Court Opinion

ID: 3215019
Source: CourtListenerOpinion
Date Created: 2016-06-20 21:06:28.836915+00
Date Added: 2024-06-11T14:46:02.794340
License: Public Domain

Filed 6/20/16 Bohbot v. Foerster CA2/4
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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           IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                   SECOND APPELLATE DISTRICT

                                                DIVISION FOUR

MERCEDES BOHBOT,                                                     B265563

         Plaintiff and Appellant,                                    (Los Angeles County
                                                                      Super. Ct. No. BC475611)
         v.

MONIQUE FOERSTER,

         Defendant and Respondent.

         APPEAL from a judgment of the Superior Court of Los Angeles County,
Marc Marmaro, Judge. Affirmed.
         Engstrom, Lipscomb & Lack, Walter J. Lack, Eric R. Bell, Robert T. Bryson
and Michael P. Lewis for Plaintiff and Appellant.
         Monique Foerster, in pro. per., for Defendant and Respondent.
          Mercedes Bohbot (Mercedes) appeals from a judgment dismissing a
malicious prosecution action against her former daughter-in-law, respondent
                                                              1
Monique Foerster, formerly Monique Bohbot (Monique). The malicious
prosecution action arose out of a marital dissolution action filed over 28 years ago
by Monique against her ex-husband and Mercedes’s son, Jeff Bohbot (Jeff). That
                                                          2
dissolution action has been the subject of four appeals. In Bohbot I, the appellate
court found that Jeff’s failure to disclose the existence of certain trademarks
associated with a line of clothing developed during the marriage constituted
extrinsic fraud. (Bohbot I, at p. 13; 2001 WL 1471725, at p. *6.) The court
remanded the matter to the trial court with instructions to grant Monique’s motion
to set aside the stipulated property division, and “redetermine the value of the
entire community estate as of a date to be determined . . . and divide the property.”
(Ibid.)
          Following remand, Monique joined Mercedes to the action and proceeded to
file a series of amended complaints against her. The sole surviving claim at issue
pled in the operative third amended complaint (TAC), alleges violation of the

1     For the sake of clarity, we refer to individuals who are or once were members of
the Bohbot family by their first names.

2      They are: In re Marriage of Bohbot (Nov. 20, 2001, B141631) [nonpub.
opn.][2001 WL 1471725] (Bohbot I); In re Marriage of Bohbot (Jan. 26, 2005, B171676)
[nonpub. opn.] [2005 WL 237234 ](Bohbot II); In re the Marriage of Bohbot (Oct. 18,
2007, B185818) [nonpub. opn.] [2007 WL 3026428] (Bohbot III); and In re Marriage of
Bohbot (Oct. 20, 2010, B214035) [nonpub. opn.] [2010 WL 4108439] (Bohbot IV].) In
addition to the record we draw the operative facts from these prior opinions, of which we
take judicial notice.

                                           2
Uniform Fraudulent Transfer Act, Civil Code section 3439 et seq. (UFTA).
Bohbot IV, at pp. 8-15; 2010 WL 4108439, at pp. *4-7.)
      In September 2008, the trial court granted Mercedes’s motion to dismiss
and/or for judgment on the TAC. In December 2011, Mercedes filed the instant
action for malicious prosecution against Monique. The court bifurcated and tried
the issue of probable cause first. After extensive briefing and oral argument, the
court found that Mercedes failed to establish that Monique lacked probable cause
to sue or maintain a suit against Mercedes, and entered judgment against
Mercedes. On appeal, Mercedes contends the court’s ruling lacks sufficient
evidentiary support, and that Monique concedes that her action against Mercedes
was premised on fraudulent misrepresentations and is devoid of probable cause.
We conclude otherwise, and affirm.

              FACTUAL AND PROCEDURAL BACKGROUND
      Although the sole issue on appeal is whether Monique lacked probable cause
to sue Mercedes, an understanding of the complex background of the litigation
involving Monique, Jeff and others is necessary to establish a backdrop for the
instant action and place the probable cause issue in context.

