Court Opinion

ID: 4880498
Source: CourtListenerOpinion
Date Created: 2021-08-31 21:04:18.279169+00
Date Added: 2024-06-11T08:02:24.808109
License: Public Domain

Filed 8/31/21 Trombetta v. Patterson CA1/3
                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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ordered published for purposes of rule 8.1115.

          IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                      FIRST APPELLATE DISTRICT

                                                DIVISION THREE

    A. PETER TROMBETTA,
           Plaintiff and Respondent,
                                                                        A158897
    v.
    BRADLEY A. PATTERSON, et al.,                                       (Sonoma County
                                                                        Super. Ct. No. SCV-263398)
           Defendants and Appellants.

         Defendants and appellants Bradley Patterson, Harry O’Hagin, Lawyers
Group International LLP (“LGI”), and Martin Cohn (individually and doing
business as Cohn, Stewart & Associates) appeal from the denial of their
special motion to strike plaintiff and respondent A. Peter Trombetta’s action
against them under Code of Civil Procedure section 425.16,1 commonly
known as the anti-SLAPP statute.
         Appellants argue that Trombetta’s claims for malicious prosecution and
unlawful business practices, which are based partly on appellants’ filing of a
cross-complaint against him in a prior case, arose from their protected
petitioning activity and that Trombetta failed to carry his burden of showing
a probability of prevailing on the merits as to those claims. They claim they

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

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are entitled to attorney fees and costs because they should have prevailed.
We affirm the order denying the special motion to strike.
                 FACTUAL AND PROCEDURAL BACKGROUND
      We draw our facts from the allegations in the complaint and the
evidence submitted to the trial court.
      Background Leading to Case No. SCV-252696
      Harry O’Hagin was married to Carolina O’Hagin and they had a
company involved in manufacturing roofing products called O’Hagin’s, Inc.
(OHI).2 Around 2002, Harry, Carolina, and their attorney, William Daniels,
met with Patterson, an attorney, and Bryan Gaggs, a certified public
accountant. Patterson and Gaggs proposed that Harry, Carolina, and OHI
use an “offshore tax structure” that would reduce their domestic tax
obligations by diverting income to offshore bank accounts maintained by a
foreign entity called Charter Star Limited, which was a Hong Kong
corporation owned by Patterson and Gaggs. Gaggs told Carolina that she
would have to expatriate to properly participate. Carolina and OHI declined,
but Harry agreed and expatriated to Thailand.
      Harry filed for divorce from Carolina around 2003. Harry and Carolina
eventually entered a “marital settlement agreement” whereby OHI would pay
Harry $10 million, while Harry agreed to convey all community-held
intellectual property to Carolina as separate property. OHI paid $500,000 to
Harry, but not the remainder, so Harry elected to enforce the settlement
agreement and obtained a judgment against OHI for $9.5 million plus about
$1.1 million in prejudgment interest in October 2008, in Sonoma County
Superior Court case no. SCV-238447.

2    To avoid confusion due to shared last names, hereafter we refer to
Harry and Carolina by their first names only.

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      Over the years, OHI made payments to Harry for consulting fees,
royalties, and portions of the aforementioned judgment. OHI believed it was
making these payments to a company in Thailand that Harry owned, Jalerm
Industries, Inc. (hereafter Jalerm Thailand). Patterson and Gaggs instructed
OHI not to withhold taxes from these payments because Harry, a U.S.
citizen, wholly owned Jalerm Thailand. Over time, however, Patterson and
Gaggs instructed OHI to pay various “Jalerm owned” accounts, without
disclosing that neither Harry nor Jalerm Thailand maintained these
accounts. Instead, a similarly named company, Jalerm Industries Ltd., a
Hong Kong corporation (hereafter Jalerm Hong Kong) maintained the
accounts. Patterson and Gaggs set up Jalerm Hong Kong, which was owned
by Charter Star Limited, the Hong Kong corporation owned by Patterson and
Gaggs.
      Around June 2012, Carolina and OHI discovered that payments to
Harry from around 2003 to 2012 were not being made to Jalerm Thailand or
Harry, but to Jalerm Hong Kong. Believing OHI should have withheld and
paid taxes to the Internal Revenue Service and the California Franchise Tax
Board, OHI stopped making payments owed to Harry and sued him,
Patterson, Gaggs, Charter Star Limited, Jalerm Hong Kong, and Jalerm
Thailand, in the Superior Court of Sonoma County, case no. SCV-252696,
seeking indemnification for federal and state tax liabilities and declaratory
relief. OHI essentially alleged that the defendants tricked OHI into not
withholding taxes.
      The Cross-Complaint in Case No. SCV-252696
      Represented by Patterson of LGI and Cohn of Cohn, Stewart &
Associates, Harry filed a cross-complaint in case no. SCV-252696 in April
2013, and a first amended cross complaint in October 2013. The first

