1

Filed 11/14/14 Purcell-Murray v. Clark Law Group CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication

or ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

PURCELL-MURRAY CO., INC.,

Plaintiff and Respondent,

v.

CLARK LAW GROUP et al.,

Defendants and Appellants.

 A139264

 (San Mateo County

 Super. Ct. No. CIV520000)

INTRODUCTION

Defendants the Clark Law Group (Clark) and Water, Inc. (Water) appeal from the 

order denying their special motion to strike the malicious prosecution action filed against 

them by plaintiff Purcell-Murray Company, Inc. (PMC) as a strategic lawsuit against 

public participation (SLAPP) under Code of Civil Procedure section 425.16 (section 

425.16).

1

 Defendants argue the trial court erred in denying their anti-SLAPP motion 

because PMC did not meet its burden of establishing a probability of prevailing on the 

merits of its malicious prosecution lawsuit. We affirm.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

I. The Underlying Action

PMC is a distributor of premium kitchen and bath products, including the 

Everpure brand of water filtration products manufactured by Pentair Residential 

Filtration, LLC (Everpure). Everpure appointed PMC as its distributor for the states of 

 

1 All further statutory references are to the Code of Civil Procedure unless otherwise 

indicated. 
2

California, Arizona, and Nevada effective September 1, 2008. Previously, Water had 

long been the exclusive distributor of Everpure water filtration products in California and 

other western states. 

Alleging that Everpure had misappropriated Water’s business model and intended 

to compete with Water, Water filed an earlier lawsuit against Everpure in federal district 

court. The two parties resolved the dispute by signing a “Mutual Termination Agreement 

and Release” (Termination Agreement) on July 31, 2008. Under this agreement, 

Everpure was allowed to designate another company as the exclusive distributor of 

Everpure products. However, Water was given the right to purchase Everpure 

replacement cartridges for an undetermined period.

Within months, Everpure advised Water and, more importantly, Water’s 

customers, that Water would no longer be providing Everpure products. In January 2009, 

Everpure contacted some of Water’s customers by letter to inform them that PMC was its 

new distributor and that Water was “no longer an authorized distributor of any type for 

Everpure, and has not been an authorized Everpure distributor since August 1, 2008.” On 

March 18, 2009, Everpure informed Water that it was terminating Water’s right to sell 

Everpure products because it believed Water was selling another manufacturer’s 

cartridges and communicating to customers that it was still an Everpure distributor.

2

 

Everpure also claimed Water had not purchased a substantial amount of cartridges from it 

since August 2008. 

On May 13, 2009, Water, represented by Clark attorneys, filed a new complaint in 

the federal court for the Central District of California. It is this complaint that has 

generated the instant malicious prosecution action. All 19 of the causes of action stated 

in the complaint were made against Everpure. Thirteen of these 19 causes of action were 

 

2 Reportedly, Water sought to convert customers to its new water filtration product, 

which went by the name “Body Glove.” 
3

also alleged against PMC, including various economic torts and three antitrust claims.3

The litigation centered on Water’s contention that Everpure and PMC had acted in 

contravention of the Termination Agreement. 

On July 20, 2009, PMC filed a motion for judgment on the pleadings as to the 

antitrust claims pled against it. 

On October 28, 2009, the district court filed its order granting PMC’s motion to 

dismiss the three antitrust claims. Water was granted leave to amend. 

On November 9, 2009, Clark filed a First Amended Complaint (FAC) on behalf of 

Water. The FAC states 10 causes of action against PMC. It omits the three antitrust 

claims. 

On May 31, 2011, Water filed a motion to supplement the FAC to add claims that 

Everpure’s products were uncertified by the California Department of Public Health. 

On August 23, 2011, the district court granted Everpure’s and PMC’s motions to 

dismiss the supplemental claims. Water was given leave to amend all but one of these

claims. 

On September 2, 2011, Water filed an amended supplemental complaint against 

Everpure and PMC, purporting to supplement the FAC with two additional causes of 

action. 

On September 21, 2011, Everpure and PMC filed motions to dismiss the amended 

supplemental complaint. 

On October 18, 2011, the district court granted Everpure’s and PMC’s separate 

motions to dismiss the supplemental claims without leave to amend. 