Jeff’s Fraudulent Business Venture with Albert Elkouby During the Marriage
      Jeff and Monique married in 1976 and had four children. Monique filed a
petition for dissolution in 1988. (Bohbot II, supra, 2005 WL 237234, at p. *1.)
During the marriage, Jeff, who began designing jackets as part of the “Guess” line,
was the sole shareholder and president of Jeff Hamilton, lnc. (JHI), and designed a
clothing line under the “Jeff Hamilton” label. Between 1985 and 1987, JHI
registered four trademarks associated with the Jeff Hamilton line (the original Jeff

                                          3
Hamilton trademarks), none of which was disclosed to Monique during the
marriage.
      In 1987, Jeff was involved in the creation and incorporation of JH Design
Group, Inc. (JH Design), which also designed and marketed clothing under the Jeff
Hamilton label. Although Albert Elkouby was JH Design’s sole shareholder of
record, he had a secret, unwritten agreement with Jeff by which Jeff retained a
half-ownership interest in JH Design. (Bohbot I, supra, at pp. 4, 7; 2001 WL
1471725, at p. *2-3.) In February 1988, Jeff caused JHI to assign its four original
trademarks to him, which he then licensed to JH Design.
      After Monique filed a petition to dissolve the marriage in April 1988, she
filed a motion to join JH Design and Elkouby as parties to the dissolution action on
the ground that they controlled assets in which the community had an interest. In
December 1989, Jeff filed a declaration in the divorce proceeding stating
unequivocally that he did “not own an interest in the business known as [JH
Design].” In February 1990, Monique, Jeff, JH Design and Elkouby entered into a
settlement agreement which the trial court entered in April 1990 as a stipulated
dissolution judgment.

Jeff Sues Elkouby
      In 1993, Jeff sued Elkouby and JH Design (the Elkouby action). Jeff alleged
that, in November 1987, he contributed over $500,000 in merchandise and assets,
plus his business expertise, in exchange for a one-half ownership interest in JH
Design and its stock shares which were to be held in Elkouby’s name. Jeff filed a
declaration in the Elkouby action stating that he and Elkouby had agreed that,
although the JH Design stock would be held in Elkouby’s name, they remained
equal co-owners of JH Design. Jeff also declared that he personally owned the

                                         4
four original Jeff Hamilton trademarks that JH Design had used pursuant to a
license agreement. Jeff had not identified those four trademarks as community
property in his divorce action. In February 1994, Monique submitted a declaration
in the Elkouby action stating that: “Although Jeff and I had very difficult times
during our divorce, we were finally able to come to a settlement in 1990. When
we made our agreement, the amount of money I was to be paid by Jeff was arrived
at by considering many things. . . . Jeff and I discussed that he was half owner of
[JH Design], but also that it was a new business and that any value it had was
developed after the time that we separated.”
      Jeff and Elkouby settled the Elkouby action in January 1997 for $1 million.

Jeff Assigns Trademarks to his Mother
      In August 1993, Jeff started J.D.I. Industries, Inc. (later changed to Jeff
Hamilton Industries, Inc., (JHI)). Jeff was president of JHI and Mercedes was its
sole shareholder, purportedly because her money had been used to form the
corporation.
      In July 1994, Jeff applied for three trademarks associated with his clothing
line, which eventually matured into registered trademarks. In August 1994, as
president of JHI, Jeff assigned seven trademarks to Mercedes (three of the four
                                                                3
original Jeff Hamilton trademarks, plus four new trademarks).

