CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
BRIAN P. LANZ,
Plaintiff and Respondent,
Defendant and Appellant.
Super. Ct. No. SCV254359)
Appellant Peter Goldstone is a Santa Rosa attorney. So is respondent Brian Lanz. Lanz represented Hebe Garcia-Bolio (Bolio) in a Marvin action,1 in connection with which Lanz had a contingency fee agreement. The Marvin action settled on the third day of trial, following which there soon arose a dispute as to the value of the settlement—and therefore Lanz’s fee. Lanz filed suit against Bolio, who failed to respond, and her default was taken. Goldstone became Bolio’s lawyer and, following relief from default, filed an answer and, as pertinent here, a cross-complaint. The cross-complaint had three causes of action, including breach of fiduciary duty and professional negligence, and it alleged several ethical violations by Lanz of the Rules of Professional Conduct and the Business and Professions Code, including that he acted with “moral turpitude.”
By motions, Lanz defeated Bolio’s claims in the cross-complaint, leaving extant only Lanz’s claim against Bolio. That claim went to trial, with Lanz obtaining a complete victory, in a statement of decision highly critical of Bolio’s conduct.
Lanz then sued Goldstone for malicious prosecution. Goldstone filed an anti-SLAPP motion to dismiss. The trial court denied it, concluding that Lanz met his burden under prong two of the anti-SLAPP analysis, demonstrating a probability of success on all three elements of malicious prosecution. We reach the same conclusion, and we affirm.
The Parties, the Marvin Action, and the Settlement
Bolio and Denis Ronchelli were involved in a relationship that began in 1991 and ended in 2009. They were not married. They apparently lived in a house on King Street, Santa Rosa, a house owned by Ronchelli. He also owned a house in Modesto. The record does not reveal much else about either of them or their relationship. One thing we do know, because Goldstone tells us, is that Bolio is a CPA, apparently one who is, as Goldstone’s counsel admitted at oral argument, “internationally certified.”
In October 2009, Bolio retained Lanz to represent her in an action against Ronchelli, in connection with which Bolio signed an “Attorney-Client Contingency Fee Contract” (contract). The contract provided that Bolio was “hiring us to represent you in the matter of your claims against Denis W. Ronchelli, arising out of your relationship with him over the past 18 years. . . . If a court action is filed, we will represent you until a settlement or judgment, by arbitration or trial, is reached, and in connection with any appropriate post-trial motions.”
The contract also provided as follows:
“6. LEGAL FEES AND COSTS. We will only be compensated for legal services if a recovery is obtained for you. If no recovery is obtained, you will be obligated to pay only for costs, disbursements and expenses as described below.
“The fees to be paid by you to us will be 33 1/3 % (thirty-three and one-third percent) of the total recovery. Afterward, all unpaid costs and disbursements set forth in Paragraph 8, will be subtracted and the remainder paid to you. In the event that the case should go to trial or arbitration, or within 60 days from the first scheduled trial date or arbitration date, the fees to be paid by you to us will be 40% (forty percent) of the total recovery. [¶] . . . [¶]
“7. NEGOTIABILITY OF FEES. The rates set forth above are not set by law, but are negotiable between an attorney and client.”
The contract also included a provision by which Bolio granted Lanz a lien against any prospective recovery securing payment of the sums owed him. Finally, the agreement contained the express statement that Lanz does “not maintain errors and omissions (malpractice) insurance.”
Lanz filed suit on behalf of Bolio, a Marvin action against Ronchelli: Hebe Garcia-Bolio v. Denis Ronchelli, et al., Sonoma County Superior Court No. SCV-246349 (Marvin action). The record contains little of what occurred in the Marvin action. What we do know is that it proceeded to trial in August 2010, and that it was settled on the third day of trial. The settlement was overseen by the trial judge (the Honorable Elaine Rushing), and was memorialized in a written “Settlement Agreement and Order” signed by the parties and approved by Judge Rushing on August 30, 2010.
The settlement agreement provided that Ronchelli would pay Bolio $10,000 cash, pay off the $106,000 mortgage balance on the Modesto house, and transfer ownership of that house to Bolio. In exchange, Bolio agreed to dismiss her causes of action and vacate the house on King Street where she had been residing.
