IN THE SUPREME COURT OF CALIFORNIA
JEROME ZAMOS et al.,
Plaintiffs
and
Appellants,
S118032
v.
Ct.App. 2/5 B160484
JAMES T. STROUD et al.,
Los Angeles County
Defendants and Respondents. )
Super. Ct. No. LC 060622
The question presented by this case is whether, assuming the other elements
of the tort are established, an attorney may be held liable for malicious prosecution
when he commences a lawsuit properly but then continues to prosecute it after
learning it is not supported by probable cause.1 We conclude an attorney may be
held liable for continuing to prosecute a lawsuit discovered to lack probable cause.
I. FACTUAL AND PROCEDURAL BACKGROUND2
The instant case for malicious prosecution is based upon a lawsuit (the
fraud lawsuit) brought by Patricia Brookes (Brookes)—who is named as a
1
As a convenient shorthand, we will refer to this as continuing to prosecute
a lawsuit discovered to lack probable cause.
2
We adopt the Court of Appeal’s statement of the factual and procedural
background. Brackets enclosing material in that part of the opinion (other than
citations) denote insertions or additions by this court. Defendants James T. Stroud
and Van T. Do petitioned for rehearing, and in their petition objected in certain
respects to the Court of Appeal’s statement of the facts. (Cal. Rules of Court, rule
28(c)(2).) The petition was denied. In part II.C., we discuss defendants’
objections and find they do not undermine the factual conclusions or the judgment
of the Court of Appeal.
1
defendant in this case but is not a party to this appeal—against [Jerome Zamos and
Odion L. Okojie (collectively Zamos)]. Zamos had represented Brookes in
another lawsuit (the foreclosure lawsuit) arising from the foreclosure on her house.
Jerome Zamos and [] Okojie practiced law together. Jerome Zamos was the
attorney who primarily represented Brookes in the foreclosure lawsuit, although
Okojie made some appearances in that case.
After a jury trial of the foreclosure lawsuit, when it appeared that the jury
was deadlocked, Brookes settled the lawsuit against some of the defendants in that
case in exchange for $250,000 paid by those settling defendants as damages for
emotional distress. Out of that $250,000, Zamos received $83,333.33 as a
contingency fee, and Brookes received $166,666.67. As part of the settlement,
Brookes expressly released all claims to her house. The terms of the settlement
agreement were stated on the record before the court at two separate hearings.
Brookes appeared by telephone at the first hearing, held on October 27, 1995, and
appeared personally at the second hearing, held on October 30, 1995.
Almost two years later, in 1997, Brookes sued Zamos for fraud, among
other claims, based upon certain alleged representations Zamos made to induce her
to settle the foreclosure lawsuit. Brookes alleged that Jerome Zamos told her that
(1) he would continue to represent her (to judgment) against the nonsettling
defendants in the foreclosure lawsuit, (2) he would substitute into and represent
Brookes in a malpractice lawsuit Brookes filed against her former attorneys (the
malpractice lawsuit), (3) he would have her house returned to her, and (4) he
would withdraw from representing her in the foreclosure lawsuit if Brookes did
not accept the settlement. Brookes also alleged, among other things, that Mr.
Zamos never intended to keep his first three promises and that Zamos withdrew
from representing her against the nonsettling defendants, never substituted into the
malpractice lawsuit, and never tried to have her house returned to her.
2
[James T. Stroud, Van T. Do, and their law firm, Stroud & Do (collectively
Stroud)] represented Brookes in the fraud lawsuit. In October 1997, shortly after
Brookes’s fraud lawsuit was served on Odion Okojie, Zamos sent to Stroud
reporter’s transcripts of three hearings in the foreclosure lawsuit, which transcripts
Zamos contended proved that Brookes’s fraud claim had no merit. The first two
hearings reflected in the transcripts were those held on October 27, 1995 and
October 30, 1995, and the transcripts show that Brookes was told and agreed that
she was releasing all claims to her house and that Zamos would not substitute into
the malpractice lawsuit. The third hearing, held on January 29, 1996, was a
hearing on Zamos’s motion to be relieved as counsel in the foreclosure lawsuit.