3     The record is unclear as to when or how the new trademarks originated or how JHI
came to own them.

                                          5
The Stipulated Property Division and Dissolution Judgment is Set Aside
       In August 1999, Monique moved to set aside the couple’s 1990 stipulated
judgment. She asserted that Jeff committed extrinsic fraud by, among other things,
lying about his ownership interest in JH Design. The trial court denied the motion.
Monique appealed.
       In November 2001, Division Three of this court issued its decision in Bohbot
I reversing the order denying the motion to set aside the stipulated judgment. The
court found that certain trademarks associated with Jeff’s clothing line were
community property and that his failure to disclose the existence of those assets
constituted extrinsic fraud. (Bohbot I, supra, at pp. 12-13; 2001 WL 1471725 at p.
*6.) The appellate court found the trial court erred when it denied the motion to set
aside the judgment because: “the evidence does not support [the trial court’s]
conclusion that Jeff disclosed the existence of a community interest in the
trademarks or that Monique was aware of those community assets. Jeff’s only
evidence that Monique was aware of the trademarks as a community asset [was]
his December 1999 declaration that the trademarks appeared on clothing
manufactured by [Jeff Hamilton] that Monique saw during the marriage. Her
observation of the trademarks on clothing during the marriage would not reveal the
falsity of Jeff’s December 1989 declaration that he had given her all the money
that he could salvage from the businesses or the falsity of his representations that
[Jeff Hamilton] was a complete financial failure and had no assets and that he was
starting anew with JH Design.” (Bohbot I, supra, at p. 11; 2001 WL 1471725 at p.
*5.)
       The matter was remanded to the trial court with directions to grant
Monique’s motion, set aside the stipulated property division and judgment,

                                          6
redetermine the value of the community estate as of a date to be determined and
divide the property. (Bohbot I, supra, at p. 13; 2001 WL 1471725 at p. *6.)

Monique Joins Mercedes to the Dissolution Action
      In July 2002, following remand, Monique filed a complaint for joinder
against Mercedes asserting a cause of action for accounting, and seeking
declaratory relief and imposition of a constructive trust. Monique alleged that the
four original Jeff Hamilton and/or new trademarks Jeff had assigned to his mother
in 1994 were community property assets “fraudulently concealed” by Mercedes
during the divorce action. Monique’s litigation against Mercedes, which survived
four different pleadings to September 2008, when Mercedes’ motion to dismiss
and/or for judgment on the TAC was granted, is the basis for the instant malicious
prosecution action.

Action Performance Acquires Most of JHI’s Assets and Trademarks and Monique
Obtains a Preliminary Injunction

      In September 2002, Jeff and his mother engaged in several transactions on
behalf of JHI and themselves. First, under an asset purchase agreement, Action
Performance Companies, Inc. (APC) purchased most of JHI’s assets, and assumed
a $1,116,122.88 debt to Mercedes, JHI’s sole shareholder. (See also Bohbot II,
supra, 2005 WL 237234, at p. *2) In a trademark purchase agreement, JHI also
sold and assigned the four new trademarks and one of the four original Jeff
Hamilton trademarks to Jeff Hamilton Collection, Inc. (JH Collection), an APC
subsidiary of which Jeff was president.
      Monique sought a preliminary injunction to freeze these transactions and
prevent further dissipation of community assets. In support of this motion,
Monique submitted a November 27, 2002 declaration in which she stated there
                                          7
could be “no question that the ‘Jeff Hamilton’ enterprise is a community asset. In
this regard, it was I who conceived the ‘Jeff Hamilton’ name, because at the time
[Jeff] bore a resemblance to the actor George Hamilton. Indeed, our 1987 tax
return . . . identifies [Jeff]’s occupation as ‘Executive,’ and my occupation as
‘Product Design.’”
      The court granted the motion and issued a preliminary injunction on
December 4, 2002, freezing the proceeds of the sale to APC, and ordered Jeff and
Mercedes to hold them in trust. The court also enjoined the transfer, encumbrance
or concealment of any proceeds pending further order.
      In May 2003 in an action concerning the sale of real property located at
2433 South Grand Avenue in Los Angeles, Mercedes stipulated to the issuance of
a preliminary injunction, which the trial court approved, requiring that all proceeds
due her from the sale of that property be placed in the same blocked account. In
October 2003, the court ordered that all proceeds from the September 2002
agreements be deposited into a blocked account and ordered Mercedes to provide
an accounting of all Jeff Hamilton product manufactured, sold, distributed or
otherwise transferred after the September 2002 agreements.

