Lilien v. Markle CA4/1

Filed 3/19/14 Lilien v. Markle CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.

COURT OF APPAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

ALLISON LOVELL LILIEN, D063397

Plaintiff and Appellant,

v. (Super. Ct. No. 37-2011-00059139-
CU-NP-NC)
JOHN R. MARKLE,

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of San Diego County, Robert

Dahlquist, Judge. Affirmed.

Bruce Cornblum for Plaintiff and Appellant.

Meador & Engle and Alan Engle for Defendant and Respondent.

Plaintiff and appellant Allison Lovell Lilien (Allison) appeals the order granting

the anti-SLAPP motion brought under Code of Civil Procedure section 425.161 by

1 All statutory references are to the Code of Civil Procedure unless indicated
otherwise. Section 425.16 is commonly referred to as the anti-SLAPP statute. (Siam v.
Kizilbash (2005) 130 Cal.App.4th 1563, 1568.) SLAPP is an acronym for "'strategic
defendant and respondent John R. Markle after she sued Markle for malicious

prosecution in connection with a $100,000 loan Markle made to Allison's husband,

Duane Lilien (Duane), when Allison and Duane were married. Allison contends she

made a prima facie showing of facts to sustain a favorable judgment, and the trial court

thus erred in granting Markle's anti-SLAPP motion. We disagree and affirm the order

granting the anti-SLAPP motion.

FACTUAL AND PROCEDURAL BACKGROUND

A. Overview

Markle in December 2005 loaned his long-time friend Duane $100,000 (loan).2

Allison and Duane married in 1989 and separated in July 2008. The loan funds were

deposited in a joint account held by Allison and Duane and were used to develop a

lawsuit against public participation.'" (Jarrow Formulas, Inc. v. LaMarche (2003) 31
Cal.4th 728, 732, fn. 1.)

2 Allison contends in her papers filed in this court that there allegedly "exists no
evidence in the record" showing the transfer of the $100,000 from Markle to Duane was a
loan, as opposed to an "investment." (Italics added.) This contention boarders on the
frivolous. Indeed, Allison in her operative complaint repeatedly referred to the $100,000
payment by Markle to Duane in December 2005 as a "loan" and never once referred to
the payment as some sort of "investment." (See Myers v. Trendwest Resorts, Inc. (2009)
178 Cal.App.4th 735, 746 [noting that "[j]udicial admissions may be made in a pleading"
and noting that "[f]acts established by pleadings as judicial admissions '"are conclusive
concessions of the truth of those matters, are effectively removed as issues from the
litigation, and may not be contradicted, by the party whose pleadings are used against
him or her"'"].) In addition, Allison also referred to this payment as a "loan" in her
declaration under penalty of perjury to set aside the default judgment. Duane also stated
under penalty of the perjury that the $100,000 was a loan, as did Markle. And, of course,
Duane prepared the original note and the new note, the latter which he signed in
connection with the settlement of the underlying action, verifying the $100,000 payment
was a loan. Finally, as discussed post, the issue of whether the $100,000 payment was a
loan or an investment is in any event a red-herring, given that payment constituted a
"debt" incurred by Duane while he was married to Allison.
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property located in Borrego Springs, California, "for which Allison [was] listed as a joint

tenant [(real property)]."

Duane prepared a written promissory note setting out the terms of the loan

(original note). The terms of the original note suggest it was to be signed by Duane and

Allison and was to be secured by the real property. It appears neither Duane nor Allison

signed the note.

In or around July 2008, Markle learned that Allison had filed for divorce from

Duane. In August 2009, Markle, Duane and Allison signed a document titled "Letter of

Intent -- Loan Restructuring and related Property Purchase" (LOI). Paragraph 16 of the

LOI provided that as a "condition to consummation of the [proposed real estate purchase

and sale agreement for the property] contemplated by this LOI[,] and further as a

condition the closing of any escrow associated therewith, the Buyer [i.e., Markle] and

Seller Duane Lilien only shall enter into, and concurrently close escrow for, a

restructuring of the present indebtedness [i.e., ostensibly the loan] owing by Seller to

Buyer" on certain terms and conditions provided in the LOI. The LOI defined the term

"Seller" to include Duane and Allison. The proposed real estate purchase and sale

agreement was never consummated, however. As such, the LOI by its own terms

expired.

