California Landmark Cases on Malicious Prosecution

The elements of malicious prosecution are: (1) a favorable termination on the merits of a prior action; (2) the defendant initiated or continued to prosecute the action without probable cause; (3) the defendant acted with malice in initiating or continuing to prosecute the action. (Siebel v. Mittlesteadt (2007) 41 Cal.4th 735, 740; Zamos v. Stroud, supra, 32 Cal.4th at p. 970; Contemporary Services Corp. v. Staff Pro Inc. (2007) 152 Cal.App.4th 1043, 1056.) Zamos, supra, 32 Cal.4th at page 970, held that "an attorney may be held liable for malicious prosecution for continuing to prosecute a lawsuit discovered to lack probable cause." The rule that an attorney may be held liable for continuing to prosecute an action after discovering that it lacks probable cause compels the conclusion that the defendant's malice in continuing to prosecute an action in those circumstances would satisfy the element of malice. (Daniels v. Robbins (2010) 182 Cal.App.4th 204, 226 (Daniels); Sycamore Ridge Apartments LLC v. Naumann (2007) 157 Cal.App.4th 1385, 1408 & fn. 12 (Sycamore).) A favorable termination on the merits means a termination in favor of the defendant in the prior action in circumstances reflecting the defendant's innocence of the alleged misconduct. (Casa Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, 341-342.) The voluntary dismissal of an action constitutes a favorable termination on the merits if the circumstances of the dismissal reflect the opinion of the trial court or the plaintiff that the action had no merit. (Sycamore, supra, 157 Cal.App.4th at p. 1399.) Conflicting evidence as to the reasons for the dismissal creates a question of fact for the trier of fact to decide. (Ibid.; cf. Ross v. Kish (2006) 145 Cal.App.4th 188, 198.) "Probable cause" in the context of malicious prosecution means an objectively reasonable belief that the action is legally tenable based on the facts known to the malicious prosecution defendant at the time. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 292; Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 878 (Sheldon Appel).) A person has no probable cause to initiate or continue to prosecute an action if the person relies on facts that he or she has no reasonable cause to believe to be true, or seeks recovery on a legal theory that is untenable under the facts known to him or her. (Soukup, supra, at p. 292.) There is no probable cause to initiate or continue to prosecute an action if, and only if, no reasonable attorney would believe that the action has any merit and any reasonable attorney would agree that the action is totally and completely without merit. (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 743, fn. 13 (Jarrow); Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 817 (Wilson).) The existence of probable cause to initiate or continue to prosecute an action in light of the facts known to the malicious prosecution defendant at the time is a legal question for the court to decide. (Wilson, supra, 28 Cal.4th at p. 817; Sheldon Appel, supra, 47 Cal.3d at p. 875.) A controversy as to what facts were known to the malicious prosecution defendant at the time the action was initiated or prosecuted presents a question of fact for the trier of fact. (Sheldon Appel, supra, at p. 881.) Probable cause is a low threshold in order to protect a litigant's right to assert arguable legal claims, even if the claims are extremely unlikely to succeed. (Jarrow, supra, 31 Cal.4th at pp. 742-743; Wilson, supra, at p. 817.) Malice concerns a person's subjective intent in initiating or continuing to prosecute an action, and is a question of fact for the trier of fact. (Sheldon Appel, supra, 47 Cal.3d at p. 874.) A person initiates or continues to prosecute an action with malice only if he or she acts primarily for an improper purpose; that is, a purpose other than to secure a proper adjudication on the merits. (Albertson v. Raboff (1956) 46 Cal.2d 375, 383; Downey Venture v. LMI Ins. Co. (1998) 66 Cal.App.4th 478, 494 (Downey Venture); see Rest.2d Torts, 676.) Such situations may include: (1) when the person does not believe that the claim is meritorious; (2) when the person prosecutes the action because of hostility or ill will, to harass the defendant; (3) when the person prosecutes the action to deprive another person of the beneficial use of his or her property; (4) when the person prosecutes the action to force a settlement unrelated to the merits of the action; and (5) when a person prosecutes