Saunders v. Ziprick & Assocs.

GEORGE SAUNDERS, Plaintiff and Appellant, v. ZIPRICK & ASSOCIATES, LLP et al., Defendants and Respondents.

D080077

California Court of Appeals, Fourth District, First Division

February 23, 2023

NOT TO BE PUBLISHED

APPEAL from orders of the Superior Court of San Bernardino, No CIVDS2019810, Donald R. Alvarez, Judge. Affirmed.

Law Offices of Raul B. Garcia and Raul B. Garcia; Law Office of Antoniette Jauregi and Antoniette Jauregui; and Raymond G Ramirez for Plaintiff and Appellant.

Hammett &Galan and Erik J. Hammett for Defendants and Respondents.

BUCHANAN, J.

George Saunders and Donald Paulson went into business together buying and selling real estate. When disputes arose between them, Saunders sued Paulson to enforce payment on a promissory note, among other causes of action. Paulson retained the law firm Ziprick &Associates LLP (Law Firm) including attorneys Robert H. Ziprick (Robert), Jonathan R. Ziprick (Jonathan),^[1] and William F. Ziprick (William), to defend the suit and file a cross-complaint against Saunders. Paulson also retained his accountant, Louise Woiteshek (Woiteshek), as an expert and percipient witness in the case.

After Saunders won favorable verdicts in two bifurcated trials, he brought a separate suit for abuse of process and malicious prosecution against Law Firm, attorneys Robert, Jonathan, and William, and accountant Woiteshek (collectively, defendants). Defendants filed a special motion to strike the complaint as a strategic lawsuit against public participation (SLAPP) on the grounds that it arose from protected litigation activity and lacked merit. In granting the motion, the trial court ruled that: (1) the action arose from protected litigation activity, (2) the abuse of process claim was barred by the litigation privilege, and (3) Saunders failed to demonstrate a probability of prevailing on the malicious prosecution claim. Saunders moved for reconsideration, and the trial court denied his motion.

Saunders contends on appeal that the court erred by granting defendants' anti-SLAPP motion and denying his motion for reconsideration. We conclude the trial court correctly ruled that Saunders's action arose from protected activity and that he failed to establish a probability of prevailing on either of his claims. We further conclude that Saunders failed to show there were any new or different facts that would justify reconsideration. Accordingly, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. Underlying Litigation

In 2004, Saunders and Paulson agreed to purchase, develop, and sell properties together and split the profits. The parties did not reduce their agreement to writing or create a formal partnership entity. In early 2006, after the parties had purchased four properties, Saunders sought to exit the partnership. According to Paulson, their business relationship soured after Paulson discovered discrepancies in the accounting done by Saunders's wife (Dawn), who was initially in charge of the partnership's bookkeeping. After Paulson asked his accountant, Woiteshek, to review the partnership's financial records, the parties negotiated an agreement under which Paulson would pay Saunders $199,430.51, which was memorialized in a promissory note. In exchange, Saunders agreed to give up his interest in three of the four acquired properties.

However, Paulson never paid Saunders, and Saunders filed suit in late 2006 to recover the promissory note amount and seek other miscellaneous relief. Paulson retained Law Firm, with Robert as his attorney of record, to represent him in the suit. Paulson subsequently filed a cross-complaint against Saunders alleging, among other claims, that Saunders owed Paulson at least $65,000 in connection with diverted funds. Nearly four years later, after extensive discovery, Paulson filed a third amended cross-complaint against Saunders and his wife, alleging fraud and several other claims. Paulson, through counsel, deposed Saunders and his wife in connection with his cross-complaint and also retained Woiteshek as an expert and percipient witness. During that time, Law Firm attorneys Jonathan and William also assisted with preparing the case for trial.

Several years after Saunders first filed his original suit, he prevailed at the first phase of trial in 2013 to determine the enforceability of the promissory note. In the second phase in 2016, the court ruled mainly in favor of Saunders as to both his complaint and Paulson's cross-complaint, but concluded that Saunders did not prove his contract claims based on the promissory note. On cross-appeals by both parties, we reversed the judgment against Saunders on his contract claims, directed entry of judgment in his favor on those claims, and otherwise affirmed the judgment.