During that hearing, Jerome Zamos explained that he had submitted all of the
paperwork necessary for entry of default against the nonsettling defendants, and
the trial court explained to Brookes that Zamos would be relieved as counsel and
that Brookes would be responsible for bringing the default to judgment. When the
trial court asked Brookes whether “there [was] a problem” with relieving Zamos
as counsel, Brookes responded, “No, not really.” The transcript even shows that
Brookes contended that Zamos was never her attorney of record, and she
complained that Zamos forced her to come into court for the hearing; she asked
the court, “Why couldn’t he just send me whatever to be relieved of counsel?” A
short time later, Brookes told the court, “I don’t care if you sign him off or not.
He’s never been on.”
After Stroud and Brookes refused to dismiss the fraud lawsuit against
Zamos despite these transcripts, Zamos moved for summary judgment. In
opposition to Zamos’s motion for summary judgment, Stroud submitted a
declaration signed by Brookes in which Brookes stated, among other things, that
she agreed to settle the foreclosure lawsuit in reliance upon Zamos’s promises to
(1) continue representing her against the nonsettling defendants, (2) represent her
3
in the malpractice lawsuit, and (3) have her house returned to her. The trial court
questioned whether Brookes could establish that she was damaged as a result of
Zamos’s alleged fraud, but the court nonetheless denied Zamos’s motion, although
it did so “reluctantly,” finding that Brookes’s declaration raised a triable issue of
fact regarding whether Zamos made the alleged promises.
Brookes’s fraud lawsuit proceeded to trial before a judge who had not been
the judge in any of the other proceedings in that case. Before the trial began, the
trial judge informed the parties that he had read the transcripts of the three
hearings discussed above in preparation for ruling on several motions. Based on
the judge’s understanding of Brookes’s anticipated testimony, he warned Mr.
Stroud several times that he needed to advise Brookes of her Fifth Amendment
rights, and that he would notify the district attorney’s office if Brookes’s
testimony at trial contradicted those transcripts because such testimony would be
perjurious.
[Carl A.] Taylor and [Nancy M.] Peterson testified at the trial. Apparently
(although the record is not entirely clear), Brookes was unable to testify due to
health reasons, and Zamos had to put on the defense before the plaintiff’s
case-in-chief was completed. When Brookes failed to appear after all other
witnesses had completed their testimony, Stroud asked for a continuance to allow
her an additional opportunity to appear. The trial court denied Stroud’s request
and granted Zamos’s motion for a nonsuit. In granting the motion, the court found
that, even if Brookes testified in accordance with the offers of proof that had been
made, “no reasonable jury would ever provide a judgment for [Brookes].” In
addition, the court found that, based upon the transcripts of the hearings regarding
the settlement of the foreclosure lawsuit, Brookes’s settlement of that lawsuit “acts
as a bar probably in the form of estoppel to [Brookes’s fraud lawsuit].”
4
Following entry of judgment in the fraud lawsuit, Zamos filed the instant
malicious prosecution action against Brookes, Stroud, Taylor, and Peterson.
Zamos alleged on information and belief that Taylor encouraged Brookes to file
the fraud lawsuit against Zamos and engaged Stroud to represent Brookes, and that
Peterson urged Brookes to file the fraud lawsuit and gave false testimony to assist
Brookes in prosecuting the lawsuit. Zamos also alleged that defendants
prosecuted the fraud lawsuit to extort an unwarranted settlement by Zamos.
Stroud, Taylor, and Peterson filed a joint anti-SLAPP[3] motion in which
they argued that Zamos could not show a reasonable probability of success on the
malicious prosecution claim. Stroud asserted that Zamos cannot show that the
fraud lawsuit was brought without probable cause because Stroud’s decision to file
the action was based upon (1) Brookes’s statements regarding Zamos’s alleged
promises; (2) corroboration by Peterson and, to a lesser degree, by Taylor; and (3)
the timing of Zamos’s alleged promises, Zamos’s receipt of the contingency fee
from the settlement, and Zamos’s motion to be relieved as counsel in the
foreclosure lawsuit. Taylor and Peterson asserted that Zamos [could not] hold
them liable for malicious prosecution because their sole involvement with the
fraud lawsuit was as witnesses, and thus they [were] protected by the litigation
privilege.
In opposition to the anti-SLAPP motion, Zamos presented evidence that
shortly after the fraud lawsuit was filed Stroud received the transcripts that Zamos
contended gave notice to Stroud that the fraud lawsuit had no merit. Zamos also
presented evidence that Taylor sought counsel to represent Brookes in the fraud
lawsuit and gave assistance to Stroud during Peterson’s deposition. (Taylor
3
[SLAPP stands for strategic lawsuit against public participation. (Equilon
Enterprises, LLC v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57, fn. 1
(Equilon).)]
