Cheong Yu Yee v. Don Cheung

We reject Yee’s contentions on appeal and affirm the trial court’s rulings.

FACTUAL AND PROCEDURAL BACKGROUND

A. Factual background

Lin Wah is an organization whose members promote and participate in Chinese opera. Sometime in 2004, Lin Wah members met with Yee about the possibility of forming a nonprofit musical organization to stage and perform Chinese opera events. In 2005, Yee and Lin Wah formed the nonprofit organization “Asian Culture & Senior Center, Inc.” (ACSC). A representative of Lin Wah withdrew funds from its bank account and deposited them into an account created for ACSC. Yee became president of ACSC, and Cheung, one of the members of Lin Wah, became the treasurer of ACSC.

In 2006, a dispute arose concerning the management of the ACSC bank account, to which Cheung had access. At some point, Yee removed Cheung as a signatory of the ACSC bank account. Members of Lin Wah were unhappy with Yee’s decision and accused Yee of withholding the funds. The members of Lin Wah voted to disassociate from Yee and ACSC.

Not long after Lin Wah and Yee parted ways, members of Lin Wah approached Wong-Avery for assistance in recovering from Yee money that they believed rightfully belonged to Lin Wah. Wong-Avery learned that Yee had hired an attorney to represent his interests with respect to the monetary dispute. Wong-Avery referred Lin Wah members to Attorney Jensen to assist them in the matter. In November 2007, Jensen sent a letter to Yee on behalf of Lin Wah requesting that he return the disputed funds.

As with all questions of statutory interpretation, we begin with the words of the statute. “ ‘ “[W]e must look first to the words of the statute ‘because they generally provide the most reliable indicator of legislative intent.’ [Citation.] If the statutory language is clear and unambiguous our inquiry ends. ‘If there is no ambiguity in the language, we presume the Legislature meant what it said and the plain meaning of the statute governs.’ [Citations.] In reading statutes, we are mindful that words are to be given their plain and commonsense meaning. [Citation.]” [Citation.] Thus, we “avoid a construction that would produce absurd consequences, which we presume the Legislature did not intend. [Citations.]” [Citation.]’ ” (Vafi, supra, 193 Cal.App.4th at p. 880.)

Other principles of statutory interpretation are also helpful: “ ‘[T]he intention of the Legislature ... is to be pursued, if possible; and when a general and [a] particular provision are inconsistent, the latter is paramount to the former. So a particular intent will control a general one that is inconsistent with it.’ ” (Vafi, supra, 193 Cal.App.4th at p. 880, quoting § 1859.) “Thus, a specific statute of limitations takes precedence over a general one, even though the latter ‘ “would be broad enough to include the subject to which the more particular provision relates.” [Citation.]’ [Citations.]” (Vafi, supra, at p. 880.)

When determining which statute of limitations applies to a particular action, a court considers what the principal purpose or “gravamen” of the action is, rather than the form of action or the relief demanded. (Vafi, supra, 193 Cal.App.4th at p. 880.)

The plain language of section 340.6 applies to all actions, with the exception of those actions asserting actual fraud, that are brought against an attorney for that attorney’s “wrongful act or omission . . . arising in the performance of professional services.” (§ 340.6.) The phrase “ ‘wrongful act or omission’ ” is “used interchangeably as a reference to both tortious and contractual wrongdoing.” (Southland Mechanical Constructors Corp. v. Nixen

Yee’s complaint alleges that Jensen acted wrongfully in “pursuing] a meritless lawsuit against [Yee] for fraud and conversion” and in “fil[ing] and continu[ing] litigation of the Underlying Action on behalf of [the nonattomey defendants] despite the fact no reasonable attorney would have done so.” Thus, the gravamen of Yee’s complaint against Jensen is the allegation that Jensen engaged in wrongful acts in his performance of professional legal services in his representation of the nonattomey defendants. This claim clearly falls within the plain language of the statute. (See Vafi, supra, 193 Cal.App.4th at p. 880.) Yee’s claim against Jensen also falls within the plain language of the alternative statute of limitations set forth in section 335.1 that has been held generally applicable to malicious prosecution actions (see Stavropoulos, supra, 141 Cal.App.4th at p. 197).

