RUBIN v. GREEN

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Court of Appeal, Fourth District, Division 2, California.

Gerald S. RUBIN, Plaintiff and Appellant, v. Norma GREEN, et al., Defendants and Respondents.

No. E008838.

Decided: February 26, 1992

Grebow & Barish, Arthur Grebow, Lincoln Stone and Susan Gruskin, Los Angeles, for plaintiff and appellant. Musick, Peeler & Garrett, Harry W.R. Chamberlain, II, Birgit Sale, Matthew P. Stone and Joseph D. Rubin, Los Angeles, for defendants and respondents.

OPINION

INTRODUCTION

Plaintiff Gerald S. Rubin (Rubin) has appealed from an order of dismissal entered in favor of defendant Endeman, Lincoln, Turek & Heater, a law partnership (ELTH) and defendant Norma Green (Green), as an agent of ELTH, following those defendants' successful demurrer to Rubin's first amended complaint.

FACTS

On September 28, 1989, Rubin, the owner of the Cedar Village Mobilehome Park in Bloomington (Cedar Village), filed a verified complaint against ELTH and Green for (1) intentional interference with contractual relations;  (2) intentional interference with prospective economic advantage;  (3) intentional interference with lawful business;  (4) “harassment—temporary restraining order” and for a preliminary and permanent injunction.

This complaint alleged, as the preliminary factual basis upon which its various causes of action were predicated, that:

“9. Sometime in March, 1989, Defendants embarked on a malicious effort to harm Plaintiff's economic and business standing by stirring up animosity among residents, utilizing fear, intimidation and coercion against residents, and communicating the false promise of frivolous litigation as a means to profit unjustly at Plaintiff's expense.   California law provides a comprehensive statutory and regulatory scheme, which is enforced by providing notice of alleged code and regulatory violations, which are to be inspected by competent government employees.   Rather than avail themselves of such objective administrative mechanism, Defendants have been intent upon litigating a matter without any prior effort to amicably resolve any problems that may exist—all for the improper motive of an unjust and coercive settlement and award of attorneys' fees.

“10. Since sometime in March, 1989, the Law Firm has attempted to solicit Cedar Village residents in an unethical and unseemly manner although various residents had no prior complaints about conditions or maintenance at Cedar Village.   The Law Firm has coordinated meetings of residents, issued unsolicited questionnaires, disseminated falsities about park conditions and residents' rights in relation thereto, and has induced residents to become clients.   Defendant Green is a prominent member of a residents committee, which ‘represents' the Law Firm and has threatened, coerced and unethically solicited residents to become clients of the Law Firm.   The Law Firm has ratified the conduct of Green by accepting the benefits of her acts.   Green is either an actual or ostensible agent of the Law Firm.   By disseminating various falsities, Defendants have interfered with Plaintiff's business relations by inducing residents to demand lower rents and by misrepresenting to prospective residents that Cedar Village is an unfit place to live, is improperly maintained and is the subject of imminent litigation.

“11. On or about August 28, 1989, Defendants for the first time informed Plaintiff of complaints and alleged negligence in maintenance of Cedar Village by mailing to Plaintiff Rubin a letter entitled ‘Notice of Intention to Commence Action.’   Such letter is the first correspondence made from Defendants to Plaintiff, and a true and [sic] copy of such letter is attached hereto as Exhibit ‘A.’   The letter states its intention to sue the management and owner of Cedar Village based on twenty-three (23) unspecific, general alleged violations.   The letter also requests ‘all remedies afforded under California and federal law,’ naming thirteen (13) specific remedies.   Such letter evidences Defendants' clear intention to litigate, rather than resolve, whatever grievances Cedar Village residents may have.

“12. In response, on or about September 12, 1989, Plaintiff, through counsel, mailed a letter to Defendants, a true and correct copy of which is attached hereto as Exhibit ‘B,’ inviting Defendants to meet with Plaintiff and amicably resolve Cedar Village resident grievances.   Defendants, however, have demonstrated no interest in resolving this matter amicably and without litigation.”

ELTH and Green each answered the verified complaint, and each raised the single affirmative defense that the complaint failed to state facts sufficient to constitute a cause of action.   They also opposed Rubin's request for a temporary restraining order (TRO) and a preliminary injunction, and the TRO and the preliminary injunction were denied.

On December 7, 1989, approximately 120 residents of Cedar Village, including Green, filed Case No. 253356, Stephen Allen, et al. v. Gerald S. Rubin, et al., against Rubin and others for damages for alleged maintenance violations in the park (hereafter Allen).   An amended complaint in Case No. 253356 was filed on March 8, 1990.   On June 13, 1990, Rubin moved to consolidate this case and Allen.   The plaintiffs in Allen opposed the motion to consolidate, as did Green and ELTH.   The motion to consolidate was denied without prejudice.

On July 3, 1990, Green and ELTH filed a notice of motion and motion for judgment on the pleadings and dismissal of Rubin's complaint.   The basis for their motion was that Rubin's action was barred by the absolute privilege of Civil Code section 47, subdivision (b).   Rubin opposed the motion, asking the court to take judicial notice of various declarations and death certificates, as well as of documents in the file of Case No. 253356.   Rubin contended that the privilege available pursuant to section 47, subdivision (b) was not applicable to his action because the conduct of Green and ELTH was not intended to achieve the legitimate objectives of the Allen litigation, and because their communications constituted evidence of a tortious course of conduct.   Rubin also asked, if the court should conclude he had failed to state a cause of action, that he be given leave to file his proposed first amended complaint, a copy of which was attached to his opposition to the motion for judgment on the pleadings.

Rubin's proposed first amended complaint contained additional facts in support of his action against Green and ELTH, those facts being that (1) ELTH had actually filed a complaint against Rubin, without making any effort to resolve the dispute first, and that it entirely ignored the established administrative body designed to resolve such disputes, (2) ELTH had filed “duplicate” complaints and numerous other actions throughout California without bothering to revise the allegations of their form complaint to fit the facts of the underlying cases, (3) ELTH had named as plaintiffs in Allen persons who were either deceased before the complaint was filed, or who had not agreed to be plaintiffs, and (4) ELTH was refusing to allow Rubin any discovery in that case.

The first amended complaint added a cause of action for Unfair Business Practices (Solicitation) (Bus. & Prof.Code, § 17200 et seq.).   It contained a description of the defendants' alleged pattern of soliciting in person clients through assistance of an agent:

“9. For several years the Law Firm has engaged in a pattern of unfair business practices through which it has improperly solicited litigation on behalf of residents of mobilehome parks against park owners.   The litigation has taken the following form:

“(a) The Firm arranges to be invited to a meeting of residents allegedly to help negotiate a resolution with the owner of alleged problems with the park facilities.

“(b) At one or more meetings with the residents, the Firm promises to secure a monetary settlement for the residents in the amount of between $5,000.00 and $20,000.00 per person if the residents agree to join in a proposed lawsuit.

“(c) The Firm uses the services of one or more residents to intimidate or coerce other residents to join as plaintiffs in the proposed lawsuit.

“(d) The Firm instructs residents to refuse to meet with the owner, either directly or through a third party intermediary, to discuss a resolution of pending park problems.

“(e) The firm, without adequate investigation of the relevant facts files a form notice under Civil Code Section 798.84 and form Complaint essentially alleging every conceivable fact and every conceivable theory, thus depriving the owner of the opportunity to learn of any specific allegations and to thus address such allegations.

“(f) After filing a complaint on behalf of often over 150 plaintiffs, the Firm moves for trial preference on the basis that one or more plaintiffs is over the age of 70, thus shortening the opportunity that the defendant has to do full and adequate discovery.”

The first amended complaint also contained a description of actual acts of solicitation:

“13. Since sometime in March, 1989, the Law Firm has attempted to solicit Cedar Village residents in an unethical and unseemly manner although various residents had no prior complaints about conditions or maintenance at Cedar Village.   As set forth in paragraph 9 herein, the Law Firm has coordinated meetings of residents, issued unsolicited questionnaires, disseminated falsities about park conditions and residents' rights in relation thereto, and has induced residents to become clients.   Defendant Green is a prominent member of a residents committee, which ‘represents' the Law Firm and has threatened, coerced and unethically solicited residents to become clients of the Law Firm.   The Law Firm has ratified the conduct of Green by accepting the benefits of her acts.   Green is either an actual or ostensible agent of the Law Firm.   By disseminating various falsities, Defendants have interfered with Plaintiff's business relations by inducing residents to demand lower rents and by misrepresenting to prospective residents that Cedar Village is an unfit place to live, is improperly maintained and is the subject of imminent litigation.”