5
graduated from law school, although apparently he is not a licensed attorney.)
Zamos contended that this evidence shows that Taylor was actively involved in
maliciously prosecuting the fraud lawsuit. Finally, Zamos presented evidence that
Peterson was not present or within hearing distance when Jerome Zamos spoke
with Brookes about the settlement agreement in the foreclosure lawsuit, and
therefore Peterson is liable for malicious prosecution because her assertion that
she heard Mr. Zamos make the alleged promises at issue in the fraud lawsuit was
demonstrably false.
The trial court granted the anti-SLAPP motion as to all of the moving
parties. As to Stroud, the court found that Stroud had probable cause to bring the
lawsuit based upon Brookes’s representations that were corroborated by Taylor
and Peterson. The court held that Taylor and Peterson were immune from liability
under the “common law witness immunity doctrine” set forth in Briscoe v. LaHue
(1983) 460 U.S. 325 and Silberg v. Anderson (1990) 50 Cal.3d 205, 214. The
court awarded $3,000 in attorney fees to Taylor and $3,000 in attorney fees to
Peterson. Zamos timely appealed from the trial court’s order dismissing the entire
action against Stroud, Taylor, and Peterson and awarding attorney fees.
[The Court of Appeal affirmed the dismissal as to Taylor and Peterson,
holding that Zamos failed to meet their burden to demonstrate that their malicious
prosecution claim would succeed against Taylor and Peterson. However, the
Court of Appeal reversed the dismissal as to Stroud, “hold[ing] that Zamos met his
burden with respect to Stroud because we conclude that an attorney may be liable
for malicious prosecution if the attorney continues to prosecute a lawsuit after
discovery of facts showing the lawsuit has no merit.”]
[Both plaintiffs Jerome Zamos and Odion Okojie and defendants James
Stroud and Van Do petitioned this court for review. Defendants’ petition was
granted; plaintiffs’ petition was denied.]
6
[We affirm the judgment of the Court of Appeal.]
II. DISCUSSION
A. Interface Between Anti-SLAPP Statute and Malicious Prosecution
Code of Civil Procedure section 425.16, the anti-SLAPP statute, provides
in relevant part: “A cause of action against a person arising from any act of that
person in furtherance of the person’s right of petition or free speech under the
United States or California Constitution in connection with a public issue shall be
subject to a special motion to strike, unless the court determines that the plaintiff
has established that there is a probability that the plaintiff will prevail on the
claim.” (Id., § 425.16, subd. (b)(1).) Under this statute, the party moving to strike
a cause of action has the initial burden to show that the cause of action “aris[es]
from [an] act . . . in furtherance of the [moving party’s] right of petition or free
speech.” (Ibid.; Equilon, supra, 29 Cal.4th at p. 67.) Once that burden is met, the
burden shifts to the opposing party to demonstrate the “probability that the
plaintiff will prevail on the claim.” (Code Civ. Proc., § 425.16, subd. (b)(1);
Equilon, supra, 29 Cal.4th at p. 67.) “To satisfy this prong, the plaintiff must
‘state[ ] and substantiate[ ] a legally sufficient claim.’ [Citation.] ‘Put another
way, the plaintiff “must demonstrate that the complaint is both legally sufficient
and supported by a sufficient prima facie showing of facts to sustain a favorable
judgment if the evidence submitted by the plaintiff is credited.” ’ [Citation.]”
(Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 741, fn. omitted
(Jarrow Formulas).)
The parties agree that plaintiffs’ malicious prosecution action arises from
acts in furtherance of defendants’ right of petition or free speech.4 Thus, the issue
4
In Jarrow Formulas, supra, 31 Cal.4th at page 741, we declined to create a
categorical exemption from the anti-SLAPP statute for malicious prosecution
actions.
7
is whether plaintiffs presented evidence in opposition to defendants’ anti-SLAPP
motion that, if believed by the trier of fact, was sufficient to support a judgment in
plaintiffs’ favor. Whether plaintiffs have established a prima facie case is a
question of law. (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811,
821 (Wilson) [“In deciding the question of potential merit, the trial court considers
the pleadings and evidentiary submissions of both the plaintiff and the defendant
([Code Civ. Proc.,] § 425.16, subd. (b)(2)); though the court does not weigh the
credibility or comparative probative strength of competing evidence, it should
grant the motion if, as a matter of law, the defendant’s evidence supporting the
motion defeats the plaintiff’s attempt to establish evidentiary support for the
claim”].)
