LA Investments, LLC v. Spix

Filed 2/9/22; Modified and Certified for Part. Pub. 3/4/22 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION THREE

LA INVESTMENTS, LLC, et al., B304734

Plaintiffs and Respondents, (Los Angeles County
Super. Ct. No. BC544662)
v.

RICHARD SPIX et al.,

Defendants and Appellants.

APPEAL from a judgment of the Superior Court of
Los Angeles County, Barbara Marie Scheper, Judge. Affirmed.
Lewis Brisbois Bisgaard & Smith, Roy G. Weatherup,
Bartley L. Becker and Kenneth C. Feldman for Defendants and
Appellants.
The E. Johnson Law Firm, Erik L. Johnson; Houston Law
of California and Troy G. Houston for Plaintiffs and Respondents.
——————————
 Defendants and appellants Richard Spix, Deborah
Elizabeth Martin, and Law Office of Spix & Martin (collectively,
the Attorney Defendants) appeal from a judgment following a
jury’s verdict finding them liable to plaintiffs and respondents LA
Investments, LLC, a California limited liability company (LAI)
and Peter Starflinger (Starflinger) (sometimes collectively
referred to as plaintiffs) for malicious prosecution. After the trial
court determined as a matter of law the Attorney Defendants had
no probable cause to maintain a lawsuit in which they
represented defendant, Rosa Banuelos (Banuelos), the jury
determined the Attorney Defendants acted with malice and
awarded compensatory damages and punitive damages. Finding
no error, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
I. The Kevin Action and Underlying Action
Sometime in 2009 1 the Attorney Defendants, on behalf of
Banuelos’s son, Kevin Banuelos (Kevin), filed an action against
218 Properties, LLC, (218) involving a disputed determination
that Kevin was not financially eligible to rent a mobilehome
space (Kevin Action).
While the Kevin Action was pending, on June 26, 2010,
Banuelos entered into a contract to sell her mobilehome in Park

1 We cannot locate the exact date in the record on appeal.
As will be seen, appellants have provided neither a complete
record, nor adequate citations to the record. It is appellants’
burden to provide an adequate record on appeal. (Amato v.
Mercury Casualty Co. (1993) 18 Cal.App.4th 1784, 1794.) To the
extent the record is inadequate, we make all reasonable
inferences in favor of the judgment. (Ibid.)

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Granada Trailer Lodge (Park) 2 to Rosa Rodriguez for $55,000.
218 owns the Park and LAI owns 100 percent of the membership
interest in 218. Rodriguez submitted an application for residency
at the Park in connection with the contract. The application
included paystubs showing monthly gross income of $4,000, but
Rodriguez’s credit report showed she owed $5,112 per month in
loan payments.
On July 2, 2010, 218 attorney Douglas Beck sent a letter to
Rodriguez asking for additional information in support of her
application for residency (Beck Letter). The Beck Letter
requested three categories of documents: (1) a schedule of real
estate owned, mortgage statements for each mortgage loan, and a
schedule of gross income, expenses, and net income for the years
2009 and 2010; (2) verification of funds to complete the $55,000
purchase of Banuelos’s mobilehome; and (3) written confirmation
Rodriguez intended to reside in the mobilehome and she did not
intend to rent to her son or anyone else.
Rodriguez did not respond to the Beck Letter and on July 7,
2010, exercised her right to cancel the purchase because she did
not want to provide the documentation requested.
About a week later on July 15, 2010, Banuelos submitted a
declaration in the Kevin Action in support of Kevin’s request for a
preliminary injunction seeking, inter alia, an order that the
mobilehome park must receive permission from the trial court
before denying approval of any lease transfer. Banuelos attached
three exhibits to her declaration: (1) a June 28, 2010 notice to
prospective tenant(s) of Park Granada advising the mobilehome

The Park is also referred to as Park Granada Mobile
2
Home Park.

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park was in the process of being converted to condominiums
(Notice); (2) the July 2, 2010 Beck Letter; and (3) a July 14, 2010
letter from the City of Carson to LAI stating the application to
approve the conversion had been denied (City of Carson Letter).
Banuelos declared her mobilehome in the Park had been
listed for sale for about four months and Rodriguez had entered
into an agreement to purchase it. She stated about one week
before escrow was to close, Rodriguez backed out of the
transaction, forcing her to cancel the escrow. She also stated
there was no application to convert to condominiums pending for
the Park.
On July 20, 2010, five days after Banuelos filed her
declaration in the Kevin Action, the Attorney Defendants, on
behalf of Banuelos, filed an action for declaratory and injunctive
relief, statutory violations, interference with contractual and
economic advantage, and intentional and negligent infliction of
emotional distress (Underlying Action). They named 218 and
LAI as defendants. The gravamen of the complaint was 218 and
LAI had attempted to prevent mobile homeowners from
exercising their rights to sell their mobilehomes to anyone other
than the defendants or their proxies. Banuelos alleged
Starflinger, a manager of the Park, retaliated against her saying
he was not going to make selling her mobilehome easy because he
had spent more than $250,000 in legal fees litigating against her
son. Banuelos alleged the sale to Rodriguez fell through because
of the unreasonable conduct of the Park in withholding approval
of buyers. Banuelos attached to the complaint the same three
exhibits she attached to her declaration filed in the Kevin Action.
Meanwhile, on July 29, 2010, 218 filed its opposition to the
motion for preliminary injunction in the Kevin Action, along with