According to Lanz’s later-filed declaration, in agreeing to the settlement, Bolio advised Lanz that the fair market value of the Modesto house was $106,000 and that she wanted that house, not its cash equivalent, as part of the settlement. Bolio’s version of events would be different, claiming, among other things, that the Modesto house was worth $80,000 and, moreover, had some $20,000 in deferred maintenance.
Within days of the August 30 settlement, the differences between Lanz and Bolio had resulted in several pieces of correspondence between them, including these:
On September 9, Bolio sent Lanz an e-mail asserting that (1) they had a subsequent agreement to cap his contingency fee percentage at 33 percent; (2) the value of the Modesto house was far less than $106,000; and (3) Lanz later promised he would shift his fees and costs to Ronchelli and not seek to recover them from Bolio. It bears noting that Bolio’s lengthy e-mail made no claim about, or criticism of, any aspect of Lanz’s handling of her case.
Lanz responded with two letters on September 15. One letter began as follows: “The following [is] the estimated settlement statement you requested, for your case against Denis Ronchelli. I cannot provide a statement of actual figures, as first of all, the case is not completed in that the required transactions have not yet been completed. Second, the value of the home and Denis’s waiver of his request for reimbursement, can only be estimated. With that in mind, the statement being provided is an estimate of what I believe the fees to be. The issue of resolving the value of the recovery, is why I advised you to consult with separate counsel.” The letter then went on to provide an itemized breakdown of various values.
The other letter provided in pertinent part as follows:
“This letter shall confirm that pursuant to your request, I obtained an extension of the deadline for you to advise Denis Ronchelli if he needs to proceed in giving the [Modesto house] tenant, notice to vacate, until September 11, 2010 and that I’ve advised you of my need to know, at least four times now, if you want him to follow through with giving him notice. As of this date, you have not given me an answer on this issue and the deadline has now passed. . . .”
“This letter shall also confirm that I’ve advised you we have an issue to resolve, regarding the payment of my fees and costs. The issue being that the fees to be paid, have to be based on what we understand or believe the value of the home and the value of the waiver from Denis, to be. This letter shall also confirm that immediately after we signed the settlement agreement in this case, I advised you to consult with separate counsel on the issue of my fees, as we may disagree on the values of the home and the waiver. Further, that I also offered to advance the fees for you to have such a consultation. As of this date, you have not told me if you plan to consult with separate counsel and/or if you need me to advance the fees to do so. I would appreciate you letting me know at your earliest convenience.
“Thank you for your time and consideration in this matter.”
Thereafter, Lanz filed in the Marvin action a notice of attorney lien in the amount of $60,000 against the settlement proceeds, claiming it was for fees and costs. Lanz also filed an action against Bolio.
Lanz’s Action Concerning the Fee
On November 1, 2010, Lanz filed a complaint, and on December 1, an amended complaint, against Bolio concerning the fee dispute. It alleged two claims, for breach of contract and a common count.
Bolio was served, but did not file a response, and on January 11, 2011, Lanz filed a request for entry of default.
Sometime in early February, probably the 2nd, Bolio contacted Goldstone to represent her. The record does not contain any evidence from Goldstone as to what he did in early February. The record does contain this evidence from Lanz:
“[O]n or about February 4, 2011 [Lanz] was contacted by Bolio’s new attorney, Peter Goldstone (‘Goldstone’), who demanded that I voluntarily set aside Bolio’s default. [¶] When I declined, Goldstone personally delivered an unfiled cross-complaint to my office on February 14, 2011 and threatened to file the cross-complaint unless I dismissed my complaint against Bolio and walked away from my unpaid fees and unreimbursed costs. Goldstone made it clear to me that the threatened litigation would be so expensive and protracted that the cost to defend the cross-complaint would exceed the amounts owed to me under the contingent fee agreement. In this regard, Goldstone rejected my suggestion that we submit all disputes to less expensive binding arbitration and told me that he would not rule out the possibility of prosecuting an appeal from any judgment. In order to remind me that I would need to defend the cross-complaint at my own expense, Goldstone asked me if I was insured even though Goldstone knew from the contingent fee agreement (which was attached to the unfiled cross-complaint) that I did not carry malpractice insurance.”2
Lanz did not capitulate, or even agree to lift the default. So, on behalf of Bolio, Goldstone filed a motion for relief from default. The motion was accompanied by a four-page declaration of Bolio that described for several paragraphs her case against Ronchelli and the dispute about the fee. Not once in those four pages is there any mention that Lanz in any way mishandled her case.
