SHUFFLER v. THOMAS II

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Court of Appeal, Fourth District, Division 1, California.

Betty L. SHUFFLER, Cross–Complainant and Appellant v. William R. THOMAS, II et al., Cross–Defendants and Respondents.

D012256.

Decided: August 13, 1991

Purviance & Purviance, Farris C. Purviance and Lorraine M. Purviance, San Diego, for cross-complainant and appellant. Thompson & McIntyre, and Peter R. Thompson, Baker & McKenzie, Thomas M. Shoesmith and Gustavo J. Lamelas, San Diego, for cross-defendants and respondents.

Cross-complainant Betty Shuffler appeals the judgment in favor of cross-defendant William Thomas in an action for wrongful attachment and abuse of process.1  Pursuant to White Lighting Co. v. Wolfson (1968) 68 Cal.2d 336, 66 Cal.Rptr. 697, 438 P.2d 345 and the rules governing our review we decide we must reverse the judgment.   As we shall explain, however, where the abuse of process action rests solely on the ground the attachment is excessive, i.e., the value of the attached property substantially exceeds the amount of property necessary to secure the potential judgment, we conclude abuse of process must be specifically pleaded.   We reach this conclusion in light of the nature of the tort in a case such as this where a party, Thomas, has successfully prosecuted his action to judgment in an amount equalling the amount sought in the writ of attachment.   In such circumstances the party desirous of proliferating meritorious litigation by characterizing the process used in that proceeding as tortious should be required to plead the values of the property attached and specifically allege the proximate cause of such damages.

FACTUAL AND PROCEDURAL BACKGROUND

This case involving Betty Shuffler's cross-complaint is a sliver of the litigation between Thomas, a lawyer, and his former clients Betty and Rex Shuffler.   Previously we reviewed the particulars of the parties' professional relationship when we examined the extensive record developed in the jury trial on Thomas's complaint seeking damages for breach of contract, unpaid attorney's fees and loans.   In our unpublished opinion (Thomas v. Shuffler, No. D010312, filed April 12, 1991) we rejected virtually all of the numerous arguments made by the Shufflers and affirmed the judgment as modified.2  The remittitur issued by this court directed the trial court to enter judgment in favor of Thomas for approximately $226,863.

The day after he filed his complaint Thomas sought and later obtained a $228,564.23 prejudgment writ of attachment against two of the Shufflers' Oceanside properties, a personal residence and a large parcel of unimproved land.   About a year later Shuffler cross-complained against Thomas, asserting abuse of process and wrongful attachment 3 and moved to quash the writ of attachment, arguing (1) the writ should not have been issued ex parte;  (2) the underlying claim was not liquidated;  and (3) Thomas was unlikely to prevail on the underlying claim.   The cross-complaint alleged the attachment was wrongful because Thomas levied upon property greatly in excess of the value of Thomas's claim against the Shufflers.4  The court denied the motion to quash 5 and severed the cross-complaint from the main action.

After Thomas prevailed on his complaint, he successfully moved for judgment on the pleadings on Shuffler's cross-complaint, arguing “as a matter of law, there can be no cause of action for abuse of process based on excessive attachment where (i) a jury verdict is returned in an amount greater than the writ of attachment, and (ii) the attachment is recorded solely against real property.”   In granting the motion the court explained that Shuffler could not establish an abuse claim since the judgment against her on the underlying contract claim was greater than the amount of the attachment levied on the two properties.

DISCUSSION

STANDARD OF REVIEW

Our analysis of a judgment on the pleadings is similar to our review of a judgment following the sustaining of a demurrer.   Like the demurrer the motion is confined to the face of the pleading under attack.  (Fosgate v. Gonzales (1980) 107 Cal.App.3d 951, 957, 166 Cal.Rptr. 233.)  “It admits all material and issuable facts pleaded and the issue is whether a cause of action has been stated.”  (Loomis v. Murphy (1990) 217 Cal.App.3d 589, 592, 266 Cal.Rptr. 82.)

