D and S Homes v. Ludlow CA2/5

Filed 7/7/15 D and S Homes v. Ludlow CA2/5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication

or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

D AND S HOMES, INC., B257783

Plaintiff and Respondent, (Los Angeles County

Super. Ct. No. LC100734)

v.

JEFFREY LUDLOW et al.,

Defendants and Appellants.

APPEAL from a judgment of the Superior Court of Los Angeles County.

John P. Farrell, Judge. Reversed with directions.

Henrichs Law Firm, John Henrichs for Plaintiff and Respondent.

Ray B. Bowen, Jr., for Defendants and Appellants.

D and S Homes, Inc., a California Corporation (D & S), filed this malicious

prosecution action against Edmundo Bustamante and Tiffany Bustamante (the

Bustamantes), Ray B. Bowen, Jr. (Bowen), and Jeffery Ludlow (Ludlow). The

Bustamantes had sued plaintiff and others in connection with the purchase of their newly-

constructed home, alleging that the home had been built by an unlicensed contractor (the

Underlying Action). Bowen represented the Bustamantes in that lawsuit, and Ludlow

notified the Bustamantes that the builder of their home was unlicensed and referred them

to Bowen for legal advice. The Bustamantes lost the Underlying Action and were

ordered to pay attorney fees of $1,019,013.59.

In the present litigation, the trial court denied the motions of Bowen and Ludlow

brought under Code of Civil Procedure section 425.16.1 We hold that the trial court

improperly took judicial notice of the truth of the contents of documents from the

Underlying Action, and D & S otherwise failed to sustain its burden to establish a prima

facie case that it would prevail at trial, as required by section 425.16. Accordingly, we

reverse and order the trial court to grant the motions and dismiss this litigation.

PROCEDURAL AND FACTUAL BACKGROUND

In its first amended complaint in this action against the Bustamantes, Bowen and

Ludlow, D & S alleged that filing and maintaining the Underlying Action constituted

malicious prosecution. In the Underlying Action, the Bustamantes had alleged that the

contract to purchase their new home was a construction contract subject to the protections

of Business and Professions Code section 7031 rather than a contract for purchase of a

completed home not covered by that statute. Based on Bowen’s (later discredited)

interpretation of that statute, Bowen had prepared and filed on behalf of the Bustamantes

the complaint in the Underlying Action, which included causes of action for fraud,

negligent misrepresentation and conspiracy to commit fraud in connection with the

1

All further undesignated code section references are to the Code of Civil

Procedure.

2

construction of their residence. The Underlying Action was the subject of a judicial

reference under Code of Civil Procedure section 638, as provided for in the contract

between D & S and the Bustamantes.2 On appeal from the judgment in that action,

Division Six of this court affirmed in a non-published decision, Edmundo Bustamante, et

al. v. T.O. IX, LLC, et al. (July 10, 2012, B237167), holding that Business and

Professions Code section 7031 was inapplicable as the contract was one for sale of a

completed home rather than a contract for its construction, and the former was not subject

to the provisions of that statute.

In the present litigation, D & S alleges that the Underlying Action “was

commenced by or at the direction of the defendants named herein, was pursued to a legal

conclusion favorable to D & S, was brought without probable cause and was not

objectively reasonable. . . .” D & S further alleges that the Underlying Action was

brought “with the intentional wrongful purpose of injuring [D & S]. . . .”3

Ludlow4 and Bowen filed separate motions pursuant to section 425.16 which were

2

Section 638 and California Rules of Court, rule 3.900 et seq., set out the procedure

for a general reference. After the referee renders a statement of decision (§ 643), the trial

court enters judgment as if the action had been tried by the court. (§ 644, subd. (a).) The

judgment so entered is subject to appeal in the same manner as other judgments. (§ 645.)

3

The elements required to establish a claim for malicious prosecution were set out

in Bisno v. Douglas Emmet Realty Fund 1988 (2009) 174 Cal.App.4th 1534, 1544, as

follows: “To prevail on a claim for malicious prosecution, the plaintiff must show the

prior action was begun with malice and without probable cause at the defendant’s

direction and was terminated in the plaintiff’s favor. The probable cause element is

objective, not subjective, with the trial court required to determine whether, on the basis

of the facts known to defendant, it was legally tenable to bring the prior action. The

benchmark for legal tenability is whether any reasonable attorney would have thought the

claim was tenable. (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 871.)