B. Liability for Continuing to Prosecute Lawsuit Found to Lack Merit
Previously, this court has characterized one of the elements of the tort of
malicious prosecution as commencing, bringing, or initiating an action without
probable cause. “ ‘To establish a cause of action for the malicious prosecution, of
a civil proceeding a plaintiff must plead and prove that the prior action (1) was
commenced by or at the direction of the defendant and was pursued to a legal
termination in his, plaintiff’s, favor [citations]; (2) was brought without probable
cause [citations]; and (3) was initiated with malice [citations].’ (Bertero [v.
National General (1974) 13 Cal.3d 43,] 50 [(Bertero)].” (Crowley v. Katleman
(1994) 8 Cal.4th 666, 676 (Crowley), italics added.)
Defendants
contend
continuing to prosecute a lawsuit discovered to lack
probable cause does not constitute the tort of malicious prosecution, and in making
this argument they rely heavily on the tort’s being a disfavored cause of action.
The tort of malicious prosecution is disfavored “both because of its
‘potential to impose an undue “chilling effect” on the ordinary citizen’s
willingness to report criminal conduct or to bring a civil dispute to court’
8
[(Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 872 (Sheldon
Appel Co.)]) and because, as a means of deterring excessive and frivolous
lawsuits, it has the disadvantage of constituting a new round of litigation itself
(id. at p. 873).” (Wilson, supra, 28 Cal.4th at p. 817.) For these reasons, we
have declined to extend the scope of the tort. (Crowley, supra, 8 Cal.4th at
p. 680; Sheldon Appel Co., at p. 873.)
On the other hand, we have cautioned that this “convenient phrase,” i.e.,
the characterization of malicious prosecution as a disfavored cause of action,
“should not be employed to defeat a legitimate cause of action” or to “invent[]
new limitations on the substantive right, which are without support in principle
or authority.” (Bertero, supra, 13 Cal.3d at p. 53; see Crowley, supra, 8 Cal.4th
at p. 680.)
Confining the tort of malicious prosecution to the initiation of a suit
without probable cause would be, we conclude, without support in authority or in
principle.
1. Authority
The question we address today is a question of first impression in this
court, and was first addressed by a California Court of Appeal only two years
ago.5 However, so far as our research reveals, the rule in every other state that
has addressed the question is, and in many states has long been, that the tort of
malicious prosecution does include continuing to prosecute a lawsuit discovered
to lack probable cause.
5
Prior to this case, only one division of the Court of Appeal—Division
Seven of the Second District—had addressed this question. (Swat-Fame, Inc. v.
Goldstein (2002) 101 Cal.App.4th 613, 627-629 (Swat-Fame); Vanzant v.
DaimlerChrysler Corp. (2002) 96 Cal.App.4th 1283, 1290-1291 (Vanzant).) After
the decision in this case was filed, Swat-Fame was followed by Division Three of
the Fourth District. (Morrison v. Rudolph (2002) 103 Cal.App.4th 506, 514
(Morrison).)
9
Over 25 years ago the drafters of the Restatement Second of Torts
(Restatement) stated that “one who continues a civil proceeding that has properly
been begun or one who takes an active part in its continuation for an improper
purpose after he has learned that there is no probable cause for the proceeding
becomes liable as if he had then initiated the proceeding.” (Rest., § 674, com. c,
p. 453.)6 Indeed, almost 80 years ago Corpus Juris, in reciting the elements of an
action for malicious prosecution, stated the first element as the “commencement
or continuance of an original criminal or civil judicial proceeding.” (38 C.J.
(1925) Malicious Prosecution, § 5, p. 386, italics added; see 34 Am.Jur. (1941)
Malicious Prosecution, § 26, p. 718.)7
The Restatement’s position on this question has been adopted or was
anticipated by the courts of a substantial number of states: Alabama (Laney v.
Glidden Co., Inc. (Ala. 1940) 194 So. 849, 851-852); Arizona (Smith v. Lucia
(Ariz.Ct.App. 1992) 842 P.2d 1303, 1308); Arkansas (McLaughlin v. Cox (1996)
922 S.W.2d 327, 331-332); Colorado (Slee v. Simpson (Colo. 1932) 15 P.2d
6
Section 674 of the Restatement (section 674) provides:
“One who takes an active part in the initiation, continuation or
procurement of civil proceedings against another is subject to liability to the other
for wrongful civil proceedings if
“(a) he acts without probable cause, and primarily for a purpose other than
that of securing the proper adjudication of the claim in which the proceedings
are based, and
“(b) except when they are ex parte, the proceedings have terminated in
favor of the person against whom they are brought.” (Italics added.)
