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MALICIOUS PROSECUTION

An intentional tort arising from the institutionor instigation of unjustifiable and unreasonable civil or criminallitigation. An action for malicious prosecution can be brought againstthe underlying case's plaintiff, plaintiff's counsel and/or advisors.

In one of California's leading cases its Supreme Court granted review inSheldon Appel "to consider a number of issues relating to the properdetermination of the probable cause element in a malicious prosecutionaction, including the question whether a plaintiff may establish anabsence of probable cause by proving that its former adversary'sattorney failed to perform adequate legal research before filing theprior action." (Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3dat pp.867-868.) To that end, the Court determined "that the mostpromising remedy for excessive litigation does not lie in an expansionof malicious prosecution liability" (id. at p. 873) and thus found itwas not "advisable to abandon or relax the traditional limitations onmalicious prosecution recovery." (Id. at p.874.) It was from thatperspective that the Court analyzed the specific questions presented inSheldon Appel.

First, the Supreme Court determined the issue of probable cause is onefor the court, not a jury. (Sheldon Appel, supra, 47 Cal.3d at pp.874-

877) Thus, where there are no disputed questions of fact relevant to theprobable cause issue, the matter may be determined by summary judgment(or on appeal by de novo review). Id. at pp.884-886.

Second, the Supreme Court determined that, where (as in Sheldon Appel)"the facts known by the attorney are not in dispute, the probable causeissue is properly determined by the trial court under an objectivestandard; it does not include a determination whether the attorneysubjectively believed that the prior claim was legally tenable."(Sheldon Appel, supra, 47 Cal.3d at p.881)

To avoid confusion, the Court "strongly emphasize[d]" that it did notmean to "suggest that an attorney who institutes an action which he doesnot believe is legally tenable is free from the risk of liability formalicious prosecution. If the trial court concludes that the prioraction was not objectively tenable, evidence that the defendant attorneydid not subjectively believe that the action was tenable would clearlybe relevant to the question of malice. Inasmuch as an attorney who doesnot have a good faith belief in the tenability of an action willnormally assume that a court is likely to come to the same conclusion,the malicious prosecution tort will continue to deter attorneys fromfiling actions which they do not believe are legally tenable.

"Furthermore, the probable cause element, as so defined, imposes noimproper or unjustified hardship on a malicious prosecution plaintiff.If a court finds that the initial lawsuit was in fact objectivelytenable, the court has determined that the fundamental interest whichthe malicious prosecution tort is designed to protect -- 'the interestin freedom from unjustifiable and unreasonable litigation' -- has notbeen infringed by the initial action. Under such circumstances, it isnot unfair to bar a plaintiff's suit for damages even if the plaintiffcan show that its adversary's law firm did not realize how tenable theprior claim actually was, since the plaintiff could properly have beenput to the very same burden of defending an identical claim if itsadversary had simply consulted a different, more legally astute,attorney. This is a classic case of 'no harm, no foul.'" (Sheldon Appel,supra, 47 Cal.3d at pp.881-882)

In reaching this conclusion, the Supreme Court discussed a number ofmalicious prosecution cases in which the attorney-defendants had beenspecifically charged with knowledge of the falsity of the claim assertedin the underlying action, e.g., Bertero v. National General Corp. (1974)13 Cal.3d 43, Franzen v. Shenk (1923) 192 Cal. 572, and Albertson v.Raboff (1956) 46 Cal.2d 375. As the Supreme Court put it in SheldonAppel, in each of those cases the "plaintiff's contention was that theprior action had been prosecuted 'with knowledge of the falsity of theclaim . . . .'" (Sheldon Appel, supra, 47 Cal.3d at p.880, incl fn. 8)