B. The Underlying Action

Markle in December 2009 sued Allison and Duane. Markle asserted causes of

action against Allison and Duane for breach of contract and common counts and sought

an order compelling them "to make, execute and deliver a new promissory note to

plaintiff . . . as a replacement for the destroyed original note" (Markle v. Lilien (Super.

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Ct. San Diego County, 2011, No. 37-2009-00062733-CU-CL-NC); the underlying

action). Markle in his complaint alleged that Allison and Duane in December 2005

"executed and delivered" to him the original note in the amount of $100,000, the "terms

and conditions" of which were shown in the unsigned note attached as exhibit 1 to the

complaint. Markle further alleged that the original note "was lost or misplaced, possibly

as a result of a fire which destroyed plaintiff's home, and is no longer in existence" and

that Markle was prepared "to give an indemnity bond to defendants pursuant to Section

3415 of the Civil Code with sureties approved by the court at the court's direction to

indemnify against loss, damage, expense, or other liability which may be suffered by

defendants by reason of the issuance of the duplicate promissory note." Markle sought

the return of his $100,000 plus interest.

Because Allison did not make an appearance in the underlying action and service

of the summons and complaint was initially deemed satisfactory, a default was entered

against her in March 2010.

In September 2010, Markle and Duane attended a civil collections mandatory

settlement conference and reached a settlement of the underlying action with respect to

Duane only (settlement agreement). Under the terms of the arms-length settlement

agreement, Duane agreed to pay Markle $110,000, executed a new promissory note (new

note) and agreed to make minimum monthly payments of $100 beginning in March 2011

for 30 months, at which time the outstanding balance would be due and payable in a final

balloon payment.

The settlement agreement also provided that any amounts Markle collected from

Allison would offset the amount Duane owed under the new note and, by the same logic,

4
that any payments made by Duane under the new note would offset any amounts Allison

would owe under any judgment. In addition, if Duane made all payments as provided

under the settlement agreement, Markle agreed to "file a request for dismissal of [the

underlying action] with prejudice in connection with the request for default judgment

against Allison Lillien [sic]." As a result of the settlement agreement, Markle dismissed

Duane without prejudice from the underlying action.

Markle in early November 2010 filed an application for default judgment against

Allison. In connection with that application, Markle submitted a declaration under

penalty of perjury stating that he had loaned $100,000 to "the defendants," as evidenced

by a cashier's check dated December 14, 2005, made payable to Duane in the amount of

$100,000; that the original note had been lost; that, under the terms of the original note,

Markle was entitled to seek security for the note either on default or demand; that Markle

did not seek security for the note; and that Markle hereby "waives any right to security or

to a security interest provided for by the [original] [n]ote." Markle sought a judgment in

the amount of $109,175.65 against Allison based on the $100,000 loan—with interest

accruing not from the date of the loan but from the date Markle filed his complaint

(December 2009) through November 15, 2010 at the daily rate of $27.39 (prejudgment

interest at legal rate of 10 percent)—and costs. Judgment was entered against Allison in

mid-November 2010 in the amount of $112,480.65. However, at no time did Markle

seek to execute on the judgment against Allison.

Allison in May 2011 first appeared in the underlying action and filed a motion to

set aside the default judgment. Allison alleged she had not been personally served with

the summons and complaint and thus lacked knowledge of the underlying action until late

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February 2011, when she learned from Duane in connection with a mandatory settlement

conference in their divorce proceedings that judgment in the underlying action had been

entered against her.

