Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_12-cv-00609/USCOURTS-caed-1_12-cv-00609-10/pdf.json

Parties Involved:
Allstate Insurance
Defendant
Efrain Garcia
Plaintiff
Ofelia Garcia
Plaintiff

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

EFRAIN GARCIA, et al.

Plaintiffs,

v.

ALLSTATE INSURANCE,

Defendant.

_____________________________________/

Case No. 1:12-cv-00609-AWI-SKO

FINDINGS AND RECOMMENDATIONS 

THAT DEFENDANT'S ANTI-SLAPP 

MOTION AND REQUEST FOR 

ATTORNEY'S FEES BE DENIED 

(Docket No. 39)

OBJECTIONS DUE: 21 days

I. INTRODUCTION

On June 5, 2013, Defendant Allstate Insurance ("Allstate" or "Defendant") filed a special 

motion to strike Plaintiffs Efrain Garcia and Ofelia Garcia's (collectively, the "Garcias" or

"Plaintiffs") first amended complaint ("FAC") pursuant to California's anti-Strategic Lawsuits 

Against Public Participation ("anti-SLAPP") statute, California Code of Civil Procedure Section 

425.16, and a motion for attorney's fees. (Doc. 39.) On June 17, 2013, Plaintiffs, proceeding pro 

se, filed an opposition to Allstate's motion, and on July 10, 2013, Allstate filed a reply. (Docs. 40, 

41.) The Court reviewed the motion and supporting documents and determined that this matter 

was suitable for decision without oral argument pursuant to the Rule 230(g) of Local Rules of the 

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United States District Court, Eastern District of California; as such, the hearing on the motion was 

vacated.

For the reasons set forth below, the Court RECOMMENDS that Allstate's motion be 

DENIED.

II. BACKGROUND

A. Factual Background

Plaintiffs' FAC states one cause of action for malicious prosecution and alleges that this 

action arises out of an automobile accident that occurred on January 4, 2003, and the subsequent 

subrogation lawsuit wrongfully instituted by Allstate. (Doc. 35.) Plaintiffs allege that a vehicle 

previously owned by Plaintiffs was involved in a hit and run collision against a vehicle insured by 

Allstate, and that when the police officers spoke with Plaintiff Efrain Garcia, he reported that he 

had sold the vehicle six months prior to the accident. (Doc. 35, ¶ 7.) Plaintiffs state that Allstate

contacted them in February 2003 and requested information about Plaintiffs' insurance coverage; 

Plaintiffs informed Allstate that they were not the owners of the vehicle and that they had sold the 

vehicle in June 2002. (Doc. 35, ¶ 8.) Plaintiffs allege that Allstate made no further contact with 

Plaintiffs; however, Allstate filed a lawsuit against Plaintiffs for subrogation in the Tulare County 

Superior Court, case no. PCL104534. (Doc. 35, ¶ 8-11), The subrogation lawsuit sought

reimbursement of the damages Allstate had paid to its insured due to the automobile collision. 

(Doc. 35, ¶ 9.)

Plaintiffs allege that, prior to filing the subrogation lawsuit, Allstate had knowledged that 

Plaintiffs no longer owned the vehicle. (Doc. 35, ¶¶ 10-11.) Plaintiff Ofelia Garcia spoke with 

Allstate's representative after receiving a request for information regarding insurance coverage. 

(Doc. 35, ¶ 10.) The police report indicated that Plaintiffs were not the owners of the automobile 

in question. (Doc. 35, ¶ 10.) Further, the vehicle was sold on June 11, 2002, the title was "filestamped" on June 25, 2002, and was processed by the Department of Motor Vehicle ("DMV") on 

July 19, 2002, supporting Plaintiffs' claim that they were not the owners of the vehicle at the time 

of the January 4, 2003, accident. (Doc. 35, ¶ 10.) Plaintiffs allege that "[a]fter Plaintiffs verbally 

provided the sale information to Defendant, Allstate, Defendant still pursued subrogation against 

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Plaintiffs despite knowledge that Plaintiffs were not the owners of the vehicle at the time of the 

accident. Allstate filed suit against Plaintiffs on October 19, 2004[,] in Tulare County Superior 

Court." (Doc. 35, ¶ 11.)

Plaintiffs allege that they were not served with the complaint and "were unaware of any 

action being taken against them until they were personally served with an Order to Appear for 

Examination dated July 23, 2007." (Doc. 35, ¶¶ 12-13.) Upon investigation, Plaintiffs learned of 

the case against them in Tulare County Superior Court, learned that default judgment had been 

entered, and were notified by the DMV that their licenses would be suspended as of October 1, 

2007. (Doc. 35, ¶ 13.) Plaintiff Efrain Garcia's employer was served with an "Earnings 

Withholding Order for Wage Garnishment" by Allstate on September 17, 2008. (Doc. 35, ¶ 13.) 

Plaintiffs filed a motion to set aside and vacate the default and default judgment in the state 

court subrogation suit on July 8, 2008. (Doc. 35, ¶ 15.) On October 14, 2008, the motion was

granted by the Tulare County Superior Court; however, the judge "only signed one order, on 

behalf of Plaintiff Ofelia Garcia[,] and inadvertently failed to sign the second order on behalf of 

Plaintiff Efrain Garcia." (Doc. 35, ¶ 16.) 

On January 17, 2008, the DMV notified Plaintiff Ofelia Garcia that her driving privileges 

had been reinstated. (Doc. 35, ¶ 17.) Plaintiffs allege that they "thought the matter settled and 

assumed all previous judgments against them would be removed." (Doc. 35, ¶ 18.) In 2009, 

Plaintiffs discovered that the Abstract of Judgment was still recorded against them. (Doc. 35, 

¶ 18.) Plaintiffs contacted Allstate's attorney of record, including sending "several . . . letters . . ., 

all of which went unanswered." (Doc. 35, ¶ 18.) Plaintiffs discovered that the second order to set 

aside default for Plaintiff Efrain Garcia had not been signed. (Doc. 35, ¶ 18.) Plaintiffs alleged 

that, "[a]lthough the Court's intent was clear," Allstate's counsel "refused to remove the Abstract 

of Judgment." (Doc. 35, ¶ 18.) 

On February 28, 2011, Plaintiffs filed a declaration from Efrain Garcia with the Tulare 

County Superior Court, requesting that the judge sign the order setting aside the default and 

removing the Abstract of Judgment. (Doc. 35, ¶ 19.) The order was signed on April 5, 2011, and 

default and default judgment against Efrain Garcia were set aside. (Doc. 35, ¶ 19.) Plaintiffs 

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allege that Allstate and its attorney "refused to dismiss the case," despite "years of providing 

supporting documentation." (Doc. 35, ¶ 20.) On November 3, 2011, Plaintiffs filed a Settlement 

Conference Statement with the Tulare County Superior Court for a settlement conference 

scheduled for November 15, 2011. (Doc. 35, ¶ 20.) On November 11, 2011, Allstate dismissed 

the state court action. (Doc. 35, ¶ 20.)

Plaintiffs' FAC alleges one cause of action for malicious conduct in pursuing a subrogation 

claim. (Doc. 35, ¶¶ 21-28.) 

B. Procedural Background

On March 14, 2012, Plaintiffs, represented by counsel, filed a lawsuit in Tulare County 

Superior Court against Allstate alleging a single cause of action for malicious prosecution. On 

April 17, 2012, Allstate removed the action to this Court, in the case entitled Garcia, et al. v. 

Allstate Insurance, case no. 1:12-cv-00609-AWI-SKO ("Garcia I"). (Doc. 1.) 