Everpure and PMC each filed motions for summary judgment as to all remaining 

claims. PMC moved for summary judgment and judgment on the pleadings on the claims

 

3

These claims were for violation of the Sherman Anti-Trust Act (15 U.S.C. §§ 1, 2), 

violation of the Clayton Act (15 U.S.C. § 14), and violation of the Cartwright Act (Bus. 

& Prof. Code, § 16700 et seq.). 
4

stated against it, arguing that its potential liability turned solely on whether Water had 

any viable claims against Everpure. PMC contended Water had failed to specifically 

identify any wrongful conduct by PMC itself. 

On December 19, 2011, the district court filed a 47-page ruling, granting both 

motions for summary judgment. The court dismissed the FAC with prejudice and denied 

leave to amend. The court noted the key facts, namely, the Termination Agreement and 

Everpure’s January 2009 letter to customers, did not involve any conduct by PMC. 

Additionally, the court observed Water had not separately responded to PMC’s summary 

judgment motion. 

On February 21, 2012, the district court entered judgment in favor of PMC and 

against Water. 

On September 17, 2012, Water filed a notice of appeal as to the February 21, 2012 

judgment. Federal Rules of Appellate Procedure require that any appeal be filed within

30 days of entry of judgment. (Fed. Rules App.Proc., rule 4(a)(1).)

On October 29, 2012, PMC filed a motion to dismiss the appeal for lack of 

jurisdiction. 

On January 25, 2013, the Ninth Circuit issued an order granting PMC’s motion 

and dismissing the appeal. 

On February 14, 2013, PMC’s Managing Director Matthew Murray added his 

signature to a “Settlement Agreement” purporting to resolve the federal action filed by 

Water. This agreement was signed by Water and Everpure representatives without words 

of limitation, but contained the following typed words above Murray’s signature: “[PMC] 

hereby acknowledges receipt of this Settlement Agreement and hereby agrees to be 

bound by the terms of the confidentiality agreement as set forth in Paragraph 7.” 
5

II. The Current Action

On February 20, 2013, PMC filed its complaint against defendants, alleging causes 

of action for malicious prosecution, negligent interference with economic advantage, and 

intentional interference with prospective economic advantage.

On March 27, 2013, defendants filed a motion to strike PMC’s complaint under 

section 425.16. 

On June 17, 2013, the trial court issued its order granting the motion as to the two 

business torts pursuant to the litigation privilege of Civil Code section 47, subdivision 

(b). It denied the motion directed to the cause of action for malicious prosecution. This 

appeal followed. 

DISCUSSION

I. Anti-SLAPP Motions

An anti-SLAPP motion is a special statutory “procedure for striking meritless, 

chilling causes of action at the earliest possible stages of litigation.” (Gerbosi v. Gaims, 

Weil, West & Epstein, LLP (2011) 193 Cal.App.4th 435, 443.) If the defendant makes 

the “threshold showing that the challenged cause of action is one ‘arising from protected 

activity’ ” (ibid.), then “the burden shifts to the plaintiff to demonstrate a reasonable 

probability of prevailing on the merits of his cause of action. [Citations.] ‘Put another 

way, the 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.” [Citations.]’ [Citations.] The role of 

the trial court is not to weigh the credibility or comparative strength of the parties’

evidence; rather, it determines whether the defendant’s evidence defeats the plaintiff’s 

prima facie showing as a matter of law. [Citation.]” (Trapp v. Naiman (2013) 218 

Cal.App.4th 113, 119.)

In Cole v. Patricia A. Meyer & Associates, APC (2012) 206 Cal.App.4th 1095, the 

court explained the standard of review applicable to an order granting or denying an anti-
6

SLAPP motion: We review such an order “de novo, applying the same two-step 

procedure as the trial court. [Citation.] We look at the pleadings and declarations, 

accepting as true the evidence that favors the plaintiff and evaluating the defendant’s 

evidence ‘ “only to determine if it has defeated that submitted by the plaintiff as a matter 

of law.” [Citation.]’ [Citation.] The plaintiff’s cause of action needs to have only ‘ 

“minimal merit” [citation]’ to survive an anti-SLAPP motion. [Citation.]” (Id. at p.

1105.) 

The first step of the anti-SLAPP analysis is not at issue here. “[B]y 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. [Citation.] Accordingly, every Court of Appeal that has addressed the 

question has concluded that malicious prosecution causes of action fall within the 

purview of the anti-SLAPP statute. [Citations.]” (Jarrow Formulas, Inc. v. LaMarche

(2003) 31 Cal.4th 728, 734-735, fn. omitted (Jarrow).) Here, the parties do not contest 

that the challenged action arises from protected activity. Accordingly, we turn to the 

merits of PMC’s malicious prosecution claim. 