Moreover, the "fundamental interest" protected by the maliciousprosecution tort is "'freedom from unjustifiable and unreasonablelitigation." Sheldon Appel, supra, 47 Cal.3d at p. 882. For this reason,even under the subjective belief standard rejected in Sheldon Appel (thequestion used to be whether the attorney had an "honest belief" that hisclient's claim was tenable, e.g. Tool Research & Engineering Corp. v.Henigson (1975) 46 Cal.App.3d 675, 683), a jury verdict in the client'sfavor in the underlying case was "conclusive evidence of the existenceof probable cause even though subsequently reversed." (Cowles v. Carter(1981) 115 Cal.App.3d 350, 356.) That rule was based on the notion thatpersons who initiate civil proceedings should not thereafter besubjected to malicious prosecution litigation unless it could be shownthat they acted without probable cause -- and that if probable cause hadbeen determined by the trier of fact in the prior proceedings, it wasnot subject to reevaluation even when the jury's determination wasreversed. (Ibid; see also Gause v. McClelland (1951) 102 Cal.App.2d 762,764; Black v. Knight (1919) 44 Cal.App. 756, 770; Lucchesi v. Giannini &Uniack (1984) 158 Cal.App.3d 777, 785-788.)

The several references in Sheldon Appel to freedom from "unjustifiable"and "unreasonable" litigation suggests the continuing validity of therule that a prior determination of "probable cause" cannot be second-

guessed in a malicious prosecution action even where the judgment in theunderlying action is reversed on appeal. It follows necessarily thatwhere the record in the underlying action is equally complete (albeitwith a different ending), it constitutes all the evidence needed todetermine whether the underlying action was objectively tenable when itwas filed. Accordingly, there are no disputed facts concerning therecord in the underlying action, the trial court may by summary judgmentdetermine the probable cause issue, and the attorney's knowledge isentirely irrelevant.

After holding that an attorney's "reasonable" research and "industrious"investigation are legally irrelevant to the determination of probablecause, (Sheldon Appel, supra, 47 Cal.3d at pp.882-883), and that experttestimony is not admissible on the question of probable cause (id. at p.

884), the Supreme Court concluded with the articulation of a standardfor determining whether the underlying action was objectively tenablewhen filed.

In Sheldon Appel, supra, 47 Cal.3d at p. 868, the California SupremeCourt held that where "there is no dispute as to the facts upon which anattorney acted in filing the prior action, the question whether therewas probable cause to institute the prior action is purely a legalquestion, to be determined by the trial court on the basis of whether,as an objective matter, the prior action was legally tenable or not. Ifthe court determines that the prior action was not objectively tenable -- and thus concludes that the action was brought without probable cause-- evidence of the extent of an attorney's legal research may berelevant to the further question of whether the prior action wasinstituted with malice, but if the court finds that the prior action wasin fact tenable, probable cause is established -- and the maliciousprosecution action fails -- without regard to the adequacy or inadequacyof the attorney's legal research efforts."

Consideration of the actual holding of Sheldon Appel and of the reasonsthe Supreme Court adopted an objective standard persuade that therepeated references in the opinion to the attorney's knowledge wereincluded because, in the factual context of that case, reference to theattorney's knowledge was the only way to determine whether theunderlying action was objectively tenable when it was filed. Whereundisputed evidence establishes an objectively reasonable basis forinstituting the underlying action, a "dispute" about what the attorneyknew or did not know at the time she filed the underlying action isirrelevant.

The Court expressly rejected the more stringent "prudent attorney" test(where the question is whether a prudent attorney, after suchinvestigation of the facts and research of the law as circumstancesreasonably warrant, would have considered the action to be tenable onthe theory advanced), adopting instead the less stringent "reasonableattorney" formulation of In re Marriage of Flaherty (1982) 31 Cal.3d637, 650, the definition applied to court-imposed sanctions forfrivolous appeals "'to avoid a serious chilling effect on the assertionof litigants' rights. . . . Counsel and their clients have a right topresent issues that are arguably correct, even if it is extremelyunlikely that they will win . . . .'" Sheldon Appel Co. v. Albert &Oliker, supra, 47 Cal.3d at p.885, quoting In re Marriage of Flaherty,supra, 31 Cal.3d at p.650. As the Court put it, there is no "reason toafford litigants and their attorneys less protection from subsequenttort liability than [there] is to shield them from court-imposedsanctions within the initial action." Sheldon Appel Co. v. Albert &Oliker, supra, 47 Cal.3d at p.885.

