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 the claim of 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 - http://www.lawlink.com/research/CaseLevel3/10818

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; Zamos 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.

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 3rd 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 B.S. served on a silver platter (as is the case with many a defense, I may add). Now, I am not a plaintiff's lawyer per se, and I do quite a bit of defense work, but it seems to me that the Supremes muddied the waters for both sides, which can only drive up the costs and length of litigation for everyone involved.

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.


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, or to say it otherwise, only an unreasonable attorney would conclude otherwise. Once the standard is stated in these logical terms, its high level of proof becomes obviously clear.

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.

4/2010 update - as of this time, the Zamos v. Stroud case appears to still be good law and is being cited in Apellate decisions - see Roth v. Fryzer (3/29/2010), No. B209274 (Court of Appeals, Second District, Division One) ["Malicious prosecution . . . includes continuing to prosecute a lawsuit discovered to lack probable cause."]. However, I am unaware of any published cases dealing squarely with the issue of liability for post-filing litigation conduct, though one recent opinion deals with attorneys liability generally - Daniels v. Robbins (2/2010), No. G039984 (Court of Appeals, Fourth District, Division Three) [finding no malice and dismissing case against former attorneys of client who refused to provide them documents to substantiate his claims in discovery].

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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