As noted, where more than one statute might apply to a particular claim, “ ‘a specific limitations provision prevails over a more general provision.’ [Citation.]” (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308 , 1316-1317 [ 64 Cal.Rptr.3d 9 ].) Given that section 340.6 is a more specific statute of limitations, applicable only to actions against attorneys for their wrongful acts or omissions, its provisions prevail over the more general “catchall” statute of limitations for claims against any defendant based on his or her alleged “wrongful act or neglect” of another.

We are not persuaded by Yee’s argument that the language of section 340.6 “contemplates situations where the wrongful act is related to the duties of an attorney to the client.” (Italics added.) We are bound by the plain language of the statute, which clearly applies when “the plaintiff” discovers the wrongful act on the part of the attorney. There is no requirement in the statute that the plaintiff have been a client of the attorney. (§ 340.6.) Rather, the Legislature chose to use the term “plaintiff’ and not “client,” in framing the entire provision. Although one of the tolling provisions included in the statute provides for tolling in a situation in which an attorney continues to represent “the plaintiff,” the other tolling provisions do not indicate that they are limited to situations involving actions by a client against his or her attorney, as opposed to claims by a third party against an attorney.

Yee’s contention that the phrase “a wrongful act or omission” in section 340.6 refers only to “malpractice” is undermined by the fact that the term “malpractice” does not appear anywhere in the statute. If the Legislature had wanted to limit section 340.6 to malpractice actions between clients and attorneys, it could have done so by making it clear that the actions to which it applies are limited to those brought by a client or former client against his or her attorney for malpractice. The Legislature did not do this, and instead, enacted a broadly worded statute that limits the time within which any plaintiff may bring an action against an attorney for the attorney’s conduct “arising in the performance of professional services.” (Ibid.)

Unless giving the words of a statute their plain and commonsense meaning would produce “ ‘ “absurd consequences,” ’ ” we adhere to the plain meaning. (Vafi, supra, 193 Cal.App.4th at p. 880.) Although in enacting section 340.6, the Legislature may have intended the statute to apply to malpractice actions against an attorney by a client, the language of the statutory provision is not limited tó that situation, and we cannot say that interpreting the one-year limitation set forth in section 340.6 to apply to a malicious prosecution action initiated by a third party against an attorney would produce absurd consequences. First, we note that “malicious prosecution has traditionally been regarded as a disfavored cause of action because ‘the tort has the potential to impose an undue “chilling effect” on the ordinary citizen’s willingness to report criminal conduct or to bring a civil dispute to court.’ [Citation.] 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.’ [Citation.]” (Stavropoulos, supra, 141 Cal.App.4th at p. 197.) Arguably, this disfavor for malicious prosecution actions could apply even more so to malicious prosecution claims against an attorney, who, by the nature of his or her profession, is more likely to be involved in litigation than the average plaintiff, and thus, may be more likely to be subjected to malicious prosecution claims.

Second, interpreting section 340.6 as imposing a one-year statute of limitations for malicious prosecution actions against attorneys supports the

For purposes of an anti-SLAPP motion, “[t]he court considers the pleadings and evidence submitted by both sides, but does not weigh credibility or compare the weight of the evidence. Rather, the court’s responsibility is to accept as true the evidence favorable to the plaintiff . . . .” (HMS Capital, supra, 118 Cal.App.4th. at p. 212.) A plaintiff “need only establish that his or her claim has ‘minimal merit’ [citation] to avoid being stricken as a SLAPP. [Citation.]” (Soukup v. Law Offices of Herbert Hafff (2006) 39 Cal.4th 260 , 291 [ 46 Cal.Rptr.3d 638 , 139 P.3d 30 ].)

To establish a claim for malicious prosecution, a plaintiff is required to show that a prior claim initiated by the defendant was (1) pursued to a legal termination favorable to the plaintiff, (2) brought without probable cause, and (3) initiated with malice. (Villa v. Cole (1992) 4 Cal.App.4th 1327 , 1335 [ 6 Cal.Rptr.2d 644 ].)

