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self-study / Civil Practice

Nov. 9, 2022

Selected issues in malicious prosecution cases

Although it is frequently stated that actions for malicious prosecution are not favored by the law, this should not be used to deny a legitimate cause of action. So it is stated that the courts "should not be led so astray by the notion of a 'disfavored' action as to defeat the established rights of the plaintiff." (Jaffe v. Stone (1941) 18 Cal.2d 146, 159.)

In the words of the California Supreme Court: "The malicious commencement of a civil proceeding is actionable because it harms the individual against whom the claim is made, and also because it threatens the efficient administration of justice. The individual is harmed because he is compelled to defend against a fabricated claim which not only subjects him to a panoply of psychological pressures most civil defendants suffer, but also to the additional stress of attempting to resist a suit commenced out of spite or ill will, often magnified by slanderous allegations in the pleadings." (Bertero v. National General Corp. (1974) 13 Cal. 3d 43, 50-51.) The judicial process is adversely affected by a malicious prosecution cause not only by the clogging of already crowded dockets but by the unscrupulous use of the courts by individuals as instruments within which to maliciously injure their fellow man. (Id. at 51.)

Each of the following elements must exist for the plaintiff to prevail on a claim for malicious prosecution:

1. The prior action was commenced by or at the direction of the defendant and was pursued to a legal termination in the plaintiff's favor;

2. The defendant lacked objective probable cause to bring the original action;

3. The defendant must have initiated the original action with subjective malice;

4. The malicious prosecution action was a substantial factor in causing the plaintiff to suffer damages.

Final and Favorable Termination

There must be a final termination of the action before a malicious prosecution action can be brought. All time for appeals, motions for rehearing, new trial and the like must have run before an action for malicious prosecution may be filed. In addition to being a final termination of the underlying case, it must be favorable to the defendant in the underlying litigation. "Favorable termination" means more than showing simply that the malicious prosecution plaintiff prevailed in the underlying action. It is not necessary for the defendant in the prior case to be exonerated after a trial on the merits. But the termination must reflect favorably on the defendant's innocence. If the termination does not relate to the merits of the termination, such as a dismissal on technical or procedural grounds, it is not favorable in the sense that it would support a subsequent action for malicious prosecution. (Maleti v. Wickers (2022) 82 Cal. App. 5th 181; Casa Herrera, Inc. v. Beydoun (2004) 32 Cal. App. 4th 336; Lackner v. LaCroix (1979) 25 Cal. 3d 247, 250.)

A voluntary dismissal of the prior action, even one without prejudice, will generally constitute a favorable termination which will support an action for malicious prosecution, unless it was the result of a settlement or compromise. In most cases, a unilateral dismissal is considered to be a termination in favor of the defendant in the underlying action. The dismissal may be viewed as an implicit concession that the dismissing party cannot maintain the action and may constitute a decision on the merits. But it is not enough merely to show that the proceeding was dismissed; the reason for the dismissal of the action must be examined to determine whether the termination is reflected on the merits. (Maleti v. Wickers (2022) 82 Cal. App. 5th 181.)

Some of the other terminations of an action that are deemed favorable to the defendant in the underlying action include:

By summary judgment that reflects on the merits of the claim.

A dismissal for failure to prosecute reflects on the merits of the action, a natural assumption being that one does not simply abandon a meritorious action once instituted.

A plaintiff's decision not to amend a pleading to reallege one or more causes of action after a demurrer to those claims is sustained on substantive grounds with leave to amend may, upon a proper showing, constitute a favorable termination on the merits of the abandoned claim.

After a judgment of nonsuit because the plaintiff failed to designate an expert on causation.

Where the court dismissed the underlying action because the claims were barred by the litigation privilege.

A dismissal resulting from negotiation, settlement or agreement is generally not deemed a favorable termination of the proceedings because of its ambiguity. A termination based upon the action being barred by the statute of limitations is deemed technical or procedural as distinguished from a substantive termination.

Final and favorable termination of the action must be distinguished from the lack of probable cause element of the tort of malicious prosecution. Whether a prior action was terminated favorably tends to show the innocence of the defendant in the underlying action, an issue not affected by the objective tenability of the claim.