7
Corpus Juris Secundum continues to state that “[t]he commencement or
continuation of the original proceeding by defendant against plaintiff is essential
to an action for malicious prosecution.” (54 C.J.S. (1988) Malicious Prosecution
or Wrongful Litigation, § 17, p. 537, italics added.) American Jurisprudence
Second concurs, giving the first element of the tort of malicious prosecution as
“the institution or continuation of original judicial proceedings by, or at the
instance of, the defendant.” (52 Am.Jur.2d (2000) Malicious Prosecution, § 8,
p. 145, fns. omitted & italics added.)
10
1084, 1085); Idaho (Badell v. Beeks (Idaho 1988) 765 P.2d 126, 128); Iowa
(Wilson v. Hayes (Iowa 1990) 464 N.W.2d 250, 264); Kansas (Nelson v. Miller
(Kan. 1980) 607 P.2d 438, 447-448); Mississippi (Benjamin v. Hooper
Electronic Supply Co., Inc. (Miss. 1990) 568 So.2d 1182, 1189, fn. 6); New
York (Broughton v. State of New York (1975) 37 N.Y.2d 451, 457); Ohio (Siegel
v. O.M. Scott & Sons Co. (Ohio Ct.App. 1943) 56 N.E.2d 345, 347); Oregon
(Wroten v. Lenske (Or.Ct.App. 1992) 835 P.2d 931, 933-934); Pennsylvania
(Wenger v. Philips (Pa. 1900) 45 A. 927); and Washington (Banks v. Nordstrom,
Inc. (Wash.Ct.App. 1990) 787 P.2d. 953, 956-957).
Even more significantly, defendants have not brought to our attention, nor
has our own research revealed, a single state that has declined to adopt the
Restatement’s view in this regard.
Defendants’ position, that the tort of malicious prosecution does not
include continuing a lawsuit discovered to lack probable cause, is no more
supported by the decisions of this court than it is by out-of-state authority.
Defendants rely upon two decisions of Division Seven of the Second
District—Swat-Fame, supra, 101 Cal.App.4th 613 and Vanzant, supra, 96
Cal.App.4th 1283. In Swat-Fame, the plaintiff in a malicious prosecution action
contended “a party can be held liable for malicious prosecution even if he or she
first becomes aware of facts that negate the claim after the litigation is
commenced . . . .” (Swat-Fame, at pp. 627-628.) Reiterating the position it had
taken five months earlier in Vanzant, Division Seven of the Second District
Court of Appeal rejected the contention. (Id. at p. 628.) Vanzant relied upon
this court’s decision in Coleman v. Gulf Ins. Group (1986) 41 Cal.3d 782
(Coleman) for the proposition that “California courts have typically refused to
permit malicious prosecution claims where, as here, the claim is based on the
11
continuation of a properly initiated existing proceeding.” (Vanzant, at pp. 1290-
1291.)
Coleman is distinguishable. In order to establish a cause of action for
malicious prosecution, a plaintiff must prove “ ‘the prior action . . . was
commenced by or at the direction of the defendant [in the malicious prosecution
action].’ [Citation.]” (Coleman, supra, 41 Cal.3d at p. 793, italics added.) In
Coleman, the underlying action was commenced by the plaintiffs in the
malicious prosecution action. Therefore, in order to establish their cause of
action against the defendant’s insurer for malicious prosecution, the plaintiffs
argued that the insurer, in maliciously causing the defendant to file a frivolous
appeal, caused the initiation of a separate action. This is the argument the
Coleman court rejected.
In the underlying action in Coleman, the survivors of a man who drowned
in a city swimming pool brought a wrongful death action against the city and
were awarded $350,000 in damages. During the pendency of the city’s appeal,
the city’s insurer offered the plaintiffs less than half the judgment award to settle,
and plaintiffs declined, but later accepted a settlement of $300,000. The
plaintiffs then sued the insurer, which allegedly controlled all aspects of the
defense, on the ground, among others, of malicious prosecution, claiming the
appeal had been frivolous, designed solely to force the plaintiffs to settle for a
fraction of the judgment and to enable the insurer to realize interest earnings
during the pendency of the appeal based on the differential between the statutory
rate of interest and the market rate. (Coleman, supra, 41 Cal.3d at pp. 788-789.)
