The New Assault Against Malicious Prosecution
by Wendy Gordon Carroll
(County Bar Update, October 2000, Vol. 20, No. 9)


The New Assault Against Malicious Prosecution

By Wendy Gordon Carroll. Carroll is vice president of Cambridge Integrated Services Group, Inc., an affiliate of Aon Corporation, and has managed more than 4,000 legal malpractice cases.

The Anti-SLAPP Statute

Although malicious prosecution is generally considered to be a disfavored derivative tort, attorneys and their clients continue to be the target of malicious prosecution claims.

In Los Angeles County and surroundings areas, malicious prosecution is becoming the leading claim asserted against attorneys. It seems that successful defendants are no longer satisfied with a civil verdict; they want to punish the perceived perpetrator for their time and money invested in defending the action. They feel they have nothing to lose by seeking vindication in a malicious prosecution case.

The explosion of malicious prosecution actions is fueled by the growing trend of legal professionals willing to sue other attorneys without reservation.

The proliferation of malicious prosecution cases is expensive for both carriers and insureds. Judicial reluctance to resolve cases by summary judgment drives up the cost of defending malicious prosecution cases. Further, California Insurance Code Section 533 precludes indemnity coverage for malicious prosecution cases, thus exposing the defendant insured's personal assets (Downey Venture v. LMI Ins. Co. (1998) 66CA 4h 478,498).

There is, however, a new development that may impact the filing of malicious prosecution cases.

Historically, to extricate a defendant from a malicious prosecution lawsuit, the defending attorney would need to file a motion for summary judgment to establish that one or more elements of the cause of action cannot be met.

But it's now possible to resolve the malicious prosecution case early on by a motion to strike pursuant to California Code of Civil Procedure § 425.16, California's anti-SLAPP (Strategic Lawsuit Against Public Policy) statute.

In 1994, the California Legislature enacted the anti-SLAPP statute because it recognized that "there has been a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for redress of grievances" (Code Civ.Proc. § 425.16, Subd.(a).) Since California enacted § 425.16, there have been a number of "derivative tort" actions including malicious prosecution and abuse of process cases, which have been dismissed pursuant to § 425.16.

§ 425.16 and the litigation privilege of Civil Code Section 47(b) work together to protect litigants from retaliatory lawsuits that impair the pursuit of "colorable claims." (See, e.g., Rubin v. Green(1993) 4 Cal.4th 1187, 1198.) The litigation privilege, however, does not provide protection against a cause of action for malicious prosecution. The dissenting opinion in Briggs v. Eden Council for Hope & Opportunity(1999) 19 Cal.4th 1106, confirmed that a majority of our Supreme Court interprets § 425.16 as intended to "supplant Civil Code Section 47, subdivision (b)'s absolute litigation privilege for communications made in any legislative, judicial, or other official proceeding authorized by law." (See Briggs, supra, 19 Cal 4th at p. 1136 (dis. opn. of Baxter, J.).)

Should there be any question as to whether counsel for litigants are protected by § 425.16, the Briggscourt also explained that the statute is available to participants in litigation -- including legal advisors -- who exercise their freedom of expression and facilitate their clients' constitutional right to petition for redress of grievances. (Briggs, supra,19 Cal.4th at p. 1110 [defendants allegedly "gave [a potential litigant] maliciously false advice in connection with [landlord-tenant action]"]; Lafayette Morehouse, Inc. v. Chronicle Publishing Co. (1995) 37 Cal App.4th 855, 863.)

The policies underlying § 425.16 are implemented by a special motion to strike that requires the plaintiff to produce evidence showing it will likely prevail in its action. To satisfy this mechanism, plaintiff "must make a prima facie showing [verified under oath] which would, if proved at trial, support a judgment in [its] favor." (Wilcox v. Superior Court (1994) 27 Cal. App.4th 809, 823.) The special motion to strike must be granted "if the evidence introduced either negates or fails to reveal the actual existence of a triable claim." (Ludwig v. Superior Court (1995) 37 Cal.App.4th 8, 15, citing College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 719.) § 425.16 therefore operates like a summary judgment "in reverse" -- with the burden on plaintiff to demonstrate under oath a "reasonable probability of success." (See College Hospital, supra, at pp. 718-719.)