II. Malicious Prosecution

To prevail on a malicious prosecution claim, a plaintiff must show that the prior 

action (1) was commenced by or at the direction of the defendant and was pursued to a 

legal termination favorable to the plaintiff; (2) was brought or continued without probable 

cause; and (3) was initiated with malice. (Zamos v. Stroud (2004) 32 Cal.4th 958, 965, 

970 (Zamos).) Water, represented on appeal by Clark, contends PMC did not 

demonstrate either that the federal action lacked probable cause, or that it was brought or 

maintained with malice. It further asserts the action is barred by the terms of the 

February 2013 settlement agreement. Clark additionally argues PMC failed to show it 
7

obtained a favorable termination as to the three antitrust claims. We address this last 

assertion first.4

A. Favorable Termination

Clark claims Water’s “voluntary abandonment” of the antitrust claims does not 

satisfy the favorable termination element of the malicious prosecution tort. We note 

Clark did not raise this ground in its motion to the trial court. “Generally, failure to raise 

an issue or argument in the trial court waives the point on appeal.” (Kolani v. Gluska

(1998) 64 Cal.App.4th 402, 412, italics omitted.) Thus, the argument is forfeited. 

Regardless, the argument fails. 

To determine whether the malicious prosecution plaintiff received a favorable 

termination, the court considers the judgment as a whole in the prior action. (Casa 

Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, 341 (Casa Herrera).) However, victory 

following a trial on the merits is not required. Rather, the termination simply must reflect 

the merits of the action and indicate that the plaintiff is innocent of the alleged 

misconduct. (Siebel v. Mittlesteadt (2007) 41 Cal.4th 735, 741.)

Where, as here with respect to the three antitrust claims, a termination is by 

dismissal, the termination is deemed favorable when it reflects the opinion of either the 

trial court or the prosecuting party that the action either lacked merit or, if pursued, would 

result in a decision in favor of the defendant. (Contemporary Services Corp. v. Staff Pro 

Inc. (2007) 152 Cal.App.4th 1043, 1056.) Thus, the reasons for the dismissal must be 

examined. For example, a voluntary dismissal may be an implicit concession that the 

dismissing party cannot maintain the action. (JSJ Limited Partnership v. Mehrban (2012) 

205 Cal.App.4th 1512, 1524.) However, a technical or procedural termination, reflecting 

neither innocence of nor responsibility for the alleged misconduct, is not favorable for 

purposes of a malicious prosecution claim. (Casa Herrera, supra, 32 Cal.4th at pp. 341-

 

4

PMC’s request that we dismiss Clark’s appeal due to the untimeliness of the filing of its 

opening brief is denied. 
8

342.) Examples of technical or procedural dismissals include dismissals on statute of 

limitations grounds, pursuant to a settlement, or based on laches. (Id. at p. 342.) Here, 

the dismissal was based on the merits and not on technical or procedural grounds. 

Specifically, the district court’s order dismissing the antitrust claims states, in part: 

“Water has alleged no antitrust injury here. Water alleges injury from Everpure’s refusal 

to sell it Everpure products, for informing customers that Water was not authorized to sell 

Everpure products, and by using rebates . . . to force customers not to do business with 

Water. Whatever injury those actions might inflict on Water individually, Water does not 

allege that consumers have been harmed in the marketplace.” While the court did grant 

leave to amend these claims, it observed “[b]ased on the above discussion, the Court fears 

this effort might be a Sisyphean task.” Further, although the court had written no less 

than nine pages documenting the multiple flaws contained in Water’s causes of action, it 

noted it still had not pointed out every deficiency. 

