECISION CASE No. B244841 SECOND APPELLATE DISTRICT, DIVISION THREE FOLLOWING AN APPEAL FROM LOS ANGELES SUPERIOR COURT CASE No. BC482394 HON.JAMES R. DUNN RESPONDENTS’ ANSWERBRIEF ON THE MERITS MCKOOL SMITH HENNIGAN,P.C. J. Michael Hennigan, SBN 59491 Michael Swartz, SBN 163590 300 South Grand Avenue, Suite 2900 Los Angeles, California 90071 (213) 694-1200 / Fax (213) 694-1234 Attorneys for Defendants and Respondents LATHAM & WATKINSLLPand DANIEL SCHECTER TABLE OF CONTENTS PAGE INTRODUCTION...0.0...cccecccseceeecscesssceccecesscseeeessecesssseeeceeeeesessseessseeesaes 1 OVERVIEWou..ecccccccccecscscssecessscscsssecececcssceececseeesecsneeseceeeseessneesseetsenses 1 FACTUAL AND PROCEDURAL BACKGROUND ........ceee6 I. THE UNDERLYING SANTA BARBARA ACTION..ooicccccescccccesesscesssssccceccessescesseseceeseesesesseecsnssenaseece 6 Il. PETITIONERS’ MALICIOUS PROSECUTION ACTION AGAINSTFLIR................ 14 Ill. THE PRESENT ACTION|... cccccccccccccececeeeseseeesnees 15 IV. THE COURT OF APPEAL DECISION..........0..0..0.: 16 V. THE GRANTOF THE PETITION FOR REVIEW... oo.c.ccccccccsescccesessseccccecssccessneceesseeceseseeeesseenseees 18 LEGAL DISCUSSION.......eccccccccceccccessssseeeceesceeeesseeeeeeeeeesecneessneeneters 20 I. PETITIONERS WERE REQUIRED TO SHOW A PROBABILITY OF PREVAILING ON BOTH “LACK OF PROBABLE CAUSE” AND THE STATUTE OF LIMITATIONS........cccceccessseeeteeteeee 20 Il. THE DENIAL OF SUMMARY JUDGMENT CONCLUSIVELY ESTABLISHED PROBABLE CAUSE DESPITE A LATER RULING THAT THE ACTION WAS BROUGHT IN BAD FAITH ooocece ccesscecccccececscsseeeceeessaeeeeceeeesesessssseesseees 21 A. InA Malicious Prosecution Action, The “Lack of Probable Cause” ElementIs A High Hurdle ...000..eeeeeeeeeeeees 2] Il. TABLE OF CONTENTS A Court’s Interim Determination That A Case Has Sufficient Merit To Proceed Conclusively Establishes Probable Cause...........cccsesececcsseeseeeeeees Denial Of The Motions For Summary Judgment Triggered Application Of TheInterim Adverse Judgment Rule.. No Exception To The Interim Adverse Judgment Rule Applies Here The Trial Court’s Later Finding Of Bad Faith Does Not Undo The Preclusive Force OfIts Earlier Summary Judgment Ruling................. Latham’s Pursuit OfThe Case After The Summary Judgment Ruling, Using The Same Arguments And Theories, Is Protected By The Interim Adverse Judgment Rule ..........ee THIS ACTION IS ALSO BARRED BY THE ONE-YEAR STATUTE OF LIMITATIONS UNDER CODEOFCIVIL PROCEDURE SECTION 340.6(a)....sssssssssesssssssssssseeees 41 A. Lee v. Hanley Establishes The Requirements For Application of PAGE seveeetarseeeaees 22 seseseeseeseesees 24 sevseeseeeaeenees 25 seveveseneeeseee 32 seteseesseeseeees 38 Section 340.6.............::cceesecceseccssscessccesssscssvecsveceese 42 This Malicious Prosecution Action Falls Within Lee’s Pronouncement Of The Scope Of Section 340.6 oo...eeeeeeeeeees 43 The Public Policy Concerns That Prompted The Legislature To Enact il TABLE OF AUTHORITIES PAGE(S) CASES AFFCO Investments, LLC v. KPMG, LLP (S.D. Texas Sept. 28, 2009) 2009 U.S. Dist. Lexis ROSS ....ccccccceceeccceccccceceesececsececeeceseuseueuscecccccecsceceessuasseceeeeessersseseeeess 50 Anderson v. West Marine, Inc. (Nov. 16, 2009) 2009 Cal.App. Unpub. Lexis 9048...eee 53 Bank ofAmerica, N.A. v. Roberts (2013) 217 Cal.App.4th 1386.......ccseesenenererireseneeesenseeees 39,51 Board ofPilot Commissionersfor the Bays ofSan Francisco, San Pablo and Suisun v. Superior Court (2013) 218 CalApp.4th 577....c.cccecsssceseeerererssenetsessseseseseessenens 38 City Products Corp. v. Globe Indemnity Co. (1979) 88 Cal.App.3d 31... ccesesseseseneeeeeeneeeetesteerteerseeneneeeeneeees 47 Clark v. Optical Coating Laboratory, Inc. (2008) 165 Cal.App.4th 150.0... ceeseeseeeeeeeeeeeenteseneneeneeereseeneees 34 Cowles v. Carter (1981) 115 Cal.App.3d 350... .cessseeceeenrsereresseeretereees 23, 24, 26 Crowley v. Katleman (1994) 8 Cal.4th 666.0... ccscsssseeseseenesneeeeneseneneneeeesesestensnenenenseees 32 Downey Venture v. LMIIns. Co. (1998) 66 Cal.App.4th 478.0... cccceeseeeeneceeereneeneeaeesneeneeerereney 49 Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53... cecceseseseseseseseesesesenenscsenseeeeseaessasenerereeseney 20 Estate ofPropst (1990) 50 Cal.3d 448.00... cccssesseereteeeteneeeseetenerteneeseeentenererenteney 52 iv TABLE OF AUTHORITIES PAGE(S) Expansion Pointe Properties L.P. v. Procopio, Cory, Hargreaves & Savitch, LLP (2007) 152 Cal.App.4th 42.....ccesesecnsenerersesteeneeesssenenenenesenenenes 57 Fairfield v. Adams (1959) 170 Cal.App.2d 10 ......cccsseecseeeeeserretseeeseeenenssesneseneneseneees 24 Franklin Mint Co. v. Manatt, Phelps & Phillips, LLP (2010) 184 Cal.App.4th 313.0... cceeeeneerereressenerssseressenesseenesens 31 Gemini Aluminum Corp. v. California Custom Shapes, Inc. (2002) 95 CalApp.4th 1249... ceesesersererseseereneeesenes 36, 37 Gilbert v. Master Washer & Stamping Co. (2001) 87 Cal.App.4th 212.....ccccecseeeeterersteeensteserereneaeeeneseneees 53 Gilmore v. Superior Court (1991) 230 CalApp.3d 416......cescecesecseseresessterecesessesnearaneeseenenees 31 In re Retirement Cases (2003) 110 Cal.App.4th 426............seesaeenennessaneneaneneesenneanenes 52,57 Jacksonv. County ofLos Angeles (1997) 60 Cal.App.4th 171... ccecseceeeesereneeterersessieeeseeesesenseeees 37 Knoell v. Petrovich (1999) 76 Cal.App.4th 164.0... cecseeeeeeeeeeeerererersessenesssnseeeseensness 55 Laird v. Blacker (1992) 2 Cal.4th 606.0... ccccscseeessseeeereereseterersssssseerensesens 51,54, 55 Lee v. Hanley (2015) 61 Cal4th 1225 occ eceeeeesesersreneneesessesenseesenereneneeseneens passim Lockley v. Law Office ofCantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875.....cccceccsseeceeserererssstenersessseneeeesensseees 31 TABLE OF AUTHORITIES PAGE(S) Oasis W. Realty, LLC v. Goldman (2011) 51 Cal.4th 811.eeeeeesseseseseeeeserereesesaesessereneneneneesenes 20 Parrish v. Latham & Watkins (2014) 229 CalApp.4th 64......cccsccesseneeesseeerereeererstereesenennes 16, 41 Parrish v. Latham & Watkins (2015) 238 CalApp.4th 81... cceeseseeceseneererreteesersenesstseeesens passim Planning & Conservation League v. Dept. of Water Resources (1998) 17 Cal4th 264... cccesessssesessesseeneeeeetererseseneenseceesesseescas 51 Plumley v. Mockett (2008) 164 Cal.App.4th 103 1...cessseeeseeeeeteeseestersneees 22, 24, 31 | Ray v. First Fed. Bank (1998) 61 CalApp.4th 315.0... cccsessesseseesenenstenerseesserenssenensatesasans 53 Roberts v. Sentry Life Ins. (1999) 76 Cal.App.4th 375... ccccecsseeseeeeeereeresseeesees 4, 21, 23, 25 Roger Cleveland GolfCo. v. Krane & Smith, APC (2014) 225 Cal.App.4th 660.......:ccceeseeeeeeeesenecseneeseerereens 5, 18, 41 Rosenaur v. Scherer (2001) 88 Cal.App.4th 260.......cccsssesssseetenerenseeeeneresnsreseneseerarens 60 Sahadi v. Scheaffer (2007) 155 Cal.App.4th 704.0... cccssesesseereteeereeeeseneenensassesseresarens 50 Sheldon Appel v. Albert & Oliker | (1989) 47 Cal.3d 863... cecseeseecesseeceeeeeeetenerensesererereneen 21, 22, 34 Silas v. Arden (2012) 213 Cal.App.4th 75.....cccssessssesseeteeneetenerenearentenenseeenenes 54 Slaney v. Ranger Insurance Co. (2004) 115 Cal.App.4th 306.........cceesseeeeteterereteeseasererereens 33, 34 vi TABLE OF AUTHORITIES Stavropoulos v. Superior Court (2006) 141 Cal.App.4th 190......csccsuessesssseessssneseseeee Vafi v. McCloskey (2011) 193 Cal.App.4th 874...cccccccsuessssseerssneeesesees West Shield Investigations and Sec. Consultants v. Superior Court (2000) 82 Cal.App.4th 935.0... ceeeeeeerereteetereees Whyte v. Schlage Lock Co. (2002) 101 Cal-App.4th 1443... cc eeeeseserreeerenes Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811.0... ccecseseee ceeereeeeeeeteetesseren Woods v. Young (1991) 53 Cal.3d 315.........eucecacsece socsssseesacencacvsrececeses Yee v. Cheung (2013) 220 Cal.App.4th 184.0...scenesreseees STATUTES Business & Professions Code section 6068...............6 Civil Code SECTION 3426.2.....cccccccccccsescccscssceneeececceeccesceeseeeteeeeeseeses SCCHION 3426.4......ccccccesccccesscccceccsesessssesttteeseseeneerecseenees Code of Civil Procedure SCCHION 425.16......cccccceccecesseecceescceseusssssststceeeeseceseeeneeees section 339, Subd. (1)... eee eesssseeseeeneeteeeeseteetsnerees section 340.6........... socccusceceuaacsseeeceersesssesecceuneseceastessess SECTION 352....ccccccssecccuccccscccesscccsceenaeceeeeeeersaseeueeenenessoes SCCLION 425.16 .....ccccceeccceessssceceessees seesssessneeseeceeeeeeeeneeees SECLION 870 .....ccccccsecccecccccecccesscsscees ceceeceesseeceeecaeetenseeeees Vii PAGE(S) sevesaseeens 53, 54 seceenneeess passim seceuntereteneenane 52 — seveeeeeeeaneeneaees 8 eceetsneees passim seveateraeees 51, 56 eceeneeeees passim seseesseeeeseeoenes 44 seeteseeersstersnes 10 seseeseeeeaes 13, 36 seveneevenees 20, 60 seseneeeaneceneenes 50 ecteeseneee passim seceseceeesatensees 52 seteentereues 20, 60 sesevaceessneeeates 51 P R R I N T T I N O P e r e p e s t e r g TABLE OF AUTHORITIES PAGE(S) Evidence Code SECtION BO2.......ccceseccccesccscecccccccsceeee wosessceescceeeeecsssauecssonsensceseereroeueens 12 SECTION 1200 .........ccccccecccecccsseeceesscee aeceesisecuccesaecessseessaeseeseseuseseuseoeees 31 OTHER AUTHORITIES California Rules of Court . 2(A).ceccscssescecseseeceesenersesesesecscsenecsesese assueseeessenenacacensceneesensneeeeeneneneses 52 B.268() ..ccccscsseecececcseseesseseessscsessenee eeeessseneeseneesacseasssessesssaeesesesersenens 16 California Rules of Professional Conduct Ule 3-120 .ccccccccccccceseccccsccccccececessesec sesssssscecccceeeseceuansecereasesceeaeesenea 42 TUle 3-200... eeessesseeeeeseeeesseesenneee ceeeeesdeveceseeeceesenseeeneeeeeers 43, 44, 45 Greisen, Attorney Liabilityfor Malicious Prosecution and Legal Malpractice: Do They Overlap? (1977) 8 Pacific LJ. 897 .cccccccccssscccccscssssccecee sesssssesecceeneeccsececeeceuanenseseeeeesensees 48 Hager, Attorney Conduct: Reduce Your Malicious Prosecution Exposure (June/July 2002)... ccseeceseserereesecsesseneesens 48 Mallen, An Attorney’s Liabilityfor Malicious Prosecution, a Misunderstood Tort(July 1979) 46 Ins. Couns. J. 407 ........ccccccccsssssecee o cssteesescceesccssceecenseeseuseceeceeeessenees 48 Smith, Medical Malpractice: the Countersuit Fad (December1976) 12 .......cccssssssseee a eeseesseeeeeeeneneenenerseeeeeeseeeseeenney 48 Vill M k , o R INTRODUCTION The Court of Appealrightly affirmed the dismissal of this _ malicious prosecution action. It correctly held that a trial court’s denial of summary judgment conclusively establishes that thereis probable cause for that action and thusprecludesanylater finding of malicious prosecution regardless ofhow the action eventually resolves on the merits. That holding is consistent with this Court’s precedent in Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, and should be affirmed. | The Court of Appealerred in holding that a malicious prosecution action against a lawyer for prosecuting an action on behalf of a client is not a “[a]n action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services” subject to the one-yearstatute of limitations of Code of Civil Procedure Section 340.6(a). That holding is inconsistent with the text of Section 340.6(a) and this Court’s decision in Lee v. Hanley (2015) 61 Cal.4th 1225, and should be reversed. The judgment should be affirmed on both grounds. OVERVIEW Petitioners Parrish and Fitzgibbons were shareholders and senior executives of Indigo Systems, a company that owned intellectual property related to high-tech infrared sensors. In 2004, Petitioners and Indigo’s other shareholders sold the company for $185 million to FLIR Systems. Petitioners remained executives at Indigo. Less than two years later, Petitioners announcedtheir plan to form a new company that would compete directly with FLIR in the 1 production of infrared components. Representing FLIR and Indigo (collectively, “FLIR”), Latham & Watkins andits partner Daniel Schecter(collectively, “Latham’”) filed a trade secret action in Santa Barbara Superior Court. In that action, each Petitioner moved for summary judgment and, alternatively, for summary adjudication on each cause of action. The Court denied the motions on the merits. However, followingtrial, the Santa Barbara Court ruled against FLIR andalso found that the action had been brought in “badfaith” as that term is used in the California Uniform Trade Secrets Act, Civil Code section 3426.4. Petitioners argued, and the Court concluded, that its earlier denial of summary judgment wasnotinconsistent with its finding bad faith under the Trade Secrets Act. Morethana yearafter that judgment was sustained on appeal, Petitioners brought this malicious prosecution action against Latham in Los Angeles Superior Court. Latham respondedbyfiling an anti-SLAPP motion on two independent grounds: the interim adverse judgmentrule and