Citizens of Humanity, LLC v. Ramirez ( 2021 )

Filed 4/19/21
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
CITIZENS OF HUMANITY, LLC, B299469
et al.,
(Los Angeles County Super.
Plaintiffs and Respondents, Ct. No. 18SMCV00066)
v.
OSCAR RAMIREZ et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Elaine Mandel, Judge. Reversed and remanded
with directions.
California Anti-SLAPP Project and Mark Goldowitz for
Defendants and Appellants Oscar Ramirez and Law Offices of
Oscar Ramirez.
Verum Law Group, Sam K. Kim and Yoonis J. Han for
Defendants and Appellants Kevin Mahoney and Mahoney Law
Group.
Mahoney Law Group, Kevin Mahoney and Joshua D. Klein
for Defendant and Appellant Ana Jimenez.
Browne George Ross, Peter W. Ross and Charles Avrith for
Plaintiffs and Respondents.
__________________________
An employee brought a wage and hour class action against
her employer. Prior to certification, the action was settled. The
employer paid a sum to the employee to resolve her individual
claims, and she dismissed the class claims without prejudice,
with court approval. Thereafter, the employer brought the
current malicious prosecution action against the employee and
her counsel. The employee and her counsel each moved to strike
the action under the anti-SLAPP law (Code Civ. Proc., § 425.16).
The trial court denied the anti-SLAPP motions on the basis that
the employer established a prima facie showing of prevailing on
its malicious prosecution cause of action. We disagree. As the
prior action resolved by settlement, the employer is unable to
establish the action terminated in its favor as a matter of law.
We therefore reverse and remand for determination of one
unadjudicated anti-SLAPP issue, and whether the employee and
her counsel are entitled to an award of attorney fees.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Underlying Action
Because we resolve this appeal on the element of favorable
termination, we focus our discussion of the underlying action on
the facts and procedure relevant to the termination of the action,
and omit the substantial history relating to whether it was
pursued with probable cause and/or malice.
A. The Complaint
Ana Jimenez was an hourly employee of Oheck, LLC,
making clothing for Citizens of Humanity, LLC. In May 2015,
Jimenez brought suit against Oheck, Citizens of Humanity, and
Eric Kweon (collectively, Oheck) alleging eight causes of action
2
for wage and hour violations.1 Jimenez brought this action as an
individual and on behalf of all other employees similarly situated.
She also asserted a claim for civil penalties under the Private
Attorney General Act (PAGA; Lab. Code, § 2698). Jimenez was
represented by attorneys from two different law firms: Kevin
Mahoney of Mahoney Law Group, APC; and Oscar Ramirez of
Law Offices of Oscar Ramirez, PC.
B. Jimenez Expresses Interest in Settlement
At a case management conference in January 2017, the
court opened discovery on class issues only, and directed Jimenez
to file her motion for class certification by September 29, 2017.
Jimenez was deposed on April 27, 2017. The parties
disputed whether Jimenez was to make herself available for a
second day of deposition. At this point, according to Jimenez, she
decided she did not want to pursue the case further and
instructed her attorneys to attempt to resolve the case.2
1 Oheck’s relationship with Citizens of Humanity, and
whether Jimenez was also employed by Citizens of Humanity,
was disputed, but is not relevant to this appeal.
Jimenez also named Jerome Dahan as a defendant. Her
claims against Dahan were encompassed by the same settlement
agreement as her claims against the other defendants. Dahan,
however, did not join in the current malicious prosecution action.
We therefore do not discuss him further.
2 Oheck believes any such decision was motivated by
Jimenez’s first deposition revealing that her wage and hour claim
had no factual basis. While Jimenez did not go into further detail
as to why she declined to pursue her action after her first day of
her deposition, we observe that the record discloses one of the
many reasons Oheck sought a second day of deposition: Oheck
3
C. Initial Settlement Negotiations Are Unsuccessful
The parties agreed to put discovery disputes on hold
pending settlement negotiations. May 2017 e-mails between
counsel show that both sides were agreeable to a settlement “on
an individual basis,” which encompassed a payment to Jimenez
and a dismissal without prejudice of the class claims. By June
2017, it appeared that the parties’ demands were too far apart,
and the case did not settle at this time.