ABUSE OF PROCESS

 A party seeking damages for abuse of process must prove a wrongful act was committed—“a willful act in the use of the process not proper in the regular conduct of the proceeding.”  (Loomis v. Murphy, supra, 217 Cal.App.3d at p. 595, 266 Cal.Rptr. 82;  Templeton Feed & Grain v. Ralston Purina Co. (1968) 69 Cal.2d 461, 466, 72 Cal.Rptr. 344, 446 P.2d 152.)   “Some definite act or threat beyond the scope of the process is required․”   (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 876, 168 Cal.Rptr. 361.)   The party must also show the act was committed for an improper or ulterior purpose.  (Abraham v. Lancaster Community Hospital (1990) 217 Cal.App.3d 796, 826–827, 266 Cal.Rptr. 360.)

The California Supreme Court has recognized prejudgment attachment of property possessing a value “greatly in excess of the amount of the legitimate claim” constitutes a wrongful use of process.  (White Lighting Co. v. Wolfson, supra, 68 Cal.2d 336, 349, 66 Cal.Rptr. 697, 438 P.2d 345.)   In White Lighting, a creditor attached the debtor's property, including 5,000 shares of stock and a Porsche automobile, allegedly worth over $19,500 to secure an $850 claim.   The debtor alleged the creditor attached this amount of property to force him to drop a counterclaim.   The court allowed the debtor to sue for abuse of process, holding “excessive attachments should be treated as giving rise to a cause of action for abuse of process rather than for malicious prosecution.”  (Id. at p. 350, 66 Cal.Rptr. 697, 438 P.2d 345.)   In so ruling, the court emphasized the debtor need not show the creditor lacked probable cause to bring the underlying claim or that the claim was terminated in the debtor's favor.  “[T]he wrongfulness in the excessive attachment lies, not in the institution of the suit or the procurement of the attachment, but in the illegitimate use of the attachment process to tie up more property than is reasonably necessary to secure the attaching creditor's claim.”  (Id. at p. 350, 66 Cal.Rptr. 697, 438 P.2d 345.)

In her first amended cross complaint, Shuffler alleged:  “[Thomas] attached property in excess of any legitimate claim.  [Thomas] knew, or willfully ignored the fact that the value of the properties subject to the attachment were greatly in excess of the alleged liability of [the Shufflers], ․ but nonetheless, [Thomas] ․ gave the levying officer instructions to levy attachment on all of said property and submitted to the Court an application to levy attachment on all such property.  [¶] In addition, [Thomas] ․ utilized, a regularly issued attachment for an improper purpose and motive, namely to pressure and intimidate cross-complainants in order to effectuate an unfair and [i]nequitable settlement of the claims as presented in the Complaint.”

Shuffler argues these allegations fall squarely within the holding of White Lighting.   She points out the allegations show (1) a wrongful use of process and (2) an improper purpose in employing that process.   Under prevailing supreme court authority, Shuffler maintains these allegations are sufficient to state a cause of action for abuse of process, regardless that Thomas prevailed on his underlying claim.

THE ATTACHMENT WAS NOT PRIVILEGED

 Thomas counters Shuffler's reliance on White Lighting is misplaced since his attachment was absolutely privileged under Civil Code section 47.   Although section 47 was in force when White Lighting was decided, the parties there did not raise, nor did the court address, the privilege issue.

Subdivision (b) of section 47 provides a privileged publication or broadcast is one made “[i]n any (1) legislative or (2) judicial proceeding, or (3) in any other official proceeding authorized by law, ․”  With respect to judicial proceedings, the privilege applies “to any communication (1) made in judicial or quasi-judicial proceedings;  (2) by litigants or other participants authorized by law;  (3) to achieve the objects of the litigation;  and (4) that have some connection or logical relation to the action.”  (Silberg v. Anderson (1990) 50 Cal.3d 205, 213, 266 Cal.Rptr. 638, 786 P.2d 365.)   The privilege is absolute and applies to all torts except malicious prosecution.   (Id. at pp. 211–212, 266 Cal.Rptr. 638, 786 P.2d 365;  see Umansky v. Urquhart (1978) 84 Cal.App.3d 368, 371, 148 Cal.Rptr. 547.)