The
Coleman court distinguished Bertero, supra, 13 Cal.3d 43. In
Bertero, this court held malicious prosecution may include maliciously filing a
cross-complaint. “By seeking affirmative relief [through a cross-complaint],”
the Bertero court pointed out, the “defendants . . . did more than attempt to repel
12
[the plaintiff’s] attack; they took the offensive in attempting to prosecute a cause
of action of their own.” (Bertero, at p. 53.) “By contrast,” the Coleman court
held, “filing an appeal ‘is not a separate proceeding and has no independent
existence’ [citation]; it is merely the continuation of an action. [Citation.] Based
on the reasoning of Bertero, a defendant’s appeal cannot be considered a
separate action ‘seeking affirmative relief,’ but rather is merely the continuation
of an attempt ‘to repel’ plaintiff’s attack.” (Coleman, supra, 41 Cal.3d at p. 794,
fn. omitted.)
The operative distinction, then, is between continuing a prosecution and
continuing a defense. In Coleman, the defendant in the malicious prosecution
action had merely continued its defense of the underlying wrongful death action
by causing the filing of the appeal in that action.8 Here, defendants in the
malicious prosecution action continued their prosecution of the underlying fraud
action after learning it was baseless.
2. Principle
Just as it is without support in authority, the limitation defendants urge is
also without support in principle. Malicious prosecution “is actionable because it
harms the individual against whom the claim is made, and also because it threatens
the efficient administration of justice.” (Bertero, supra, 13 Cal.3d at p. 50; see
Crowley, supra, 8 Cal.4th at p. 677.) Continuing an action one discovers to be
baseless harms the defendant and burdens the court system just as much as
initiating an action known to be baseless from the outset. (See 1 Harper et al., The
8 Vanzant also relied upon Merlet v. Rizzo (1998) 64 Cal.App.4th 53 (Merlet)
and Adams v. Superior Court (1992) 2 Cal.App.4th 521 (Adams). (Vanzant,
supra, 96 Cal.App.4th at pp. 1290-1291.) Merlet and Adams are distinguishable,
as well. These two cases simply involved application of the familiar rule that
subsidiary procedural actions cannot be the basis for malicious prosecution claims.
(Merlet, at p. 59; Adams, at p. 528.)
13
Law of Torts (3d ed. 1996) § 4.3, p. 4:13 [“Clearly, it is as much a wrong against
the victim and as socially or morally unjustifiable to take an active part in a
prosecution after knowledge that there is no factual foundation for it, as to
instigate such a proceeding in the first place”].) As the Court of Appeal in this
case observed, “It makes little sense to hold attorneys accountable for their
knowledge when they file a lawsuit, but not for their knowledge the next day.”
Moreover, as the Court of Appeal went on to point out, “Holding attorneys
liable for the damages a party incurs as a result of the attorneys prosecuting civil
claims after they learn the claims have no merit also will encourage voluntary
dismissals of meritless claims at the earliest stage possible. Because an attorney
will be liable only for the damages incurred from the time the attorney reasonably
should have caused the dismissal of the lawsuit after learning it has no merit, an
attorney can avoid liability by promptly causing the dismissal of, or withdrawing
as attorney in, the lawsuit. This will assist in the efficient administration of justice
and reduce the harm to individuals targeted by meritless claims. Moreover, by
advising a client to dismiss a meritless case, the attorney will serve the client’s
best interests in that the client will avoid the cost of fruitless litigation, and the
client’s exposure to liability for malicious prosecution will be limited.”
Defendants contend our holding—that malicious prosecution includes
continuing to prosecute a lawsuit discovered to lack probable cause—would be
unworkable and therefore contrary to public policy. Defendants assert the holding
would be unworkable because it would divert an attorney’s attention away from
the zealous representation of his or her client by causing the attorney (1)
continually to second-guess the merits of the litigation and (2) to fear retaliation
for malicious prosecution if the attorney argues for an extension of the law. We
disagree. Only those actions that any reasonable attorney would agree are totally
and completely without merit may form the basis for a malicious prosecution suit.
14
(Wilson, supra, 28 Cal.4th at p. 817; Sheldon Appel, supra, 47 Cal.3d at p. 886.)