On June 21, 2012, Allstate filed an anti-SLAPP motion. (Doc. 13.) Plaintiffs, represented 

by counsel, did not file an opposition. 

On August 17, 2012, Plaintiffs, representing themselves pro se, filed another action in 

Tulare County Superior Court against Allstate, which was eventually removed by Allstate to this 

Court in the case entitled Garcia, et al. v. Allstate Insurance, case no. 1:12-cv-01762-AWI-SKO 

("Garcia II"). (Garcia II, Doc. 1, pp. 5-14.) The parties were identical to those in Garcia I. 

On September 18, 2012, Magistrate Judge Oberto issued Findings and Recommendations 

("F&R") in Garcia I that Allstate's anti-SLAPP motion be granted without prejudice to Plaintiffs' 

ability to amend the complaint. (Doc. 16.) No objections to the F&R were filed, and on October 

17, 2012, District Judge Ishii issued an order adopting the F&R and allowing Plaintiffs 21 days to 

file an amended complaint. (Doc. 18.) 

On October 29, 2012, Allstate removed Garcia II, Plaintiffs' pro se action, to this Court, 

asserting that it was related to Garcia I. (Garcia II, Doc. 1, 2:10-20.) On November 5, 2012, 

Allstate filed a Motion to Dismiss in Garcia II contending that Garcia II was duplicative of 

Garcia I. (Garcia II, Doc. 10.)

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On November 21, 2012, the Court closed Garcia I and entered judgment in favor of 

Allstate due to Plaintiffs' failure to file an amended complaint. (Docs. 20, 21.) Plaintiffs were still 

represented by counsel at the time Garcia I was closed, as their attorney had neither filed a request 

for substitution of counsel nor sought to withdraw from representation. (See generally Garcia I

docket.)

On December 3, 2012, Allstate filed a Motion for Attorney's Fees in Garcia I. (Doc. 22.) 

On December 6, 2012, Plaintiffs filed their opposition to Allstate's Motion to Dismiss in Garcia II, 

and on December 10, 2012, Allstate filed its reply. (Garcia II, Docs. 12, 13.) 

On December 13, 2012, District Judge Ishii issued an order in Garcia II (Doc. 16 (also 

docketed in Garcia I as Doc. 25)), finding that the complaints in Garcia I and Garcia II were 

impermissibly duplicative with identical parties. (Garcia II, Doc. 16, 3:27-28.) The order noted 

that Garcia I alleged a malicious prosecution claim and, while the precise cause of action in 

Garcia II was not clear, "[n]evertheless, the two cases appear to infringe on the same rights of 

Plaintiffs[;] it appears that substantially the same evidence would be used in . . . both cases, it 

appears that the rights established in one case would impair or destroy the rights in the other, and 

the two cases share the same nucleus of facts." (Garcia II, Doc. 16, 4:3-6.) Accordingly, the 

Court dismissed Garcia II, noting that "[g]iven the considerable work that has already occurred in 

Garcia I, and the fact there is a pending motion in that case, the Court sees no utility in 

maintaining [Garcia II]." (Garcia II, Doc. 16, 4:11-13.) 

The Court also ordered further proceedings in Garcia I, finding that "Plaintiffs' opposition 

[to the Motion to Dismiss in Garcia II] suggests that they were abandoned by their attorney in 

Garcia I. Plaintiffs' opposition indicates that they were never properly informed about the 

consequences of filing a substitution of attorney, that the substitution was never filed, or that 

Garcia I had been removed." (Garcia II, Doc. 16, 5:20-23.) Further, it appeared that Plaintiffs 

were not aware of Allstate's anti-SLAPP motion or the 21-day deadline to file an amended 

complaint. (Garcia II, Doc. 16, 5:23-24.) As such, District Judge Ishii found that further 

proceedings were warranted and that possible relief may be justified. (Garcia II, Doc. 16, 

5:24-28.) The Court ordered that Plaintiffs' opposition to the Motion to Dismiss in Garcia II be 

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filed as a Motion for Relief in Garcia I, and referred the matter to Magistrate Judge Oberto to 

issue findings and recommendations on whether relief from judgment was appropriate due to 

attorney abandonment under Rules 59 and/or 60 of the Federal Rules of Civil Procedure. (Garcia 

II, Doc. 16, 6:10-13.) 

On December 14, 2012, District Judge Ishii denied without prejudice Allstate's Motion for 

Attorney's Fees in Garcia I pending the resolution of Plaintiffs' Motion for Relief. (Doc. 26.)

On April 22, 2013, Magistrate Judge Oberto issued an F&R in Garcia I that Plaintiffs' 

motion for relief be granted, the order closing Garcia I be set aside, and the case be reopened. 

(Doc. 28.) On May 8, 2013, Plaintiffs lodged the FAC, which was held in abeyance by the Court 

pending the objection period for the F&R and the District Judge's final determination. (Docs. 29, 

30.) No objections to the F&R were filed, and on May 21, 2013, District Judge Ishii issued an 

order adopting the F&R. (Doc. 32.) The case was reopened, and Plaintiffs' lodged FAC was 

deemed filed on that date. (Docs. 32, 35.) 

On June 5, 2013, Allstate filed the instant anti-SLAPP and motion for attorney's fees. 

(Doc. 39.) 

III. DISCUSSION

A. Legal Standard

The California legislature enacted California Code of Civil Procedure section 425.16(a) as 

a remedy for the "disturbing increase in lawsuits brought primarily to chill the valid exercise of the 

constitutional rights of freedom of speech and petition for the redress of grievances." Cal. Code 

Civ. Proc. § 425.16(a); see also Equilon Enters., LLC v. Consumer Cause, Inc., 29 Cal. 4th 53, 

59-60 (2002). Such lawsuits are known as "SLAPP" suits, an acronym for "strategic lawsuit 

against public participation." Equilon Enters, 29 Cal. 4th at 57, n.1. SLAPP suits are "civil 

lawsuits. . . aimed at preventing citizens from exercising their political rights or punishing those 

who have done so." Rezec v. Sony Pictures Entm't, Inc., 116 Cal. App. 4th 135, 139 (2004) 

(citations omitted). Section 425.16(a) provides that the statute shall be broadly construed. Rohde 

v. Wolf, 154 Cal. App. 4th 28, 35 (2007).

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A defendant opposing a SLAPP claim may bring a special motion to strike any cause of 

action "arising from any act of that person in furtherance of the person's right of petition or free 

speech under the United States or California Constitution in connection with a public issue." Cal. 

Civ. Proc § 425.16(b)(1). The so-called "anti-SLAPP" statute provides a means of quickly 

identifying and eliminating SLAPP actions through early dismissal. Because SLAPP suits seek to 

deplete "the defendant's energy" and drain "his or her resources," the legislature sought "to prevent 

SLAPPs by ending them early and without great cost to the SLAPP target." Kibler v. N. Inyo 

Cnty. Local Hosp. Dist., 39 Cal. 4th 192, 197 (2006) (citations omitted). "Thus, in promulgating 

section 425.16, the California legislature provided that a 'special motion to strike may be brought 

early in the lawsuit and that discovery ordinarily may not proceed unless and until the court finds 

that the [plaintiff's] suit has a probability of success.'" Aeroplate Corp. v. Arch Ins. Co., No. CV F 

06-1099 AWI SMS, 2006 WL 3257487, at *3 (E.D. Cal. Nov. 9, 2006) (citing Rogers v. Home 

Shopping Network, Inc. 57 F. Supp. 2d 973, 976 (C.D. Cal.1999)).

