Filed 2/13/ 24 Alepyan v. Adzhemyan CA2/5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SECOND APPELLATE DISTRICT

DIVISION FIVE

ZABEL ALEPYAN et al.

,

Cross

- complainants and Appellants

,

v.

VARTAN ADZHEMYAN et al.

,

Cross

- defendants and Respondents. B323610

(Los Angeles County Super. Ct. No. 20STCV02294 )

APPEAL from an order of the Superior Court of Los Angeles County, Maureen Duffy

- Lewis

, Judge

. Affirmed. Ilya Alekseyeff , for Appellants and Cross

- complainants

. Raymond Hovsepian, for Respondent and Cross

- defendant Vartan Adzhemyan.
N e mecek and Cole

, Kenny C. Brooks and Daniel L. Reback

, for Respondent and Cross

- defendant Raymond Hovsepian

.2 Attorney Raymond Hovsepian, on behalf of his client Vartan Adzhemyan

, filed a quiet title action against Zabel Alepyan and Artur Elizarov

. T he action was later d ismissed by stipulation

, but plaintiffs and appellants Alepyan and Elizarov brought the current malicious prosecution action against
defendants and respondents Adzhemyan and Attorney
Hovsepian

. 1 Respondents each moved to strike the malicious prosecution action under the anti

- SLAPP law (Code Civ. Pro., § 425.16) , which t he trial court granted because the underlying action was dismissed pursuant to settlement

. We agree that appellants are unable to establish favorable termination because

t he underlying action was resolved by settlement

. We therefore
affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Because we resolve this appeal on the element of favorable termination, we limit our fact ual a nd procedur al discussion accordingly.
1. The Underlying Action Adzhemyan and Alepyan married in 2008, separated in April 2015, and divorced in 2019. During their marriage, they lived in a duplex on Harvard Street in the City of Glendale (“Harvard Property”). Adzhemyan purchased the Harvard Property in his own name in 2005 prior to marriage. In 2012, Adzhemyan defaulted on the Harvard Property , but th e couple’s friend, Elizarov, purchased the p roperty in a “short sale” in 2014. Elizarov sold the property to a non

- party in 2017

.

1 The malicious prosecution action was brought also against defendant a ttorney Gary Simonian , but he was not a party to the anti

- SLAPP motions, nor is he a party in this appeal.3 A. The Underlying Complaint On February 20, 2018, Ad zhemyan filed a complaint against a ppellants alleging three causes of action related to the Harvard Property : (1) quiet title ; (2) cancellation of the deed ; and (3) damages for breach of fiduciary duty and/or constructive fraud (“Harvard Action”)

. In his complaint, Ad zhemyan claimed Alepyan forged his name on the Harvard Property deed transferring title to Elizarov , then falsely notarized the deed.
I n November 20 20, a ppellants moved for judgment on the pleadings. In May 2021, t he trial court granted judgment on the pleadings , but with leave to amend as to breach of fiduciary
duty

. 2 On June 1, 2021, Adzhemyan filed a first amended complaint

. B. The Settlement and Stipulation to Dismiss On June 29, 2021, Ilya Ale kseyeff

, a ppellants’ attorney,
emailed Attorney Hovs epian bank records and other documents
related to the Harvard Property sale

, with a letter entitled, “Privileged Settlement Communication (Evid. Code, § 1152)” (“Settlement Letter”) The letter summariz ed his theory on how
these records and documents support the falsity of the allegations
in the Harvard Ac tion. It stated in conclusion , “ [g] iven these circumstances and Adzhemyan’s subsequent admissions, Ms. Alepyan and Mr. Elizarov will not agree to pay Adzhem yan [sic] a

penny. However, both Ms. Alepyan and Mr. Elizarov will agree [to] waive their costs an d attorney’s fees [] if Adzhemyan [sic] dismisses the action with prejudice.” A footnote in the letter

2 The trial court found that a n O ctober 4, 2019

, stipulated divorce judgment and failure to timely join indispensabl e part ies barred Adzhemyan’s claims for quiet title and cancellation of the deed

.4

explained, “ [m] y clients have incurred nearly $20,000 in costs and attorney’s fees, which my clients can recover because the stipulated divorce judgment allows for the recovery of atto rn ey’s
fees in an enforcement action.” The letter ended with

, “[u] nless the parties settle

, I will then demur to the amended complaint and will seek to recover all costs and attorney’s fees after the
court sustain [s ] the demurrer without a further leave to amend.” The parties eventually agreed to a July 2, 2021 response deadline