On July 18, 1990, ELTH's and Green's motion for judgment on the pleadings was granted, but Rubin was granted leave to file his first amended complaint which he did.   Green and ELTH noticed a motion to strike portions of the first amended complaint, and also noticed a demurrer to be heard concurrently with the motion to strike.   The demurrer was to four causes of action 1 in the first amended complaint, i.e., (1) unfair business practices (solicitation), (2) intentional interference with contractual relations, (3) intentional interference with prospective business advantage, and (4) intentional interference with lawful business, and was based on two grounds:  the absolute privilege of Civil Code section 47, subdivision (b), and the alleged failure of each cause of action to state facts sufficient to constitute a cause of action.

Rubin opposed the demurrer on the grounds that the litigation privilege did not apply when the communications were evidence of noncommunicative conduct, and that solicitation was a sufficient basis upon which to premise a cause of action for unfair business practices pursuant to Business and Professions Code section 17200.   Rubin also asked the trial court to take judicial notice of a copy of the complaint in Lake Cadena Investments, Limited v. Endeman, Lincoln, Turek and Heater, et al., San Bernardino Superior Court Case No. 257932, and of three declarations from residents of the park.   Rubin contended that a comparison of the complaint in Case No. 257932 and in the action brought against him would show that ELTH had engaged in a “pattern of elevating its own avarice above its obligation to conform to a high standard of conduct,” and that the declarations would show that ELTH and Green had solicited, and then harassed and threatened, residents who were not willing to be named as plaintiffs in the action against Rubin.

The trial court sustained the defendants' demurrer without leave to amend, and ordered that the complaint be dismissed in its entirety, on the ground that the absolute privilege afforded to judicial proceedings under Civil Code section 47, subdivision (b) barred Rubin's causes of action.   It also refused to rule on the motion to strike because it had been rendered moot by the ruling on the demurrer.

Rubin filed timely notice of appeal, and contends that (1) the litigation privilege does not apply because the complaint alleges a course of conduct leading up to the statutory and tort claims, rather than simply “communications,” and (2) the face of the pleadings and judicially noticeable documents failed to establish all of the elements necessary for the defense of the litigation privilege.

DISCUSSION

1. Standard of Review

“The general rule is that allegations of a complaint are to be liberally construed with a view to substantive justice between the parties.  [Citation.]  An order sustaining a demurrer without leave to amend will constitute an abuse of discretion if there is any reasonable possibility that the defect can be cured by an amendment.   This rule is liberally applied to permit further amendment not only where the defect is one of form but also where it is one of substance, provided the pleader did not have ‘ “a fair prior opportunity to correct the substantive defect.” ’  [Citations.]”  (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1387, 272 Cal.Rptr. 387, original emphasis.)

On appeal of a judgment entered following the sustaining of a demurrer, the reviewing court will assume that all properly pleaded allegations of the complaint are true, and will interpret the complaint by reading it as a whole and its parts in their context.  (Silberg v. Anderson (1990) 50 Cal.3d 205, 210, 266 Cal.Rptr. 638, 786 P.2d 365.) 2

2. Acts of Solicitation, and the Communications Which Make Up or Accompany Such Acts, Are Not Protected By the Absolute Privilege of Civil Code Section 47

Civil Code section 47, subdivision (b) “states the long-established rule that publications made in the course of a judicial proceeding are absolutely privileged [citation], ․” (Albertson v. Raboff (1956) 46 Cal.2d 375, 379, 295 P.2d 405.)  “It [the privilege under section 47, subdivision (b) ] is a bar to liability designed to protect the rights of the individual speaker, to insure that nothing will impede the individual's access to the courts.   The privilege focuses not on the timing or the manner of a lawsuit, but solely on the defendant.”  (Berman v. RCA Auto Corp. (1986) 177 Cal.App.3d 321, 325, 222 Cal.Rptr. 877.)

 The privilege protects not only litigants but attorneys, judges, jurors, witnesses and other court personnel.  (Rosenfeld, Meyer & Susman v. Cohen (1983) 146 Cal.App.3d 200, 231, 194 Cal.Rptr. 180.)   It bars all tort actions except those for malicious prosecution (Albertson v. Raboff, supra, 46 Cal.2d 375, 382, 295 P.2d 405), no matter how such actions are designated, so long as such actions are based upon a publication in a protected proceeding.  (Rosenthal v. Irell & Manella (1982) 135 Cal.App.3d 121, 125–126, 185 Cal.Rptr. 92 and cases cited thereat.)   It applies not only to communications made during judicial proceedings, but also to communications made in contemplation of legal action (see, e.g., id. at p. 126, 185 Cal.Rptr. 92;  Block v. Sacramento Clinical Labs, Inc. (1982) 131 Cal.App.3d 386, 393–394, 182 Cal.Rptr. 438;  Lerette v. Dean Witter Organization, Inc. (1976) 60 Cal.App.3d 573, 131 Cal.Rptr. 592), so long as “the communication has some relation to a proceeding that is actually contemplated in good faith and under serious consideration by ․ a possible party to the proceeding.”   (Rest.2d Torts, § 588, com. e, at p. 251.)

More specifically, as to the privilege as it applies to attorneys rather than litigants, “[a]n attorney at law is absolutely privileged to publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding, or in the institution of, or during the course and as a part of, a judicial proceeding in which he participates as counsel, if it has some relation to the proceeding.”  (Rest.2d Torts, § 586, at p. 247.)

The privilege discussed in section 586 only applies to statements made by attorneys while performing their function as such (com. c, at p. 248), does not apply to publication of defamatory matter that has no connection whatever with the litigation (ibid.), and applies only when the communication has some relation to a proceeding that “is contemplated in good faith and under serious consideration.”  (Com. e, at p. 248;  see also Block v. Sacramento Clinical Labs, Inc., supra, 131 Cal.App.3d 386, 393–394, 182 Cal.Rptr. 438.)

 The privilege also does not bar recovery for tortiously inflicted injury suffered as a result of noncommunicative conduct, regardless of the purpose for which the conduct was undertaken.  (Kimmel v. Goland (1990) 51 Cal.3d 202, 205, 211, 271 Cal.Rptr. 191, 793 P.2d 524.)   In Kimmel, several mobilehome owners, anticipating that they would be suing the mobilehome park managers for unlawfully refusing to allow them to sell their mobilehomes in place, tape recorded confidential telephone conversations between themselves and the managers in violation of Penal Code section 632.   These conversations were apparently recorded with the knowledge of the owners' attorney, who accepted the recordings and had them transcribed on several occasions.

After the owners filed suit against the managers, the managers learned of the existence of the tapes, and cross-complained against the owners and their attorney for violation of Penal Code section 632 pursuant to Penal Code section 637.2, which allows any person injured by such a violation to bring a civil action for damages, as well as an action to enjoin and restrain violations of section 632.

The owners and their attorney moved for judgment on the cross-complaint, arguing that because the tapes were made for the purpose of gathering evidence in anticipation of litigation, their conduct, i.e, recording and transcribing the conversations, was privileged under Civil Code section 47, former subdivision 2 (now relettered).   The trial court ruled in the owners' and their attorney's favor, the tapes were used at trial, and the jury awarded the owners damages against the managers.   The California Supreme Court reversed, noting that the managers alleged that they had suffered injury from the taping of their conversations, not from any publication of the information contained in these conversations.  (Id. at p. 209, 271 Cal.Rptr. 191, 793 P.2d 524.)   The court noted that the distinction between injury allegedly arising from communicative acts and injury resulting from noncommunicative conduct “has traditionally served as a threshold issue in determining the applicability of section 47(2).”  (Id. at p. 211, 271 Cal.Rptr. 191, 793 P.2d 524.)

 Here, Rubin alleges that defendants “communicated falsities and unethically solicited legal clients,” and therefore their “conduct is not constitutionally protected speech.”   However, it seems to us that the issue is not whether defendants' conduct is constitutionally protected speech, but whether the absolute privilege of section 47, subdivision (b) serves as a bar to civil liability for the unlawful act of solicitation.   (Bus. & Prof.Code, § 6152.) 3

We conclude that Civil Code section 47, subdivision (b) does not serve as a bar to such liability.   Soliciting business for an attorney must of necessity involve communicative acts, which acts in turn will commonly involve communications which would normally be privileged under section 47, subdivision (b), i.e., “communications preliminary to a proposed judicial proceeding, or in the institution of, ․ a judicial proceeding in which [the attorney for whom the solicitation is made] participates as counsel,” and which communications will also have “some relation to the proceeding.”  (Rest.2d Torts, § 586, at p. 247.)   Thus, the conduct condemned in Business and Professions Code sections 6152 and 6153 involves the same subject matter covered by Civil Code section 47, subdivision (b), i.e., communications between attorneys and laypersons which are preliminary to the institution of a judicial proceeding.   However, Business and Professions Code sections 6152 and 6153 involve a limited subset of that subject matter, i.e., communications initiated by attorneys or by their runners and cappers for the purpose of soliciting business for the attorneys.