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amended cross-complaint named many cross-defendants, including OHI,
Carolina, Daniels, William Daniels, Limited, William B. Daniels II, P.C.,
Twin Concord Enterprises Limited (Twin Concord), and three newly formed
companies related to OHI—namely, O’Hagin Heavy Metal Maintenance LLC
(HMM), O’Hagin Sheet Metal Fabrication LLC (SMF), and O’Hagin
Manufacturing LLC. The first amended cross-complaint also named
attorneys of these cross-defendants as cross-defendants themselves, including
Trombetta, who was representing Daniels, William Daniels, Limited, William
B. Daniels II, P.C., Twin Concord, and the three newly formed companies
related to OHI in case no. SCV-252696.3 This cross-complaint alleged four
causes of action against all cross-defendants, including Trombetta:
(1) fraudulent transfers to defraud a creditor; (2) constructive fraudulent
transfers to defraud a creditor; (3) fraudulent concealment; and (4) breach of
fiduciary duty. In short, the cross-complaint alleged OHI owed Harry about
$16 million for the judgment in case no. SCV-238447, and the cross-
defendants transferred, or assisted in transferring, OHI’s assets to Twin
Concord and the three newly formed companies related to OHI in order to
avoid paying Harry. The attorneys were sued on the theory that the
complained of transfer of assets could not have occurred without the
assistance of legal counsel.

3     OHI had previously hired Trombetta from around 2009 to 2011, in part
to keep it apprised of the status and consequences of the marital dissolution
proceedings and to review the judgment in case no. SCV-238447. During this
time, Trombetta did some work for Carolina in connection with a motion to
compel in the dissolution matter.
      Other attorneys sued as cross-defendants in SCV-252696 included:
Philip Kelly, who represented OHI in case no. SCV-238447; Robert
Montgomery, who represented Carolina in the marital dissolution matter;
and Mitchell Greenberg and Stephanie Walker, who were Trombetta’s
cocounsel in representing OHI in case no. SCV-252696.

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      Harry and Gaggs’ Lawsuit against Trombetta and Daniels
      After Trombetta subpoenaed financial records for Patterson, Harry,
Gaggs, Charter Star Limited, and Jalerm Hong Kong in case no. SCV-252696
in November 2013, Harry and Gaggs also filed a separate lawsuit against
Trombetta and Daniels for abuse of process in Sonoma County Superior
Court case no. SCV-254711. Trombetta and Daniels prevailed on their anti-
SLAPP motion in that case.
      The Settlement in Case No. SCV-252696
      At a hearing in April 2015 in case no. SCV-238447, counsel for OHI and
Carolina, on the one hand, and Patterson appearing on behalf of Harry, on
the other, announced they reached a settlement that would also resolve the
multiple actions between them. Among other things, these parties indicated
they agreed to amend the judgment Harry obtained against OHI in case no.
SCV-238447 to $6.5 million, and to add Carolina plus the three new OHI
related entities—O’Hagin HMM, O’Hagin SMF, and O’Hagin
Manufacturing—as judgment debtors. They also agreed to dismiss various
related actions, including the complaint and the cross-complaint in case no.
SCV-252696.
      The trial court asked the parties present in the courtroom whether they
understood and assented to the settlement. Carolina indicated her assent, as
did Daniels. Patterson indicated his assent on behalf of himself and Gaggs,
Harry, Charter Star Limited, and Jalerm Hong Kong. When the court turned
to counsel for Trombetta and several other attorneys, counsel stated: “we did
not participate in the settlement discussions. It is our understanding that
each of the parties that I am here representing are being dismissed with
prejudice, but none of the parties are being asked to provide mutual releases

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or to waive any rights which they may still retain after the dismissal with
prejudice.” (Capitalization omitted.)
      Nearly a year later, in March 2016, the trial court issued an amended
judgment in case no. SCV-238447, and related cases such as case no. SCV-
252696, reflecting many of the terms discussed at the April 2015 hearing,
including: Harry’s agreement to amend the judgment to a total of $6.5
million; the addition of Carolina and the three new OHI related entities as
judgment debtors; and Harry’s agreement to dismiss his cross-complaint with
prejudice as to all cross-defendants. The judgment further indicated that
Carolina, Daniels, OHI, the three OHI related companies, Harry, Patterson,
Gaggs, Jalerm Hong Kong, and Charter Star Limited agreed to release and
forever discharge each other from any and all claims based on acts or
omissions that occurred prior to April 3, 2015.
      Over a year later, in October 2017, Patterson, on behalf of Harry, filed
the request to voluntarily dismiss Trombetta with prejudice from the cross-
complaint.
      The Present Action
      In 2018, Trombetta sued appellants alleging a cause of action for
malicious prosecution based on appellants’ naming of Trombetta as a cross-
defendant in the cross-complaint in case no. SCV-252696. Trombetta claimed
he and other attorneys and advisors were all named as cross-defendants in
order to intimidate Carolina, OHI, and their advisors, and to dissuade any
cooperation with domestic authorities investigating the tax evasion scheme.
Trombetta also alleged a cause of action for unlawful business practices (Bus.
& Prof. Code, § 17200), claiming the tax evasion scheme was an unlawful
business practice, as was appellants’ prosecution of frivolous, fraudulent, and