Plaintiff must therefore present evidence to satisfy three primary elements of the malicious prosecution cause of action:

1) Probable Cause -- The California Supreme Court employs an objective test for determining probable cause, i.e., whether based on the facts upon which the attorney acted would lead a reasonable attorney to believe that the action was tenable. (Sheldon Appel Co. supra,47 Cal.3d at p. 878). This element is decided as a question of law by the court. The attorney defendant and the client may not be aligned on this element if the client asserts the "advice of counsel" defense. This defense waives the attorney-client privilege regarding communications between the client and the attorney on the advice given and relied on.

2) Malice -- Plaintiff must plead and prove either ill will or some ulterior purpose distinct from that of enforcement of the alleged cause of action. (5 Witkin, Summary of California Law 9th Ed 1988 § 450 p. 534, citing Restatement 2d. Torts, 676.) This element is a question of fact.

3) Favorable Termination -- It calls for a termination reflecting on the merits of the action and the plaintiff's innocence of the misconduct alleged. (Lackner v. LaCroix 1979) 25 Cal.3d 747, 750-751; Pattiz v. Minye, 61 Cal.App.4th 826-827.) When the termination of the proceeding does not obviously reflect on the merits, the court must examine the reasons for termination to see if the disposition reflects the opinion of the court or the prosecuting party that the action would not succeed. If resolution of the underlying action leaves a residue of doubt about the plaintiff's innocence or liability, it is not a favorable termination sufficient to support a cause of action for malicious prosecution. ( p. 827.)

Attorney Fees

  Under the anti-SLAPP statute, if the attorney defendant is the prevailing party, the defendant attorney is entitled to his or her attorney fees and costs pursuant to CCP § 425.16.(c). On the other hand, even if the plaintiff is able to overcome the motion by demonstrating a "reasonable probability" of success or the merits, plaintiff may recover fees only if the motion was frivolous. (Ibid.)

Right to Immediate Appeal

In 1997, the legislature also granted the SLAPP-Defendant the right of immediate appeal if the motion is denied -- effectively staying proceedings in the trial court until the probable merits of the claim are determined by a higher court. (CCP § 425.16(j.).)

  Avoiding Malicious Prosecution Claims

  Although the anti-SLAPP legislation can help limit the expenses incurred in defending malicious prosecution cases, attorneys need to avoid becoming targets of malicious prosecution claims in the first place. Attorneys may reduce their exposure by considering the following:

1) Screen prospective clients before accepting a case.

2) Document facts supporting the client's claim. Have the client confirm any questionable facts in writing.

3) Document any legal analysis and maintain copies of research and memos.

4) Consult with an expert if the area of law is outside the attorney's expertise.

5) Ensure communications remain professional and courteous. Acrimonious and threatening letters could be found as evidence of malice. Write all letters as if they were going to be read to a jury.

6) Limit pleadings to theories that are supportable under the facts known to the attorney. Amend the complaint if additional theories can be supported by ensuing discovery.

7) Avoid naming peripheral parties or any party where there is insufficient legal and factual basis for naming such a party.

8) Dismiss parties or claims in exchange for waiver of costs and a mutual release. Dismissing a claim or party without prejudice may or may not be deemed a favorable termination and is a question of fact. The opposing party will have the burden of proving that the termination was favorable. See Haight v. Handweiter (1988) 199 Cal.App. 3d 85.

9) Continue to evaluate the merits during the pendency of the action.

Consideration of the above factors may help eliminate your exposure to malicious prosecution claims.


This article is brought to you by Aon Attorneys' Advantage, the LACBA Sponsored Lawyers Professional Liability Insurance Program.

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