Frank E. Rogozienski, Inc. v. Hylton CA4/1

Filed 2/24/14 Frank E. Rogozienski, Inc. v. Hylton CA4/1
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

FRANK E. ROGOZIENSKI, INC. et al., D063303

Plaintiffs and Appellants,

v. (Super. Ct. No. 37-2011-00088273-
CU-MC-CTL)
ELDON HYLTON et al.,

Defendants and Respondents.

APPEAL from an order of the Superior Court of San Diego County, Jeffrey B.

Barton, Judge. Affirmed.

Frank E. Rogozienski for Plaintiffs and Appellants.

Waxler Carner Brodsky and Barry Z. Brodsky, Christopher L. Wong for

Defendant and Respondent Eldon Hylton.

Stephen M. Hogan for Defendants and Respondents Matthew V. Herron,

Herron+Steele and Herron Law.
 Plaintiffs and appellants Frank E. Rogozienski, Inc. and Frank E. Rogozienski,

individually and as trustee of the Frank E. Rogozienski Family Trust (collectively

Rogozienski) sued defendants and respondents Matthew V. Herron, Herron + Steele,

APC, and Herron Law, APC (collectively the Herron defendants) and the Herron

defendants' client, Eldon Hylton, for malicious prosecution. Hylton and the Herron

defendants successfully moved to strike the complaint under Code of Civil Procedure

section 425.16, commonly known as the anti-SLAPP (strategic lawsuit against public

participation) law. Asserting the motions should have been denied, Rogozienski

contends: (1) the trial court erred by overruling his objections to certain evidence

presented in support of Hylton's motion; (2) he demonstrated prima facie that Hylton's

voluntary dismissal of the underlying action constituted a favorable termination; and (3)

he made a prima facie showing that Hylton and the Herron defendants acted with malice.

We conclude Rogozienski has not met his burden to make a prima facie showing

of malice as to either Hylton or the Herron defendants. We therefore affirm.

FACTUAL AND PROCEDURAL BACKGROUND

On our review of the court's order on Hylton's and the Herron defendants' anti-

SLAPP motions, we accept as true the competent and admissible evidence presented by

Rogozienski and only consider defendants' evidence to the extent it defeats Rogozienski's

evidence as a matter of law. (Hylton v. Rogozienski (2009) 177 Cal.App.4th 1264, 1267,

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fn. 2 (Hylton I); Tuchscher Development Enterprises, Inc. v. San Diego Unified Port

District (2003) 106 Cal.App.4th 1219, 1236.)1

Hylton was a co-founder, president and director of DivX Networks, Inc. (DivX), a

company formed to commercialize video compression technology. In August 2000,

Hylton purchased three million shares of DivX common stock for $3000 under the terms

of a founder stock purchase agreement. The founder stock purchase agreement contained

a provision granting DivX the right to reacquire shares of DivX stock under certain

circumstances, including Hylton's termination from employment with cause.2 On

1 The trial court granted the parties' requests for judicial notice, which included
Hylton's request as to all of the documents in the underlying action, and the Herron
defendants' request as to all of the documents in Hylton v. DivX Networks, Inc. et al.
(Super. Ct. S.D. County, 2003, No. GIC 783404) (the Hylton v. DivX action). Thus,
while the court excluded the vast majority of Rogozienski's lodged exhibits, to the extent
they constituted pleadings in the underlying action or Hylton's action against his former
employer, their existence may properly be considered, but not the truth of their factual
contents. (Big Valley Band of Pomo Indians v. Superior Court (2005) 133 Cal.App.4th
1185, 1192.)

2 The provision reads in part: "Unvested Share Repurchase Option. In the event the
Purchaser's employment with the Company is terminated for Cause, as hereinafter
defined, or if the Purchaser or the Purchaser's legal representative attempts to sell,
exchange, transfer, pledge or otherwise dispose of any shares purchased pursuant to this
Agreement which have not vested in the Purchaser pursuant to Section 2(a) below (the
'Unvested Shares'), the Company shall have the right to reacquire the Unvested Shares
under the terms and subject to the conditions set forth in this Section 2 (the 'Unvested
Share Repurchase Option')." The agreement sets forth an initial vesting date of February
1, 2001, for the first one-fourth of the stock and incremental vesting of the remaining
shares "[f]or each full month of the Company's employment of Purchaser as an employee
following one month from the Initial Vesting Date." The agreement further provides that
with the exception of certain transfers to ancestors, descendants, spouse or trustees, DivX
could exercise the unvested share repurchase option by written notice to a defined escrow
agent and to Hylton or his legal representative within sixty days of either Hylton's
termination for cause or his attempted disposition of shares.
3
February 16, 2001, DivX terminated Hylton's employment. Believing he had been

wrongfully terminated, Hylton consulted with legal counsel and eventually engaged in an

unsuccessful mediation with DivX partly over whether his DivX shares had vested absent

Hylton's continued employment with DivX; Hylton taking the position that all of his

shares had automatically vested upon his termination without cause.

Hylton then met with Rogozienski, who reviewed Hylton's stock certificate, the

founder stock purchase agreement and other DivX corporate documents. DivX did not

attempt to exercise its rights under the founder stock purchase agreement, nor did it

tender payment or open an escrow in the 10 months after Hylton's termination.

Nevertheless, in December 2001, Hylton signed a legal services contract in which he

agreed to pay Rogozienski a contingent fee that was defined to include recovery of any

portion of the three million shares of DivX stock issued and sold to Hylton under the

founder stock purchase agreement "which are confirmed, awarded, or otherwise retained

by" Hylton.

In February 2002, Rogozienski filed on Hylton's behalf the Hylton v. DivX action,

in which Hylton alleged in part that DivX had breached the founder stock purchase

agreement by purporting to terminate his right to the three million shares of DivX stock.

The complaint further alleged that DivX had no legitimate right to repurchase any of the

three million shares of DivX stock because it had not terminated Hylton for cause, given

written notice of its repurchase option, or made any timely cash payment for repurchase

of the shares. The Hylton v. DivX action entailed multiple depositions and discovery,

document review, and trial preparation. The case eventually settled under an agreement

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by which DivX paid Hylton $125,000 and warranted that Hylton owned his three million

DivX shares. The settlement eliminated DivX's unvested share repurchase option. For

his fee, Rogozienski received one-third of the settlement, which included transfer to him

of one million shares of Hylton's DivX stock.

In September 2006, Hylton called Rogozienski about the status of his shares.

Rogozienski confirmed that the unvested share repurchase option had been removed, and

informed Hylton that he (Rogozienski) was not selling shares in the DivX initial public

offering and thus had declined to sign a lockup agreement presented to him by DivX and

J.P. Morgan Securities.

