Greensprings Baptist Christian Fellowship Trust v. Miller et al

Filing 131

ORDER by Judge Samuel Conti denying 121 Motion for Hearing (sclc1, COURT STAFF) (Filed on 5/26/2011)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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GREENSPRINGS BAPTIST CHRISTIAN
FELLOWSHIP TRUST,
Plaintiff,

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v.

For the Northern District of California

United States District Court

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JAMES P. CILLEY, an individual;
MARK A. SCHMUCK, an individual;
and TEMMERMAN, CILLEY & KOHLMANN,
LLP,

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Defendants.

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I.

) Case No. 09-1054 SC
)
) ORDER DENYING DEFENDANTS'
) SECOND MOTION TO STRIKE
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INTRODUCTION
This is a suit for malicious prosecution brought by Plaintiff

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Greensprings Baptist Christian Fellowship Trust ("Greensprings")

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against Defendants Robert Miller ("Bob"), Barbara Miller

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("Barbara"), and Anne Miller ("Anne," and collectively, "the

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Millers"), as well as the Millers' former attorneys, Defendants

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James Cilley ("Cilley"), Mark Schmuck ("Schmuck"), and their firm,

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Temmerman, Cilley & Kohlmann, LLP ("TCK," and collectively,

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"Attorney Defendants").

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settled its dispute with the Millers and they have been dismissed

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from this action, leaving Attorney Defendants as the sole

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defendants.

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Special Motion to Strike the Second Amended Complaint.

ECF No. 1 ("Compl.").

Greensprings has

Now before the Court is Attorney Defendants' Renewed
ECF No. 121

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("Mot.").

Greensprings filed an Opposition, ECF No. 122 ("Opp'n"),

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and Attorney Defendants filed a Reply, ECF No. 130 ("Reply").

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the following reasons, the Court DENIES Attorney Defendants'

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Motion.

For

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II.

BACKGROUND
The history of this action spans more than eleven years and

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three civil actions.

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Court's July 28, 2009 Order granting Defendants' first Anti-SLAPP

United States District Court

For the Northern District of California

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motion.

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A detailed background is provided in the

See ECF No. 60 ("July 28, 2009 Order").

follows below.

A brief synopsis

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A.

Elsie Turchen's Offer

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On November 23, 2000, Elsie Turchen ("Turchen") wrote a one-

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page letter to Bob and Barbara Miller, the adoptive parents of

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Turchen's biological great-granddaughter, Molly Miller ("Molly").

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Id. at 3.

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Belmont, California ("the Belmont house") for the benefit of Molly

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as well as Anne, Bob and Barbara's biological daughter.

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4.

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know soon if Bob and Barbara were interested.

Turchen offered the gift of a three-bedroom house in

Id. at 3-

Turchen noted that because she was "very ill," she needed to
Id.

Before Bob or Barbara could accept this gift, Turchen died.

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In an attempt to reach Turchen, Barbara was put in contact

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Id.

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with Christine Dillon ("Dillon"), an employee of Ber Management

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("Ber"), an entity that apparently assisted in management of

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Turchen's properties and Greensprings's properties.

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told Barbara that Turchen did not own the Belmont house at the time

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she made the offer, but Dillon wanted to honor Turchen's gift by

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giving the Millers the equivalent amount of money.

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Id.

Id.

Dillon

Dillon

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later informed Barbara that the house had been appraised for

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approximately $500,000.

Id. at 5.

Barbara and Bob decided that the money should go to the Maui

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Preparatory Academy ("MPA"), which was planning to buy land near

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the Millers' home in Maui.

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$500,000 signed by Donald Bohn ("Bohn"), another employee of Ber,

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were issued from "Real Estate Trust" to "First Hawaiian Title

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Company."

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explained that "First Hawaiian Title Company" did not exist, and

Id.

Id.

In 2002, two checks totaling

The Millers then wrote to Bohn and Dillon,

United States District Court

For the Northern District of California

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asked them to reissue the checks to "First Hawaii Title

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Corporation."