. On July 2, 2021, Attorney Hovsepian emailed his response, “[g]o ahead and send me the stip. f or a mutual waiver .” The stipulation filed s hortly there afte r specifically explained, “Adzhemyan no longer wishes to pursue his claim against
Defendants [ a pp ellants ] to save on addition al costs of litigation

... [and] to save on addition al costs of litigation, Def en dants [ a ppellants] will waive their costs and attorney’s fees [].”
P ursuant to the stipulation, the trial court dismissed the Harvard Action with prejudice and parties were to “bear their own costs and attorney’s fees in connection with this action .”
2. The Current Action
A. The M

alicious Prosecution Complaint More than six months later, a ppellants file d the current malicious p rosecution action alleg ing Adzhemyan knew the Harvard Property was lawfully purchased in a “short sale ,” yet maliciously pursued the Harvard Actio n to retaliate against Alepyan for filing for divorce and to gain leverage in the divorce
action. A ppellants further alleged Adzhemyan’s attorneys filed
the Ha rvard Action knowing it was fa bricated

. The complaint omitted any reference to the settlement and the issue of favorable
termination

.5 B. The Anti

- SLAPP Motions Respondents each filed separate anti

- SLAPP motions

. Both concede d a malicious prosecution action is subject to the

a nti

- SLAPP statu t e as a matter of law because it is based on the right to petition. E ach then argued a ppellants could not meet their burden to establish the Harvard A ction was terminated in
their favor because it was resolved by sett lement. In their oppositions to both motions, a ppellants argue d the circumstances leading to the dismissal of the Harvard Action

— namely, “the devastating evidence t h at exposed Adzhemyan as a
liar []” given to r espondents prior to the dismissal

— supported the
dismissal was on the merits

. They argue d the reason given for
the stipulated dismissal, which was to save on litigation cost s ,

w as likely contrived

. Respondents maintained in their replies
that the dismissal was pursuant to a written settlement agreement to avoid a dditional costs of litigation.
On July 18, 2022, the trial court granted the anti

- SLAPP
motions and reason ed

, “ [a] dismissal for a waiver of costs is sufficient to disqualify an action as successful on the merits

. [Citation.] Given the plain language in t he Stipulation and Dismissal, [the Harvard Action] was voluntarily dismissed by Adzhemyan to save litigation costs for a waiver of cost s.

DISCUSSION

Resolution of th is appeal turns on whether a ppellants ha ve made a prima facie showing of the favorable ter mination element of malicious prosecution. A ppellants argue they ha ve demonstrated a “probability of success” under the second prong of
the anti

- SLAPP statute because the Harvard A ction was dismissed based on its lack of merit

. On the contrary, the record6

establishes the Harvard A ction was dismissed pursuant to settlement, a termination not favorable to a ppellants

. 1. Anti

- SLAPP Law
“Resolution of an anti

- SLAPP motion “ requires the court to engage in a two

- step process. First, the c ourt decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving
defendant’s burden is to demonstrate that the act or acts of which the plaintiff complains were taken ‘ in furtherance of the [defendant]’s right of petition or free speech under the United States or California Constitution in connection with a public issue, ’ as defined in the statute. [Citation.] If the court finds such a showing has been made, it then determ ines whether the plaintiff has demonstrated a probability of prevailing on the
claim. ” [Citation.]” ( Jarrow Formulas, Inc. v. LaMarche (2003)
31 Cal.4th 728, 733.) ““This second step is a summary

- judgment

- like procedure.... We first determine whether [ a ppellants ’] prima facie showing is enough to win a favorable judgment.... This threshold is ‘ “not high.” ‘... Claims with minimal merit proceed. We accept [ a ppellant s ’ ] evidence as true and do not weigh evidence or resolve conflicting factual claims .... We may consider affidavits, declarations, and their equivalents if it is reasonably possible these statements will be admissible at trial.... [¶] After examining [ a ppellants ’] evidence, we evaluate [ r espondents’] showings only to determine if they defeat [ a ppellants ’] claim as a matter of law.... [ R espondents] can prevail either by establishing a defense or the absence of a necessary element.... If there is a conflict in the evidence (the existence of a disputed material fact),
the anti

- SLAPP motion should be denied.” [Citation].” ( Citizens7

of Humanity LLC v. Ramirez ( 2021) 63 Cal.App.5th 117
, 127

- 128 .) We review an order granting an anti

- SLAPP motion de

novo. ( Sweetwater Union High School D ist. v . Gilbane Building
Co. (2019) 6 Cal.5th 931, 942.)
2. Malicious Prosecution