The record does not reflect any further settlement
negotiations for approximately five months.
D. Issues Arise Regarding Class Notice and a Motion to
Strike Class Allegations
An informal discovery conference was held on October 11,
2017. The parties were ordered to meet and confer regarding
outstanding discovery issues, and the court directed that a notice
be sent to the prospective class members by November 1, 2017.3
The parties could not agree on the terms of the notice, so, on
October 19, 2017, they submitted a joint status report that
attached their competing drafts of the notice. While Jimenez
believed the court had “ordered” the notice be sent by November
1, 2017, Oheck believed that date was simply “suggested” by the
court. Oheck planned to file a motion to strike class allegations,
wanted Jimenez to answer questions regarding whether she had
lied regarding her immigration status on her employment
application and I-9 form.
3 The anticipated notice would have informed prospective
class members of the pending action, and given them an
opportunity to decide whether their information would be
disclosed to Jimenez’s counsel.
4
and proposed that the notice be delayed until resolution of its
upcoming motion to strike.
On November 7, 2017, Oheck filed its motion to strike the
class and PAGA claims, on the basis that Jimenez lacked
standing to pursue them. Specifically, Oheck argued that
Jimenez did not herself possess any wage and hour claims, so
was unfit to be a class representative. Oheck further argued that
the complaint could not be amended to find a more appropriate
class representative, because Oheck’s policies were compliant
with the Labor Code, so “individual issues would predominate.”
E. The Matter Is Settled
On appeal, Oheck takes the position that, although
Jimenez’s individual claims were resolved by settlement
agreement, the class claims were unilaterally voluntarily
dismissed, prompted by Oheck’s pending motion to strike the
class claims. We therefore set forth the facts surrounding
whether the parties’ settlement encompassed the class claims.
The record does not specifically reflect the date when
settlement negotiations reopened, but by November 14, 2017, the
parties had an agreement on the amount to be paid Jimenez and
were working on a draft settlement agreement.
On November 20, 2017, Jimenez filed a “Notice of
Settlement of Entire Case.” She checked the box indicating that
the settlement was conditional, indicating, “The settlement
agreement conditions dismissal of this matter on the satisfactory
completion of specified terms that are not to be performed within
45 days of the date of the settlement.”
5
F. Oheck Withdraws Its Motion to Strike in Light of the
Settlement
On December 4, 2017, Oheck filed a notice of withdrawal of
its motion to strike the class claims. Oheck’s motion stated that
it withdrew the motion, “in light of the filing of Plaintiff’s Notice
of Settlement of Entire Case on November 20, 2017.”
G. The Terms of the Settlement Agreement
The settlement agreement was executed by all parties and
counsel between November 30 and December 13, 2017. It
provided for Oheck to pay Jimenez $50,000, with $15,000 of the
amount to be paid to Jimenez and the remainder to her
attorneys. Jimenez would dismiss her individual claims with
prejudice and the class claims without prejudice. Dismissal was
required before she would receive the settlement check.4 Jimenez
also released all further claims arising from her employment.
H. Jimenez’s Request for Dismissal and Court Approval
On January 4, 2018, Jimenez filed a request for dismissal
of class action claims. In it, she sought dismissal of her
individual claims with prejudice, and the class and PAGA claims
without prejudice.
In language Oheck would later find significant, Jimenez’s
request, prepared by counsel, stated, “Ultimately, Plaintiff
determined it would be in the best interests of the class to
dismiss the class allegations and PAGA claims, without
4 Specifically, the agreement provided, “Oheck, LLC will
cause to be paid the Settlement Sum to Plaintiff by mail to
Plaintiff’s counsel of record within fifteen (15) business days once
the appropriate W-9 tax forms are provided to Defendants, the
Agreement has been signed by Plaintiff, and after the Court’s
dismissal of the class representative claims in this action without
prejudice and Plaintiff’s individual claims with prejudice.”