Monique Joins APC and JH Collection.
      In March 2004, Monique filed a first amended complaint for joinder against
Mercedes, APC and JH Collection. She alleged that the trademarks sold in the
2002 trademark purchase agreement between JHI, APC and JH Collection included
community property, sold without her consent and for less than the trademarks’
reasonable value. Monique alleged that she had a 50 percent ownership interest in
the trademarks, and a right to receive income generated from them and their
associated goodwill.

                                          8
APC and JH Collection Sue in Federal Court
      In June 2005, APC and JH Collection filed a federal court action against
Jeff, JHI, Mercedes and others (the district court action). The gravamen of that
action was that the defendants were alleged to have committed fraud in entering
into the September 2002 transactions by failing to disclose that, in its 2001
decision in Bohbot I, the California Court of Appeal found that Jeff committed
fraud in his divorce proceeding.

Summary Judgment is Entered in Favor of APC and JH Collection on the Second
Amended Complaint

      Monique filed a second amended complaint for joinder (SAC) against
Mercedes in February 2006. APC and JH Collection remained named defendants
in the SAC but Monique sought no specific relief against either defendant. In due
course, the trial court granted summary judgment in favor of APC and JH
Collection on the ground that they had purchased the trademarks at issue “for fair
and reasonable value.”

Trial Regarding Valuation of Trademarks
      In July 2006, the trial court found that the date of valuation of the Jeff
Hamilton trademarks deemed community property in Bohbot I was July 2, 1993.
A trial to determine the value of those trademarks and any associated goodwill was
conducted in October and November 2006.
      Twice Jeff and Mercedes moved to dissolve the preliminary injunction and
have the SAC dismissed against Mercedes. The trial court denied the motions, but
granted Monique leave to amend to file the operative third amended complaint
                                          9
(TAC). In the TAC, Monique sought: (1) a declaration that Mercedes was Jeff’s
“financial straw person and/or alter ego”; (2) a declaration that funds Mercedes
received from the sale of the Grand Avenue property and the new trademarks were
received solely for Jeff’s benefit; (3) a declaration that Mercedes held title to
certain real properties solely for Jeff’s benefit; (4) a declaration that any monetary
judgment entered against Jeff should also be entered against Mercedes; (5) an
accounting by Mercedes; and (6) the imposition of a constructive trust over all
properties and revenues generated by the four new trademarks.
      On March 14, 2007, the court issued an intended statement of decision
valuing the original Jeff Hamilton trademarks at $451,457 as of July 1993, and
found Monique entitled to half that amount.

Judgment is Entered—and Later Vacated––in the District Court Action
      In a judgment entered on April 18, 2007, the district court found Jeff and
JHI to be one another’s “alter egos,” and awarded $1.5 million to APC and JH
Collection. The district court also entered judgment in favor of and awarded
Mercedes $114,495 on her counterclaim against APC and JH Collection.
      In January 2008, pursuant to a stipulation between the parties, the district
court vacated the portion of its April 20, 2007 judgment finding Jeff and JHI to be
one another’s alter egos. In March 2008, the district court denied Monique’s
request to intervene in that action in order to obtain an order preserving the
preclusive effect of its since–vacated April 2007 alter ego judgment. Monique did
not seek appellate review of that denial.