In her declaration in support of her motion brought pursuant to Code of Civil

Procedure section 473.5 to set aside the default judgment, Allison stated she "never"

(emphasis in original omitted) signed the unsigned original note and she "knew nothing

about this 'loan,' and as stated previously only found out about the existence of this

lawsuit during a mandatory settlement conference" in late February 2011, where, she

alleged, Duane "strategically waited until the end of a four (4) hour settlement conference

to reveal this, knowing that Allison was kept in [t]he dark about the existence of this

lawsuit from the outset."

Allison in her declaration further alleged that she did not own the business where

she was allegedly personally served; that she was never personally served and, instead,

that she was "merely a treating physician" at the business; and that, in any event, she

practiced medicine using her maiden name "Dr. Lovell" and perhaps that is why she

never received the summons and complaint. The trial court in early September 2011

tentatively granted Allison's motion to set aside Markle's default judgment, finding she

made a sufficient showing that she did not receive actual notice of the summons and

complaint and that her lack of such notice was not the result of her avoiding service or

inexcusable neglect.

The day after the trial court issued its tentative ruling granting Allison's motion to

set aside the default judgment, Markle dismissed Allison without prejudice from the

underlying action. Markle in his declaration in support of his anti-SLAPP motion stated

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under penalty of perjury that his decision to dismiss Allison "had nothing to do with the

merits" of the underlying action; that he dismissed the underlying action against Allison

because of the settlement agreement reached with Duane; that the "case against Allison

had dragged on for nearly two years and seemed no closer to resolution once the default

had been set aside"; and that he "had already spent significantly more on legal fees than

[he] had expected and believed, based on the ongoing divorce proceeding, that Allison

Lilien would vigorously litigate the case even if doing so were not economically

justified." Markle also stated the only reason he filed the underlying action against

Allison was to have the loan repaid.

Allison in response/retaliation sued Markle and Duane. In her original complaint,

Allison asserted causes of action against Markle for malicious prosecution, based on his

dismissal of the underlying action against her, and for conspiracy to inflict emotional

distress. After the court sustained Markle's demurrer to the conspiracy cause of action,

Allison in July 2012 filed the 23-page operative complaint, asserting against Markle a

single claim for malicious prosecution.3

In her operative complaint, Allison generally alleged that Duane and Markle for

the last 30 years have been "close personal and business friends"; that Markle has assisted

Duane "financially over these 30 years"; that she and Duane separated in early July 2008;

3 As noted ante, Allison's operative complaint also asserted various causes of action
against Duane—who is not a party in this appeal—including for breach of fiduciary duty
based on Allison's contention that she was involved in "'marital proceedings made in
hell'" as a result of Duane's "frivolous and fictitious claims" against her; Allison's
attempts to "uncover the existence and extent of community property holdings" solely
under Duane's control; and his attempts to saddle Allison with "numerous loans and debts
not previously known" by Allison that Duane contends must be paid out of "community
equity in the community property of the parties," including the loan made by Markle.
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that during her marriage with Duane he "experienced a history of failed business

endeavors"; that she was "never involved" in Duane's business endeavors and that he, in

any event, "kept his business dealings . . . away from [her]"; that Duane contends the loan

made by Markle was and is a community debt; and that Markle unlawfully sued her after

Markle and Duane "collu[ded]" to use Markle's lawsuit as "leverage to force" her to repay

the 2005 loan with income she earned after she and Duane had separated.

Allison further alleged that Markle brought the underlying action against her "for

the sole purpose of forcing [her] to involuntarily give real property security" for the

original promissory note "knowing [she] had no legal obligation" in connection with that

note. She also alleged Markle knew the default judgment he obtained against her was a

"sham," and he did not have "an honest suspicion or belief" in his declaration in support

of the application for default judgment that Allison was personally liable for repayment

of the loan.

Allison alleged that if the underlying action had been successful, Markle not only

would benefit from obtaining a personal judgment against her "but also would be

performing an act of friendship for his close friend Defendant Duane by aiding Duane in

forcing Allison to pay Duane's personal obligation owing to Markle." Allison prayed for

damages in excess of $100,000 and sought an award of punitive damages of $500,000

against Markle.