the statute of limitations. The Los Angeles Court granted the motion based onthe statute of limitations and did not address the interim adverse judgment rule. The Court of Appeal affirmed based on the interim adverse judgmentrule but concluded that the case wasnot barred bythe statute of limitations. The Court ofAppeal should have affirmed on both grounds. Interim Adverse Judgment Rule © The Court of Appeal correctly applied the interim adverse judgmentruleto affirm dismissal of Petitioners’ claim. Under the 2 rule, the Santa Barbara Court’s denial of summary judgment conclusively establishes that FLIR and Latham met the low threshold for probable cause, which “does not depend upon [the action] being meritorious, as such, but upon it being arguably tenable,i.e., not so completely lacking in apparent merit that no reasonable attorney would have thought the claim tenable.” (Wilson, supra, 28 Cal.4th 811, 824, original italics.) Under well-established case law, including Wilson, dismissal ofPetitioners’ malicious prosecution action was compelled. Petitioners contendthat the interim adverse judgmentrule should not apply because (according to Petitioners) the Santa Barbara Court denied summary judgment based on false expert declarations. But the summary judgmentruling refutes that contention. In that order, the Santa Barbara Court explained that Petitioners had themselvescreated a triable issue with their own evidence. The Court explained that FLIR’s expert declarations were relevant only to a second independent ground for denying summary judgment. Asthe Court of Appeal stated in the decision here, Petitioners do not and cannotassert that the Santa Barbara Court’s first ground for denying summary judgment was induced by the challenged expert declarations. Petitioners’ contention also fails because there is no evidencethat the challenged declarations werefalse. Norcan Petitioners avoid the interim adverse judgmentrule based on the Santa Barbara Court’s post-trial finding of “bad faith” underthe California Uniform Trade Secrets Act. A subsequentruling cannot undothe probable-cause-determining effect ofthe earlier denial of summary judgment. As this Court held in Wilson, the 3 interim adverse judgmentrule applies even if the interim ruling favoring the plaintiff in the underlying action is “subsequently reversed by thetrial or appellate court.” (Wilson, supra, 28 Cal.4th at p. 818.) A subsequentruling that does notcall into question the propriety of the earlier interim ruling cannot have a greater impact. The interim adverse judgmentrule follows from the high standard a malicious prosecution plaintiff must meet to establish a lack ofprobable cause. The hindsight approach urged by Petitioners is at odds with the principle that “a judge’s denial of summary judgmentaccurately predicts that reasonable lawyers would find a case arguably meritorious.” (Roberts v. Sentry Life Ins. (1999) 76 Cal.App.4th 375, 384.) The rule permits lawyers with a court-tested case to continue to represent their client without fear of potential tort liability. In all events, Petitioners themselves successfully argued in the underlying action that the finding ofbad faith was not inconsistent with the earlier denial of summary judgment. AsPetitioners successfully argued, the Trade Secrets Act standard for badfaith is easier to satisfy than the requirement for “lack ofprobable cause” in a malicious prosecution action, so while denial of summary judgment precludes“lack of probable cause,” that same summary judgment ruling does not preclude a finding of badfaith. In sum, as the Court of Appealheld, the denial of summary judgmenton the merits in the underlying action conclusively established probable cause and precludedPetitioners from establishing the “lack of probable cause” required for their malicious prosecution claim. Statute of Limitations Codeof Civil Procedure section 340.6 provides a one-year statute of limitationsfor actions “against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services.” It is undisputed that Petitioners filed this malicious prosecution action against lawyers more than one yearafter their claim accrued. As the Los Angeles Superior Court held, Section 340.6 therefore compelled dismissal of this action because Petitioners’ claim is based entirely on Latham’sacts “in the performance of professional services”: representing their clients in court. The Court ofAppeal disagreed based on the same division’s decision in Roger Cleveland GolfCo. v. Krane & Smith, APC (2014) 225 Cal.App.4th 660, that Section 340.6’s one-yearstatute applies only to actions for professional negligence. Shortly after the Court of Appeal’s decision in this case, this Court stated that Roger Cleveland wasin error in limiting Section 340.6 to professional negligence claims. (Lee, supra, 61 Cal.4th at p. 1239.) This Court held that Section 340.6 applies more broadly to any alleged attorney misconductso longas the alleged misconduct was“in the course ofproviding professional services” and would “violate a professional obligation.” (/d. at p. 1229.) Here, both parts ofLee’s test are met. Latham’s alleged malicious prosecution occurred “in the course of providing professional services” whenit represented its client in court. And the alleged malicious prosecution violates “the professional obligations” found in Rule of Professional Conduct 3-200 and Business and Professions Code section 6068, a rule and code section that bar a lawyer from acting without probable cause or with malice as a matter of professional responsibility. Thelegislative history of Section 340.6 confirmsthat the statute rightly applies here. The legislative record establishes that the statute was intended to addressthe effect that liability claims against lawyers were having uponthe availability of professional liability insurance, whichat the time covered (and whichstill partially covers) malicious prosecution claims. To overcomeLee, Petitioners argue, for the first time on appeal, that they reasonablyrelied on “settled prior law” indicating that their claim was subject only to the two-year statute for malicious prosecution claims against non-lawyers. This argument wasnot raised in the Los Angeles Court and was therefore waived. Moreover, there was no suchsettled prior law on which Petitioners could reasonably haverelied. Nor doesthe record reflect any evidence of the requisite actual reliance. Section 340.6’s one-year limitations period applies. Petitioners’ claims are time-barred. FACTUAL AND PROCEDURAL BACKGROUND Petitioners’ factual recitation is incomplete and, in important respects, wrong. I. THE UNDERLYING SANTA BARBARA ACTION In 2004, Petitioners sold Indigo Systemsandits trade secrets and intellectual property to FLIR Systems for $185 million. Petitioners then worked for the combined companies.’ Amongother things, Indigo had a business manufacturing high volume,low cost, TEC-less microbolometers—sensorsused to detect infrared radiation. In 2005, Petitioners announced that they would be leaving FLIRto start a company that would engage in the high volume production of competing microbolometers—in direct competition with FLIR. They indicated that they intended to implement a 2005 “NuCo”business plan, which they asserted was derived from a 1999 businessplan that Petitioner Fitzgibbons created before joining Indigo. However,in the fall of 2005, before departing FLIR’s employ, Petitioner Parrish attempted to copy onto a portable drive a FLIR engineering database regarding the design and manufacture of its imaging products.” In early 2006, after Petitioners left, FLIR became concerned that they would misuseits intellectual property in the new venture. On June 15, 2006, Latham, representing FLIR,filed suit in Santa Barbara alleging misappropriation oftrade secrets.’ That Complaint alleged that Petitioners’ 2005 NuCo business plan wasnot derived from the 1999 plan, but instead was taken from a 2004 business plan ' This factual summary reflects certain undisputed facts regarding Petitioners’ conduct and the underlying Santa Barbara action which wereputat issue on the anti-SLAPP motion. In support ofthat motion, Latham did not attempt to marshal the complete factual record whichestablishes probable cause. ? Sealed Volume AA 1029, electronic file P03229 at pp. 461-62; AA 0013; Sealed Volume AA 1029,electronic file 03763 at pp. 762- 763, 859-860, 886-889. ; Sealed Volume AA 1029,electronic file P002929 at pp. 6-29. 7 that relied on trade secrets FLIR acquired through its $185 million acquisition of Indigo just two years earlier.’ Each Petitioner filed a motion seeking summary judgmentor summary adjudication as to each cause of action.” Each presentedthe 1999, 2004 and 2005 businessplans in support of his motion.° Each argued that “[nJothing in the [2005] NuCo business plan was copied from [the 2004 business plan].”’ Each asserted that the 2005 NuCo business plan was drawn solely from Petitioner Fitzgibbons’ 1999 business plan and that“a simple comparison”ofthese two plans would establish that the 2005 plan contained none of FLIR’s trade secret information.® Citing Whyte v. Schlage Lock Co. (2002) 101 Cal.App.4th 1443, Petitioners also argued in their summary judgment motions that FLIR was impermissibly seeking to pursue a theory of“inevitable disclosure.” They explainedthat, by “inevitable disclosure,” they meant a request for “an injunction based on speculation about future ‘ Sealed Volume AA 1029, electronic file P002929 at pp. 9-10, 13-14 [FJ 4, 22, 23]. ° Sealed Volume AA 1029,electronic file P002929 at pp. 135- 138, 205-208. 6 Sealed Volume AA 1029,electronic file P003229 at pp. 308- 310, 314-315, 327-329, 334. 7 Sealed Volume AA 1029,electronic file P003229 at pp. 310, 329. 8 Sealed Volume AA 1029,electronic file P003229 at pp. 314- 315, 334. 9 Sealed Volume AA 1029,electronic file P003229 at pp. 313, 318, 332, 337. misuse oftradesecrets.”!° In California, “inevitable disclosure” generally describes a claim based on the notion that a departing employee will “inevitably” use his former employer’stradesecrets, based on nothing more than the fact that the employeeis entering the employ of an existing competitor. FLIR opposed the motionsby arguing that the 2005 NuCo plan was based on FLIR’s protected 2004 plan.'' FLIR also opposed with evidence that included two very brief declarations, covering just a few pages, from industry experts stating that, other than FLIR, they were unaware of anyone who had“the requisite technology and capability to produce a high volumeofbolometersat yields and costs sufficient to support” the 2005 business plan on its stated schedule.” These expert declarations addressed oneofthe case’s core issues: Whether Indigo’s tradesecrets in the production of low-cost infrared sensors were unique, or whether some other party had technology available for license sufficient to allow Petitioners to implementtheir 2005 plan on its stated schedule. FLIR also contested Petitioners’ argumentthat it was asserting an “inevitable disclosure” case. It explained that it was not seeking an injunction merely because Petitioners were entering into competition. Rather, FLIR argued that Petitioners had concededthat implementation of their 2005 plan required someoneelse’s 0 Sealed Volume AA 1029,electronic file P003229at p. 313. s 11 Sealed Volume AA 1029,electronic file P003229 at pp. 465- C 466. . ae 12 Sealed Volume AA 0217-0222; Sealed Volume AA 1029, electronic file P003229 at pp. 463-465. 9 technology,not just their own know-how,and FLIR wasthe only obvious source of that technology. Accordingly, FLIR asserted thatit was pursuing a “threatened misappropriation” claim, as authorized by Civil Code section 3426.2,'° based on, among otherthings, “[e]xpert testimony[that] establishes that Defendants only could meet[their NuCobusiness] goals by using FLIR’s trade secrets and proprietary technology.” On March 21, 2007, the Santa Barbara Court denied Petitioners’ summary judgment motions for two independent reasons.!° First, it held that: Defendants have failed to sustain their burden ofproof on the motion. Defendants have made a compelling argumentthat they are entitled to judgmentatthis stage. Nonetheless, the concepts involvedin this action are highly technical. Following a review ofthe [three business plans], the court is unable to find as a matter of law, for purposesofthis motion only,that the plaintiffs own none of the concepts for [Petitioners’] new business, that nothing in the NuCo business plan made use of 13 Sealed Volume AA 1029,electronic file P003229 at p. 469, 473. 4 Sealed Volume AA 1029,electronic file P003229 at pp. 456, 468-469. 15 AA 0081-0089. 10 E N E plaintiffs’ proprietary confidential information, intellectual property, or work product, orthat all concepts in the NuCo plan were identical to those in the 1999 plan.'