                                            10
Mercedes’ Motions for Judgment on the Pleadings and to Dismiss the TAC
      Meanwhile, in September 2008, following the trial court’s trial on valuation
of the trademarks, Mercedes filed a motion to Dismiss and/or for Judgment on the
TAC. She argued that she could not be liable as her son’s alter ego because one
individual cannot act as another’s alter ego. She also argued that Monique had not
alleged and could not allege a claim of fraudulent transfer between Mercedes and
Jeff. Initially, this motion was denied. However, the trial court limited Monique
from proceeding against Mercedes on anything other than a UFTA claim premised
on APC’s September 2002 payment of $1,116,122.88 to Mercedes to purchase the
assets of JHI.
      After the district court partially vacated its April 2007 judgment, Mercedes
renewed her motion to dismiss the TAC and/or for judgment on the pleadings as to
the TAC, on the ground that Monique could not establish the requisite elements of
a UFTA claim.
      On September 29, 2008, the trial court issued a statement of decision
granting Mercedes’ motion to dismiss and/or for judgment on the TAC. The trial
court explained that:
      “The theory underlying Monique’s [UFTA] claim is that: (a) [Jeff] is the
      alter ego of JHI; (b) the [APC] Payment [of $1,116,122.88 in September
      2002] to Mercedes was to extinguish JHI’s debt to Mercedes; (c) in light of
      the alter ego relationship between Jeff and JHI, the debt extinguished by the
      [APC] Payment may be considered to be Jeff’s debt; and (d) the [APC]
      Payment was therefore a transfer that benefitted Jeff.

      “The foregoing theory is predicated on the finding in the April 20, 2007
      Judgment [in the district court action] . . . that Jeff and JHI were the alter
      egos of each other . . . .

      “Pursuant to an order entered on January 23, 2008, . . . the [district court]
      vacated the portions of [its April 2007] Judgment that had included the Alter
      Ego Finding. [¶] . . . [¶]
                                          11
      “Monique has not presented sufficient evidence that the [APC] Payment in
      September 2002 . . . was made with intent to defraud pursuant to Civil Code
      section 3439.04.

      “The [APC] Payment was to extinguish a scheduled debt of JHI to
      Mercedes, which debt apparently reflected either: (a) a loan by Mercedes to
      JHI; or (b) a distribution to which Mercedes, as JHI’s sole shareholder,
      would have been entitled, but that she forwent.

      “Monique has not presented sufficient evidence . . . of any lack of
      reasonably equivalent value in exchange for JHI’s obligations to
      Mercedes . . . .

      “Monique has had ample time to assemble evidence to support a fraudulent
      transfer claim and has not shown that the claim is viable.

      “Because Monique has not presented sufficient evidence to establish a viable
      claim against Mercedes, the Court grants Mercedes’ Motion . . . , and
      judgment shall be entered in favor of Mercedes on the [TAC].”

      Monique appealed. On October 20, 2010, the Court of Appeal affirmed the
judgment, putting the divorce action to rest. (Bohbot IV, supra, at pp. 13-18.)

Mercedes sues Monique for Malicious Prosecution
      In December 2011, Mercedes filed this malicious prosecution action. The
trial court bifurcated and ordered the element of probable cause tried first. After
extensive briefing, the court found that Mercedes failed to demonstrate that
Monique lacked probable cause to initiate and prosecute an action against
Mercedes. The court found that the preliminary injunction Monique obtained in
2002 constituted sufficient evidence of probable cause to sue Mercedes, and
Mercedes had not shown that Monique obtained the preliminary injunction as a

                                         12
result of fraud or perjury. Judgment was entered in favor of Monique. This timely
appeal followed.