 In interpreting these statutes to determine whether solicitation was intended to be protected by the litigation privilege, we are guided by several principles of statutory construction.   First, statutory provisions should be construed so as to give effect, if possible to every provision.  (Woodard v. Southern Cal. Permanente Medical Group (1985) 171 Cal.App.3d 656, 664, 217 Cal.Rptr. 514.)   Second, “[b]roadly speaking, a specific provision relating to a particular subject will govern in respect to that subject as against the general provision, although the latter, standing alone, would be broad enough to include the subject to which the more particular provisions relate [citation].”  (Natural Resources Defense Council, Inc. v. Arcata Nat. Corp. (1976) 59 Cal.App.3d 959, 965, 131 Cal.Rptr. 172;  Louisiana–Pacific Corp. v. Humboldt Bay Mun. Water Dist. (1982) 137 Cal.App.3d 152, 156–157, 186 Cal.Rptr. 833.)

By construing Business and Professions Code sections 6152 and 6153 as creating an exception to the privilege afforded under Civil Code section 47, subdivision (b) to communications made in anticipation of litigation, we not only give effect to the provisions of Business and Professions Code sections 17204, 6152 and 6153, which are clearly designed to allow private, civil litigation to enforce the prohibitions against solicitation, but we also harmonize the public policies behind each of the sections.4

The policy behind the absolute privilege of Civil Code section 47, subdivision (b), as noted above, is to “protect the rights of the individual speaker, to insure that nothing will impede the individual's access to the courts.”  (Berman v. RCA Auto Corp., supra, 177 Cal.App.3d 321, 325, 222 Cal.Rptr. 877.)

The policy behind Business and Professions Code sections 6152 and 6153 is “the protection of [the state's] citizens from the probability of fraud, deception, and overreaching inherent in the practice of ‘ambulance chasing.’   In-person solicitation, with its attendant employment of ‘high-pressure’ tactics at a time when persons are least able to exercise a free and independent judgment, has an adverse impact on the process of making an intelligent, thoughtful determination as to whether or not counsel will be employed and the subsequent selection of same.   As a matter of fact it tends to diminish rather than enhance the free flow of information in that it perverts and disrupts the ordinary communication and activity incident to the public's right to select counsel of its own free will.   In effect, this legislation is designed to prevent a type of consumer fraud, a matter of legitimate public concern.   Speech itself is not the evil;  rather, [the evil is] the act of entering into contracts for legal representation, to which speech is merely incidental.”  (People v. Kitsis (1977) 77 Cal.App.3d Supp. 1, 6, 143 Cal.Rptr. 537, emphasis added;  Ohralik v. Ohio State Bar Assn. (1978) 436 U.S. 447, 457–458, 461, 98 S.Ct. 1912, 1919, 1921, 56 L.Ed.2d 444, 454, 457.)

By concluding that the act of in-person solicitation, despite its communicative nature, is not protected by the privilege afforded by section 47, subdivision (b), we have not limited or impeded the individual litigant's access to the courts, for only the attorney and his or her runners and cappers may be held liable for such solicitation;  the solicited client is not subject to liability under sections 6152 and 6153.   The only acts which may be enjoined are the acts of in-person solicitation,5 not the continued representation of the solicited client, assuming that the client wishes to continue to employ the attorney.   And, by concluding that in-person solicitation is not protected by the litigation privilege, we have furthered the State's interest in protecting the public from fraud and overreaching by attorneys with a pecuniary interest in promoting litigation, as well as the general public's interest in the resolution of disputes, if possible, without immediate recourse to litigation, and in a legal system driven by the litigants' need for legal redress, rather than by attorneys' need for fees.

We therefore conclude that when, as here, the gravamen of the complaint is noncommunicative action or conduct to which speech or communication is an incidental aspect, the privilege is not a bar to liability.   As stated in Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1132, at footnote 12, 270 Cal.Rptr. 1, 791 P.2d 587:  “The privilege [under section 47, subdivision (b) ] does not apply to bar liability here ․ because the gravamen of the complaint was not a communication but a course of conduct.  [Citations.]  Thus, while it could be argued that an exhortation to sue might be privileged, financing and otherwise promoting the litigation would not be.”

Here, contrary to the dissent's assertion that all that is alleged here is an “exhortation to sue” (dis. opn. at pp. 344, 347), Rubin has alleged facts showing that Green and ELTH did much more than simply exhort or induce the residents of Cedar Village to sue.   He has alleged that Green and ELTH “induce [d] residents to be clients.”   He alleges:  (1) they illegally solicited personally for ELTH the business of representing the residents in the action which they were concomitantly exhorting the residents to bring, and (2) the solicitation was itself accomplished through the use of threats and falsehoods.   Simply because the solicitation arose from the same general facts as the exhortation to sue, and involved communication, does not mean that it must be protected as a privileged communication, any more than an illegal extortionate demand made by an attorney to a client during litigation involving facts on which the demand was based, would be entitled to protection as a privileged communication.

This theme, that the allegations of the first amended complaint simply assert that defendants encouraged the mobilehome owners to sue Rubin, is carried forward by the dissent in support of its conclusion that Rubin cannot prosecute the subject causes of action until he can plead that the termination of the owners' suit against him was in his favor.  (Dis. opn. at pp. 348–350.)   Once again the dissent ignores the allegations that ELTH and Green as its agent solicited the owners to retain ELTH as their counsel in prosecuting the lawsuit.   Such conduct is a violation of Business and Professions Code section 17204 (unlawful business practice) by ELTH and constitutes the basis of the other alleged torts.   None of the alleged torts involve any of the elements of malicious prosecution.

3. The Litigation Privilege Does Not Bar Rubin's Causes of Action Against Green and ELTH for Unfair Business Practices, Intentional Interference with Contractual Relations, Intentional Interference with Prospective Business Advantage, and Intentional Interference with Lawful Business

Having concluded that the unlawful solicitation of business for attorneys, though it involves communicative acts preliminary to the institution of a judicial proceeding, is conduct not protected by the litigation privilege afforded by Civil Code section 47, subdivision (b), we next consider whether Rubin has stated, or conceivably can state, facts sufficient to constitute causes of action for unfair business practices, intentional interference with contractual relations, intentional interference with prospective business advantage, and intentional interference with lawful business.6

As a preliminary matter, we point out that Rubin has based each of these tort actions on the defendants' acts of solicitation, not on their acts of “ ‘induc[ing] another to undertake litigation’ ” as suggested by the dissent.   (Dis. opn. at p. 348.)

a. The Cause of Action for Unfair Business Practices

 In his first amended complaint, Rubin specifically relied upon Business and Professions Code section 6152, which prohibits solicitation, and section 6153, which makes any violation of subdivision (a) of section 6152 a misdemeanor, as a basis for alleging that defendants were committing unfair business practices in violation of Business and Professions Code section 17200.  Section 6152 provides, in relevant part:

“(a) It is unlawful for:

“(1) Any person, in his individual capacity ․ to act as a runner or capper 7 for any such attorneys or to solicit any business for any such attorneys ․ in and about any private institution or upon private property of any character whatsoever.

“(2) Any person to solicit another person to commit or join in the commission of a violation of subdivision (a)․”

Under section 6152, subdivision (a)(2), attorneys themselves who retain the services of a runner or capper have committed a violation of the section.   (See Hutchins v. Municipal Court (1976) 61 Cal.App.3d 77, 88–89, 132 Cal.Rptr. 158.)

Business and Professions Code section 17200 defines unfair competition to include unlawful, unfair or fraudulent business practices.  Section 17200 was designed to establish a broad standard “for the guidance of courts of equity in restraining all unfair business practices because [the Legislature] felt that ‘given the creative nature of the scheming mind, ․ a less inclusive standard would not be adequate.’  [Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 112, 101 Cal.Rptr. 745, 496 P.2d 817.]   Quoting an earlier Supreme Court decision, the Barquis court enlarged upon its view of former Civil Code section 3369:  ‘ “When a scheme is evolved which on its face violates the fundamental rules of honesty and fair dealing, a court of equity is not impotent to frustrate its consummation because the scheme is an original one.   There is a maxim as old as law that there can be no right without a remedy, and in searching for a precise precedent, an equity court must not lose sight, not only of its power, but of its duty to arrive at a just solution of the problem.” ’  [Citations.]”  (People v. James (1981) 122 Cal.App.3d 25, 35, 177 Cal.Rptr. 110, quoting Barquis v. Merchants Collection Assn., supra, 7 Cal.3d 94, 112, 101 Cal.Rptr. 745, 496 P.2d 817, quoting American Philatelic Soc. v. Claiborne (1935) 3 Cal.2d 689, 698–699, 46 P.2d 135.)