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the declarations of Beck and Starflinger. Starflinger explained
while reviewing Rodriguez’s application for residency, he wanted
to approve it because he “did not want to give Ms. Banuelos any
excuse for her to join her son in a multiplicity of lawsuits.” He
asked Beck to review the application as it appeared Rodriguez
did not meet the financial qualifications. According to
Starflinger, when Rodriguez did not respond to the request to
provide additional financial information, the Park declined her
application.
Beck reviewed Rodriguez’s application, which provided for
a purchase price of $55,000. The application included a net
worth statement of Rodriguez showing total assets of $1,273,300.
The net worth statement did not show a source for the purchase
price, so it appeared Rodriguez would be incurring additional
debt to finance the purchase. Beck also reviewed Rodriguez’s
credit report, and it showed monthly loan payments of $5,112.
But Rodriguez stated her gross monthly salary was $4,000, with
rental income of $2,800. As a result, Beck sent a letter to Park
management to transmit to Rodriguez asking for information he
thought was necessary to assess her qualifications. Beck also
declared to a conversation he had with Harry Madera, who was
apparently an agent representing Rodriguez. Beck asked Madera
where Rodriguez was getting the funds for the purchase. Madera
stated Rodriguez was getting the money from her sister. Beck
never heard back from Madera or Rodriguez, so on July 19, 2010,
he drafted a letter to Rodriguez denying her application.
The record on appeal does not reflect the outcome of the
motion for preliminary injunction, but we assume it was denied. 3

3 Otherwise, presumably the Attorney Defendants would
rely on the trial court’s granting of the preliminary injunction as

5
 On January 10, 2011, a new buyer made an offer to
purchase Banuelos’s mobilehome for $51,000, which Banuelos
accepted. The new buyer’s application for residency was
approved, and the sale closed February 28, 2011.
Following several demurrers and motions to strike, it
appears the operative third amended complaint 4 filed April 4,
2011 was reduced to three causes of action against R22, Inc. dba
Star Management (R22, served as Doe 1), the authorized agent
working on behalf of the owner, 218, and Starflinger (served as
Doe 2), the agent/representative of R22: (1) second cause of
action for violation of Civil Code section 798.74; (2) ninth cause of
action for intentional infliction of emotional distress; and
(3) tenth cause of action for negligence. On these, R22 and
Starflinger filed motions for summary judgment.
The trial court granted summary judgment as to each
defendant. According to this Division’s opinion in Banuelos v.
218 Properties, LLC (Sept. 3, 2013, B241645) [nonpub. opn.]
(Banuelos I), the trial court found: “(1) as to the cause of action
for violation of Civil Code section 798.74 and the derivative
negligence claim, the undisputed evidence showed . . . Rodriguez
cancelled her purchase of [Banuelos]’s mobile home because she

evidence they had probable cause to continue the Underlying
Action. (See Paiva v. Nichols (2008) 168 Cal.App.4th 1007, 1011
[one way a defendant can negate absence of probable cause and
defeat malicious prosecution claim is by showing interim victory
such as granting of a preliminary injunction in the underlying
case].)
4 The first, second, and third amended complaints are not
in the record on appeal. Nor are the trial court’s minute orders
sustaining the demurrers.

6
did not want to respond to the requests for further information
and those requests were objectively reasonable; (2) as to the
intentional interference with contract cause of action, it was
undisputed . . . Rodriguez exercised her contractual right to
cancel the purchase and . . . defendants were not strangers to the
contract; (3) as to the interference with economic advantage
cause of action, the undisputed evidence showed . . . the
interference was not wrongful and the requests for additional
information were objectively reasonable;[ 5] and (4) as to the
intentional infliction of emotional distress cause of action, the
undisputed evidence showed defendants did not engage in
extreme or outrageous conduct and plaintiff did not suffer severe
emotional distress.” (Banuelos I, supra, B241645 at p. 6.)
Banuelos appealed, and a different panel of this Division
affirmed in Banuelos I. The Division held, inter alia, “the
defendants were well within their rights in demanding that the
prospective purchaser located by [Banuelos] provide satisfactory
evidence of an ability to pay the required park rent and charges.
Civil Code section 798.74 allows park owners to refuse to approve
mobile home purchasers for residency based on their ‘lack of
ability to pay park rent and charges.’ ” (Banuelos I, supra,
B241695 at p. 9.) 6

5 It is unclear from the record on appeal where the
interference with economic advantage and intentional infliction
of emotional distress causes of action arose, given R22’s and
Starflinger’s motions for summary judgment do not address
them.
6This Division also affirmed on procedural grounds.
Banuelos I explained, Banuelos’s “arguments improperly rely on
evidence to which objections were sustained. However,

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II. The Instant Action
A. Complaint
Six months after issuance of the remittitur in Banuelos I,
on May 5, 2014, LAI, 218, R22, and Starflinger filed the instant
action against Banuelos and the Attorney Defendants, alleging
causes of action for malicious prosecution and defamation.
“The complaint alleged in relevant part: the [Underlying
Action] was terminated in LAI’s favor. Banuelos and her counsel
lacked probable cause to initiate and prosecute the [Underlying
Action], no reasonable attorney would have thought the claims
were legally tenable, and there was a complete failure to
investigate the facts before bringing suit. The [Underlying
Action] ‘was predicated on the charge that [LAI and others] acted
in concert to unreasonably, intentionally, and wrongfully refuse
the transfer of mobile homes to [LAI and others] or their proxies.’
Had Banuelos and her counsel ‘conducted any investigation
whatsoever, they would have discovered that there was only one
occasion—which occurred more than five years earlier, before
Plaintiffs 218 . . . , LAI, and R22 even had any involvement with
Park Granada—where the sale of a mobile home to a prospective

[Banuelos] does not challenge the court’s rulings sustaining
defendants’ objections to this evidence. As a result, any issues
concerning the correctness of the court’s evidentiary rulings have
been waived and we consider all such evidence to have been
properly excluded. [Citation.] [¶] In addition, [Banuelos] does
not address the numerous alternate bases for the trial court’s
rulings, including the court’s conclusion that her separate
statement was deficient and that [LAI] was not liable for the acts
of 218 . . . . Therefore, [Banuelos] has failed to show that
summary judgment was improper.” (Banuelos I, supra, B241645
at p. 12, fn. omitted.)