Good faith reliance on the advice of counsel, after truthful disclosure of all the relevant

facts, is a complete defense to a malicious prosecution claim.” (Bertero v. National

General Corp. (1974) 13 Cal.3d 43, 53-54.)

4

Appellant Ludlow was represented in the trial court in this action by appellant

Bowen, as he is on this appeal.

3

heard together.5 The trial court ruled that the moving parties met the first prong of the

anti-SLAPP statute as “malicious prosecution causes of action fall within the purview of

the anti-SLAPP statute.” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728,

735.)6 The trial court also concluded that D & S had established the required prima facie

case and did have a probability of prevailing on the merits of each claim as to Ludlow

and as to Bowen. Accordingly, the trial court denied each motion. Bowen and Ludlow

filed a timely notice of appeal.

CONTENTIONS

Bowen and Ludlow contend the trial court applied the incorrect standard in ruling

on their motions; erred in admitting into evidence for the truth of their contents most of

the items on D & S’s request for judicial notice; and erred in concluding that D & S had

met its “second prong” obligation under section 425.16 to establish a probability of

prevailing on its cause of action. Additionally, appellants contend the evidence in the

record from the reference proceeding, if admissible, does not support a malicious

prosecution action; the trial court erred in other evidentiary rulings; and it erred in not

ruling that Bowen’s advice of counsel defense was meritorious.

5

Litigation brought under section 425.16 addresses “strategic lawsuits against

public participation.” The statute is commonly referred by the acronym “SLAPP” and

motions under it are commonly referred to as “anti-SLAPP motions.” An anti-SLAPP

motion seeks to terminate well prior to trial litigation that is determined to be without

merit and to be intended to chill the defendant’s exercise of constitutional rights of free

speech or petition for redress of grievances in connection with a public issue.

There are two steps or prongs in the analysis of motions under this section. If the

defendant establishes in the first prong that the challenged cause of action arises from

protected activity, the burden shifts to the plaintiff to establish in the second prong a

prima facie case based on admissible evidence that it has a probability of prevailing on

the claim at trial. If the plaintiff establishes such a prima facie case, the trial court denies

the anti-SLAPP motion and allows the case to proceed to trial, denying the moving

defendant an early termination of the litigation. (See § 425.16, subds. (a) & (b)(1);

Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055-1056, and cases cited therein.)

6

The record on appeal contains both the minute order for the date of the hearing

and the reporter’s transcript of proceedings that date.

4

DISCUSSION

The nature of a section 425.16 motion and the standard of review

“The Legislature [found and declared] that there [had] been a disturbing increase

in lawsuits brought primarily to chill the valid exercise of the constitutional rights of

freedom of speech and petition for the redress of grievances.” (§ 425.16, subd. (a).)

These suits have been referred to as “Strategic Litigation Against Public Participation” or

“SLAPP” suits. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 268,

fn. 1.) In seeking to prevent the abuse of the judicial process through SLAPP suits, the

Legislature enacted a specific procedure, found in section 425.16, by which defendants

may dispose of such suits at the pleading stage to avoid the costs and delays of litigation.

(Id. at p. 278.) This procedure is referred to as an anti-SLAPP motion. “‘[T]he point of

the anti-SLAPP statute is that you have a right not to be dragged through the courts

because you exercised your constitutional rights.’ [Citation.]” (Varian Medical Systems,

Inc. v. Delfino (2005) 35 Cal.4th 180, 193.)

“A section 425.16 special motion to strike involves a two-step analysis. This

includes determining first whether the plaintiff’s cause of action arose from an act taken

by the defendant in furtherance of the defendant’s right of petition or free speech, and if it

did so arise, then determining whether the plaintiff has shown a probability of prevailing

on the claim in the complaint. The defendant bears the burden on the first question, and

the plaintiff on the second. If the court determines the cause of action did not arise from

such protected activity, the motion to strike must be denied. [Citations.]” (Santa Monica

Rent Control Bd. v. Pearl Street (2003) 109 Cal.App.4th 1308, 1316-1317.)