6
prejudice, thereby preserving the individual claims of the
putative class members.” The document then has a heading
reading, “SETTLEMENT OF INDIVIDUAL CLAIMS.” The first
sentence under that heading reads, “After determining that the
best interests of the class would be preserved by dismissing the
class allegations and PAGA claims, the parties discussed a
settlement of Plaintiff’s individual claims.”5
Dismissal of a class action requires court approval. (Cal.
Rules of Court, rule 3.770(a).) The court requested submission of
supplemental evidence demonstrating that the amount of the
settlement was fair. On February 15, 2018, Jimenez’s counsel
submitted a declaration estimating Jimenez’s damages at
$14,710, comprised of: $4,500 for lost meal and rest breaks;
$4,050 for unpaid overtime; $4,000 for inaccurate wage
statements; and $2,160 in waiting time penalties. The
declaration did not discuss the claims of the class.
On February 26, 2018, the court indicated its approval of
the request to dismiss the class claims without prejudice and the
individual claims with prejudice. California Rules of Court,
rule 3.770(c) provides that if the class action is dismissed prior to
certification and/or notice, the action may be dismissed “without
notice to the class members if the court finds that the dismissal
will not prejudice them.” As the court dismissed the class action
without prejudice and without notice, it impliedly found the class
members would not be prejudiced by the dismissal.
On March 9, 2018, the trial court dismissed the class action
without prejudice and Jimenez’s individual claims with prejudice.
5 Jimenez’s attorney subsequently filed a declaration
containing identical statements.
7
2. The Current Action
A. The Complaint
On October 19, 2018 – some seven months later – Oheck
filed the current action against Jimenez and one of her attorneys
(Ramirez) who had represented her in the underlying action. On
March 27, 2019, Oheck filed a Doe amendment naming Attorney
Mahoney.6 The complaint alleged two causes of action. The first,
against Jimenez and the attorneys, was for malicious prosecution
of the underlying action. The second was against Jimenez alone,
seeking sanctions against her under Code of Civil Procedure
section 128.5, for allegedly pursuing fraudulent workers’
compensation claims. This latter cause of action is not before us
on appeal.
As to malicious prosecution, Oheck alleged each element of
the cause of action: First, that the underlying action was
pursued without probable cause, as Jimenez had been properly
paid all wages and had taken all breaks to which she was
entitled; and, further, that Jimenez and her counsel were
unaware of any other Oheck employee who had a viable wage and
hour claim. Oheck alleged also that the underlying action was
pursued maliciously, with the purpose of forcing a settlement
unrelated to the merits of the claims made. On the key element
of favorable termination, Oheck’s complaint entirely omitted
reference to the settlement. Instead, Oheck alleged, “On
November 7, 2017, [Oheck] moved to strike the class claims from
the lawsuit, based on overwhelming evidence that Jimenez’s
claims were fabricated. Rather than oppose the motion, [Jimenez
and her counsel] requested dismissal [of] the class claims without
6 Unless otherwise indicated, references to the individual
attorneys include their respective firms.
8
prejudice. On March 2, 2018, the court granted [Jimenez’s]
request.” It would eventually be revealed that Oheck drafted its
complaint in this fashion because it believed the settlement
resolved Jimenez’s individual claims only, and it was attempting
to pursue malicious prosecution only of the class claims.
B. The Anti-SLAPP Motions
Jimenez, Attorney Ramirez and Attorney Mahoney each
filed separate anti-SLAPP motions. The motions all argued that
(1) the malicious prosecution action was based on conduct
protected by the anti-SLAPP law, and (2) Oheck could not
establish a probability of prevailing on its cause of action.
Specifically, although not exclusively, they all argued that Oheck
could not establish the “favorable termination” element of
malicious prosecution, because the underlying action was
actually resolved by settlement.
