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April 18, 2001

Videotape Plus, Inc. v. Lyons (2001) 89 Cal.App.4th 156

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Probable cause must support even “superfluous” causes of action to avoid potential malicious prosecution liability.

Dubs, Inc. (“Dubs”) sued Videotape Plus, Inc., (“Videotape”) alleging a conspiracy with a Dubs’ supervisor to steal videotapes from Dubs’ warehouse.  Dubs’ complaint asserted causes of action for conversion, fraud, and negligence.  After Videotape obtained summary judgment, the appellate court reversed dismissal of the conversion action. Dubs’ complaint eventually was dismissed as a sanction for Dubs’ discovery abuses.

Videotape then filed a malicious prosecution action against Dubs, its owner, and its attorney alleging that the complaint lacked probable cause for the fraud and negligence claims.  Videotape asserted that it never owed Dubs any duties of disclosure or care, and that Dubs alleged negligence only to get an insurer to contribute to a settlement.

In granting Dubs’ motion for judgment on the pleadings, the trial court agreed with Dubs’ argument that probable cause for the conversion claim was sufficient to insulate the entire lawsuit.  The trial court viewed the fraud and negligence claims as alternative theories of recovery that “added nothing” to the conversion claim and so were “superfluous counts.”  The court reasoned that if conversion was shown, neither reasonable care nor honesty would have protected Videotape.  Similarly, if the tapes were not stolen, Videotape would not have been liable under any theory.

The court of appeal reversed and reiterated the rule of Crowley v. Katleman (1994) 8 Cal.4th 666 that probable cause must support each cause of action.  Although surviving summary judgment ordinarily means a cause of action was supported by probable cause, the court’s prior reversal of summary judgment on the conversion claim implied nothing about the fraud and negligence claims.

The appellate court also rejected defendants’ resort to the “primary right” theory that a properly pleaded cause of action premised on a single primary right may state multiple grounds of liability.

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