West v. Taylor & Goins

Filed 11/30/05 West v. Taylor & Goins CA1/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

DAVID WEST, Plaintiff and Appellant, v. TAYLOR & GOINS LLP, et al., Defendants and Respondents.

A106106 (Alameda County Super. Ct. No. 2002-048375)

Following a grant of summary judgment, David West appeals from a dismissal entered in his malicious prosecution action against William Goring and his attorneys. We reverse.

BACKGROUND

A. The Contract

This case stems from a contract between Goring and Pennie Arneson for the sale of Arneson’s real property. West was Arneson’s agent in the transaction. Arneson and Goring executed the contract on July 28, 1999, with a closing date of September 10, 1999.

By the end of December 1999, despite having been granted various extensions, Goring had still not obtained funding. He was unhappy with his agent, whom he felt was not communicating properly or helping close the deal. West helped Goring prepare a letter terminating his agent. It read: “Without limiting any recourse any party to the above contract may have against you . . . , we hereby terminate any interest you may have in the above sale. You have not returned calls from either David West or Bill Goring, and most recently caused Quincy Virgilio (the lender) to withdraw his promised loan. [¶] . . . The present parties to the contract will attempt to complete the transaction: You will not be paid a commission.” Goring did not retain another agent. He neither expected West to help him with the transaction nor felt West was acting as his agent.

In early March 2000, Goring’s loan broker, Charles Mortimer, told West he believed he could obtain funding and close escrow by April 1. West offered a new closing date of April 15, 2000. While he knew the title company office was closed on Saturdays, he did not realize at the time that April 15th indeed fell on a Saturday. Sometime in March, West obtained a backup offer for the property at a higher price.

Goring had not secured a loan by the closing date and did not deposit the required funds into escrow. Goins testified at his deposition that he understood the loan was “in process” as of April 15th, but the funds were not yet available. Goring testified that he tried to close escrow on the 15th by faxing “every document that we had” to the title company and telling them the documents would be delivered on Monday when the office opened. The record contains no evidence that he attempted to do so on Monday, nor does it identify exactly which documents Goring faxed to the title company.

Four days after the closing date, West asked Goring to sign a document releasing the parties from the transaction. Goring was initially reluctant to sign, but acceded after West reminded him he had agreed to do so when the parties last extended the closing date. Goring was upset. He still wanted to close the deal and “was very close” to making it.

B. The Lawsuit

Goring, represented by Vernon C. Goins II and his firm Taylor & Goins LLP, sued Arneson on April 27, 2000. One year later he added West as a defendant. The amended complaint asserted three causes of action against West: interference with prospective economic advantage, failure to exercise reasonable care in the performance of statutory duties as a seller’s agent, and negligent performance of contract.

West successfully moved for summary judgment. The court found as a matter of law that Goring had failed to show an intent to interfere with contract; that the statutory provisions Goring relied on were inapplicable; and that West owed him no duty.

West sued Goring and his attorneys for malicious prosecution, and they moved for summary judgment, asserting they had probable cause to sue when they filed the amended complaint. They relied on four facts: first, that West procured the more favorable backup offer; second, that he typed the letter firing Goring’s agent; third, that he selected a closing date that fell on a Saturday, when he knew or should have known the title office was closed; and fourth, that he forced Goring to sign the cancellation document.

The trial court found Goring’s attorneys had probable cause to sue West and granted summary judgment as to them. It denied summary judgment as to Goring himself.^[1] This appeal timely followed.

DISCUSSION

I. Legal Standards

A. Summary Judgment

“The standard of review on appeal after an order granting summary judgment is well settled. ‘A trial court properly grants summary judgment where no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. [Citation.] We review the trial court’s decision de novo, considering all of the evidence the parties offered in connection with the motion (except that which the court properly excluded) and the uncontradicted inferences the evidence reasonably supports. [Citation.] In the trial court, once a moving defendant has “shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established,” the burden shifts to the plaintiff to show the existence of a triable issue; to meet that burden, the plaintiff “may not rely upon the mere allegations or denials of its pleadings . . . but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action.” [Citations.]’ ” (Swat-Fame, Inc. v. Goldstein (2002) 101 Cal.App.4th 613, 622 (Swat-Fame), disapproved on other grounds in Zamos v. Stroud (2004) 32 Cal.4th 958, 973 (Zamos).) “In reviewing the evidence, we strictly construe the moving party’s evidence and liberally construe the opposing party’s and accept as undisputed only those portions of the moving party’s evidence that are uncontradicted. ‘Only when the inferences are indisputable may the court decide the issues as a matter of law. If the evidence is in conflict, the factual issues must be resolved by trial. . . .’ ” (Swat-Fame, at pp. 622-623.)