Oheck’s opposition took the position that Jimenez’s class
claims and her individual claims were two different things – and
explained that the action sought recovery for malicious
prosecution only of the class claims. Oheck argued that the
settlement agreement related only to the individual claims and
posited that Jimenez and her counsel had actually decided to
voluntarily dismiss the class claims before settlement was even
discussed.
In reply, Jimenez and her counsel all argued that they had
dismissed the class claims pursuant to the settlement.
At the hearing on the anti-SLAPP motions, the court
indicated that Oheck had established a probability of prevailing
on the elements of lack of probable cause and malice. Argument
quickly turned to whether there was evidence of favorable
termination, and, specifically, whether the class claims were
9
encompassed by the settlement.7 Oheck relied heavily on the
statements in Jimenez’s request for dismissal which indicated the
decision to dismiss the class claims was made prior to entering
settlement discussions regarding the individual claims, as well as
7 Curiously, at one point in the argument, Oheck’s counsel
seemed to concede that Oheck could not pursue Jimenez for
malicious prosecution. The following exchange occurred:
“THE COURT: Before I turn to the other side of the table
for their response, let me ask you about the claims versus
Jimenez personally, setting aside the claims against the lawyers.
I think she stands in a slightly different circumstance than the
lawyer defendants do.
“[OHECK’S COUNSEL]: Yes.
“THE COURT: It seems to me that as to her, there was a
termination in her favor. You paid her money.
“[OHECK’S COUNSEL]: Right.
“THE COURT: Not you, but your client paid her money,
paid her $50,000. How is that not a termination in her favor of at
least her individual claims? [¶] Doesn’t that preclude you from
going after Ms. Jimenez personally for a malicious prosecution
claim?
“[OHECK’S COUNSEL]: It doesn’t prevent us from going
after her on 128.5 with respect to the workers’ comp claims, and I
think, and I could be wrong, because I’ve been in trial for about
ten days, but I think that that’s our only claim against her is on
the 128.5 sanctions, and we did settle with her all her claims. [¶]
We didn’t give her a release of anything, she released us, but we
settled, so that’s not a favorable termination. But on 128.5
sanctions, we’re not required to have a favorable termination.
We’re seeking sanctions based on what now appears to us to have
been two frivolous workers’ comp claims where we paid out a
total of a hundred thousand dollars.”
Neither the trial court in its ruling, nor any of the parties
on appeal, addressed this apparent concession.
10
the fact that the class claims were ultimately dismissed after
Oheck filed its motion to strike the class claims. Jimenez and her
counsel countered that, from early settlement negotiations in
May 2017, it had been agreed that any settlement would
encompass the voluntary dismissal of the class claims, but the
class claims were not to be actually dismissed until the entire
settlement was reached.
Jimenez and her attorneys argued that the court, in its
assessment of favorable termination, should consider the action
as a whole and not separate the individual and the class claims.
Oheck’s counsel did not directly respond, but again argued that
the settlement agreement constituted a favorable termination for
Jimenez on her individual claims, but it did not resolve the class
claims “and did not insulate any of the attorney defendants from
malicious prosecution.”
The court took the matter under submission. On June 17,
2019, the court issued its ruling denying the anti-SLAPP
motions. Specifically, it found Oheck had established a prima
facie case of malicious prosecution. As to the heavily disputed
element of favorable termination, the court adopted Oheck’s view
of the settlement chronology. The court stated that, after Oheck
filed its motion to strike the class claims, “[Jimenez and her
attorneys] did not oppose that motion, but requested dismissal of
the class claims without prejudice. After [they] agreed to dismiss
the class claims, the parties resumed discussions regarding
settlement of Jimenez’s individual claims.” The court concluded
that the voluntary dismissal of the class claims implied that
“defeat [was] expected.”
Jimenez and her counsel filed timely notices of appeal.