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later, on November 14, 2004, the Millers wrote Dillon and Bohn

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reiterating their demand for a reissued check.

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January 10, 2005, Bohn sent the Millers a cashier's check for

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$500,000 made out to MPA.

Id.

Bohn and Dillon did not respond.

Two years

Id. at 6-7.

On

Id. at 6.

Barbara, however, no longer wanted the money to be given to

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MPA.

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Foundation"), a non-profit entity run by Bob and Barbara, made a

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$200,000 pledge to Seabury Hall, a college preparatory school in

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Hawaii.

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requesting that the check be reissued to Seabury Hall and two other

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academic institutions.

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attorney Carleton Briggs ("Briggs"), counsel for Greensprings.

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Id.

Around this time, the Miller Family Foundation ("the

Id. at 9.

Barbara sent another letter to Dillon and Bohn

Id. at 7.

Bohn referred Barbara to
Id.

On August 11, 2005, Briggs sent Barbara a letter informing her

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that he had been ordered to "assume direct control of all the

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accounts and to suspend charitable donations or unapproved

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expenditures" pending the disposition of a lawsuit brought by Penny

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Anderson ("Anderson"), granddaughter of Turchen, against Dillon,

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Greensprings, and others.

Anderson v. Dillon, No. Civ. 445617 (San

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Mateo Super. Ct., filed Mar. 18, 2005) ("Anderson").

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alleged in her complaint that Dillon, Bohn, Briggs, and

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Greensprings were part of a conspiracy to defraud Turchen and her

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heirs and assigns of more than $20 million in real property.

Anderson

Id.

Briggs requested that Barbara return the $500,000 check and

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promised that it would be deposited with Greensprings in a separate

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interest-bearing account pending the resolution of Anderson.

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28, 2009 Order at 8.

Barbara returned the check.

Id.

July

However,

United States District Court

For the Northern District of California

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the was money paid into Turchen's estate as part of the settlement

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in the Anderson suit, and was never submitted to the academic

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institutions selected by Barbara and Bob.

Id.

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B.

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The Millers engaged Attorney Defendants to determine if the

The Miller Action

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$500,000 could be recovered.

On July 30, 2007, Cilley e-mailed the

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Millers a seven-page letter in which he provided a factual summary

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of the Millers' case and performed a legal evaluation of their

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potential causes of action.

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Letter") at 3.1

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Turchen's estate, concluding that Turchen's letter was not

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"enforceable as a contract, will, trust or other testamentary

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document."

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causes of action against Bohn, Dillon, Briggs, and Greensprings:

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establishment of a constructive trust; breach of contract;

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negligent misrepresentation; and declaratory relief.

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Cilley noted that "these causes of action may only be enforced by

Rice Decl. Ex. A ("July 30, 2007 Op.

Cilley wrote that the Millers had no claim against

Id. at 3.

However, Cilley identified four potential

Id. at 4-6.

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James E. Rice ("Rice"), counsel for Greensprings, filed a
declaration in support of Greensprings' Opposition. ECF No. 123.
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you on behalf of your daughters, not by you or your wife directly,

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as the underlying gift from Elsie [Turchen] was intended for them

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and not for you."

Id. at 4.

The constructive trust cause of action was premised on the

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theory that Bohn sent the $500,000 check to the Millers in

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satisfaction of Turchen's intent to make a gift.

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that a weakness of this claim was "case law that states that where

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a donor retained the right to stop payment on a check, delivery is

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not complete and no gift is made."

Id. at 5.

Id.

Cilley noted

Under this law,

United States District Court

For the Northern District of California

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because Briggs not only retained the right to stop payment, but

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demanded return of the check, there was no enforceable gift.

Id.

The breach-of-contract claim was premised on the theory that a

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contract existed between Greensprings and the Millers whereby

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Greensprings promised to pay the Millers $500,000 in exchange for

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the Millers' forbearance of any claim against the estates of

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Turchen or her son, Ward Anderson.