The Ninth Circuit has determined that Section 425.16 applies in federal courts in the 

absence of "direct collusion" between the state enactment and the Federal Rules of Civil Procedure

8, 12, and 56. U.S. ex rel. Newsham v. Lockheed Missiles & Space Co., Inc., 190 F.3d 963, 973 

(9th Cir. 1999); see also Makaeff v. Trump Univ., LLC, 11-55016, 2013 WL 6183821 (9th Cir. 

Nov. 27, 2013) (denying petition for rehearing of Makaeff v. Trump Univ., LLC, 715 F.3d 254, 

275 (9th Cir. 2013)) (Wardlaw, J., and Callahan, J., concurring) (finding that anti-SLAPP 

provisions apply in federal court); Hopscotch Adoptions, Inc. v. Kachadurian, No. CV F 09-2101 

LJO MJS, 2011 WL 587357, at *3 (E.D. Cal. Feb. 9, 2011); Aeroplate Corp, 2006 WL 3257487, 

at *4. California's "[a]nti-SLAPP statute and the Federal Rules do, in some respects, serve similar 

purposes, namely the expeditious weeding out of meritless claims before trial . . . . [T]here is no 

indication that Rules 8, 12, and 56 were intended to 'occupy the field' with respect to pretrial 

procedures aimed at weeding out meritless claims." Newsham, 190 F. 3d at 972. The Ninth 

Circuit found that:

///

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Although Rules 12 and 56 allow a litigant to test the opponent's claims before trial, 

California's "special motion to strike" adds an additional, unique weapon to the 

pretrial arsenal, a weapon whose sting is enhanced by an entitlement to fees and 

costs. Plainly, if the anti-SLAPP provisions are held not to apply in federal court, a 

litigant interested in bringing meritless SLAPP claims would have a significant 

incentive to shop for a federal forum. Conversely, a litigant otherwise entitled to 

the protections of the Anti-SLAPP statute would find considerable disadvantage in 

a federal proceeding. 

Id. at 973.

"Special procedural rules apply where an anti-SLAPP motion is brought in federal court." 

Bulletin Displays, LLC v. Regency Outdoor Adver., Inc., 448 F. Supp. 2d 1172, 1180 (C.D. Cal. 

2006); see also Hopscotch Adoptions, Inc., 2011 WL 587357, at *3. As such, "the federal court 

special motion is a far different (and tamer) animal than its state-court cousin." Makaeff, 715 F.3d 

254, 275 (9th Cir. 2013) (Kozinski, C.J., concurring). Federal courts must apply federal standards 

when considering Section 425.16 motions. Rogers, 57 F. Supp. 2d at 982. "If a defendant makes 

a special motion to strike based on alleged deficiencies in the plaintiff's complaint, the motion 

must be treated in the same manner as a motion under Rule 12(b)(6) except that the attorney's fee 

provision of § 425.16(c) applies." Id. at 983. However, "[i]f a defendant makes a special motion 

to strike based on the plaintiff's alleged failure of proof, the motion must be treated in the same 

manner as a motion under Rule 56 except that again the attorney's fees provision of § 425.16(c) 

applies." Id. 

While a Section 425.16 special motion to strike does not apply to federal claims in federal 

court, see, e.g., Bulletin Displays, LLC, 448 F. Supp. 2d at 1182; Hopscotch Adoptions, Inc., 2011 

WL 587357, at *4, the anti-SLAPP statute does apply to "state law claims that federal courts hear 

pursuant to their diversity jurisdiction." Hilton v. Hallmark Cards, 599 F.3d 894, 900 (9th Cir. 

2010). 

A court considering a motion to strike under California's anti-SLAPP statute must engage 

in a two-part inquiry. First, a defendant must make an initial prima facie showing that the 

plaintiff's suit arises from activity protected by the anti-SLAPP statute. Cal. Code Civ. Pro. 

§ 425.16(b)(1); Brill Media Co. v. TCW Group, Inc., 132 Cal. App. 4th 324, 329, (2005), 

disapproved on other grounds in Simpson Strong-Tie Co., Inc. v. Gore, 49 Cal. 4th 12 (2010). In 

determining whether the defendant has made this showing, the California Supreme Court has 

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stressed that "the critical point is whether the plaintiff's cause of action itself was based on an act 

in furtherance of the defendant's right of petition or free speech." City of Cotati v. Cashman, 

29 Cal. 4th 69, 78 (2002). Second, if the defendant is able to make this threshold showing, the 

burden shifts to the plaintiff to demonstrate a probability of prevailing on the challenged claims. 

Accordingly, a plaintiff must show that the claim is "both legally sufficient and supported by a 

sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted 

by the plaintiff is credited." Jarrow Formulas, Inc. v. LaMarche, 31 Cal. 4th 728, 744 (2003). 

Claims for which a plaintiff is able to satisfy this burden are "not subject to being stricken as a 

SLAPP." Id.; see also Roderick v. Weissman, No. 1:11-CV-02093 LJO, 2012 WL 639463, at *2 

(E.D. Cal. Feb. 24, 2012).

B. Analysis

Allstate moves to strike Plaintiffs' single cause of action for malicious prosecution. As

Plaintiffs' complaint alleges a state law claim, and this action was removed by Allstate to this

Court based on diversity, the Court properly considers Allstate's anti-SLAPP motion.

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1. Allstate Meets Its Burden to Show that Plaintiffs' Suit Arises From Protected 

Activity

Allstate bears the initial burden of making a prima facie showing that Plaintiffs' suit arises 

from activity that is protected under California's anti-SLAPP statute. Cal. Code Civ. Pro. 

§ 425.16(b)(1); Brill Media Co., 132 Cal. App. 4th at 329. "[T]he critical consideration is whether 

the cause of action is based on the defendant's protected free speech or petitioning activity." 

Navellier v. Sletten, 29 Cal. 4th 82, 89 (2002). "[A] defendant that satisfies its initial burden of 

demonstrating the targeted action is one arising from protected activity faces no additional 

requirement of proving the plaintiff's subjective intent . . . Nor need a moving defendant 

demonstrate that the action actually has had a chilling effect on the exercise of such rights." Id. at 

88 (citation omitted). "A defendant meets this [protected activity] burden by demonstrating that 

 

1 Defendant's anti-SLAPP motion was timely filed, as it was filed within 60 days of the date that the Court deemed 

Plaintiffs' FAC filed. See Cal. Code Civ. Proc. § 425.16(f).

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the act underlying the plaintiff's cause fits one of the categories spelled out in section 425.16, 

subdivision (e)." Braun v. Chronicle Publ'g Co., 52 Cal. App. 4th 1036, 1043 (1997). 

California Code of Civil Procedure 425.16 (e) provides:

As used in this section, "act in furtherance of a person's right of petition or free 

speech under the United States or California Constitution in connection with a 

public issue" includes:

(1) any written or oral statement or writing made before a legislative, executive, 

or judicial proceeding, or any other official proceeding authorized by law;

(2) any written or oral statement or writing made in connection with an issue under 

consideration or review by a legislative, executive, or judicial body, or any other 

official proceeding authorized by law;

(3) any written or oral statement or writing made in a place open to the public or a 

public forum in connection with an issue of public interest;

(4) or any other conduct in furtherance of the exercise of the constitutional right of 

petition or the constitutional right of free speech in connection with a public issue 

or an issue of public interest.

(emphasis added.) 