11
DISCUSSION
Resolution of the appeal turns on whether Oheck has
established a prima face case of the favorable termination
element of malicious prosecution. The parties focus the bulk of
their argument on the factual aspect of this issue, Oheck’s
position is that it has demonstrated a “probability of success”
under the second prong of the anti-SLAPP statute (Baral v.
Schnitt (2016) 1 Cal.5th 376, 384) because Jimenez dismissed the
class claims unilaterally and voluntarily in the belief they were
meritless, not that the claims were resolved as part of the
settlement agreement.
We believe it is unnecessary to reach this issue. We
conclude that in this precertification class action, the class claims
are not severable from the individual claims for the purposes of
the favorable termination analysis. The entire action terminated
by settlement – a termination which was not favorable to Oheck
as a matter of law.
1. Anti-SLAPP Law
“Resolution of an anti-SLAPP motion ‘requires the court to
engage in a two-step process. First, the court decides whether
the defendant has made a threshold showing that the challenged
cause of action is one arising from protected activity. The moving
defendant’s burden is to demonstrate that the act or acts of which
the plaintiff complains were taken “in furtherance of the
[defendant]’s right of petition or free speech under the United
States or California Constitution in connection with a public
issue,” as defined in the statute. [Citation.] If the court finds
such a showing has been made, it then determines whether the
plaintiff has demonstrated a probability of prevailing on the
12
claim.’ [Citation.]” (Jarrow Formulas, Inc. v. LaMarche (2003)
31 Cal.4th 728, 733.)
The parties do not dispute that claims for malicious
prosecution fall within the first prong. (See Citizens of
Humanity, LLC v. Hass (2020) 46 Cal.App.5th 589, 598 (Citizens
of Humanity).) We therefore turn to whether Oheck has
demonstrated a probability of prevailing on its claim for
malicious prosecution.
“This second step is a summary-judgment-like
procedure. . . . We first determine whether [Oheck’s] prima facie
showing is enough to win a favorable judgment. . . . This
threshold is ‘ “not high.” ’ . . . Claims with minimal merit
proceed. We accept [Oheck’s] evidence as true and do not weigh
evidence or resolve conflicting factual claims. . . . We may
consider affidavits, declarations, and their equivalents if it is
reasonably possible these statements will be admissible at
trial. . . . [¶] After examining [Oheck’s] evidence, we evaluate
Appellants’ showings only to determine if they defeat [Oheck’s]
claim as a matter of law. . . . Appellants can prevail either by
establishing a defense or the absence of a necessary element. . . .
If there is a conflict in the evidence (the existence of a disputed
material fact), the anti-SLAPP motion should be denied.”
(Citizens of Humanity, supra, 46 Cal.App.5th at p. 598, citations
omitted.)
2. Elements of Malicious Prosecution
“An action for malicious prosecution has three required
elements: ‘(1) the defendant brought (or continued to pursue) a
claim in the underlying action without objective probable cause,
(2) the claim was pursued by the defendant with subjective
malice, and (3) the underlying action was ultimately resolved in
13
the plaintiff’s favor.’ [Citation.]” (Citizens of Humanity, supra,
46 Cal.App.5th at pp. 598–599.)
3. Oheck Cannot Establish Favorable Termination
A. Principles Governing Favorable Termination
We are concerned with the final element – that the
underlying action was ultimately resolved in Oheck’s favor. This
can be seen as implicating two elements: termination of the
entire action, and termination on the merits, reflecting innocence
of the underlying defendants.
First, favorable termination requires favorable resolution of
the underlying action in its entirety, not merely a single cause of
action. (Crowley v. Katleman (1994) 8 Cal.4th 666, 686.) “[I]f the
defendant in the underlying action prevails on all of the
plaintiff’s claims, he or she may successfully sue for malicious
prosecution if any one of those claims was subjectively malicious
and objectively unreasonable. But if the underlying plaintiff
succeeds on any of his or her claims, the favorable termination
requirement is unsatisfied and the malicious prosecution action
cannot be maintained.” (Lane v. Bell (2018) 20 Cal.App.5th 61,
64.)