® In short, before considering any of FLIR’s evidence (including the expert declarations), the Santa Barbara Court concluded, based on Petitioners’ own evidence,that there wasa triable issue with respect to whethertheir new business plan was taken only from their 1999 plan without using trade secrets embodied in FLIR’s 2004 plan. Petitioners do not contendthatthis first independent ground for summary judgment wasinduced by materially false statements. The Santa Barbara Court also identified a second alternative ground for denying summary judgment: “Evenif [Petitioners] had sustained their burden of proof on the motion,plaintiffs have producedsufficient evidence, for example with the [two expert] declarations, to raise a triable issue as to misappropriation oftrade secrets.”!’ Petitioners argue that this second ground was induced by misrepresentations in the expert declarations. Petitioners contendthat “[the SantaBarbara Court in the underlying action] specifically found that FLIR (and Latham) ‘opposed the summary judgment motion with expert declarations '6 AA 0087. In summarizing the parties’ arguments, the Santa Barbara Court stated: “Per the defendants’ declarations, nothing in the NuCo business plan was copied from the 2004 presentation. (Disputed by [FLIR] — Sundermeier declaration, Exhibit A.).” (AA 0087.) 17 AA 0087. E U R . S E R R R R T S B O E S O R E 11 suggesting that there wasa scientific methodologyto predict the likelihoodoftrade secret misuse.’”'® But the Santa Barbara Court madenosuch finding, and the experts never “suggested” any such thing.” Both experts merely testified in brief declarationsthat they knew of no available technology, other than FLIR’s, that could support Petitioners’ business plan on its contemplated schedule.” Neither expert offered testimony regarding any “scientific methodology,” let alone one for predicting likelihood oftrade secret misuse.”" In the summary judgmentruling, the Santa Barbara Court also expressly noted and implicitly addressed Petitioners’ claim that FLIR was impermissibly pursuing a claim based on “inevitable 8 POB,p.10. Petitioners repeat this misrepresentation many times. (E.g., POB 10 [“asthetrial court later found”, 13 [“those courts concluded”], 17 [“‘it was actually determined in the Underlying Action’’].) "9 Sealed Volume AA 0217-0222, AA 0009-0035. 20 Sealed Volume AA 0217-0222. The experts offered this testimony based on their special knowledge and experiencein the infrared technology industry. (See Evid. Code § 802 [allowing expert testimony based on “special knowledge, ... experience, training, and education”].) 1 On cross-examination, the experts acknowledged the uncontroversial proposition that they were unawareofa scientific method for predicting trade secret misuse. (Sealed Volume AA 1029, electronic file P001876 at transcript p. 582; Sealed Volume AA 1029, electronic file P002078 at transcript pp. 673-74.) 12 disclosure.””* The Court concluded, as FLIR had argued, that “threatened misappropriation may be enj oined.””° Followinga court trial, the Santa Barbara Court entered |judgment for Petitioners.”* The Court foundthat “the conduct of both [Petitioners had] raised a reasonable suspicion that they might misuse [FLIR’s] trade secrets,””> but concluded that no injunction was appropriate.”° Despite that “reasonable suspicion,” the Court also awardedattorney’s fees to Petitioners based on a finding, under Civil Code section 3426.4, that the action had been brought and pursued in bad faith.”” The Court concludedthat this finding of bad faith was not inconsistent with its earlier denial of summary judgment.”* The judgment wasaffirmed on appeal. As Petitioners note, the affirming opinion stated, “[FLIR] opposed the summary judgment motion with expert declarations suggesting there wasa scientific methodologyto predictthe likelihood oftrade secret misuse.””” As discussed below,this hearsay factual recitation is erroneous and inconsistent with the declarations.°” 22 AA 0087. 23 AA 0087; Sealed Volume AA 1029,electronic file P003229at pp. 456, 468-469. *4 AA 0009-0035. 5 AA 0021. 76 AA 0020-0025. 27 AA 0027-0035. 8 AA 0014. ° AA 0198. 30 Sealed Volume AA 0217-0222. 13 The remittitur in the underlying action issued on October 6, 2009." II. PETITIONERS’ MALICIOUS PROSECUTION ACTION AGAINST FLIR On July 10, 2008, after the judgmentin the underlying action, Petitioners filed a complaint against FLIR and twoofits officers asserting tortious interference.” On November 20, 2009, following the remittitur, Petitioners amended their complaintto allege malicious prosecution.’ They alleged that FLIR filed the underlying action “in bad faith, with malice, without probable cause and without any valid legal or factual 34 bases.” ” Moreparticularly, Petitioners alleged that FLIR “initiated and maintained and prosecuted [the underlying action] ... on a legal theory that [Petitioners] would misuse trade secrets in the future,... even thoughthe ‘inevitable disclosure’ doctrine is not supported by California law.”*> Theyalso alleged that FLIR did not have a sufficient “legal basis to initiate the lawsuit.”*° On July 20, 2010, nine monthsafter the remittitur and with no newcharging allegations, Petitioners named Latham & Watkins as a “Doe” defendantin their action against FLIR.*’ On August 31, 2010, 31 AA 0124-0125. 32 AA.0127-0136. 33 AA 0138-0154. “AA 0141. 3 AA 0144. 36 AA 0142. *7 AA 0204. 14 after Latham threatened to bring an anti-SLAPP motion, Petitioners dismissed Latham without prejudice and without any agreementto toll the statute of limitations.** Il. THE PRESENT ACTION On April 5, 2011, eighteen monthsafter the remittitur and seventeen monthsafter they filed their malicious prosecution action against FLIR, Petitioners and Latham signed a tolling agreement. This agreementprovided that “in no circumstances” would it “revive any claim or defense that was already time-barred.”*” Petitioners filed this action on April 6, 2012, in the Los Angeles Superior Court.”” Their allegations mirror those asserted in their November 2009 complaint against FLIR.*’ Althoughtheyallege that they could not have discovered their claim until after FLIR asserted the advice-of-counsel defense, the complaint is silent about why that fact was material. Latham filed an anti-SLAPP motion arguing that Petitioners’ action was untimely underthe one-year statute oflimitations set forth 38 AA 0206. 39 AA 0208. 40 AA 0001. 41 AA 0004 (Latham “in bad faith, with malice, without probable cause and without any valid legal or factual bases”filed the underlying action; Latham’s “bad faith, malice, and lack ofprobable causein filing the lawsuit is evidenced by, amongotherthings, the fact that [Latham]filed the Lawsuit in part on a legal theory that [Petitioners] would misusetrade secrets in thefuture, even though such a theory (i.e. ‘inevitable disclosure’) is not supported by California law”; Latham did not havea sufficient “legal basis to initiate the lawsuit,” originalitalics.) 15 in Code of Civil Procedure section 340.6 and that the action was barred by the interim adverse judgment rule.” The Los Angeles Court granted the motion, finding the action time-barred under Code of Civil Procedure section 340.6.*° The Court declined to reach the interim adverse judgmentrule. IV. THE COURT OF APPEAL DECISION On August 27, 2014, the Court of Appeal reversed. (Parrish v. Latham & Watkins (2014) 229 Cal.App.4th 264.) However, on October 6, 2014, the Court granted rehearing on its own motion, which, under Rule of Court 8.268(d), vacated its earlier decision. On June 26, 2015, following rehearing, the Court ofAppeal issued a new Opinionaffirming the granting ofthe anti-SLAPP motion based on the interim adverse judgment rule. The Court rejected Petitioners’ argument “that the interim adverse judgment rule does not preclude this malicious prosecution action because thetrial court’s finding of badfaith after a benchtrial in the Underlying Action negatesits prior ruling denying summary judgment.” (Parrish y. Latham & Watkins (2015) 238 Cal.App.4th 81, 87.) The Court concludedthat Petitioners’ “hindsight approach is inconsistent with a core principle of the interim adverse judgment rule—namely,that an interim ruling on the merits establishes probable causein the underlying action, even though that rulingis later reversed bythetrial court, a jury, or an appellate court.” (/bid.) 42 AA 0054-0071. 48 AA 1061-1062. 16 The Court of Appeal recognized that the Santa Barbara Court had denied Petitioners’ summary judgment motion on two independent grounds. The Court observedthat the triable issue identified by the Santa Barbara Court regarding the source of the NuCobusinessplan was not connected to the disputed expert declarations. Rather, that triable issue arose from the face of the three business plans that Petitioners themselves submitted in support of their motions. The Court ofAppeal correctly noted that Petitioners do not contend that this aspect of the ruling was obtained by fraud. Thetrial court in the Underlying Action, viewing the evidence in the light most favorable to Latham’s clients as the non- movingparties, concludedit could not grant [Petitioners’] defense motion for summary judgment on the trade secret claim. Though it acknowledged[Petitioners] had made a “compelling argument” for summary judgment, the court ruled that, “[flollowing a review ofthe [1999 business plan submitted, the 2004 plan presented to FLIR, and the new business plan], the court is unable to find as a matter of law, for purposesofthis motion only, that [FLIR] own{s] none of the concepts for [Petitioners’] new business, that nothing in the [new] business plan made use of [FLIR]’s proprietary confidential 17 information, intellectual property, or work product, or that all concepts in the [new] plan were identical to those in the 1999 plan.” Accordingly, the court found [Petitioners] had “failed to sustain their burden of proof on the motion.” [] Petitioners do not contend Latham obtained this ruling through fraud or perjury. (Parrish, supra, 238 Cal.App.4th at pp. 98-99.) Relying on this last sentence, but ignoring that “this ruling” identified by the Court of Appeal was the Santa Barbara Court’s first ground for denying summary judgment(i.e., the ground that was independentofthe contested expert declarations), Petitioners assert that the Court of Appeal incorrectly concluded that they were not arguing that any evidence submitted in opposition to summary judgment wasfraudulent or perjurious. With respectto the statute of limitations, the Court of Appeal followed the samedivision’s own decision in Roger Cleveland, supra, 225 Cal.App.4th 660, and held that Code of Civil Procedure section 340.6 applies only to professional negligence claims. (Parrish, supra, 238 Cal.App.4th at pp. 93-94.) V. THE GRANT OF THE PETITION FOR REVIEW On August 5, 2015, Petitioners petitioned for review regarding application of the interim adverse judgmentrule. “4 POB,p. 2 fn.1. 18 On August 20, 2015, this Court decided Lee, supra, 61 Cal.4th 1225, addressing the scope of Code of Civil Procedure section 340.6. Amongotherthings, this Court concluded that Roger Cleveland erred in concluding that Section 340.6 applies only to professional negligence claims. (/d. at p. 1239.) On August 26, 2015, Latham requested that, if this Court granted review,it should also review the statute of limitationsissue in light ofLee. The Court accepted review of both issues. 19 LEGAL DISCUSSION 1. PETITIONERS WERE REQUIRED TO SHOW A PROBABILITY OF PREVAILING ON BOTH “LACK OF PROBABLE CAUSE” AND THE STATUTE OF LIMITATIONS Petitioners’ action was dismissed on Latham’s anti-SLAPP motion. (Code Civ. Proc. § 425.16.) On that motion, once Latham established “protected conduct” (which wasnot disputed), Petitioners bore the burden of establishing a “probability of prevailing on the merits.” (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67; Code Civ. Proc. § 425.16(b)(1).) Meeting this burden requires admissible evidence constituting a “sufficient primafacie showing offacts to sustain a favorable judgmentifthe evidence submitted by theplaintiff is credited.” (Wilson, supra, 28 Cal.4th at p. 821; Oasis W. Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820.) Although the court “does not weigh the credibility or comparative probative strength of competing evidence, it 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, supra, 28 Cal.4th at p. 821, original italics, citations and internal quotation marks omitted.) The anti-SLAPP motion challenged Petitioners’ ability to prove the “lack of probable cause” element oftheir malicious prosecution claim, and their compliance with the statute oflimitations. Petitioners’ burden was to demonstrate a probability that they would prevail on both issues. 