                                    DISCUSSION
1.    Malicious Prosecution Law and the Standard of Review
      Because of its potential chilling effect on citizens’ willingness to report
criminal conduct or sue on civil disputes, and an “antipathy for litigation spawning
litigation” (Brennan v. Tremco, Inc. (2001) 25 Cal.4th 310, 315), the tort of
malicious prosecution “has traditionally been regarded as a disfavored cause of
action.” (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 872
(Sheldon Appel); Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 817
(Wilson).) As a result, “the elements of the tort 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, supra, 47 Cal.3d at p. 872.)
      “A plaintiff in a malicious prosecution action ‘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 [citations]; (2) was brought
without probable cause [citations]; and (3) was initiated with malice [citations].’
[Citation.]” (Paiva v. Nichols (2008) 168 Cal.App.4th 1007, 1018 (Paiva);
Franklin Mint Co. v. Manatt, Phelps & Phillips, LLP (2010) 184 Cal.App.4th 313,
333 (Franklin Mint).) The question whether there was an absence of probable
cause to bring the prior case is a question of law to be determined by the court
from facts established in the case. (Sheldon Appel, supra, 47 Cal.3d at p. 875;
Paiva, supra, 68 Cal.App.4th at p. 1018.)

                                           13
      “The presence or absence of probable cause is viewed under an objective
standard applied to the facts upon which the defendant acted in prosecuting the
prior case. [Citation.] The test . . . is whether any reasonable attorney would have
thought the claim to be tenable. [Citation.] This ‘less stringent’ standard [citation]
is based upon the Flaherty test (In re Marriage of Flaherty (1982) 31 Cal.3d 637)
for determining frivolous appeals, and ‘more appropriately reflects the important
public policy of avoiding the chilling of novel or debatable legal claims’
[citation].” (Paiva, supra, 168 Cal.App.4th at pp. 1018–1019; see also Franklin
Mint, supra, 184 Cal.App.4th at p. 333 [probable cause determination does not
consider defendant’s subjective mental state; if underlying claim was objectively
tenable, malicious prosecution action fails without regard to evidence of malice on
defendant’s part].) In short, probable cause exists unless all reasonable attorneys
would agree that an action was completely devoid of merit. (Jarrow Formulas,
Inc. v. LaMarche (2003) 31 Cal.4th 728, 743, fn. 13.)
      The sole issue before us is whether Monique lacked probable cause to
initiate and maintain an action against her former mother-in-law after the divorce
action was reopened on remand after Bohbot I. The threshold showing here is
purposefully set quite low: “Plaintiffs and their attorneys are not required, on
penalty of tort liability, to attempt to predict how a trier of fact will weigh the
competing evidence, or to abandon their claim if they think it likely the evidence
will ultimately weigh against them. They have the right to bring a claim they think
unlikely to succeed, so long as it is arguably meritorious.” (Wilson, supra, 28
Ca1.4th at pp. 822; see also Uzyel v. Kadisha (2010) 188 Cal.App.4th 866, 927.)
      Probable cause to pursue a civil claim does not hinge on the claim’s merit, as
such, but upon it being arguably tenable, viz., not so completely lacking in
arguable merit that no reasonable attorney would think it was tenable. (Paiva,

                                           14
supra, 168 Cal.App.4th at p. 1019.) Probable cause exists if the claim is legally
sufficient and can be substantiated by competent evidence. (Id. at p. 1021.) In the
context of the probable cause element of malicious prosecution, initiating an action
“‘requires evidence sufficient to prevail in the action or at least information
reasonably warranting an inference there is such evidence.’” (Arcaro v. Silva &
Silva Enterprises Corp. (1999) 77 Cal.App.4th 152, 156.) If a litigant possesses
competent evidence to substantiate a legally cognizable claim for relief, she
commits no tort by asserting that claim, even if she is also aware of the existence
of evidence weighing against the claim. The plaintiff is not required, on penalty of
tort liability, either to attempt to predict how the trier of fact will weigh competing
evidence or to abandon her claim even if she or her counsel believe the evidence
will ultimately weigh against her.

2.    Monique had Probable Cause to Sue Mercedes
      This malicious prosecution action arose out of an extremely contentious and
vigorously litigated divorce action. Mercedes became enmeshed in that litigation
after Monique succeeded in re-opening the dissolution action as to the couple’s
1990 settlement by virtue of the decision in Bohbot I. In that decision, the court
found that Jeff committed extrinsic fraud by concealing specific trademarks
associated with his clothing line. (Id. at p. 13.)