8
third party buyer was turned down before it was sold to an
alleged “proxy” of Plaintiff Starflinger.’ Further, Banuelos and
her counsel acted with malice, as evidenced by, inter alia,
derogatory comments about Starflinger in the presence of others.
Finally, the cause of action for defamation was predicated on a
June 2013 statement by Martin, in the presence of others, that
Starflinger had been sued by the SEC for securities fraud. ‘This
statement was . . . indisputably false, as . . . Starflinger has never
been sued by the SEC for securities fraud.’ Further, said
statement was defamatory per se and was not privileged because
it was not made in the course of a judicial proceeding.” (LA
Investment v. Banuelos (June 30, 2016, B260151) [nonpub. opn.]
at p. 6 (Banuelos II).)
B. Special Motion to Strike and Banuelos II
The Attorney Defendants filed a special motion to strike
the complaint, and Banuelos joined. The motion asserted, inter
alia, LAI could not prevail on the malicious prosecution claim
because the facts known as of the date of filing of the Underlying
Lawsuit established probable cause as a matter of law. The
motion also argued LAI could not establish the element of malice
and that Banuelos had a complete defense because she acted on
the advice of counsel.
“In opposition, LAI argued a lack of probable cause can be
established by showing either that the prior action was initiated
without probable cause, or that it continued to be prosecuted
after Banuelos learned it was not supported by probable cause.”
(Banuelos II, supra, B260151 at pp. 7–8.) LAI further contended
it could show Banuelos and the Attorney Defendants acted with
malice and that Banuelos’s invocation of the advice of counsel
defense was premature.

9
 The trial court denied the special motion to strike.
The Attorney Defendants appealed. A different panel of
this Division reversed in part and remanded with directions to
grant the motion as to the defamation claim, and otherwise
affirmed in Banuelos II, supra, B260151 at page 28. This
Division determined the trial court properly denied defendants’
special motion to strike the cause of action for malicious
prosecution. 7
C. Trial
With the agreement of counsel, the trial court dismissed
plaintiffs 218 and R22 and agreed to Attorney Defendants’
request to bifurcate the punitive damages phase of trial. It was
also agreed argument regarding probable cause would be made to
the court, not the jury, and the court would make a finding before
the case was argued to the jury.
The case was tried in September 2019. On September 24,
2019, the trial court denied plaintiffs’ motion for directed verdict
and denied the Attorney Defendants’ motion for nonsuit. The
court found as a matter of law the Attorney Defendants had no
probable cause to initiate the Underlying Action. 8 The court

7 Our decision in Banuelos II cannot form the basis for a
finding of probable cause or malice in the instant appeal. (See
Code Civ. Proc., 425.16, subd. (b)(3).)
8 On September 23, 2019, both sides filed requests for
judicial notice, which the trial court stated it had “read and
considered.” The record on appeal does not contain the Attorney
Defendants’ request(s) for judicial notice. Plaintiffs
supplemented the record on appeal to include the following
requests for judicial notice dated: September 19, 2019;
September 22, 2019; and October 1, 2019. Based on the timing of

10
stated, “I think this case was utterly lacking in probable cause
from its beginning to its end and that no reasonable attorney
would have maintained it.” The court also found the two
witnesses (Spix and Martin) who testified they thought what they
did was supported by probable cause were “utterly lacking” in
credibility, stating, “I found all three of the defendants’ testimony
[Banuelos was the third] to be combative and their refusal to
answer straightforward questions in a straightforward manner
contributes to the court’s finding that they are lacking in
credibility.” The court found the only reason to commence or
continue the underlying action was to harass the Park and
Starflinger. “So the court finds that there was no probable cause
to commence the case and certainly no probable cause to continue
it.”
On September 30, 2019, the jury returned its verdict. The
jury found the Attorney Defendants acted primarily for a purpose
other than succeeding on the merits of the claim and that their
conduct was a substantial factor in causing plaintiffs harm. 9 The
jury found the Attorney Defendants engaged in the conduct with
malice, oppression, or fraud.

the court’s comments, it appears the court “read and considered”
plaintiffs’ September 22, 2019 request. It contains the moving
and opposing papers on the motion for preliminary injunction in
the Kevin Action, and the moving and opposing papers on the
motion for summary judgment in the Underlying Action.
9The jury found Banuelos did not act primarily for a
purpose other than succeeding on the merits and was not a
substantial factor in causing harm to any plaintiff.

11
 The jury awarded compensatory damages representing
attorney fees and costs in the sum of $171,465.09 and emotional
distress damages in the sum of $10,000. The trial court added
interest of $85,581.18 to the compensatory damages award. With
respect to punitive damages, the jury awarded LAI punitive
damages from Spix of $300,000 and from Martin $25,000. The
jury awarded Starflinger punitive damages from Spix of $15,000
and from Martin $5,000.
Judgment was entered December 3, 2019. Following denial
of their motion for judgment notwithstanding the verdict and
motion for new trial, Attorney Defendants timely appealed. 10
CONTENTIONS
The Attorney Defendants contend (1) there was probable
cause to prosecute the Underlying Action; (2) the evidence was
insufficient to support the jury’s finding of malice; (3) the
compensatory damages award must be vacated and set aside
because LAI and Starflinger did not pay anything for attorney

10 We asked counsel to brief whether the March 4, 2020
notice of appeal was timely based on the notice of entry of
judgment served by mail by the clerk of the superior court on
December 3, 2019. We have reviewed the parties’ letter briefs.
We grant defendants’ unopposed motion to augment the record on
appeal filed January 7, 2022. We deem the clerk’s certificate of
mailing effective December 4, 2019, the date it was signed by the
clerk. (See Code Civ. Proc., § 659, subd. (a)(2) [party intending to
move for new trial shall file notice of intention to move for new
trial within 15 days of “date of mailing notice of entry of
judgment by the clerk of the court”].) Therefore, the time having
been extended by 30 days, the notice of appeal was timely filed.
(See Cal. Rules of Court, rule 8.104(a)(1)(A)-(B).)