Clark relies on Oprian v. Goldrich, Kest & Associates (1990) 220 Cal.App.3d 337 

(Oprian) in arguing that Water’s decision to forgo amending the complaint after the 

antitrust actions had been dismissed did not constitute a favorable termination because 

Water’s decision was made solely to avoid costly litigation. In Oprian, the underlying 

plaintiff’s complaint against Oprian was for breach of contract and Oprian crosscomplained for fraud; the jury found against plaintiff on the complaint and in favor of 

Oprian on the cross-complaint. On appeal, the appellate court asked plaintiff’s counsel 

whether, assuming the court reversed with directions to enter judgment against Oprian on 

the cross-complaint, the plaintiff would retry his complaint against Oprian. After counsel 

indicated that under those circumstances his client would not endure the expense of a new 

trial even though the complaint was meritorious, the court directed the complaint be 

dismissed. (Oprian, supra, 220 Cal.App.3d 337, 342-344.) Oprian stands for the 

unremarkable proposition that when a plaintiff agrees to voluntarily dismiss his 

complaint, the favorable termination element is not satisfied. It does not hold that a 
9

voluntary dismissal occurs when a plaintiff elects not to pursue filing an amended 

complaint after his or her claims have been dismissed on their merits.

In asserting Water voluntarily abandoned those claims solely because it could not 

afford to continue with the antitrust causes of action after the district court granted it 

leave to amend, Clark fails to apprehend that these claims were not “abandoned” until 

after PMC incurred the expense of having to file a motion to dismiss them. The district 

court evidently found PMC’s motion to be meritorious. The fact that the court granted 

leave to amend does not negate the fact that the claims, as set forth by Clark on behalf of 

Water, were found to be seriously deficient. A reasonable fact finder could thus conclude 

defendants’ decision to abandon these claims constituted an acknowledgement the action 

lacked merit. (Ross v. Kish (2006) 145 Cal.App.4th 188, 200 (Ross).) In short, Clark’s 

attempt to dispute the element of favorable termination fails.

B. Lack of Probable Cause

Defendants claim the court below erred in relying solely upon the conclusions of 

the district court to the effect that the there was no admissible evidence to substantiate 

Water’s claims against PMC in the federal action. Even if this contention has merit, our 

own review of the record on appeal supports the trial court’s ultimate finding.

1. General Principles

“The question of probable cause is ‘whether, as an objective matter, the prior 

action was legally tenable or not.’ [Citation.] ‘A litigant will lack probable cause for his 

action either if he relies upon facts which he has no reasonable cause to believe to be true, 

or if he seeks recovery upon a legal theory which is untenable under the facts known to 

him.’ [Citation.] ‘In a situation of complete absence of supporting evidence, it cannot be 

adjudged reasonable to prosecute a claim.’ [Citation.] Probable cause, moreover, must 

exist for every cause of action advanced in the underlying action. ‘[A]n action for 

malicious prosecution lies when but one of alternate theories of recovery is maliciously 

asserted . . . .’ [Citations.]” (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 
10

260, 292.) Probable cause “is ‘ “a suspicion founded upon circumstances sufficiently 

strong to warrant a reasonable man in the belief that the charge is true.” ’ [Citations.]” 

(Bertero v. National General Corp. (1974) 13 Cal.3d 43, 55.)

“Probable cause is a low threshold designed to protect a litigant’s right to assert 

arguable legal claims even if the claims are extremely unlikely to succeed. ‘[T]he 

standard of probable cause to bring a civil suit [is] equivalent to that for determining the 

frivolousness of an appeal [citation], i.e., probable cause exists if “any reasonable 

attorney would have thought the claim tenable.” [Citation.] This rather lenient standard 

for bringing a civil action reflects “the important public policy of avoiding the chilling of 

novel or debatable legal claims.” [Citation.] Attorneys and litigants . . . “ ‘have a right to 

present issues that are arguably correct, even if it is extremely unlikely that they will 

win . . . .’ ” [Citations.] Only those actions that “ ‘any reasonable attorney would agree 

[are] totally and completely without merit’ ” may form the basis for a malicious 

prosecution suit. [Citation.]’ [Citation.]” (Plumley v. Mockett (2008) 164 Cal.App.4th 

1031, 1047-1048.)

To make a prima facie case of a lack of probable cause in response to the antiSLAPP motion, PMC must submit substantial evidence showing no reasonable attorney 

would have thought the action was tenable in light of the facts known to defendants at the 

time the suit was filed (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 

817, 822, fn. 6; Ross, supra, 145 Cal.App.4th at p. 202), or that defendants continued 

pursuing the lawsuit after they had discovered the action lacked probable cause. (Zamos, 

supra, 32 Cal.4th at pp. 966-970.) However, “[w]here there is no dispute as to the facts 

upon which an attorney acted in filing [or prosecuting] the prior action, the question of 

whether there was probable cause to institute [or continue prosecuting] that action is 

purely legal. [Citations.] If there is a dispute as to such facts, that dispute must be 

resolved by the trier of fact before the objective standard can be applied by the court. 