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this cause of action was susceptible to an argument that no valid

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consideration existed, because none of the Millers had a valid

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claim against Turchen's or Ward Anderson's estate.

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concluded that "it is unclear how a court would decide this issue."

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Id.

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Id. at 6.

Cilley noted that

Id.

Cilley

The negligent misrepresentation claim was premised on the

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theory that by not making a claim against Turchen's estate, the

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Millers reasonably relied on Dillon's promise to pay $500,000 to

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charities of their choosing.

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with this cause of action -- the invalidity of the claim against

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Turchen's estate, and the one-year statute of limitations for

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claims against a decedent.

Id.

Cilley identified two "concerns"

Id. at 6-7.

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Cilley concluded by

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stating that Attorney Defendants were "in the process of drafting a

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complaint against Greensprings."

Id. at 7.

One week later, on August 8, 2007, Cilley e-mailed Bob a draft

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of the complaint.

Robert Miller Decl. Ex. H ("Aug. 7, 2007

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Letter").2

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underlying facts, it is my opinion that the Miller Family

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Charitable Foundation should not be a Plaintiff in this matter."

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Id.

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financial commitments "based on the representations of the

Cilley wrote that "after reviewing the file and the

Cilley wrote that despite the fact that Bob and Barbara made

United States District Court

For the Northern District of California

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defendants," the fact that any promise made to pay the $500,000 was

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made "to (or on behalf of) your daughters, not to the Foundation"

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was "fatal to any causes that the Foundation may have against the

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defendants."

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Foundation as a plaintiff unless Bob instructed him otherwise.

Id.

Cilley wrote that he would not include the
Id.

On August 17, 2007, Attorney Defendants filed a complaint on

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behalf of Barbara and Anne against Greensprings, Bohn, Dillon, and

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Briggs in state court, which the defendants subsequently removed.

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Miller v. Greensprings Baptist Christian Fellowship Trust, No. 07-

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4776 (N.D. Cal. Sept. 17, 2007) ("Miller").

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complaint, Barbara and Anne alleged that Greensprings had breached

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a contract with the Millers, unlawfully converted the $500,000 in

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question, and committed fraud.

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Millers requested that the $500,000 be paid to Anne and Molly

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personally, and they also requested punitive damages.

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Millers claimed that they had relied upon Dillon and Briggs'

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assurances, and that based on these assurances they had made no

In this initial

July 28, 2009 Order at 8.

The

Id.

The

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Robert Miller filed a declaration in support of Greensprings'
Opposition. ECF No. 126.
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claim against Turchen's estate and had returned the certified check

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to Greensprings.

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the Foundation was not named as a plaintiff.

Id. at 8-9.

Per Cilley's August 8, 2007 Letter,
Id.

Magistrate Judge Larson dismissed the complaint with leave to

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amend.

Id. at 9.

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make a showing of damages, because the $500,000 in question was to

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be donated to charities and not to be delivered to the Millers.

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The court also found that because Turchen's attempted gift was

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never accepted, Barbara and Anne had failed to explain how

The court found that the Millers had failed to

United States District Court

For the Northern District of California

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Turchen's attempted gift resulted in viable claims against either

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Greensprings or Turchen's estate.

Id.

On March 28, 2008, Attorney Defendants filed a First Amended

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Complaint.

Miller, ECF No. 49 ("Miller FAC").

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several allegations: that Dillon, Bohn, and Greensprings were part

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of a conspiracy to defraud Turchen; that Dillon assumed the name

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"Beth Anderson" and held herself out as Turchen's granddaughter;

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and that Greensprings agreed to pay the Millers $500,000 to avoid

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"increased scrutiny."

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Millers had pledged $200,000 to Seabury Hall in reliance on

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assurances made by the Miller defendants.

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9.

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and negligent interference with the right to inherit.

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Barbara were named as new plaintiffs, individually, and Briggs was

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named as a defendant.

Id.

The FAC added

The FAC included a claim that the

July 28, 2009 Order at

The Millers also added two new causes of action: intentional
Id.

Bob and

Id.