12
fees and costs; and (4) the punitive damages awards are excessive
as a matter of law.
DISCUSSION
To state a cause of action for malicious prosecution,
plaintiff must plead and prove the prior action (1) was
commenced by or at the direction of defendant and was pursued
to a legal termination in plaintiff’s favor; (2) was brought without
probable cause; and (3) was initiated with malice. (Sheldon
Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 871 (Sheldon
Appel).) A malicious prosecution suit may be maintained even if
only some of the claims in the prior action lacked probable cause.
(Crowley v. Katleman (1994) 8 Cal.4th 666, 676.)
There is no dispute the Underlying Action was commenced
by the Attorney Defendants and plaintiffs obtained a favorable
termination in the Underlying Action. The issues on appeal
concern probable cause, malice, and compensatory and punitive
damages.
I. The Trial Court Correctly Found the Attorney Defendants
Had No Probable Cause to Initiate or Maintain the
Underlying Action
The question whether defendant had probable cause for
instituting the prosecution is always a matter of law to be
determined by the trial court. (Sheldon Appel, supra, 47 Cal.3d
at p. 875.) The question whether, on a given set of facts, there
was probable cause requires a sensitive evaluation of legal
principles and precedents, a task generally beyond the ken of lay
jurors. (Ibid.) Malicious prosecution includes continuing to
prosecute a lawsuit discovered to lack probable cause. (Zamos v.
Stroud (2004) 32 Cal.4th 958, 970.) The reasonableness of

13
counsel’s persistence in continuing to prosecute is a question of
law to be decided on a case-by-case basis. (Ibid., fn. 9.)
Whether a reasonable lawyer would have thought the claim
legally tenable—an objective inquiry—is a legal issue we review
de novo. (Arcaro v. Silva & Silva Enterprises Corp. (1999)
77 Cal.App.4th 152, 156; see Hufstedler, Kaus & Ettinger v.
Superior Court (1996) 42 Cal.App.4th 55, 63 [where no disputed
questions of fact relevant to probable cause issue, matter
reviewed on appeal by de novo review].)
A party has probable cause to bring a lawsuit if, objectively
viewed, its claims were legally tenable, meaning a reasonable
attorney would conclude the underlying action was not totally
and completely without merit. (Sheldon Appel, supra, 47 Cal.3d
at p. 885.) “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 action either if he relies upon facts which
he has no reasonable cause to believe to be true, or if he seeks
recovery upon a legal theory which is untenable under the facts
known to him.” (Sangster v. Paetkau (1998) 68 Cal.App.4th 151,
164–165.)
The Attorney Defendants asserted in the Underlying Action
that LAI and Starflinger interfered with Banuelos’s contract to
sell her mobilehome by unreasonably refusing to approve a sale.
They also asserted the Beck declaration from the Kevin Action
evidenced Rodriguez’s ability to pay about $300 per month in
rent. In their opening brief, Attorney Defendants fail to
differentiate between what they knew upon initiation of the

14
Underlying Action and what they learned after its inception. 11
Attorney Defendants offer the following evidence in support of
their contention they had probable cause.
Banuelos testified Starflinger “didn’t let me sell the mobile
home” and “[h]e was not going to let me do it.” Banuelos then
told her attorneys all the facts as she knew them.
Spix testified at the time the Rodriguez sale fell through,
he was aware the mobilehome residency laws permitted inquiry
concerning the ability of a prospective tenant to pay rent. He
agreed the law stated approval of a prospective tenant cannot be
withheld if financial ability of the prospective tenant is
established. However, he believed the Beck Letter was intrusive
and requested more information than was permitted under the
statute. Spix also testified the Notice sent to Rodriguez was a lie,
because the condominium conversion had been denied for more
than a month before the Notice was given. Spix testified one of
the bases for his allegation the sale fell through was due to the
Park’s unreasonable conduct in not approving the sale to
Rodriguez. 12

11 In their reply brief, Attorney Defendants touch on
whether they had probable cause to continue the Underlying
Action to a final judgment, but they fail to cite to the record on
appeal throughout the reply. We consider the points waived.
(See Mansell v. Board of Administration (1994) 30 Cal.App.4th
539, 545 [“We are not required to search the record to ascertain
whether it contains support for [appellant’s] contentions”].)
12The Attorney Defendants represent, “Mr. Spix believed
that Mr. Starflinger’s request for information was a pretext for
denying Ms. Rodriguez’s application to rent” citing page 2606 of
the reporter’s transcript. Page 2606 does not reflect the
referenced testimony.

15
 The Attorney Defendants fail to address Spix’s admission
during his testimony that he initiated the Underlying Action to
spur the closing of escrow and to free Banuelos from the Park.
The Attorney Defendants also fail to address the requests for
judicial notice the lower court relied on in reaching its conclusion
the Underlying Action lacked probable cause. 13
When they filed the Underlying Action, the Attorney
Defendants had the exhibits to the complaint—the Notice, Beck
Letter, and City of Carson Letter. None constitute probable
cause to institute or continue the Underlying Action.
As for the Notice, in her testimony, Martin acknowledged
Rodriguez viewed the prospect of conversion favorably.
Therefore, a reasonable attorney would have concluded even if
Attorney Defendants believed the Notice contained a lie, it did
not cause Rodriguez any hesitation in pursuing a purchase of
Banuelos’s mobilehome.
As to the City of Carson Letter, the Attorney Defendants do
not argue it legitimately formed a basis for initiating or
continuing the Underlying Action.
The Beck Letter is another matter, but we do not believe it
constituted probable cause to initiate the Underlying Action. The
Beck Letter raised three concerns and requested additional
information on each—Rodriguez’s mortgage debt, the source of
$55,000 in cash she was going to pay for the mobilehome, and the
Park’s rules prohibiting subletting, given Rodriguez disclosed her
adult son would occupy the mobilehome.