20 Il. THE DENIAL OF SUMMARY JUDGMENT CONCLUSIVELY ESTABLISHED PROBABLE CAUSE DESPITE A LATER RULING THAT THE ACTION WAS BROUGHTIN BAD FAITH The Court of Appeal correctly concludedthat, underthe interim adverse judgmentrule, the denial of Petitioners’ motions for summary judgment on the merits conclusively precluded them from establishing the “lack of probable cause” required for their malicious prosecution claim. A. InA Malicious Prosecution Action, The “Lack of Probable Cause” Element Is A High Hurdle Malicious prosecution is a disfavored tort becauseofits - potential to chill claims and because, as a meansofdeterring frivolous lawsuits, it has the disadvantage of constituting a new round of litigation. (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 872-873.) Accordingly, “the elements of [malicious prosecution] havehistorically been carefully circumscribed.” (/d. at p. 872.) Asone element, a plaintiff must demonstrate that the defendant lacked probable cause to bring the underlying action. (Wilson, supra, 28 Cal.4th at p. 814.) This requirementis challenging for the malicious prosecution plaintiff, because the threshold for establishing the existence of probable causeis purposefully low. (Roberts, supra, 76 Cal.App.4th at p. 382 [discussing “permissive standard” for probable cause]; Sheldon Appel, supra, 47 Cal.3d at p. 885 [“‘Counsel and their clients have a right to present issues that are arguably correct, even if it is extremely unlikely that they will win ... .””].) “[P]robable cause to bring an action does not depend uponit being meritorious, as such, but upon it being arguably tenable, i.e., 21 not so completely lacking in apparent merit that no reasonable attorney would have thoughtthe claim tenable.” (Wilson, supra, 28 Cal.4th at p. 824,originalitalics.) This standard is “ratherlenient.” (Id. at p. 817.) Probable cause is determined objectively based on the assessmentofa “reasonable attorney,” not based on a subjective assessmentofthe plaintiffs attorney’s personal view of a case’s merit. (Sheldon Appel, supra, 47 Cal.3dat p. 882.) “Only those cceactions that ‘“any reasonable attorney would agree [are] totally and 996completely without merit”‘ may form the basis for a malicious prosecution suit.” (/d. at p. 817.) B. A Court’s Interim Determination That A Case Has Sufficient Merit To Proceed Conclusively Establishes Probable Cause Theinterim adverse judgmentrule establishes a bright line test for the objective existence of probable cause. A favorable interim ruling for a plaintiff on the merits of a case conclusively establishes that probable causeexists, unless the ruling was obtained by fraud or perjury. (Wilson, supra, 28 Cal.4th at p. 822.) Therule allows a lawyer who defeats summary judgment on the merits to continue to pursue the claim “evenif [the attorney is] also aware of evidencethat will weigh against the claim.” (Wilson, 28 Cal.4th at p. 822; Plumley v. Mockett (2008) 164 Cal.App.4th 1031, 1050.) Having prevailed at an interim stage, “Plaintiffs and their attorneys are not required, on penalty oftort liability, to attempt to predict howa trier of fact will weigh the competing evidence,orto 22 abandontheir claim if they think it likely the evidence will ultimately weigh against them.” (Wilson, supra, 28 Cal.4th at p. 822.) The interim adverse judgmentrule protects both client and lawyer, and ensures that a client or lawyer whois “in possession of [evidence that a court deemedsufficient to deny summary judgment] has the right to bring the claim, even whereit is very doubtfulthe claim will ultimately prevail.” (Wilson, supra, 28 Cal.4th at p. 824; see also Roberts, supra, 76 Cal.App.4th at pp. 383-84 [parallel holding].) “Claims that have succeededat a hearing on the merits... are not so lacking in potential merit that a reasonable attorney or litigant would necessarily have recognizedtheir frivolousness.” (Wilson, supra, 28 Cal.4th at p. 818.) This rule “serves the policy expressed in Sheldon Appel to discourage dubious malicious prosecution suits.’” (Ud. at p. 819, quoting Roberts, supra, 76 Cal.App.4th at p. 384.) Asthis Court explained in Wilson, a litigant or attorney’s ability to rely on an interim court ruling in deciding whetherto take a case to trial is an essential aspect ofthe interim adverse judgmentrule. As this Court stated, “‘It would be hard law which would render a plaintiff liable in damages for instituting an action, wherein he made a truthful and honest statement ofthe 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 thateffect should afterwards beset aside ... ."” (Wilson, supra, 28 Ca].4th at p. 818, quoting Cowles v. Carter (1981) 115 Cal.App.3d 350, 357, further internal quotation marks omitted.) As this Court furtherstated, “<'The inquiry [is] not whether the plaintiff had in fact a good and 23 valid cause of action, but whether this was apparently true, and it was accordingly the right ofthe plaintiff to invoke a judicial decision concerning the merits of the case presented for determination.’” (Ibid.) Importantly, the rule applies “even if that [interim] result is subsequently reversed by thetrial or appellate court.” (dd. at p. 818; Plumley, supra, 164 Cal.App.4th at p. 1052 [same], Cowles, supra, 115 Cal.App.3d at pp. 355-356; Fairfield v. Adams (1959) 170 Cal.App.2d 10, 15.) A reversal establishes only thatit is also possible for a different reasonable lawyer (an appellate judge) or even the same reasonable lawyer(thetrial court judge) to concludelater that the case - does not have merit. This aspect ofthe rule is grounded in common-sensefairness. As Wilson holds, an alternative “hard law” permitting the imposition of liability for having proceeded followingthe trial court’s blessing would unfairly leave a lawyer whorelied on that blessing unable to take back his or her resulting conduct. (Wilson, supra, 28 Cal.4th at p. 818.) C. Denial Of The Motions For Summary Judgment Triggered Application Of The Interim Adverse Judgment Rule The March 2007 denial of summary judgment and summary adjudication motions by the Santa Barbara Court was a determination on the merits that Latham hada triable case, bringing its prosecution of the trade secret action within the interim adverse judgmentrule. As detailed above, this summary judgmentruling was based on two independent merits-based grounds: (1) the court’s recognition (based 24 solely on evidence offered by Petitioners themselves)ofa triable issue regarding whether their NuCo business plan depended on protected trade secrets in FLIR’s 2004 businessplan, and (2) the court’s determination that FLIR’s expert declarations created a triable issue as to whether Petitioners could execute their business plan on its express timetable without use ofFLIR’s technology.” The Court of Appeal applied well-established case law to concludethat the summary judgmentruling triggered the interim adverse judgmentrule and conclusively established probable cause. Asthis Court has explained, “[j]ust as a trial victory by the underlying — plaintiff ‘showsthatthe suit was [brought with] probable cause,’ so too ‘[dJenial of a defendant’s summary judgment motion provides similarly persuasive evidence that a suit does not totally lack merit.” (Wilson, supra, 28 Cal.4th at p. 819 [internal citation omitted].) “A trial court’s conclusion that issues of material fact remain fortrial ‘necessarily impl[ies] that the judge finds at least some merit in the claim.” (Ibid., quoting Roberts, supra, 76 Cal.App.4th at p. 383.) In short, “a judge’s denial of summary judgmentaccurately predicts that | reasonable lawyers would find a case arguably meritorious.” (Roberts, supra, 76 Cal.App.4th at p. 384.) D. No Exception To The Interim Adverse Judgment Rule Applies Here California recognizes only one exceptionto therule that probablecauseis conclusively established by a favorable judicial ruling on the merits: an instance in which “theprior ruling is shown 4% AA0087. 25 to have been obtained by fraud or perjury.” (Wilson, supra, 28 Cal.4th at p. 825.) | This exception is based on logic and fairness. In deciding whetherit is safe to pursue an action withoutfearoftort liability, a litigant or lawyer cannotproperly draw comfort from a court ruling that the litigant or lawyer knows was induced by deceit. Petitioners argue that the exception should be broader. In their view,the interim adverse judgmentrule should have no application wheneverit can be shownthatthe interim ruling was caused by a “materially false fact”—even an inadvertent misstatement unknownto the plaintiff in the underlying action or its counsel. This “exception” would undothe rule and destroythe certainty the rule provides. A central purposeofthe interim adverse judgmentrule is to assure a party or its counsel that they may continue to pursue a claim without fear oftort liability. (Wilson, supra, 28 Cal.4th at p. 824 [(“[A] claimant or attorney whois in possession of such evidence[that a court found sufficient to support denial of summary judgment] has the right to bring the claim, even whereit is very doubtful the claim will ultimately prevail.”]; Cowles, supra, 115 Cal.App.3dat p. 357 [“It would be hard law which would rendera plaintiff liable in damages for instituting an action, wherein he made truthful and honest statementofthe facts, in the event that, notwithstanding a judge ofthe superior court was satisfied that upon those facts the plaintiff had a meritorious case, a ruling to that effect should afterwardsbe set aside ...,” internal citation omitted].) . | In all events, Petitioners’ focus on the precise bounds of the exception to the interim adverse judgmentruleis, in this case, not 26 important. As the Court of Appeal correctly noted, Petitioners do not contend that the first ground for the Santa Barbara Court’s denial of summary judgment wasinducedby perjury, fraud, a materially false fact or any other misconduct.”° (Parrish, supra, 238 Cal.App.4th at pp. 98-99.) Instead, that first ground for denial was based on evidence presented by Petitioners themselves. Specifically, in support oftheir motions, Petitioners presented the 1999, 2004 and 2005business plans.*’ They argued that “In]othing in the [2005] NuCobusiness plan was copied from [the 2004 business plan].”“* They asserted that the 2005 NuCobusiness plan wasinstead drawn solely from the 1999 business plan, and that “a simple comparison”ofthese two plans would establish that the 2005 plan contained notrade secret information.”” FLIR opposed by “6 The interim adverse judgmentrule also requires that the ruling be based on an assessmentofthe merits, not “technical” grounds such as a failure to include a separate statement of material facts. (Wilson, supra, 28 Cal.4th at p. 823.) Although Petitioners once contended that the first ground for denial of summary judgment was“technical,” they later conceded it was not. (Petitioners’ Pet. for Rehearing,p. 7.) In the eventthat Petitioners renew this “technical denial” argument, the Court of Appeal properly rejected it. (Parrish, supra, 238 Cal.App.4th at p. 99; see also Respondents’ Suppl. Brief, pp. 4-9.) 7 Sealed Volume AA 1029,electronic file P003229 at pp. 308- 310, 314-315, 327-329, 334. “8 Sealed Volume AA 1029,electronic file P003229 at pp. 310, 329. ° Sealed Volume AA 1029,electronic file P003229 at pp. 314- 315, 334. 27 arguing that the 2005 NuCo plan wasbased on the protected 2004 plan.’ The Santa Barbara Court stated, as its first ground for denying summary judgment,that it had identified a triable issue with respectto whetherPetitioners’ new business plan used trade secrets embodied in FLIR’s 2004 plan. The Court specifically explained that it had reachedthis conclusion based solely on evidence presented by Petitioners: “Following a review ofthe [three business plans], the court is unable to find as a matter of law, for purposes of this motion only, that the plaintiffs own none ofthe concepts for defendants’ new business, that nothing in the NuCo business plan made use of plaintiffs’ proprietary confidential information, intellectual property, or work product, orthat all concepts in the NuCo plan wereidentical to those in the 1999 plan.”*! BecausePetitioners cannot arguethat this first independent ground for denying summary judgment was wrongfully induced, the Court of Appealcorrectly held that there was no justification for avoiding the interim adverse judgmentrule, regardless of Petitioners’ contention that the second independent ground was induced by wrongful conduct. (Parrish, supra, 238 Cal.App.4th at p. 102 fn.9.) °° Sealed Volume AA 1029, electronic file P003229 at pp. 465- 466. AA 0087. In summarizing the parties’ arguments, the Santa Barbara Court stated: “Per the defendants’ declarations, nothing in the NuCo business plan was copied from the 2004 presentation. (Disputed by [FLIR] — Sundermeier declaration, Exhibit A.).” (AA 0087.) 