Markle in response filed an anti-SLAPP motion to strike Allison's malicious

prosecution action. The trial court granted that motion, ruling as follows:

"The sole cause of action asserted against defendant Markle in the [operative]

complaint is for malicious prosecution. An action for malicious prosecution based on a

8
party's or attorney's statements or writings in an earlier judicial proceeding is subject to

being stricken as a SLAPP suit: '[B]y its terms, section 425.16 potentially may apply to

every malicious prosecution action, because every such action arises from an underlying

lawsuit, or petition to the judicial branch.' Jarrow Forumlas, Inc. v. LaMarche (2003) 31

Cal.4th 728, 735; Dickens v. Provident Life & Acc. Ins. Co. (2004) 117 Cal.App.4th 705,

713. Malicious prosecution plaintiffs must be prepared to show at the outset a probability

of prevailing—i.e., that the earlier suit was filed 'maliciously' and 'without probable

cause.' This does not 'unduly burden plaintiffs' access to court.' Jarrow Formulas, Inc. v.

LaMarche, supra, 31 Cal.4th at 740.

"In order to show the probability of success on her malicious prosecution claim,

plaintiff must show a legally sufficient claim and that the claim is supported by

competent, admissible evidence. DuPont Merck Pharmaceutical Co. v. Superior Court

(2000) 78 Cal.App.4th 562, 568. The 'probability of prevailing' is tested by the same

standard governing a motion for summary judgment. That is, in opposing a SLAPP

motion, it is the plaintiffs' burden to make a prima facie showing of facts that would

support a judgment in the plaintiffs' favor. Kyle v. Carmon (1999) 71 Cal.App.4th 901,

907. The court will consider the pleadings and evidentiary submissions of both the

plaintiff and the defendant, but the court does not weigh credibility or comparative

strength of the evidence; the court considers the defendant's evidence only to determine if

it defeats the plaintiff's showing as a matter of law. Kashian v. Harriman (2002) 98

Cal.App.4th 892, 906.

"A plaintiff in a malicious prosecution action 'must plead and prove that the prior

action (1) was commenced by or at the direction of the defendant and was pursued to a

9
legal termination in his, plaintiff's, favor [citations]; (2) was brought without probable

cause [citations]; and (3) was initiated with malice [citations].' Bertero v. National

General Corp. (1974) 13 Cal.3d 43, 50; see Cote v. Henderson (1990) 218 Cal.App.3d

796. Unlike the malice element, which is a factual question, the issue of whether there

was an absence of probable cause in bringing the prior case is a question of law to be

determined by the court. Paiva v. Nichols (2008) 168 Cal.App.4th 1007, 1018.

"As to (1), Markle brought a prior action against the plaintiff and later dismissed

that action following an order setting aside the default of the plaintiff. 'Voluntary

dismissal is presumed to be a favorable termination on the merits, unless otherwise

proved to a jury. (Citations omitted[.]) This is because "[a] dismissal for failure to

prosecute . . . does reflect on the merits of the action [and in favor of the defendant]. . . .

The reflection arises from the natural assumption that one does not simply abandon a

meritorious action once instituted."' Sycamore Ridge Apartments, LLC v. Naumann

(2007) 157 Cal.App.4th 1385, 1400.

"Markle testifies that he dismissed the prior action because 'he decided that his

time and money could be spent on activities more rewarding than litigation.' See Markle

Decl., ¶ 11. However, there is no case that holds that financial considerations should be

analyzed in determining whether a dismissal of the underlying action constitutes a

favorable determination. Thus, Markle's declaration cannot establish, as a matter of law,

that plaintiff would be unable to establish the element of favorable termination.

Drummond v. Desmarais (2009) 176 Cal.App.4th 439, 457.