a cross-complaint to delay adjudication of the complaint. (Albertson, supra, 46 Cal.2d at p. 383, citing Rest., Torts, 676, com. b; Sycamore, supra, 157 Cal.App.4th at p. 1407; see Rest.2d Torts, 676, com. c., pp. 462-463.) Malice turns on the subjective intent of the malicious prosecution defendant and therefore cannot be inferred based solely on the determination that the action objectively lacked probable cause. (Jarrow, supra, 31 Cal.4th at p. 743; Downey Venture, supra, 66 Cal.App.4th at p. 498.) Lack of probable cause is a factor in determining the presence of malice, but is insufficient alone to establish malice. (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1543.) "'Merely because the prior action lacked legal tenability, as measured objectively . . . without more, would not logically or reasonably permit the inference that such lack of probable cause was accompanied by the actor's subjective malicious state of mind.' ." (Jarrow, supra, at p. 743, quoting Downey Venture, supra, at p. 498.) Rather, a malicious prosecution plaintiff must present some other evidence of the defendant's subjective intent to misuse the judicial system for an improper purpose, such as evidence that the defendant subjectively believed that a cause of action was meritless. (Jay, supra, at p. 1543; Downey Venture, supra, at p. 498.) The favorable termination element of a malicious prosecution action is established by showing that the termination of the prior lawsuit reflected on the merits of the action and the malicious prosecution plaintiff's lack of responsibility or liability for the alleged misconduct. (Ross v. Kish (2006) 145 Cal.App.4th 188, 198.) In other words, the plaintiff must demonstrate that the termination reflects on his or her innocence in the underlying action. (Pattiz v. Minye (1998) 61 Cal.App.4th 822, 827 (Pattiz).) "If the termination does not relate to the merits--reflecting on neither innocence of nor responsibility for the alleged misconduct--the termination is not favorable in the sense it would support a subsequent action for malicious prosecution." (Lackner v. LaCroix (1979) 25 Cal.3d 747, 751.) "The test is whether or not the termination tends to indicate the innocence of the defendant or simply involves technical, procedural or other reasons that are not inconsistent with the defendant's guilt. The focus is not on the malicious prosecution plaintiff's opinion of his innocence, but on the opinion of the dismissing party. " (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 881.)To establish a cause of action for malicious prosecution, a plaintiff must demonstrate that the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination in his favor, (2) was brought without probable cause, and (3) was initiated with malice. (Zamos v. Stroud (2004) 32 Cal.4th 958, 965.) "'"The theory underlying the requirement of favorable termination is that it tends to indicate the innocence of the accused, and coupled with the other elements of lack of probable cause and malice, establishes the tort of malicious prosecution."It is not essential to maintenance of an action for malicious prosecution that the prior proceeding was favorably terminated following trial on the merits. However, termination must reflect on the merits of the underlying action. It is apparent "favorable" termination does not occur merely because a party complained against has prevailed in an underlying action. While the fact he has prevailed is an ingredient of a favorable termination, such termination must further reflect on his innocence of the alleged wrongful conduct. . . . The key is whether the termination reflects on the underlying defendant's innocence.If the resolution of the underlying litigation 'leaves some doubt as to the defendant's innocence or liability, it is not a favorable termination, and bars that party from bringing a malicious prosecution action against the underlying plaintiff.'. . . 'The test is whether or not the termination tends to indicate the innocence of the defendant or simply involves technical, procedural or other reasons that are not inconsistent with the defendant's guilt.'"A voluntary dismissal may be an implicit concession that the dismissing party cannot maintain the action and may constitute a decision on the merits.'It is not enough, however, merely to show that the proceeding was dismissed.'The reasons for the dismissal of the action must be examined to determine whether the termination reflected on the merits." (Eells v. Rosenblum (1995) 36 Cal.App.4th 1848, 1854-1855.)