Modified to the malicious prosecution context, the standard is "whetherany reasonable attorney would have thought the claim tenable" (SheldonAppel Co. v. Albert & Oliker, supra, 47 Cal.3d at p.886), a standardthat is satisfied if the issues presented in the underlying action werearguably correct, even if it was extremely unlikely the client would win(id. at p.885)

The theoretical underpinnings of Sheldon Appel is the imposition ofreasonable limitations on malicious prosecution actions to avoid aserious chilling effect on the assertion of litigants' rights, bypermitting lawyers and their clients to present issues that are arguablycorrect, even if it is extremely unlikely that they will win. SheldonAppel Co. v. Albert & Oliker, supra, 47 Cal.3d at p.885.

Denial of a motion for summary judgment in the underlying action doesnot itself preclude a subsequent malicious prosecution claim. Lucchesiv. Giannini & Uniack, supra, 158 Cal.App.3d at p.787.

The standard of proof on a motion for summary judgment for the plaintiffin the underlying action may differ from the standard applied to thelawyer for the plaintiff in the underlying action. (Leonardini v. ShellOil Co. (1989) 216 Cal.App.3d 547, 569, fn.7, cert. denied (1990) 498U.S. 919.)

In Sheldon Appel, a lis pendens was filed in the underlying case (anaction for declaratory relief). When the lis pendens was expunged, thatmeant the declaratory relief action had "terminated in Sheldon Appel'sfavor." (Sheldon Appel, supra, 47 Cal.3d at p. 869.) Thus, the maliciousprosecution defendant's knowledge at the time the underlying action wasinitiated was the only way to determine whether the prior action wasobjectively tenable when filed. (See also Leonardini v. Shell Oil Co.,supra, 216 Cal.App.3d at pp.563, 567-570; Klein v. Oakland Raiders,Ltd. (1989) 211 Cal.App.3d 67, 71, 75-76; Sheldon Appel, supra, 47Cal.3d at p.886.)

MALICIOUS PROSECUTION, or MALICIOUS ARREST

torts, or remedies. These terms import a wanton prosecution or arrest, made by a prosecutor in acriminal proceeding, or a plaintiff in a civil suit, without probablecause, by a regular process and proceeding, which the facts did notwarrant, as appears by the result.

This definition will be analysed by considering: 1. The nature ofthe prosecution or arrest. 2. Who is liable under it. 3. What aremalice and probable cause. 4. The proceedings. 5. The result of theprosecution and afterwards, 6. The remedy.

Where the defendant commenced a criminal prosecution wantonly and inother respects against law, he will be responsible. The prosecution ofa civil suit, when malicious, is a good cause of action, even when therehas been no arrest. But no action lies for commencing a civil action,though without sufficient cause.

The action lies against the prosecutor and even against a mereinformer, when the proceedings are malicious. But grand jurors are notliable to an action for a malicious prosecution, for information givenby them to their fellow jurors, on which a prosecution is founded. Suchaction lies against a plaintiff in a civil action who maliciously suesout the writ and prosecutes it but an action does not lie against anattorney at law for bringing the action, when regularly employed.There must be malice and want of probable cause.

The Proceedings under which the original prosecution or action washeld, must have been regular, in the ordinary course of justice, andbefore a tribunal having power to ascertain the truth or falsity of thecharge, and to punish the supposed offender, the now plaintiff. Whenthe proceedings are irregular, the prosecutor is a trespasser.

The malicious prosecution or action must be ended, and the plaintiffmust show it was groundless, either by his acquittal or by obtaining afinal judgment in his favor in a civil action.

The remedy for a malicious prosecution is an action on the case torecover damages for the injury sustained.

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