13As previously noted, the Attorney Defendants did not
supply us with their request(s) for judicial notice.

16
 Spix testified the Beck Letter, rather than a request or
phone call directly from management, was “sort of amping it up,
sort of raising the intimidation factor. That got my eyebrows
raised.” Spix was also concerned about what Beck did not say in
the letter, such as whether or not Rodriguez’s credit report
showed delinquencies. Spix testified the request to identify the
source of Rodriguez’s cash was not reasonable. But he had no
idea whether, if Rodriguez was going to get a loan, it would affect
her monthly payments. He thought she had the cash. He stated
Beck’s request was unreasonable because “[i]t’s outside the
statute. It’s not related to a prior tenancy.”
To address the reasonableness of concluding the
Underlying Action was legally tenable, we turn to the law upon
which the Attorney Defendants rely. In arguing plaintiffs
interfered with Banuelos’s contract to sell her mobilehome to
Rodriguez, the Attorney Defendants cite the current version of
Civil Code section 798.74, subdivisions (a) and (c), which was
added in 2015 and amended in 2019. 14 However, the Underlying

14 The current version of Civil Code section 798.74,
subdivisions (a) to (d) reads in relevant part: “(a) The
management may require the right of prior approval of a
prospective purchaser of a mobilehome that will remain in the
park. [¶] (b) [¶] (1) A selling homeowner or their agent shall
give notice of a sale of a mobilehome that will remain in the park
to management before the close of the sale. [¶] (2) Management
shall, within 15 days, provide the seller and the prospective
purchaser both of the following, in writing, upon receiving the
notice required in paragraph (1): [¶] (A) The standards that
management customarily utilizes to approve a tenancy
application, including the minimum reported credit score from a
consumer credit reporting agency that management requires for
approval. [¶] (B) A list of all documentation that management

17
Action was filed in 2010, so the reasonableness of Attorney
Defendants’ actions must be viewed with reference to the 2010
version of Civil Code section 798.74. 15
As it read in 2010, Civil Code section 798.74, subdivision
(a) provided, “[t]he management may require the right of prior
approval of a purchaser of a mobilehome that will remain in the

will require to determine if the prospective purchase will qualify
for tenancy in the park. [¶] (c) Management shall not withhold
approval from a prospective purchaser of a mobilehome unless
any of the following apply: [¶] (1) Management reasonably
determines that, based upon the purchaser’s prior tenancies, they
will not comply with the rules and regulations of the park. [¶]
(2) The purchaser does not have the financial ability to pay the
rent, estimated utilities, and other charges of the park. [¶]
(3) The purchaser has committed fraud, deceit, or concealment of
material facts during the application process. [¶] (d) In
determining whether the prospective purchaser has the financial
ability to pay the rent and charges of the park pursuant to
paragraph (2) of subdivision (c), the management may require the
prospective purchaser to document the amount and source of
their gross monthly income or means of financial support.
However, management shall not require the prospective
purchaser to submit any of the following: [¶] (1) Documentation
beyond that disclosed pursuant to subparagraph (B) of paragraph
(2) of subdivision (b). [¶] (2) Copies of any personal income tax
returns.”
15 Therefore, the Attorney Defendants’ argument there is
no evidence Rodriguez was disapproved because she would not
comply with the rules and regulations of the park or because she
had committed fraud, deceit, or concealment of material facts, is
irrelevant and based on an incorrect statement of the law as it
existed in 2010.

18
park and that the selling homeowner or his or her agent give
notice of the sale to the management before the close of the sale.
Approval cannot be withheld if the purchaser has the financial
ability to pay the rent and charges of the park unless the
management reasonably determines that, based on the
purchaser’s prior tenancies, he or she will not comply with the
rules and regulations of the park. In determining whether the
purchaser has the financial ability to pay the rent and charges of
the park, the management shall not require the purchaser to
submit copies of any personal income tax returns in order to
obtain approval for residency in the park. However, management
may require the purchaser to document the amount and source of
his or her gross monthly income or means of financial support.”
(Civ. Code, former § 798.74, subd. (a), added by Stats. 1990,
ch. 645, § 1, pp. 3131–3132, italics added.)
For context, we turn now to the Mobilehome Residency Law
(MRL) (Civ. Code, § 798 et seq.). Mobilehome evictions differ
significantly from conventional residential evictions. The MRL
regulates relations between the owners and residents of
mobilehome parks. (SC Manufactured Homes, Inc. v. Canyon
View Estates, Inc. (2007) 148 Cal.App.4th 663, 674.) The MRL
also regulates the sales and transfers of mobilehomes in the park,
providing specified protections for management, selling
homeowners, purchasers, and occupants. (Ibid.; see Civ. Code,
§ 798.70 et seq.)
When enacting the MRL, the Legislature expressly found,
“ ‘because of the high cost of moving mobilehomes, the potential
for damage resulting therefrom, the requirements relating to the
installation of mobilehomes, and the cost of landscaping or lot
preparation, it is necessary that the owners of mobilehomes

19
occupied within mobilehome parks be provided with the unique
protection from actual or constructive eviction afforded by the
provisions of this chapter.’ ” (Rich v. Schwab (1998)
63 Cal.App.4th 803, 813; see Civ. Code, § 798.55, subd. (a).) The
MRL “provide[s] mobilehome owners unique protection by
requiring they be given greater notice of rent increases and other
changes in the terms of their tenancy and by limiting the
circumstances under which they may be evicted.” (Ibid.; see Civ.
Code, §§ 798.30, 798.55.)
The resident owner is a “ ‘[h]omeowner,’ ” as defined in
Civil Code section 798.9, who has a “ ‘[t]enancy,’ ” as defined in
Civil Code section 798.12. However, a nonowner resident of a
mobilehome does not enter into a tenancy agreement with park
management, so he or she is not a homeowner but instead a
“ ‘[r]esident,’ ” as defined in Civil Code section 798.11.
As a result of the difficulties mobilehome parks may
experience evicting a homeowner or resident, the law allows
mobilehome park managers to require potential homeowners and
residents to strictly comply with financial and other
requirements prior to being accepted as a tenant. This was the
precise issue with the Beck Letter. Former section 798.74
permits inquiry into gross monthly income or means of financial
support. There was nothing overreaching about the Beck Letter,
which requested a schedule of real estate owned, mortgage
statements, income and expense detail, and verification of funds
to complete the $55,000 purchase. The trial court determines all
these items constitute documentation as to “the amount and
source of his or her gross monthly income or means of financial
support.” (Civ. Code, former § 798.74, subd. (a).) No reasonable