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vexatious legal actions—such as the cross-complaint in case no. SCV-
252696—to conceal the tax fraud scheme.
      Patterson—acting as counsel—filed an anti-SLAPP motion on behalf of
all the appellants. Trombetta opposed it, and the trial court denied it.
                                   DISCUSSION
      The anti-SLAPP statute authorizes a special motion to strike claims
arising from any act in furtherance of the person’s constitutional right of
petition or free speech “in connection with a public issue.” (§ 425.16,
subd. (b)(1).) As used in section 425.16, such acts include: “(1) any written or
oral statement or writing made before a . . . judicial proceeding . . . , [and]
(2) any written or oral statement or writing made in connection with an issue
under consideration or review by a . . . judicial body . . . .” (§ 425.16,
subd. (e).)
      Resolution of an anti-SLAPP motion involves two steps. “First, the
defendant must establish that the challenged claim arises from activity
protected by section 425.16. [Citation.] If the defendant makes the required
showing, the burden shifts to the plaintiff to demonstrate the merit of the
claim by establishing a probability of success.” (Baral v. Schnitt (2016) 1
Cal.5th 376, 384 (Baral).) This second step inquiry is a “ ‘summary-
judgment-like procedure.’ ” (Ibid.) “The court does not weigh evidence or
resolve conflicting factual claims. Its inquiry is limited to whether the
plaintiff has stated a legally sufficient claim and made a prima facie factual
showing sufficient to sustain a favorable judgment. It accepts the plaintiff’s
evidence as true, and evaluates the defendant’s showing only to determine if
it defeats the plaintiff’s claim as a matter of law.” (Id. at pp. 384–385, italics
added.) Claims with “minimal merit” may proceed. (Navellier v. Sletten
(2002) 29 Cal.4th 82, 94.) “In making its determination, the court shall

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consider the pleadings, and supporting and opposing affidavits stating the
facts upon which the liability or defense is based.” (§ 425.16, subd. (b)(2).)
      We review a ruling on an anti-SLAPP motion de novo. (Flatley v.
Mauro (2006) 39 Cal.4th 299, 325.)
      A. The Malicious Prosecution Claim
      The first step of the anti-SLAPP inquiry is not disputed by the parties,
and we agree it is satisfied. (Daniels v. Robbins (2010) 182 Cal.App.4th 204,
215.) Therefore, we proceed to the second step: Did Trombetta carry his
burden of establishing a probability of success? “To establish a cause of
action for malicious prosecution, a plaintiff must demonstrate that the prior
action (1) was initiated by or at the direction of the defendant and legally
terminated in the plaintiff’s favor, (2) was brought without probable cause,
and (3) was initiated with malice.” (Siebel v. Mittlesteadt (2007) 41 Cal.4th
735, 740 (Siebel).) To obtain monetary relief, a malicious prosecution plaintiff
must also prove damages. (Sycamore Ridge Apartments LLC v. Naumann
(2007) 157 Cal.App.4th 1385, 1411 (Sycamore Ridge).) We examine these
elements in turn.
            1. Favorable Termination
                    (a) General Principles
      “To determine whether a party has received a favorable termination,
we consider ‘ “the judgment as a whole in the prior action . . . .” [Citation.]’
[Citation.] Victory following a trial on the merits is not required. Rather,
‘ “the termination must reflect the merits of the action and the plaintiff’s
innocence of the misconduct alleged in the lawsuit.” ’ ” (Siebel, supra, 41
Cal.4th at p. 741.) “ ‘ “[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 disposition reflects the opinion of the court or the