The plaintiff may pursue a claim for malicious prosecution where one theory in an underlying multi-claim action was pursued without probable cause and with malice, even though there was probable cause to pursue other theories. A defendant cannot escape liability for the malicious prosecution of an unjustified claim by joining it with a justified claim. (Citizens of Humanity, LLC v. Ramirez (2021) 63 Cal. App. 5th 117, 128; Albertson v. Raboff (1956) 46 Cal. 2d 375, 385; Mabie v. Hyatt (1998) 61 Cal. 4th 581, 592.)

Where a malicious claim is only one of multiple claims, the plaintiff need not show that all claims were resolved on the merits as long as at least one claim was terminated on the merits. But favorable termination requires favorable resolution of the underlying action in its entirety, not merely a single claim. If the plaintiff in the original action succeeds on any of his or her claims, the favorable termination element is not satisfied and the malicious prosecution action cannot be maintained. (Citizens of Humanity, LLC v. Ramirez (2021) 63 Cal. App. 5th 117, 128.) The fact that a malicious prosecution suit may be maintained where only one of several claims in the prior action lacked probable cause does not alter the rule that there first must be a favorable termination of the entire action. (Crowley v. Katleman (1994) 81 Cal. 4th 666, 686.)

Lack of Probable Cause

The element of probable cause calls on the trial court to make an objective determination whether, on the basis of the facts known to the defendant, the institution of the prior action was legally tenable. Whether one has probable cause to file an action is determined by that person's knowledge at the time the original or an amended complaint is filed, not by knowledge that is acquired at a later time. As one court observed, "a litigant cannot be permitted to file a suit based merely on a wing and a prayer and then be retroactively justified by some serendipitous discovery." (Williams v. Coombs (1986) 179 Cal. App. 3d 626, 632 fn. 4.)

The probable cause element of a malicious prosecution action requires an objective determination of the "reasonableness" of the defendant's prior lawsuit, i.e., whether, on the basis of the facts known to the defendant and fully disclose to the attorney, any reasonable attorney would have objectively believed the institution of the prior action was legally tenable. If so, the prior action was objectively reasonable, and the malicious prosecution defendant is entitled to prevail regardless of what his subjective intent or belief in bringing the prior action may have been. (Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal. 3d 863, 875, 886; Mabie v. Hyatt (1998) 61 Cal. App. 4th 581, 594.)

The resolution of probable cause or lack thereof is a question of law that calls for the application of an objective standard to the facts on which the defendant acted. Because the tort of malicious prosecution is intended to protect an individual's interest in freedom from unjustifiable and unwarranted litigation, if the trial court determines that the prior action was objectively reasonable, the plaintiff in the malicious prosecution action has failed to meet the threshold requirement of demonstrating an absence of probable cause and therefore defendant is entitled to prevail. Sheldon Appel Co. v. Albert & Oliker 47 Cal.3d 863, 878.

Probable cause to bring an action does not depend upon it being meritorious, as such, but it being arguably tenable, i.e., not so completely lacking in apparent merit that no reasonable attorney would have thought the claim tenable. A litigant will lack probable cause for his action either if he relies upon facts which he has no reasonable cause to believe to be true, or if he seeks recovery upon a legal theory which is untenable under the facts known to him.

Probable cause may be established by the defendant in a malicious prosecution proceeding when they prove that they have in good faith consulted a lawyer, have stated all the facts to the attorney, have been advised by the lawyer that they have a good cause of action, and have honestly relied and acted upon the opinion and advice of the lawyer. (Mabie v. Hyatt (1998) 61 Cal. 4th 581; Sosinsky v. Grant (1992) 6 Cal. App. 4th 1548, 1556.) It is irrelevant whether the lawyer's analysis or advice is correct or not: "There can be no imputation to a client of his attorney's misconceived legal analysis so as to void the client's good faith reliance on his counsel's advice." (Brinkley v. Appleby (1969) 276 Cal. App. 2d 244, 247.)