For example, in People v. James, the defendants were charged with unfair business practices under Business and Professions Code section 17200.   Specifically, the defendants, one of whom owned a liquor store in a busy beachside area, and the other of whom operated a towing and impound service, were alleged to have committed the following acts:  (1) posted ambiguous or difficult to see warning signs in the liquor store parking lot, which failed to adequately apprise customers how long they might park there, (2) engaged in unlawful practices in hoisting and towing cars from the lot, including charging unconscionable fees, intimidating vehicle owners by threatening them with bodily harm, damaging vehicles, failing to safeguard personal property left in vehicles, charging “let-down” fees before releasing vehicles which had been hoisted for towing but not yet removed from the lot, and making false representations concerning the existence of liens and other rights in exacting charges for the release of such hoisted vehicles, all in violation of Civil Code section 1770, subdivision (n) 8 , and (3) arranged that the towing company owner would pay the liquor store owner a “kickback” fee for authorizing removal of cars from the El Don lot.  (122 Cal.App.3d at p. 31, 177 Cal.Rptr. 110.)   The trial court granted the People's request for a preliminary injunction enjoining these acts.

On appeal, the liquor store owner contended that because there were no cases in which section 17200 had been applied to this particular kind of business practice, he could not be said to have engaged in unfair business practices.   This court, in an opinion by Justice Tamura, stated that when the principles enunciated in Barquis (quoted above) were applied to the facts of the case before it, “the business practices which defendants were shown to be engaged in were manifestly ‘unlawful, unfair, and fraudulent,’ and held that “[t]he fact that defendants' scheme had never been dealt with by the appellate court does not render it any less fundamentally dishonest, unfair, or unlawful.  [Citation.]”  (Id. at pp. 35–36, 177 Cal.Rptr. 110.)

Solicitation of business for an attorney is an unlawful act.  (Bus. & Prof.Code, § 6152, 6153.)  Business and Professions Code section 17204 9 allows any member of the public to sue on his or her own behalf or on behalf of the public generally to enjoin ongoing wrongful business conduct in whatever context such activity might occur.  (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 209–210, 197 Cal.Rptr. 783, 673 P.2d 660;  Stoiber v. Honeychuck (1980) 101 Cal.App.3d 903, 927, 162 Cal.Rptr. 194 and cases cited therein.) 10

Here, Rubin alleged that defendants were engaged in a pattern of intimidation and harassment in an attempt to induce residents of the mobilehome park to retain ELTH as their attorney.   This is clearly business conduct which may be enjoined under section 17200.11

Defendants urge that Rubin has admitted on appeal that he seeks only damages, not injunctive relief, and that damages are not recoverable by a private litigant in an action brought pursuant to Business and Professions Code section 17204.   We do not read Rubin's briefs on appeal as waiving his right to seek the injunctive relief he requested in connection with all his causes of action, including the first cause of action for unfair business practices.12  Because such relief is available, regardless of the availability of damages as a remedy, Rubin has stated a viable cause of action.   We therefore need not reach the issue of whether or not such damages are available to a private litigant in an action under section 17204, although we agree with Rubin that the California Supreme Court in Committee on Children's Television, Inc. v. General Foods Corp., supra, 35 Cal.3d 197, 215 and footnote 16, 197 Cal.Rptr. 783, 673 P.2d 660, specifically left this issue open.13  We also note that the First District, Division One, in the recent case of People v. Powers (1992) 2 Cal.App. 4th 330, 3 Cal.Rptr.2d 34, held that restitution and disgorgement of profits may be ordered in an action brought pursuant to Business and Professions Code section 17203.  (Id. at pp. 340–342, 3 Cal.Rptr.2d 34.)   And, in two cases involving Civil Code section 3369 14 , which then provided for the enjoining, by any person, of unfair competition, it was held that (1) a trial court has the inherent power to order restitution as a form of ancillary relief (People v. Pacific Land Research Co. (1977) 20 Cal.3d 10, 19, fn. 9, 141 Cal.Rptr. 20, 569 P.2d 125) and (2) even though a statute does not specify that damages may be awarded, “the breach of a duty imposed by statute gives rise to a cause of action for damages if damages can be shown.”  (United Farm Workers of America v. Superior Court (1975) 47 Cal.App.3d 334, 344–345, 120 Cal.Rptr. 904.)

b. The Causes of Action for Intentional Interference With Contractual Relations, Intentional Interference With Prospective Business Advantage, and Intentional Interference with Lawful Business

These torts are closely related.   The tort of interference with contractual relations is “merely a species of the broader tort of interference with prospective economic advantage” (Buckaloo v. Johnson (1975) 14 Cal.3d 815, 823, 122 Cal.Rptr. 745, 537 P.2d 865), and the tort of interference with lawful business, as pleaded by Rubin, is merely interference with ongoing and existing, rather than prospective, business advantage.   The general wrong involved in each tort consists of intentional and improper methods of diverting or taking away ongoing or prospective business or contractual rights from another, which methods are not within the privilege of fair competition.  (See 5 Witkin, Summary of Cal.Law (9th ed. 1988) Torts, § 652, at p. 740.)

 As to the cause of action for intentional interference with contractual relations, Rubin alleged that defendants knew of the contractual relations between him and the mobilehome park residents, that by engaging in the acts of solicitation, defendants intended to interfere with those relations, and that as a result of defendants' conduct, those contractual relations were injured, and Rubin was damaged thereby.

As to the cause of action for intentional interference with prospective economic advantage, Rubin alleged that defendants knew of his ongoing and potential owner/resident relationships with Cedar Village residents, that in doing the acts complained of they intended to interfere with those relationships, and did interfere with those relationships, and that he was damaged thereby.   This cause of action is really one for interference with both prospective and existing economic advantage.

As to the cause of action for interference with lawful business, Rubin has alleged basically the same facts as alleged in the cause of action for intentional interference with prospective economic advantage, and this separately denominated cause of action is not really an independent cause of action.

As noted above, the conduct of unlawfully soliciting business for an attorney is not protected by the litigation privilege.   If the conduct involved in the solicitation resulted in the diversion of business or the taking away of contractual rights from Rubin, then such unprivileged conduct may form the basis for an action for interference with business relationships.15

We conclude plaintiff has alleged sufficient facts to state each of the four causes of action which were challenged by the demurrer.

Needless to say, none of these four causes of action—for unfair business practices, intentional interference with contractual relations, intentional interference with prospective business advantage, and intentional interference with lawful business—is a “new tort.”   They are grounded in long established statutory and common law.   The dissent states that “․ the majority's holding constitutes the recognition of a new tort” (dis. opn. at p. 349) and that “․ [the] new cause of action is the very tort which a unanimous Supreme Court expressly rejected just 18 months ago, ․” (Dis. opn. at p. 349.)   The dissent continues to miss the mark by suggesting we are attempting to create causes of action for the “new” torts of interference with contract or prospective economic advantage “ ‘[which are] based on inducing potentially meritorious litigation on the contract’․”  (Dis. opn. at p. 349, quoting Pacific Gas & Electric Co., supra, 50 Cal.3d at p. 1137, 270 Cal.Rptr. 1, 791 P.2d 587.)   The first amended complaint is not bottomed on the defendants inducing (another word for “exhorting”) potential litigation (meritorious or nonmeritorious) on a contract.   Rather, the first amended complaint consists of allegations sufficient to show acts of unlawful solicitation, as proscribed by Business and Professions Code section 6152, as the basis for suing those committing the unlawful solicitation for an unlawful business practice under Business and Professions Code section 17204 and as the factual basis for the other three alleged torts.   Admittedly, the official reports apparently contain no other case in which unlawful solicitation by an attorney and/or the attorney's agent formed the gravamen of a cause of action pursuant either to Business and Professions Code section 17204 or to common law theories of economic torts.   However, a novel factual basis for a lawsuit is hardly tantamount to a new tort.

Because we are not creating a new tort or a new cause of action, nor are we extending the established limits of tort liability, the dissent's discussion of the public policies against the creation of a new tort or cause of action, or the extension of the limits of tort liability is, in our opinion, simply irrelevant.   However, we feel compelled to respond to the warning cry of the dissent that our decision will somehow “unleash[ ] floods of secondary litigation.”  (Dis. opn. at p. 350.)