“‘As is true with summary judgment motions, the issues in an anti-SLAPP motion

are framed by the pleadings. [Citations.] The plaintiff may not rely solely on its

complaint, even if verified; instead, its proof must be made upon competent admissible

evidence. [Citation.] In reviewing the plaintiff’s evidence, the court does not weigh it;

rather, it simply determines whether the plaintiff has made a prima facie showing of facts

necessary to establish its claim at trial. [Citation.]’ [Citation.]” (Paiva v. Nichols (2008)

5

168 Cal.App.4th 1007, 1017.) “‘When reviewing a ruling on a defendant’s section

425.16 special motion to strike a complaint, we employ our independent judgment.’

(Santa Monica Rent Control Bd. v. Pearl Street, supra, 109 Cal.App.4th at p. 1317.)”

(Oviedo v. Windsor Twelve Properties, LLC (2012) 212 Cal.App.4th 97, 109.)

“Summary judgment-like” burden

The parties did not dispute, and the trial court ruled, that defendants had met their

first prong burden to establish that the present complaint for malicious prosecution

implicates the right to petition, and thus that defendants had met their burden to establish

compliance with the first prong of the anti-SLAPP statute. The trial court correctly relied

on the holding of our Supreme Court in Jarrow Formulas, Inc. v. LaMarche, that section

425.16 applies to malicious prosecution actions. (Jarrow Formulas, Inc. v. LaMarche,

supra, 31 Cal.4th 728 at p. 735.) Addressing the second prong of the required analysis

of anti-SLAPP motions, Bowen and Ludlow err in their contention that the trial court

applied an incorrect standard when it stated during the hearing, and wrote in its tentative

ruling, that analysis of the plaintiff’s burden on this prong of the motion was a

“[s]ummary judgment-like procedure.”

Our Supreme Court has often used the phrase “summary judgment-like” as a

shorthand to describe the analysis under the second prong of the anti-SLAPP statute. For

example, in Varian Medical Systems, Inc. v. Delfino, supra, 35 Cal.4th 180, our Supreme

Court cited with favor prior decisions in which it had used this phrase to describe the

process for determining anti-SLAPP motions: “The Legislature enacted section 425.16 to

prevent and deter ‘lawsuits [referred to as SLAPP’s] brought primarily to chill the valid

exercise of the constitutional rights of freedom of speech and petition for the redress of

grievances.’ (§ 425.16, subd. (a).) Because these meritless lawsuits seek to deplete ‘the

defendant’s energy’ and drain ‘his or her resources’ (Simmons v. Allstate Ins. Co. (2001)

92 Cal.App.4th 1068, 1074), the Legislature sought ‘“to prevent SLAPPs by ending them

early and without great cost to the SLAPP target”’ (Equilon Enterprises v. Consumer

Cause, Inc. (2002) 29 Cal.4th 53, 65). Section 425.16 therefore establishes a procedure

6

where the trial court evaluates the merits of the lawsuit using a summary judgment-like

procedure at an early stage of the litigation. (See Simmons, supra, 92 Cal.App.4th at p.

1073.) In doing so, section 425.16 seeks to limit the costs of defending against such a

lawsuit. (See Equilon Enterprises, supra, 29 Cal.4th at p. 65 [noting that the ‘short time

frame for anti-SLAPP filings and hearings’ and the ‘stay of discovery’ pending resolution

of the motion evidences the Legislature’s intent to minimize the litigation costs of

SLAPP targets].)” (Id. at p. 192 [emphasis added].) The same term is used in the same

way in other cases decided by our Supreme Court and courts of appeal. (E.g., Briggs v.

Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1122-1123; Oviedo v.

Windsor Twelve Properties, LLC, supra, 212 Cal.App.4th at p. 109.)

The record establishes that the trial court had the understanding articulated in the

cases cited above when it used the phrase “summary judgment-like procedure” to refer to

the plaintiff’s burden in this case, and to describe the analysis of the evidence presented

on the second prong of these motions which it was supposed to conduct. There was no

error in so describing the manner of analysis under the second prong of section 425.16;

this contention lacks merit.