"As to (2), the presence or absence of probable cause is viewed under an objective

standard applied to the facts upon which the defendant acted in prosecuting the prior

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case. Sheldon Appel v. Albert & Oliker (1989) 47 Cal.3d 863, 878, 881. The test of

determining probable cause is whether any reasonable attorney would have thought the

claim to be tenable. Id. at 886.

"Hence, 'probable cause to bring an action does not depend upon it being

meritorious, as such, but upon it being arguably tenable, i.e., not so completely lacking in

apparent merit that no reasonable attorney would have thought the claim tenable.

[Citation.] Counsel and their clients have a right to present issues that are arguably

correct, even if it is extremely unlikely that they will win. . . .[] [Citation.]' [Citations.]

Probable cause is established by showing that the 'claim . . . is legally sufficient and can

be substantiated by competent evidence. . . . ' Paiva v. Nichols[, supra,] 168 Cal.App.4th

[at pp.] 1019-20.

"The Court has considered both parties' arguments regarding whether Markle had

probable cause to bring the underlying action and concludes that the claim against

Allison for recovery of the alleged loan is an arguably tenable claim. In particular, even

assuming that the loan was made to Duane only and Markle never obtained a promise by

Allison to re-pay the loan, Markle's claims against Allison to recover under community

property or agency principles from Allison is legally tenable.

"As to (3), the Court is not persuaded that plaintiff has presented admissible

evidence establishing that the prior action was filed maliciously. To constitute malice

there must be an improper motive or purpose. Masterson v. Pig'n Whistle Corp., 161

Cal.App.2d 323, 338. 'Malice' is demonstrated by evidence which establishes bad faith,

or the absence of an honest and sincere belief that the prosecution was justified by the

existent facts and circumstances. Singleton v. Singleton, 68 Cal.App.2d 681, 696; Grove

11
v. Purity Stores, Ltd., 153 Cal.App.2d 234, 241. Plaintiff's evidence does not establish a

prima facie case of malice."

DISCUSSION

A. Guiding Principles of the Anti-SLAPP Statute

Under section 425.16, subdivision (b)(1), a "cause of action against a person

arising from any act of that person in furtherance of the person's right of petition or free

speech under the United States Constitution or the California Constitution in connection

with a public issue shall be subject to a motion to strike, unless the court determines that

the plaintiff has established that there is a probability that the plaintiff will prevail on the

claim."

In the instant case, the parties recognize that a malicious prosecution claim is

subject to the anti-SLAPP statute. (See Jarrow Formulas, Inc. v. LaMarche, supra, 31

Cal.4th at pp. 736-741; Kleveland v. Siegel & Wolensky, LLP (2013) 215 Cal.App.4th

534, 548-549.) As such, the burden then shifted to Allison to show a likelihood of

prevailing on that claim. (See § 425.16, subd. (b)(1).)

To show the likelihood of prevailing on the merits, Allison "'must demonstrate that

the complaint [was] both legally sufficient and supported by a sufficient prima facie

showing of facts to sustain a favorable judgment if the evidence [she] submitted . . . [was]

credited.' [Citations.]" (See Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th

811, 821.) "'We consider "the pleadings, and supporting and opposing affidavits . . .

upon which the liability or defense is based." [Citation.] However, we neither "weigh

credibility [nor] compare the weight of the evidence. Rather, [we] accept as true the

evidence favorable to the plaintiff [citation] and evaluate the defendant's evidence only to

12
determine if it has defeated that submitted by the plaintiff as a matter of law." [Citation.]'

[Citations.]" (Nygard, Inc. v. Uusi–Kerttula (2008) 159 Cal.App.4th 1027, 1036.)

In opposing an anti-SLAPP motion, a plaintiff need only establish that the claim

subject to section 425.16 has "minimal merit." (Soukup v. Law Offices of Herbert Hafif

(2006) 39 Cal.4th 260, 291 (Soukup); Sycamore Ridge Apartments LLC v. Naumann

(2007) 157 Cal.App.4th 1385, 1397.) We independently review the trial court's order

granting a special motion to strike under section 425.16. (Rusheen v. Cohen (2006) 37

Cal.4th 1048, 1055.)

