Serdy v. Alnasser CA2/6

Filed 6/28/22 Serdy v. Alnasser CA2/6
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
SHAY SERDY, 2d Civil No. B314924
(Super. Ct. No. 56-2020-
Plaintiff and Respondent, 00545893-CU-PO-VTA)
(Ventura County)
v.
SUMAYYAH IBRAHIM
ALNASSER et al.,
Defendants and Appellants.
Sumayyah Ibrahim Alnasser and Sumaya369, LLC
(collectively, Appellants), appeal from the trial court’s order
denying their motion to strike Shay Serdy’s complaint as a
strategic lawsuit against public participation (SLAPP). (Code
Civ. Proc.,1 § 425.16.) Appellants contend Serdy failed to show a
reasonable probability of prevailing on the merits of the malicious
prosecution claim in her complaint. Alternatively, they contend
that even if Serdy made the required showing, their reliance on
1 Unlabeled statutory references are to the Code of Civil
Procedure.
the advice of counsel provides them with a complete defense to
malicious prosecution. We affirm.
FACTUAL AND PROCEDURAL HISTORY
Alnasser formed Sumaya369 in 2016. She hired Serdy as
an independent contractor to register and maintain Sumaya369’s
website. Alnasser and Serdy worked closely over the next three
years, eventually growing Sumaya369 into a business with more
than $7 million in annual revenue.
Alnasser and Serdy’s relationship began to deteriorate in
late 2019. The two disagreed about Sumaya369 funds and the
compensation due to Serdy. There were also disagreements
about the Sumaya369 website and whether Serdy changed
passwords associated with it. Their disagreements came to a
head in March 2020 when Alnasser fired Serdy.
After her firing, Serdy sued Appellants in state court to
enforce the contract. Alnasser then sued Serdy in federal court,
asserting claims for computer fraud, trade secrets violations,
racketeering, copyright violations, and conversion. In the weeks
that followed she filed copyright and trademark applications.
She later amended her complaint to add claims for statutory and
common law trademark infringement. She also added
Sumaya369 as a plaintiff in the action.
Appellants moved for a preliminary injunction in federal
court on their computer fraud, copyright, and trademark claims.
The district court denied the motion. It concluded that
Appellants were unlikely to succeed on their fraud claim because
they failed to show that Serdy was not authorized to access the
Sumaya369 website and passwords and because they failed to
show that she changed any passwords. Appellants were unlikely
to succeed on their copyright claim because there was “no
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evidence showing that they have a valid registered copyright.”
They were unlikely to succeed on their trademark claims because
they submitted no evidence that they owned the claimed
trademarks or that Serdy was using the Sumaya369 website to
sell Appellants’ courses.
After the court denied injunctive relief, the parties
stipulated to the dismissal of Appellants’ copyright claim and one
of the trademark claims. Appellants later retained new counsel
and voluntarily dismissed their remaining claims so they could
litigate them in a single forum.2
Serdy sued for malicious prosecution. Appellants moved to
strike Serdy’s complaint as a SLAPP, but the trial court denied
the motion. Though Appellants’ filing of their federal complaint
was protected activity, Serdy showed a probability of prevailing
on the merits of her malicious prosecution action: Voluntary
dismissal is generally viewed as a favorable termination on the
merits. Appellants lacked probable cause to file their copyright
claim because they submitted their copyright application after
filing their federal complaint. A lack of probable cause can give
2 In their opening brief, Appellants asserted, without
citation to the record, that two weeks earlier they had filed cross-
complaints to the contract action Serdy filed in state court.
Because they failed to properly cite the record, it was unclear
which, if any, of the claims included in those cross-complaints
were identical to those dismissed in Appellants’ federal action.
With their reply brief, Appellants requested that we take judicial
notice of the cross-complaints. We grant the request (Cal. Rules
of Court, rule 8.252(a)(2); see Evid. Code, §§ 452, subd. (d), 459,
subd. (a)), but note that the only claim common to Appellants’
federal action and their state cross-complaints is one for common
law trademark infringement.
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rise to an inference of malice. (See Soukup v. Law Offices of
Herbert Hafif (2006) 39 Cal.4th 260, 292 (Soukup).) And though
Appellants claimed that they relied on the advice of counsel when
filing their federal action, they also admitted that they knew
their copyright application was filed after their lawsuit, giving
rise to the inference that they knew they had no basis for that
claim.