Our holding in no way presages a perceived onslaught of wholesale attempts to harass one's opponents by suing the opponent's attorneys.   Our holding applies only to those alleged rare (we hope) situations in which opposing counsel not only has engaged in unlawful solicitation (as such solicitation is narrowly proscribed according to constitutional requirements), but has done so successfully, i.e., has actually signed on the client so solicited.16

In contrast, were we to follow the course preferred by the dissent, attorneys could, with almost absolute immunity,17 unlawfully solicit clients, using whatever high-pressure tactics they desired, and file lawsuits in those clients' names—lawsuits which otherwise might never have been brought, the plaintiffs either having decided not to pursue resolution of the underlying controversy or to pursue it through negotiation.   This scenario, with the litigation privilege as its protective cloak, could, just as easily as that envisioned by the dissent, lead to a flood of primary litigation, which flood would be driven, unlike the flood of secondary litigation, by the profit-making considerations of attorneys already unethical enough to engage in unlawful solicitation.

DISPOSITION

The judgment is reversed and the case is remanded to the trial court with the direction to vacate its order of dismissal and to proceed to hear the defendants' pending motion to strike.

I respectfully dissent.

The complaint at issue here pleads, in substance, (1) that a law firm improperly solicited clients for the express purpose of commencing litigation against the clients' landlord to demand lower rents, (2) that the firm thereafter filed litigation against the landlord on behalf of the clients thus solicited, (3) that the allegations of the lawsuit were false, (4) that the lawsuit was filed for the purpose of harming the landlord rather than resolving any legitimate grievances the clients may have had against him, and (5) that as a result, the landlord has suffered and will continue to suffer harm, entitling him to monetary damages and injunctive relief.   The majority holds that these allegations are sufficient to state causes of action against the law firm under the business tort theories of unfair business practice, intentional interference with contractual relations, intentional interference with prospective economic advantage, and intentional interference with lawful business.   I cannot agree.

INTRODUCTION

In response to Rubin's suit against it, the law firm demurred on the basis of Civil Code section 47, by which publications made in a judicial proceeding are privileged.   It argued that the alleged solicitations, having been made in preparation for litigation, are privileged and thus cannot form the basis for any civil liability.   The trial court agreed, sustained the demurrer to all four causes of action on that basis without leave to amend, and dismissed Rubin's action.

My colleagues conclude that the order of dismissal must be reversed.   Under their analysis, the litigation privilege of Civil Code section 47 does not apply to the law firm's solicitation for two reasons.   First, they hold that if the law firm's solicitation constituted communication, Business and Professions Code section 6152 constitutes an exception to the general rule of privilege under Civil Code section 47.   Alternatively, they conclude that the alleged solicitation is primarily a course of conduct, not simply communication, and thus is not a privileged “publication” in any event.   Having disposed of the privilege defense, they go on to explain that the complaint pleads all the necessary elements of the four business tort causes of action asserted by Rubin.

As I will explain below, I cannot accept any of these conclusions.   In my view, there is no conflict between Civil Code section 47 and Business and Professions Code section 6152, and the latter provision does not constitute an exception to the litigation privilege.   Furthermore, the conduct which has been alleged here is, in substance, an exhortation to sue, which is a privileged communication.   Finally, regardless of the applicability vel non of the litigation privilege, the various business torts asserted here are, in this factual context, the equivalent of actions for malicious prosecution, of which a mandatory element is the allegation of a favorable termination of the underlying lawsuit.   That allegation is entirely absent from the complaint.   For all of these reasons, I believe that the complaint fails to state facts sufficient to constitute a cause of action.   I would affirm the judgment of dismissal.

DISCUSSION

The majority's analysis fails either if the alleged statements are privileged, or if the complaint otherwise fails to state the required elements of a cause of action.   I submit that it suffers from both of those defects.

A. THE LAW FIRM'S SOLICITATION IS PRIVILEGED COMMUNICATION.

1. Business and Professions Code section 6152 Is Not an Exception to the Litigation Privilege.

Civil Code section 47 provides in relevant part:  “A privileged publication or broadcast is one made:  ․ (b) In any ․ (2) judicial proceeding․”  As the majority acknowledges, that privilege extends to statements made before the actual initiation of the judicial proceedings, so long as “ ‘they are in some way related to or connected with a pending or contemplated action.’ ”   (Block v. Sacramento Clinical Labs, Inc. (1982) 131 Cal.App.3d 386, 393–394, 182 Cal.Rptr. 438.)

Business and Professions Code section 6152 provides in relevant part:

“(a) It is unlawful for:

“(1) Any person ․ to act as a runner or capper for any such attorneys or to solicit any business for any such attorneys ․ in any public place or ․ upon private property of any character whatsoever.

“(2) Any person to solicit another person to commit or join in the commission of a violation of subdivision (a).

“ ․

“(c) Nothing in this section shall be construed to prevent the recommendation of professional employment where such recommendation is not prohibited by the Rules of Professional Conduct of the State Bar of California.”

A “runner or capper” is defined as one who acts on behalf of an attorney in the solicitation or procurement of business for that attorney.  (Bus. & Prof.Code, § 6151.)  “Any person ․ violating subdivision (a) of Section 6152 is guilty of a [crime]․”  (Bus. & Prof.Code, § 6153.)   If an attorney uses a capper, both are guilty of the violation.  (Hutchins v. Municipal Court (1976) 61 Cal.App.3d 77, 88–89, 132 Cal.Rptr. 158.)

The majority notes that both Civil Code section 47 and Business and Professions Code section 6152 cover communications between attorneys (or their agents) and potential clients which are preliminary to the institution of judicial proceedings.  (Maj. opn., p. 337.)   From this interpretation, with which I agree, it concludes that the two sections are in conflict and must be reconciled by deeming Business and Professions Code section 6152 to be an exception to the litigation privilege of Civil Code section 47.  (Maj. opn., p. 337.)   With this I disagree.   Although the two statutes cover the same type of communications, they do not ultimately deal with the same subject.   To the contrary, one deals with the limitations of civil tort liability, while the other is concerned solely with liability for criminal and disciplinary sanctions.

The limited scope of the privilege created by Civil Code section 47 is apparent from the sections which immediately precede it.  Civil Code section 44 defines the tort of defamation to be either libel or slander.  Civil Code sections 45 and 46 define libel and slander, respectively, to be false and “unprivileged” publications.   The statutory privilege created by Civil Code section 47, therefore, is from liability for defamation.

Not only is the privilege an absolute defense to defamation actions, it will also “defeat tort actions which, however labeled and whatever the theory of liability, are predicated upon the publication in protected proceedings of an injurious falsehood.”  (Block v. Sacramento Clinical Labs, Inc., supra, 131 Cal.App.3d at pp. 390–391, 182 Cal.Rptr. 438, fns. omitted.)   In particular, it is a defense “to claims of abuse of process, intentional infliction of emotional distress, negligent misrepresentation, invasion of privacy, fraud, and to the torts alleged here:  interference with contract and prospective economic advantage.”  (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1132, 270 Cal.Rptr. 1, 791 P.2d 587.)   In fact, the privilege applies to all tort actions derived from such publications except actions for malicious prosecution.  (Ibid.)  Thus, the litigation privilege shields the publisher of a statement from all other tort liability which is alleged to arise out of the false publication.

However, that shield does not extend to liability originating outside of the realm of tort law.   For instance, while a plaintiff is immune from tort liability for injurious statements made in his verified complaint, he is nevertheless criminally liable for perjury if that statement was knowingly false.  (Pen.Code, § 118;  cf. Kachig v. Boothe (1971) 22 Cal.App.3d 626, 99 Cal.Rptr. 393.)   Similarly, while the knowing inclusion of a false statement in a pleading by an attorney will not result in civil liability (other than for a potentially malicious prosecution), the privilege will not protect the attorney from disbarment or other disciplinary proceedings by the State Bar.  (Cf. Bus. & Prof.Code, §§ 6103 and 6106;  1 Witkin, Cal.Procedure (3d ed. 1985) Attorneys, §§ 399–400, pp. 451–453.)

The fact that the scope of the litigation privilege is limited to tort liability, as opposed to criminal and disciplinary liability, is important because the violation of Business and Professions Code section 6152 results in criminal liability (Bus. & Prof.Code, § 6153) and disciplinary liability (Rules Prof. Conduct, rule 1–400(C);  Bus. & Prof.Code, § 6077), but does not result in any civil tort liability.   There is no private remedy for violations of the restrictions on solicitation contained in Business and Professions Code section 6152.1  Thus, the liability shield provided by Civil Code section 47 does not impinge upon or otherwise affect the liability created by a violation of Business and Professions Code section 6152.   Therefore, there is no conflict between the two sections.