B. Current Complaint

In 2020, Saunders filed a complaint against Law Firm, Robert, William, Jonathan, and Woiteshek alleging abuse of process and malicious prosecution in one cause of action.^[2] According to the trial court's description, the complaint alleged the following misconduct: (1) that Paulson perjured himself in the underlying litigation; (2) that Woiteshek testified falsely about Saunders and his wife diverting funds; (3) that the attorney defendants knowingly elicited perjured testimony and encouraged Paulson to sign a false declaration; and (4) that respondents were "conspirators" in a scheme to use the underlying litigation to help Paulson avoid payment and to "wear[] Saunders down financially."

Defendants filed an anti-SLAPP motion pursuant to California Code of Civil Procedure^[3] section 425.16 on the grounds that the complaint arose from protected litigation activity and also lacked merit. Specifically, defendants argued that the abuse of process claim was barred by the litigation privilege.

(Civ. Code, § 47, subd. (b).) Defendants further argued that Saunders had no probability of success on his malicious prosecution claim because (1) a reasonable attorney would have believed probable cause existed for the causes of action in Paulson's cross-complaint, (2) defendants acted without malice, and (3) certain defendants had limited involvement in the underlying litigation.

In his opposition to the anti-SLAPP motion, Saunders submitted a declaration by his attorney, Raul Garcia, with no exhibits or documents attached. In Garcia's 16-page declaration, he purported to summarize facts known to him "based on [his] participation in depositions, exchange of discovery, participation in trials and appeals and review of depositions transcripts, trial transcripts and appellate opinions related to this case." Citing only to the declaration, Saunders argued there was no probable cause for defendants to initiate or continue prosecuting Paulson's cross-complaint because they purportedly knew that supporting testimony was false and certain claims were barred by statute. Saunders further argued that malice could be inferred from lack of probable cause.

The trial court granted the anti-SLAPP motion, finding first that Saunders's complaint arose from defendants' litigation of the underlying case, a protected activity. Relatedly, the court found that since the complaint only alleged conduct pertaining to the underlying suit, the litigation privilege was a complete bar to Saunders's abuse of process claim.

As to malicious prosecution, the court found that Saunders failed to demonstrate a probability of prevailing because the only evidence he submitted was Garcia's declaration, which was a mere "recitation of the unverified complaint's allegations" about which Garcia had no personal knowledge. The court also pointed out that there were no pleadings, discovery, or trial transcripts submitted with the declaration to support its recitation of alleged facts. In contrast, the court noted that defendants submitted declarations with exhibits that tended to show, among other things, that there was probable cause to pursue Paulson's cross-complaint. The court further found that through their declarations, defendants demonstrated that William, Jonathan, and Woiteshek were not involved in initiating or maintaining the litigation to a degree that they would be liable for malicious prosecution.

Saunders moved for reconsideration, this time attaching an amended declaration from Garcia including exhibits. According to Garcia, he did not submit the exhibits with his original declaration because he "did not want to burden the record with an abundance of documents and exhibits." Saunders argued in his motion that the attachments, consisting of pleadings, deposition transcripts, discovery, and other documents, supported Garcia's recitation of the facts. Defendants argued in opposition that the court should deny the motion to reconsider because it was untimely, was not based on new or different facts as required by section 1008, and failed to give a satisfactory explanation for why the exhibits were not provided in the first instance.

The trial court denied Saunders's motion for reconsideration finding that it was both untimely and without merit because each of the newly attached exhibits was part of the underlying litigation and could have been included with Garcia's initial declaration in response to the anti-SLAPP motion. The court also found that Garcia's desire to avoid "burden[ing] the record" was not a satisfactory explanation for why he failed to provide the exhibits earlier. Nonetheless, the court considered the exhibits and concluded that Saunders still had not shown a likelihood of success on his claims because the evidence did not show Paulson's cross-claims lacked probable cause, nor did the evidence indicate that defendants acted with malice. Finally, the court again found that Jonathan, William, and Woiteshek had limited roles in the...