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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 dismissal is a question of
fact.’ ” (Sycamore Ridge, supra, 157 Cal.App.4th at p. 1399.)
      “In most cases, a voluntary unilateral dismissal is considered a
termination in favor of the defendant in the underlying action . . . .” (Villa v.
Cole (1992) 4 Cal.App.4th 1327, 1336 (Villa).) Indeed, “[a] voluntary
dismissal is presumed to be a favorable termination on the merits, unless
otherwise proved to a jury.” (Sycamore Ridge, supra, 157 Cal.App.4th at
p. 1400, italics added.) This presumption “ ‘ “arises from the natural
assumption that one does not simply abandon a meritorious action once
instituted.” ’ ” (Ibid.; see Roche v. Hyde (2020) 51 Cal.App.5th 757, 770 [“a
unilateral dismissal raises a presumption of favorable termination” and the
circumstances of the dismissal must be evaluated “[t]o determine whether the
presumption has been rebutted”].)
      That said, courts have distinguished between unilateral dismissals and
dismissals resulting from settlement. (See, e.g., Villa, supra, 4 Cal.App.4th
at pp. 1335–1336.) For example, where parties negotiate a settlement and
both sides give up something of value to end the litigation, the dismissal
cannot support the element of favorable termination because it creates only
ambiguity as to the merits of the underlying action. (Ferreira v. Gray, Cary,
Ware & Freidenrich (2001) 87 Cal.App.4th 409, 413–414.) In cases where
certain parties reach a settlement, a nonsettling defendant’s “dismissal from
the lawsuit pursuant to that settlement will not be viewed as a favorable
termination as long as it was a necessary condition to achievement of the
overall settlement. Such a dismissal is not considered unilateral because it
was required by the terms of a settlement agreement, and it will act as a bar

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to a later malicious prosecution action by the nonsettling defendant.” (Villa,
supra, 4 Cal.App.4th at p. 1336, italics added.)
       For instance, in Villa, supra, 4 Cal.App.4th 1327, an arrestee sued a
city, the police chief, and two police officers, including Villa. (Villa, at
p. 1331.) The city’s attorney acted as counsel for all the defendants, and the
city was obligated to indemnify Villa, to represent him, and to bear the costs
of his representation. (Id. at pp. 1331–1332.) Villa, who was in the
courtroom when the settlement agreement was announced and acknowledged
as correct the city attorney’s statement that he appeared “ ‘on behalf of all
defendants,’ ” objected to the settlement. (Id at p. 1332.) Nevertheless, the
federal district court dismissed the action “with prejudice, pursuant to the
stipulation ‘entered into by the parties by and through their counsel of record
. . . .’ ” (Id. at p. 1333.)
       Villa subsequently sued the arrestee for malicious prosecution. (Villa,
supra, 4 Cal.App.4th at p. 1333.) The trial court entered summary judgment
in favor of the arrestee on the ground that Villa could not show the earlier
action terminated in his favor based on the prior settlement. (Id. at p. 1334.)
The Court of Appeal affirmed, applying the rule that “even where a defendant
does not agree to a settlement made on his behalf, his or her dismissal from
the lawsuit pursuant to that settlement will not be viewed as a favorable
termination as long as it was a necessary condition to achievement of the
overall settlement.” (Id. at p. 1336.) The court explained: “As [Villa]
concedes, the terms of the settlement between the City and [the arrestee]
required the dismissal of all the defendants, including Villa. The City could
not realize the benefits of settling the litigation with [the arrestee] unless the
action against Villa was simultaneously terminated. Otherwise, the City
would continue to be exposed to potential liability on Villa’s behalf . . . . In

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short, [the arrestee] dismissed Villa from the lawsuit because it was
necessary to effect the settlement with the City. Such a termination does not
necessarily reflect [the arrestee’s] opinion that his action against Villa lacked
merit, and thus does not qualify as a favorable termination for purposes of a
malicious prosecution action.” (Ibid., italics added.)
      In Haight v. Handweiler (1988) 199 Cal.App.3d 85 (Haight), Haight,
represented by attorney Gergen, sued one Dr. Godes, represented by attorney
Handweiler, for medical malpractice. (Haight, at p. 87.) The jury rendered a
verdict for Godes after Haight’s expert gave unfavorable testimony. (Ibid.)
Godes then sued Haight, Gergen, and their expert for malicious prosecution.
(Ibid.) The expert settled for $37,500, and Gergen offered to settle for the
same amount “in exchange for the dismissal of both Gergen and Haight.”
(Ibid.) Haight did not authorize the dismissal, but learned of it when the
settlement was finalized, after Gergen’s attorney tried to get him to sign a
release of future claims. (Ibid.) Haight then sued Godes and Handweiler for
malicious prosecution. (Ibid.) At trial, the issue of favorable termination was
tried first, and judgment was rendered against Haight. (Ibid.)
      On appeal, Haight argued he did not agree to the settlement so the
termination should be treated as a voluntary dismissal, i.e., a termination in
his favor. (Haight, supra, 199 Cal.App.3d p. 89.) The Court of Appeal
disagreed, explaining the focus of the favorable termination inquiry was not
on Haight’s opinion of his own innocence, but on the opinion of Godes. (Ibid.)
The court then explained that the determination of the reasons underlying
Godes’s dismissal of Haight was a question of fact and that substantial
evidence supported the trial court’s conclusion that Haight’s dismissal was
necessary to effectuate the settlement. Namely, essentially undisputed
testimony was presented that “[Gergen’s attorney] insisted on Haight’s