Since the two statutory provisions, when viewed in this manner, do not concern the same subjects, it is unnecessary to determine whether one is more specific than the other, as the majority has done.  (Maj. opn., p. 337.)   While the general rule of statutory construction is that “[p]articular expressions qualify those which are general” (Civ.Code, § 3534), that maxim applies only where the general statute covers the same subject as, and thus conflicts with, the narrower statute.  (People v. Watson (1981) 30 Cal.3d 290, 295, 179 Cal.Rptr. 43, 637 P.2d 279.)   Here, those prerequisites do not exist.   Since the two statutes do not conflict, the provisions of both can be given full effect without deeming one to be an exception to the other.

For these reasons, I see no statutory justification for creating an exception to the “absolute privilege” (5 Witkin, Summary of Cal.Law (9th ed. 1988) Torts, § 498, p. 585) of Civil Code section 47 from civil tort liability for communications made in connection with pending or contemplated judicial proceedings.

2. Solicitation Is Communication, and Thus Privileged.

As an alternative to their statutory interpretation, the majority opines that “the gravamen of the complaint is noncommunicative action or conduct to which speech or communication is an incidental aspect,” to which the privilege does not apply.  (Maj. opn., p. 338.)   I cannot accept this characterization.

Communication is far from merely incidental to the defendants' activities as described in the complaint.   To the contrary, they are alleged to have made promises to the prospective clients, to have intimidated or coerced them into joining the proposed law suit, to have instructed them regarding their dealings with Rubin, to have filed boilerplate notices and complaints, to have sent a letter to the prospective clients, to have “issued unsolicited questionnaires, disseminated falsities about park conditions and residents' rights in relation thereto, and [to have] induced residents to become clients.”   In all of those activities, communication is central rather than incidental.

Indeed, in the very case cited by the majority in support of its conclusion in this regard, Pacific Gas & Electric Co. v. Bear Stearns & Co., supra, 50 Cal.3d 1118, 270 Cal.Rptr. 1, 791 P.2d 587, a unanimous Supreme Court recognized that a distinction might be properly drawn between verbally encouraging a claimant to sue, such as is alleged here, and promoting litigation by the claimant by giving it financial inducements which was the allegation in that case:  “[W]hile it could be argued that an exhortation to sue might be privileged, financing and otherwise promoting the litigation would not be.”  (Id. at p. 1132, fn. 12, 270 Cal.Rptr. 1, 791 P.2d 587.) 2

The exhortation to sue alleged here is limited primarily to the communication to the proposed clients of the alleged advantages of suing and disadvantages of not joining the suit.   There are no allegations of substantial activities which involve noncommunicative promotion of the litigation, such as financing.   I would adopt the distinction suggested by the Supreme Court in Pacific Gas & Electric Co. and hold that the litigation privilege does apply to the defendants' alleged solicitation.3  Accordingly, the demurrer was properly sustained, and the judgment of dismissal should be upheld on that basis.

B. RUBIN CANNOT ALLEGE A CLAIM BASED UPON THE LAW FIRM'S INDUCEMENT OF THE CLIENTS TO PROSECUTE AN ACTION UNLESS HE CAN PLEAD THE TERMINATION OF THAT ACTION IN HIS FAVOR.

As noted, regardless of whether the litigation privilege applies under the facts alleged, the judgment must be affirmed if the complaint fails to allege facts sufficient to constitute a recognized cause of action.   Thus, more troubling than my disagreement with the majority on the scope of that privilege is the majority's conclusion that Rubin has adequately alleged the causes of action of intentional interference with contractual relations, intentional interference with prospective business advantage, and similar claims based upon the defendants' alleged instigation of the underlying litigation.  (Maj. opn., p. 343.)

“Under existing law, the only common law tort claim that treats the instigation or bringing of a lawsuit as an actionable injury is the action for malicious prosecution.”  (Pacific Gas & Electric Co. v. Bear Stearns & Co., supra, 50 Cal.3d at p. 1130–1131, 270 Cal.Rptr. 1, 791 P.2d 587;  emphasis added.)   It would be “repugnant” to fundamental public policy “to make it a tort to induce potentially meritorious litigation.”  (Id., p. 1137, 270 Cal.Rptr. 1, 791 P.2d 587.)   The only way to determine whether an action is meritorious is to allow it to proceed to judgment.   Therefore, “a plaintiff seeking to state a claim for intentional interference with contract or prospective economic advantage because defendant induced another to undertake litigation, must allege that the litigation was brought without probable cause and that the litigation concluded in plaintiff's favor.” 4  (Ibid., emphasis added.)

Here, while the complaint at issue might be construed to allege that the initial action was brought by the law firm against Rubin without probable cause, it certainly does not aver that that action had terminated in Rubin's favor.   Indeed, the first action was still pending at the time Rubin's complaint was filed, making it impossible for him to truthfully state such an allegation.

The Supreme Court has repeatedly emphasized the continuing importance of the requirement of the prior favorable termination of the underlying litigation.   For instance, in Babb v. Superior Court (1971) 3 Cal.3d 841, 846–848, 92 Cal.Rptr. 179, 479 P.2d 379, the court discussed in detail the “conceptual, practical, and policy reasons” which support the “requirement of a favorable termination of the principal litigation before institution of a malicious prosecution action․”  (Id., p. 846, 92 Cal.Rptr. 179, 479 P.2d 379.)   One of the policy considerations mentioned is that the elimination of the prior termination requirement would facilitate the use of malicious prosecution actions “as dilatory and harassing devices.”  (Id., p. 847, 92 Cal.Rptr. 179, 479 P.2d 379.)

The court revisited the subject in Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 254 Cal.Rptr. 336, 765 P.2d 498.   There, the court noted that “the large volume of litigation filed in American courts has become a matter of increasing concern,” and that the relaxation of some of the traditional elements of the tort of malicious prosecution, such the favorable termination of the prior action, had been proposed as a possible solution.   (Id., p. 872, 254 Cal.Rptr. 336, 765 P.2d 498.)   However, the court rejected that approach:  “After reviewing the competing policy considerations, we ․ have concluded that the most promising remedy for excessive litigation does not lie in an expansion of malicious prosecution liability․  While the filing of frivolous lawsuits is certainly improper and cannot in any way be condoned, in our view the better means of addressing the problem of unjustified litigation is through the adoption of measures facilitating the speedy resolution of the initial lawsuit and authorizing the imposition of sanctions for frivolous or delaying conduct within that first action itself, rather than through an expansion of the opportunities for initiating one or more additional rounds of malicious prosecution litigation after the first action has been concluded․  Because these avenues appear to provide the most promising remedies for the general problem of frivolous litigation, we do not believe it advisable to abandon or relax the traditional limitations on malicious prosecution recovery.”  (Id., pp. 873–874, 254 Cal.Rptr. 336, 765 P.2d 498.)

The importance of maintaining the current restrictions on malicious prosecution actions was also strongly stated by the court in Pacific Gas & Electric Co. v. Bear Stearns & Co., supra:  “The [only] actionable harm is in forcing the individual to expend financial and emotional resources to defend against a baseless claim.  [Citation.]  The bringing of a colorable claim is not actionable;  plaintiff in a malicious prosecution action must prove that the prior action was brought without probable cause and was pursued to a legal termination in plaintiff's favor.5 Citations. ]  ․ The probable cause requirement is essential to assure free access to the courts;  the cause of action [for malicious prosecution] is the result of an accommodation ‘between the freedom of an individual to seek redress in the courts and the interest of a potential defendant in being free from unjustified litigation.’ ”  (Id., 50 Cal.3d at p. 1131, 270 Cal.Rptr. 1, 791 P.2d 587.)

Since Rubin has not pleaded and cannot plead the threshold fact of a prior favorable termination, he has not alleged the lack of probable cause.   In the absence of that allegation, none of the four theories alleged by Rubin, all of which attempt to base the law firm's liability upon its instigation of the initial lawsuit, state the element that the Supreme Court so recently held to be essential to the statement of such claims.

Despite the impossibility of pleading that essential element, the majority holds that all elements of those causes of action have been alleged.   Since the elements of malicious prosecution have not been pleaded, and since existing law does not treat the instigation of a lawsuit as an actionable injury under any other theory (Pacific Gas & Electric Co., supra, 50 Cal.3d at pp. 1130–1131, 270 Cal.Rptr. 1, 791 P.2d 587), the majority's holding constitutes the recognition of a new tort.   Moreover, that new cause of action is the very tort which a unanimous Supreme Court expressly rejected just 18 months ago, when it refused to “permit a cause of action for interference with contract or prospective economic advantage to be based on inducing potentially meritorious litigation on the contract․”  (Id., p. 1137, 270 Cal.Rptr. 1, 791 P.2d 587.)