 While the privilege is to be construed broadly, the privilege does not preclude the abuse of process action here.  Civil Code section 47, subdivision (b) bars tort actions predicated on a judicial statement, publication, or other type of communication.   Shuffler is not seeking to impose liability on Thomas on the basis of a communication.   Rather, as explained above, the heart of Shuffler's action is her assertion Thomas wrongfully used the attachment process to tie up more property than was reasonably necessary to secure his claim.   Where the alleged wrongful act goes beyond a communication made in the course of a judicial proceeding, the conduct is not privileged and cannot shield the party from liability.  (See McKnight v. Faber (1986) 185 Cal.App.3d 639, 650, 230 Cal.Rptr. 57 [“the privilege applies only to statements or publications and not to the fraudulent act of conveying the property”] [disapproved on other grounds in Silberg v. Anderson, supra, 50 Cal.3d 205, 217, 219, 266 Cal.Rptr. 638, 786 P.2d 365];  Abraham v. Lancaster Community Hospital, supra, 217 Cal.App.3d at p. 827, 266 Cal.Rptr. 360 [privilege inapplicable where “more than a simple publication ․ was involved”].) 6  We conclude Thomas's alleged wrongful conduct was not privileged.

THE APPLICABILITY OF WHITE LIGHTING

 Thomas alternatively attempts to distinguish White Lighting on the ground it involved the attachment of personal, as opposed to real, property and as a matter of law the excessive attachment of real property should not constitute abuse of process.   To support this argument he first points out the value of real property, unlike personal property, is not fixed and is subject to rapid fluctuations caused by factors outside the control of the creditor.7  In addition he stresses there is no certainty any particular parcel of real property will be available when the litigation is over and given such circumstances a requirement that a creditor obtain a precise estimate of a property's market value would be so expensive and unreliable as to render attachment a useless remedy.

 While we recognize the difficulties inherent in determining a debtor's equity in a particular parcel of property, such difficulties do not create an insurmountable problem for a creditor.   A creditor is not required to determine the “precise” or “exact” value of the debtor's property, a “ballpark” estimate is certainly permissible.   A creditor will not incur liability using “ballpark” figures as liability is incurred only where the value “greatly exceeds” the amount of the claim.   Thus a creditor making a good faith attempt to estimate the value of the property will not be liable for excessive attachment, even if his estimate is wrong, since a debtor must show the creditor knew or should have known the value of the property and nonetheless imposed an excessive attachment for the purpose of obtaining a collateral advantage.  (See White Lighting, supra, 68 Cal.2d at p. 347–351, 66 Cal.Rptr. 697, 438 P.2d 345.)

 Moreover, contrary to Thomas's assertions, the need to ensure an attachment is not excessive arises only where the creditor attaches more than one parcel of property.   The creditor who limits the attachment to a single piece of property can not be faulted if the specific parcel has a value in excess of the claim.   Further, the excessiveness of an attachment is measured at the time the creditor applies for the writ and/or levies upon the property.   Without more the fact the property may later increase in value should not result in making the creditor liable for abuse of process.   Likewise where a creditor reasonably believes a debtor's equity will be reduced during the pendency of the litigation, the creditor may attach additional property for security without incurring liability for abuse of process.

Based on the foregoing, we see no reason to limit White Lighting 's holding to allow liability for excessive attachments of personal property but not for attachments of real property.