The Underlying Fraud Action Against Rogozienski

In August 2007, the Herron defendants on Hylton's behalf filed a complaint

against Rogozienski, Hylton v. Rogozienski, et al. (Super. Ct. S.D. County, 2007, No.

37-2007-00072299-CU-PN-CTL) for rescission, restitution, and declaratory relief. The

trial court sustained a demurrer to the complaint as barred by the statute of limitations,

but granted Hylton leave to amend.

In January 2008, Hylton filed a first amended complaint including a fourth cause

of action for fraud and a fifth cause of action for rescission and restitution based on fraud.

Hylton alleged that while Rogozienski had included a claim related to Hylton's DivX

stock in the Hylton v. DivX action, there was no actual dispute over Hylton's ownership of

those shares because DivX had not terminated his employment for cause and the

repurchase option held by DivX under the founder stock purchase agreement had lapsed,

unexercised. He alleged Rogozienski had reviewed that agreement and advised him that

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the DivX stock belonged to Hylton, but, knowing the stock's value and hoping to obtain

some shares as a fee, Rogozienski represented that legal action was necessary to protect

the stock from DivX's claims in order to induce Hylton to sign the legal services

contract.3 Based on these allegations, Hylton sought to rescind the legal services

contract and obtain restitution of the stock proceeds. Rogozienski unsuccessfully

demurred to Hylton's first amended complaint, and also brought an anti-SLAPP motion to

strike it. This court affirmed the trial court's denial of Rogozienski's anti-SLAPP motion

in Hylton I, supra, 177 Cal.App.4th 1264, on grounds Rogozienski did not meet his

threshold burden to show Hylton's action was subject to the anti-SLAPP law. (Id. at p.

1275.)

Rogozienski propounded requests for admissions, form interrogatories and special

interrogatories, as well as other discovery regarding Hylton's fraud claims. Hylton

responded, and also appeared for a partial day of his deposition. In amended responses to

Hylton's form interrogatory No. 17.1, Hylton set out his theory of fraud, which was that

there was no claim by DivX that Hylton had any contractual obligation to return the three

3 Hylton alleged that after his initial consultation with Rogozienski, during which
Rogozienski reviewed the founder stock purchase agreement, Rogozienski "recognized
that [Hylton's] stock was worth many millions of dollars and he might be able to mislead
[Hylton] to use a portion of these shares as a 'contingent fee' if [Hylton] were convinced
that a lawsuit was needed to protect [Hylton's] ownership interest" and Rogozienski
"knew there would be no basis to claim the shares as a fee if he were retained only to
prosecute a wrongful termination claim, but that he might be able to exploit the unusual
use of the term 'vested' in the [founder stock purchase agreement] to make it appear that
[Hylton's] ownership was at risk in order to convince [Hylton] to agree to turn over a
portion of his stock to litigate ownership of the stock, knowing that DivX had not
exercised the Repurchase Option, which had lapsed months before." Hylton alleged he
relied on these representations in executing Rogozienski's fee agreement.
6
million shares of stock, but Rogozienski had manufactured a sham dispute by

misinterpreting the vesting provision of the founder stock purchase agreement and had

Hylton sign a contingent fee agreement over stock Hylton already owned "regardless of:

(a) whether the ownership was at risk; (b) the value of the stock or the services which

[Rogozienski] would render; and (c) whether [Rogozienski's] services had any causal

connection to whether the stock was 'otherwise retained' as a consequence of

[Rogozienski's] legal services."

On April 29, 2010, the trial court ordered Hylton to appear in July 2010 for his

continued deposition until its completion. It also ordered Hylton to respond to certain

discovery by May 14, 2010. On July 30, 2010, the court heard Rogozienski's motion to

compel discovery, to recover costs of Hylton's failure to appear at his deposition, and for

sanctions, and tentatively ordered Hylton to provide further, code-compliant responses to

Rogozienski's request for admission No. 12 and form interrogatory No. 17.1 without

objections, and to provide all responsive documents. It ordered Hylton to pay

Rogozienski monetary sanctions as well as reimburse Rogozienski costs for Hylton's

nonappearance at his deposition. The court further ordered Hylton to notify

Rogozienski's counsel whether he elected to complete his deposition in San Diego or

China.

On August 9, 2010, Matthew Herron sought to file on shortened time a motion to

withdraw as Hylton's counsel. In a sworn declaration, he stated the case was set for trial

on October 1, 2010, and Hylton had engaged in conduct rendering it impossible for him

to continue as Hylton's counsel. Herron averred that Hylton's only communication was

7
via his companion, a Chinese national, who did not respect the need to comply with the

superior court's orders; made it impossible to prosecute the case within the court-imposed

time frames; and had informed him that Hylton refused to be deposed.

On August 10, 2010, the trial court issued its final ruling on Rogozienski's motion

to compel discovery. It confirmed its tentative ruling, and, observing the parties had met

and conferred through counsel, further ordered Hylton to provide document responses

and produce documents, and to pay all costs, expenses and fees if he chose to be further

deposed in China. That day, Herron filed a request for dismissal of the entire action

without prejudice. The trial court later entered a judgment of dismissal awarding

Rogozienski $9,325.35 in costs.

The Present Malicious Prosecution Action Against Hylton and the Herron Defendants

In March 2011, Rogozienski sued Hylton and the Herron defendants for malicious

prosecution. In part, he alleged that in filing and prosecuting the underlying action they

acted maliciously and without probable cause, without investigation or research into the

facts and in willful disregard of Rogozienski's rights in order to force him into a

settlement of "fabricated claims of fraudulent misconduct . . . ." As to the Herron

defendants, Rogozienski alleged they "harbored ill will against [Rogozienski] because

immediately prior to filing the Underlying Litigation, [they were] abruptly discharged in

an unrelated fee-for-service matter they were handling for a client who was dissatisfied

with their work and replaced them with . . . Rogozienski."

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The Herron Defendants' Special Motion to Strike

The Herron defendants moved to strike Rogozienski's complaint under Code of

Civil Procedure section 425.16. The trial court tentatively granted the motion on grounds

Rogozienski had not established Hylton's termination of the action was in his favor; he

had not shown the dismissal was based on Hylton's concession that his case lacked merit.

Following oral argument, however, the court denied the motion, ruling Rogozienski had

presented a prima facie case of favorable termination, lack of probable cause and malice,

and the Herron defendants had failed to produce any evidence to support their claim that

Hylton had dismissed the underlying lawsuit not because he was losing, but for some

other reason.