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Briggs declares that upon reading the Miller FAC, he

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telephoned Schmuck, demanding to see communication from Seabury

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Hall commencing a collection action against Robert and Barbara on

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Briggs Decl. ¶ 19.3

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their pledge.

Briggs declares that in a later

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conversation with Cilley, Briggs pointed out that Seabury Hall

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apparently viewed the Millers' pledge as being from the Foundation,

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rather than from the Millers personally.

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Cilley responded that the Millers would merely amend the complaint

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again to add the Foundation as a plaintiff and "keep on amending"

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until Greensprings paid $200,000 to the Millers or gifted that

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amount in satisfaction of their pledge to Seabury Hall.

Id.

Briggs declares that

Id.

On August 7, 2008, Magistrate Judge Larson dismissed the FAC

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United States District Court

For the Northern District of California

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without leave to amend, finding many of the flaws present in the

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first complaint uncured in the FAC.

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Second Dismissal Order").

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Plaintiff's breach of contract claim was time-barred, the

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interference with the right to inherit claims were unrecognized by

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existing law, and that the Millers had alleged no cognizable

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damages.

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Hall was made not by the Millers, but by the Foundation, a non-

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party entity currently in suspended status.

Id.

Miller, ECF No. 97 ("Miller

Specifically, the court found that

The court found that the $200,000 pledge to Seabury

Id. at 9.

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C.

The Current Action

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On March 10, 2009, Greensprings brought the present malicious

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prosecution suit against the Millers and Attorney Defendants.

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No. 1 ("Compl.").

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Complaint.

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the Attorney Defendants acted without probable cause in bringing

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the Miller action "because, as a matter of law, no reasonable

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attorney would regard as tenable the prosecution of the claims

Three days later, it filed its First Amended

ECF No. 4 ("FAC").

In it, Greensprings alleged that

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ECF

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Briggs filed a declaration in support of Greensprings'
Opposition. ECF No. 128.
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contained in the above-referenced complaint, and/or they

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unreasonably neglected to research the law in making the

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determination to proceed against plaintiff."

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Greensprings also alleged that Attorney Defendants acted

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maliciously because the complaint was filed with knowledge "that

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the claims asserted therein against plaintiff were false and/or the

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proceedings were initiated for the purpose of depriving the

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plaintiff of the beneficial use of its property and/or to destroy

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plaintiff by depriving it of its tax-exempt status and/or the

Id. ¶¶ 18-19.

United States District Court

For the Northern District of California

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proceedings were initiated primarily because of hostility and ill

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will on the part of [Barbara and Anne] and/or the proceedings were

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initiated for the purpose of coercing plaintiff into settling with

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[Barbara and Anne]."

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Greensprings attached a November 14, 2004 letter from Miller to

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Dillon and Bohn which it claimed "threatened an investigation of

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Dillon and Bohn's handling of Elsie Turchen's estate" unless

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$500,000 was paid as directed by Bob and Barbara.

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Id. ¶ 22.

As evidence of malice,

Id. ¶ 23.

The Millers and Attorney Defendants then separately filed

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special motions to strike the FAC under California's anti-SLAPP

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statute, Cal. Code. Civ. Proc. § 425.16.

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28, 2009, the Court granted Defendants' anti-SLAPP motions.

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July 28, 2009 Order.

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suit, Defendants were engaged in an act in furtherance of their

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right of petition, triggering the anti-SLAPP statute.

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The Court found that Greensprings had failed to make the required

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minimal showing that the Miller suit was initiated with malice.

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Id. at 23.

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by Greensprings -- the November 14, 2004 letter from Bob and

ECF Nos. 28, 38.

On July
See

The Court found that by bringing the Miller

Id. at 17.

The Court found that the single piece of evidence cited

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Barbara to Dillon and Bohn -- was "typical pre-litigation

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posturing" and not evidence of malice.

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that while the arguments made in the Miller complaints were

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"objectively poor and therefore made without probable cause, there

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is no indication that they were made in bad faith."