PLEADING ABUSE OF PROCESS

I

 Shuffler's cross-complaint was not defective because she failed to allege Thomas acted with the requisite ulterior motive or wrongful purpose.   The “improper purpose” element of an abuse of process claim “usually takes the form of coercion to obtain a collateral advantage, not properly involved in the proceeding itself, such as the surrender of property or the payment of money, by the use of the process as a threat or a club.   There is, in other words, a form of extortion․”  (Templeton Feed & Grain v. Ralston Purina Co., supra, 69 Cal.2d 461, 466, 72 Cal.Rptr. 344, 446 P.2d 152;  see Golden v. Dungan (1971) 20 Cal.App.3d 295, 301, 97 Cal.Rptr. 577.)   In her cross-complaint Shuffler alleged Thomas attached excessive property for the purpose of “pressuring and intimidating” her to “effectuate an unfair and [i]nequitable settlement.”   This was a sufficient allegation to show an improper purpose.

 Thomas nonetheless contends Shuffler's allegation of improper purpose is insufficient as a matter of law since the court previously denied Shuffler's motion to quash the attachment, expressly finding the attachment was sought for a proper purpose.  (See fn. 5, p. 450, ante.)   As sympathetic as we may be to this argument, we must reject it in light of Code of Civil Procedure section 490.060 which provides that:  “Nothing in this chapter limits the right to recover for damages caused by an attachment or protective order on any common law theory of recovery.”   Precluding Shuffler from seeking damages for abuse of process because of her earlier unsuccessful efforts to release the attachment would directly contravene the statutory mandate stating we can not do so.

 We also reject Thomas's contention that because the amount of the attachment was essentially equivalent to the judgment, his purpose must have been proper.   As set forth above, an abuse of process action for excessive attachment may be established regardless of the merit of the creditor's claims and regardless whether the creditor ultimately recovers more than the attachment.   This is because the crux of the excessive attachment claim is the allegation that excessive property is tied up during the pendency of the litigation and not the propriety of filing the writ in the first place.  (See White Lighting Co. v. Wolfson, supra, 68 Cal.2d 336, 66 Cal.Rptr. 697, 438 P.2d 345.) 8

In sum, based on White Lighting, the standard of review governing this appeal and the statutory framework governing the issuance of attachments (Code Civ.Proc., § 481.010 et seq.) we must conclude Shuffler's first amended cross-complaint states a cause of action for abuse of process.

II

 Having reached the foregoing conclusion we frankly admit we are concerned with the apparent ease in which an abuse of process cause of action can be stated.   Regardless of the facts, an adept pleader tracking White Lighting will be able to plead such a cause of action in virtually any case where multiple properties are attached.   For the reasons which follow we conclude more should be required.

Public policy considerations influence the judicial characterization of certain torts.   For example the tort of malicious prosecution is now categorized as “disfavored” because of its potential to chill a citizen's desire to institute a civil action and its burden on the court system adding another round to litigation.  (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 871–874, 254 Cal.Rptr. 336, 765 P.2d 498.)   Although abuse of process is different from malicious prosecution it nonetheless has sufficient similar characteristics that we see no reason why the pleadings of an abuse of process action should be liberally construed.   A strict interpretation has the salutary effect of screening non-meritorious actions.   Moreover, allegations attacking a party's motive and asserting an ulterior purpose for collateral gain, challenge a party's integrity, and as such, like fraud, they should be specifically alleged.  (See 5 Witkin, Cal.Procedure (3d ed. 1985) Pleading § 662, p. 111;  see also Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216–217, 197 Cal.Rptr. 783, 673 P.2d 660 and cases cited.)   Requiring specificity gives the defendant notice of the charges allowing resolution of those charges in a summary manner rather than subjecting a successful plaintiff such as Thomas to seemingly endless litigation.   It is particularly unfair to permit generalized, conclusionary pleading in this type of case where the statutory scheme authorizes a party to move for return of property levied upon that “clearly exceeds the amount necessary to satisfy the amount to be secured by the attachment” (Code of Civ.Proc., § 488.720), but elects not to do so preferring to sue for damages following resolution of the underlying action.