Since the complaint fails to plead malicious prosecution, and since the Supreme Court has so recently held that the cause of action relied upon by the majority does not exist, I conclude that the complaint fails to state a viable cause of action.

The majority seeks to distinguish the holding of Pacific Gas & Electric Co. by emphasizing the complaint's allegations of solicitation, rather than those of inducement to sue.  (Maj. opn., pp. 338–339.)   However, under the facts alleged here, I believe that the two cannot be fairly separated.   There is no substantial difference between an attorney advising a tenant, “Although you don't know it, you have valid claims against your landlord, and you ought to sue him.”   and telling the tenant, “Although you don't know it, you have valid claims against your landlord, and you ought to hire me to sue him.”   Both statements are exhortations to sue.   In both, the attorney is instigating litigation which otherwise would not have been filed.   The only distinction is that in the latter, the attorney is explicitly stating that which was implicit in the former.   I view that as a distinction without a difference.

C. PERMITTING A DEFENDANT TO SUE OPPOSING COUNSEL DURING THE PENDENCY OF THE UNDERLYING LITIGATION IS CONTRARY TO PUBLIC POLICY.

Even if the Supreme Court's recent pronouncements on this issue had not predetermined the proper outcome of this appeal, I would still oppose the creation of this new tort because of the serious practical consequences of allowing a defendant in a pending action to sue his opposing counsel.

In Pacific Gas & Electric Co., supra, the Supreme Court observed that what PG & E was really trying to achieve by barring Bear Stearns from participating in the lawsuit was “to abort the lawsuit by starving the litigant of funds.”   (50 Cal.3d at p. 1136, 270 Cal.Rptr. 1, 791 P.2d 587.)   If permitted, the court said, such a tactic “would defeat the purpose of assuring free access to the courts, and cause a flood of oppressive derivative litigation․”  (Ibid.)

Here, it appears that Rubin is trying to create the same adverse economic impact on the plaintiffs in the underlying action by forcing them to go to the expense of discharging their present law firm and attempting to retain new counsel.   While the majority assures the plaintiffs that they can continue to use the services of their original attorneys (maj. opn., p. 338), that promise is hollow because those attorneys will have a conflict of interest with those clients if this action is permitted to continue.   The attorneys owe their undivided loyalty to those clients.   How can they be expected to conform to that duty when their own potential liability to Rubin is directly proportional to their success in representing their clients against Rubin?   To minimize their own liability, they will be motivated either to withdraw from the case, or to urge their clients to drop the suit.   Either alternative exposes the conflict between the attorneys' interests and those of their clients.

The warning against unleashing floods of secondary litigation is also appropriate here.   Far from being limited to those situations in which counsel in the underlying action is actually guilty of wrongdoing, the new tort sanctioned by the majority is likely to be subjected to the same abuses as are motions to disqualify opposing counsel.  “[A]s courts are increasingly aware, motions to disqualify counsel often pose the very threat to the integrity of the judicial process that they purport to prevent.  [Citation.]  Such motions can be misused to harass opposing counsel [citation], to delay the litigation [citation], or to intimidate an adversary into accepting settlement on terms that would not otherwise be acceptable.  [Citations.]  In short, it is widely understood by judges that ‘attorneys now commonly use disqualification motions for purely strategic purposes․' ”  (Gregori v. Bank of America (1989) 207 Cal.App.3d 291, 300–301, 254 Cal.Rptr. 853, fns. omitted.)

Like motions for disqualification, the cause of action sanctioned by the majority is a mechanism by which a party can attempt to force his adversary to switch counsel.   Given the history of the abuse of such mechanisms, the majority's prediction that its new tort will “not limit[ ] or impede[ ] the individual litigant's access to the courts” is unconvincing.  (Maj. opn., p. 338.)

A civil litigant is free to discharge his attorney at any time.   However, we should not lightly allow that decision to be made by a person outside of that attorney-client relationship, particularly when that person is the opposing party in pending litigation.   Because of the potential for abuse, we should allow that opposing party to force a change in his adversary's choice of counsel for only the most compelling reasons.   In my judgment, the allegations of the complaint do not satisfy that requirement.

CONCLUSION

For all of these reasons, I believe that the demurrer was properly sustained, without leave to amend.   I would affirm the judgment of dismissal.

FOOTNOTES

1.   The fifth cause of action for an injunction to prevent harassment was the fourth cause of action in the original complaint.   The parties apparently considered it to be moot because Rubin's motion for a TRO and preliminary injunction had been denied.

2.   For purposes of this appeal, we shall not take judicial notice of matters outside the pleadings, as such notice is unnecessary to our decision.

3.   Business and Professions Code section 6152 provides in relevant part:“(a) It is unlawful for:“(1) Any person, in his individual capacity or in his capacity as a public or private employee, or for any firm, corporation, partnership or association to act as a runner or capper for any such attorneys or to solicit any business for any such attorneys ․ upon private property of any character whatsoever.”

4.   The dissent repeatedly states that we have concluded that Civil Code section 47, subdivision (b) conflicts with Business and Professions Code section 6152.  (Dis. opn. at pp. 344, 345, 346.)   Not so.   As expressed in the text, we conclude that each statutory provision has a separate purpose and underlying policy and that each provision is fully compatible with the other.

5.   Attorneys remain free to engage in constitutionally protected solicitation by mail (see, e.g., Shapero v. Kentucky Bar Assn. (1987) 486 U.S. 466, 108 S.Ct. 1916, 100 L.Ed.2d 475;  In re Primus (1978) 436 U.S. 412, 435–437, 98 S.Ct. 1893, 1906–1907, 56 L.Ed.2d 417, 436–437.)The dissent states that “a message delivered in person is no less communicative than the same message set to paper.”  (Dis. opn. at p. 347, fn. 3, emphasis added.)   However, the determinative issue is not whether an in-person solicitation is more or less “communicative” than a mailed solicitation.   Instead, the issue is whether, because an in-person solicitation is more likely to be accompanied by high-pressure tactics and fraud likely to overwhelm a consumer's free and independent judgment than is a mailed (and hence written) solicitation, a state's interest in preventing the possibility of such overreaching of consumers' wills sufficiently outweighs attorneys' First Amendment rights so as in turn to serve as the compelling basis upon which laws making such in-person solicitations unlawful may be upheld as constitutional.  (People v. Kitsis, supra, 77 Cal.App.3d Supp. at p. 6, 143 Cal.Rptr. 537.)

6.   The trial court's order granting the demurrer specified that the ground upon which its decision was based was the bar of section 47, subdivision (b)2, and did not state that it also relied upon the second ground raised by defendants, that Rubin had failed to state facts sufficient to constitute each of the four causes of action.   However, “if any ground stated in a demurrer is sustainable, the trial court's action is proper․  ‘ “It is the validity of the court's action in sustaining the demurrer which is here reviewable, and not the court's opinion or statement of reasons for its action.” ’ ”  (Gonzales v. State of California (1977) 68 Cal.App.3d 621, 627, 137 Cal.Rptr. 681, quoting Weinstock v. Eissler (1964) 224 Cal.App.2d 212, 225, 36 Cal.Rptr. 537, emphasis added by Gonzales court.)   We therefore must consider all grounds raised by defendants below to determine whether the judgment here may be affirmed.

7.   “As used in this article:  [¶] (a) A runner or capper is any person, ․ acting in any manner or in any capacity as an agent for an attorney at law, ․ in the solicitation or procurement of business for such attorney at law as provided in this article.  [¶] (b) An agent is one who represents another in dealings with one or more third persons.”   (Bus. & Prof.Code, § 6151 in effect during the time period of the alleged wrongful conduct.  Section 6151, subdivision (a), effective on January 1, 1992, adds to the definition of “runner” or “capper”:  one who acts “for consideration” in the solicitation of business for an attorney or law firm.)

8.   Civil Code section 1770 provides, in pertinent part:  “The following unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer are unlawful:  ․ [¶] (n) Representing that a transaction confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law.”

9.   Business and Professions Code section 17204 provided:“Actions for injunction pursuant to this chapter may be prosecuted by the Attorney General or any district attorney or any city attorney of a city having a population in excess of 750,000, and, with the consent of the district attorney, by a city prosecutor in any city or city and county having a full-time city prosecutor in the name of the people of the State of California upon their own complaint or upon the complaint of any board, officer, person, corporation or association or by any person acting for the interests of itself, its members or the general public.”  (Emphasis added.)

10.   The dissent states that:  “There is no private remedy for violations of the restrictions on solicitation contained in Business and Professions Code section 6152.”  (Dis. opn. at p. 346.)   It fails, however, to cite any authority for this proposition, and ignores the fact that a right and cause of action to enforce the right is found in section 17204 of the Business and Professions Code.