Second, the action must have been terminated on a basis
which reflects upon the innocence of the underlying defendant.
“A ‘ “favorable” termination does not occur merely because a
party complained against has prevailed in an underlying action.
While the fact he has prevailed is an ingredient of a favorable
termination, such termination must further reflect on his
innocence of the alleged wrongful conduct. If the termination
does not relate to the merits—reflecting on neither innocence of
nor responsibility for the alleged misconduct—the termination is
not favorable in the sense it would support a subsequent action
14
for malicious prosecution.’ [Citation.] ‘ “[W]hen the underlying
action is terminated in some manner other than by a judgment
on the merits, the court examines the record ‘to see if the
disposition reflects the opinion of the court or the prosecuting
party that the action would not succeed.’ ” [Citations.]’
[Citation.] ‘Should a conflict arise as to the circumstances of the
termination, the determination of the reasons underlying the
dismissal is a question of fact. [Citation.]’ [Citation.]” (Sycamore
Ridge Apartments LLC v. Naumann (2007) 157 Cal.App.4th 1385,
1399 (Sycamore Ridge).)
Cases have identified specific types of termination which
are generally considered favorable and others which are
generally considered unfavorable. A voluntary dismissal may or
may not constitute a favorable termination. If the voluntary
dismissal is an implicit concession that the dismissing party
cannot maintain the action, it may constitute a dismissal on the
merits which is a favorable termination. (JSJ Limited
Partnership v. Mehrban (2012) 205 Cal.App.4th 1512, 1524
(JSJ).) “A voluntary dismissal is presumed to be a favorable
termination on the merits, unless otherwise proved to a jury.
[Citation.] 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.” ’ [Citation.]” (Sycamore Ridge, supra,
157 Cal.App.4th at p. 1400.)
In contrast, a dismissal on technical or procedural, rather
than substantive, grounds is not considered favorable for
purposes of malicious prosecution. (JSJ, supra, 205 Cal.App.4th
at p. 1525.) These include dismissals for lack of jurisdiction, for
15
lack of standing, to avoid litigation expenses, or pursuant to
settlement. (Ibid.) Generally, a dismissal resulting from a
settlement does not constitute a favorable termination because
the dismissal reflects ambiguously on the merits of the action.
The purpose of a settlement is specifically to avoid a
determination on the merits. (Dalany v. American Pacific
Holding Corp. (1996) 42 Cal.App.4th 822, 827.) When litigation
is terminated by agreement “there is ambiguity with respect to
the merits of the proceeding and in general no favorable
termination for purposes of pursuing a malicious prosecution
action occurs. [Citations.]” (Id. at p. 828.) Even if the action was
tried to a verdict, a subsequent bilateral settlement in which each
side gave up something of value (reduced payment accepted in
exchange for waiving right to appeal) defeats favorable
termination as a matter of law.8 (Ferreira v. Gray, Cary, Ware &
Freidenrich (2001) 87 Cal.App.4th 409, 412–413.)
Considering these elements, Jimenez was partially
successful in her action. The case was resolved by settlement, by
which Oheck paid her (and her counsel) $50,000. Taking
8 Relying on Roche v. Hyde (2020) 51 Cal.App.5th 757, 790,
Oheck argues that there is no unyielding rule that no resolution
by agreement can ever be a favorable termination. We do not
disagree. Roche explained that “[i]f the record clearly discloses
the terms of an overall compromise of claims requiring dismissal
as a condition,” the rule that the dismissal was not a favorable
termination applies. (Ibid.) But if there is no written settlement
agreement, the court must assess the surrounding circumstances
to discern the terms and determine if the dismissal was truly
part of a bilateral agreement, as opposed to a unilateral
voluntary dismissal. (Id. at p. 791.)
16
Jimenez’s action as a whole, as we must, Oheck cannot establish
that it was favorably terminated.