The same standard will apply to the continuation as to the initiation of a suit.
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.9
For the reasons stated, we conclude an attorney may be held liable for
malicious prosecution for continuing to prosecute a lawsuit discovered to lack
probable cause.
C. Defendants’ Prima Facie Liability
As we stated earlier, the parties agree that plaintiffs’ malicious prosecution
action arises from acts in furtherance of defendants’ right of petition or free
speech. Thus, the issue is whether plaintiffs presented evidence in opposition to
defendants’ anti-SLAPP motion that, if believed by the trier of fact, was sufficient
to support a judgment in plaintiffs’ favor. Plaintiffs, we conclude, did make the
required showing.
As the Court of Appeal observed, “Whether the facts known to Stroud
constituted probable cause to prosecute the fraud lawsuit is a question of law.
(Wilson, supra, 28 Cal.4th at p. 817.) The court must ‘make an objective
determination of the “reasonableness” of [Stroud’s] conduct, i.e., to determine
whether, on the basis of the facts known to [Stroud], the institution [and
prosecution] of the [fraud lawsuit] was legally tenable.’ (Sheldon Appel, supra, 47
Cal.3d at p. 878.) The test applied to determine whether a claim is tenable is
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.
15
‘whether any reasonable attorney would have thought the claim tenable.’ (Id. at p.
886.) [¶] In the present case, . . . Stroud presented evidence in support of the anti-
SLAPP motion to show that the facts available to Stroud at the time the lawsuit
was filed were sufficient to support a cause of action for fraud. But in opposition
to the motion, Zamos presented evidence that Stroud was given transcripts shortly
after the fraud lawsuit was filed that, Zamos contends, show[s] that Stroud knew
or should have known that the fraud lawsuit had no merit.”
1. Zamos’s alleged promise to represent Brookes in
the foreclosure action
Brookes alleged that Jerome Zamos told her he would continue to represent
her against the nonsettling defendants in the foreclosure lawsuit. However, at the
January 29, 1996 hearing, the judge advised Brookes there was a motion pending
to relieve Mr. Zamos in the foreclosure matter. “Is there a problem?” he asked
her. “No,” Brookes replied, “other than I can’t understand how Mr. Zamos can be
relieved when he’s never been my attorney of record to my knowledge.” After
listening to Brookes’s rambling diatribe against Zamos, the judge asked her,
“What’s the point?” “The point,” Brookes replied, “is I don’t care if you sign him
off or not. He’s never been on.” Brookes was apparently being sarcastic because
as the judge pointed out, Mr. Zamos had tried the foreclosure matter and had
persisted in obtaining a favorable settlement for her “when lesser lawyers would
have just bowed out.” Hearing no objection whatsoever from Brookes regarding
Mr. Zamos’s motion to be relieved, the judge, after admonishing Brookes that she
“couldn’t have had a better lawyer than Mr. Zamos,” ordered him relieved.
16
2. Zamos’s alleged promise to represent Brookes
in the malpractice action
Brookes alleged that Jerome Zamos told her he would substitute into and
represent her in a malpractice lawsuit Brookes had filed against her former
attorneys. However, as the Court of Appeal stated, the “transcript of [the]
October 30, 1995 settlement hearing in the foreclosure lawsuit . . . shows that
before Brookes agreed to the settlement, Brookes and Zamos stated on the record
that Brookes had changed her mind regarding Zamos’s representation in the
malpractice lawsuit and that Zamos was not going to represent Brookes in that
lawsuit.”
On Friday, October 27, 1995, in a phone call he placed to Brookes in open
court, Jerome Zamos advised Brookes he would represent her in the malpractice
action. However, on Monday, October 30, 1995, Mr. Zamos advised the court he
would not be doing so, after all, and that Brookes had another attorney who would
be representing her in that matter. Brookes, who was present in court on this
occasion, acknowledged, “That’s correct, yes.”
Defendants assert “there is testimony from Taylor that he was later told by
Brookes that Zamos had promised to get back into the case.” To the contrary,
Taylor’s statement was unclear in this regard. In a declaration, Taylor stated
Brookes told him “she had been promised that Mr. Zamos would continue with the
malpractice lawsuit against [her former attorneys] and that it would be taken to a
conclusion as long as the offer to settle was accepted.” However, Taylor did not
claim that his second conversation with Brookes occurred after Brookes
acknowledged in court on Monday, October 30, that Jerome Zamos was not going
to represent her in the malpractice action. Taylor merely stated he spoke to
Brookes on “a Friday in late October of 1995” and again “on the following
Monday.”