Hylton's Special Motion to Strike

Thereafter, Hylton specially moved to strike the complaint. He argued

Rogozienski's action arose from conduct protected under the anti-SLAPP law—Hylton's

act of filing the underlying action—and Rogozienski could not meet his burden to

demonstrate a likelihood of success on the merits of that action. Hylton maintained

Rogozienski could not demonstrate a favorable termination of the entire action as three of

the five causes of action were dismissed on statute of limitations grounds and

Rogozienski could not show Hylton's voluntary dismissal of the remaining causes of

action was a favorable termination because at the time of the dismissal, Hylton had been

suffering from life-threatening health issues and continued prosecution of the action

would have required Hylton to pay all of Rogozienski's travel expenses to China,

expenses for a court reporter and videographer to travel to China for his continued

9
deposition, and the cost of retaining new counsel. Hylton also maintained Rogozienski

could not demonstrate malice on Hylton's part in filing and prosecuting the underlying

action; in part, he asserted he solely sought to obtain a civil recovery of his DivX shares

relying on an expert's letter that confirmed the DivX stock was his own.

Hylton supported these assertions in a sworn declaration accompanying the motion

to strike. He averred that after his termination from DivX, he had relocated to China and

during the pendency of the underlying action found himself facing significant cardiac

health issues requiring hospitalizations in June, July, August and November of 2008 and

during the spring and summer of 2010. Hylton attached medical records from various

health care facilities. He also averred that in December 2007, Herron had retained an

expert, Timothy Binder, and had forwarded him Binder's opinion letter regarding

Hylton's ownership of the DivX stock stating that Hylton " 'owned all of his 3,000,000

shares' and that DivX's 'Repurchase Option based upon termination for Cause either

never existed or lapsed.' " Hylton averred that Binder "confirmed what Mr. Rogozienski

had told me before I retained him: that I owned my DivX stock. Correspondingly, there

should have been no need for Mr. Rogozienski to include such stock as part of his

contingency fee."

With regard to the circumstances surrounding the filing of his fraud causes of

action, Hylton stated he knew at that time that Rogozienski had included his three million

DivX shares as part of his contingency fee even though Rogozienski had previously

concluded Hylton owned those shares outright, and also knew Rogozienski put the

ownership status of his shares at issue and then put "very little work into [the] case."

10
Hylton averred that Rogozienski had made representations to him about the extent of

another DivX employee's potential stock holdings that he later discovered were untrue,

and based on those representations, as well as Rogozienski's representation that Hylton

could lose all of his stock if he did not settle, Rogozienski coerced him into a settlement

of the Hylton v. DivX action that confirmed Hylton's ownership then transferred one

million shares into Rogozienski's family trust. Hylton stated the underlying action

involved the recovery of his DivX shares and he "bore no malice or ill will toward Mr.

Rogozienski or his firm."

Rogozienski's Opposition to Hylton's Anti-SLAPP Motion

In opposition to Hylton's motion, Rogozienski submitted his own declaration and

lodged numerous exhibits.4 He averred that Hylton made no attempt to conduct

discovery, designate or counterdesignate any experts in the underlying action, and had

delayed his responses or refused to completely respond to Rogozienski's discovery,

including by refusing to produce documents that would "expose the total lack of merit of

[his] allegations of fraud . . . ." Rogozienski averred Hylton refused to complete his

deposition despite being ordered to do so by the court, but instead unilaterally and

suddenly dismissed his action.

4 Rogozienski also submitted "Separate Statement[s] of Alleged and Undisputed
Facts" in opposition to Hylton's motion to strike and the Herron defendants' later motion
for reconsideration. The trial court, however, sustained defendants' objections to the
entirety of the statements. Rogozienski does not challenge that ruling on appeal, and thus
we disregard those pleadings.
11
 As for the merits of Rogozienski's malicious prosecution claim, Rogozienski

argued the Binder letter, though inadmissible, established that Hylton's action lacked

probable cause because Rogozienski had followed the expert's strategy recommendation,

namely, to explain to DivX why its repurchase option had lapsed, and if unable to

compromise, seek declaratory relief on that point. Rogozienski denied telling Hylton the

DivX stock belonged to him and he did not have to sue for it; he stated there was an

actual and ongoing dispute between Hylton and DivX over Hylton's vesting and

ownership of the shares, and DivX's right to repurchase the shares registered in Hylton's

name. Rogozienski denied making representations concerning other DivX shareholders

stock positions, and he averred that Hylton never expressed reservations about agreeing

to the settlement with DivX, but freely entered into it.

The Herron Defendants' Reconsideration Motion

After Hylton filed his motion, the Herron defendants moved for reconsideration of

the order denying their anti-SLAPP motion. They argued newly available evidence,

namely Hylton's declaration and the Binder letter, conclusively demonstrated probable

cause as well as an ambiguous termination of the underlying lawsuit, and defeated any

inference of malice.

The Court's Ruling

Ruling on the parties' evidentiary objections and taking the requested judicial

notice of various documents, the court granted Hylton's motion. As to all of

Rogozienski's proffered exhibits, the court sustained Hylton's objections on grounds they

lacked authentication except "to the extent that other parties referenced the exhibit or

12
provided copies." It found Hylton met his burden to show the malicious prosecution

action arose out of the right to petition the court, and Rogozienski failed to establish

prima facie an unambiguous termination on the merits of the underlying case or malice. 5

Relying on Hylton's evidence that the reason he dismissed the underlying lawsuit was for

health and financial reasons, the court ruled Rogozienski had not shown Hylton's

dismissal of the underlying complaint reflected Rogozienski's innocence of the alleged

misconduct. The court further ruled Rogozienski had not met his burden to show Hylton

brought the malicious prosecution suit with malice; it was not sufficient by itself to show

Hylton sought to rescind the attorney fee agreement based on fraudulent inducement or

that Rogozienski had done what expert Binder recommended. Given its rulings on

Hylton's motion, the court granted the Herron defendants' request for reconsideration,

thus granting their anti-SLAPP motion.

Rogozienski appeals from the court's order.