B. Malicious Prosecution

To establish a cause of action for malicious prosecution, a plaintiff must demonstrate that the prior action was (1) initiated at the defendant’s direction, (2) terminated in plaintiff’s favor, (3) brought without probable cause, and (4) brought with malice. (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 871 (Sheldon Appel).)

The probable cause element is the focus here. This 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.” (Sheldon Appel, supra, 47 Cal.3d at p. 878.) “ ‘[P]robable cause requires evidence sufficient to prevail in the action or at least information reasonably warranting an inference there is such evidence.’ To put it another way, probable cause is lacking ‘when a prospective plaintiff and counsel do not have evidence sufficient to uphold a favorable judgment or information affording an inference that such evidence can be obtained for trial.’ ” (Arcaro v. Silva & Silva Enterprises Corp. (1999) 77 Cal.App.4th 152, 156-157 (Arcaro).)

While the existence of probable cause is a legal question to be determined by the court, if there is conflicting evidence about the facts on which the defendant relied, the “jury must resolve any controverted facts about the defendant’s knowledge before the trial court may make a legal determination of the issue of probable cause.” (Dalrymple v. United Services Auto. Assn. (1995) 40 Cal.App.4th 497, 516.)

Finally, a person can be held liable not only for filing a lawsuit without probable cause, but for continuing to prosecute after discovering a lack of probable cause. (Zamos, supra, 32 Cal.4th at p. 970, italics added.) Under Zamos, an attorney will be held liable for damages incurred from the time the attorney reasonably should have sought a dismissal. (Id. at p. 970.) Although decided after the ruling in this case, Zamos applies retroactively. (Bergman v. Drum (2005) 129 Cal.App.4th 11, 23-24.)

II. Analysis

With these principles in mind, we turn to whether the attorney defendants adduced undisputed facts establishing that they had probable cause.^[2] Framed differently, the issue is whether they demonstrated that they had evidence sufficient to sustain a judgment or information indicating that such evidence could be produced at trial. (Arcaro, supra, 77 Cal.App.4th at pp. 156-157.) They contend that the four allegedly undisputed facts set out above are sufficient. These facts, they maintain, “demonstrated that West’s conduct in the underlying real estate transaction was, at best, unreasonable, and that in his dealings with Goring, West did not act fairly, honestly and in good faith.” We turn to the evidence introduced on each of those facts.

1. The Backup Offer

It is undisputed that West sought and procured a backup offer at a higher purchase price while Goring was in escrow.^[3] The attorney defendants infer from this action that West had a motive to thwart Goring’s purchase because he stood to receive a higher commission under the backup contract.

In opposition, West submitted testimony from experienced realtors that (1) listing brokers regularly obtain backup offers to insure a prompt sale in case the original buyer cannot complete the transaction; and (2) obtaining a backup offer is the responsible thing for a broker to do if the prospective buyer is having difficulty performing. West also adduced testimony that Goins had no evidence West’s conduct changed in any way after he procured the backup offer.

The existance of the backup offer could support an argument that West had a financial disincentive to complete the original transaction. However, West asserts facts supporting an opposite conclusion.

2. Termination of Goring’s Agent

Defendants asserted that West helped type the letter discharging Goring’s agent and that Goring subsequently proceeded without an agent. From this, and from the statement in the letter that “the present parties to the contract will attempt to complete the transaction,” they infer that any reasonable attorney would surmise West disposed of Goring’s agent knowing he would proceed unassisted, so that West would receive the entire commission.

West did not dispute that he had typed the letter or that Goring subsequently proceeded without an agent. In opposition, however, he introduced deposition testimony that Goring had fired his agent because the agent was not communicating with him; that West did not convince him to do so or tell him he could not hire another agent; that Goring himself decided to handle the matter alone; that he did not look to West to assist him; and that he never felt West was acting as his agent. Goins was aware of these facts because he was present when they were discussed at Goring’s deposition before West was sued. Finally, West introduced expert evidence that it is a prudent business practice for a listing broker to send such a letter when a buyer fires his agent.