28 That holdingis sufficient to affirm the dismissal ofthis action, and makesit unnecessary for this Court to consider the Santa Barbara Court’s second ground for denial of summary judgment. But even so, Petitioners are also wrongin their attack on that ground. Asits second ground for denying summary Judgment, the Santa Barbara Court stated: “Even if defendants had sustained their burden ofproof on the motion, [FLIR has] produced sufficient evidence, for example with the [two expert] declarations,to raise a triable issue as »°2 Petitioners charge, withoutto misappropriation oftrade secrets. record support, that this second ground wasinduced by fraudulent or “materially false” expert declarations. Morespecifically, they contend that “[the Santa Barbara Court judge] specifically found that FLIR (and Latham) ‘opposed the summary judgment motion with expert declarations suggesting that there was a scientific methodologyto predict the likelihood oftrade secret misuse.””°> But the Santa Barbara Court never made such a finding,” and the declarations themselves refute Petitioners’ characterization.’ At summary judgment, the experts merely declared that, aside from FLIR, they were unaware of anyone who had “the requisite technology and capability to produce a high volume of bolometers at yields and costs sufficient to support” the 2005 business 52 AA 0087. °3 POB,p.10. Petitioners repeat this misrepresentation many times. (E.g., POB 10 [“as the trial court later found”], 13, 17 [“it was actually determined in the Underlying Action”].) 54 AA 0009-0035. 55> Sealed Volume AA 0217-0222. 29 plan onits stated schedule.Neither expert offered testimony regarding any “scientific methodology,”let alone one for predicting likelihoodoftrade secret misuse.”” After the experts’ subsequenttrial testimony, the Santa Barbara Court found that the experts had not successfully refuted the possibility that new innovation might allow Petitioners to meettheir business plan or that Raytheon might have the necessary technology.*® This trial finding, however, did not call into question thetruth of the experts’ earlier statements at summary judgment that they, as experts in the field, were unaware of anyone other than FLIR that already had the necessary technology and capability. To support the assertion that the experts falsely suggested that there was a scientific method to predict trade secret misappropriation, Petitioners rely on a single sentence in the Court of Appeal decision in the underlying case: “{FLIR] opposed the summary judgment motion with expert declarations suggesting there wasa scientific methodologyto predictthe likelihood oftrade secret misuse.””’ This 56 Sealed Volume AA 0218, 0221-0222; Sealed Volume AA 1029, electronic file P003229 at pp. 463-465. 7 On cross-examination, the experts acknowledgedthe uncontroversial proposition that they were unawareofa scientific method for predicting trade secret misuse. (Sealed Volume AA 1029, electronic file P001876 at transcript p. 582; Sealed Volume AA 1029, electronic file P002078 at transcript pp. 673-74.) 8 AA 0022, 0031. 9 «POR,p.10. 30 sentence is non-admissible hearsay.”” (Evid. Code § 1200; Lockley v. Law Office ofCantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 885 [An appellate court’s description of facts is merely the hearsay assertions of the justices who delivered the opinion. Hearsay statements within the opinion are inadmissible unless they fall within an exception to the hearsay rule.”}.)" This hearsay doesnot gain weight by its publication in a court opinion. California does not allow judicial notice of the truth of facts stated in a prior court ruling. (Plumley, supra, 164 Cal.App.4th at pp. 1048-1051; Gilmore v. Superior Court (1991) 230 Cal.App.3d 416, 418 [It appears that the superior court took notice not only ofthe existence of that opinion and the result reached, but also relied upon our statementofthe facts ... to establish the truth thereof. While an appellate opinion may be judicially noticed for the first purpose,it would ordinarily be errorto useit for the latter purpose.”J.) Most importantly, the Court of Appeal’s characterization ofthe expert declarationsis flatly incorrect. The error is apparent on the face ofthe declarations. The expert declarations are five pages long 60 WhenPetitioners attempted to use the Court of Appeal’s sentence in the Los Angeles Court’s consideration of the anti-SLAPP motion, Latham objected to it as hearsay, and not supported by the record. (AA 0070-0071, 1030, 1041-1042.) - 61 Franklin Mint Co. v. Manatt, Phelps & Phillips, LLP (2010) 184 Cal.App.4th 313, 332-333, appears to indicate that an underlying trial court’s factual statements can be given evidentiary weight. But the Court did not indicate whether a hearsay objection wasasserted or considered. In all events, as the dissent stated, factual statements in prior rulings “cannot be considered substantive evidence of lack of probable cause.” (Id. at p. 368 [Mosk,J., dissenting].) 31 and are reproducedintheir entirety at pages 0217 to 0212 of the Sealed Volume of the Appellate Appendix. Thus, the Los Angeles Court’s dismissal also should be affirmed because Latham’s evidence, including the expert declarations themselves, defeats Petitioners’ attempt to establish evidentiary . support for the lack of probable cause elementoftheir malicious prosecution claim. (Wilson, supra, 28 Cal.4th at p. 821 [court “should grant the [anti-SLAPP] motionif, as a matter of law, the defendant’s evidence supporting the motion defeats the plaintiffs attempt to establish evidentiary support for the claim,”citations and internal quotation marks omitted].) E. The Trial Court’s Later Finding Of Bad Faith Does Not Undo The Preclusive Force OfIts Earlier Summary Judgment Ruling Petitioners argue that the Santa Barbara Court’s post-trial finding ofbad faith warrants an exception to the interim adverse judgmentrule’s determination that the denial of summary judgment conclusively established probable cause. The Court ofAppeal rightly rejected that argument. Asthe Court ofAppeal explained, the hindsight approach urged by Petitioners “is inconsistent with a core principle of the interim adverse judgment rule—namely, that an interim ruling on the merits establishes probable cause in the underlying action, even though that ruling is later reversed bythe trial court, a jury, or an appellate court.” (Parrish, supra, 238 Cal.App.4th at p. 87; see Wilson, supra, 28 Cal.4th at pp. 818; Crowley v. Katleman (1994) 8 Cal.4th 666, 692 fn.15 [an interim adverse judgment on the merits, even though 32 subsequently set aside on motion or on appeal, conclusively establishes probable cause for the prior action”].) A hindsight-based exception would create the “chilling effect” of potential tort liability that this Court sought to avoid. (Wilson, supra, 28 Cal.4th at pp. 816- 817.) This Court’s decision in Wilson, including its extensive discussion and endorsementofthe Court of Appeal’s decision in Roberts, establishes that, once there has been a denial of summary judgmenton the merits, probable cause is conclusively determined evenifthe summary judgmentruling is overturned or reversed. (Wilson, supra, 28 Cal.4th at pp. 818-819, 822-824; Roberts, supra, 76 Cal.App.4th at pp. 383-384.) Asdetailed above, the only subsequentruling that can allow a finding of lack ofprobable causeis a determination that the denial of summary judgment was induced by fraud(or, if Petitioners were correct, a materially false fact), and there was no suchruling here. Notwithstanding Wilson and its endorsement ofRoberts, Petitioners rely on Slaney v. Ranger Insurance Co. (2004) 115 Cal.App.4th 306, to suggest that the probable-cause-determining effect of a summary judgmentruling can be undone by a subsequent ruling that calls into question the correctness ofthe summary judgment ruling. In Slaney, the Court of Appeal determinedthat, notwithstanding an initial ruling denying summary judgmenton the merits, a trial court’s subsequent finding that summary judgment should be granted can allow a finding of “lack of probable cause,” at least in circumstances wherethere is evidence of subjective malice. 33 Slaney is an erroneous outlier. When it was decided, this Court had already held in Wilson that the denial of summary judgmenton the merits conclusively establishes probable cause and a subsequent reversal of that ruling is inconsequential. (See Wilson, supra, 28 Cal.4th at p. 819 [‘A trial court’s conclusion that issues of material fact remain fortrial ‘necessarily impl[ies] that the judge findsat least somemerit in the claim. The claimant may win,if certain material facts are decided favorably. This finding (unless disregarded) compels [the] conclusion that there is probable cause, because 339probable causeis lacking only in the total absence of merit.’” quoting Roberts, supra, 76 Cal.App.4th at p. 383].) Yet the Slaney court did not mention Wilson.” The Slaney Court also erred fundamentally by considering the existence of subjective malice as a relevant factor, even though the determination of probable cause is supposed to be objective. (Sheldon Appel, supra, 47 Cal.3d at p. 881.) As the Court of Appealstated 62 Slaney considered and apparently rejected the holding in Roberts, supra, 76 Cal.App.4th at p. 384, that “a judge’s denial of summary judgmentaccurately predicts that reasonable lawyers would find a case arguably meritorious.” (Slaney, supra, 115 Cal.App.4th at pp. 319-321.) In doing so, however, Slaney failed to appreciate that this Court had endorsed Roberts’ holding. (Wilson, supra, 28 Cal.4th at pp. 816-819.) Notably, S/aney stands alone. Its holding was rejected implicitly in a subsequent appellate decision that instead properly relied on Wilson. (Clark v. Optical Coating Laboratory, Inc. (2008) 165 Cal.App.4th 150, 182-184 [“reasonable cause” under Code Civ. Proc. § 1038—whichisparallel to “probable cause” in malicious prosecution cases—isestablished byan initial denial of summary judgment even if summary judgmentlater granted].) 34 correctly here, “[c]lontrary to the S/aney court’s conclusion, the fact that the trial court or jury later rejects a plaintiffs claim and,after weighing the competent evidence, finds the claim was brought with malice, does not negate other evidence which,standing alone, establishes the existence of probable cause.” (Parrish, supra, 238 Cal.App.4th at p. 101.) In all events, even if a subsequent decision could somehow undo the probable-cause-determining impact of an order denying summary judgmenton the merits, the subsequentruling would, at a minimum, haveto establish that the first ruling was in error. Here, the subsequent bad-faith ruling did notcall into question the correctness of the order denying summary judgment. Asthe Court ofAppeal correctly held, the Santa Barbara Court’s post-trial finding of bad faith under Civil Code section 3426.4 is not inconsistent with that Court’s earlier denial of summary judgment(andit therefore casts no doubt on the existence ofprobable cause).” (Parrish, supra, 238 Cal.App.4th at p. 102 [Thebadfaith finding does not negate the court’s prior conclusion that the trade coe 396 secret claim had ‘“at least some merit’’* so as to warrant a trial on the conflicting evidence.”].) A finding of bad faith (or speciousness) under Civil Code section 3426.4 does not require “that a case is 63 The Santa Barbara Court itself concluded that there was no conflict between its denial of summary judgmentandits bad faith finding. (AA 0014.) 35 frivolous”™ or lacking in probable cause.” (Gemini Aluminum Corp. v. California Custom Shapes, Inc. (2002) 95 Cal.App.4th 1249, 1261- 1262.) While claimsthat are frivolous or lacking in probable cause do not even superficially appear to have merit, “specious” actions warranting attorney’s fees under Section 3426.4 may havesuperficial merit, but fail so badly when evidenceis weighedattrial that attorney’s fees may be awarded. (Gemini, supra, 95 Cal.App.4th at pp. 1261-1262. As the Court of Appealstated here: The finding, based on the more complete record developedattrial, that ... support[ed] the bad faith finding, does not establish a lack of probable cause. Asnoted, if FLIR and Latham hadevidenceto substantiate the trade secret claim, as thetrial court concluded they had in denying summary judgment, there was probable cause, “even if [they were] also aware of evidencethat [would] weigh against the claim.” (Parrish, supra, 238 Cal.App.4th at p. 102.) Because the standards are different, there is no conflict in finding both bad faith and probable cause. Indeed, Petitioners themselves madethis very point in the underlying case. Citing Gemini, they argued successfully that the 64 See also AA 0107-0108 at J] 57-58. 