[Citations.]” (Ross, supra, 145 Cal.App.4th at p. 202.)
11

Defendants claim PMC failed to satisfy its burden of proof to establish that any 

aspect of Water’s federal action lacked probable cause. They assert Water had probable 

cause to file the federal district court action because Everpure and PMC “misled 

customers into believing that Water no longer had the right to sell or promote Everpure 

products.” As evidence in support of this assertion, it cites, in part, to the January 2009 

letter Everpure sent to its dealers indicating that Water was no longer an authorized 

distributor. It also cites to a December 12, 2008 draft letter written by Tom Boor, 

Director of Sales for Everpure. This letter also clarifies that PMC would be the new 

master distributor and was apparently given to PMC to transmit to dealers. Water argues 

on appeal that the federal lawsuit was initiated because the letters did not include a 

disclosure of Water’s continued right to sell Everpure products as set forth in the 

Termination Agreement. In response, PMC does not assert that the entire complaint was 

brought without probable cause. Instead, it draws our attention to the causes of action for 

defamation and antitrust, as well as the claims stated in the supplemental complaint. 

2. Defamation Claim

“ ‘Defamation is an invasion of the interest in reputation. The tort involves the 

intentional publication of a statement of fact which is false, unprivileged, and has a 

natural tendency to injure or which causes special damage.’ [Citation.]” (Gilbert v. 

Sykes (2007) 147 Cal.App.4th 13, 27.) Defamation has two forms, libel and slander. 

(Civ. Code, § 44.) Defamatory publications that are made “by writing, printing, picture, 

effigy, or other fixed representation to the eye,” are considered libel. (Civ. Code, § 45.) 

Our Supreme Court has stated “that libel includes ‘almost any language which, upon its 

face, has a natural tendency to injure a person’s reputation. [Citations.]’ [Citation.]” 

(Slaughter v. Friedman (1982) 32 Cal.3d 149, 153.) Slander involves defamatory 

publications that are “orally uttered,” and also includes “communications by radio or any 

mechanical or other means . . . .” (Civ. Code, § 46.) 
12

The federal complaint alleges a cause of action for defamation against both 

Everpure and PMC. The complaint asserts the following false statements were 

published: “1) [Water] was no longer authorized to sell ‘Everpure’ products; 2) customers 

could only purchase ‘Everpure’ products through [PMC] as the exclusive provider of 

‘Everpure’ products in the Western United States; 3) that [Water] was selling 

‘counterfeit’ ‘Everpure’ products; and 4) that [Water] had ‘falsely advertised’ its 

products.”

As noted above, defamation requires the intentional publication of a false 

statement of fact that has a natural tendency to injure the plaintiff’s reputation. (Smith v. 

Maldonado (1999) 72 Cal.App.4th 637, 645; Raghavan v. Boeing Co. (2005) 133 

Cal.App.4th 1120, 1132.) The January 2009 letter from Everpure to its customers states, 

in part: “Water, Inc. has decided to take on a line that is competitive with Everpure 

products. Thus, while we have worked closely with Water, Inc. in the past as our Master 

Distributor, Water Inc. and Everpure are now competitors in this marketplace and we 

wanted to make sure that you fully understand the situation. As part of the separation, 

Water, Inc. must discontinue using any Everpure materials, displays, etc. We would 

appreciate your cooperation in this regard.” The draft letter dated December 12, 2008 

contains a virtually identical passage. Significantly, neither letter accuses Water of 

selling counterfeit products or engaging in false advertising practices. While such

statements could have potentially been deemed defamatory, we are unable to discern any 

defamatory content in the two letters. 

Once a plaintiff makes a prima facie showing of facts that would support a 

judgment in its favor, the court will “consider[] the defendant’s opposing evidence, but 

only to determine if it defeats the plaintiff’s showing as a matter of law. [Citation.]” 

(Kashian v. Harriman (2002) 98 Cal.App.4th 892, 906.) The evidence presented by 

defendants does not do so. In granting the motion for summary judgment, the district 

court observed that while Water claimed Everpure committed commercial disparagement 
13

and defamation by telling customers that Water’s cartridges were “counterfeit” and 

“knock-offs,” Water had offered no admissible evidence that Everpure had actually 

published such statements to any of its customers. Additionally, Water had offered no 

evidence that the alleged statements were false statements of fact, rather than nonactionable opinions on the quality of Water’s cartridges.5

 Finally, the court noted Water 

had not substantiated the allegation that Everpure had accused Water of falsely 

advertising its products. 