B. Probability of Prevailing on the Malicious Prosecution Claim

As noted by the trial court, to prove a malicious prosecution claim Allison must

show the underlying action "'(1) was commenced by or at the direction of the defendant

and was pursued to a legal termination in . . . plaintiff's[] favor [citations]; (2) was

brought without probable cause [citations]; and (3) was initiated with malice [citations].'

[Citation.]" (Crowley v. Katleman (1994) 8 Cal.4th 666, 676; see also Soukup, supra, 39

Cal.4th at p. 292.)

The record shows the parties in this appeal do not dispute that Markle's dismissal

without prejudice of the underlying action against Allison was a termination in her favor.

(See Sycamore Ridge Apartments LLC v. Naumann, supra, 157 Cal.App.4th at p. 1400

[noting that a voluntary dismissal, such as in the instant case, "is presumed to be a

favorable termination on the merits, unless otherwise proved to a jury"]; cf. Lackner v.

LaCroix (1979) 25 Cal.3d 747, 750-751 [observing that a dismissal (i.e., for failure to

prosecute) "'reflect[s] on the merits of the action'" in favor of the defendant because of

13
"'the natural assumption that one does not simply abandon a meritorious action once

instituted'"].)

1. Probable Cause

"An action is deemed to have been pursued without probable cause if it was not

legally tenable when viewed in an objective manner as of the time the action was initiated

or while it was being prosecuted. The court must 'determine whether, on the basis of the

facts known to the defendant, the institution of the prior action was legally tenable.'

(Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 878 [(Sheldon)].) 'The

resolution of that question of law calls for the application of an objective standard to the

facts on which the defendant acted. [Citation.]' (Ibid.; italics omitted.) The test the court

is to apply is whether 'any reasonable attorney would have thought the claim tenable . . . .'

(Id. at p. 886.) The tort of malicious prosecution also includes the act of 'continuing to

prosecute a lawsuit discovered to lack probable cause.' (Zamos v. Stroud (2004) 32

Cal.4th 958, 973.) In determining the probable cause issue, the same standard applies 'to

the continuation as to the initiation of a suit.' (Id. at p. 970.)

"'In analyzing the issue of probable cause in a malicious prosecution context, the

trial court must consider both the factual circumstances established by the evidence and

the legal theory upon which relief is sought. A litigant will lack probable cause for his

[or her] action either if he [or she] relies upon facts which he [or she] has no reasonable

cause to believe to be true, or if he [or she] seeks recovery upon a legal theory which is

untenable under the facts known to him [or her].' [Citation.]

"In determining whether the prior action was legally tenable, i.e., whether the

action was supported by probable cause, the court is to construe the allegations of the

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underlying complaint liberally, in a light most favorable to the malicious prosecution

defendant. [Citation.]" (Kleveland v. Siegel & Wolensky, LLP, supra, 215 Cal.App.4th at

pp. 550-551.)

Here, the record shows that Markle made the $100,000 loan to Duane in

December 2005; that, at the time, Allison and Duane were married and they separated in

July 2008; that Duane prepared the original note setting forth the terms of the loan that

included signature lines for Allison and him, as husband and wife; that Duane obtained

the loan to develop the real property in which Allison was a joint tenant; that the loan

proceeds were deposited in a joint account held by Allison and Duane; that, although it

appears neither Duane nor Allison signed the original note, the loan was in fact made by

Markle as evidenced by the check cashed by Duane in December 2005; that, during their

marriage, Duane allegedly had a history of failed business endeavors and kept Allison in

the dark about many such endeavors, to her financial detriment; and, perhaps most

importantly, that when Markle sued Allison and Duane in December 2009 for repayment

of the loan proceeds, the law provided the community estate is generally liable for the

debt of either spouse.