On March 29, the motion for relief from default was granted, and the default vacated. On April 1, Goldstone filed Bolio’s answer to the complaint. And a cross-complaint.
Bolio’s Cross-Complaint Against Lanz
Bolio’s cross-complaint against Lanz alleged three causes of action: (1) breach of fiduciary duty; (2) declaratory relief; and (3) professional negligence. The cross-complaint was 10 pages long, containing 42 paragraphs, nine of which were “facts common to all causes of action” setting forth generally the history described above. The cross-complaint then turned to the specific cause of action for breach of fiduciary duty, and alleged the following:
“18. As her attorney and fiduciary, Lanz owed fiduciary duties to Hebe of undivided service, loyalty and integrity in representing Hebe in preparing and litigating her case. The relation between attorney and client is a fiduciary relation of the very highest character and binds the attorney to most conscientious fidelity, including good faith, absolute and perfect candor, openness, honesty, and the absence of any deception or concealment, however slight. Hebe is informed and believes and thereon alleges that included in such duties were the duty to avoid conflicts of interest, and to make full and complete disclosure of all pertinent facts known by Lanz, the duty to properly investigate all the consequences and damages caused by Lanz’s and Hebe’s acts and omissions, including but not limited to the settlement of the lawsuit and payment of fees from the proceeds therefrom. [¶] . . . [¶]
“20. Hebe is informed and believes and thereon alleges that commencing in or about October 2010, Lanz . . . willfully and intentionally breached [his] fiduciary duties toward Hebe, in the following particulars:
“a. Lanz failed to properly prepare for the trial;
“b. Lanz failed to adequately advise and inform Hebe of the consequences of entering into the Settlement Agreement;
“c. Lanz placed his own financial interests in the outcome of this case before the financial interests of Hebe and acted counter to Hebe’s best interests and in his own best interest;
“d. Lanz failed to properly listen to Hebe’s concerns, advice, and counsel on substantive matters;
“e. Lanz acted in a coercive manner with moral turpitude when he persuaded Hebe to enter into a settlement agreement that was in Lanz’s best interest but not in Hebe’s best interest;
“f. Lanz failed to properly represent and protect Hebe at trial and in the negotiation of the settlement agreement;
“g. Cross-Defendants’ conduct yet to be discovered.
“21. In doing the acts herein alleged, and by failing to communicate with Hebe, and failing to properly prepare and investigate the case, Cross-Defendants failed to comply with the standards of conduct established by the requirements of the Rules of Professional Conduct, including, but not limited to, Rules 3-110, 3-300, and 3-500.
“22. As an attorney who secured payment of fees by acquiring a charging lien against his client’s future judgment or recovery, Lanz acquired an interest adverse to his client, Hebe, and so was required to comply with the requirements of Rules of Professional Conduct Rule 3-300. In relevant part, this required that Lanz advise Hebe in writing that she was entitled to seek the advice of an independent lawyer of her choice and be given a reasonable opportunity to seek that advice and that Hebe consent in writing to the terms of that acquisition.
“23. Within the body of the Fee Agreement the language granting to Lanz a charging lien against the proceeds from the case or against any property of Hebe fails to advise in [sic] Hebe in writing (or at all) that she could seek the advice of an independent lawyer of her choice in deciding whether to enter into an attorney’s fees agreement containing a charging lien. Hebe is informed and believes, and thereupon alleges that the lien asserted by Lanz is a charging lien in violation of Business and Professions Code section 6147, subd. (a)(4); Rules of Professional Conduct Rule 3-300 and the case law interpreting and applying said Statute and Rule.
“24. Lanz has breached his fiduciary duty to Hebe by including within his Fee Agreement a charging lien that is not drawn in conformity with California law and thereby placing his own interest above the interest of his client.
“25. The conduct of said Cross-Defendants herein alleged fell below the standards of professional conduct for attorneys and was in breach of the Cross-Defendants’ fiduciary duties of full and fair disclosure, loyalty, candor and diligence, and constituted a material breach of said fiduciary duties.