Water asserts “[t]he issue presented was whether [Everpure and PMC] 

misrepresented that Water was no longer authorized to sell Everpure cartridges, and that 

therefore dealers could only purchase Everpure from [PMC] as the exclusive provider in 

the Western United States.” Even as framed, these contentions do not support an 

inference that any defamatory statements were made. At best, they suggest that 

Everpure’s letters contained statements that were factually misleading, as opposed to 

statements that would tend to injure Water’s reputation. 

Similarly, a declaration prepared by Roger W. Clark in connection with the antiSLAPP motion states that before filing the federal lawsuit, he obtained information that 

PMC representatives had told dealers they could no longer purchase any Everpure 

product from Water and placed them under “ ‘extreme pressures’ ” to purchase only from 

PMC. However, Water concedes it did not submit a declaration from any such dealer in 

opposition to PMC’s motion for summary judgment. Thus there appears to have been no 

admissible evidence that any dealer received any communication from PMC or Everpure 

that could have been perceived as defamatory. While Water faults PMC for failing to 

submit a declaration or deposition testimony from any of the dealers establishing that 

these alleged misrepresentations were not made, the existence of a misrepresentation is 

 

5 Only statements of fact are actionable as defamation, while statements of opinion are 

constitutionally protected. (Franklin v. Dynamic Details, Inc. (2004) 116 Cal.App.4th 

375, 384.)
14

not relevant in a defamation action if the alleged misrepresentations are not defamatory in 

nature. 

As to the allegation regarding false advertising, included as an exhibit to Clark’s 

declaration is a letter to a representative of Water from a customer named Linda M. 

Smith, who reported that after she noticed water coming from the bottom of her 

“Everhot” Everpure water system, she contacted Everpure and was told that this was 

“ ‘not their product and never has been’ ” and had been “ ‘advertised falsely.’ ” This 

statement is hearsay and is inadmissible as evidence. Similarly, there is no evidence that 

statements concerning “counterfeit” Everpure cartridges were ever actually made to any 

of Water’s customers. Again, defendants have not set forth any admissible evidence that 

PMC representatives made any defamatory statements.6 

Accordingly, we conclude PMC has satisfactorily demonstrated, for purposes of 

this appeal, that defendants lacked probable cause to pursue the action for defamation. 

Probable cause must exist not only at the commencement of the action, but also at every 

stage thereafter, and on every claim asserted. (Mabie v. Hyatt (1998) 61 Cal.App.4th 

581, 596-597.) We conclude that the complete absence of admissible evidence as to the 

making of a defamatory statement by the time of the dispositive motion for summary 

judgment supports a finding that defendants lacked probable cause to continue the 

defamation action. 

3. The Antitrust Claims

We find an even stronger case with respect to the federal action’s antitrust claims. 

While the district court gave Water leave to amend after granting PMC’s motion for 

 

6 We note the district court found the deposition testimony of Wayne Feltenberger, a 

Water salesman who testified customers told him that PMC representatives had 

disparaged Water’s cartridges, to be inadmissible hearsay. Water questions that ruling in 

a footnote in its brief on appeal, claiming the statements had not been offered to prove 

their truth. The district court’s ruling was sound as the testimony was offered to prove 

the truth of the matter stated, namely, that PMC representatives had indeed made the 

allegedly defamatory utterances.
15

judgment on the pleadings, such a ruling does not support the inference that Water had 

probable cause to bring the claims in the first place. 

As we noted above, the district court found Water had failed to allege antitrust 

injury. As an absolute threshold to stating an antitrust claim, a party must allege 

“antitrust injury, which is to say injury of the type the antitrust laws were intended to 

prevent and that flows from that which makes defendants’ acts unlawful.” (Brunswick 

Corp. v. Pueblo Bowl-O-Mat, Inc. (1977) 429 U.S. 477, 489, italics omitted

(Brunswick).) This injury, which must result from the alleged antitrust violation, must be 

injury to “the market or to competition in general, not merely injury to individuals or 

individual firms . . . .” (McGlinchy v. Shell Chemical Co. (9th Cir. 1988) 845 F.2d 802, 

812.) The “failure to allege injury to competition is a proper ground for dismissal by 

judgment on the pleadings.” (Id. at p. 813.) 

