Second District Determines SLAPP Ruling Does Determine Amount of Motion to Strike Fees, But Remaining Attorney’s Fees Are Fair Game and Defendant Bears Burden of Allocating Out Unreasonable Fees.
The next decision is an interesting one that we predict will have more and more play as SLAPP motions and later malicious prosecution awards interact in seriatim litigation involved between bitterly engaged parties. The case is Jackson v. Yarbray, Case No. B204321 (2d Dist., Div. 7 Nov. 10, 2009) (certified for partial publication), authored by Presiding Justice Perluss on behalf of a 3-0 panel of the Second District, Division 7.
Plaintiffs (earlier, successful defendants) won a substantial $3.1 million malicious prosecution award against certain defendants (earlier plaintiffs suing and losing to the malicious prosecution plaintiffs) in a Los Angeles bench trial, arising from plaintiffs’ successful defense of an action commenced in Riverside. (An attorney firm was exonerated in the L.A. malicious prosecution action.) Malicious prosecution plaintiffs appealed the trial court’s refusal to award further special damages in the form of fees and costs incurred in their defense of the Riverside action, keeping in mind the plaintiffs (defendants at the time) did partially win an anti-SLAPP motion after the Fourth District, Division 2 so held and were awarded fees of $77,000 by the Riverside judge for prevailing on the motion. (See ComputerXpress, Inc. v. Jackson, 93 Cal.App.4th 993, 1020 (2001).) [As a quick aside, the SLAPP victors had requested $300,720 in fees, but were only awarded $77,000.] In the malicious prosecution trial, the attorney firm successfully moved to preclude introduction of fees other than the $77,000 fee award, a motion granted by the trial court—but with the understanding that this did not preclude introduction of fees as special damages.
At trial, malicious prosecution plaintiffs introduced unrebutted evidence they expended $379,000 in defense of the prior Riverside case eventually dismissed by the malicious prosecution defendants. Although deciding that the $77,000 SLAPP fees award had to be offset from this and did have collateral estoppel effect, the trial judge eventually denied any fees as malicious prosecution special damages because plaintiffs failed to allocate fees from the overall amount spent and show that they were not included in the SLAPP award.
Malicious prosecution plaintiffs appealed and obtained a reversal/remand on this issue.
Justice Perluss, on behalf of the panel, initially noted that all reasonable fees incurred in defending a malicious prosecution action are recoverable as special damages, contrasted with the situation in SLAPP motions—only reasonable fees spent on the motion to strike are recoverable as fees under the SLAPP fee-shifting statute.
The real error identified by the appellate court was the trial court’s reversal of the burden of proof on the allocation issue. Malicious prosecution defendants, not plaintiffs, are the ones having the burden of showing that fees in a malicious prosecution action were not reasonably incurred in defense of the prior case. (Bertero v. National General Corp., 13 Cal.3d 43, 60 (1974).) Although agreeing that the $77,000 SLAPP fee was an appropriate offset, the matter had to be reversed and remanded for a proper calculation of special damages in the malicious prosecution action based on the improper application of the burden of proof by the lower court.