      A.     Preclusive Effect of the Preliminary Injunction
      In July 2002, Monique joined Mercedes to the family law action and, in
December 2002, obtained a preliminary injunction to prevent dissipation of
community assets. In granting the injunction, the trial court was persuaded by
Monique’s argument that Mercedes had, in effect, acted as an “alter ego” or “straw

                                           15
person” for Jeff. The court froze distribution of any proceeds from the September
2002 transactions between JHI and Action Performance, and those funds remained
in a blocked account for the duration of Monique’s action against.
      Monique insists Mercedes cannot satisfy her burden to demonstrate an
absence of probable cause to bring or maintain an action against her, because the
existence of probable cause was definitively established by virtue of the court’s
issuance of a preliminary injunction on the merits. She argues that even though
she ultimately failed to prevail against Mercedes, the trial court’s decision to grant
a preliminary injunction, constitutes a “[c]laim[ ] that . . . succeeded at a hearing on
the merits” for the purpose of establishing probable cause. (See Wilson, supra, 28
Cal.4th at p. 818.) We agree. Other courts have embraced this view and held that
issuance of a preliminary injunction conclusively establishes that an underlying
suit was brought with probable cause. (See e.g., Fleishman v. Superior Court
(2002) 102 Cal.App.4th 350, 356–357 (Fleishman) [trial court’s issuance of a
preliminary injunction establishes probable cause to defeat subsequent claim of
malicious prosecution]; Paiva, supra, 168 Cal.App.4th at pp. 1011, 1022
[defendant may negate element of probable cause to defeat malicious prosecution
claim by showing that interim victory in underlying case––such as granting of
preliminary injunction in favor of malicious prosecution defendant––established
probable cause].)

      B.     The Fraud Exception
      Mercedes contends that the trial court erred in finding that Monique had a
legally tenable basis upon which to initiate or continue an action against her
because the preliminary injunction was supported by fraudulent evidence and
cannot, as a matter of law, amount to probable cause. “The principle that a

                                          16
favorable interim ruling on the merits will establish probable cause is subject to an
exception in instances in which that ruling was procured by fraud or perjury
perpetrated by the plaintiff (the malicious prosecution defendant). [Citation.]”
(Paiva, supra, 168 Cal.App.4th at pp. 1025–1026; Wilson, supra, 28 Cal.4th at p.
820; Fleishman, supra, 102 Cal.App.4th at p. 357.)
      Mercedes insists that Monique could not have drawn her into the reopened
dissolution action nor obtained a preliminary injunction had she not made
misrepresentations to the court in Bohbot I that Jeff fraudulently concealed his
interest in JH Design and the Jeff Hamilton trademarks. Mercedes argues that
Monique knew about Jeff’s interest in JH Design long before she sought to reopen
the divorce proceeding following the 1999 $1 million settlement between Jeff and
Elkouby. Specifically, Mercedes points to declarations submitted by Monique in
1994 and 1996 in which she stated that, in negotiating the 1990 settlement, she and
Jeff “discussed that [Jeff] was half owner of [JH Design].” Mercedes also points to
1996 deposition testimony in which Monique acknowledged a conversation she
had with Elkouby regarding her understanding that he and Jeff “were 50/50 percent
partner[s].” And, at a deposition in 2013, Monique reaffirmed that she knew in
1989 and 1990 that Jeff was a half owner in JH Design Group.
      Mercedes argues that, notwithstanding these acknowledgments, in seeking to
reopen the dissolution action, Monique misrepresented to the trial court in 1999
that she did had not known of Jeff’s ownership interest in JH Design. In a
declaration in support of her petition to reopen the dissolution action, Monique
claimed she had agreed to the 1990 property settlement in reliance on Jeff’s “sworn
declaration . . . that Jeff Hamilton was financially unsuccessful and resulted in
millions of dollars of losses, and that [Jeff] owned no interest whatsoever in JH