Here, Plaintiffs' FAC alleges one claim for malicious prosecution based on Allstate having 

filed a prior lawsuit against Plaintiffs for subrogation of damages. (Doc. 35.) Allstate's filing of 

the underlying lawsuit is a protected activity under Section 425.16(e)(1). "The constitutional right 

to petition . . . includes the basic act of filing litigation or otherwise seeking administrative 

action." Ludwig v. Super. Ct., 37 Cal. App. 4th 8, 19 (1995). "It is well established that filing a 

lawsuit is an exercise of a party's constitutional right of petition." Chavez v. Mendoza, 94 Cal. 

App. 4th 1083, 1087 (2001). The "filing of a judicial complaint satisfies the 'in connection with a 

public issue' component of section 425.16, subdivision (e)(1) because it pertains to an official 

proceeding." Id. at 1087.

Further, "by its terms, section 425.16 potentially may apply to every malicious prosecution 

action, because every such action arises from an underlying lawsuit, or petition to the judicial 

branch. By definition, a malicious prosecution suit alleges that the defendant committed a tort by 

filing a lawsuit." Jarrow Formulas, Inc., 31 Cal. 4th at 734–35 (2003).

As such, Allstate has met its prima facie burden to show that Plaintiffs' suit arises under 

activity protected by California's anti-SLAPP statute. 

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2. Plaintiffs Demonstrate a Probability of Prevailing on Their Claim for 

Malicious Prosecution

As Allstate has met its initial burden, the burden now shifts to Plaintiffs to show the 

probability of prevailing on the challenged claims. Cal. Code Civ. Pro. § 425.16(b)(1); Jarrow 

Formulas, Inc., 31 Cal. 4th at 744. "[T]he plaintiff must demonstrate that the complaint is both 

legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable 

judgment if the evidence submitted by the plaintiff is credited." Premier Med. Mgmt. Sys., Inc. v. 

Cal. Ins. Guarantee Assn., 136 Cal. App. 4th 464, 476 (2006) (citations and emphasis omitted). 

As such, a plaintiff must "establish a probability he or she will prevail on the claim at trial, i.e., to 

proffer a prima facie showing of facts supporting a judgment in the plaintiff's favor." Chavez, 

94 Cal. App. 4th at 1087. 

"At [the] second step of the anti-SLAPP inquiry, the required probability that [a party] will 

prevail need not be high." Hilton, 599 F.3d at 908. The "statute does not bar a plaintiff from 

litigating an action that arises out of the defendant's free speech or petitioning; it subjects to 

potential dismissal only those actions in which the plaintiff cannot state and substantiate a legally 

sufficient claim." Id. at 908 (quoting Navellier, 29 Cal. 4th at 93); see also Chevron Corp. v. 

Bonifaz, No. 09-05371 CW, 2010 WL 1948681, at *3 (N.D. Cal. May 12, 2010).

To survive an anti-SLAPP motion against a malicious prosecution claim, Plaintiffs are 

required to show that their complaint is "supported by a sufficient prima facie showing of facts to 

sustain a favorable judgment" on the issues of probable cause and malice. Roberts v. McAfee, Inc., 

660 F.3d 1156, 1163 (9th Cir. 2011) (internal citations and quotations omitted). The Court 

"considers the pleadings and evidentiary submissions of both the plaintiff and the defendant; 

though the court does not weigh the credibility or comparative probative strength of competing 

evidence." Id. 

Where, as here, the process of discovery is not begun or is incomplete, the rule . . . 

is . . . : (1) If the motion pursuant to section 425.16 challenges the legal sufficiency 

of the complaint, and does not require the consideration of facts that are produced 

through the discovery process, then the issue is decided under the standards 

applicable to a motion to dismiss pursuant to Rule 12(b)(6) . . . [and] (2) If the 

motion challenges the factual basis of the plaintiff's case, and relies on declarations 

and affidavits produced through the discovery process, then the application of Rule 

56 may require the motion to strike pursuant to section 425.16 be denied as 

premature.

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Aeroplate Corp, 2006 WL 3257487, at *5 (citing Rogers, 57 F. Supp. 2d at 982-83). 

As the court in Rogers stated:

In sum, § 425.16 applies in federal court. However, it cannot be used in a manner 

that conflicts with the Federal Rules. This results in the following outcome: If a 

defendant makes a special motion to strike based on alleged deficiencies in the 

plaintiff's complaint, the motion must be treated in the same manner as a motion 

under Rule 12(b)(6) except that the attorney's fee provision of § 425.16(c) applies. 

If a defendant makes a special motion to strike based on the plaintiff's alleged 

failure of proof, the motion must be treated in the same manner as a motion under 

Rule 56 except that again the attorney's fees provision of § 425.16(c) applies.

Rogers, 57 F. Supp. 2d at 983; see also Aeroplate Corp, 2006 WL 3257487, at *5.

Here, it appears that Allstate is moving to specially strike the FAC under both the Rule 12 

and Rule 56 standards. (See Doc. 39, 11:21-22 ("Evaluated either under a Rule 12 or a Rule 56 

standard, the plaintiffs cannot meet their burden of proof on this action.").) Allstate contends that 

Plaintiffs' "pleadings do not fulfill their burden" in establishing their probability of prevailing on 

the malicious prosecution claim. (Doc. 39, 14:3.) Further, Allstate contends that the evidence 

submitted in support of its anti-SLAPP motion, the Declaration of Nancy Daveldek, "establishes 

that Allstate had no knowledge of the acts" undertaken in the filing of the underlying state court 

lawsuit. (Doc. 39, 14:3-5; pp. 17-20.)

As Allstate is moving under both a Rule 12 and Rule 56 standard, the Court will first 

consider if Plaintiffs' FAC adequately pleads a malicious prosecution claim under the Rule 12 

standard. If Plaintiffs' claim is adequately pled, then the Court will consider whether Plaintiffs' 

claim survives in light of the evidence submitted by Allstate. 

a. Plaintiffs' FAC Claim for Malicious Prosecution is Sufficiently Pled

The Court considers the legal sufficiency of Plaintiffs' complaint under a motion to dismiss 

Rule 12(b)(6) standard. In determining whether a complaint fails to state a claim, the Court uses 

the same pleading standard used under Federal Rule of Civil Procedure 8(a). Under Rule 8(a), a 

complaint must contain a "short and plain statement of the claim showing that the pleader is 

entitled to relief." Fed. R. Civ. P. 8(a)(2). "[T]he pleading standard Rule 8 announces does not 

require 'detailed factual allegations,' but it demands more than an unadorned, the-defendantunlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. 

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Corp. v. Twombly, 550 U.S. 544, 555 (2007)). "[A] complaint must contain sufficient factual 

matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. (quoting 

Twombly, 550 U.S. at 557). "[A] complaint [that] pleads facts that are 'merely consistent with' a 

defendant's liability . . . 'stops short of the line between possibility and plausibility of entitlement 

to relief.'" Id. (quoting Twombly, 550 U.S. at 557). Further, although a court must accept as true 

all factual allegations contained in a complaint, a court need not accept a plaintiff's legal 

conclusions as true. Id. "Threadbare recitals of the elements of a cause of action, supported by 

mere conclusory statements, do not suffice." Id. (quoting Twombly, 550 U.S. at 555).

Plaintiffs' FAC alleges one cause of action for malicious prosecution. (Doc. 35.) "To 

establish a cause of action for the malicious prosecution of a civil proceeding, a plaintiff must 

plead and prove that the prior action (1) was commenced by or at the direction of the defendant 

and was pursued to a legal termination in [plaintiff's] favor; (2) was brought without probable 

cause; and (3) was initiated with malice." Citi-Wide Preferred Couriers, Inc. v. Golden Eagle Ins. 