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dismissal as a condition of settlement because he wanted to protect Gergen
from future cross-complaints”; that Handweiler advised Godes to dismiss
Haight because Gergen would not settle otherwise and because $75,000 was
reasonable compensation for the damage Godes suffered; and that Godes
authorized the dismissal based on Handweiler’s advice and to achieve the
settlement. (Ibid.)
      In spite of the foregoing, we take a moment to note there is no
categorical rule that a favorable termination can never be found when a case
is terminated by settlement. Indeed, the California Supreme Court has
indicated such a categorical rule is inappropriate. (Siebel, supra, 41 Cal.4th
at p. 742 .) So while case law supports a general rule that termination
pursuant to settlement is not considered favorable for purposes of malicious
prosecution (Haight, supra, 199 Cal.App.3d at p. 88), exceptions may arise.
(See, e.g., Siebel, supra, 41 Cal.4th at p. 743.)
                   (b) Analysis
      We now turn to appellants’ main contention, which is that the
underlying action was not terminated in Trombetta’s favor because
Trombetta was dismissed pursuant to a settlement agreement. Starting from
the premise that Trombetta’s dismissal was necessary to that settlement,
appellants argue the dismissal does not reflect on the merits of the case or
otherwise indicate Trombetta’s innocence of the misconduct alleged in the
cross-complaint. In making this argument, appellants rely heavily on Villa,
supra, 4 Cal.App.4th 1327.
      The case at hand, however, is materially distinguishable from Villa. In
that case, Officer Villa, the malicious prosecution plaintiff, conceded that the
settlement in a prior action between the City of Alameda (Villa’s employer
and codefendant) and Seeterlin (the arrestee who sued the city and Villa) was

                                        12
contingent on Villa’s dismissal. (Villa, supra, 4 Cal.App.4th at p. 1336.)
Specifically, because the city was obligated as Villa’s employer to represent
and indemnify him in Seeterlin’s lawsuit, the city “could not realize the
benefits of settling the litigation with Seeterlin unless the action against
Villa was simultaneously terminated.” (Ibid.) Accordingly, the settlement
did not reflect a termination favorable to Villa because, as Villa
acknowledged, the city required his dismissal from the lawsuit “to effect the
settlement.” (Ibid.) Trombetta makes no similar concession here, however,
and neither Trombetta nor his attorney participated in the settlement
negotiations in case no. SCV-252696. More to the point, there is no evidence
that the settling cross-defendants, such as OHI and Carolina, made the
settlement with Harry contingent on Trombetta’s dismissal. Without such
evidence, the fact remains that the cross-claims against Trombetta were
voluntarily dismissed with prejudice.
      This case is also distinguishable from Haight. In Haight, “essentially
undisputed” evidence was presented during trial that Gergen, who was sued
along with Haight in the prior action, made settlement in the prior action
contingent on the dismissal of Haight, who would later become the malicious
prosecution plaintiff. (Haight, supra, 199 Cal.App.3d at pp. 87, 89.) But as
already stated, here there is no evidence in the record that the settling cross-
defendants, such as OHI and Carolina, required the dismissal of Trombetta,
who did not participate in the settlement. While there is evidence that
dismissal of the cross-complaint as to all cross-defendants was a term of the
settlement, there is no evidence indicating how that term came to be. As the
trial court observed, “[t]he record gives no direct discussion regarding the
reasoning or why” Harry and the other appellants here dismissed the cross-

                                        13
complaint against Trombetta and the others. Not every term in a contract is
essential, and we cannot simply assume otherwise here.
      Appellants assert that Trombetta’s dismissal was “a necessary, and in
fact required, condition to achievement of the overall settlement,” but provide
no record citations to evidence that cross-defendants, such as OHI and
Carolina, who negotiated the settlement, required this. We have reviewed
the record and found no such evidence. Patterson’s declarations
accompanying his moving and reply papers shed no light on the subject.
Ultimately, without such evidence, the record provides no indication the
dismissal of Trombetta with prejudice could not reflect a favorable
termination in his favor.
      Rejecting appellants’ argument, however, does not end our discussion.
Instead, we must examine the record and consider the judgment as a whole
to determine if the disposition “ ‘ “ ‘reflects the opinion of the court or the
prosecuting party that the action would not succeed.’ ” ’ ”4 (Sycamore Ridge,
supra, 157 Cal.App.4th at p. 1399.) Thus, we assess if Trombetta made a
prima facie showing that his claims have minimal merit. (Navellier v.
Sletten, supra, 29 Cal.4th at p. 94.)
      Here, we conclude Trombetta carried his burden. The evidence reflects
that from around 2009 to 2011, OHI hired Trombetta, in part to keep it
apprised of the status and consequences of the marital dissolution
proceedings and to review the judgment in case no. SCV-238447. During this
time, Trombetta did some work for Carolina in connection with a motion to
compel in the dissolution matter. Then, in 2013, attorney Daniels hired
Trombetta to represent Daniels and Daniels’ company, and also to act as

