Medley Capital Corp. v. Security National Guaranty, Inc.
Annotate this CaseThe underlying suit involved a loan foreclosure. The borrowers filed a cross-complaint against MCC, alleging fraud, despite being advised MCC had no involvement in the transaction involved in the lawsuit. The borrowers mistakenly identified MCC as an agent of the lender and a loan servicer and continued the lawsuit despite being warned that it should be dismissed. After the borrowers settled the main lawsuit against them, they filed a voluntary dismissal in favor of MCC. MCC then sued the borrowers for malicious prosecution. The borrowers filed an anti-SLAPP motion (Code of Civil Procedure 425.16(b)(1)) to dismiss. The court of appeal affirmed the denial of the motion, concluding that MCC met its burden under step two of the anti-SLAPP analysis, demonstrating a probability of success on its claim for malicious prosecution. There was no evidence of any research done before filing the cross-complaint seeking $300 million in damages; the borrowers were notified no fewer than four different times that MCC was the wrong entity to sue.
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