Alepyan v. Adzhemyan CA2/5 ( 2024 )

Filed 2/13/24 Alepyan v. Adzhemyan CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
ZABEL ALEPYAN et al., B323610
Cross-complainants and (Los Angeles County
Appellants, Super. Ct. No.
20STCV02294)
v.
VARTAN ADZHEMYAN et al.,
Cross-defendants and
Respondents.
APPEAL from an order of the Superior Court of Los
Angeles County, Maureen Duffy-Lewis, Judge. Affirmed.
Ilya Alekseyeff, for Appellants and Cross-complainants.
Raymond Hovsepian, for Respondent and Cross-defendant
Vartan Adzhemyan.
Nemecek and Cole, Kenny C. Brooks and Daniel L. Reback,
for Respondent and Cross-defendant Raymond Hovsepian.
Attorney Raymond Hovsepian, on behalf of his client
Vartan Adzhemyan, filed a quiet title action against Zabel
Alepyan and Artur Elizarov. The action was later dismissed by
stipulation, but plaintiffs and appellants Alepyan and Elizarov
brought the current malicious prosecution action against
defendants and respondents Adzhemyan and Attorney
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Hovsepian. Respondents each moved to strike the malicious
prosecution action under the anti-SLAPP law (Code Civ. Pro.,
§ 425.16), which the trial court granted because the underlying
action was dismissed pursuant to settlement. We agree that
appellants are unable to establish favorable termination because
the underlying action was resolved by settlement. We therefore
affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Because we resolve this appeal on the element of favorable
termination, we limit our factual and procedural discussion
accordingly.
1. The Underlying Action
Adzhemyan and Alepyan married in 2008, separated in
April 2015, and divorced in 2019. During their marriage, they
lived in a duplex on Harvard Street in the City of Glendale
(“Harvard Property”). Adzhemyan purchased the Harvard
Property in his own name in 2005 prior to marriage. In 2012,
Adzhemyan defaulted on the Harvard Property, but the couple’s
friend, Elizarov, purchased the property in a “short sale” in 2014.
Elizarov sold the property to a non-party in 2017.
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The malicious prosecution action was brought also against
defendant attorney Gary Simonian, but he was not a party to the
anti-SLAPP motions, nor is he a party in this appeal.
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A. The Underlying Complaint
On February 20, 2018, Adzhemyan filed a complaint
against appellants alleging three causes of action related to the
Harvard Property: (1) quiet title; (2) cancellation of the deed; and
(3) damages for breach of fiduciary duty and/or constructive fraud
(“Harvard Action”). In his complaint, Adzhemyan claimed
Alepyan forged his name on the Harvard Property deed
transferring title to Elizarov, then falsely notarized the deed.
In November 2020, appellants moved for judgment on the
pleadings. In May 2021, the trial court granted judgment on the
pleadings, but with leave to amend as to breach of fiduciary
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duty. On June 1, 2021, Adzhemyan filed a first amended
complaint.
B. The Settlement and Stipulation to Dismiss
On June 29, 2021, Ilya Alekseyeff, appellants’ attorney,
emailed Attorney Hovsepian bank records and other documents
related to the Harvard Property sale, with a letter entitled,
“Privileged Settlement Communication (Evid. Code, § 1152)”
(“Settlement Letter”) The letter summarized his theory on how
these records and documents support the falsity of the allegations
in the Harvard Action. It stated in conclusion, “[g]iven these
circumstances and Adzhemyan’s subsequent admissions, Ms.
Alepyan and Mr. Elizarov will not agree to pay Adzhemyan [sic] a
penny. However, both Ms. Alepyan and Mr. Elizarov will agree
[to] waive their costs and attorney’s fees[] if Adzhemyan [sic]
dismisses the action with prejudice.” A footnote in the letter
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The trial court found that an October 4, 2019, stipulated
divorce judgment and failure to timely join indispensable parties
barred Adzhemyan’s claims for quiet title and cancellation of the
deed.
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explained, “[m]y clients have incurred nearly $20,000 in costs and
attorney’s fees, which my clients can recover because the
stipulated divorce judgment allows for the recovery of attorney’s
fees in an enforcement action.” The letter ended with, “[u]nless
the parties settle, I will then demur to the amended complaint
and will seek to recover all costs and attorney’s fees after the
court sustain[s] the demurrer without a further leave to amend.”
The parties eventually agreed to a July 2, 2021 response
deadline.
On July 2, 2021, Attorney Hovsepian emailed his response,
“[g]o ahead and send me the stip. for a mutual waiver.” The
stipulation filed shortly thereafter specifically explained,
“Adzhemyan no longer wishes to pursue his claim against
Defendants [appellants] to save on additional costs of litigation ...
[and] to save on additional costs of litigation, Defendants
[appellants] will waive their costs and attorney’s fees[].”
Pursuant to the stipulation, the trial court dismissed the
Harvard Action with prejudice and parties were to “bear their
own costs and attorney’s fees in connection with this action.”
2. The Current Action
A. The Malicious Prosecution Complaint
More than six months later, appellants filed the current
malicious prosecution action alleging Adzhemyan knew the
Harvard Property was lawfully purchased in a “short sale,” yet
maliciously pursued the Harvard Action to retaliate against
Alepyan for filing for divorce and to gain leverage in the divorce
action. Appellants further alleged Adzhemyan’s attorneys filed
the Harvard Action knowing it was fabricated. The complaint
omitted any reference to the settlement and the issue of favorable
termination.
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B. The Anti-SLAPP Motions
Respondents each filed separate anti-SLAPP motions.