“26. By doing the acts set forth above willfully and intentionally, either for his own benefit or as ostensible agent for Hebe, Lanz failed to comply with the standards of conduct established by the Rules of Professional Conduct including RPC Rules 3-300, 3-310 and 3-500, and Business and Professions Code Sections 6068 and 6106. Lanz’s conduct fell below the standards of professional conduct for attorneys and was in breach of his professional and fiduciary duties herein alleged. [¶] . . . [¶]
“29. Lanz knowingly and intentionally engaged in such actions with an intent to cause such harm to Hebe, or with reckless disregard for the consequences of such actions. Said actions by Lanz were despicable, and were undertaken for the purpose of inducing Hebe to act in a manner contrary to her own interests and in the interests of Lanz and thereby procuring a benefit for Lanz, to the detriment of Hebe, and causing such harm, with malice, fraud and oppression, as defined in Section 3294 of the Civil Code, and by reason thereof Hebe is entitled to an award of punitive and exemplary damages against Lanz, in an amount according to proof.”
Those charging allegations were incorporated into the second and third causes of action.
In sum, each cause of action alleged that with “moral turpitude” Lanz placed “his own financial interests” before Bolio’s and breached his fiduciary and professional duties in several ways: (1) by including within the contingency fee agreement an “[in]valid” charging lien “in violation” of rule 3-300 of the Rules of Professional Conduct; (2) by “violat[ing]” the disclosure requirements contained in Business and Professions Code section 6147, subdivision (a)(4); (3) by “persuad[ing]” Bolio to enter into a settlement in which Bolio “gave up” her “[‘community property’] ownership” of Ronchelli’s Santa Rosa property and obtained “no recovery” as a result; and (4) by “persuad[ing]” Bolio to enter into a settlement rather than completing trial and “procuring” a “better result . . . at substantially less expense.”
Lanz filed an answer to the cross-complaint, and the discovery began. While the record does not reflect all that happened thereafter, we do know that at some point the parties tried to resolve the dispute. To no avail.
On September 19, 2011, Lanz filed a motion for summary adjudication, asserting that all three claims in Bolio’s cross-complaint lacked merit. The motion was set for hearing on December 6. The Superior Court of Sonoma County, Local Rules, rule 5.4 requires the moving and opposing parties to “make a reasonable and good faith attempt to informally resolve . . . motion[s]” for summary adjudication. Despite that, according to Lanz, Goldstone ignored Lanz’s request to meet and confer, and indicated he would continue to prosecute the cross-complaint and threatened to conduct costly discovery, “cost[ing] much more than [the action’s] . . . eventual benefit,”—all, according to Lanz, to “squeeze a settlement . . . before the summary-adjudication motion could be heard . . . .”
Whatever Goldstone’s motivation, his threats apparently did not come to pass. Rather, according to Lanz, Goldstone recommended that Bolio declare bankruptcy. And she did, on November 7: In re Hebe Garcia-Bolio, United States Bankruptcy Court, Eastern District of California, No. 11-93911 (bankruptcy action). Attorney Patrick M. Kolasinski represented Bolio in the bankruptcy action, not Goldstone. The bankruptcy action caused the Lanz-Bolio litigation to be stayed, which stay lasted until February 24, 2012, when the bankruptcy closed. Pertinent here, Bolio did not list the breach of fiduciary duty claim or the professional negligence claim in the bankruptcy schedule.
Following the lifting of the stay, Lanz filed a motion to file a second amended complaint in his case against Bolio, to assert only one cause of action, for declaratory relief. Then, on March 12, Lanz filed a motion for judgment on the pleadings as to the breach of fiduciary duty and professional negligence claims in Bolio’s cross-complaint, on the basis that those claims failed under the doctrine of judicial estoppel because Bolio failed to disclose the claims in her bankruptcy schedules.
Two days later, March 14, Lanz moved ex parte to have his previously filed motion for summary adjudication reset for briefing and hearing.
That same day, Goldstone substituted out as Bolio’s attorney. She was now in pro per.