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The Court granted Greensprings leave to amend its complaint "if it

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believes it can make a successful showing of malice."

The Court concluded

Id. at 25.

Id. at 26.

Greensprings then filed a Second Amended Complaint -- having

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Id.

reached a settlement with the Millers, only the Attorney Defendants

United States District Court

For the Northern District of California

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were named as defendants.

ECF No. 63 ("SAC").

Greensprings

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attached to its SAC correspondence between Attorney Defendants and

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the Millers which it claims shows Attorney Defendants filed the

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Miller complaints with the knowledge that the claims asserted were

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invalid and for the improper purpose of extracting a settlement.

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Id.

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- in which Defendants allege Dillon, Bohn, Greensprings, and Briggs

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to be part of a "conspiracy" to defraud Turchen -- were taken from

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a superseded pleading in the Anderson action and stated without

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probable cause and with malice.

The SAC additionally alleged that portions of the Miller FAC -

Id. ¶¶ 35-36.

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Attorney Defendants then appealed the Court's July 28, 2009

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Order, arguing that the Court erred when it granted Greensprings

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leave to amend its complaint.

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also filed a second anti-SLAPP motion to strike.

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Court sua sponte terminated the motions and stayed the case pending

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the outcome of Attorney Defendants' appeal.

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ECF No. 64.

Attorney Defendants
ECF No. 76.

The

ECF No. 110.

In a published opinion, the Ninth Circuit found that it lacked

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jurisdiction over Attorney Defendants' appeal because the July 28,

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2009 Order was neither a final decision on the merits nor an order

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conclusively resolving "claims of right separable from, and

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collateral to, rights asserted in the action."

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Baptist Christian Fellowship Trust v. Cilley, 629 F.3d 1064, 1070

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(9th Cir. 2010).

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merits of Attorney Defendants' claim that the district court erred

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in giving Greensprings leave to amend.

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subsequently renoticed their anti-SLAPP motion.

Greensprings

In doing so, the Ninth Circuit did not reach the

Attorney Defendants

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III. LEGAL STANDARD

United States District Court

For the Northern District of California

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To determine whether to grant an anti-SLAPP motion brought

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under section 425.16 of California's Code of Civil Procedure, a

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court must undertake a two-step process.

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filing the anti-SLAPP motion must show that the cause of action

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arises from "any act of that person in furtherance of the person's

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right of petition or free speech under the United States or

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California Constitution in connection with a public issue . . . ."

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Cal. Civ. Proc. Code § 425.16(b)(1).

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burden, then the burden shifts to the plaintiff non-movant to

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demonstrate a probability of prevailing on the merits.

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Merck Pharm. Co. v. Super. Ct., 78 Cal. App. 4th. 562, 567 (Ct.

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App. 2000).

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claim has 'minimal merit.'"

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Hafif, 39 Cal. 4th 260, 291 (2006) (citations omitted).

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submitted by both parties may be considered, and although "the

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court does not weigh the credibility or comparative probative

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strength of competing evidence, it should grant the motion if, as a

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matter of law, the defendant's evidence supporting the motion

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defeats the plaintiff's attempt to establish evidentiary support

First, the defendant

If the defendant meets this

DuPont

"The plaintiff need only establish that his or her
Soukup v. Law Offices of Herbert

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Evidence

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for the claim."

Wilson v. Parker, Covert & Chidester, 28 Cal. 4th

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811, 821 (2002).

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and averments made on information and belief will not suffice.

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Salma v. Capon, 161 Cal. App. 4th 1275, 1289 (Ct. App. 2008).

Evidence must be of the type admissible at trial,

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IV.

DISCUSSION

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Greensprings concedes that Attorney Defendants' actions in

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litigating the Miller action were taken in furtherance of their

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right of petition.

See Opp'n.

Hence, to survive Attorney

United States District Court

For the Northern District of California

10

Defendants' anti-SLAPP motion, Greensprings must demonstrate its

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malicious prosecution claim has "minimal merit" such that there is

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a probability of prevailing on its merits.