65 Thetest for “lack of probable cause” is parallel to the standard for frivolousness and sanctions under Code of Civil Procedure section 128.5. (See Gemini, supra, 95 Cal.App.4th at pp. 1261-1262.) 36 prior summary judgmentdenial did not preclude a fee award because bad faith (or speciousness)is a “different standard”that is easier to provethan a lack of probable cause: [O]bjective bad faith under section 3426.4 does not require that all reasonable attorneys would believe that the claim is totally and completely meritless. Frivolousnessis not the standard and need notbe established. The “speciousness” required for objective bad faith is a lower standard, and includes trade secret claims that “may superficially appear to have merit.” In the underlying action, the Court of Appeal, quoting Gemini, adopted Petitioner’s then-current argument: “‘[S]ection 3426.4 requires objective speciousness ... as opposed to frivolousness.’””” That holding was correct. Moreover, having prevailedin the | underlying action by arguing that the bad faith is easier to show than an absence ofprobable cause, Petitioners are judicially estopped from arguing the opposite now. (Jackson v. County ofLos Angeles (1997) 60 Cal.App.4th 171, 183 [judicial estoppel applies “when: (1) the sameparty has taken twopositions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position(i.e., the tribunal adopted the position or acceptedit as true); (4) the two positionsaretotally 66 Sealed Volume AA 1029, electronic file PO01055 at electronic pp. 37-38. 6&7 AA 0291. 37 inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.”]; Board ofPilot Commissionersfor the Bays ofSan Francisco, San Pablo and Suisun v. Superior Court (2013) 218 Cal.App.4th 577, 591 [“It seems patently wrongto allow a person to abuse the judicial process by first [advocating] one position, andlater, if it becomesbeneficial, to assert the opposite,” internal quotation marks omitted].) Finally, Petitioners argue that the interim adverse judgmentrule should be abrogated whenever there has been a subsequentfinding of bad faith, because the “effect of such a rule is that parties who believe they are being victimized by a maliciously prosecuted action will be deterred from attempting to minimize their damages by moving for »68 In the real world, however, almostallsummary judgment. defendants will focus on the suit facing them,not positioning for a future malicious prosecution action. Few would trade the probability of a quick summary judgmentexit for the inherent uncertainty of a trial on the merits. Moreover, if a court determines (even erroneously) that the underlying case has merit, then the low threshold for probable cause has been met, and a malicious prosecution action should be barred. F. Latham’s Pursuit Of The Case After The Summary Judgment Ruling, Using The Same Arguments And Theories, Is Protected By The Interim Adverse Judgment Rule Petitioners argue forthe first time on appeal that Latham committed malicious prosecution by pursuing different theoriesafter 68 POB,p.28. 38 the summary judgmentruling than it had pursuedearlier in the Santa Barbara action. Petitioners, however, did not makethis factual argument in opposing the anti-SLAPP motion.” The argumentis therefore waived. (Bank ofAmerica, N.A. v. Roberts (2013) 217 Cal.App.4th 1386, 1398-1399 [“[I]t is fundamental that a reviewing court will ordinarily not consider claims made forthe first time on appeal which could have been but were not presentedto thetrial court,” citation and internal quotation marks omitted].) The argumentis also wrong and defeated by the existing record. Throughtrial, FLIR pursued both theories on which the Santa Barbara Court based its denial of summary judgment. At summary judgment, the Santa Barbara Court founda triable issue regarding the derivation of the 2005 NuCobusinessplan.” Attrial, the same Court weighed the evidence on that issue and concludedthat Petitioner Fitzgibbons had not used any ofFLIR’s trade secrets in preparing the 2005 NuCo business plan.” | FLIR’s threatened misappropriation theory also remained consistent. At summary judgment, Petitioners contended that FLIR wasarguing “inevitable disclosure,” and FLIR explainedthatit instead was arguing “threatened misappropriation.””” The Santa Barbara Court denied summary judgment and concludedthat “threatened misappropriation” may be enjoined basedin part on the 69 AA 0244-0264. 70 AA 0087. 71 AA 0019-0020. 2 Sealed Volume AA 1029, electronic file P003229 at pp. 313, 318, 332, 337, 469; AA 87. 39 expert declarations regarding Petitioners’ ability to implementtheir business plan on their stated schedule without use of FLIR’strade secrets. Weighing the evidenceattrial, the same Court concluded that FLIR’s claim arose from a non-actionable concern that Petitioners would use FLIR’s technology simply because they were entering into competition with FLIR, and an unreasonable assumptionthat Petitioners would not innovate.” Additionally, Petitioners’ malicious prosecution complaints against both Latham and FLIRconsistently describe FLIR’s position as unchangedbefore and after summary judgment, claiming the “inevitable disclosure” theory was pursued before and after summary judgment.” For the reasons set forth above, this Court should affirm the Court of Appeal based on the interim adverse judgmentrule. BAA 0087. 4 AA 0021-0023. » AA 0144 (FLIR“initiated and maintained and prosecuted [the underlying action] ... on a legal theory that [Petitioners] would misuse trade secrets in the future, ... even though the ‘inevitable disclosure doctrine is not supported by California law.”); AA 0004 (“[Latham] filed the Lawsuit in part on a legal theory that [Petitioners] would misusetrade secrets in thefuture, even though such theory (i.e. ‘inevitable disclosure’) is not supported by California law,”original italics). 40 Ill. THIS ACTION IS ALSO BARRED BY THE ONE-YEAR STATUTE OF LIMITATIONS UNDER CODE OF CIVIL PROCEDURE SECTION340.6(a) The Los Angeles Court properly concludedherethat Petitioners’ claim was barred by Code of Civil Procedure section 340.6(a),”° which provides: An action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performanceofprofessional services shall be commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission, or four years from the date ofthe wrongful act or omission, whicheveroccursfirst. (Codeof Civil Proc., § 340.6.) Based on the samedivision’s holding in Roger Cleveland, supra, 225 Cal.App.4th 660, that Section 340.6 applies only to professional negligence claims, the Court of Appeal held here that Section 340.6 does not apply to a malicious prosecution action against a lawyer. (Parrish, supra, 229 Cal.App.4th at p. 276.) That holding wasin error. 7% AA 1059-1063. | Al A. Lee v. HanleyEstablishes The Requirements For Application of Section 340.6 This Court’s subsequent opinion in Lee v. Hanley specifically disapproved Roger Cleveland’s holding limiting the reach of Section 340.6. (Lee, supra, 61 Cal.4th at p. 1239.) This Court held, “the statute applies not only to actions for professional negligence but to any action alleging wrongful conduct, other than actual fraud, arising in the performanceofprofessional services.” (/d. at p. 1236.) Lee explained, “[w]e hold that section 340.6(a) applies to a claim when the merits of the claim will necessarily depend on proofthat an attorney violated a professional obligation—thatis, an obligation the attorney has by virtue of being an attorney—inthe course of providing professional services.” (/d. at p. 1229.) Thus, Section 340.6 applies if the claim depends on (1) misconduct“in the course ofproviding professional services” and (2) misconductthat “violate[s] a professional obligation,” whichis “an obligation the attorney has by virtue of being an attorney.” (A “professional obligation” includes, among others, “the obligations _ embodiedin the Rules of Professional Conduct.” (Lee, supra, 61 Cal.4th at pp. 1236-1237.)) Together, these requirements prevent Section 340.6 from applying to claims that have nothing to do with a lawyer’s provision of professional services. (Lee, supra, 61 Cal.4th at p. 1238.) For example, although an attorney is obliged not to obtain sexual relations from a client through coercion or intimidation (Cal. RulesofProf. Conduct, rule 3-120), a violation of that obligation does not involve providing professional services. Similarly, “[a] garden-variety theft 42 claim against an attorney alleges wrongful conduct, but that conduct doesnotarise in the performanceofprofessional services evenifthe client and the attorney were discussing legal matters at the time the theft took place.” (/d. at p. 1231.) B. This Malicious Prosecution Action Falls Within Lee’s Pronouncement Of The Scope Of Section 340.6 Unlike the conversion-by-a-lawyer claim analyzed in Lee, a malicious prosecution claim against a lawyerfalls squarely within Section 340.6’s text: “[a]n action against an attorney for a wrongful act or omission ... arising in the performance ofprofessional services.” As the Court ofAppeal concluded in Yee v. Cheung (2013) 220 Cal.App.4th 184, 194-195 and Vafi v. McKloskey (2011) 193 Cal.App.4th 874, 881, a malicious prosecution claim against an attorney alwaysentails “a wrongful act or omission” committed “in the performanceofprofessional services.” Indeed Lee cites Vafi and Yee with favor as cases recognizing the application of Section 340.6 to malicious prosecution actions. (Lee, supra, 61 Cal.4th at p. 1236.) Malicious prosecution claims against lawyerssatisfy both of Lee’s conditions. A lawyer’s malicious prosecution can happen only “in the course of” providing professional services to a client before a 1.” And, a lawyer’s malicious prosecution alwaysviolates “antribuna obligation that an attorney has by virtue of being an attorney,” including “the obligations embodied in the Rules of Professional Conduct.” A lawyeris obliged by the rules governing the profession ™ Although a lawyer could commit malicious prosecution by bring a groundlessaction in his or her own behalf, pro se, such an action would not involve the provisions of “services,” which requires one to be serving another. 43 notto use his or her professional skills to prosecute a baseless claim on behalf of another. Rule of Professional Conduct 3-200 forbids a lawyer from representing a client when doing so would constitute malicious prosecution: A membershall not seek, accept, or continue employmentifthe member knows or should knowthat the objective of such employmentis: (A) To bring an action, conducta defense, assert a positionin litigation, or take an appeal, without probable cause and for the purposeofharassing or maliciously injuring any person; or (B) To present a claim or defense in litigation that is not warranted underexisting law, unless it can be supported by a good faith argument for an extension, modification, or reversal of such existing law. (Cal. Rules of Prof. Conduct, rule 3-200.) Rule 3-200(A) mirrors the probable cause and malice elements of malicious prosecution, and Rule 3-200(B) includes one ground for an absence of probable cause. Similarly, Business and Professions Code section 6068 providesthatit is the “duty of an attorney”: (1) to “counsel or maintain”only civil actions that appear“just” to that attorney, and (2) not to commence or 44 continue an action from a corrupt motive. (Bus. & Prof. Code, § 6068, subd. (c) & (g).) Theseare obligations an attorney has “by virtue of” being an attorney. They are proscriptions that are made expressin therules governing the conduct of attorneys exercising their exclusive right to represent others before tribunals. The Rules of Professional Conduct and the Business and Professions Code donotcontain similar injunctions against other tortious conduct, like battery or negligent operation of a motor vehicle, because lawyers are not “different” from other actors in those regards. Nordotherulesset forth there apply to persons other than attorneys. Lawyers are different from other actors in being able to prosecute claimsin a representative capacity. Andit is the capacities in which lawyers are different that the Legislature deemed worthy ofthe different limitations period provided by Section 340.6. Petitioners’ claim alleges conduct violating Rule 3-200 and Section 6068 andthus alleges a violation of a professional obligation. In their Complaint, Petitioners allege that their claim is based on Latham’s alleged pursuit of an “inevitable disclosure” theory that they assert was not warranted under existing law.” Further, in their Opening Brief in this Court, they