It is established that an exclusive distributorship agreement between a 

manufacturer and a distributor causing harm to another distributor is not, standing alone, 

sufficient to show antitrust injury. (Rutman Wine Co. v. E. & J. Gallo Winery (9th Cir. 

1987) 829 F.2d 729, 735 (Rutman).) Rather, there is no violation unless the agreement is 

intended to or actually does harm competition in the relevant market. (Ibid.) Antitrust 

laws “were enacted for ‘the protection of competition, not competitors.’ ” (Brunswick,

supra, 429 U.S. at p. 488, italics omitted.) The intent to harm a particular competitor is 

not actionable, even if a distributor-competitor is put out of business. (Rutman, supra,

829 F.2d at p. 735; see also Dunn & Mavis, Inc. v. Nu-Car Driveaway, Inc. (6th Cir. 

1982) 691 F.2d 241, 243-244.) Therefore, an exclusive distributorship agreement does 

not give rise to the requisite inference of intent to harm competition. (See Rutman, supra,

829 F.2d at p. 736.) Even if there were a conspiracy to shut out Water, there would not 

necessarily be an antitrust violation absent an anticompetitive effect on the industry as a 

whole. (See Oreck Corp. v. Whirlpool Corp. (2d Cir. 1978) 579 F.2d 126, 130, fn. 4.) 
16

On appeal, defendants offer no evidence to support an argument that the antitrust 

claims had any basis in law or fact. Instead, they argue that the decision to forgo 

amending the complaint is the equivalent of a voluntary dismissal done merely for 

financial reasons. While a declaration prepared by Roger W. Clark in support of 

defendants’ anti-SLAPP motion states that Water could have cured some of the defects 

identified by the district court, he does not provide any elaboration. He also 

unconvincingly asserts the district court’s substantive conclusions were flawed.

Importantly, he offers little to dispute the court’s finding that Water’s claims failed to 

properly allege an antitrust injury, instead of just an injury to itself as an individual 

competitor in the market. He also claims the district court erred in that it narrowly 

interpreted the complaint’s allegation of a tying arrangement, however he does not set 

forth any evidence or legal argument in support of this assertion. 

The district court’s analysis was extremely comprehensive, and defendants offer 

no factual or legal grounds to undermine the basis of the court’s findings and 

conclusions.7 In sum, for purposes of this appeal, PMC has satisfactorily demonstrated 

that defendants lacked probable cause to bring the antitrust claims against it. Having so 

concluded, we need not address PMC’s arguments concerning the supplemental 

complaint. 

C. Malice

Defendants assert PMC did not make a prima facie showing of malice. Although 

the element of malice is satisfied by showing actual hostility or ill will (Downey Venture 

v. LMI Ins. Co. (1998) 66 Cal.App.4th 478, 494 (Downey Venture)), it can also be 

satisfied by showing the action was initiated primarily for an improper purpose. (Sierra 

 

7 We observe “ ‘[t]he malicious commencement of a civil proceeding is actionable 

because it harms the individual against whom the claim is made, and also because it 

threatens the efficient administration of justice.’ [Citation.]” (Crowley v. Katleman

(1994) 8 Cal.4th 666, 677.)
17

Club Foundation v. Graham (1999) 72 Cal.App.4th 1135, 1157.) Malice can be shown 

by direct evidence or may be inferred from all of the circumstances of the case (Northrup 

v. Baker (1962) 202 Cal.App.2d 347, 355), and is ultimately a question of fact for the 

jury. (Sheldon Appel Co. v. Albert & Oliker, 47 Cal.3d 863, 874.) Although the fact the 

defendant did not have probable cause to initiate or continue the defamation and antitrust 

claims does not alone suffice to show malice (Downey Venture, supra, at p. 498, fn. 29), 

the absence of probable cause may be considered by the jury when assessing the issue of 

malice. (Swat-Fame, Inc. v. Goldstein, 101 Cal.App.4th 613, 633.)

The trial court inferred malice based on its finding that “[t]hroughout the extensive 

discovery process, [Water] should have come to the conclusion that it had no admissible 

evidence to support these claims, yet continued to prosecute the action.” We agree PMC

has satisfied the minimal burden placed on a plaintiff responding to an anti-SLAPP 

motion.8 Going forward, the jury may consider the absence of probable cause for claims 

against PMC in the federal litigation as evidence of malice. 