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To prevail on a malicious prosecution claim, a plaintiff must

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show that the prior action "(1) was commenced by or at the

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direction of the defendant and was pursued to a legal termination

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favorable to the plaintiff; (2) was brought without probable cause;

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and (3) was initiated with malice."

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In its July 28, 2009 Order, the Court determined that the Miller

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action terminated in favor of Greensprings and that Miller was

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brought without probable cause.

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Therefore, the only issue before the Court is whether Greensprings

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has made the required "minimal showing" of malice on the part of

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Attorney Defendants in litigating the Miller action.

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Soukup, 39 Cal. 4th at 292.

July 29, 2009 Order at 18-22.

"Evidence of malice is typically drawn from inferences and

25

circumstantial evidence."

Paulus v. Bob Lynch Ford, Inc., 139 Cal.

26

App. 4th 659, 675 (Ct. App. 2006).

27

actual hostility or ill will toward the plaintiff.

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is present when proceedings are instituted primarily for an

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Malice "is not limited to
Rather, malice

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improper purpose."

2

4th 1135, 1157 (Ct. App. 1999).

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a number of examples of an "improper purpose":

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5
6
7
8
9

Sierra Club Foundation v. Graham, 72 Cal. App.
California courts have identified

[T]he principal situations in which the civil
proceedings are initiated for an improper
purpose are those in which (1) the person
initiating them does not believe that his claim
may be held valid; (2) the proceedings are
begun primarily because of hostility or ill
will; (3) the proceedings are initiated solely
for the purpose of depriving the person against
whom they are initiated of a beneficial use of
his property; (4) the proceedings are initiated
for the purpose of forcing a settlement which
has no relation to the merits of the claim.

United States District Court

For the Northern District of California

10
11
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Albertson v. Raboff, 46 Cal. 2d 375, 383 (1953).
There is considerable case law in California on the question

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of what constitutes malice on the part of an attorney defendant.

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While "a lack of probable cause in the underlying action, by

15

itself, is insufficient to show malice," Daniels v. Robbins, 182

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Cal. App. 4th 204, 225 (Ct. App. 2010), "an attorney may be held

17

liable for continuing to prosecute a lawsuit discovered to lack

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probable cause."

19

While negligence by an attorney defendant in failing to conduct

20

adequate research prior to the filing of a complaint does not alone

21

establish malice, Grindle v. Lorbeer, 196 Cal. App. 3d 1461, 1467-

22

68 (Ct. App. 1987), "[i]f the prior action was not objectively

23

tenable, the extent of a defendant's attorney's investigation and

24

research may be relevant to the further question of whether or not

25

the attorney acted with malice," Daniels, 182 Cal. App. 4th at 226.

26

Zamos v. Stroud, 32 Cal. 4th 958, 960 (2004).

In finding the lack-of-probable cause requirement to be

27

satisfied in its July 28, 2009 Order, the Court found that "at

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least some of these claims lacked probable cause because the legal

13

1

theory asserted was wholly inapplicable."

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at 21.

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Defendants knew that legal theories underlying the Millers' claims

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were fatally flawed such that there was no possibility a court

5

could find otherwise, they will have met their burden under the

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first prong of Albertson.

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See July 28, 2009 Order

Thus, if Greensprings can produce evidence that Attorney

Whereas Greensprings's evidence in opposition to the first

8

anti-SLAPP motion consisted of a single pre-litigation document,

9

Greensprings's opposition to the current Motion is considerably

United States District Court

For the Northern District of California

10

more robust.

Having settled with the Millers, Greensprings submits

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declarations by Bob, Anne, and Barbara Miller -- attached to which

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is correspondence between the Millers and Attorney Defendants.

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Included in this correspondence is the e-mail sent by Cilley to Bob

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on July 30, 2007 analyzing the potential claims available against

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Greensprings and other Miller defendants, see July 30, 2007 Op.