state: “Latham ... focused entirely 8 AA 0004 (Latham’s “badfaith, malice, and lack ofprobable cause in filing the lawsuit is evidenced by, amongotherthings, the fact that [Latham]filed the Lawsuit in part on a legal theory that [Petitioners] would misuse trade secrets in thefuture, even though such a theory (i.e. ‘inevitable disclosure’) is not supported by California law,” and Latham did not have a sufficient “legal basis to initiate the lawsuit,” original italics). | 45 on the discredited and factually meritless inevitable disclosure theory.””” Latham’s alleged conduct was exclusively conduct undertaken on behalf of its clients, and so was both “in the course of” Latham’s performance of professional services and, were it proven, “in violation of” an obligation not to accept an engagementto prosecute a malicious, probable-cause-lacking action. C. The Public Policy Concerns That Prompted The Legislature To Enact Section 340.6 Confirm Its Application To Malicious Prosecution Claims Independentofthe reading given Section 340.6 in Lee, interpreting the language ofthe statute in light ofits legislative purpose also requires the conclusion that Petitioners’ malicious prosecution claim is subject to the one-yearlimitations period. Lawyerliability for malicious prosecution waspart and parcel of the concern with the cost and availability of legal services that led the Legislature to adoptthat rule. Asthis Court stated in Lee, the Legislature enacted Section 340.6 “to ‘reduce[] the cost of legal malpractice insurance’ and ‘limit[] the open-endedness’ of the variouslimitations periods for claims against attorneys.” (Lee, supra, 61 Cal.4th at p. 1234.) As the Court ofAppeal stated in Yee, that concern reinforces the conclusion that Section 340.6 should be read, consistent with its plain text, to apply to malicious prosecution claims: Oneofthe purposesthat the Legislature had in enacting section 340.6 ... was to attempt to reduce the costs of legal malpractice ” POB,p. 30. 46 insurance. (See Sen. Com. on Judiciary, Rep. on Assem.Bill No. 298°° (1977-1978 Reg. Sess.) p. 1.) California courts have acknowledgedthat malicious prosecution actions have an impact on attorney malpractice insurance premiumsandraise the costs of practicing law. (See Bidnav. Rosen (1993) 19 Cal.App.4th 27, 35-36 [disallowing malicious prosecution action in family law cases, in part because of impact of malicious prosecutions on malpractice insurance premiums]; see also Lossing v. Superior Court (1989) 207 Cal.App.3d 635, 641, fn. 5 [noting that allowing malicious prosecution actionsfiled by one attorney against anotheris the type oflitigation that “is a substantial reason for skyrocketing premiumsfor legal malpractice insurance”].) (Yee, supra, 220 Cal.App.4th at p. 197.) Yee’s conclusion that Section 340.6 should apply to malicious prosecution actions isconfirmed by further examining the lawyer liability landscapeasit existed at the time of the statute’s adoption in 1977. At that time, lawyers’ professional liability insurance policies specifically covered malicious prosecution liability, and insurers regularly paid on those claims. (See, e.g., City Products Corp. v. 80 AA 0612 (the Senate Committee report). 47 Globe Indemnity Co. (1979) 88 Cal.App.3d 31, 34 [“Upon affirmance ..., defendant[insurer] paid plaintiff the amount ofthe compensatory damage award [for malicious prosecution] but refused to pay the $10,000 in punitive damages.”].) Moreover, in 1977, malicious prosecution claims were an important feature of the insurance burden for insurers of lawyers in California, much moreso than they are today. The reason was a doctor-led backlash against the proliferation of medical malpractice claims being filed in California. That perceived abuseofthe tort system led the California Medical Association to announce in 1976 that doctors would go on the offense against plaintiffs’ lawyers, with the Association even providing fundingto doctors to pursue malicious prosecution actions against attorneys whofiled unsuccessful malpractice claims. (Greisen, Attorney Liabilityfor Malicious Prosecution and Legal Malpractice: Do They Overlap? (1977) 8 Pacific L.J. 897, 897.) The threat was not idle. As one commentator noted a short while later, “[m]Jost recent [malicious prosecution] plaintiffs have been irate physicians seeking revenge for an unsuccessful medical malpractice action or pursuing the belief that suing lawyers will deter future medical malpractice suits.” (Mallen, An Attorney's Liabilityfor Malicious Prosecution, a Misunderstood Tort (July 1979) 46 Ins. Couns. J. 407, 407; see also Smith, Medical Malpractice: the Countersuit Fad (December 1976) 12 Trial 44 [discussing “rash of recentfilings” of malicious prosecution claims by physicians against opposing counsel].) 48 It was not until more than two decadeslater that an insurer’s indemnification of an individual lawyer for malicious prosecution was held to be contrary to California’s public policy. (Downey Venturev. LMIIns. Co. (1998) 66 Cal.App.4th 478, 506.) But even post- Downey Venture, “most lawyers’ errors and omissionspolicies include coverage for malicious prosecution claims,” if only for costs of defense. (/d. at p. 571 [(“However, section 533 does not preclude a defense for such a claim ... .”]; Hager, Attorney Conduct: Reduce Your Malicious Prosecution Exposure (June/July 2002) San Francisco Att’y 19, 19.) Moreover, even under current California law,liability insurance is available to indemnify a lawyeragainstliability for malicious prosecution in some circumstances. These circumstancesinclude cases in whichtheliability is vicarious rather than direct (such as where an employed lawyer’s malicious prosecution imposesliability on an employer underthe doctrine of respondeat superior), and cases in which the claim against a California lawyerarises in anotherstate that does not share California’s public policy barring such coverage. (See Downey Venture, supra, 66 Cal.App.4th at pp. 512-515.) Accordingly, application of Section 340.6 to Petitioners’ malicious prosecution claim is faithful to the purpose as well as the letter of the statute. D. The Application Of Different Limitations Periods To Different Classes Of Defendants Is Not Unique To Section 340.6 Or Otherwise Problematic Petitioners argue that Section 340.6 should not be applied to a lawyer’s malicious prosecution because doing so would result in a 49 different statute of limitations applyingto the plaintiff in an underlying action and to thatplaintiff's lawyer, even when both committed malicious prosecution. Yee noted this argument’s flaws, “TW]e cannot concludethat [a different limitations period for a lawyer and a client] is absurd. As we have explained, the Legislature may havevalid policy reasons for providing a more circumscribed limitations period to attorney defendants than to other defendants of malicious prosecution actions.” (Yee, supra, 220 Cal.App.4th atp. 197.) Moreover, there is nothing unusual about different limitations periods applying to different defendants, even whenthey are alleged to have committed the sametort. For example, if a plaintiff sues both her lawyer and her accountant for providing the same faulty tax advice, Section 340.6 will provide a one-year statute for the lawyer, while the accounting malpractice claim will be “governed by a two- yearstatuteof limitations under Code of Civil Procedure section 339, subdivision (1).” (Sahadi v. Scheaffer (2007) 155 Cal.App.4th 704, 707.) Such claims against both a lawyer and an accountantforfaulty tax advice are commonplace. (See, e.g., AFFCO Investments, LLCv. KPMGLLP (S.D.TexasSept. 28, 2009) 2009 U.S. Dist. Lexis 89595, *2-6 [accounting firm KPMGand twolaw firmsjointly sued for allegedly misadvising clients with regard to same tax shelter].) Not every difference in treatmentis invidious. Here, the Legislature reasonably determinedthat the availability of legal services warranted treating lawyers differently from other defendants. The Legislature was persuaded that lawyers,like doctors, faced an insurancecrisis. In particular, the Legislature would have appreciated 50 that lawyers whopractice litigation necessarily take on the malicious prosecution risk with every case theyfile. (Yee, supra, 220 Cal.App.4th at p. 196 [“any attorney ... is more likely to be involved in litigation that the average plaintiff, and thus, may be more likely to be subject to malicious prosecution claims.”’].) E. Petitioners’ Plea For “Prospective Application”Fails In the alternative, Petitioners argue that, even if Section 340.6 applies to their claim, their untimely filing should be excused by making the application of Section 340.6 prospective only. They contendthat their failure to file within one year resulted from their asserted reliance on “prior law,” which they assert called for application of a two-year statute of limitations.’ This argumentfails on multiple grounds. First, it comes too late. In opposing Latham’s anti-SLAPP motion, Petitioners made no argument and submitted no factual support for prospective-only application.” Accordingly, they waived this argument. (Bank ofAmerica, supra, 217 Cal.App.4th at pp. 1398- 1399 [waiverrule particularly applicable where contention is “based upon facts or documentsthat are outside of the record”].) Second, the argumentalso fails on the merits. In general, court decisions interpreting statutes of limitations apply both prospectively and retroactively—arule that has been applied by this Court to a different question concerning Section 340.6. (Laird v. Blacker (1992) 2 Cal.4th 606, 620 [rejecting request to apply Section 340.6 ruling 81 POB,p.38. 82 AA 259-264. 51 only prospectively]; see also Woods v. Young (1991) 53 Cal.3d 315, 330 [discussed at page 56 infra]; Planning & Conservation Leaguev. Dept. of Water Resources (1998) 17 Cal.4th 264, 274 [giving retroactive effect to decision holding shortened time period under Codeof Civil Procedure section 870, rather than longer period under Rule of Court 2(a), applied to filing of appeal]; West Shield Investigations and Sec. Consultants v. Superior Court (2000) 82 Cal.App.4th 935, 955 [giving retroactive effect to decision holding that tolling provisions of Code of Civil Procedure section 352 applied to minors did not apply following minor’s emancipation where no prior decisional authority existed addressing issue].) A party urging that a legal ruling be given only prospective application must demonstrate both that there was settled law to the contrary andthat the party actually and reasonably relied on that settled prior law. (Estate ofPropst (1990) 50 Cal.3d 448, 464 [“Ifa party ... proves such reliance” it may claim under formerrule of law]; In re Retirement Cases (2003) 110 Cal.App.4th 426, 455 [parties resisting retroactivity “must establish that they have “forgone substantial benefits’ in reliance” on prior law].) Petitioners cannot establish either of these required propositions here. 52 1. There WasNoSettled Prior Law Supporting A Two-Year Limitations Period For A Malicious Prosecution Claim Against A Lawyer Petitioners cannot point to any settled prior law on which they could have reasonably relied.** There was none. As Vafi itself noted, whenthat case was decided in 201 1—monthsbefore Petitioners filed this action—‘“no reported decision ha[d] addressed ... which statute of limitations applies to an action for malicious prosecution against an attorney.” (Vafi, supra, 193 Cal.App.4that p. 877.) Asthat carefully worded observation implies, there was one unreported decision, but it did not support the longer statute of limitations urged by Petitioners. In Anderson v. West Marine, Inc. (Nov. 16, 2009) 2009 Cal.App.Unpub.Lexis 9048, the Court of Appeal held that Section 340.6 applied to a malicious prosecution action against a lawyer. Though notcitable as authority, Andersonis judicially noticeable evidence that Vafi was not an abrupt change in the law. (See Ray v. First Fed. Bank (1998) 61 Cal.App.4th 315, 318 [“The decision is relevant not as legal authority butas an historical fact”]; Gilbert v. Master Washer & Stamping Co. (2001) 87 Cal.App.4th 212, 218 [Although the Court ofAppeal opinion... is not published, we maytake judicial notice thereof as a court record pursuant to Evidence Code section 452, subdivision (d)(1)”].) Despite Vafi’s analysis and Anderson’s holding,Petitioners seek to establish uniform prior law (contrary to Vafi and Lee) 83 Petitioners mis-describe the issue as if it were whether Latham can establish that there was uniform law so that Petitioners should have concluded that Section 340.6 applied. (POB,p. 39.) 