Defendants rely on Daniels v. Robbins (2010) 182 Cal.App.4th 204 (Daniels) and 

Jarrow, supra, 31 Cal.4th 728. The precise holding in Jarrow was that obtaining 

summary judgment on a complaint in the underlying litigation does not, standing alone,

establish malice as a matter of law. (Jarrow, supra, 31 Cal.4th at p. 743.) We note that 

Daniels concerned the affirmance of a trial court’s order granting the defendants’ antiSLAPP motion. Here, we have an order of the trial court denying defendants’ motion. 

From the history summarized above, it can be inferred that defendants prosecuted certain 

claims against PMC after becoming aware these claims lacked probable cause, both 

 

8

The probability-of-success stage requires a plaintiff only to prove the challenged cause 

of action has “minimal merit.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 93-94.) The 

court does not weigh the evidence submitted by each side (Wilson v. Parker, Covert & 

Chidester, supra, 28 Cal.4th at pp. 821-822), but only decides whether evidence exists 

that, if credited by a jury, would support a judgment in favor of the plaintiff. (Navellier 

v. Sletten, supra, 29 Cal.4th at pp. 93-94.)
18

legally and factually. Viewing the evidence in the light most favorable to PMC, its 

assertion that defendants acted with malice has at least minimal merit. (Soukup, supra,

39 Cal.4th at p. 291.) 

While not overwhelming, there is sufficient circumstantial evidence from which a 

trier of fact could conclude the litigation was pursued against PMC for an ulterior 

purpose not related to the remedy Water sought in the federal lawsuit. Specifically, there 

is circumstantial evidence from which the jury could infer PMC was pursued for the 

ulterior purpose of derailing the distribution agreement it had with Everpure. We note 

that the federal litigation appears to have been primarily directed at Everpure, raising an 

inference of an ulterior motive behind the decision to name PMC as an additional 

defendant. This factor could support an inference that defendants used the litigation as an 

opportunity to harass PMC. For example, PMC reports that Water knowingly scheduled 

a deposition of Laurence Purcell, PMC’s most knowledgeable person, at a time when his 

wife was undergoing daily chemotherapy for brain cancer. While Clark claims the only 

reason the parties could not stipulate to a continuance was because counsel for Everpure 

would not agree to a two-week extension of the discovery and motion cut-off dates, this 

discrepancy creates a factual dispute, which, in light of the standard of review that we 

must apply, need not be resolved at this stage of the proceedings.9

III. The Settlement Rule

Finally, defendants argue that the settlement rule bars PMC’s action for malicious 

prosecution. They cite to multiple cases purporting to set forth that a negotiated 

settlement should bar this action. However, PMC’s contention that there was never any 

negotiated settlement between PMC and Water is persuasive. The only evidence offered 

by defendants in this regard is the document called “Settlement Agreement” dated 

 

9 Water also renews its argument that the voluntary dismissal of its antitrust claims 

negates the element of malice. For the reasons stated above, we are unmoved by this 

contention.
19

February 1, 2013. The following words of limitation appear above the PMC signature 

block: “[PMC] hereby acknowledges receipt of this Settlement Agreement and hereby 

agrees to be bound by the terms of the confidentiality agreement as set forth in Paragraph 

7.” The sole reference to PMC in the substance of the document states that PMC 

understands the reaffirmation of the Termination Agreement between Everpure and 

Water “is a material part of the consideration necessary to reach an overall settlement of 

the Lawsuit and dismissal of the appeal.” By then, the Ninth Circuit had already 

dismissed Water’s appeal as to PMC under its order of January 25, 2013. Thus, PMC’s 

representations that it signed the Settlement Agreement merely to indicate its assent to 

keeping its terms confidential is a reasonable reading of the contract. To the extent there 

is any doubt or ambiguity about the construction of any words of limitation in the 

agreement, the doubt is to be resolved in favor of PMC as it was not the drafter of the 

document. (Civ. Code, § 1654.) Thus, we do not find the Settlement Agreement to bar 

the instant action for malicious prosecution. 

DISPOSITION

The order denying the special motion to strike the complaint under section 425.16 

is affirmed.

_________________________

Dondero, J.

We concur:

_________________________

Margulies, Acting P.J.

_________________________

Becton, J.*

 

*

Judge of the Contra Costa County Superior Court, assigned by the Chief Justice 

pursuant to article VI, section 6 of the California Constitution.