Indeed, Family Code section 910, subdivision (a) provides: "Except as otherwise

expressly provided by statute, the community estate is liable for a debt incurred by either

spouse before or during marriage, regardless of which spouse has the management and

control of the property and regardless of whether one or both spouses are parties to the

debt or to a judgment for the debt."

"Thus, the liability of community property is not limited to debts incurred for the

benefit of the community, but extends to debts incurred by one spouse alone exclusively

15
for his or her own personal benefit. [Citations.] Although a spouse may be required to

reimburse the community for the misuse of community assets [citations], the community

estate remains liable to third party creditors for any debt incurred as a result of such

misuse of assets." (Lezine v. Security Pacific Fin. Services, Inc. (1996) 14 Cal.4th 56,

64.)

A "debt" within the meaning of the Family Code is an "obligation incurred by a

married person before or during marriage, whether based on contract, tort, or otherwise."

(Fam. Code, § 902.) In the case of a contract, a "debt" is deemed "incurred" at the time

the contract is made. (Fam. Code, § 903, subd. (a).) That performance of a contract may

extend into the postseparation period of a marriage does not mean the contract was made

after separation so as to avoid Family Code section 910, subdivision (a). (See, e.g., In re

Marriage of Feldner (1995) 40 Cal.app.4th 617, 622 (Feldner).)

In Feldner, the obligor spouse, a contractor, entered into a contract while married

to act as a superintendent for the construction of a home for a third party. After

separation, the obligor spouse refused to complete work on the contract and ultimately

the third party sued the obligor spouse for breach of contract/implied warranty. The trial

court found the third party lawsuit was a community obligation. The Feldner court

agreed. (Feldner, supra, 40 Cal.App.4th at p. 625.)

In so doing, the court in Feldner construed Family Code section 903 and noted the

statute was "oblivious to the time of performance of a contract. The statute does not say

that a contract debt is incurred when a contract is broken, or incurred when it is to be

substantially performed, or anything like that. It says that a contract debt is 'incurred'

when the contract is 'made.' When read together with section 910, subdivision (a)

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['Except as otherwise expressly provided by statute, the community estate is liable for a

debt incurred by either spouse before or during marriage . . . .'] the effect of section 903 is

to characterize contract debts as community when the contract is 'made' (as distinct from

performed) during the marriage." (Feldner, supra, 40 Cal.App.4th at p. 622.)

The Feldner court recognized that many contracts required extended periods of

performance but, even in those cases, when performance continues after marital

separation, the underlying character of the debt is unchanged: "The performance of a

contract, however, is fundamentally different from the problem of determining its

community or separate character. Many contracts, such as an installment debt, require

extended periods of performance. The classic solution to the problem created by a

separation date during such an extended period is to allow for reimbursement by the

spouse who uses his or her postseparation earnings to pay a 'preexisting' community

obligation. [Citations.]" (Feldner, supra, 40 Cal.App.4th at p. 624, fn. omitted.)

We independently conclude Allison has not satisfied her minimal burden under

step two of the anti-SLAPP statute of showing a probability of prevailing on her

malicious prosecution action because we conclude the underlying action (in which

Markle sought repayment of the loan made to Duane during his marriage to Allison),

when viewed in an objective manner, was legally tenable as to Allison and the

community's obligation to pay that "debt." (See Fam. Code, §§ 902, 903, subd. (a) &

910, subd. (a); see also Sycamore Ridge Apartments LLC v. Naumann, supra, 157

Cal.App.4th at p. 1402 [noting an action is without probable cause "if it was not legally

tenable when viewed in an objective manner as of the time the action was initiated or

17
while it was being prosecuted"].)4 For this reason alone, we independently conclude the

trial court properly granted Markle's anti-SLAPP motion.5

2. Malice

Assuming, for the sake of argument, that Allison can establish a probability of

prevailing on the lack of probable cause element of malicious prosecution, we

nonetheless conclude she cannot meet her minimal burden to show a probability of

prevailing on the malice element. The malice element focuses on a defendant's subjective

intent in initiating the prior action and is generally an issue to be determined by a jury.