Corp., 114 Cal. App. 4th 906, 911 (2003). These elements "have historically been carefully 

circumscribed so that litigants with potentially valid claims will not be deterred from bringing 

their claims to court by the prospect of a subsequent malicious prosecution claim." Sheldon Appel 

Co. v. Albert & Olliker, 47 Cal. 3d 863, 872 (1989).

i. Plaintiffs Have Sufficiently Alleged that the Prior Action was 

Terminated in Plaintiffs' Favor

Plaintiffs meet the first prong that the prior action terminated in Plaintiffs' favor. Plaintiffs' 

complaint alleges that on October 19, 2004, Allstate instituted the prior civil action against 

Plaintiffs in the Tulare County Superior Court in Allstate Insurance Company v. Efrain Garcia 

and Ofelia Garcia, case no. PCL1045534. (Doc. 35, ¶ 11.) Plaintiffs further allege that Allstate

voluntarily dismissed that action on November 11, 2011, after numerous court proceedings and 

after Plaintiffs' filing of a Settlement Conference Statement. (Doc. 35, ¶ 20.) Plaintiffs thus sets 

forth that the underlying state court action was commenced by Allstate and was terminated in 

Plaintiffs' favor. As such, Plaintiffs' allegations sufficiently meet the first prong of establishing a 

claim for malicious prosecution. See Chevron, 2010 WL 1948681, at *4 (noting that "[t]o be 

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considered favorable for the purposes of a malicious prosecution suit, the termination must reflect 

the merits of the action and the plaintiff's innocence of the misconduct alleged in the lawsuit" and 

finding that "[i]n most cases, a voluntary unilateral dismissal is considered a termination in favor 

of the defendant in the underlying action") (citations omitted). Further, Allstate's anti-SLAPP 

motion does not challenge this prong of the malicious prosecution claim. See Doc. 39. 

ii. Plaintiffs Have Sufficiently Alleged that Allstate Lacked 

Probable Cause to Bring the Prior Action

Plaintiffs must also demonstrate that Allstate lacked probable cause to initiate the lawsuit. 

"The probable cause inquiry is objective, asking whether a reasonable person would have thought 

that the claim was legally tenable without regard to her mental state . . . . This is a lenient standard; 

only those actions that any reasonable attorney would agree are totally and completely without 

merit may form the basis for a malicious prosecution suit." Chevron Corp., 2010 WL 1948681, at 

*6 (citations and quotation marks omitted). 

Probable cause "is a question of law that turns on whether the underlying claim was legally 

tenable, as determined on an objective basis." Estate of Tucker ex rel. Tucker v. Interscope 

Records, Inc., 515 F.3d 1019, 1031 (9th Cir. 2008) (quoting Padres L.P. v. Henderson, 114 Cal.

App. 4th 495, 517) (quotation marks omitted). Probable cause "is measured by the state of the 

defendant's knowledge, not by his intent. . . . [T]he standard applied to defendant's consciousness 

is external to it. The question is not whether he thought the facts to constitute probable cause, but 

whether the court thinks they did." Id. (citing Sheldon Appel Co., 47 Cal. 3d at 881) (quotation 

marks omitted). 

As noted above, when deciding an anti-SLAPP motion under a Rule 12(b)(6) standard, the 

Court considers the sufficiency of pleadings. Plaintiffs' FAC alleges that the initial action arose 

from an automobile accident that occurred on January 4, 2003, involving a vehicle previously 

owned by Plaintiffs but sold by them six (6) months prior to the accident. (Doc. 35, ¶ 7.) 

Plaintiffs allege that Plaintiff Efrain Garcia informed the police that the vehicle had been sold and 

then re-sold again, and that they did not know the new owner of the vehicle. (Doc. 35, ¶ 7.) The 

FAC contains the police report concerning the automobile accident, which states that the police 

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had contacted the registered owner of the subject vehicle, Efrain Garcia, at his residence and "Mr. 

Garcia stated that he sold V-1 [Vehicle 1] approximately 6 months ago to a man named Jose Luis 

and Jose Luis had sold V-1 to another person in the last few days. Mr. Garcia did not know the 

name of the second buyer or the last name of Jose Luis. No further follow up was possible." 

(Doc. 35, Exh. A, p. 19.) 

Further, Plaintiffs allege that after receiving "correspondence from Allstate dated February 

28, 2003[,] requesting insurance company information[,] Plaintiffs informed Allstate Insurance 

they were not the owners, [and that] the vehicle had been sold in June 2002." (Doc. 35, ¶ 8, see 

also ¶¶ 10, 21 and Exh. B.) Plaintiffs allege that "[a]fter Plaintiffs verbally provided the sale 

information to Defendant, Allstate, Defendant still pursued subrogation against Plaintiffs despite 

knowledge that Plaintiffs were not the owners of the subject vehicle at the time of the accident." 

(Doc. 35, ¶ 11.) Additionally, Plaintiffs' FAC contains a Registration Information Request from 

the DMV showing that Plaintiffs had been the owners of the subject vehicle, but there had been a 

"release of liability" based on a "receipt date" of "7/19/02" with a "transfer date" of "6/11/02" to 

"buyer: Adame JoseL." (Doc. 35, Exh. D, p. 27.) Plaintiffs allege that information obtainable 

from the DMV "clearly support[ed] Plaintiffs' claim of their non-ownership of the subject 

vehicle." (Doc. 35, ¶ 10.)

Plaintiffs' FAC contains the underlying state court complaint brought in the Tulare County 

Superior Court, case no. PCL104531, which was filed on October 19, 2004. (Doc. 35, Exh. E, pp. 

29-34.) Allstate Insurance Company was the named Plaintiff in the underlying suit, which was 

brought against Efrain Garcia and Ofelia Garcia. (Doc. 35, Exh. E, p. 30.) Attorney Gary A. 

Rosenberg indicated that he was "Attorney[] for Plaintiff." (Doc. 35, Exh. E, p. 30, 34.) The suit 

was a "complaint in subrogation for damages" and alleged that on January 4, 2003, Allstate's 

insured was involved in a motor vehicle accident with a vehicle that was "negligently owned, 

drove, entrusted, managed, operated, maintained and controlled" by the Garcias, causing injuries

and damage to the insured. (Doc. 35, Exh. E, p. 30 and p. 32, ¶¶ 9-10.) Further, Allstate's 

subrogation claim alleged that, "[p]rior to the filing of the instant lawsuit, [Allstate] notified [the 

Garcias], and each of them, of the payment [that Allstate made to its insured] and of [Allstate's] 

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right to subrogation and demanded payment from [the Garcias], and each of them, in the sum of 

$10,233.20, but [the Garcias], and each of them, have failed and refused, and continue to fail and 

refuse, to pay [Allstate] the whole or any part thereof." (Doc. 35, Exh. E, p. 33, ¶ 17.) 

Plaintiffs' FAC also contains the "Declaration in Lieu of Testimony" from Lorey K. Allen, 

"litigation claims representative of Allstate Insurance Company" submitted by Allstate in the prior

action. (Doc. 35, Exh. Q, pp. 118-22.) The declaration was dated December 20, 2004, and signed 

under penalty of perjury. (Doc. 35, Exh. Q, p. 122.) Ms. Allen declared that she was "one of the 

custodians of the books, records and files of Plaintiff [Allstate] as those books, records and files 

pertain to Defendants [the Garcias] herein." (Doc. 35, Exh. Q. p. 118, ¶ 2.) Ms. Allen declared 

that she had "personally worked" on the books, records, and files pertaining to the Garcias, and 

that, "[i]f called upon to testify in this action, as to the matters set forth in this Declaration, could 

and would competently testify thereto, since the facts herein set forth are personally known to 

[Ms. Allen] to be true." (Doc. 35, Exh. Q, p. 118-19, ¶ 2.) Ms. Allen declared that she "personally 

reviewed the Complaint filed" in the underlying state court action and "verif[ied] the same and 

hereby adopt said verified Complaint." (Doc. 35, Exh. Q, p. 119, ¶ 3.) Additionally, Ms. Allen's 

declaration purports to attach "true and correct copies of documents in support of the negligence of 

[the Garcias] . . ., (including, but not limited to, police reports if applicable) . . . ." (Doc. 35, Exh. 