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Letter; the e-mail sent by Cilley to Bob on August 8, 2007

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suggesting that the Miller Family Charitable Foundation had no

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causes of action against Greensprings and should not be named as a

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plaintiff, see Aug. 7, 2007 Letter; an October 17, 2007 e-mail from

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Schmuck to Barbara providing details of Attorney Defendants'

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informal investigation into the Miller defendants, Rice Decl. Ex. J

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("Oct. 17, 2007 E-mail"); a February 26, 2008 intra-firm memorandum

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from Schmuck to Cilley evaluating Greensprings's motion to dismiss

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the SAC; Rice Decl. Ex. H ("Feb. 26, 2008 Memorandum"); an April

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24, 2008 letter from Cilley to Bob and Barbara advising them on the

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strengths and weaknesses of the SAC, Barbara Miller Decl. Ex. K

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("Apr. 24, 2008 Letter"); and a May 5, 2008 e-mail sent by Cilley

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to Greensprings's attorneys proposing to dismiss the case in

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1

exchange for a $350,000 payment from Greensprings to the Miller

2

Family Foundation, Rice Decl. Ex. C ("May 5, 2008 Settlement

3

Offer").

4

these exhibits.

5

Attorney Defendants do not challenge the authenticity of

Attorney Defendants argue that this Court held in its July 28,

lack of objective probable cause.

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counters that the proof submitted shows not only that the initial

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complaint and FAC were drafted and filed without objective probable

10

United States District Court

2009 Order that proof of malice requires more than mere proof of

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For the Northern District of California

6

cause, but that Attorney Defendants knew they lacked probable cause

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when they drafted and filed them.

12

Mot. at 17.

Greensprings

Opp'n at 10.

Having reviewed the documents submitted in light of the

13

relevant case law, the Court finds that Greensprings has introduced

14

evidence that supports several inferences.

15

Attorney Defendants did very little research into Greensprings and

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the other defendants before they filed the Miller initial

17

complaint, and as a consequence, they knew very little about

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Greensprings and its relationship to Ber, Bohn, and Dillon when the

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initial complaint was filed.

20

October 17, 2007 Letter, Schmuck reports to the Millers that

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Greensprings had offices in Santa Rosa, California, and Ashland,

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Oregon; that it was a 501(c)(3) contribution; that Briggs was its

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general counsel; that Bohn at one point had authority to write

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checks on behalf of Greensprings "until that authority was stopped

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by a preliminary injunction" in Anderson; and that according to

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pleadings in the Anderson action, Dillon has no connection with

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Greensprings.

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Greensprings months after the initial complaint was filed, this

Id.

The first is that

See Oct. 17, 2007 Letter.

In the

If this is all Attorney Defendants knew about

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1

lack of pre-filing research into Greensprings is relevant under

2

Daniels to the question of malice.
A second and related inference is that Attorney Defendants

3
4

knew that a court was likely to find many of the causes of action

5

asserted in the initial complaint to be unsupported by probable

6

cause.

7

discussed the problems with each cause of action later brought in

8

the initial complaint -- chiefly that the Millers had no claim to

9

Turchen's estate and that any promise by Dillon, Bohn, or Briggs to

In the July 30, 2007 Opinion Letter, Cilley frankly

United States District Court

For the Northern District of California

10

issue a $500,000 check to the charities of the Millers' choosing

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was not likely to be found to be supported by consideration or

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reasonable reliance.

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clear his belief that the Foundation had no cause of action against

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Greensprings or the other Miller defendants, writing that the fact

15

that any promise to pay $500,000 was made to the Millers on behalf

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of their daughters and not the Foundation was "fatal" to any claim

17

by the Foundation.

18

In Cilley's August 10, 2007 Letter, he makes

Id.

Were the story to end here, the decision whether to grant or

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deny Attorney Defendants' Motion would be difficult.

Attorney

20

Defendants cite Sangster v. Paetkau, 68 Cal. App. 4th 151, 164 (Ct.

21

App. 1998) for the proposition that "litigants have the right to

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present issues that are arguably correct even if it is extremely

23

unlikely that they will win."

24

while arguably unwise in hindsight -- could be seen as consonant

25

with the attorney's duty to zealously represent the interests of

26

his or her clients within the bounds of the law.