(Sheldon, supra, 47 Cal.3d at p. 874; HMS Capital, Inc. v. Lawyers Title Co. (2004) 118

Cal.App.4th 204, 218.) To establish malice, Allison was required to show by a

preponderance of the evidence that Markle brought the underlying action based on

hostility or ill will or for another improper purpose. (See Ross v. Kish (2006) 145

Cal.App.4th 188, 204; Padres L.P. v. Henderson (2003) 114 Cal.App.4th 495, 522.)

"Malice is usually proved by circumstantial evidence. [Citation.] Although a lack

of probable cause, standing alone, does not support an inference of malice, malice may

still be inferred when a party knowingly brings an action without probable cause.

[Citation.]" (Padres L.P. v. Henderson, supra, 114 Cal.App.4th at p. 522.) Whether

4 Our decision in the instant case is limited solely to the issue whether Allison met
her burden to show a probability of prevailing on her malicious prosecution action and,
specifically, to establish the lack of probable cause element of this tort action. We thus
are not deciding in this proceeding whether and to what extent Allison and/or the
community, if at all, are liable to pay the debt on the loan as set forth in the new note
executed by Duane.

5 In reaching our decision, we did not consider any of the evidence proffered by
Markle in support of his anti-SLAPP motion to which Allison had unsuccessfully
objected to in the trial court.
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malice exists presents a factual question, and its proof may be inferred from all the

circumstances of the case. (Sheldon, supra, 47 Cal.3d at p. 874.)

Here, Allison has not proffered sufficient evidence for purposes of the anti-SLAPP

statute from which a reasonable person could infer an improper motive by Markle in

asserting against her causes of action for breach of contract and common counts in the

underlying action.

First, we reject Allison's contention that Markle brought the underlying action

against her for the "sole purpose" of forcing her to give involuntarily real property

security on the note she did not sign. Instead, the record shows that in November 2010,

before Allison filed her malicious prosecution action against Markle, he already had

agreed (under penalty of perjury) to "waive[] any right to security or to a security interest

provided for by the [original] note" in connection with the prove up of his default

judgment against Allison.

Second, that Markle alleged in the underlying action that the original note had

been lost or misplaced, when it appears neither Duane nor Allison had signed that note,

also does not establish the requisite malice. There is no dispute on this record that

Markle made the loan to Duane, a married person, during Duane's marriage to Allison.

(See Fam. Code, §§ 902 & 903, subd. (a).) In addition, the record shows that Duane

reaffirmed the debt in the new note, after he and Markle signed the settlement agreement

and that Markle agreed, in connection with that settlement, to dismiss Allison from the

underlying action if and when Duane repaid the debt evidenced by the new note.

What's more, the record shows that Allison, in August 2009 and before the

underlying action was filed, knew about the loan from Markle to Duane as generally

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referenced by the LOI that sought, among other things, to restructure the loan so that it

could be repaid by Duane only in connection with the sale of certain property.

Finally, we conclude Allison's contention that the underlying lawsuit was the

result of some sort of collusion between Duane, on the one hand, and Markle, on the

other, to saddle her with the entire debt from the loan is wholly speculative, is contrary to

the law in any event, and is not supported by admissible evidence in the record. Rather,

the record shows Markle sued on the note after the parties unsuccessfully sought in the

LOI to restructure the debt. In addition, as noted above, Duane signed a new note

reaffirming the debt and agreed to make all payments toward that debt. The record also

shows that even after a default judgment was entered against Allison, Markle did not seek

to execute on that judgment.

For these reasons, we independently conclude Allison also has not shown a

probability of prevailing on the malice element of her malicious prosecution action.

DISPOSITION

The trial court's order granting Markle's special motion to strike Allison's

malicious prosecution claim is affirmed. Markle to recover his costs of appeal.

BENKE, Acting P. J.

WE CONCUR:

AARON, J.

IRION, J.

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