5 The trial court did not address the issue of probable cause, nor does Rogozienski
on appeal, other than to say that the "trial court did not find that Plaintiffs had failed to
meet their burden to show no probable cause exists for Defendant's filing and prosecution
of their [first amended complaint], and Plaintiffs do not appeal that aspect of the trial
court's ruling." Herron argues Rogozienski's failure to address probable cause on appeal
is fatal to his appeal, and permits us to affirm the judgment on forfeiture grounds. The
authority Herron cites for this proposition pertains to a plaintiff's burden in the trial court
for opposing an anti-SLAPP motion (Hall v. Time Warner, Inc. (2007) 153 Cal.App.4th
1337, 1346), or general rules regarding an appellant's burden to overcome the
presumption of correctness on appeal. (Benach v. County of Los Angeles (2007) 149
Cal.App.4th 836, 852.) We do not decide the case on forfeiture grounds, but
Rogozienski's failure on appeal to address whether he demonstrated Hylton's fraud claims
lacked probable cause has some bearing on Rogozienski's burden to demonstrate prima
facie the element of malice, at least to the extent he seeks to show malice on the theory
that Hylton commenced or continued to pursue his action subjectively believing it to be
without probable cause.
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 DISCUSSION

I. Legal Standards Governing Anti-SLAPP Motions

"The anti-SLAPP law involves a two-step process for determining whether a claim

is subject to being stricken. In the first step, the defendant bringing an anti-SLAPP

motion must make a prima facie showing that the plaintiff's suit is subject to [Code of

Civil Procedure] section 425.16 by showing the defendant's challenged acts were taken in

furtherance of his or her constitutional rights of petition or free speech in connection with

a public issue, as defined by the statute. . . . [¶] If the defendant satisfies the first step,

the burden shifts to the plaintiff to demonstrate there is a reasonable probability of

prevailing on the merits at trial." (Hylton I, supra, 177 Cal.App.4th at p. 1271.)

" 'In order to establish a probability of prevailing on the claim . . . , a plaintiff

responding to an anti-SLAPP motion must " 'state[ ] and substantiate[ ] a legally

sufficient claim.' " [Citations.] Put another way, the plaintiff "must demonstrate that the

complaint is both legally sufficient and supported by a sufficient prima facie showing of

facts to sustain a favorable judgment if the evidence submitted by the plaintiff is

credited." [Citations.] In deciding the question of potential merit, the trial court

considers the pleadings and evidentiary submissions of both the plaintiff and the

defendant . . . ; though the court does not weigh the credibility or comparative probative

strength of competing evidence, it should grant the motion if, as a matter of law, the

defendant's evidence supporting the motion defeats the plaintiff's attempt to establish

evidentiary support for the claim.' " (Taus v. Loftus (2007) 40 Cal.4th 683, 713-714.) "In

making this assessment it is 'the court's responsibility . . . to accept as true the evidence

14
favorable to the plaintiff . . . . ' [Citation.] The plaintiff need only establish that his or

her claim has 'minimal merit' [citation] to avoid being stricken as a SLAPP." (Soukup v.

Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291 (Soukup).)

On appeal, this court reviews de novo the order granting defendants' motions,

applying the same two-step procedure as the trial court. (Soukup, supra, 39 Cal.4th at p.

269, fn. 3; Cole v. Patricia A. Meyer & Associates, APC (2012) 206 Cal.App.4th 1095,

1105.) We assess the trial court's rulings on the parties' evidentiary objections for clear

abuse of discretion. (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1536.)

II. Defendants Met Their Threshold Burden to Show Rogozienski's Malicious

Prosecution Action Arises From Protected Activity

Rogozienski does not challenge the court's finding that defendants met their initial

burden to show his malicious prosecution action falls within the purview of the anti-

SLAPP law. Indeed, a malicious prosecution cause of action always arises from

protected activity; "[b]y definition, a malicious prosecution suit alleges that the defendant

committed a tort by filing a lawsuit." (Jarrow Formulas, Inc. v. LaMarche (2003) 31

Cal.4th 728, 735 (Jarrow Formulas); see Kleveland v. Siegel & Wolensky, LLP (2013)

215 Cal.App.4th 534, 548; Daniels v. Robbins (2010) 182 Cal.App.4th 204, 214-215

(Daniels).) This appeal turns on the second step of the anti-SLAPP inquiry: whether

Rogozienski met his burden to establish a probability of prevailing on the merits of his

malicious prosecution claim.

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 III. Rogozienski Cannot Demonstrate A Probability of Prevailing on His Claim of

Malicious Prosecution

A. Evidentiary Rulings

Because Rogozienski was required to meet his burden via competent and

admissible evidence (Tuchscher Development Enterprises, Inc. v. San Diego Unified Port

District, supra, 106 Cal.App.4th at p. 1236), we preliminarily address his challenge to the

trial court's evidentiary ruling excluding most of his lodged exhibits. As stated, the court

sustained Hylton's objections to Rogozienski's exhibits, ruling they lacked authentication

except "to the extent that other parties referenced the exhibit or provided copies." Citing

his list of lodged exhibits and Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486,

Rogozienski challenges this ruling, arguing it is " 'routine law-and-motion practice' " for

an attorney with "personal knowledge" of exhibits to provide declarations establishing

their authenticity, and the writings were provided by defendants to Rogozienski and thus

admitted and acted upon by defendants as authentic. Rogozienski also argues writings

authored by Hylton and his agents and provided by them to him during the course of the

underlying litigation are admissible under the party admission exception to the hearsay

rule. In a footnote, Rogozienski states Hylton and the Herron defendants "never denied

(and cannot honestly deny) the authenticity of the copies of their own records."

The arguments are meritless. Unlike the authority on which Rogozienski relies,

Rogozienski's list of lodged exhibits is not a declaration. (See Greenspan v. LADT, LLC,

supra, 191 Cal.App.4th at p. 523 ["[M]ost of Greenspan's exhibits were authenticated

through declarations submitted by his attorneys, who had personal knowledge of how [a

16
joint owner of defendant] obtained the exhibits, how they had been identified, who had

identified them, and their status as true and correct copies of the 'originals.' "].) Thus, the

pleading does not contain a sworn statement of the foundational fact that the lodged

exhibits were produced by Hylton or the Herron defendants, or any other fact from which

we may infer Hylton or the Herron defendants treated them as authentic. (Compare The

Luckman Partnership, Inc. v. Superior Court (2010) 184 Cal.App.4th 30, 34 [exhibits

sufficiently authenticated by counsel who submitted a declaration that he had personal

knowledge that attached documents were a party's verified interrogatory responses in the

action, along with exhibits included with those responses].) Nor did Rogozienski include

such foundational averments in his declarations opposing the anti-SLAPP motions, in

which he merely cited to some of the proffered exhibits. As for Rogozienski's latter

point, it is of course his burden to present competent evidence in opposition to

defendants' anti-SLAPP motions; defendants' failure to deny the authenticity of

Rogozienski's lodged exhibits is irrelevant. Rogozienski has not demonstrated the court

abused its discretion by excluding his exhibits as unauthenticated, and thus we do not

consider them in assessing whether he met his burden to show a probability of prevailing

on the merits of his malicious prosecution complaint.