The request for judicial notice and other evidence in the record

To meet its second prong burden, D & S asked that the trial court take judicial

notice of multiple documents (listed in the accompanying footnote) 7 for the truth of their

7

D & S filed its request for judicial notice in two volumes. In the first volume, it

sought judicial notice of (1) the joint purchase agreement and escrow instructions for the

Bustamantes’ property; (2) the superior court complaint in the Underlying Action; (3) a

2008 minute order of the trial court in that action; (4) the Bustamantes’ petition for writ

of mandate seeking review of a pre-trial ruling in that action; (5) the order of Division 6

of this court summarily denying that writ petition; (6) the Bustamantes’ petition for

hearing in the Supreme Court after denial of this writ petition; (7) the Supreme Court’s

denial of the petition for review; (8) the Bustamantes’ appellants’ opening brief on their

appeal from the judgment in that litigation; (9) Division Six’s non-published opinion

affirming the trial court’s judgment (Edmundo Bustamante, et al. vs. T.O. IX, LLC, et al.

(July 10, 2012 B237167)); (10) the referee’s interim award and “judgment” in the

reference proceeding; (11) uncertified pages of the trial transcript from three days of

testimony in the reference proceeding; and (12) a declaration of counsel for D & S

7

contents. It also offered into evidence a declaration of counsel for D & S by which that

lawyer sought to provide certification of the reporter’s transcripts of the reference

proceeding which D & S included in its requests for judicial notice. Three days prior to

the hearing on the anti-SLAPP motions, D & S filed additional declarations by which it

sought to establish that Bowen had made materially false statements to a court in an

unrelated action. Defendants made a timely oral objection to admission of these

documents as being filed untimely, which objection was sustained. Also, defendants had

timely filed before the hearing, as a principal part of their reply briefs, objections and

arguments, supported by case citations, as to why most of D & S’s requests for judicial

notice of the truth of the documents filed in or created in the reference proceeding

(including in particular the uncertified transcripts of testimony taken there) should not be

admitted for other than the fact of their existence and filing.8

D & S also filed written objections to evidence offered by Bowen and Ludlow.9 D

& S did not make any objection to the request for judicial notice of documents requested

by defendants. The trial court granted this request for judicial notice.

seeking to authenticate certain transcripts of the reference proceeding. In the second

volume, D & S sought judicial notice of 10 days of testimony from the reference

proceeding. D & S later filed certified copies of some of these documents.

8

The minute order setting out the rulings made for this hearing states that there

were no written evidentiary objections offered by plaintiff. This is clearly a

typographical error as there are numerous copies of the plaintiff’s evidence objections in

the record. The trial court may have intended the sentence to refer to objections by

defendants, but it is incorrect in any event as defendants’ separate reply briefs in the trial

court devote much of their analysis to reasons why the trial court should not grant judicial

notice to the findings and conclusions of the referee or to the transcripts of testimony

given in that proceeding, except as to the fact of their existence and their being filed in

this action, as discussed in the body of this opinion.

9

California Rules of Court, rule 3.1354, which requires that objections to evidence

be presented in a certain format, applies only to motions for summary judgment. While

appellants’ argument that that rule applies to evidentiary objections made in connection

with other motions is erroneous, it is otherwise of no moment in the analysis of the issues

in this case as the “evidence” offered by D & S is not admissible for the reasons

discussed in the text.

8

At the conclusion of the hearing, the trial court stated that the tentative ruling

would become its final ruling and attached it to the minute order issued after the hearing.

That ruling granted judicial notice “as to additional documents filed May 19, 2013 by

Plaintiff as to being records and as to findings and rulings of court or arbitrator filed with

court.” While the minute order itself is unclear on whether the trial court also granted

judicial notice to the larger group of documents in the two part request for judicial notice

filed by D & S, our reading of the reporter’s transcript of proceedings for the day of the

hearing leads us to conclude that the trial court did grant judicial notice of all of the

documents offered by D & S, and that in granting D & S’s request for judicial notice of

these documents, it admitted them for the truth of their contents.

We reach this conclusion for the following reasons. First, a plaintiff seeking to

meet its obligation on the second prong of analysis of an anti-SLAPP motion must

substantiate a legally sufficient claim; it “‘must demonstrate that the complaint is both

legally sufficient and is supported by a sufficient prima facie showing of facts to sustain a

favorable judgment if the evidence submitted by the plaintiff is credited.’” (Wilson v.

Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821, quoting Matson v. Dvorak

(1995) 40 Cal.App.4th 539, 548.) And the evidence presented by a plaintiff to sustain its

burden on the second prong must be admissible at trial. (HMS Capital, Inc. v. Lawyers

Title Co. (2004) 118 Cal.App.4th 204, 212; Roberts v. Los Angeles County Bar Assn.

(2003) 105 CalApp.4th 604, 613-614.)

Second, the burden of going forward on the second prong of an anti-SLAPP

motion is on the plaintiff, here D & S (Roberts v. Los Angeles County Bar Assn., supra, at

p. 616), and, without the “evidence” contained in the documents within D & S’s requests

for judicial notice being offered for the truth of the matters contained therein, D & S

could not have met this second prong burden. (The only “evidence” it offered that was

not contained in its two volume request for judicial notice was the declaration of its

counsel seeking to “certify” the reference proceeding transcripts.) Thus, the trial court

could not have denied the anti-SLAPP motions without first determining that D & S had

met its second prong burden, and this could be met only if the “evidence” offered by

9

D & S was determined to be admissible for the truth of its contents. Bowen and Ludlow

correctly contend that the trial court erred in so concluding.

To be admissible for judicial notice a matter must be within one of the categories

described either in Evidence Code section 451 (mandatory judicial notice) or section 452

(permissive judicial notice). In general, as a substitute for other methods of proof,

judicial notice is limited to matters which are indisputably true. (Mack v. State Bd. of Ed.

(1964) 224 Cal.App.2d 370, 373.) Further, Evidence Code section 450 makes clear that

“[j]udicial notice may not be taken of any matter unless authorized by law.” Only section

452 has potential for application in this case. That section provides: “Judicial notice may

be taken of the following matters . . . [¶] (c) Official acts of the legislative, executive,

and judicial departments of the United States and of any state of the United States. [¶]

(d) Records of (1) any court of this state or (2) any court of record of the United States or

of any state of the United States. [¶] (h) Facts and propositions that are not reasonably

subject to dispute and are capable of immediate and accurate determination by resort to

sources of reasonably indisputable accuracy.” Thus, while judicial notice can be a

substitute for other forms of proof, it is limited to those things that are indisputably true.

And, even if a court takes judicial notice of the fact that a document was filed in prior

litigation or that certain factual findings were made in that litigation, the trial court in the

later proceeding does not take judicial notice of the truth of those factual findings. (Arce

v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 483-484.) This is

illustrated well by many of the items which D & S sought to have admitted for the truth

of their contents in this action.10 The items may be grouped into the following categories

for analysis: (1) transcripts of testimony in the reference proceeding; (2) pleadings and

briefs filed in the Underlying Action together with petitions filed in the subsequent writ

proceedings; (3) evidentiary materials (the purchase agreement for the Bustamantes’

home); (4) records of actions taken in the Underlying Action (a minute order and the non-

10

These items are inventoried in footnote 7, ante, page 7.

10

published opinion of the Court of Appeal in the Underlying Action); and (5) the “Interim

Award and Judgment” issued by the referee in the reference proceeding.

As Bowen and Ludlow argue, the transcripts of testimony from the reference

proceeding are not certified and therefore are not admissible in any event. Moreover,

they do not qualify under any of the subsections of section 452. Were they certified,

arguably judicial notice could be taken of the fact of their existence, but they are not

admissible for the truth of their content by means of judicial notice.11 Nor is the purchase

agreement in the Underlying Action admissible via judicial notice; it does not qualify

under any subsection of Evidence Code section 452.

The various filings in the Underlying Action (including the complaint and minute

order and the documents concerning attempts to obtain review of that order, as well as the

non-published opinion from the appeal in the Underlying Action), are admissible as court

records. (Evid. Code, §§ 452, subds. (c) & (d).) By their existence and the fact of their

filing, these documents do tend to establish that, in the Underlying Action, Bowen (and

arguably Ludlow) advocated a view of the application of the statute underlying the claims

asserted in that action12 which the Court of Appeal later determined was erroneous.

However, these records do not support key elements of D & S’s cause of action in this

case: there is no viable inference from these records that the prior action was begun or

maintained with malice and without probable cause. (Bisno v. Douglas Emmet Realty

Fund 1988, supra, 174 Cal.App.4th at p. 1544.)

