Cross-defendants, Financial Indemnity Company (Financial), Allstate Insurance Company (Allstate), Dennis B. Kass, and Manning & Marder, Kass, Ellrod, Ramirez (the Manning law firm), appeal from orders denying special motions to strike the third amended cross-complaint of Naum “Neil” Shekhter pursuant to Code of Civil Procedure[1] section 425.16 and conditionally granting a motion to compel arbitration.  The present lawsuit arises out of a prior action commenced by Financial against Mr. Shekhter.  Financial was represented by Mr. Kass and the Manning law firm in the prior litigation.  Mr. Kass and the Manning law firm commenced the present litigation against Mr. Shekhter.  In the published portion of this opinion, we address the application of a section 425.16 special motion to strike to a single cause of action in a multi-count cross-complaint to attorneys who provide legal representation in a prior lawsuit.  We conclude a section 425.16 special motion to strike can apply under the circumstances of this case to an individual cause of action and one brought against lawyers who provided representation in a prior lawsuit. 

            Appellants denied the allegations, claiming they bought the videotapes in good faith from the supervisor.  They propounded discovery to learn what evidence supported Dubs’s claims.  Dubs repeatedly thwarted appellants’ discovery efforts, requiring appellants to obtain orders to compel, which Dubs refused to honor.  Appellants thereafter moved for summary judgment, arguing Dubs had no evidence to support its allegations.  Following appellants’ motion, Dubs dismissed its negligence claim with prejudice and the trial court granted summary judgment dismissing the conversion and fraud claims.

Dubs appealed from the judgment against it.  In an unpublished decision, we affirmed dismissal of the fraud cause of action, but reversed dismissal of the conversion cause of action and remanded for further proceedings.  (Dubs, Inc. v. Videotape Plus, Inc. et al. (B118053 Jan. 7, 1999) [Armstrong, J., Turner, P.J. and Godoy Perez, J. conc.].)

After remand, Dubs continued to refuse appellants’ legitimate discovery requests.  On the trial’s first day, the court suspended proceedings and ordered Dubs to produce two witnesses for deposition.  Dubs did not, however, comply with the order:  one witness did not appear and the second witness improperly terminated her deposition after less than one hour of testimony.  Based on Dubs’s willful misconduct, the trial court issued terminating sanctions in July 1999 for Dubs’s discovery abuses.

Four months later, appellants filed their malicious prosecution complaint against respondents.  Appellants alleged Dubs’s lawsuit against them was maliciously prosecuted because Dubs lacked probable cause for the fraud and negligence causes of action.  Appellants asserted the negligence claim was meritless as a matter of law because they owed no duty of care to Dubs;  according to appellants, Dubs included the claim solely to trigger liability insurance coverage which would generate settlement proceeds.  Appellants argued the fraud claim was meritless because appellants owed Dubs no duty of disclosure.

Respondents moved for judgment on the pleadings.  They argued our prior reversal of the summary dismissal of Dubs’s claim for conversion established probable cause for Dubs’s lawsuit as a matter of law.  The trial court agreed, and dismissed appellant’s malicious prosecution complaint.  In its ruling, the court apparently relied on our previous opinion in which we found that it was undisputed appellant Videotape Plus, Inc., had bought videotapes from a Dubs’s supervisor.  Coupling our conclusion with the law of conversion, the trial court concluded that if the supervisor had stolen the videotapes from Dubs before selling them, conversion occurred as a matter of law regardless of appellants’ possible good-faith in believing the sales were legitimate.  Describing the negligence and fraud claims as thus “add[ing] nothing” to the conversion claim, the court declared it was not malicious prosecution to add such “superfluous counts” because, according to the court, reasonable lawyers never plead only a single cause of action for a given set of facts, instead always pleading alternative theories to avoid malpractice claims.  It particularly would have been malpractice not to plead negligence here, the court held, since such a claim triggers insurance coverage that could help settle the lawsuit.  This appeal followed.

STANDARD OF REVIEW

            We review judgment on the pleadings under the same standard by which we review a trial court’s dismissal of a complaint after sustaining a demurrer.  (Inter-Modal Rail Employees Assn. v. Burlington Northern & Santa Fe Ry. Co., supra, 73 Cal.App.4th at p. 924;  Barker v. Hull, supra, 191 Cal.App.3d at p. 224.)  “ ‘We treat [a] demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.  [Citation.]  We also consider matters which may be judicially noticed.’  [Citation.]  Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.  [Citation.]  When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action.  [Citation.]  And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment:  if it can be, the trial court has abused its discretion and we reverse;  if not, there has been no abuse of discretion and we affirm.  [Citations.]  The burden of proving such reasonable possibility is squarely on the [appellant].”  (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)