4     Harry repeatedly claims he “prevailed” by achieving the goals of his
cross-complaint but this ignores the test set out here.

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cocounsel for O’Hagin HMM, O’Hagin SMF, O’Hagin Manufacturing and
Twin Concord in connection with the cross-complaint in case no. SCV-252696.
Trombetta was not named as a cross-defendant until the first amended cross-
complaint was filed in October 2013, after Trombetta’s first appearance as
counsel in early September 2013. After Trombetta subpoenaed financial
records for Patterson, Harry, Gaggs, Charter Star Limited and Jalerm Hong
Kong in case no. SCV-252696, Harry and Gaggs filed a separate lawsuit
against Trombetta and Daniels for abuse of process (case no. SCV-254711)
that was dismissed after Trombetta and Daniels prevailed on their anti-
SLAPP motion. In January and September 2014, Trombetta filed
declarations in case no. SCV-252696 attesting he was hired solely as
litigation counsel in the aforementioned matters, he never acted in a
transactional capacity, and he had nothing to do with the alleged fraudulent
transfers at the heart of the cross-complaint in case no. SCV-252696.
      With regard to the circumstances surrounding the settlement, neither
Trombetta nor his attorney participated in the settlement negotiations. The
original judgment in case no. SCV-238447 was worth $9.5 million plus over
$1.1 million in prejudgment interest; Harry’s first amended cross-complaint
alleged the amount due on that judgment was over $16 million; and Harry
sought damages exceeding $15 million, punitive damages, and attorney fees
and costs. And yet Harry settled case no. SCV-238447 and the various
related cases, including case no. SCV-252696, for a total of $6.5 million.
      In addition to the foregoing, Trombetta’s declaration opposing the
special motion to strike averred there is no evidence that he or any of the
other attorneys named in the cross-complaint were involved in moving assets
from OHI to the newly formed OHI related companies. Moreover, Trombetta
asserted appellants named him as a cross-defendant to retaliate against him

                                       15
for previously representing other cross-defendants in prior proceedings, and
to intimidate and dissuade him from engaging in future representation of
these parties and from discovering more information about appellants’ tax
fraud scheme.
      The evidence, including the circumstances of the dismissal and terms of
the underlying judgment, permits the reasonable inference that the
allegations against Trombetta were groundless, and that the prosecuting
parties—i.e., Harry and his attorneys—knew they could not prevail against
Trombetta for the misconduct alleged and so dismissed him. (Sycamore
Ridge, supra, 157 Cal.App.4th at p. 1399.) And as already discussed, none of
the evidence shows, much less conclusively establishes, Trombetta’s
dismissal was a “necessary” term of the settlement required by the parties,
such as Carolina and OHI, who negotiated the settlement. Again, there is no
evidence concerning how that term came to be, and without such evidence, we
cannot say the dismissal was not akin to a unilateral dismissal by appellants,
or that it should defeat Trombetta’s claim as a matter of law. (Baral, supra, 1
Cal.5th at pp. 384–385.)
      In sum, Trombetta made a sufficient prima facie showing that the
claims against him in case no. SCV-252696 were terminated in his favor.
            2. Remaining Elements
      Appellants contend Trombetta was unable to demonstrate the
remaining elements of a malicious prosecution claim, i.e., malice and lack of
probable cause.
      “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, and past cases establish that the defendant’s motivation is a
question of fact to be determined by the jury.” (Sheldon Appel Co. v. Albert &