20
attorney would have imputed nefarious meaning to the Beck
Letter.
In addition to lacking probable cause to initiate the
Underlying Action, the Attorney Defendants also lacked probable
cause to maintain it. The Attorney Defendants have not
addressed the timeline of events in the Underlying Action, but
the trial court has gleaned the following from the record on
appeal.
The Attorney Defendants were on notice the Underlying
Action lacked merit as early as July 29, 2010, when plaintiffs
served their opposition to Kevin’s motion for preliminary
injunction. Banuelos sold her mobilehome in February 2011.
Two months later, on April 4, 2011, Banuelos filed her third
amended complaint. On July 26, 2011, the Attorney Defendants
sent an offer to compromise under Code of Civil Procedure section
998 in the Underlying Action offering to have judgment entered
for Banuelos in the sum of zero, with “each party to bear its own
costs and attorney’s fees.” Plaintiffs filed their motion for
summary judgment in December 2011, and it was granted on
April 10, 2012, with the trial court finding the requests for
further information in the Beck Letter were “objectively
reasonable as shown by undisputed evidence.”
Spix testified he could not dismiss the case at the time the
offer to compromise was served without subjecting Banuelos to
attorney fees. The trial court infers from this statement
Banuelos was in too deep at that point, and yet the litigation
continued. Knowing the MRL provides for attorney fees to the
prevailing party (Civ. Code, § 798.85; see SC Manufactured
Homes, Inc. v. Canyon View Estates, Inc., supra, 148 Cal.App.4th
at p. 673) should have motivated the Attorney Defendants to

21
proceed with added caution at all stages of the litigation. The
court concludes a reasonable attorney would have known there
was little to zero chance of prevailing in the litigation after losing
on summary judgment, yet the Attorney Defendants pursued the
case through an unsuccessful appeal. 16 No reasonable attorney
would have continued to prosecute a lawsuit with potential
damages of only $4,000 (the difference between Rodriguez’s offer
of $55,000 and the subsequent sales price of $51,000) and
exposure to an award of attorney fees.
We conclude there was no probable cause to initiate or
maintain the Underlying Action. The trial court did not err in its
determination.

16 The trial court does not suggest the grant of summary
judgment alone supports a finding no probable cause existed.
(Compare Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th
728, 747 [defense summary judgment on underlying claim does
not establish lack of probable cause as a matter of law]; with
Parrish v. Latham & Watkins (2017) 3 Cal.5th 767, 776
[“California courts have long embraced the so-called interim
adverse judgment rule, under which ‘a trial court judgment or
verdict in favor of the plaintiff or prosecutor in the underlying
case, unless obtained by means of fraud or perjury, establishes
probable cause to bring the underlying action, even though the
judgment or verdict is overturned on appeal or by later ruling of
the trial court’ ”].)

22
II. Substantial Evidence Supports the Jury’s Finding of Malice
and Award of Compensatory Damages
A. The Attorney Defendants Waived Their Argument
There Is No Substantial Evidence to Support the
Jury’s Malice Finding
We review the jury’s finding of malice for substantial
evidence. (Sheldon Appel, supra, 47 Cal.3d at p. 875 [malice is
always a question of fact for the jury]; see George F. Hillenbrand,
Inc. v. Insurance Co. of North America (2002) 104 Cal.App.4th
784, 816 [our task on review of jury verdict for malicious
prosecution is to review entire record to determine whether
substantial evidence supports jury’s findings].)
When a finding of fact is attacked on the ground there is no
substantial evidence to sustain it, the power of an appellate court
begins and ends with the determination as to whether there is
any substantial evidence, contradicted or uncontradicted, which
will support it. (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d
875, 881.) It is well established a reviewing court starts with the
presumption the record contains evidence to sustain every
finding of fact. (Ibid.)
On appeal challenging sufficiency of the evidence,
appellant’s opening brief must set forth all the material evidence
on point, not merely state facts favorable to appellant. (See
Foreman & Clark Corp. v. Fallon, supra, 3 Cal.3d at p. 881.) The
burden to provide a fair summary of the evidence grows with the
complexity of the record. (Myers v. Trendwest Resorts, Inc. (2009)
178 Cal.App.4th 735, 739.) When appellant’s opening brief states
only favorable facts, ignoring evidence favorable to respondent,
the appellate court may treat the substantial evidence issues as
waived and presume the record contains evidence to sustain

23
every finding of fact. (See Huong Que, Inc. v. Luu (2007)
150 Cal.App.4th 400, 409–410 [appellant cannot shift burden of
presenting all material evidence to respondent, nor is appellate
court required to undertake independent examination of record
when appellant has shirked responsibility in this respect].)
Moreover, an appellant’s opening brief must provide a
summary of the significant facts limited to matters in the record.
(Cal. Rules of Court, rule 8.204(a)(2)(C).) Every brief must
support any reference to a matter in the record by a citation to
the volume and page number of the record where the matter
appears. (Cal. Rules of Court, rule 8.204(a)(1)(C).) The appellate
court is not required to search the record on its own seeking
error. If a party fails to support an argument with the necessary
citations to the record, the argument will be deemed waived.
(Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246; see Estate of
Palmer (1956) 145 Cal.App.2d 428, 431 [attack on evidence
without fair statement of evidence entitled to no consideration
when apparent substantial amount of evidence was received on
respondent’s behalf].)
Here, the reporter’s transcript spans over 5300 pages and
the appendices exceed 2800 pages, including nearly 1500 pages of
court-filed documents omitted in the Attorney Defendants’
appendix. The missing documents supplied by plaintiffs in their
appendix contain legally significant facts necessary to our
determination of the issues raised on appeal. In addition to
omitting from the record on appeal substantial portions of the
trial court record, in their opening brief, the Attorney Defendants
consistently fail to include record cites for several assertions of
fact in their statement of facts and never once include a reporter’s
transcript record cite in their argument sections. This pattern is