Here again, the facts fall short of disposing of the question as a matter of law. Defendants’ argument notwithstanding, the wording of the letter cannot reasonably be read as indicating West knew Goring would proceed without hiring another agent. More significantly, West’s opposing evidence indicates he acted only at Goring’s instigation, and that Goins was aware of this. At best then, the evidence on this subject points to conflicting inferences as to what Goins knew and whether it amounted to probable cause. “ ‘Only when the inferences are indisputable may the court decide the issues as a matter of law. If the evidence is in conflict, the factual issues must be resolved by trial. . . .’ ” (Swat-Fame, supra, 101 Cal.App.4th at pp. 622-623.)

3. Saturday Closing Date

Defendants introduced evidence that West selected a close of escrow date that fell on a Saturday; that West knew when he chose the date that the title company was closed on Saturdays; and that Goring tried to perform “certain tasks” on the closing date, but could not do so because the title company was closed. They conceded that West’s selection of the date, standing alone, would be insufficient to justify a finding of probable cause. However, they urged the court to consider the date selection as evidence, along with the other circumstances, from which a reasonable attorney could find probable cause to sue.

Notably, defendants’ make no claim that Goring would have been able to perform but for the Saturday closing date. Their statement of undisputed facts instead vaguely asserts that “Goring and Goins knew that Goring had tried to perform certain tasks at the title company on the close of escrow date, as required by his purchase contract, but found the company closed; and he was thereby preventing [sic] from doing so on that day.” (Italics added.) The supporting evidence, consisting of Goring’s equally vague deposition testimony, was as follows: “Q. On April 15th, 2000, did you make an attempt to close escrow on that date or did you do nothing? A. Yes. Q. For example, did you go there and try to deposit funds? A. What I did was, on—the 15th was a Saturday, and I faxed every document that we had to the title company and also informed them that physical delivery would be again on Monday.”

In opposition, West introduced Goins’s testimony that he did not recall Goring ever telling him the Saturday close date affected the transaction.^[4] Furthermore, Goins admitted he knew the loan funds were not available by the close of escrow. Thus, it is unclear how this evidence helps demonstrate probable cause to sue West. Assuming arguendo the selection of a Saturday close date might constitute negligence or even intentional misconduct, West introduced evidence that defendants knew their client could not have closed by April 15th in any event. Given the evidence that the date had no causal connection to the failure to complete the transaction, the attorney defendants have not shown it provided probable cause to sue.

4. The Cancellation

Defendants’ fourth purported fact was that West “coerced” Goring to sign the cancellation document several days after escrow was supposed to have closed. The evidence completely fails to support the allegation. While defendants claim they “believe” West threatened Goring with litigation, they cite no evidence to support that belief. Indeed, defendants concede “[t]he record is unclear as to what West said to Goring to procure Goring’s signature.” They cited testimony that West told Goring he “needed to” sign the cancellation document “because he agreed to do so in the extension granted in March in the event he failed to close escrow by the 15th of April.” Also, Goring was upset and did not want to sign. This record is insufficient to support a reasonable inference that West coerced Goring to sign the cancellation.

5. Summary

We agree with defendants that we consider all the facts and circumstances known to them as a whole, not in artificial isolation. Even viewed conjointly, however, defendants’ “facts” amount to no more than the sum of their parts. Defendants attempted to show that, as a matter of law, they possessed information reasonably warranting an inference that they had tenable claims against West when they initiated the action against him. The evidence adduced on summary judgment is insufficient to do so. Summary judgment was improperly granted.

DISPOSITION

The judgment is reversed and the case remanded to the trial court for further proceedings.

_________________________

Corrigan, Acting P. J.

We concur:

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Parrilli, J.

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Pollak, J.

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^[1] For clarity, we shall hereafter refer to Goins and the law firm as “defendants” or “the attorney defendants.”

^[2] Under Zamos, supra, 32 Cal.4th 958 the moving parties must also establish that they had probable cause to maintain their action against West. Relying on then-current authority, they restricted their showing to the facts known to them when they filed the amended complaint. The trial court, not having the benefit of Zamos when the summary judgment motion came before her, also relied on precedent that has been superseded. (Swat-Fame, supra, 101 Cal.App.4th 613; Zamos, at p. 966, fn 5.)

^[3] West disputed defendants’ assertion that the backup offer was for $10,000 over Goring’s contract price, objecting that the amount was not supported by admissible evidence. The court sustained an objection to evidence of the specific amount, but ruled it would consider that the backup offer was higher. West does not take issue with that ruling.

^[4] He also adduced evidence that Goring’s loan agent had originally set the closing for a Saturday; that West had suggested extending the date by two weeks as an accommodation to Goring; and that at the time he did not realize the closing fell on a Saturday. There is no evidence, however, that the attorney defendants were aware of these facts.