B. The Class Claims Cannot Be Considered Separately
Oheck tries to avoid this result by parsing Jimenez’s
underlying complaint into two separate actions: her individual
claims and her class claims. Pointing to the disputed facts
surrounding whether the class claims were encompassed by the
settlement, Oheck argues that it has established a probability of
success because the class claims themselves were terminated in
its favor. The argument is based on the unspoken premise that
class claims are severable from individual claims for malicious
prosecution purposes.9 (Cf. Sycamore Ridge, supra,
157 Cal.App.4th 1385 [attorneys were properly sued for
maliciously prosecuting the claim of one of 45 individually named
plaintiffs in the underlying action].)
The argument misconstrues the nature of a class action,
and fails on both the “entire action” and the “on the merits”
elements of favorable termination.
As to favorable termination of the entire action, Watkins v.
Wachovia Corp. (2009) 172 Cal.App.4th 1576 establishes that
there is no such thing as a separate class claim. In that case,
Watkins brought a wage and hour class action. After the court
denied her motion for class certification, she settled her
individual claims, but purported to retain the right to appeal the
denial of certification in her representative capacity. (Id. at
p. 1581.) Division Three of the Second Appellate District
9 Oheck does not expressly argue that class claims are
severable for malicious prosecution purposes, and therefore
submits no authority in support of the argument. Oheck simply
assumes that the class claims can be treated separately.
17
dismissed Watkins’s appeal, on the basis that she had settled her
wage and hour claim, which was indivisible. (Id. at p. 1588.) The
court explained, “Watkins assumes, however, that her ‘class
claim’ for unpaid overtime wages has independent vitality and
can continue after she has settled her ‘individual claim’ for the
same wages. The argument reflects a misunderstanding of the
nature of a class action. A class action is a procedural device
used ‘when the parties are numerous, and it is impracticable to
bring them all before the court.’ [Citation.] In such a situation,
‘one or more may sue or defend for the benefit of all.’ [Citation.]
When a plaintiff brings a class action, the plaintiff undertakes a
fiduciary duty to the other members of the class, under which the
plaintiff agrees not to settle the other class members’ claims for
the plaintiff’s individual gain. [Citation.] But this duty should
not be confused with an additional claim for relief. A
representative plaintiff still possesses only a single claim for
relief—the plaintiff’s own. That the plaintiff has undertaken to
also sue ‘for the benefit of all’ does not mean that the plaintiff has
somehow obtained a ‘class claim’ for relief that can be asserted
independent of the plaintiff’s own claim. ‘[T]he right of a litigant
to employ [class action procedure] is a procedural right only,
ancillary to the litigation of substantive claims. Should these
substantive claims become moot . . . , by settlement of all
personal claims for example, the court retains no jurisdiction over
the controversy of the individual plaintiffs.’ [Citation.] Thus, a
class representative’s voluntary settlement of her individual
claim constitutes a voluntary settlement of her only claim, and
moots her right to proceed on appeal.” (Id. at pp. 1588–1589,
fn. omitted.)
18
As in Watkins, Jimenez here possessed only a single claim
for relief – her own. She did not also pursue class claims. The
class action was no more than an ancillary procedure. We
therefore do not separately consider whether the class claims
were favorably terminated; Jimenez pursued a single claim for
wage and hour violations, which was settled, on terms that
included Oheck’s payment of $50,000 to Jimenez.10
We reach the same result when we consider whether the
class claims were resolved on the merits in Oheck’s favor.
Accepting Oheck’s argument that the class claims were
unilaterally dismissed, this establishes only a dismissal for
procedural grounds, not on the merits. The class allegations were
voluntarily dismissed without prejudice, and the court impliedly
found the dismissal would not, in fact, prejudice the class
members. Oheck suggests Jimenez voluntarily dismissed the
class claims because she knew Oheck’s pending motion to strike
the class claims would be granted. But this does not render the
dismissal a dismissal on the merits. Oheck moved to strike the
class allegations on the basis that Jimenez was not an
10 Area 55, LLC v. Nicholas & Tomasevic, LLP (2021)
61 Cal.App.5th 136 [275 Cal.Rptr.3d 519] (Area 55) presented the
mirror image of this case. There, attorneys were sued for
maliciously prosecuting an underlying class action which,
following certification, was dismissed for failure to prosecute.