                                      16
Oliker (1989) 47 Cal.3d 863, 874.) “Whereas the malice element is directly
concerned with the subjective mental state of the defendant in instituting the
prior action, the probable cause element calls on the trial court to make an
objective determination of the ‘reasonableness’ of the defendant’s conduct,
i.e., to determine whether, on the basis of the facts known to the defendant,
the institution of the prior action was legally tenable. The resolution of that
question of law calls for the application of an objective standard to the facts
on which the defendant acted.” (Id. at p. 878.)
      Here, the evidence previously discussed supports the conclusion that
appellants filed the cross-complaint against Trombetta without probable
cause and with malice. In addition to the foregoing, we note Trombetta’s
declaration in opposition to the special motion to strike also averred that
Patterson acknowledged naming the various attorneys including Trombetta
as cross-defendants “because he had been sued by OHI as a [d]efendant in
the [c]omplaint for unlawful activity.” Additionally, even after settling the
case in 2015 and telling the court they would dismiss Trombetta, appellants
did not actually dismiss Trombetta from the action until late 2017. (See
Zamos v. Stroud (2004) 32 Cal.4th 958, 970 [an attorney is liable “for the
damages incurred from the time the attorney reasonably should have caused
the dismissal of the lawsuit after learning it has no merit” and “can avoid
liability by promptly causing the dismissal of, or withdrawing as attorney in,
the lawsuit”].)
      Appellants argue that Trombetta did not meet his burden at the second
step of the anti-SLAPP inquiry because he did not produce additional
“corroborating evidence” to support statements made in his declaration, such
as statements denying any participation in the misconduct claimed against
him in the cross-complaint. But appellants cite no authority indicating the

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evidence Trombetta produced was insufficient. (See generally Sweetwater
Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, 949 [at
the second stage, “the court may consider affidavits, declarations, and their
equivalents if it is reasonably possible the proffered evidence set out in those
statements will be admissible at trial”]; Soukup v. Law Offices of Herbert
Hafif (2006) 39 Cal.4th 260, 291 [in assessing whether a plaintiff has shown a
probability of prevailing, the court must “ ‘accept as true the evidence
favorable to the plaintiff’ ”].)
      Finally, appellants argue Trombetta failed to set forth evidence of any
recoverable damages, aside from his expenditure of time, which is not
recoverable. This is meritless.
      “The malicious commencement of a civil proceeding is actionable
because it harms the individual against whom the claim is made . . . . The
individual is harmed because he is compelled to defend against a fabricated
claim which not only subjects him to the panoply of psychological pressures
most civil defendants suffer, but also to the additional stress of attempting to
resist a suit commenced out of spite or ill will, often magnified by slanderous
allegations in the pleadings. In recognition of the wrong done the victim of
such a tort, settled law permits him to recover the cost of defending the prior
action including reasonable attorney’s fees [citations], compensation for
injury to his reputation or impairment of his social and business standing in
the community [citations], and for mental or emotional distress [citation].”
(Bertero v. National General Corp. (1974) 13 Cal.3d 43, 50–51.)
      Here, Trombetta’s declaration claimed he sustained economic loss
because he had to pay for litigation fees and costs, and he had to spend
innumerable hours dealing with the case, substantially displacing his income.
Also, he had to report the suit to his malpractice insurer, and his name now

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appears on public documents as having been sued twice. This is prima facie
evidence of recoverable harm, and appellants fail to point to any authority to
the contrary.
      In sum, Trombetta has carried his burden under the second step of the
anti-SLAPP inquiry to demonstrate a probability of success as to his
malicious prosecution claim and claim for damages.
      B. The Unlawful Business Practices Claim
      Because Trombetta’s cause of action for unlawful business practices
appears to be a so-called “mixed cause of action,” we preface our discussion by
noting that “[w]hen relief is sought based on allegations of both protected and
unprotected activity, the unprotected activity is disregarded at [the first
stage of the anti-SLAPP inquiry]. If the court determines that relief is
sought based on allegations arising from activity protected by the statute, the
second step is reached. There, the burden shifts to the plaintiff to
demonstrate that each challenged claim based on protected activity is legally
sufficient and factually substantiated. The court, without resolving
evidentiary conflicts, must determine whether the plaintiff’s showing, if
accepted by the trier of fact, would be sufficient to sustain a favorable
judgment. If not, the claim is stricken. Allegations of protected activity
supporting the stricken claim are eliminated from the complaint, unless they
also support a distinct claim on which the plaintiff has shown a probability of
prevailing.” (Baral, supra, 1 Cal.5th at p. 396.)
      With regard to the unfair business practices cause of action, the trial
court indicated the complaint appeared to set forth two “different causes of
action for unfair business practices.” Specifically, some of the allegations
were about appellants engaging in a tax fraud scheme, while other
allegations concerned the malicious prosecution conduct underlying the first