11

Transcripts of testimony are most unlikely to qualify as matters “not reasonably

subject to dispute” under Evidence Code section 452, subdivision (h) as, by their very

nature, they are a record of a dispute. To be admissible for the truth of their content, they

would have to come within an exception to the hearsay rule. D & S does not argue that

they do or may. We therefore do not further consider this contention; nor do we suggest

that they would meet any such exception.

12

In Edmundo Bustamante, et al. vs. T.O. IX, LLC, et al. (July 10, 2012 (B237167)),

Division Six of this court held that the contract for purchase of the new residence was a

contract of sale rather than a construction contract and thus Business and Professions

Code section 7031 was inapplicable. (Id. at 4 et seq.)

11

Further, it is error to take judicial notice of the truth of contents of briefs filed in

the appellate courts or to take judicial notice of factual statements made in a prior

appellate court opinion. (Gilmore v. Superior Court (1991) 230 Cal.App.3d 416.) The

same reasoning applies to the statements of or conclusions reached by the referee in this

case. “[A] court may take judicial notice that a prior order was entered, but it may not

take judicial notice of the truth of factual findings made therein.” (Steed v. Department

of Consumer Affairs (2012) 204 Cal.App.4th 112, 121; accord Plumley v. Mockett (2008)

164 Cal.App.4th 1031, 1050.) This is so because, as the court stated in Sosinsky v. Grant

(1992) 6 Cal.App.4th 1548 (Sosinsky), “‘Judicial notice substitutes for formal proof only

because the matters judicially noticed are not reasonably subject to dispute.’ (2 Jefferson,

[Cal. Evidence Benchbook (Cont. Ed. Bar 2d ed. 1982) Judicial Notice,] at § 47.2,

p. 1758 [italics in original].)”

D & S argues both that all of the documents which it submitted for judicial notice

may be admitted for the truth of their contents and that the burden is on Bowen and

Ludlow to “to submit admissible, competent evidence to the Court.” These contentions

are not supported by either the Evidence Code, as discussed above, or by the cases, to

which we now turn.

The cases upon which D & S relies for these contentions are inapposite. D & S

relies on Evans v. Unkow (1995) 38 Cal.App.4th 1490 (Evans), to support its claim that

the burden is on Bowen and Ludlow to submit “admissible, competent evidence.”

However, the portion of Evans which D & S cites in support of this contention addresses

evidence required on the second prong of the motion and discusses the plaintiff’s burden

rather than that of the defendant. Further, the Court of Appeal in that case points out that

the evidence proffered on the second prong must be admissible. (Id. at p. 1497.) D & S

also cites as support for its position a superseded opinion, the Court of Appeal opinion in

Reid v. Google, ignoring that the decision of the Supreme Court at 50 Cal.4th 512

rendered the Reid opinion at 155 Cal.App.4th 1342 a nullity.

Several of the other cases upon which D & S relies have been distinguished or

disagreed with by better reasoned later cases. For example, Weiner v. Mitchell,

12

Silberberg & Knupp (1980) 114 Cal.App.3d 39 (Weiner) was distinguished in Sosinsky,

supra, 6 Cal.App.4th at page 1564. The extent to which a court may take judicial notice

of factual findings made by a judge in a prior proceeding was expressly considered in

Sosinsky, supra, 6 Cal.App.4th 1548. Also analyzing a malicious prosecution action, the

Court of Appeal in Sosinsky specifically held that it would be improper to take judicial

notice of the truth of findings of fact rendered in the prior proceeding; in that action,

those “facts” were the predicate for the complaint in the later action. Instead, the

Sosinsky court held that the proper ruling would be to judicially notice that the rulings in

the prior case had been made as indicated; but that “is different from the taking of judicial

notice that A’s testimony must necessarily have been true simply because the judge

believed A and not B. Indeed, if A’s testimony consists of ‘facts . . . that are not

reasonably subject to dispute and are capable of immediate and accurate determination by

resort to sources of reasonably indisputable accuracy’ (Evid. Code, § 452, subd. (h)),

there would have been no need for a trial on the dispute between A and B in the first

place.” (Id. at p. 1565.) Nor may hearsay be treated as true simply because it is included

in a court record that is properly noticed. (Day v. Sharp (1975) 50 Cal.App.3d 904, 914.)