Rogozienski additionally contends the court reversibly erred when it based its

rulings on copies of what Hylton claimed were his medical records and a copy of the

Binder letter. As for evidence of Hylton's general health, medical conditions, and

multiple hospitalizations, we need not decide whether Hylton's lodged medical records

were properly authenticated, as Hylton possesses personal knowledge of and is competent

17
to provide evidence of those general matters, as well as the fact that his poor health was

one reason for his decision to dismiss the underlying action. (Evid. Code, § 702; People

v. Montoya (2007) 149 Cal.App.4th 1139, 1150 [to testify, a witness must have personal

knowledge of the subject of the testimony based on the capacity to perceive and

recollect]; Waite v. Godfrey (1980) 106 Cal.App.3d 760, 764 [no error to admit plaintiff's

testimony concerning her own physical condition which she claimed caused her to miss

24 months of work]; Frederick v. Federal Life Ins. Co. (1936) 13 Cal.App.2d 585, 590

[witness need not be an expert to testify concerning whether he has had a particular

disease, as it is a matter of fact known to himself]; Love v. Wolf (1967) 249 Cal.App.2d

822, 833 [a witness may always testify to his or her own state of mind when it becomes a

material fact in the case]; accord, McDonald v. Superior Court (1994) 22 Cal.App.4th

364, 370 [plaintiff's personal declaration as to her own financial condition and its impact

on her ability to proceed with litigation was competent evidence].)

As for the import of the Binder letter, Hylton was capable of testifying generally

that he relied upon an expert opinion in proceeding with his fraud claims against

Rogozienski. With regard to its authenticity, we observe Rogozienski relied on the

Binder letter below to demonstrate Hylton's case lacked probable cause. A writing may

be authenticated by evidence that it has been acted upon as authentic by the party against

whom it is offered. (Evid. Code, § 1414; Ambriz v. Kelegian (2007) 146 Cal.App.4th

1519, 1527 [trial court erred by sustaining party's general objections to excerpt from

deposition as unauthenticated where the party sought to use portions of the deposition in

support of its summary judgment motion].) Under these circumstances, we cannot say

18
the court manifestly abused its discretion by overruling Rogozienski's objection to the

Binder letter's authentication.

B. Elements of Malicious Prosecution

To establish a claim for malicious prosecution, a plaintiff is required to

demonstrate that the underlying action (here, Hylton's first amended complaint for fraud

and rescission based on fraud) "(1) was commenced by or at the direction of the

defendant and was pursued to a legal termination favorable to the plaintiff; (2) was

brought without probable cause; and (3) was initiated with malice." (Soukup, supra, 39

Cal.4th at p. 292.) A plaintiff may also prevail by showing defendants "maliciously

continued to prosecute the case against him . . . without probable cause." (Cole v.

Patricia A. Meyer & Associates, APC, supra, 206 Cal.App.4th at p. 1105, citing Zamos v.

Stroud (2004) 32 Cal.4th 958, 973.)

The malice element of a malicious prosecution action goes to the defendant's

subjective intent or purpose in initiating the prior action. (Kleveland v. Siegel &

Wolensky, LLP, supra, 215 Cal.App.4th at pp. 553-554; Daniels, supra, 182 Cal.App.4th

at p. 224.) It is usually proven by circumstantial evidence and inferences from the

evidence. (Jay v. Mahaffey, supra, 218 Cal.App.4th at p. 1543.) " 'The motive of the

defendant must have been something other than that of . . . the satisfaction in a civil

action of some personal or financial purpose. [Citation.] The plaintiff must plead and

prove actual ill will or some improper ulterior motive.' Improper purposes can be

established in cases in which, for instance (1) the person bringing the suit does not

believe that the claim may be held valid; (2) the proceeding is initiated primarily because

19
of hostility or ill will; (3) the proceeding is initiated solely for the purpose of depriving

the opponent of a beneficial use of property; or (4) the proceeding is initiated for the

purpose of forcing a settlement bearing no relation to the merits of the claim. [Citation.]

If the prior action was not objectively tenable, the extent of a defendant's attorney's

investigation and research may be relevant to the further question of whether or not the

attorney acted with malice." (Daniels, at pp. 224-225.)

"The lack of probable cause is one factor in determining the presence of malice,

but alone it is insufficient. [Citation.] 'Merely because the prior action lacked legal

tenability, as measured objectively (i.e., by the standard of whether any reasonable

attorney would have thought the claim tenable [citation]), without more, would not

logically or reasonably permit the inference that such lack of probable cause was

accompanied by the actor's subjective malicious state of mind. In other words, the

presence of malice must be established by other, additional evidence.' " (Jay v. Mahaffey,

supra, 218 Cal.App.4th at p. 1543; see also Jarrow Formulas, supra, 31 Cal.4th at p.

743.)

C. Rogozienski Has Not Demonstrated a Prima Facie Case of Malice

Rogozienski contends he made a prima facie showing of malice as to both Hylton

and the Herron defendants. He points out that malice may be inferred when a party

knowingly brings an action without probable cause, and asserts the "overwhelming

evidence," which he does not describe in connection with his malice argument, shows

defendants "knowingly alleged and prosecuted claims of 'actual fraud' they knew were

fabricated, factually baseless and totally and completely without merit."

20
 Additionally, as to the Herron defendants, Rogozienski as indicated above averred

in his declaration that they "harbored ill will against plaintiffs herein because

immediately prior to filing the underlying litigation, defendants were abruptly discharged

in an unrelated fee-for-service matter they were handling for a client who was dissatisfied

with their work and replaced them with [Rogozienski]." (Some capitalization omitted.)

Rogozienski further averred, on information and belief, that "Herron has a practice and a

long history of initiating and prosecuting meritless actions and proceedings, and has been

sanctioned and has been sued for malicious prosecution by reason thereof." According to

Rogozienski, this evidence and the inferences drawn from it are sufficient to establish

Hylton and the Herron defendants acted with malice.

1. Malice as to Herron

Even if we were to accept the statements concerning the Herron defendants in

Rogozienski's declaration as true, the inferences Rogozienski asks us to draw from it—

that the Herron defendants harbored actual ill will because an unidentified client replaced

them with Rogozienski, or that the Herron defendants acted with malice in this case

because it has previously brought meritless actions or acted with malice in other cases—

are simply not logical or reasonable. An opposition to an anti-SLAPP motion may not be

based on speculative inferences. (See Kashian v. Harriman (2002) 98 Cal.App.4th 892,

931-933 [plaintiff failed to demonstrate a probability of prevailing on his defamation

cause of action because he relied on a "series of speculative inferences" from evidence

purporting to show actual malice]; Wilcox v. Superior Court (1994) 27 Cal.App.4th 809,

828 [a reasonable inference " ' " 'may not be based on suspicion alone, or on imagination,

21
speculation, supposition, surmise, conjecture or guess work' " . . . [but] must logically

flow from other facts established in the action' "], disapproved on other grounds in

Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 68, fn. 5.)