11.   It is noteworthy that the trial court here believed that Rubin's only remedy was to report defendant ELTH to the State Bar, and that in fact the trial court, though it denied Rubin's request for a temporary restraining order and preliminary injunction, warned the attorney for ELTH, “I would ask you to discuss the matter more with Mrs. Green, I think her name is, to tell her to tone down her activities a little bit in regards to what she says or does not say to the other tenants in that park.”

12.   Furthermore, the fact that Rubin's request for a temporary restraining order and preliminary injunction were denied does not foreclose him from seeking, and being granted, a permanent injunction.

13.   Defendants base their contention that damages are not available on Industrial Indemnity Co. v. Superior Court (1989) 209 Cal.App.3d 1093, 257 Cal.Rptr. 655.   In Industrial Indemnity, the plaintiffs sued their homeowners association's insurer for violation of Business and Professions Code sections forbidding unfair competition based on the insurer's violation of Insurance Code section 790.03 and for violation of Insurance Code section 790.03.   The insurer contended that neither cause of action was viable, and moved for summary judgment, which was denied.   The insurer filed a petition for a writ of mandate to compel the trial court to grant its motion for summary judgment, and the reviewing court issued a peremptory writ, holding that after Moradi–Shalal v. Fireman's Fund Ins. Companies (1988) 46 Cal.3d 287, 250 Cal.Rptr. 116, 758 P.2d 58, no private right of action based on a section 790.03 violation exists for either insureds or third parties such as plaintiffs.   Although the reviewing court stated that the plaintiffs could not recover damages in their action based on Business and Professions Code section 17203, it also noted, as do we, that in Committee on Children's Television, Inc. v. General Foods Corp., supra, 35 Cal.3d 197, 215, 197 Cal.Rptr. 783, 673 P.2d 660, the California Supreme Court left open the issue of whether private litigants could recover damages in an action brought pursuant to the unfair competition provisions of the Business and Professions Code, and then pointed out that nonetheless, after Moradi–Shalal, there was no private right to bring such an action if it was based on violations of Insurance Code section 790.03.  (See also Safeco Ins. Co. v. Superior Court (1990) 216 Cal.App.3d 1491, 1493–1494, 265 Cal.Rptr. 585, holding that to allow an action under Business and Professions Code section 17200 et seq. to be based on violations of Insurance Code section 790.03 would render Moradi–Shalal meaningless.   Because the reviewing court concluded that plaintiffs could not bring an action under Business and Professions Code section 17203, its statements as to plaintiffs' right to recover damages under such a cause of action are simply dicta and, in any event, limited to insurers.)

14.   The former provisions of Civil Code section 3369 are now contained in Business and Professions Code sections 17200 (subd. (3)), 17201 (subd. (4)), 17202 (subd. (1)), 17203 (subd. (2)), 17204 (subd. (5)), and 17205 (subd. (6)).  (See Hist. and Stat.Notes to Civ.Code, § 3369.)

15.   The Legislature, by enacting Business and Professions Code section 17205, expressly sanctioned the use of other theories for obtaining relief from the wrongful conduct which constitutes the basis for an action pursuant to Business and Professions Code section 17204.  Section 17205 provides that “Unless otherwise expressly provided, the remedies or penalties provided by this chapter are cumulative to each other and to the remedies or penalties available under all other laws of this state.”  (See, e.g., People v. McKale (1979) 25 Cal.3d 626, 633, 159 Cal.Rptr. 811, 602 P.2d 731;  Balboa Ins. Co. v. Trans Global Equities (1990) 218 Cal.App.3d 1327, 1342, 267 Cal.Rptr. 787:  “In a proper case, the same conduct may support relief under multiple theories.”)

16.   Solicitation is an unlawful act which may be enjoined regardless of whether the solicitation is successful in snaring a client.   (Hutchins v. Superior Court (1976) 61 Cal.App.3d 77, 88, 132 Cal.Rptr. 158.)   However, in the context posed by the dissent, i.e., that an action based on unlawful solicitation may be used to harass the clients of the attorneys accused of solicitation, only those cases in which the solicitation was successful are relevant.

17.   We say almost absolute, because the dissent does not contest the fact that there is at least the possibility of criminal (Bus. & Prof.Code, § 17204) or disciplinary action (Rules Prof.Conduct, rule 1–400(B), (C);  see also, e.g., Belli v. State Bar (1974) 10 Cal.3d 824, 833, 837–838, 112 Cal.Rptr. 527, 519 P.2d 575) being taken against attorneys who unlawfully solicit clients.   Practically speaking, however, we believe that the likelihood of such prosecution in any given case by the government or the State Bar is slight, given the pressure on the charging and prosecuting authorities to handle a wide (and deep) array of relatively more serious matters.

1.   The majority takes issue with this contention.  (Maj. opn, p. 341, fn. 10.)   It argues that Business and Professions Code section 17204, by stating that any person may sue to enjoin unfair competition, indirectly establishes a private tort right of action to enforce Business and Professions Code section 6152 since unfair competition is defined to include unlawful business practices (Bus. & Prof.Code, § 17200).   I remain unpersuaded, for two reasons.First of all, section 17204 refers solely to actions for injunctive relief.   Accordingly, any cause of action created thereby is strictly prospective;  it is preventive in nature, rather than remedial.   There is no authority for a private cause of action to remedy past acts of solicitation in violation of section 6152.Moreover, even assuming that a private party is authorized by section 17204 to bring an action to enjoin future violations of section 6152, it does not follow that such a cause of action is not subject to the litigation privilege.   By the majority's own analysis, that issue is determined by deciding which of the two competing statutory provisions is more general.   The majority apparently concludes that Civil Code section 47, subdivision (b)(2), which expressly grants tort immunity to publications made in judicial proceedings, is more general than the “broad, sweeping language” (Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 112, 101 Cal.Rptr. 745, 496 P.2d 817) of Business and Professions Code section 17200, which imposes tort liability for any “ ‘scheme ․ which on its face violates the fundamental rules of honesty and fair dealing․’ ”  (Barquis, supra, at p. 112, 101 Cal.Rptr. 745, 496 P.2d 817.)   I do not agree.   In my view, the latter is far more general, and thus any civil liability which it creates is subject to the defense of the immunity specifically provided by Civil Code section 47.

2.   In Pacific Gas & Electric Co., a water agency, the plaintiff in the underlying action, had sued PG & E for declaratory relief, seeking a declaration that it was entitled to terminate its long-term contract with PG & E.   In its action against Bear Stearns, PG & E alleged that Bear Stearns had induced the agency to file suit by paying “for legal, engineering, and marketing studies on the feasibility of terminating the power contract,” as well as paying half of the agency's attorney's fees.   (50 Cal.3d at p. 1124, 270 Cal.Rptr. 1, 791 P.2d 587.)

3.   The majority emphasizes that it is only “in-person solicitation” which it is exempting from the protection of the litigation privilege, and that an attorney is still free to solicit by mail.  (Maj. opn., p. 338, fn. 5.)   Apparently, it views the former as conduct, while the latter is communication.   However, a message delivered in person is no less communicative than the same message set to paper.Significantly, the majority's characterization of in-person solicitation as conduct rather than communication is precisely opposite the treatment of the subject in the Rules of Professional Conduct of the State Bar of California.   Those rules expressly define solicitation, including solicitation “delivered in person or by telephone,” to be a form of communication.  (Rules Prof.Conduct, rule 1–400(B)(2)(a).)Similarly, the distinction proposed by the majority is contrary to the statutory scheme to which the litigation privilege belongs.   As noted above, Civil Code section 47 defines “privileged publication” as that term is used in Civil Code sections 45 and 46, concerning libel and slander, respectively.   Thus, the privilege is obviously intended to apply to both written and oral publications.   Therefore, solicitation cannot be outside the scope of that definition merely because it is “in-person” and oral, rather than written.

4.   While Pacific Gas & Electric Co. deals specifically with only two of the four causes of action which Rubin attempts to assert here, the reasoning of the Supreme Court applies equally to the other two as well, since all four are based on the defendants' alleged inducement of an unmeritorious lawsuit.

5.   Although separately stated, probable cause and prior favorable termination are just two elements of the same prerequisite.   The requirement of a favorable termination of the prior action is used as a threshold indicator of the lack of probable cause, without which the courts will not even consider the issue.  “[T]he rule tends to eliminate unnecessary litigation,” because a judgment adverse to the defendant in the prior action “operates to establish conclusively that the plaintiff had probable cause.”  (Babb v. Superior Court, supra, 3 Cal.3d at p. 847, 92 Cal.Rptr. 179, 479 P.2d 379.)

TIMLIN, Associate Justice.

DABNEY, Acting P.J., concurs.