D & S’s reliance on Lockley v. Law Office of Cantrell, Green, Pekich, Cruz &

McCort (2001) 91 Cal.App.4th 875 (Lockley), is also misplaced. In that case, the

appellate court reversed the trial court, which had taken judicial notice of a “fact” which

had not been determined in a prior adversary proceeding. (Id. at p. 883.) That ruling

meant that the appellate court in Lockley did not have to then analyze whether the “fact”

would have been admissible for the truth of its content under section 452 had it been

determined in the prior adversary proceeding. Almost certainly, the issue of whether that

“fact” would have been admissible for the truth of its content in the second proceeding

would have been dependent upon its meeting other Evidence Code requirements, most

likely qualifying for admission under one of the statutory exceptions to the hearsay rule.

Here, to the extent D & S sought to have the trial court rely on the testimony given in the

prior reference proceeding, Lockley makes clear that section 452 is not a sufficient basis

for admission of such evidence for its truth. Had the transcripts of the reference

13

proceeding in the Underlying Action been certified, then the trial court here could have

correctly taken judicial notice of the fact of their existence; but even then their admission

for the truth of the matters testified to and recorded in those transcripts is governed by

other provisions of the Evidence Code, most likely exceptions to the hearsay rule.

Further, the Lockley court confirms that only facts which are indisputably true are a

proper subject of judicial notice, criticizes Weiner, supra, 114 Cal.App.3d 39, and

explains why Sosinsky, supra, 6 Cal.App.4th 1548, is the better reasoned decision.

(Lockley, supra, 91 Cal.App.4th at pp. 884-885).

The particular difficulty which D & S faces in this case is that it has not presented

a prima facie case as to two essential elements of its cause of action for abuse of process;

as noted, the record is devoid of any evidence admissible at trial of malice or of lack of

probable cause. D & S argues that there is evidence of malice “because [Bowen and

Ludlow] continued to pursue the [Bus. & Prof. Code, § 7031] argument after losing on a

demurrer and writ.” While D & S correctly argues that malice may be inferred from

circumstantial evidence and inferences drawn from that evidence, more is required than

just lack of legal tenability of the prior action. (Jay v. Mahaffey (2013) 218 Cal.App.4th

1522, 1543, citing Downey Venture v. LMI Ins. Co. (1998) 66 Cal.App.4th 478, 494.)

And, D & S’s argument relies exclusively on testimony presented in the reference

proceeding, but that testimony is not admissible by judicial notice for the reasons

discussed above. Without admissible evidence, D & S cannot meet even the threshold

required of it to defeat the anti-SLAPP motion.

In summary, D & S has not met its second prong burden to establish by admissible

evidence its prima facie case of malicious prosecution. The trial court’s reliance on the

truth of the contents of the items proffered by D & S in its request for judicial notice, as

noted above, was clearly contrary to the limited purpose for which such items may be

14

admitted as permitted by Evidence Code section 452, and constituted an abuse of

discretion. The erroneous ruling was clearly prejudicial to Bowen and Ludlow.13

A plaintiff who fails to present admissible evidence that establishes a prima facie

claim to relief on its complaint, fails to meet its burden under the second prong of section

425.16. (Roberts v. Los Angeles County Bar Assn., supra, 105 Cal.App.4th at p. 616.)

That is the circumstance in this case: D & S pinned its evidentiary presentation on

admission for the truth of their contents the transcripts of testimony in the reference

proceeding. That strategy is fatally flawed. As a result D & S did not sustain its burden

under section 425.16. For the reasons discussed, the trial court erred in concluding that

D & S had done so.

13

Resolution of this matter as discussed above moots the need to address any other

contentions raises in the parties’ briefs.

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DISPOSITION

The order denying appellants’ section 425.16 motion to strike is reversed. The

case is remanded to the superior court with instructions to grant the motion, dismiss the

complaint with prejudice, and determine the issue of appellants’ entitlement to attorney

fees, if any. Appellants are awarded their costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

GOODMAN, J.

We concur:

TURNER, P.J.

MOSK, J.



Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to

article VI, section 6 of the California Constitution.

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