Siebel v. Mittlesteadt

In Siebel v. Mittlesteadt (2007) 41 Cal.4th 735, a jury had returned a favorable judgment on the merits of the claims brought against Siebel, the future malicious prosecution plaintiff. While the parties' appeals were pending, they reached a settlement that did not alter in any respect the judgment on the merits for Siebel, instead affecting only other parties to the suit. The court concluded: "Because Siebel received a favorable judgment in the underlying proceeding and settled without giving up any portion of the judgment in his favor, we hold that the parties' settlement constitutes a favorable termination." (Id. at p. 743.) The court further clarified: "Our case is limited to a postjudgment settlement by the parties that does not fundamentally change the parties' relationship established by the underlying judgment on the merits." (Id. at p. 744.) The court explicitly left untouched the principle that a prejudgment settlement generally will not be considered a favorable termination, because there was nothing that established the innocence of the malicious prosecution plaintiff. (Id. at pp. 742-744.) In sum, the plaintiff won the underlying action, after which appeals were filed. Before resolution the parties settled certain issues that were not relevant to the judgment in the plaintiff's favor. The plaintiff subsequently brought the action at issue and the defendants obtained summary judgment based on lack of a favorable termination. The Supreme Court affirmed reversal by the appellate court, holding that "because the plaintiff received a favorable judgment in the underlying proceeding and settled without giving up any portion of the judgment in his favor, . . . the parties' settlement constituted a favorable termination. " (Id. at p. 743.) The court specifically limited its holding to "a postjudgment settlement by the parties that does not fundamentally change the parties' relationship established by the underlying judgment on the merits." (Id. at p. 744.)