|  Dimitry Tsimberg, Esq.
California Supreme Court expands liability for
malicious prosecution
(Will Lawyers Drop Plaintiff Cases?)
On Monday, April 19, 2004, the California Supreme
Court created yet another hurdle for plaintiffs in civil cases -
keeping their lawyers!
The "wise old men (and women) upstairs"
decided the case of Zamos v. Stroud (S118032), the facts of which
are not as important as its shocking ruling and particularly its
implications. In this case of "first impression," the
Cal. Supremes expanded the scope of "malicious prosecution"
- a civil claim often made against attorneys who represent plaintiffs
that end up losing their civil cases - to include liability for
"continuing" a claim the attorney later discovers to be
unsupported by evidence.
If all of this sounds a bit confusing, a little
history is in order. Scores of California cases have held that if
a lawsuit (or any cause of action within a lawsuit) is brought with
"malice" and without "probable cause," and a judgment is returned
against plaintiff, both plaintiff and his or her lawyer may find
themselves the unfortunate defendants in a subsequent lawsuit for
malicious prosecution.
Whether there was "probable cause" to bring the underlying suit
is a question of law for the court to decide; the issue is tested
objectively -- i.e., whether "any reasonable attorney would have
thought the claim tenable." For this purpose, the nature and extent
of the attorney's subjective research and investigation of the facts
is irrelevant (although "adequacy" of the attorney's research may
be relevant to the issue of "malice"--a question of fact for the
jury).
Many prior CA cases, including 2 lower Appellate court decisions,
and the CA Supreme Court's own pronouncements in Coleman v. Gulf
Ins. Co. (1986) 41 Cal.3d 782, have decided that a "continuation"
of a civil case does not constitute malicious prosecution. The tenability
of a civil case was always judged at the point of its "initiation"
-- the theory being that it is the filing of a lawsuit which sets
the wheels of justice in motion. A technicality? Perhaps, but also
a bright line rule for lawyers that freed them from constant worry
of being sued for a wrong litigation decision.
To curb abuses after the initiation of a lawsuit, courts have other
remedies - sanctions, which may include monetary sanctions, as well
as sanctions that preclude a party from putting on evidence about
a particular "issue" or terminating the case altogether. Moreover,
another civil claim of "abuse of process" already prevents parties
and lawyers from using the legal process for an improper purpose.
In short, California courts have traditionally steered clear of
extending malicious prosecution to post-filing litigation conduct.
But comes the current CA Supreme Court and turns the law of malicious
prosecution on its head. Relying on the Restatement of Torts (which
the Court has previously declined to follow), the unanymous Court
now says that an attorney who discovers evidence that undermines
a claim in the suit has an affirmative obligation to pursuade the
client to drop the claim or withdraw from the case, or else face
civil liability for malicious prosecution.
You can read the entire opinion here in DOC
or PDF.
There is also an article from Law.com on the ruling here.
Now, how many defense attorneys will use this new case of "first
impression" to threaten plaintiff's counsel at every step of the
litigation? Does the Supreme Court care? No - it actually gives
defendants and their lawyers a "get out of bad faith jail" card
by refusing to apply malicious prosecution rules to a frivolous
appeal. Why? Because an appeal is a "continuation" of a defense
to "repel plaintiff's attack," and not a separate legal action.
(See, Coleman at 794; Zames at 12)
Oh, now a technicality is OK? So, it is malicious prosecution to
continue a meritless action, but not a meritless appeal. Go figure.
Further, to get back to the original point (do they care), the Supremes
seemed to be aware of the consequences their ruling will have on
practicing plaintiff's attorneys, who will now have to second guess
every decision they make in a lawsuit and fear retaliation if they
are wrong. Here is the gem of wisdom our judicial leaders have to
offer:
Applying the standard in any
given case may be very difficult. However, applying it to the decision
to continue to prosecute a case should be no more or less difficult
than applying it to the decision to initiate a case.
But wait, there is more in footnote 9:
Counsel who receives interrogatory answers
appearing to present a complete defense might act reasonably by
going forward with the defendant’s deposition in light of the possibility
that the defense will, on testimonial examination, prove less than
solid. The reasonableness of counsel’s persistence is, of course,
primarily an issue of fact, and we have no occasion here to formulate
more detailed rules.
So, apparently when defense counsel serves
self-serving discovery responses (we have a defense, we have a defense!),
it is still OK to take defendant's deposition to see if he read the
responses and signed his name to them? What about subpoenaing 3-rd
parties or their documents? The Court has no guidance for that, it
just gives license to defense counsel to threaten malicious prosecution
when plaintiff's lawyer will not simply buy the bullshit served on
a silver platter (as is the case with many a defense).
The net effect
As a practical matter, the Supreme Court's expansion of malicious
prosecution liability to post-filing litigation conduct will serve
as a terribly lopsided burden imposed on civil plaintiffs and their
counsel. The new rules effectively force plaintiff's lawyers to drop
claims, or cases altogether, for fear of retaliation by overzealous
defense lawyers itching to personally sue their opponents in court.
Yet, if a plaintiff manages to obtain a victory and justice in court,
defense lawyers cannot be sued for maliciously filing an appeal. Is
this Homer Simpson justice?
Some "advice" for plaintiffs and their attorneys in the wake of this
ruling:
1. Do legal research on all claims and document your research in the
file. Pursue claims that are not only legally viable, but for which
you have evidence (this makes pre-filing investigation even more crucial).
Drop questionable claims (which do not yield supporting evidence in
discovery) voluntarily and prior to any defense motion, especially
if they add nothing to the damages or relief sought. Pursue fraud
claims with extreme caution.
2. If confronted with defense counsel's alleged evidence of a defense,
probe it with caution (some moderated discovery should be found reasonable).
3. If sued for malicious prosecution, immediately make an anti-SLAPP
motion under CCP 425.16. Plaintiff will have to state a prima facie
case (and malice is often hard to state with any specific evidence
or even a reasonable inference). At the very least, plaintiff will
be forced to lay out the entire case and you can have a road map for
discovery.
4. When arguing the issue of objective tenability (i.e., "any reasonable
attorney") to the judge, emphasize that even reasonable attorneys
may sometimes disagree and the standard is - "Only those actions that
any reasonable attorney would agree are totally and
completely without merit may form the basis for a malicious prosecution
suit." Thus, the test is essentially whether "all" reasonable attorneys
would agree.
5. If the anti-SLAPP motion is denied, pursue aggressive discovery,
including taking the depositions of the lawyers suing you and questioning
them on all evidence that they have about your "malice." File a summary
judgment motion and request sanctions, especially if the the other
side fails to cooperate, fails to produce evidence, or destroys evidence.
6. Write your California Senator and Representative and tell them
to change the law! The Supreme Court decision will, without doubt,
drive more and more lawyers away from plaintiff representation ...
to the detriment of all those little people who need a little justice
sometimes in their lives.
This post is for educational and information
purposes only. It is not legal advice on any particular case, and
merely a general opinion of one California lawyer. You should not
rely on it without consulting a competent attorney in your area
about your specific case and facts. It is not intended to, and shall
not, create an attorney-client relationship. So, be happy you got
some free info and use your grey matter!
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