Q, p. 121, ¶ 14.)

As such, Allstate's underlying claim for subrogation was based on the allegation that the 

Garcias drove, owned, and controlled the vehicle that was involved in the January 4, 2003, 

accident against Allstate's insured. Allstate further alleged that it had contacted the Garcias prior 

to initiating the lawsuit. Additionally, a representative from Allstate declared under penalty of 

perjury that she was the litigation claims representative for Allstate and one of the custodian of 

records for the files pertaining to the Garcias, and that she had adopted and verified the allegations 

in Allstate's complaint and set forth that a police report had been reviewed, "if applicable." (Doc. 

35, Exh. Q.)

However, the Garcias' allegations in the FAC set forth that the Garcias informed the police 

that they no longer owned the subject vehicle on the date of the accident, the police report 

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reflected this information, and the Garcias further contacted Allstate to inform the insurance 

company directly that they were not the owners of the vehicle and that it had been sold in June 

2002, six (6) months prior to the accident. (Doc. 35, ¶¶ 7-10.) 

In determining whether Allstate lacked probable cause to bring the initial lawsuit against 

the Garcias for subrogation, the Court must determine if a reasonable person would have thought 

that Allstate's claim was legally tenable. See Tucker, 515 F.3d at 1031. Allstate's underlying 

complaint for subrogation was based on the allegation that the Garcias "were the owners, drivers, 

employers of the drivers, principals of the drivers, maintained and/or controlled" the vehicle that 

was involved in the automobile accident with Allstate's insured. (Doc. 35, Exh. E, p. 32, ¶ 8.) 

However, the Garcias' FAC contains allegations and supporting documentation, including a copy 

of the police report and a Registration Information Request from the DMV that shows that the 

Garcias were not the owners of the vehicles at the time of the accident, had sold the vehicle

six (6) months prior to the date of the accident, and alleges that the Garcias had informed Allstate 

of this information. (Doc. 35, ¶¶ 7-10, Exhs. A, D.) Further, the declaration by Allstate's 

representative, Ms. Allen, in the underlying lawsuit implies that Allstate had access to the police 

report, which states that the Garcias had informed the police that they no longer owned the 

vehicle. (See Doc. 35, Exh. Q, p. 121, ¶ 14; see also Exh. A, p. 19.) 

"In the context of an Anti-SLAPP motion, Plaintiff[s] merely must demonstrate a 

probability of prevailing." Roderick, 2012 WL 639463, at *12 (citation and quotation marks 

omitted). Here, Allstate's subrogation claim is based upon the Garcias owning, driving, or 

controlling the subject vehicle, and the Garcias' FAC sets forth that Allstate knew or should have 

known prior to initiating the underlying lawsuit that the Garcias did not drive, control, or own the 

vehicle because they had sold the vehicle prior to the accident. As such, the Garcias have 

sufficiently alleged that Allstate lacked probable cause to initiate the underlying case, since there 

would not be a legally tenable reason for Allstate to bring a subrogation lawsuit against the 

Garcias if they did not drive, own, or control the automobile at the time of the accident. The 

Garcias have thus shown the probability of prevailing on the element of probable cause in their 

malicious prosecution claim.

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iii. Plaintiffs Have Sufficiently Alleged that Allstate Acted with 

Malice in the Prior Action

"The malice element of the malicious prosecution tort relates to the subjective intent or 

purpose with which the defendant acted in initiating the prior action." Sheldon Appel Co., 47 Cal. 

3d at 874. In some jurisdictions, malice can be inferred from, among other things, a lack of 

probable cause. See Downey Venture v. LMI Ins. Co., 66 Cal. App. 4th 478, 515 n. 39 (1998). 

However, in California, because the presence or absence of probable cause is an entirely objective 

inquiry, "[b]y itself, the conclusion that probable cause is absent logically tells the trier of fact 

nothing about the defendant's subjective state of mind." Id. at 498. As such, "the presence of 

malice must be established by other, additional evidence." Id. The additional evidence "must

include proof of either actual hostility or ill will on the part of the defendant or a subjective intent 

to deliberately misuse the legal system for personal gain or satisfaction at the expense of the 

wrongfully sued defendant." Id. at 498–99.

"Additional proof of malice can consist of evidence a party knowingly brings an action 

without probable cause . . . . [A] corollary to this rule can be stated as follows: malice can be 

inferred when a party continues to prosecute an action after becoming aware that the action lacks 

probable cause." Daniels v. Robbins, 182 Cal. App. 4th 204, 226 (2010). The actual ill will or 

improper purpose required for "malice" in a malicious prosecution action can range from "open 

hostility to indifference." See Soukup v. Law Offices of Herbert Hafif, 39 Cal. 4th 260, 296 (2006).

Malice can be inferred when "defendants in the malicious prosecution action continued their 

prosecution of the underlying . . . action after learning it was baseless." Id. at 297 (citing Zamos v. 

Stroud, 32 Cal. 4th 958, 968-69 (2004)). 

Here, Plaintiffs have sufficiently alleged that Allstate lacked probable cause in bringing the 

underlying suit. The Garcias' FAC alleges that Allstate had knowledge that it lacked probable 

cause to bring the prior subrogation suit because Allstate had access to the police report, the

Garcias had informed the police that they no longer owned the subject vehicle at the time of the 

accident, and the Garcias personally informed Allstate that they were not the owners of the 

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vehicle. (Doc. 35, ¶¶ 7-10, 21-22.) As such, the Garcias' allegations set forth that Allstate brought 

the prior action knowing that it lacked probable cause to sue for subrogation. 

Further, the Garcias' FAC sets forth allegations that the prior lawsuit continued to be 

prosecuted despite Allstate's knowledge that it lacked probable cause. The Garcias allege that, on 

July 8, 2008, upon learning of Allstate's suit after default judgment was entered against them, they 

filed a motion to set aside and vacate the default judgment, and "provided all documentation 

regarding the sale of the subject vehicle, the Department of Motor Vehicle print-out proving the 

sale, (equally available to defendant[] all along) and Plaintiff[] Efrain Garcia's pay stub for the 

date that Defendant[], Allstate[,] allegedly served Mr. and Mrs. Garcia with the subject lawsuit 

showing that Mr. Garcia could not have been served that day as [Allstate] alleged." (Doc. 35, 

¶ 15, Exh. K.) Plaintiffs also filed a general denial that asserted that the vehicle had been sold and 

that this information had been provided to the police. (Doc. 35, ¶ 15, Exh. L.)

On October 14, 2008, the judge in the prior state court action approved the motion and 

signed the order setting aside default and vacating default against Ofelia Garcia, but allegedly 

inadvertently failed to sign the second order on behalf of Efrain Garcia. (Doc. 35, ¶ 16, Exh. M.) 