24
repeated throughout their reply brief where not a single citation
to the record on appeal can be located in its 29 pages. On a
lengthy (over 8000 pages) and complex (11 years of litigation
history) record such as that before us, the failure is particularly
acute.
The Attorney Defendants failed to provide an adequate
record for our substantial evidence review and further failed to
include adequate record cites for their assertion the evidence was
insufficient to support the jury’s finding of malice. Consequently,
the claim is waived, and we presume the record contains evidence
to sustain the jury’s finding of malice. (See Le Mere v. Los
Angeles Unified School Dist. (2019) 35 Cal.App.5th 237, 248.)
B. Substantial Evidence Supports the Jury’s Award of
$171,465.09 in Compensatory Damages
We review the jury’s determination of compensatory
damages for substantial evidence. (Rufo v. Simpson (2001)
86 Cal.App.4th 573, 614.)
The Attorney Defendants concede damages potentially
recoverable in a malicious prosecution action include out of
pocket expenditures such as attorney fees and other legal fees.
(See Bertero v. National General Corp. (1974) 13 Cal.3d 43, 59
[measure of compensatory damages for malicious prosecution of a
civil action includes attorney fees and court costs for defending
the prior action and compensation for emotional distress, mental
suffering and impairment to reputation proximately caused by
the initiation and prosecution of the action].)
Here, the parties stipulated the total amount of attorney
fees and costs plaintiffs incurred in the Underlying Action was
$171,465.09. Nevertheless, the Attorney Defendants contend
there is no evidence LAI or Starflinger (as opposed to dismissed

25
plaintiffs 218 and R22) paid or incurred any liability for attorney
fees and costs generated in defense of the Underlying Action.
They contend R22 paid attorney fees for LAI and only the entity
that has been damaged has standing to bring a claim for such an
expense. Further, even if LAI or Starflinger was, at one time,
obligated to pay attorney fees and costs in the Underlying Action,
no such obligation existed at the time of trial, because, according
to the Attorney Defendants, under Civil Code section 1474,
“[p]erformance of an obligation, by one of several persons who are
jointly liable under it, extinguishes the liability of all.”
The Attorney Defendants are wrong. Civil Code section
1474 applies to codefendants who are jointly liable for a
judgment. (See Salter v. Lombardi (1931) 116 Cal.App. 602, 604
[when a codefendant pays the judgment, it is paid for all
purposes].) To “ ‘incur’ ” a fee is to become liable for it. (Trope v.
Katz (1995) 11 Cal.4th 274, 280.) It is not necessary for a party
to actually pay for fees incurred. (See Lolley v. Campbell (2002)
28 Cal.4th 367, 371 [rejecting contention attorney fees “incurred”
means only fees litigant actually pays or becomes liable to pay
from his or her own assets].)
Starflinger testified all the attorney fees in the Underlying
Action were paid through LAI but were actually funded from
Thomas Heinemann, the owner of LAI. He said R22 sent the
checks to the lawyers, but 218, which was owned by LAI,
reimbursed R22. Starflinger testified he was personally
responsible to pay legal fees, but he was reimbursed by 218.
The Attorney Defendants cannot escape from paying
damages because Heinemann, as benefactor, duly paid an
attorney fees bill presented to his company. There is no evidence
Heinemann considered his payments to the lawyers who

26
defended plaintiffs in the Underlying Action a satisfaction of
judgment in this case. The fees were paid, and the jury affixed
liability for them squarely on the shoulders of the Attorney
Defendants, not Heinemann, plaintiffs, 218 or R22. The Attorney
Defendants’ argument defies logic and reason, and attempts to
shift their liability to an innocent party.
Finally, the trial court denied the Attorney Defendants’
motion for new trial which argued, inter alia, compensatory
damages were excessive. The appellate court ordinarily defers to
the trial court’s denial of a motion for new trial based on
excessive damages, because of the trial judge’s greater familiarity
with the case. (Rufo v. Simpson, supra, 86 Cal.App4th at p. 614.)
The appellate court will interfere with the jury’s determination
only when the award is so disproportionate to the injuries
suffered that it shocks the conscience and virtually compels the
conclusion the award is attributable to passion or prejudice. (Id.
at p. 615.) No such situation is present here.
III. The Jury’s Award of Punitive Damages Was Not Excessive
as a Matter of Law
The parties stipulated Spix had a net worth of $1,000,000
and Martin had a net worth of $125,000. The jury awarded
punitive damages of $300,000 against Spix payable to LAI and
$15,000 against Spix payable to Starflinger. The jury awarded
punitive damages of $25,000 against Martin payable to LAI and
$5,000 against Martin payable to Starflinger.
A reviewing court will reverse an award of punitive
damages only when the award as a matter of law appears
excessive, or where the recovery is so grossly disproportionate as
to raise a presumption that it is the result of passion or prejudice.
(Neal v. Farmers Ins. Exchange (1978) 21 Cal.3d 910, 928 (Neal).)