“ “ An action for malicious prosecution has three required
elements: ‘(1) the defendant brought (or continued to pursue) a claim in the underlying action without objective probable cause, (2) the claim was pursued by the defendant with subjective malice, and (3) the underlying action was ultimately resolved in the plaintiff’s favor.’ [ C itation

. ]” [Citation.] ” ( Citizens of Humanity, supra, 63 Cal.App.5th at p. 128.) The determinative
issue here is the third element. On the third element, “ “ [a] ‘ “favorable” termination does not occur merely because a party complained against has prevailed in an underlying action. While the fact he has prevailed is an ingredient of a favorable termination, such termination must further reflect on his innocence of the alleged wrongful conduct. If the termination does not relate to the
merits

— reflecting on neither innocence of nor responsibility for the alleged misconduct

— the terminatio n is not favorable in the sense it would support a subsequent action for malicious prosecution.’ [Citation.] ‘ “[W]hen the underlying action is terminated in some manner other than by a judgment on the merits, the court examines the record ‘to see if the d isposition reflects the opinion of the court or the prosecuting party that the
action would not succeed.’ ” [Citations.]’ [Citation.] ‘Should a conflict arise as to the circumstances of the termination, the determination of the reasons underlying the dismi ssal is a8

question of fact. [Citation.]’ [Citation.]” [Citation.]” ( Citizens of Humanity, supra, 63 Cal.App.5th at p p . 128

- 129 .) A voluntary dismissal may constitute a favorable
termination on the merits if it reflects a n implicit concession that
the dism issing party cannot maintain the action

. ( Citizens of Humanity, supra, 63 Cal.App.5th at p. 129 (citing JSJ Limited Partnership v. Mehrban (2012) 205 Cal.App. 4th 1512, 1524).) A dismissal on technical or procedural ground, however, including lack of jurisdiction, lack of standing, avoiding litigation expenses, or settlement, is not considered a favorable termination. ( I bid

. ) “Generally , a dismissal resulting from a settlement does not
constitute a favorable termination because the d ismissal reflects ambiguously on the merits of the action. The purpose of a settlement is specifically to avoid a determination on the merits

. [Citation.] ” ( Ibid. ) “ When litigation is terminated by agreement

‘ there is ambiguity with respect to the merit s of the proceeding and in general no favorable termination for purposes of pursuing a malicious prosecution action occurs. ’ [Citations.]” [ Citation. ]” ( Ibid. )
3. Settlement Precludes Favorable Termination
In sum mary , a ppellants argue r espondents implicitly
dismissed the Harvard Action on the merits because

, just day s prior to the stipulated dismissal, r espondents were provided with

“ irrefutable evidence” that the claims in the Harvard Action were false

. Respondents maintain probable cause existed to pursue the Harvard Action regardless of the “irrefutable evidence,” but
at any rate, the dismissal wa s pursuant to a settlement agreement to save costs of litigation

. The record here is clear that the dismissal of the underlying action was pur suant to a settlement agreement to9

save costs of litigation

— a technical or procedural ground disqualifying favorable termination

. The June 29, 2021

, Settlement Letter is transparent; Appellants offered to waive costs and attorney fees incurred in defending the Harvard Action

, which they believe d they were entitled based on a prior divo rce judgment, in exchange for a prejudicial dismissal of the Harvard
Action. Th e offer was accepted via email by the response deadline. This settlement agreement was memorialized in the “Stipulation for Dismissal With Order and J udgment of Dismissal,” filed on July 13, 2021

, whereby the parties agreed
that the purpose of the dismissal was to save litigation costs and
that parties were to bear t heir owns costs and attorney’s fees.
Both side s gave up something of value to end the li ti gation, and thus, “a party cannot later claim [it] received a favorable termination. [Citation.] It is not necessary to analyze the particular circumstances of the settlement or to examine the motivations of the parties

— a negotiated settlement not only creates an ambiguity as to the merits of the underlying action, it is entirely inconsistent with bringing a further lawsuit for malicious prosecution. [Citation.]” ( F erreira v. Gray, Cary, Ware
& Freidenrich (2001) 87 Cal.App. 4th 409, 412

- 414.)
O n this recor d

, a ppellants failed to carry their burden of establishing a probability of su ccess on the element of a favorable
termination

. Accordingly, the trial court properly grant ed the
anti

- SLAPP motions and struck the malicious prosecution claim.10 DISPOSITION

The order granting the anti

- SLAPP motion is affirmed

. Respondent s are entitled to recover their reasonable costs on appeal in this matter

. (Cal. Rules of Court, rule 8.278(a)(1), (2).)
NOT TO BE PUBLISHED

.

LEE , J. 

We concur:

MOOR , Acting P. J. KIM , J.

 Judge of the San Bernardino Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.