Sycamore Ridge Apartments LLC v. Naumann

In Sycamore Ridge Apartments LLC v. Naumann (2007) 157 Cal.App.4th 1385, the LaFave law firm associated into an action in October 2004 that had been filed in June 2003 by the Naumann law firm on behalf of 45 defendants, including Shirley Powell. (Id. at pp. 1391-1392, 1394.) That action asserted 18 causes of action arising out of, among other things, the poor living conditions at the Sycamore Ridge Apartments. (Id. at pp. 1392-1393.) Powell's September 2003, discovery responses demonstrated that there was no factual basis to support a number of the causes of action alleged on Powell's behalf. (Id. at p. 1405.) On November 19, 2004, Powell dismissed her portion of the lawsuit without prejudice. (Id. at p. 1394.) On January 20, 2005, in exchange for a waiver of costs from Sycamore Ridge Apartments, Powell filed a dismissal with prejudice. (Ibid.) Sycamore Ridge Apartments subsequently brought an action for malicious prosecution against Powell and her attorneys. (Id. at p. 1391.) The trial court granted the LaFave law firm's subsequent anti-SLAPP motion, stating, "'It appears the LaFave defendants joined in the underlying case only two months before the case was dismissed and nine days after Powell had requested that her case be dismissed. There is no evidence presented that the LaFave defendants continued to prosecute her case or did anything during this time.'" (Sycamore Ridge, supra, 157 Cal.App.4th at p. 1396.) Sycamore Ridge Apartments appealed. Addressing malice, the Court of Appeal stated: "The complaint in this case contains a number of claims that are clearly untenable. If the LaFave defendants knew the relevant facts and did not take immediate steps to dismiss Powell's unmeritorious claims, one could infer that the continued prosecution of those claims was motivated by a malicious intent." (Sycamore Ridge, supra, 157 Cal.App.4th at p. 1409.) The Court of Appeal observed, "Maintaining a case one knows, or should know, is untenable continues to harm the defendant as long as the case remains open, since the defendant must continue to prepare a defense to the case as long as the case appears to be moving forward." (Id. at p. 1410.) Among other claims, the Court of Appeal rejected the LaFave defendants' claims that their role in the underlying action was limited to the "'mold exposure aspects of the litigation'" and that they were "'not involved in deciding which plaintiffs to include in the lawsuit.'" (Sycamore Ridge, supra, 157 Cal.App.4th at p. 1410.) The Court of Appeal held that the LaFave defendants' "protestations that they believed the claims in the lawsuit were supported by probable cause and that they harbored no malice do not establish, as a matter of law, that Sycamore Ridge cannot prevail on these elements of its malicious prosecution action. None of the LaFave defendants' assertions negate the fact that they formally associated into the case and that Powell's claims remained active for approximately a month after their entry into the case, despite the obvious failings of Powell's complaint." (Id. at p. 1411)