Rogozienski's other asserted evidence is like that found insufficient to make out a

prima facie showing of malice for purposes of malicious prosecution in Daniels, supra,

182 Cal.App.4th 204. Rogozienski's assertions about the evidence of malice are vague

and unspecific. Nevertheless, Rogozienski's opposing anti-SLAPP declaration indicates

that the basis for his claim of malice is that defendants: refused and delayed in

responding to discovery; identified only two witnesses with knowledge of Hylton's fraud

allegations; never designated experts; and suddenly dismissed the action with trial set to

commence in less than two months. He asserts the action was brought without probable

cause, and that when he met with Herron to discuss the factual basis for the first amended

complaint, Herron "presented no facts which could support the allegations of fraudulent

misconduct." Rogozienski maintains Herron has never explained why Hylton stopped

communicating with them directly, and refused to disclose Hylton's last known address.

Daniels involved a claim of malicious prosecution brought by Wilhelmina Daniels

against attorneys (the Quinlivan attorneys) after the court issued terminating sanctions

and dismissed an underlying defamation action. (Daniels, supra, 182 Cal.App.4th at p.

211.) The plaintiff in the underlying defamation action, Young, had refused to follow the

court's orders or comply with his discovery obligations. (Ibid.) Daniels's evidence of

malice primarily consisted of the total lack of merit in the allegations made in the

underlying defamation action. But the Daniels court pointed out that this was insufficient

22
to show malice on the part of the Quinlivan attorneys, explaining that the California

Supreme Court had observed that even where no competent evidence is adduced during

discovery to support claims in an underlying action, this does not on its own support a

finding of malice in an anti-SLAPP hearing. (Id. at p. 225, citing Jarrow Formulas,

supra, 31 Cal.4th at p. 743.) The appellate court further observed that the record

permitted a fair inference that the Quinlivan attorneys had failed to adequately investigate

the factual assertions made by their client before suing the anti-SLAPP moving party, but

it held the attorney's "negligence in conducting factual research is also not enough on its

own to show malice." (Daniels, at p. 225.)

As for the moving party's claim that it presented evidence the Quinlivan attorneys

knowingly continued to prosecute the action without probable cause, the court rejected

the contention. It found "dispositive" that Daniels's claim of potential liability was that

the underlying factual allegations of defamation lacked evidentiary support, unlike other

cases such as Zamos v. Stroud, supra, 32 Cal.4th 958, where the factual allegations were

explicitly disproved by sworn deposition testimony of the attorneys' own client.6 The

Daniels court stated, "The Quinlivan Attorneys' sustained inability to provide any support

for Young's allegations, on its own, does not allow an inference that they knew there was

6 In Zamos v. Stroud, supra, 32 Cal.4th 958, the evidence showed the attorney
defendants to a malicious prosecution action had brought a fraud claim based on the
representations of their client, but shortly after the case was filed had received reporters'
transcripts of three hearings that the defendant contended proved the fraud claim had no
merit. (Id. at pp. 961-962, 971.) The attorney defendants refused to dismiss the lawsuit
despite the transcripts, and the court, after warning counsel that their client's testimony
would be perjurious in view of the transcripts, eventually granted nonsuit. (Id. at pp.
962-963.)
23
no probable cause for continuing to prosecute the underlying action." (Daniels, supra,

182 Cal.App.4th at p. 227.)

The malicious prosecution plaintiff in Daniels also relied on evidence of

settlement discussions in which Young offered to dismiss his complaint with prejudice

conditioned on a waiver of all malicious prosecution claims. (Daniels, supra, 182

Cal.App.4th at p. 227.) But the Court of Appeal declined to impute Young's conduct,

including his settlement position, to his attorneys. (Ibid.) And it held the offer to dismiss

in exchange for a release of all claims was not equivalent to the bad faith attempt to

" 'squeeze a settlement . . . on a baseless case' " in HMS Capital, Inc. v. Lawyers Title Co.

(2004) 118 Cal.App.4th 204 (HMS Capital), in which the plaintiff refused to dismiss a

frivolous case unless the defendant paid $25,000. (Id. at pp. 217-218.) The Daniels court

concluded: "In sum, the evidence marshaled against the Quinlivan Attorneys is as

follows: an apparent lack of evidentiary support for the factual allegations in the

underlying action; a lack of factual investigation as evidenced by an inability to provide

formal or informal discovery; a client who may have had actual ill will against

Wilhelmina; and a refusal by Young to dismiss without a waiver of claims by

Wilhelmina. This record, which lacks any affirmative evidence that the Quinlivan

Attorneys met the requirements of malice, including knowledge the case lacked probable

cause, is insufficient as a matter of law to establish malice as to the Quinlivan Attorneys."

(Daniels, 182 Cal.App.4th at p. 227.)

Under Daniels, supra, 182 Cal.App.4th 204, even if we were to assume Hylton's

fraud allegations are without factual support, that is not enough to make out a prima facie

24
case of Herron's malice, nor is Hylton's lack of cooperation in discovery imputable to his

attorneys. Though Rogozienski suggests Hylton and the Herron defendants sought to

force a settlement having no relation to the merits of the claim,7 he does not cite evidence

that they made an unreasonable settlement demand, or any settlement demand

whatsoever, in the malicious prosecution action. We are unable to conclude the Herron

defendants acted in bad faith or intended to force a monetary settlement at Rogozienski's

expense, when there is no indication, as in HMS Capital, that they insisted on some form

of payment for dismissing the case. (HMS Capital, supra, 118 Cal.App.4th 204, 217,

218.) There is no other evidence from which we may infer the Herron defendants

pursued the action to force a settlement. (E.g., Sycamore Ridge Apartments LLC v.

Naumann (2007) 157 Cal.App.4th 1385, 1407-1408 [evidence that attorneys filed a

7 Rogozienski asserts: "Defendants further knew that by seeking rescission and 'the
civil recovery of [Hylton's] . . . DivX shares . . . that during the pendency of the
underlying action, those shares in the hands of [Rogozienski] might be clawed back and
thus would effectively be 'locked up' because if disposed of, plaintiffs would have to
purchase replacement shares at any increase in the value, thereby depriving plaintiffs of
the beneficial use of those shares during the pendency of the underlying action and laying
the groundwork for the settlement which defendants hoped to achieve based on the
seriousness of the factually baseless allegations and the economic risk to plaintiffs of any
sale. When all that failed and defendants were facing a continuation of Hylton's
deposition, producing all of Hylton's documents, providing code-compliant discovery
responses and trial which would further expose that defendants' claims were factually
baseless and completely without merit, defendants unilaterally and suddenly caused the
underlying action to be dismissed." (Some capitalization and italics omitted.) These
assertions are supported only by citations to Rogozienski's points and authorities filed
below in opposition to the anti-SLAPP motions,, and the portion of Hylton's declaration
in which Hylton averred he sought only the civil recovery of his DivX shares. Hylton
correctly points out that Rogozienski cites no authority or evidence that such a clawback
procedure could have happened, nor does Rogozienski cite evidence that Hylton knew of
such a potential consequence or tried to make it happen.
25
statement of damages after the plaintiff tenant in the underlying action had provided

interrogatory responses stating she had suffered no compensable injuries or property loss

permitted an inference the proceedings were initiated to force the defendant to enter into

a settlement unrelated to the merits of the plaintiff's claims]; see also Jay v. Mahaffey,

supra, 218 Cal.App.4th at pp. 1529, 1544-1545 [evidence of malice in part shown by

counsel's threats of ongoing litigation if the defendant limited partners did not seriously

discuss settlement, as well as counsel's knowledge that the limited partners had limited

exposure and statement that they " 'were "not really at fault" ' and had been sued