DISCUSSION
The anti-SLAPP statute
We apply a two-prong inquiry to determine whether the
trial court properly denied Appellants’ anti-SLAPP motion.
(Baral v. Schnitt (2016) 1 Cal.5th 376, 384 (Baral).) Under the
first prong, we determine whether Appellants showed that
Serdy’s malicious prosecution claim arose “from any act . . . in
furtherance of [their] right of petition or free speech.” (§ 425.16,
subd. (b)(1).) Under the second, we determine whether Serdy
established a probability of prevailing on the merits of her action.
(Ibid.) Here, Appellants concede that Serdy’s malicious
prosecution action arose from protected activity. (See, e.g.,
Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 734-
735.) We accordingly focus on whether Serdy has shown a
probability of prevailing.
Our review is de novo. (Baral, supra, 1 Cal.5th at p. 384.)
When undertaking that review, we do “not weigh evidence or
resolve conflicting factual claims.” (Ibid.) Instead, we limit our
inquiry “to whether [Serdy] has stated a legally sufficient
claim and made a prima facie factual showing sufficient to
sustain a favorable judgment.” (Id. at pp. 384-385.) We “accept[]
[her] evidence as true, and evaluate[] [Appellants’] showing only
to determine if it defeats [Serdy’s] claim as a matter of law.” (Id.
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at p. 385.) “‘[C]laims with the requisite minimal merit may
proceed.’ [Citation.]” (Ibid.)
Malicious prosecution
To succeed in her malicious prosecution action, Serdy must
show: (1) Appellants’ federal action terminated in her favor, (2)
Appellants brought that action without probable cause, and (3)
Appellants initiated their action with malice. (Soukup, supra, 39
Cal.4th at p. 292.) Appellants contend the trial court should have
granted their anti-SLAPP motion because Serdy failed to show
all three of these elements. We disagree.
1. Favorable termination
Malicious prosecution’s favorable termination element
requires two distinct showings: “termination of the entire action,
and termination on the merits, reflecting innocence of the
underlying defendants.” (Citizens of Humanity, LLC v.
Ramirez (2021) 63 Cal.App.5th 117, 128 (Citizens of Humanity).)
Here, there is no question that Serdy made the former showing:
Appellants’ entire federal action was terminated when they
stipulated to the dismissal of their copyright and trademark
claims and then voluntarily dismissed their remaining claims.
As to the latter showing, “‘[a] voluntary dismissal is [generally]
presumed to be a favorable termination on the merits.’” (Oviedo
v. Windsor Twelve Properties, LLC (2012) 212 Cal.App.4th 97,
112 (Oviedo).) “‘This is because “‘a dismissal for failure to
prosecute . . . reflect[s] on the merits of the action.’”’” (Ibid.,
alterations omitted.) “‘“‘[O]ne does not simply abandon a
meritorious action once instituted.’” [Citation.]’ [Citation.]”
(Ibid.)
Appellants have not overcome the presumption that their
federal action terminated in Serdy’s favor. “When termination is
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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, and if
there is a dispute as to the circumstances of the termination[] the
determination of the reasons underlying the dismissal is a
question of fact” to be decided by a jury. (Olivares v.
Pineda (2019) 40 Cal.App.5th 343, 354 (Olivares).)
Here, the federal district court considered the merits of four
of the claims in Appellants’ complaint when it denied their
request for injunctive relief, determining that those claims lacked
evidentiary support. That is a showing that these claims
terminated in Serdy’s favor. And while neither the district court
nor the court below opined on the merits of the remaining claims,
Appellants’ only stated reason for dismissing those was so they
could be filed in state court. But the only claim included in both
Appellants’ federal action and their state cross-complaints was
one for common law trademark infringement—a claim the
district court determined lacked evidentiary support. There is
thus a factual dispute as to the reasons for Appellants’ dismissal
of their remaining federal claims. “As a result, [Serdy] has made
a prima facie showing of a favorable termination of the [federal]
action in her favor.” (Oviedo, supra, 212 Cal.App.4th at p. 113;
see also Olivares, supra, 40 Cal.App.5th at p. 354 [anti-SLAPP
motion to strike malicious prosecution claim denied where there
were factual disputes as to why underlying action was
dismissed].)
Drummond v. Desmarais (2009) 176 Cal.App.4th 439, on
which Appellants rely, does not hold otherwise. In Drummond,
the defendant dismissed the claims he had filed in one forum
because he was “required . . . to bring [them] in the court where
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plaintiffs’ claims against him were already pending.” (Id. at p.