The rule we contemplate also requires specificity as to the causal relationship between the excessive attachment and the alleged damages.   This is particularly appropriate where the attachment is on real property.   Unlike the attachment of personal property depriving the owner of use, the attachment of real property may have no effect, financial or otherwise, on the debtor.   The owner, not deprived of use, may suffer no inconvenience and only economic loss where the attachment prevents the property from being sold or refinanced.   Here, for example, we seriously question whether attachment caused Shuffler damages.9  Notwithstanding her right to a common law remedy for damages under Code of Civil Procedure section 490.060 her one year delay before taking any action to set aside the attachment suggests there was no need for her to do so.   Presumably had there been a market for her property or had she wished to borrow money against it she would have more promptly sought to remove the attachment.   In this regard we wish to stress that we do not equate the provisions of Code of Civil Procedure section 490.060 with a party's duty to mitigate damages.   Although the statutory scheme governing attachments clearly provides that it was not intended to limit a party's right to seek damages on common law theories, there is no statutory provision excusing a party from mitigating damages.

In order to expedite proceedings before the trial court we will treat Thomas's motion for judgment on the pleadings as a demurrer (see p. 450, ante ) and reverse the judgment with instructions to the trial court to sustain Thomas's demurrer, granting Shuffler leave to amend her complaint in accordance with this opinion, within 30 days after the filing of our remittitur.

DISPOSITION

Judgment reversed.   The trial court shall grant Shuffler leave to file an amended complaint within 30 days following the filing of our remittitur.   The parties to bear their respective costs for this appeal.

FOOTNOTES

1.   Shuffler also sued Thomas' attorney Peter Thompson and his law firm Thompson and Thompson.   For convenience, we do not distinguish between Thomas, Thompson and Thompson and Thompson referring to them collectively as “Thomas” even though Thompson and his law firm were not plaintiffs in the underlying case.

2.   The judgment entered on special verdicts, inclusive of interest and costs, was in the amount of $291,863.58.   To avoid a partial retrial Thomas consented to reduce the judgment by $65,000.   The amount set out in our remittitur reflects the net judgment following the modification.

3.   The cross complaint also contained a cause of action for malicious prosecution.   Shuffler has abandoned this cause of action following Thomas's success on his underlying claims.   Shuffler also does not challenge the court's denial of her requested amendment to add her husband as a cross-complainant.

4.   Shuffler also alleged the attachment was issued as a result of “various untrue and deceptive matters.”   When Shuffler later amended her cross complaint, she eliminated the allegation.

5.   In denying the motion, the court found:  “1. The Issuance of the Right to Attach Order and Writ of attachment ․ was proper;  [¶] 2. Plaintiff's claim upon which the attachment is based is one upon which an attachment may be issued;  [¶] 3. Plaintiff has established the probable validity of his claim upon which the attachment is based;  [¶] 4. The attachment is not sought for a purpose other than the recovery of the claim upon which the Attachment is based;  [¶] 5. The property attached is not exempt from attachment.”  (See Code Civ.Proc. § 484.090.)

6.   Moreover, the privilege applies only where “the communication [is] connected with, or [has] some logical relation to, the action, i.e., that it not be extraneous to the action․  [A] statement made in a judicial proceeding is not privileged unless it has some reasonable relevancy to the subject matter of the action.”  (Silberg v. Anderson, supra, 50 Cal.3d at p. 220, 266 Cal.Rptr. 638, 786 P.2d 365.)   At this stage of the litigation, Shuffler's allegation that Thomas attached property valued at much more than his alleged claim negates Thomas's claim the attachment was reasonably related to the litigation.

7.   He says, for example, the value of a debtor's equity in property could be reduced by a recession, unexpected environmental liability, or a seizure pursuant to federal drug enforcement statutes.   While such scenarios may be possible, we note there is no allegation that any such situation occurred in this case.

8.   In so concluding, we do not suggest the fact that the creditor prevailed in the underlying action for an amount close to the amount of the attachment is irrelevant to the proceedings.   On the contrary, such facts may be relevant to establish the creditor's attachment was done for a proper purpose and was not intentionally excessive.

9.   Because this case is still at the pleading stage, we cannot substitute our intuition for the facts determined either in a summary proceeding or at trial.

WIENER, Acting Presiding Justice.

BENKE and THOMPSON,* JJ., concur.

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