' "to get their attention" ' "].) In sum, Rogozienski has not presented evidence from which

we can reasonably infer the Herron defendants acted with the subjective intent to

deliberately misuse the legal system, or with an improper purpose in either instituting, or

continuing, Hylton's underlying fraud action.

We observe the Herron defendants' success on their motion was the result of the

trial court's grant of reconsideration. Rogozienski does not challenge that procedural

matter, the "new or different facts" standards, or other requirements for a reconsideration

motion. (Code Civ. Proc., § 1008, subd. (a).) Hence, there is no basis to alter our

decision based on the manner in which the court granted the Herron defendants' anti-

SLAPP motion.

2. Malice as to Hylton

Nor can we conclude Rogozienski has made the requisite showing of malice as to

Hylton. As stated, Rogozienski must demonstrate his claim is legally sufficient and

supported by a prima facie showing of facts which, if proved via direct or circumstantial

26
evidence at trial, would support a judgment in his favor. (Taus v. Loftus, supra, 40

Cal.4th at pp. 713-714; Jay v. Mahaffey, supra, 218 Cal.App.4th at p. 1543.) In assessing

his showing, we keep in mind that it is not our task to resolve factual disputes or make

credibility determinations on Hylton's anti-SLAPP motion; we accept Rogozienski's

evidence as true for purposes of our analysis. (Freeman v. Schack (2007) 154

Cal.App.4th 719, 733.) But here, we have found no abuse of discretion in the trial court's

exclusion of a significant portion of Rogozienski's evidence; and do not consider such

inadmissible or incompetent evidence in the probability-of-prevailing analysis.

As with the Herron defendants, there is no evidence in the record that Hylton

demanded some form of payment in exchange for dismissing his case, or that he made

any other quid pro quo demand on Rogozienski that can be characterized as an effort to

settle. Rogozienski has not met his burden to present facts from which we may infer

Hylton commenced or pursued his fraud action to coerce a settlement having no relation

to his claims. To infer such a tactic merely by the filing of an arguably meritless lawsuit

is speculation, and would render every meritless lawsuit a malicious prosecution

regardless of the existence of actual malice.

Rogozienski characterizes the evidence as "overwhelming" that Hylton knowingly

commenced and prosecuted fraud claims that he knew were baseless or totally and

completely without merit, establishing malice. As stated, " '[m]alice may also be inferred

from the facts establishing lack of probable cause.' " (Soukup, supra, 39 Cal.4th at p.

292.) In Soukup, the court concluded malice could be inferred from the evidence that the

defendants lacked probable cause to initiate and maintain their action against the plaintiff,

27
where the defendants knew they lacked any evidence connecting the plaintiff to other

tortfeasors. (Id. at pp. 295-296; see also Sycamore Ridge Apartments LLC v. Naumann,

supra, 157 Cal.App.4th at p. 1407 [evidence tending to show defendants did not

subjectively believe the action was tenable is relevant to whether an action was instituted

or maintained with malice]; Jay v. Mahaffey, supra, 218 Cal.App.4th at p. 1546 [evidence

of malice by a party who wished to sell and redevelop property and end a lease shown by

his conduct in trying to strike a side deal with the defendant's president, organize the

defendant's limited partners against it, and persuade a city to threaten condemnation to

achieve its goal of terminating the lease; these facts, taken together with the lack of

probable cause for an action against the limited partners, raise an inference that the party

"did not bring the limited partners into the case because [he] truly believed they were

liable, but as another tactic to create enough misery for [the defendant] that [it] would

settle the case"].) On this point, Rogozienski's burden on appeal is to explain how, in

opposition to Hylton's anti-SLAPP motion, he pointed to facts that, if true, would

establish Hylton knew when he filed the first amended complaint, or discovered at some

point during the litigation, his claims lacked probable cause.8

8 The probable cause inquiry is whether, applying an objective standard to the facts
known to Hylton, the institution of his prior fraud action was "arguably tenable, i.e., not
so completely lacking in apparent merit that no reasonable attorney would have thought
the claim tenable." (Jay v. Mahaffey, supra, 218 Cal.App.4th at p. 1540; see Wilson v.
Parker, Covert & Chidester (2002) 28 Cal.4th 811, 817 [probable cause is a lenient
standard; attorneys and litigants have a right to present issues that are arguably correct,
even if success is " ' "extremely unlikely" ' "], abrogated by statute on other grounds as
stated in Hutton v. Hafif (2007) 150 Cal.App.4th 527, 547.) Both the factual
circumstances established by the evidence and the legal theory upon which relief is
28
 Hylton's action was based on fraudulent inducement; that Rogozienski had

reviewed the terms of the founder stock purchase agreement and knew that DivX had

failed to meet the necessary conditions to exercise its right to repurchase his shares,

namely, written notice to Hylton or his legal representative and tender of cash payment to

an escrow agent within 60 days after the date of mailing of the notices. Hylton's theory

was that despite this, Rogozienski advised him to sue DivX for the stock, which then had

substantial value, and included any and all stock recoveries as part of an ethically

impermissible contingent fee. Hylton's declaration established that, as of August 2003,

DivX had not timely exercised its rights under the founder stock purchase agreement, but

Rogozienski had advised him in any event to sign a contingent fee agreement that would

include one-third of all of Hylton's DivX shares, even those shares that had "vested" as of

February 1, 2001. Hylton claimed Rogozienski also represented Hylton could lose the

stock unless he agreed to settle the Hylton v. DivX action, and made other representations

as to the possible dilution of Hylton's stock by another DivX employee's potential stock

holdings in order to induce Hylton to settle his case. Given this theory, Hylton's failure

to designate witnesses other than himself and Rogozienski is not indicative of malice, as

the claim is based on misrepresentations between the two men at or about the time Hylton

sought are relevant. (Jay v. Mahaffey, at p. 1540.) This standard is not met by evidence
that Hylton's fraud claims merely lacked merit; it must be demonstrated that any
reasonable attorney would agree the claims are totally and completely without merit.
(Jarrow Formulas, supra, 31 Cal.4th at p. 743, fn. 13.) "[E]very 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." (Id. at p.
743.)
29
signed the legal services contract or settled the case. And Hylton not only possessed an

expert opinion supporting the premise of his fraud claim, but the trial court deemed his

allegations sufficient to state with particularity a claim for actual fraud. These facts

support a conclusion that Hylton subjectively believed in the legal tenability of his fraud

and fraud-related claims. There is no evidence, as in Daniels, supra, 182 Cal.App.4th at

pp. 222-223, that Hylton was or became aware of evidence disproving his fraud claims or

otherwise a complete absence of supporting evidence, that would render it unreasonable

to prosecute Hylton's claims.