Attorney's Liability

As noted above, probable cause to bring the action is based on whether any reasonable attorney would have believed the institution of the prior action was legally tenable. In Tool Research & Engineering Corp. v. Henigson ((1975) 46 Cal. App. 3d 675, 682-83.), the court held that an attorney has probable cause to represent a client in litigation where, after a reasonable investigation and industrious search of legal authority, the attorney has an honest and good faith belief that the client's claim is tenable in the forum in which it is to be tried. ((1975) 46 Cal. App. 3d 675, 682-83.) Courts held that under Tool Research & Engineering Corp. a malicious prosecution plaintiff could establish a lack of probable cause simply by showing that its former adversary's attorney failed to perform reasonable legal research or factual investigation before filing a claim on his or her client's belief. (See, e.g., Williams v. Coombs (1986) 179 Cal. App. 3d 626, 640-44; Weaver v. Superior Court (1979) 95 Cal. App. 3d 166, 188-90.)

This inquiry was ruled irrelevant to the attorney's probable cause by the Supreme Court in Sheldon Appel Co. v. Albert & Oliker (supra, 47 Cal.3d 863). The high court therein stated that an attorney's duty of care runs primarily to his or her own client rather than to the client's adversary, and which, on the basis of important policy consideration, precludes the adversary from maintaining a negligent cause of action against its opponent's attorney. In Sheldon Appel Co., the court reasoned that allowing inadequate research to serve as an independent basis for proving the absence of probable cause on the part of an attorney would tend to create a conflict of interest between the attorney and his or her client. A cautious attorney would be tempted to create a record of diligence by performing extensive legal research, not for the benefit of his or her client, but rather simply to protect himself or herself from the client's adversary in the event the initial suit fails. (Id. at 883.) If the trial court determines that the prior action was not objectively tenable, the extent of a defendant's attorney's investigation and research may be relevant to the question of whether or not the attorney acted with malice.

The attorney's subjective belief in the legal tenability of the prior action is not a necessary element of probable cause. However, if the trial court concludes that the prior action was not objectively tenable, evidence that the defendant's attorney did not subjectively believe that the action was tenable would clearly be relevant to the question of malice. Inasmuch as an attorney who does not have a good faith belief in the tenability of an action will normally assume that a court will come to the same conclusion, the malicious prosecution tort will continue to deter attorneys from filing actions which they do not believe are legally tenable.

If the issue which the attorney is called upon to decide is fairly debatable, "then under his [or her] oath of office, he [or she] is not only authorized but obligated to present and urge his [or her] client's claim upon the court. And if it subsequently is determined that the position honestly taken by the attorney was erroneous he [or she] shall be relieved from responsibility." Brinkley v. Appleby (1969) 276 Cal. App. 2d 244, 247.

To establish malice for both liability and punitive damages, personal hostility or ill will need not be shown; the absence of an honest and sincere belief in the validity of the claim is sufficient. To establish malice for both liability and punitive damages, personal hostility or ill will need not be shown; the absence of an honest and sincere belief in the validity of the claim is sufficient. Bertero v. National General Corp. (1974) 13 Cal. 3d 43, 66.

If the trial court concludes that the prior action was not objectively tenable, evidence that the defendant attorney did not subjectively believe that the action was tenable would be clearly relevant to the question of malice. Inasmuch as an attorney will normally assume that a court is likely to come to the same conclusion, the malicious prosecution tort will continue to deter attorneys from filing actions which they do not believe are legally tenable. Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal. 3d 863, 881-82.

Expert legal testimony is not permitted on the issue of whether any reasonable attorney would conclude that the claim advanced in the prior action was tenable, it being thoroughly established that such matter is essentially within the province of the court to decide. If there is a factual dispute, then such factual dispute is up to the jury to resolve. But if there is no factual dispute, or the jury determines the facts, it is a question of law for the trial court to determine if there was probable cause as a matter of law.

Damages Recoverable

A successful plaintiff in a malicious prosecution case is entitled to recover:

The cost of defending the prior action, including reasonable attorney's fees and court costs;

Compensation for injury to his or her reputation or impairment of social and business standing;

Mental or emotional distress; and

Punitive damages.

Bertero v. National General Corp. (1974) 13 Cal.3d 43, 50-51.

Where the underlying case involved malicious actions with substantiated actions, the plaintiff does not have the burden of showing that his or her damages were specifically attributed to the malicious prosecution as opposed to the prosecution which was not malicious. (Albertson v. Raboff (1956) 46 Cal. 2d 375, 385; Singleton v. Perry ((1955) 45 Cal. 2d 389, 498; Mabie v. Hyatt (1998) 61 Cal. App. 4th 581, 592.)

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