27
We review the jury’s determination of punitive damages for
substantial evidence. (Id. at p. 922; see George F. Hillenbrand,
Inc. v. Insurance Co. of North America, supra, 104 Cal.App.4th at
p. 816.)
Factors to consider in determining whether a punitive
damages award is excessive as a matter of law or the result of
passion or prejudice include (1) the degree of reprehensibility of
defendant’s misconduct; (2) the relationship between
compensatory and punitive damages; and (3) defendant’s
financial condition. (Neal, supra, 21 Cal.3d at p. 928.)
The Attorney Defendants address only the third factor in
their opening brief. They contend the jury’s award of punitive
damages against each attorney was excessive as a matter of law,
because the “normal limit” of an award of punitive damages is ten
percent of the person’s net worth. The Attorney Defendants rely
on Storage Services v. Oosterbaan (1989) 214 Cal.App.3d 498 and
Michelson v. Hamada (1994) 29 Cal.App.4th 1566.
The jury instruction on punitive damages correctly
instructed, “[t]here is no fixed formula for determining the
amount of punitive damages.” Both cases relied on by the
Attorney Defendants are factually distinguishable, and,
consistent with the jury instruction, neither case stands for a
bright line rule that punitive damages in excess of 10 percent of
defendant’s net worth are excessive as a matter of law. There is
no such rule.
In Storage Services v. Oosterbaan, supra, 214 Cal.App.3d at
page 515, a punitive damages award of $75,000 representing
33 percent of defendant’s net worth, which amount also exceeded
his gross income for the year of trial, was disproportionate.
Similarly, in Michelson v. Hamada, supra, 29 Cal.App.4th at

28
page 1596 a punitive damages award of $1,250,000 in light of
defendant’s net worth of $4,394,500 was excessive, as it
represented 28 percent of his net worth.
But the issue does not turn on whether the award exceeds
some specified percentage of the defendant’s net worth. There is
no legal requirement that punitive damages must be measured
against a defendant’s net worth. (Zaxis Wireless
Communications, Inc. v. Motor Sound Corp. (2001)
89 Cal.App.4th 577, 582–583.) The key determination is whether
the amount of damages exceeds the level necessary to properly
punish and deter. (Cummings Medical Corp. v. Occupational
Medical Corp. (1992) 10 Cal.App.4th 1291, 1299.) The function of
deterrence will not be served if a defendant’s wealth allows him
or her to absorb the award with little or no discomfort. (Neal,
supra, 21 Cal.3d at p. 928.)
We conclude the award of $315,000 total punitive damages
against Spix and $30,000 total punitive damages against Martin
do not exceed a level necessary to properly punish and deter.
The remaining two Neal factors are not adequately
addressed by the Attorney Defendants. In their reply brief, they
contend the second factor—the relationship between
compensatory and punitive damages—does not apply in this case.
As to the first factor—the degree of reprehensibility of the
defendants’ misconduct—the Attorney Defendants rebuff
plaintiffs’ reliance on Rufo v. Simpson, supra, 86 Cal.App.4th at
page 573 by arguing the murder of two individuals has a far
higher level of reprehensibility than failure to evaluate the
merits of a lawsuit accurately.
The Attorney Defendants miss the mark. When analyzing
the degree of reprehensibility, the appellate court must examine

29
“the particular nature of the defendant’s acts in light of the whole
record.” (Neal, supra, 21 Cal.3d at p. 928, italics added.) Yet the
Attorney Defendants have failed to present “the whole record” to
this court, which, when coupled with their failure to show
insufficiency of the evidence on malice, renders the issue waived
on substantial evidence review. (See Huong Que, Inc., supra,
150 Cal.App.4th at pp. 409–410.)
The Attorney Defendants have failed to establish the
punitive damages award was excessive as a matter of law.
DISPOSITION
The judgment is affirmed. LA Investments, LLC, and Peter
Starflinger are awarded their costs on appeal.
NOT TO BE PUBLISHED.

KNILL, J. *

We concur:

LAVIN, Acting P. J.

EGERTON, J.

* Judge of the Superior Court of Orange County, assigned
by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

30
Filed 3/4/22
CERTIFIED FOR PARTIAL PUBLICATION *

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION THREE

LA INVESTMENTS, LLC, et al., B304734
(Los Angeles County
Plaintiffs and Respondents, Super. Ct. No. BC544662)

v. ORDER MODIFYING OPINION
AND CERTIFYING FOR PARTIAL
RICHARD SPIX et al., PUBLICATION

Defendants and Appellants. [NO CHANGE IN JUDGMENT]

THE COURT:
It is ordered that the opinion filed herein on February 9,
2022 be modified as follows:
1. On page 20, fifth sentence of the last paragraph, the
word “determines” is changed to “determined” so it reads:
The trial court determined all these items constitute
documentation as to “the amount and source of his or her gross
monthly income or means of financial support.”

* Pursuant to California Rules of Court, rules 8.1105 and 8.1110, this opinion
is certified for publication with the exception of part III of the Discussion.
 2. On page 21, last sentence of the first full paragraph, the
words “the trial court has” are changed to “we have” so it reads:
The Attorney Defendants have not addressed the timeline
of events in the Underlying Action, but we have gleaned the
following from the record on appeal.
3. On page 21, second sentence of the last paragraph, the
words “The trial court infers” are changed to “We infer” so it
reads:
We infer from this statement Banuelos was in too deep at
that point, and yet the litigation continued.
4. On page 22, first full sentence of the first paragraph, the
words “The court concludes” are changed to “We conclude” so it
reads:
We conclude a reasonable attorney would have known
there was little to zero chance of prevailing in the litigation after
losing on summary judgment, yet the Attorney Defendants
pursued the case through an unsuccessful appeal.
5. On page 22, footnote 16, first sentence, the words “The
trial court does not” are changed to “we do not” so it reads:
We do not suggest the grant of summary judgment alone
supports a finding no probable cause existed.
There is no change in the judgment.

2
 The opinion was not certified for publication in the Official
Reports. For good cause it now appears that the opinion should
be partially published in the Official Reports and as modified, it
is so ordered.

____________________________________________________________
KNILL, J. * LAVIN, Acting P. J. EGERTON, J.

*Judge of the Superior Court of Orange County, assigned
by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

3