There are several reasons why Rogozienski's showing is insufficient to establish a

prima facie case of malice on the theory that Hylton knowingly initiated or prosecuted

totally meritless fraud claims. As to Hylton's subjective beliefs about the asserted total

lack of merit to his claims, Rogozienski largely relies on evidence properly excluded by

the trial court. He points to Hylton's business experience and purported knowledge that

DivX terminated him for cause; he relies on negotiations between Hylton and DivX in

connection with their dispute as well DivX's discovery responses, a mediation, and a

settlement conference between them. In particular, Rogozienski asserts DivX gave notice

during settlement negotiations of its exercise of the repurchase option via a proposed

separation and release agreement delivered to Hylton. We have upheld the trial court's

exclusion of all of this evidence as unauthenticated.

Otherwise, Rogozienski's evidence shows he did not make the representations that

Hylton claimed he had made to induce Hylton to execute the legal services contract and

settle the Hylton v. DivX action; Hylton approved the accuracy of the Hylton v. DivX

30
complaint's allegations and willingly entered into the contingent fee agreement; and there

was a dispute over the vesting of some of Hylton's DivX stock, evidenced by the

settlement of Hylton's action against DivX. In opposition to Hylton's anti-SLAPP

motion, Rogozienski asserted that, apart from Hylton's statement that he acted without ill

will, Hylton "offers absolutely no evidence to support any factual basis whatsoever for

the core allegations which set forth the essential elements of the alleged claims of actual

fraud . . . ." But this argument misperceives the burdens on an anti-SLAPP motion; it is

Rogozienski's burden to demonstrate a probability of prevailing on his malicious

prosecution claim, not Hylton's burden to demonstrate merit to his underlying claims.

Second, Rogozienski does not address how Hylton's fraud claims lack probable

cause in the first instance. (See footnote 5, ante.) He therefore has not explained how the

evidence establishes, or gives rise to an inference, that Hylton's fraud claims were utterly

lacking in either direct or circumstantial evidence, much less that Hylton subjectively

believed this was the case. Rogozienski has not presented competent evidence that

Hylton became aware of verifiable facts disproving his fraud allegations or demonstrating

their falsity (e.g., Daniels, supra, 182 Cal.App.4th at p. 223), that a witness recanted

testimony supporting Hylton's claims, that Hylton gave perjured deposition testimony, or

any other evidence indicative that Hylton brought or maintained his action knowing it to

be without probable cause.

Rogozienski suggests Hylton's failure to himself propound discovery, designate

experts, or respond completely to all of the discovery, should be calculated into the

malice inquiry. Rogozienski does not explain what expert testimony was required, or

31
why an expert was necessary to prove Hylton's claim of fraudulent inducement. Though

a party's failure to investigate or conduct discovery may be assessed on the question of an

improper ulterior motive, it is usually accompanied by some other evidence to meet the

standard. (See HMS Capital, supra, 118 Cal.App.4th at pp. 216-217 [undisputed

evidence that a title company never discussed a cancellation fee during contract

negotiations or advised that such a fee would be due, did not ordinarily charge such a fee,

and that such fees were not a standard in the industry, combined with the fact the title

company took no depositions, served only one set of form interrogatories, and refused to

dismiss its case unless its opponent paid $25,000, established the title company's malice

in bringing an underlying breach of contract action premised on the party's failure to pay

a cancellation fee]; see also Daniels, supra, 182 Cal.App.4th at p. 227 [apparent lack of

evidentiary support combined with possible ill will, lack of discovery responses, and

request for waiver of claims in exchange for dismissal insufficient to show malice; failure

to investigate facts by itself will not suffice to make a prima facie case of malice].)

Hylton's failure to conduct discovery or designate experts, and his failure to provide

further responses to discovery, does not by itself permit an inference of malice,

particularly where the question of Hylton's entitlement to his shares in significant part

turned on an interpretation of the founder stock purchase agreement, a question of law.

As we have pointed out, the absence of probable cause does not by itself permit an

inference of malice. Rogozienski must point to some evidence apart from the lack of

merit to the underlying case. Rogozienski's additional evidence of malice is a theory that

Rogozienski did not raise in his opposition papers below: Hylton's declaration that

32
Rogozienski "laughed at" him during their September 2006 telephone call, and Hylton's

claim that Rogozienski expressed some advantage as to his stock because Rogozienski

was not a party to the settlement agreement. This, Rogozienski asserts, demonstrates that

Hylton was "upset and hostile" toward him. Evidence of malice may be inferred where

the tone of the relationship between a plaintiff and defendant is "hostile and divisive."

(Oviedo v. Windsor Twelve Properties, LLC (2012) 212 Cal.App.4th 97, 102-103, 114

[tenant established probability of prevailing on claim for malicious prosecution of an

unlawful detainer action with evidence that a managing member of the defendant, Myers,

posted a three-day notice to quit because the tenant was late with her rent but admitted

the tenant had accused him of intimidation and that he had earlier referred to complaints

about noise problems; Myers reported the tenant to the Department of Children and

Family Services after learning she had adopted a daughter; Myers admitted that when he

met with counsel he wanted to evict the tenant due to her late rent payments, noise, and

her daughter being left unsupervised; and Myers specifically raised the tenant's rent with

the intent to sue her].) Malice can be inferred from a party's affirmative pre-litigation

conduct in furtherance of some underlying improper purpose unrelated to the merits of a

lawsuit. Even if we were to consider this new factual theory on appeal, we conclude the

circumstances described by Rogozienski do not permit a reasonable or nonspeculative

inference of Hylton's hostility and divisiveness toward Rogozienski, ill will, or Hylton's

improper purpose in bringing, or continuing to prosecute his claims.

33
 Having concluded Rogozienski cannot meet his burden to make out a prima facie

case of malice, an essential element of his malicious prosecution claim, we need not

reach the remaining issues.

DISPOSITION

The order is affirmed.

O'ROURKE, J.

WE CONCUR:

BENKE, Acting P. J.

IRION, J.

34