                                       19
cause of action, namely, appellants’ use of litigation to harass, intimidate,
and influence Trombetta and others similarly situated from bringing the
alleged tax fraud scheme to light. The court indicated the former claim was
not susceptible to attack under section 425.16 because it did not arise from
protected activity, but the latter claim did fall within the purview of the
statute. The court then found Trombetta provided evidence to demonstrate a
probability of prevailing.
      Neither party challenges the trial court’s division of the unfair business
practices claim into two separate unfair business practices, nor do they
dispute that only the malicious prosecution allegations fall within the
purview of the anti-SLAPP statute. We agree with the court’s
determinations. Because only the abusive litigation portion of the claim is
based on protected activity, we consider whether Trombetta established that
particular claim was legally sufficient and factually substantiated. (Baral,
supra, 1 Cal.5th at p. 396.)
      Appellants contend Trombetta failed to satisfy his burden because the
litigation privilege in Civil Code section 47, subdivision (b) applies, and so
Trombetta’s sole remedy, they argue, is to proceed by way of his malicious
prosecution cause of action. Relying on Rubin v. Green (1993) 4 Cal.4th 1187
(Rubin), appellants assert that Trombetta cannot recast his malicious
prosecution claim as an unfair business claim.
      “A plaintiff cannot establish a probability of prevailing if the litigation
privilege precludes the defendant’s liability on the claim.” (MMM Holdings,
Inc. v. Reich (2018) 21 Cal.App.5th 167, 183.) “The litigation privilege . . .
provides that a ‘publication or broadcast’ made as part of a ‘judicial
proceeding’ is privileged. This privilege is absolute in nature, applying ‘to all
publications, irrespective of their maliciousness.’ [Citation.] ‘The usual

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formulation is that the privilege applies to any communication (1) made in
judicial or quasi-judicial proceedings; (2) by litigants or other participants
authorized by law; (3) to achieve the objects of the litigation; and (4) that
[has] some connection or logical relation to the action.’ [Citation.] The
privilege ‘is not limited to statements made during a trial or other
proceedings, but may extend to steps taken prior thereto, or afterwards.’ ”
(Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232,
1241.) Moreover, the immunity offered by the litigation privilege cannot be
circumvented by casting a claim as one for unlawful business practices.
(Rubin, supra, 4 Cal.4th at pp. 1200–1204.)
      Considering the foregoing, and the case law holding that filing of
pleadings in a litigation are communicative acts that are protected by the
litigation privilege (Rubin, supra, 4 Cal.4th at p. 1195), we conclude the
litigation privilege applies to appellants’ filing of their cross-complaint in case
no. SCV-252696. Thus, Trombetta’s claim—to the extent it is based on that
filing—is not legally sufficient. In reaching this conclusion, we note
Trombetta failed to respond to this argument in his brief. Nor did he point to
any exception to the litigation privilege that might make this portion of his
unfair business practices claim viable.
      Under Baral, legally insufficient claims must be stricken, and
“[a]llegations of protected activity supporting the stricken claim are
eliminated from the complaint, unless they also support a distinct claim on
which the plaintiff has shown a probability of prevailing.” (Baral, supra, 1
Cal.5th at p. 396, italics added.) Here, although the subject claim is legally
insufficient, Trombetta has shown a probability of prevailing on his malicious
prosecution claim. Therefore, while the alleged malicious prosecution of the
cross-complaint in case no. SCV-252696 cannot serve as the basis for the

                                        21
unlawful business practices claim, appellants are not entitled to have the
allegations eliminated from the complaint. Instead, evidence of the alleged
malicious prosecution may properly be considered by a jury when evaluating
the merits of this claim. (See, e.g., Jackson v. Mayweather (2017) 10
Cal.App.5th 1240, 1266–1267.)
      Because we affirm the denial of the special motion to strike, we reject
appellants’ claim that they are entitled to attorney fees and costs because
they should have prevailed on the anti-SLAPP motion.
      We also reject Trombetta’s request, in his respondent’s brief, that we
sanction appellants on the ground they filed this appeal for purposes of delay.
Trombetta did not follow the procedure set out in California Rule of Court
8.276 for requesting sanctions, and in any event, we think Trombetta’s
proffered proof of appellants’ improper purpose is insufficient.
      Before concluding, we additionally note that Trombetta requests
judicial notice of: (1) the 2012 judgment in the dissolution action between
Harry and Carolina, which includes a copy of the marital settlement
agreement; and (2) various federal district court documents concerning a
shipping company named Sargeant Marine, Inc., that entered a guilty plea in
2020 to international bribery and money laundering via foreign shell
companies. We deny these requests because Trombetta did not establish the
relevance of these documents, and they are unnecessary to our resolution of
the issues on appeal.
                                 DISPOSITION
      The order of the trial court denying the anti-SLAPP motion is affirmed.
Trombetta is entitled to costs on appeal.

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                                      _________________________
                                      Fujisaki, Acting P. J.

WE CONCUR:

_________________________
Petrou, J.

_________________________
Jackson, J.

A158897/Trombetta v. Patterson

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