In 2009, Plaintiffs alleged that they discovered that the Abstract of Judgment was still recorded 

against them, and they contacted Allstate's attorney of record requesting that the recording be 

canceled and the abstract of judgment removed. (Doc. 35, ¶ 18.) Allstate's attorney allegedly 

failed to respond to the Garcias' requests. (Doc. 35, ¶ 16.) The Garcias also wrote several letters 

to Allstate's attorney, "all of which went unanswered." (Doc. 35, ¶ 18.) Upon learning that the 

second order setting aside default and vacating the judgment against Efrain Garcia had not been 

signed, on February 28, 2011, the Garcias filed a declaration from Efrain Garcia in support of the 

motion to set aside default and remove/release the abstract of judgment, attaching all 

correspondence the Garcias had provided to Allstate's counsel as well as additional supporting 

documentation. (Doc. 35, ¶ 19, Exh. O.) The state court ordered that default judgment be set 

aside and the abstract of judgment be released/removed against Efrain Garcia on April 5, 2011. 

(Doc. 35, ¶ 19, Exh. P.)

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Plaintiffs further allege that Allstate "still refused to dismiss the case" against the Garcias, 

even though they had provided substantial supporting documentation that they were not the 

owners of the vehicle at the time of the accident. (Doc. 35, ¶ 20.) The Garcias allege that on 

November 3, 2011, they filed a Settlement Conference Statement in preparation for a settlement 

conference scheduled for November 15, 2011, which again stated their position. (Doc. 35, ¶ 20.) 

On November 11, 2011, Allstate "finally dismissed the case." (Doc. 35, ¶ 20.)

As noted above, Plaintiffs merely must demonstrate a probability of prevailing on their 

claims in the context of an anti-SLAPP motion. Roderick, 2012 WL 639463, at *12. Here, 

Plaintiffs' FAC sufficiently alleges that Allstate acted with malice since it initiated the prior 

lawsuit knowing that it lacked probable cause and continued to prosecute the lawsuit upon further 

showing that it lacked probable cause. Plaintiffs allege that Allstate knowingly lacked probable 

cause at the initiation of the prior lawsuit, since the Garcias had personally informed Allstate that 

they were not the owners of the subject vehicle at the time of the accident, the police report further 

indicated as such, and evidence submitted by Allstate indicates that it reviewed the police report. 

(Doc. 35, ¶¶ 7-10; Exh. Q.) Additionally, Plaintiffs' allegations set forth that Allstate continued to 

prosecute the action despite further showing that it lacked probable cause based on the Garcias 

providing supporting documentation that they were not the owners of the vehicle in their motions 

to set aside default and vacate default judgment, Allstate's counsel's refusal to cancel and remove 

the abstract of judgment in light of this showing, and Allstate's refusal to dismiss the case even 

after the default and default judgment were set aside until such time as Allstate was required to 

appear at a settlement conference. (Doc. 35, ¶¶ 15-20.) As such, since the Garcias' allegations 

show that Allstate both knew that it lacked probable cause at the initiation of the subrogation suit, 

and continued to prosecute the suit even after the Garcias provided documentation that Allstate 

lacked probable cause to continue, the Garcias have thus shown the probability of prevailing on 

the element of malice in their malicious prosecution claim.

As set forth above, the Garcias have sufficiently pled all three elements of a malicious 

prosecution case: that the prior action (1) was commenced by or at the direction of the defendant 

and was pursued to a legal termination in plaintiffs' favor; (2) was brought without probable cause; 

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and (3) was initiated or continued with malice. Citi-Wide Preferred Couriers, Inc., 114 Cal. App. 

4th at 911. Accordingly, after reviewing the sufficiency of Plaintiffs' pleadings under a Rule 

12(b)(6) standard, Allstate's motion should be denied.

b. Allstate's Submitted Evidence Does Not Overcome Plaintiffs' Malicious 

Prosecution Claim

Since Plaintiffs' claim is sufficiently pled, the Court now considers whether Plaintiffs' 

claim survives in light of the evidence submitted by Allstate in support of the anti-SLAPP motion. 

The Court notes that if Allstate's motion is granted based on the submitted evidence, because the 

"discovery-limiting provisions of section 425.16, subdivisions (f) and (g), collide with the 

discovery-permitting provisions of Rule 56," the motion would likely need to be denied as 

premature and Plaintiffs would need to be permitted to conduct discovery as to the contentions 

raised by Allstate's evidence. Aeroplate Corp., 2006 WL 3257487, at *9. Here, however, as 

Allstate's submitted evidence is contradicted by its own contentions in the prior lawsuit, the Court 

finds that Allstate's submitted evidence does not overcome Plaintiffs' claim for malicious 

prosecution.

Allstate contends that it contracted with an outside company, CCS Companies ("CCS") to 

pursue subrogation actions arising from Allstate's insurance claims and that CCS, not Allstate, 

decided to bring the underlying action. (Doc. 39, 7:4-20.) Allstate asserts that is not vicariously 

liable for actions by CCS and its attorney in bringing the underlying lawsuit, and Plaintiffs are 

thus unable to show probable cause or malicious intent by Allstate. (Doc. 39, 7:4-9:12.) 

As a general rule, Plaintiffs cannot maintain a claim for "malicious prosecution where 

defendants show 'that they have in good faith consulted a lawyer, have stated all the facts to him, 

have been advised by the lawyer that they have a good cause of action and have honestly acted 

upon the advice of the lawyer.'" Fisher Tool Co., Inc. v. Gillet Outillage, 530 F.3d 1063, 1066 

(9th Cir. 2008) (citing DeRosa v. Transamerica Title Ins. Co., 213 Cal. App. 3d 1390, 1397 

(1989)); see also Kennedy v. Byrum, 201 Cal. App. 2d 474, 481 (1962) ("Reliance in good faith on 

the advice of counsel is a defense to an action for malicious prosecution, inasmuch as such defense 

shows probable cause.") (citations omitted). Here, however, as set forth above, Plaintiffs' 

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allegations assert that Allstate lacked probable cause, and Allstate's motion has not shown that it

relied upon the advice of counsel before bringing the prior lawsuit.

Instead, Allstate contends that it relied entirely upon an outside agent and that agent's 

counsel, and that Allstate was not part of the decision-making process regarding the filing of the 

underlying lawsuit. (Doc. 13, 7:4-9:12.) Allstate submits the Declaration of Nancy Daveldek, a 

senior service adjuster who has been employed with Allstate for approximately ten years. (Doc. 

39, Daveldek Decl., p. 18, ¶ 1.) Ms. Daveldek declares Allstate contracted with CCS "to, among 

other things, pursue subrogation actions arising from insurance claims." (Doc. 39, Daveldek 

Decl., p. 18, ¶ 2.) Ms. Daveldek states that, in the scope of her employment, she had "access to 

the Allstate-CCS contract," which stated that "CCS provided all staffing on [subrogation] claims 

from Allstate," and that "CCS was responsible for pursuing subrogation on these claims, including 

referring claims to attorneys when appropriate." (Doc. 39, Daveldek Decl., p. 18, ¶ 3.) While 

"CCS was to notify Allstate" before filing a suit, "CCS was not obligated to report to Allstate 

about the progress of the subrogation lawsuits that [CCS] pursued." (Doc. 39, Daveldek Decl., 

p. 18, ¶ 3.) 

Ms. Daveldek indicates that she reviewed the file regarding the underlying lawsuit against 

the current Plaintiffs and notes that:

There are entries that state that this file was sent to CCS for subrogation, a few 

entries concerning checks written to CCS to reimburse for court costs incurred, and 

a few entries in 2005 concerning obtaining and transmitting to CCS a declaration 

by the insured relating to a default judgment. There was no other communications 

noted in the diary between CCS and Allstate related to Allstate being updated as to 

the progress of the subrogation action from CCS, nor did Allstate have any 

information as to the decision to dismiss the subrogation action in November 2011 

until it was told that the action was dismissed.