                                          17
Design.” The trial court found there was no basis upon which Monique was
entitled to equitable relief.
       The appellate court disagreed, but not for the reasons advanced by Monique.
Indeed, that court never reached the question whether Monique had been aware of
Jeff’s interest in JH Design. (Bohbot I, supra, at p. 13 [“we need not decide
whether Jeff disclosed the existence of a community property interest in JH Design
or concealed facts materially affecting its value”].) Instead, the reversal in Bohbot
I was premised entirely on the court’s conclusion that there was evidence Jeff
concealed trademarks that “were community property, and that his failure to
disclose the existence of those community assets constituted extrinsic fraud.”
(Ibid.) In short, the decision directing the court to reopen the dissolution action
was expressly not related to Monique’s alleged misrepresentation that she was
unaware of Jeff’s interest in JH Design. Rather, the Bohbot I court focused only on
the trademarks, the existence of which it found Jeff had concealed from his wife
Monique, and expressly stated that it was not deciding “whether Jeff disclosed the
existence of a community property interest in JH Design or concealed facts
materially affecting its value.” (Ibid.)
       Nevertheless, Mercedes argues that the appellate court’s decision to reopen
the dissolution action was premised on fraud because Monique failed to disclose to
that court that she had known about the trademarks at issue, a fact she admitted
only once Mercedes was joined to the action. Mercedes points to a declaration
Monique submitted to the trial court in November 2002 in which she stated: “there
can be no question that the ‘Jeff Hamilton’ enterprise is a community asset. In this
regard, it was I who conceived of the ‘Jeff Hamilton’ name, because at the time
[Jeff] bore a resemblance to the actor George Hamilton. Indeed, our 1987 tax

                                           18
return . . . identifies [Jeff]’s occupation as ‘Executive,’ and my occupation as
‘Product Design.’”
       Mercedes insists this statement constitutes an admission that Monique knew
about the trademarks all along because, as the originator of the Jeff Hamilton trade
name and a “Product Designer” for the company, she had to have known the
trademarks existed and may have been involved in their creation. Mercedes
maintains that, had the court in Bohbot I known about this evidence, it would not
have found that Jeff engaged in extrinsic fraud and would not have ordered the
divorce action reopened, thereby providing Monique a chance to pull Mercedes
into the litigation.
       We do not agree that Monique’s November 2002 declaration is the damning
admission Mercedes makes it out to be. It makes no reference to trademarks at all.
Rather, it addresses only the fact that Monique suggested use of the Hamilton
name because of Jeff’s resemblance to an actor, and mentions her nonspecific role
in Product Design at some point in 1987. Based solely on this limited information
it would be unreasonable to impute knowledge of trademarks to Monique based on
this declaration.
       The trial court never determined whether Monique’s November 2002
declaration amounted to an admission that she knew of the trademarks’ existence.
Even if that statement constitutes the “telling” admission Mercedes now claims it
was, it was insufficient to establish that the preliminary injunction was obtained as
a result of fraud or perjury. As Mercedes acknowledges, the trial court was aware
of and considered this declaration at time it granted Monique’s application for a
preliminary injunction, so this was neither new or pivotal evidence. Further, in
addition to the declaration, the parties could have presented the court with the
record considered by the court in Bohbot I when it decided to reopen the

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dissolution proceeding; they chose not to do so. As a result, the trial court
appropriately found that Mercedes failed to meet her burden to show that Monique
obtained the preliminary injunction as a result of fraud or perjury.

                                      DISPOSITION
             The judgment is affirmed. Monique shall recover her costs on appeal.
             NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                               WILLHITE, Acting P. J.

             We concur:

             MANELLA, J.

             COLLINS, J.

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