Unreported / Non-Citable
Background
After earlier family litigation, Joseph Markowitz sued his brothers Saul and Philip in probate court in 2017 over property he claimed was due under family trusts. The trust litigation involved sales of the Sepulveda and Chevy Chase properties and Joseph's assertion that he did not discover the relevant allocation and commingling of assets until May 2018. Saul and Philip sought terminating and monetary sanctions under Code of Civil Procedure section 128.7. The probate court relied on Joseph's deposition testimony in the Elder Abuse Action, in which he testified that he knew as early as 2006 that Trusts B and C had not been established or funded, and on his possession of Rose Markowitz's 2014 affidavit in November 2014, to conclude that he knew or had reason to know of the commingling well before his pleaded discovery date. The court found the delayed-discovery allegations 'objectively unsupportable' and 'entirely disingenuous,' and noted that Joseph verified the third amended petition under penalty of perjury, making the allegations 'all the more egregious.' It granted terminating and monetary sanctions; Division Four affirmed in In re Markowitz Trust.
The probate court separately cited Joseph's November 12, 2014 declaration, which stated that Saul had commandeered bond funds held in the Trust, as evidence contradicting the TAP's allegation that Joseph first learned on or about June 16, 2015 that Saul improperly transferred funds from the Sepulveda property sale for his own use. Philip and Saul later filed separate malicious-prosecution complaints against Joseph in September 2022 and June 2023, respectively, based on the 2017 probate action. After the cases were consolidated, Joseph moved for summary judgment on the ground that termination based on the statute of limitations was not a favorable termination. His brothers disputed that characterization, arguing that the probate court had found them innocent and the action frivolous. The trial court granted Joseph's motion, explaining that the action was dismissed because Joseph alleged false facts in his third amended petition to circumvent the statute of limitations.
The Court’s Holding
The Court of Appeal reviewed the summary judgment ruling de novo and affirmed. It explained that malicious prosecution requires a termination reflecting the merits and the plaintiff's innocence of the alleged misconduct; prevailing through a technical or procedural termination, including a limitations dismissal, is insufficient. Although this dismissal was imposed as a section 128.7 terminating sanction, the court examined the circumstances rather than treating the sanction label as dispositive. It concluded that the sanction addressed demonstrably false verified allegations intended to plead around the limitations defense, not the substantive merits of Joseph's underlying trust claims.
The court identified two defects in the brothers' contrary argument. They did not identify a probate-court finding that the particular underlying allegations of their wrongdoing were false, and the isolated statements about sale proceeds, bonds, and Saul's use of bond funds did not come with a cogent explanation of how they vindicated the brothers. The prior description of the petition as factually and legally frivolous did not itself establish innocence, and Bucur, Contemporary Services Corp., and Ray were distinguishable. An argument first advanced at oral argument that the sanctions motion also attacked the substantive allegations was forfeited and unsupported by an adequate record. The probate court granted the sanctions because the delayed-discovery allegations were demonstrably false and Joseph failed to correct them within the safe harbor period. The court therefore found no triable issue regarding favorable termination, affirmed the judgment, and awarded Joseph his costs on appeal.
Key Takeaways
- A section 128.7 terminating sanction does not automatically establish the favorable termination required for malicious prosecution.
- The dispositive inquiry is whether the dismissal reflects the merits and the accused party's innocence, rather than merely the failure of a limitations-avoidance theory.
- The probate court found Joseph's delayed-discovery allegations false, but it did not find the particular underlying allegations of his brothers' wrongdoing false.
- A prior characterization of a petition as factually and legally frivolous did not, without a merits determination, prove the brothers' innocence.
- The brothers' new oral-argument theory was forfeited and also lacked an adequate record for appellate assessment.
Why It Matters
The decision applies favorable-termination doctrine by examining why a sanctions dismissal occurred, rather than treating either a terminating sanction or a frivolousness finding as conclusive. On this record, false allegations designed to overcome a limitations bar did not amount to a judicial determination that Saul and Philip were innocent of misappropriating trust property.
The affirmance resolved the malicious-prosecution claims at summary judgment on the favorable-termination element. It did not adjudicate the underlying trust misconduct or decide every possible sanctions-based termination; the court expressly made the circumstances surrounding the dismissal central to its analysis.