53 supporting a multi-year limitations period. Petitioners cite a string of cases, none of which supports their contention. Stavropoulos v. Superior Court(2006) 141 Cal.App.4th 190, pronouncednorule relevant here. There, the defendant was not a lawyerandthecase did not discuss which statute would apply to a malicious prosecution claim against a lawyer. (See Yee, supra, 220 Cal.App.4th at p. 197.) Instead, Stavropoulos considered only which oftwo possible statutes of limitations, other than Section 340.6 (which was unmentioned because there was no lawyer defendant), should apply to a generic malicious prosecution claim. (Stavropoulos, supra, 141 Cal.App.4th at pp. 193-197.) It is correct that Silas v. Arden (2012) 213 Cal.App.4th 75, 87- 89, nevertheless held that it was reasonable, prior to Vafi, to rely upon Stavropoulos to concludethat Section 340.6 did not apply to a malicious prosecution claim against an attorney.** But Silas’s flawed reasoning on this point was noted in Yee, which concludedthatit would not be reasonable to rely on a case that was decided in a context that did not involve an attorney defendant to conclude that Section 340.6 would not apply to a malicious prosecution claim against an attorney. (Yee, supra, 220 Cal.App.4th at pp. 197 f{n.9.) 84 Silas also noted thetrial court’s “finding”there that the assumption that the two-yearstatute, rather than Section 340.6, governed malicious prosecution claims against lawyers was a “long accepted and widely relied-upon practice in the legal community.” (Silas, supra, 213 Cal.App.4th at p. 86). The court cited no evidentiary basis for that “finding”—and noneexists. In all events, where, as here, a newdecision overruled no prior judicial authority, the decision applies retroactively regardless of whether it conflicts with a prior, mistaken “practice in the legal community.” 54 Petitioners’ reliance on Laird, supra, 2 Cal.4th at p. 609,1s also misplaced. Although Petitioners argue that “Stavropoulos followed this Court’s decision in Laird ... wherein this Court’s analysis reflected that Section 340.6 relates to legal malpractice actions by 1,”Stavropoulosdid not cite Laird. Soclients against their counse Stavropoulos “followed” Laird only in the chronological sense. Similarly Laird “reflected” that Section 340.6 “relates to legal malpractice actions” only because the case involveda tolling issue in the context of the undisputed application of Section 340.6 to legal malpractice. (Laird, supra, 2 Cal.4th at p. 608.) Laird did not address whether Section 340.6 also applies to malicious prosecution or other claims against lawyers. Laird, moreover, supportsthe principle that statute-of- limitations decisions generally have retroactive effect. Laird gavefull retroactive effect to its decision that the limitations period of Section 340.6 commences on adverse judgmentand dismissal ofthe underlying action. (Laird, supra, 2 Cal.4th at p. 620.) Petitioners’ citation to Knoell v. Petrovich (1999) 76 Cal.App.4th 164, is similarly unavailing. Petitioners state: [I]n Knoell the court rejected the proposition that a non client plaintiff could invoke the tolling provisions of Section 340.6 with respect to defamation andtortious interference claims against a lawyer which 85 POB,p. 35. — 55 arose in the performanceofprofessional services.*° But in Knoell, the tolling provision that the “non-client plaintiff” unsuccessfully sought to invoke was “the continuous representation” provision of Section 340.6(a)(2) which applies only when the defendant attorney “continues to representthe [plaintiff].” (Knoell, supra, 76 Cal.App.4th at p. 169.) Thus, as Vafi correctly observed, “It]here is nothing in Knoell ... to suggest that section 340.6’s reach extends only to a client’s claim against his attorney.” (Vafi, supra, 193 Cal.App.4th at p. 883.) Petitioners’ reliance on Woods, supra, 53 Cal.3d 315, 330,is also misplaced. There, the issue presented ... ha[d] been presented in seven published Court of Appeal decisions. ... [A]ll seven opinions concludedthat the one-year limitations period wastolled [in the circumstances presented]. ... This unanimousconclusion established a settled rule upon which plaintiff could reasonably rely in determining whentofile her action. Although Petitioners note that there were two lines of Court ofAppeal decisions prior to Woods, they fail to acknowledgethat both lines would havetolled the limitations period on that case’s facts. 86 POB,p. 35. 56 In sum,Petitioners cannot come close to making a showing of “prior settled law” comparable to Woods’ seven, unanimousCourt of Appeal decisions favoring tolling. Whenthey filed this case, no reported decision had considered whether Section 340.6 applied to malicious prosecution claims against lawyers. Petitioners do not and cannot explain why they did not recognize the risk that Section 340.6’s plain language meantthatit likely covered malicious prosecution. 2. Petitioners Did Not Show Reasonable Reliance On Any Prior Law Furthermore, in opposing Latham’s anti-SLAPP motion, Petitioners offered no evidence that they actually relied on any contrary settled prior law.®’ On appeal, they cannotoffer any record citation to support their asserted reliance.*® Relianceis a factual element that cannot be presumed. In considering retroactivity, “[t]he extent and reasonablenessof a party’s reliance are questionsforthe trier of fact.” (Expansion Pointe Properties L.P. v. Procopio, Cory, Hargreaves & Savitch, LLP (2007) 152 Cal.App.4th 42, 53 [rejecting prospective-only application of ruling because party proffered no evidence of reliance].) “We cannot presumereliance or consider facts unsupported by the appellate record.” (/d. at p. 54.) The party seeking an “exception to the general rule of retroactivity ... [has] the burden of proof’onthe reliance issue. (In re Retirement Cases, supra, 110 Cal.App.4th at p. 443.) 87 AA 259-264. 88 POB,p. 38. 57 Petitioners’ request for a prospective-only application of Section 340.6 to malicious prosecution claims against lawyers is unsupported. Thestatute’s one-yearlimitations period applies here. F. The Discovery Rule Does Not Save Petitioners’ Claim Next, Petitioners argue that the one-yearlimitations period did not begin to run until their “discovery,” on May6, 2010, that FLIR might assert an advice-of-counsel defense in Petitioners’ malicious prosecution action against FLIR.® This argument has no merit. Section 340.6 provides that the one-year limitations period begins running “after the plaintiff discovers, or through the use of reasonable diligence should have discovered,the facts constituting the wrongful act or omission.” (Code Civ. Proc., § 340.6, subd. (a).) Bythe conclusion of the underlying trial, Petitioners had “discovered or should have discovered” enoughto allege every element of malicious prosecution that they ultimately pleaded. They were awarethat the Santa Barbara Court had ruled that the action had been prosecuted in bad faith. They knew that Latham had counseled their clients, presented every witness and made every argument. They were awareofall the evidencethat they cite in their complaint to support their contention that Latham lacked probable cause and acted 8° POB,p. 41. 58 with malice.” For example, they support both lack of probable cause and malice with their assertion that Latham pursued an “inevitable disclosure” theory, a theory that Petitioners contested at summary judgmentin the underlying action.” The assertion of an advice-of-counsel defense provided no new material information. The assertion of the defense by FLIR merely meant that FLIR would contendthat it had been advised by Latham that its case was arguably meritorious. But through the course of the trial, that fact was plain. Latham hadpresented the case, and presumably would not have donesohadit not advisedits client to proceed with the case. Finally, Petitioners’ assertion that they did not have sufficient evidenceto allege malice until FLIR raised a possible advice-of- counsel defenseis refuted by their own briefing in this case. They argued to the Court ofAppeal that malice may be inferred from an absence of probable cause, and in so arguing, pointed entirely to facts that they had at the conclusion of the underlying action. (AOB, p. 43.) 99 AA 0004 (Latham “in bad faith, with malice, without probable cause and withoutany valid legal or factual bases”filed the underlying action; Latham’s “bad faith, malice, and lack ofprobable causein filing the lawsuit is evidenced by, among otherthings, the fact that [Latham] filed the Lawsuitin part on a legal theory that [Petitioners] would misusetrade secrets in thefuture, even though such a theory (i.e. ‘inevitable disclosure’) is not supported by California law”; Latham did not havea sufficient “legal basis to initiate the lawsuit,” original italics.) 91 AA 0004. 59 For the reasons set forth above,in addition to approving the Court of Appeal’s correct application ofthe interim adverse judgment rule, this Court should affirm the Superior Court’s judgment based on the applicability of Section 340.6’s one-year limitations period. 60 CONCLUSION This Court should affirm the Court of Appeal’s determination that the Los Angeles Court properly granted Latham’s anti-SLAPP motion. Furthermore, pursuant to Code of Civil Procedure section 425.16, subdivision (c)(1), Latham respectfully requests that, in addition to its costs, it be awardedits reasonable attorney’s fees on appeal, in an amountto be determined as this Court may direct. (Rosenaurv. Scherer (2001) 88 Cal.App.4th 260, 287.) March 14, 2016 MCKOOL SMITH HENNIGAN,P.C. By:_/s/ J. Michael Hennigan J. Michael Hennigan Michael Swartz Attorneys for Defendants and Respondents LATHAM & WATKINSLLP and DANIEL SCHECTER 61 CERTIFICATE OF COMPLIANCE I, Michael Swartz, counsel for Respondents, declare that the word countfor this Brief, excluding Tables of Contents and Authorities, Proof of Service and this Certification is less than 13,900 wordsas calculated utilizing the word count feature of the Microsoft Word 2010 software used to create this document. I declare under penalty of perjury under the laws of the State of California that the foregoingis true and correct. Executed March 14, 2016, at Los Angeles, California. /s/ Michael Swartz Michael Swartz 62 PROOF OF SERVICE I declare as follows: I am a resident of the State of California and overthe age of eighteen years, and not a party to the within action; my business address is 300 South Grand Avenue, Suite 2900, Los Angeles, CA 90071. On March 14, 2016, I served the foregoing document described as RESPONDENTS’ ANSWERBRIEF N THE MERITS on the interested parties in this action follows: x by placing the documentlisted above in a sealed envelope with postage thereon fully prepaid, in the United States mail at Los Angeles, California addressed as set forth below. X] by electronic transmission or e-submission as indicated below. [| by placing the documentlisted above in a sealed envelope and causing the envelope to be delivered personally by a messenger to the person at the addressset forth below. [J by delivering the documentlisted aboveto the personsat the address set forth below by an agent of Express Network MessengerService. SEE ATTACHED SERVICE LIST I am readily familiar with the firm’s practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business. I am aware that on motion of the party served, service is presumedinvalidifpostal cancellation date or postal meter date is more than one day after date of deposit for mailing in affidavit. Executed on March 14, 2016 at Los Angeles, California. I declare under penalty of perjury under the laws of the United States of America that the aboveis true and correct. fttlof li0 vette C. SERVICE LIST Clerk California Court of Appeal Second Appellate District, Division 3 300 S. Spring Street Second Floor, North Tower Los Angeles, CA 90013 Court ofAppeal Case No. B244841 One Copy — viafirst class mail ESNER, CHANG & BOYER Stuart B. Esner 234 East Colorado Boulevard, Suite 750 Pasadena, CA 91101 sesner@ecbappeal.com Attorneysfor Petitioners One Copy — via e-mail andfirst class mail EAGAN AVENATTI, LLP Michael J. Avenatti Scott H. Sims 450 Newport Center Drive, 2nd Floor Newport Beach, CA 92660 Attorneysfor Petitioners One Copy — viafirst class mail PANISH, SHEA & BOYLE, LLP Brian J. Panish Adam K. Shea Kevin R. Boyle 11111 Santa Monica Boulevard, Suite 700 Los Angeles, CA 90025 Attorneysfor Petitioners One Copy — viafirst class mail Honorable James R. Dunn Attention: Rosalie Luna Department 26 3rd Floor, Room 316 Stanley Mosk Courthouse 111 N. Hill Street Los Angeles, CA 90012 Trial Court - Superior Court Case No. BC482394 One Copy — viafirst class mail Frederick R. Bennett III, Esq.Court CounselLos Angeles Superior Court111 North Hill Street, Rm. 546Los Angeles, CA 90017 Court CounselLos Angeles Superior CourtOne Copy — viafirst class mail 1141652