450.) The voluntary dismissal of his claims was thus not a
termination of the action in the plaintiffs’ favor; it was “a
‘technical’ disposition rather than one ‘on the merits.’” (Ibid.)
Here, in contrast, while Appellants assert that they
dismissed their federal action so they could pursue those claims
in cross-complaints to Serdy’s state action, they did not actually
include all of the dismissed federal claims in the state cross-
complaints. Nor have they shown that the compulsory cross-
complaint rule at issue in Drummond, supra, 176 Cal.App.4th
439 required these claims to be pursued in the forum where
Serdy’s action was already pending. We thus cannot conclude
that the dismissal of their action was a technical disposition
rather than one on the merits. Serdy has carried her burden of
showing that the entirety of Appellants’ federal action terminated
in her favor.
2. Probable cause and malice
Where, as here, “‘the defendant in the underlying action
prevails on all of the plaintiff’s claims,’” they can pursue a
malicious prosecution action if any one of those claims lacked
probable cause and was initiated with malice. (Citizens of
Humanity, supra, 63 Cal.App.5th at p. 128.) Whether a claim
lacked probable cause presents an objective inquiry (Soukup,
supra, 39 Cal.4th at p. 292) into “whether any reasonable
attorney would have thought the claim tenable” (Sheldon Appel
Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 886). A reasonable
attorney would not have thought a claim tenable if the plaintiff
either relied on assertions not believed to be true or sought
recovery on a theory without a legal basis. (Soukup, at p. 292.)
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Serdy has shown that Appellants’ copyright claim lacked
probable cause and was initiated with malice. For a copyright
claim to lie, the plaintiff must have a validly registered
copyright.3 (Fourth Estate Public Benefit Corporation v. Wall-
Street.com, LLC (2019) __ U.S. __, __ [139 S.Ct. 881, 886].) There
is no evidence that Appellants had a registered copyright when
they filed their federal action against Serdy—indeed, there is no
evidence that any of Appellants’ works are copyrighted today. A
reasonably competent attorney would not have filed a copyright
claim without proof of an essential element. (Soukup, supra, 39
Cal.4th at p. 292 [“‘it cannot be adjudged reasonable to
prosecute’” a claim lacking evidence].) And from this lack of proof
it may be inferred that the claim was initiated with malice.
(Ibid.) Serdy has therefore shown that her malicious prosecution
action has the requisite minimal merit to be presented to a jury.
Reliance on the advice of counsel
Appellants alternatively contend that even if Serdy showed
a probability of prevailing in her malicious prosecution action,
their reliance on the advice of counsel provides them with a
complete defense. (See Bisno v. Douglas Emmett Realty Fund
1988 (2009) 174 Cal.App.4th 1534, 1544.) To support this defense
they rely on a single, self-serving statement in Alnasser’s
declaration that, at the time the federal action was filed, she
provided all relevant information to her attorney and relied on
him to protect her rights. But at that time Alnasser knew that
3 Because it was not the basis for their federal copyright
claim, we do not consider Appellants’ argument that copyright
registration was not required to bring an infringement action
under the Berne Convention for the Protection of Literary and
Artistic Works.
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she had not yet filed a copyright application. As the court below
recognized, it can be inferred that a sophisticated businessperson
like Alnasser would have known she had no basis for a copyright
infringement claim in the absence of any registered copyright.
(Cf. People ex rel. Fire Ins. Exchange v. Anapol (2012) 211
Cal.App.4th 809, 830 [self-serving declaration insufficient to
establish party’s subjective belief].) The matter should be
decided by a jury. (Citizens of Humanity, supra, 63 Cal.App.5th
at p. 128 [anti-SLAPP motion should be denied where there are
factual conflicts over whether movant proved their defense].)
DISPOSITION
The trial court’s order denying Appellants’ anti-SLAPP
motion to strike Serdy’s complaint for malicious prosecution,
entered August 24, 2021, is affirmed. Serdy shall recover her
costs on appeal.
NOT TO BE PUBLISHED.
YEGAN, J.
We concur:
GILBERT, P. J.
PERREN, J.
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Henry J. Walsh, Judge
Superior Court County of Ventura
______________________________
Forward Counsel and Stuart W. Price for Defendants and
Appellants.
Lyden Law Corporation and Christine C. Lyden for
Plaintiff and Respondent.