27

Auto. Ass'n Inter-Ins. Bureau v. Bales, 221 Cal. App. 3d 227, 231

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(Ct. App. 1990).

Attorney Defendants' actions --

California State

There is a subtle difference between knowing that

16

1

a claim is not supported by probable cause and suspecting a court

2

will find a claim to be unsupported by probable cause.

3

documents submitted by Greensprings clearly support the latter;

4

whether they support the former is a closer question.

5

The story does not end here, however.

The

If there were any

probable cause, Magistrate Judge Larson's order dismissing the

8

initial complaint removed them.

9

must demonstrate that Anne and Molly were entitled to the $500,000

10

United States District Court

doubts as to whether the Millers' causes of action were lacking in

7

For the Northern District of California

6

from Turchen, Turchen's estate, or the estate of Turchen's deceased

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son, Ward Anderson.

12

hurdle which we cannot overcome."

13

(emphasis added).

14

Magistrate Judge Larson's order "cannot be overstated because it

15

forms at least a part of the basis for most of our causes of action

16

against the defendants in the First Amended Complaint."

17

despite these considerations, the FAC was filed and ultimately

18

dismissed with prejudice for failing to clear this hurdle.

19

"an attorney may be held liable for continuing to prosecute a

20

lawsuit discovered to lack probable cause," Zamos, 32 Cal. 4th at

21

960, this evidence is sufficient to satisfy Greensprings' burden on

22

the issue of malice.

23

This order stated that the Millers

Cilley believed that this order raised "a
Apr. 24, 2008 Letter at 3

Cilley wrote that the challenges raised by

Id.

Yet

Because

In addition, the FAC included new allegations that

24

Greensprings was part of a "conspiracy" to defraud Turchen, and

25

that Greensprings agreed to make a $500,000 donation to charities

26

identified by the Millers to avoid "increased scrutiny."

27

Miller FAC.

28

numerous litigation documents submitted to the Court, the

See

Given that no such conspiracy is discussed in the

17

1

similarity between these allegations and allegations made in a

2

superseded Anderson complaint, and Attorney Defendants' failure to

3

submit documents tending to prove the existence of such a

4

conspiracy, a reasonable fact finder could conclude they were

5

lifted from the Anderson complaint and unsupported by probable

6

cause.

7

Defendants knew these allegations were not supported by probable

8

cause when they made them.

As such, this evidence is sufficient to show Attorney

Based on the above, Greensprings has put forward evidence

9

United States District Court

For the Northern District of California

10

supporting its allegation that Attorney Defendants brought claims

11

against Greensprings that were unsupported by probable cause and

12

legally untenable in light of the facts that were known by Attorney

13

Defendants.

14

ultimate issue of Attorney Defendants' liability for malicious

15

prosecution, which is not yet before the Court.

16

that a reasonable fact-finder could find Attorney Defendants were

17

merely representing the Millers with the required zeal and without

18

malice.

19

SLAPP's "minimal merit" hurdle with this evidence.

20

Court DENIES Attorney Defendants' Motion.

21

///

22

///

23

///

24

///

25

///

26

///

27

///

28

///

This evidence is far from conclusive as to the

It is possible

However, Greensprings has conclusively cleared anti-

18

As such, the

1
2

V.

CONCLUSION
For the foregoing reasons, the Court DENIES the Motion to

3

Strike brought by Defendants James Cilley, Mark Schmuck, and

4

Temmerman, Cilley & Kohlmann, LLP.

5

scheduled for June 24, 2011, at 10:00 a.m. in Courtroom 1,

6

Seventeenth Floor, U.S. Courthouse, 450 Golden Gate Avenue, San

7

Francisco, California, 94102.

8

Case Management Statement by June 17, 2011.

A Status Conference is

Parties shall file an amended joint

9

United States District Court

For the Northern District of California

10

IT IS SO ORDERED.

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Dated: May 26, 2011
UNITED STATES DISTRICT JUDGE

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