2. Analysis

Yee does not challenge the trial court’s conclusion that his malicious prosecution claim falls within the purview of the anti-SLAPP statute. (See Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728 , 735 [ 3 Cal.Rptr.3d 636 , 74 P.3d 737 ] (Jarrow) [a malicious prosecution action alleges that the defendant committed a tort by filing a lawsuit, and therefore, courts routinely conclude that malicious prosecution causes of action fall within the purview of the anti-SLAPP statute].) Accordingly, we address whether Yee presented evidence sufficient to “[establish] that there is a probability that [he] will prevail on the claim.” (§ 425.16, subd. (b)(1).)

Trial in the Lin Wah action resulted in a legal termination favorable to Yee. We therefore consider whether Yee has shown that the nonattomey defendants filed and prosecuted the complaint against him without probable cause.

In determining whether the prior action was legally tenable, i.e., whether the action was supported by probable cause, the court is to construe the allegations of the underlying complaint liberally, in a light most favorable to the malicious prosecution defendant. (Songster, supra, 68 Cal.App.4th at p. 165.) Further, we keep in mind that “every case litigated to a conclusion has a losing party, but that does not mean the losing position was not arguably meritorious when it was pled. [Citation.] And just as an action that ultimately proves nonmeritorious may have been brought with probable cause, successfully defending a lawsuit does not establish that the suit was brought without probable cause. [Citations.]” (Jarrow, supra, 31 Cal.4th at p. 743.)

We conclude that Yee has failed to show a probability of prevailing on the lack of probable cause element of his malicious prosecution claim.

Certain nonfinal rulings on the merits may serve as the basis for concluding that there was probable cause for prosecuting the underlying case on which a subsequent malicious prosecution action is based. (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811 , 817-818 [ 123 Cal.Rptr.2d 19 , 50 P.3d 733 ].) This is based on the notion that “[c]laims that have succeeded at a hearing on the merits, even if that result is subsequently reversed by the trial or appellate court, are not so lacking in potential merit that a reasonable attorney or litigant would necessarily have recognized their frivolousness.” (Id. at p. 818.) Thus, for instance, the denial of a nonsuit motion and a subsequent plaintiff’s jury verdict has been found sufficient to

A review of Cheung’s testimony at trial in the Lin Wah action, which included questions pertaining to his deposition testimony, demonstrates that Cheung, who utilized an interpreter during his testimony, was confused with respect to questions about whether he had spoken with members of the media. Specifically, Cheung readily admitted that he “sponsored” a press conference sometime in November 2006 concerning the dispute between Lin Wah and Yee, and that he spoke with the reporters who were present at that press conference. He was then asked whether he remembered his prior deposition testimony, in which he had said that he had “never spoken to any member of the media regarding this matter.” Cheung’s response to this question is telling, in that he said that he had invited “the press, the reporters” but that he “was not speaking to anyone privately.” At trial, when pressed again with respect to his deposition response to a question about whether he had ever “ ‘given an interview to any member of the media concerning Mr. Yee,’ ” which was that he had not “spoken to anyone,” Cheung agreed with his deposition testimony, and reaffirmed that he “personally did not speak to any person of the media because [he] did not know any of them.” When asked about what seemed to be conflicting testimony about holding a press conference, and why he had not stated during his deposition that he had held the press conference, Cheung said, “Nobody asked me that question at the deposition.”

It is clear from this portion of the transcript that rather than constituting evidence of fraudulent testimony, Cheung misunderstood the questions concerning his having “spoken” to members of the press as referring to instances in which he had spoken privately with members of the press, separate from the press conference that he readily admitted he had “sponsored.” We therefore reject Yee’s contention that “[b]ut for this sort of testimony, the lower court would have granted Mr. Yee’s non-suit motion.”

Because the record demonstrates that the defendants in the malicious prosecution case had probable cause to bring the underlying action, Yee cannot establish a probability that he will prevail on his malicious prosecution claim.

We deem the order sustaining Jensen’s demurrer to the complaint without leave to amend to have incorporated a judgment of dismissal as to Jensen, and we affirm that judgment. We also affirm the trial court’s order granting the remaining defendants’ special motions to strike. Costs are awarded to respondents.

Benke, Acting P. J., and O’Rourke, J., concurred.