Both conceded a malicious prosecution action is subject to the
anti-SLAPP statute as a matter of law because it is based on the
right to petition. Each then argued appellants could not meet
their burden to establish the Harvard Action was terminated in
their favor because it was resolved by settlement.
In their oppositions to both motions, appellants argued the
circumstances leading to the dismissal of the Harvard Action—
namely, “the devastating evidence that exposed Adzhemyan as a
liar[]” given to respondents prior to the dismissal—supported the
dismissal was on the merits. They argued the reason given for
the stipulated dismissal, which was to save on litigation costs,
was likely contrived. Respondents maintained in their replies
that the dismissal was pursuant to a written settlement
agreement to avoid additional costs of litigation.
On July 18, 2022, the trial court granted the anti-SLAPP
motions and reasoned, “[a] dismissal for a waiver of costs is
sufficient to disqualify an action as successful on the merits.
[Citation.] Given the plain language in the Stipulation and
Dismissal, [the Harvard Action] was voluntarily dismissed by
Adzhemyan to save litigation costs for a waiver of costs.
DISCUSSION
Resolution of this appeal turns on whether appellants have
made a prima facie showing of the favorable termination element
of malicious prosecution. Appellants argue they have
demonstrated a “probability of success” under the second prong of
the anti-SLAPP statute because the Harvard Action was
dismissed based on its lack of merit. On the contrary, the record
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establishes the Harvard Action was dismissed pursuant to
settlement, a termination not favorable to appellants.
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
claim.” [Citation.]” (Jarrow Formulas, Inc. v. LaMarche (2003)
31 Cal.4th 728, 733.)
““This second step is a summary-judgment-like
procedure…. We first determine whether [appellants’] prima facie
showing is enough to win a favorable judgment…. This threshold
is ‘ “not high.” ‘… Claims with minimal merit proceed. We accept
[appellants’] 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 [appellants’] evidence, we evaluate [respondents’]
showings only to determine if they defeat [appellants’] claim as a
matter of law…. [Respondents] 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.” [Citation].” (Citizens
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of Humanity LLC v. Ramirez (2021) 63 Cal.App.5th 117, 127-
128.)
We review an order granting an anti-SLAPP motion de
novo. (Sweetwater Union High School Dist. v. Gilbane Building
Co. (2019) 6 Cal.5th 931, 942.)
2. 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
the plaintiff’s favor.’ [Citation.]” [Citation.]” (Citizens of
Humanity, supra, 63 Cal.App.5th at p. 128.) The determinative
issue here is the third element.
On the third element, ““[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 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
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question of fact. [Citation.]’ [Citation.]” [Citation.]” (Citizens of
Humanity, supra, 63 Cal.App.5th at pp. 128-129.)
A voluntary dismissal may constitute a favorable
termination on the merits if it reflects an implicit concession that
the dismissing party cannot maintain the action. (Citizens of
Humanity, supra, 63 Cal.App.5th at p. 129 (citing JSJ Limited
Partnership v. Mehrban (2012) 205 Cal.App.4th 1512, 1524).) A
dismissal on technical or procedural ground, however, including
lack of jurisdiction, lack of standing, avoiding litigation expenses,
or settlement, is not considered a favorable termination. (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.
[Citation.]” (Ibid.) “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.]” [Citation.]”
(Ibid.)
3. Settlement Precludes Favorable Termination
In summary, appellants argue respondents implicitly
dismissed the Harvard Action on the merits because, just days
prior to the stipulated dismissal, respondents were provided with
“irrefutable evidence” that the claims in the Harvard Action were
false. Respondents maintain probable cause existed to pursue
the Harvard Action regardless of the “irrefutable evidence,” but
at any rate, the dismissal was pursuant to a settlement
agreement to save costs of litigation.
The record here is clear that the dismissal of the
underlying action was pursuant to a settlement agreement to
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save costs of litigation—a technical or procedural ground
disqualifying favorable termination. The June 29, 2021,
Settlement Letter is transparent; Appellants offered to waive
costs and attorney fees incurred in defending the Harvard Action,
which they believed they were entitled based on a prior divorce
judgment, in exchange for a prejudicial dismissal of the Harvard
Action. The offer was accepted via email by the response
deadline. This settlement agreement was memorialized in the
“Stipulation for Dismissal With Order and Judgment of
Dismissal,” filed on July 13, 2021, whereby the parties agreed
that the purpose of the dismissal was to save litigation costs and
that parties were to bear their owns costs and attorney’s fees.
Both sides gave up something of value to end the litigation, and
thus, “a party cannot later claim [it] received a favorable
termination. [Citation.] It is not necessary to analyze the
particular circumstances of the settlement or to examine the
motivations of the parties—a negotiated settlement not only
creates an ambiguity as to the merits of the underlying action, it
is entirely inconsistent with bringing a further lawsuit for
malicious prosecution. [Citation.]” (Ferreira v. Gray, Cary, Ware
& Freidenrich (2001) 87 Cal.App.4th 409, 412-414.)
On this record, appellants failed to carry their burden of
establishing a probability of success on the element of a favorable
termination. Accordingly, the trial court properly granted the
anti-SLAPP motions and struck the malicious prosecution claim.
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DISPOSITION
The order granting the anti-SLAPP motion is affirmed.
Respondents are entitled to recover their reasonable costs on
appeal in this matter. (Cal. Rules of Court, rule 8.278(a)(1), (2).)
NOT TO BE PUBLISHED.
LEE, J.
We concur:
MOOR, Acting P. J. KIM, J.
 Judge of the San Bernardino Superior Court, assigned by
the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
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