Lanz’s motions for judgment on the pleadings and summary adjudication came on for hearing on June 28, before the Honorable Arthur Wick. Judge Wick granted judgment on the pleadings, holding that Bolio was estopped from pursuing her claims for breach of fiduciary duty and negligence because she failed to include them as potential assets in her bankruptcy schedules. He also granted Lanz’s motion for summary adjudication of Bolio’s declaratory relief cause of action. Bolio’s cross-complaint was thus dismissed in its entirety.
What remained was Lanz’s original dispute with Bolio, now in a single cause of action for declaratory relief.
Trial on Lanz’s Complaint
On November 26 and 27, 2012, a court trial before Judge Wick was held on Lanz’s case. As Judge Wick described it, “The single cause of action for declaratory relief seeks only a judicial declaration as to the lien and deed of trust at issue and a claim for attorney fees and costs in the present action based on the underlying contract, the Attorney-Client Contingency Fee Contract . . . .”
On January 23, 2013, Judge Wick filed a six-page statement of decision, a decision that can only be described as a total victory for Lanz. The decision held that Lanz had a valid lien; that the fair market value of the Modesto house was $106,000; and that Lanz was to recover $48,824.20 for his attorney fee and costs.
In reaching his decision, Judge Wick made several observations and holdings pertinent here, including these:
“In keeping with this court’s Trial Order, plaintiff’s evidence consisted of a rather straight forward presentation of the situation involving these two parties and the underlying litigation, with representation of the defendant by plaintiff herein.
“The shorter version of the facts indicates that plaintiff served as the attorney for defendant herein in her Marvin action filed against her long time paramour. That matter went to trial and during trial the entire Marvin action was settled.
“As soon as the underling [sic] settlement was reached and approved by the court, defendant fired plaintiff as her attorney. Defendant immediately asserted that she recovered nothing by way of the Marvin action, despite receiving real property and cash as a result of the subject settlement. Defendant’s assertion is patently false.
“Thereafter, by way of the present action plaintiff seeks to recover his fees and costs incurred as defendant’s counsel in the Marvin matter.
“Plaintiff served defendant herein with a Notice of Attorney Lien. Thereafter, sensing a problem with the lien, attorney Jilka, on behalf of defendant Ronchelli in the Marvin action, prepared a Motion for Instructions Regarding Settlement Agreement and to Expunge Lis Pendens. Said motion was filed on November 16, 2010.
“The subject motion was heard by Judge Rushing and on December 21, 2010 Judge Rushing issued a written ruling ordering among other things that:
“ ‘1. Prior to conveyance of the real property at 505 Kimble Street, Modesto, California to plaintiff, defendant Denis Ronchelli shall give a deed of trust to attorney Lanz which secures Mr. Lanz’s attorneys fee lien against this property. After delivery of this deed of trust to Mr. Lanz, defendant Ronchelli shall deliver a deed to this property to plaintiff.’
“It appears to this court that immediately thereafter [defendant] instituted a campaign against her former attorney, attacking him both personally and professionally. This unwarranted assault continues to this day.” (Fns. omitted.)
Judge Wick’s decision then continued:
“From a careful review of all testimony and the supporting exhibits two observations became readily apparent to this court: first, plaintiff handled the underlying Marvin action appropriately, including the settlement. It does not appear to this court that the host of criticisms leveled by defendant at plaintiff herein is valid. And, second, defendant has attempted to rewrite what did actually occur in the underling [sic] matter to suit her current needs, wants, or desires. Accordingly, this court finds defendant’s testimony incredulous, inflated, spiteful, and lacking all persuasive value.” Judge Wick’s decision concluded with these two paragraphs:
“Two other issues of importance are in need of being addressed here. First, it appears plaintiff offered defendant an opportunity to arbitrate the entire dispute herein. Neither defendant, nor her new attorney of record, chose to accept plaintiff’s offer to arbitrate the fee dispute.
“Second, defendant claims her bankruptcy action bars plaintiff’s right to recover herein. The testimony on this topic clearly supports plaintiff’s position on this issue and this court could not find any evidence supporting defendant’s claim of avoidance or discharge of plaintiff’s lien and/or debt in the subject bankruptcy action.” (Fn. omitted, italics added.)
What occurred next was Lanz’s malicious prosecution suit.