(Doc. 39, Daveldek Decl., p. 19, ¶ 5.) Ms. Daveldek further declares that in November 2011, she 

"received an e-mail from CCS stating that a judgment that Allstate obtained in [the underlying] 

case had been vacated at the Garcias' request." (Doc. 39, Daveldek Decl., p. 19, ¶ 4.) Ms. 

Daveldek was informed by CCS that "the attorney assigned to this subrogation action would need 

to re-file suit, serve the Garcias again, and again seek a judgment, and that Allstate would need to 

pay the costs associated with filing suit a second time." (Doc. 39, Daveldek Decl., p. 19, ¶ 4.) 

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Ms. Daveldek agreed that it would be acceptable for Allstate to incur the filing fee and court costs 

in re-filing the suit based on the amount of damages for the subrogation claim; Ms. Daveldek 

further declares that "[a]t the time that [she] made the recommendation, [she] did not have any 

further information about this subrogation lawsuit against Mr. and Mrs. Garcia." (Doc. 39, 

Daveldek Decl., p. 19, ¶ 4.) 

Ms. Daveldek sets forth that CCS' attorney, Gary Rosenberg, "did not report to Allstate at 

all during the pendency of the subrogation action against Mr. and Mrs. Garcia or after the 

dismissal of that lawsuit, nor was he expected to do so. This is because under the CCS contract, 

CCS had authority to hire attorneys to prosecute the subrogation action, and the attorney hired was 

not required to report to Allstate." (Doc. 39, Daveldek Decl., p. 19, ¶ 5.) 

Allstate contends that since Plaintiffs named Allstate as the Defendant in this action, 

Plaintiffs must show Allstate's state of mind in pursuing the subrogation claim. (Doc. 39, 11:16-

15:13.) However, Allstate asserts that it contractually ceded control of its subrogation claim to 

CCS and CCS' counsel, who are not named in the instant suit, and CCS and CCS' counsel were 

responsible for filing and pursuing the underlying suit. As such, Allstate contends that Plaintiffs 

cannot show that Allstate had the requisite state of mind to support either the probable cause or 

malice prongs of Plaintiffs' malicious prosecution claim, since CCS and CCS' counsel controlled 

the actions regarding the underlying suit, not Allstate. (Doc. 39, 12:14-19.) 

Allstate's contentions ignore the fact that Allstate, not CCS, was the plaintiff in the 

complaint filed in the prior lawsuit and that attorney Gary A. Rosenberg represented that he was 

the attorney for the named plaintiff in that case. (See Doc. 35, Exh. E.) CCS is not mentioned 

anywhere in the underlying lawsuit. (See Doc. 365, Exh. E.) Additionally, the Garcias' FAC 

contains the Declaration in Lieu of Testimony by Lorey K. Allen submitted in the prior lawsuit. 

(Doc. 35, Exh. Q.) Ms. Allen declares, under penalty of perjury, that she is a "litigation 

representative of Allstate Insurance Company, Plaintiff herein," and that she "personally reviewed 

the Complaint filed" in the prior lawsuit and "verif[ied] the same and hereby adopt said verified 

Complaint." (Doc. 35, Exh. Q, pp. 118-19, ¶¶ 1, 3.) 

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Allstate relies on Jacques Interiors v. Petrak, 188 Cal. App. 3d 1363, 1370 (1987) for the 

contention that, in a malicious prosecution suit, the court must determine the defendant's state of 

mind and cannot base the claim upon the state of mind of additional entities not named in the suit. 

Id. at 1370. Additionally, Allstate relies on Citi-Wide Preferred Couriers, Inc., 114 Cal. App. 4th 

at 912 for the contention that the court's analysis must focus on "the plaintiff in the underlying 

action" and not on entities who were "not parties." Id. at 912. Allstate's contentions appear to rely 

on the evidence submitted that CCS, not Allstate, was responsible for the prior lawsuit and that 

Allstate was not involved. Allstate's reliance on these cases appears to be misplaced, however, 

since Allstate was a named party in the prior lawsuit.

Although Allstate now contends that it was not responsible for bringing the prior lawsuit, 

the actual complaint and Ms. Allen's declaration in the prior case contradict that contention. As 

such, when there is a factual dispute regarding a malicious prosecution claim, the malicious 

prosecution plaintiff has a right to have a trier of fact "resolve the threshold question of . . . factual 

knowledge or belief." Citi-Wide Preferred Couriers, Inc., 114 Cal. App. 4th at 912. As such, 

Allstate's submitted evidence does not overcome Plaintiffs' claim for malicious prosecution.

Accordingly, for the reasons set forth above, it is RECOMMENDED that Allstate's 

anti-SLAPP motion be DENIED.

C. Allstate's Request for Attorney's Fees and Costs Should be Denied

Allstate requests attorney's fees in the amount of $7,447.50, which includes $3,900.00 for 

preparing the initial anti-SLAPP motion, as well as an additional $3,547.50 for preparing the 

instant motion. (Doc. 39, 16:1-8.) Allstate's request is based upon Section 425.16(c)(1), which 

provides that "a prevailing defendant on a special motion to strike shall be entitled to recover . . . 

attorney's fees and costs." "[D]efendants sued in federal courts can bring anti-SLAPP motions to 

strike state law claims and are entitled to attorneys' fees and costs when they prevail." Verizon 

Delaware, Inc. v. Covad Commc'ns Co., 377 F.3d 1081, 1091 (9th Cir. 2004).

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Here, however, Allstate is not the prevailing party, as the Court recommends that Allstate's 

anti-SLAPP motion be denied. As such, it is likewise RECOMMENDED that Allstate's request 

for attorney's fees for the instant motion be DENIED.2 

IV. CONCLUSION AND RECOMMENDATION

Based on consideration of the declarations, pleadings, and exhibits to the present motion, 

the Court RECOMMENDS that:

1. Allstate's anti-SLAPP motion be DENIED;

2. Allstate's request for an award of attorney's fees be DENIED; and

3. Allstate file an answer or other responsive pleading within twenty-one (21) days of 

the final order by the district judge on this motion.

The Clerk's Office is DIRECTED to serve Plaintiffs with a copy of these findings and

recommendations via U.S. mail at the following address:

Efrain Garcia and Ofelia Garcia

1095 Adams Avenue

Orange Cove, CA 93646

These findings and recommendations are submitted to the district judge assigned to this 

action, pursuant to 28 U.S.C. § 636(b)(1)(B) and this Court's Local Rule 304. Within twenty-one 

(21) days of service of this recommendation, any party may file written objections to these 

findings and recommendations with the Court and serve a copy on all parties. Such a document 

should be captioned "Objections to Magistrate Judge's Findings and Recommendations." If 

objections are filed, any responses to the objections shall be filed within fourteen (14) days of the 

service of the objections. Local Rule 304(d). The district judge will review the magistrate judge's 

findings and recommendations pursuant to 28 U.S.C. § 636(b)(1)(C). The parties are advised that 

failure to file objections within the specified time may waive the right to appeal the district judge's 

order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

IT IS SO ORDERED.

Dated: January 6, 2014 /s/ Sheila K. Oberto 

UNITED STATES MAGISTRATE JUDGE

 

2 Defendant's request for attorney's fees based on the prior anti-SLAPP motion has been denied for reasons previously 

set forth by the Court. (See Docs. 16, 18.)

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