This was considered favorable termination sufficient to defeat
their anti-SLAPP motion. The attorneys attempted to argue
against favorable termination by parsing out the claims of a class
representative from the claims of the class, arguing that their
initial representative’s claims were lost by abandonment, and
therefore not resolved adversely on the merits. The Court of
Appeal rejected this argument, because there is only one final
judgment in a case. (Id. at p. ___ [275 Cal.Rptr.3d at p. 539].)
19
appropriate class representative and that she could not be
replaced because individual issues would predominate. In other
words, Oheck challenged the procedure of Jimenez’s attempt to
pursue class action relief, not the merits of the claim. To be sure,
the argument was based on Oheck’s purported evidence that
Jimenez’s individual claims were meritless (which rendered her
an inappropriate class representative) and that it had no uniform
illegal policies (which meant individual, not class, issues would
predominate). But, the motion was, in essence, a motion that the
procedure of a class action was inappropriate; it was not a
summary judgment motion or similar motion directed to the
merits of the class claims. We have found no California authority
directly addressing whether a motion to strike class action
allegations addresses the merits. (Cf. Area 55, supra,
61 Cal.App.5th at p. __ [275 Cal.Rptr.3d at pp. 543-544] [in the
context of discussing whether the underlying action was pursued
with probable cause, holding that rulings on class certification
are procedural and do not reflect on the merits].) However, a
Florida court has concluded that dismissal of a class action for
lack of standing is not a favorable termination, as it is not
inconsistent with the defendant’s guilt. (Della-Donna v. Nova
University, Inc. (Fla.Dist.Ct.App. 1987) 512 So.2d 1051, 1057; see
also Rowen v. Holiday Pines Prop. Owners’ Ass’n
(Fla.Dist.Ct.App. 2000) 759 So.2d 13, 16 [dismissal of a class
action suit for lack of standing is not a bona fide termination
because the “lawsuit might later be brought by a plaintiff who
better qualifies as a class representative”].)
Both paths lead to the same result for the same reason. A
precertification voluntary dismissal without prejudice of so-called
“class claims” cannot constitute a favorable termination on the
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merits where, as here, the defendant agreed to pay the plaintiff a
sum in exchange for the plaintiff’s dismissal of her claims. A
class action is merely a procedure by which a plaintiff can pursue
her claim, not a separate claim that can be resolved on the merits
independent of the plaintiff’s own claim. The determination that
the class action procedure is inapplicable in a particular case is
not a resolution of the case on its merits, and does not constitute
a favorable termination for malicious prosecution purposes.11
As the trial court did not rule on Jimenez’s anti-SLAPP
motion with respect to the second cause of action in Oheck’s
complaint against her, the trial court should consider the issue on
remand.
DISPOSITION
The orders denying the anti-SLAPP motions are reversed.
The matter is remanded to the trial court with directions to grant
in their entirety the anti-SLAPP motions of Attorney Ramirez
and Attorney Mahoney and to award them attorney’s fees under
California Code of Civil Procedure section 425.16, subdivision
(c)(1).
As to Jimenez, the matter is remanded with directions to
grant the anti-SLAPP motion to the first cause of action for
malicious prosecution and to rule on Jimenez’s anti-SLAPP
motion to the second cause of action for violation of Code of Civil
Procedure section 128.5.
11 Because we resolve the matter on the element of favorable
termination, we need not reach the issue of whether the
malicious prosecution action against Attorney Mahoney is barred
by the statute of limitations or any of the other issues raised by
Jimenez and her attorneys.
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Ramirez, Mahoney and Jimenez are awarded their costs
and attorney’s fees on appeal, in an amount to be set by the trial
court.
RUBIN, P. J.
WE CONCUR:
BAKER, J.
KIM, J.
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