17
3. Zamos’s alleged promise that Brookes’s house
would be returned to her
Brookes alleged that Jerome Zamos promised Brookes he would secure the
return of her house. As the Court of Appeal stated, “The October 30, 1995
transcript shows that Brookes was told repeatedly that she would be giving up all
claims to her house if she agreed to the settlement.”
Defendants do not dispute this characterization of the record. Instead,
defendants claim that, off the record, Jerome Zamos told Brookes “the settlement
would be for ‘post eviction’ damages and that the claim for [her] house could still
proceed.”
Contrary to Brookes’s claim that she agreed to the settlement in reliance on
an assurance from Jerome Zamos that she would still be able to proceed with an
action to have her house returned to her, Brookes initially declined the settlement,
complaining that he had never discussed it with her. Then, after having been
given an opportunity to consult by phone with someone other than Mr. Zamos,
someone who was not an attorney, Brookes decided to accept the settlement.
III. CONCLUSION
Malicious prosecution, we hold, includes continuing to prosecute a lawsuit
discovered to lack probable cause. Accordingly, we disapprove of Swat-Fame,
Inc. v. Goldstein, supra, 101 Cal.App.4th 613 and Vanzant v. DaimlerChrysler
Corp., supra, 96 Cal.App.4th 1283, as well as Morrison v. Rudolph, supra, 103
Cal.App.4th 506, insofar as they are inconsistent with the views expressed herein.
18
Plaintiffs did present evidence in opposition to defendants’ anti-SLAPP
motion that, if believed by the trier of fact, was sufficient to support a judgment in
plaintiffs’ favor. Therefore, we affirm the judgment of the Court of Appeal
reversing the order of the trial court dismissing plaintiffs’ malicious prosecution
claim against defendants.10
BROWN, J.
WE CONCUR:
GEORGE, C.J.
KENNARD, J.
BAXTER, J.
WERDEGAR, J.
CHIN, J.
MORENO, J.
10
Defendants argued below that under Roberts v. Sentry Life Insurance
(1999) 76 Cal.App.4th 375, an opinion we cited with approval in Wilson, supra,
28 Cal.4th 811, the trial court’s order had to be affirmed because Zamos lost their
motion for summary judgment in the fraud lawsuit. The Roberts court held that a
favorable ruling on a motion for summary judgment in the underlying action
conclusively establishes probable cause unless that ruling was procured by
“materially false facts.” (Roberts, at p. 384.) The Court of Appeal rejected
defendants’ argument on the ground that “Zamos presented evidence in opposition
to the anti-SLAPP motion that, if believed by the trier of fact, demonstrates that
the denial of Zamos’s summary judgment motion was procured by materially false
facts. As discussed above, the trial court in the fraud lawsuit denied Zamos’s
motion for summary judgment ‘reluctantly,’ because Brookes’ declaration that
Zamos made the representations at issue raised a triable issue of fact. In
opposition to the anti-SLAPP motion in the instant case, Zamos presented the
declaration of Jerome Zamos, in which Mr. Zamos states that he did not make the
representations Brookes asserted he made. If the trier of fact in the instant case
believes Mr. Zamos’s declaration that he did not make those representations, then
the denial of Zamos’s summary judgment motion was procured by materially false
facts, and the rule set forth in Roberts does not apply.”
As defendants did not petition for review on this issue, we need not decide
whether the Court of Appeal correctly decided it.
19
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. Name of Opinion Zamos v. Stroud
__________________________________________________________________________________
Unpublished Opinion
IV.
Original Appeal
Original Proceeding
Review Granted XXX 110 Cal.App.4th 60
Rehearing Granted
__________________________________________________________________________________
Opinion No.
S118032Date Filed: April 19, 2004
__________________________________________________________________________________
Court:
SuperiorCounty: Los Angeles
Judge: Stephen D. Petersen
__________________________________________________________________________________
Attorneys for Appellant:
Jerome Zamos, in pro. per., and for Plaintiffs and Appellants.__________________________________________________________________________________
Attorneys for Respondent:
James T. Stroud, in pro per., and for Defendants and Respondents.Milam & Larsen and Paul A. Larsen for Association of California Insurance Companies as Amicus Curiae
on behalf of Defendants and Respondents.
20
Counsel who argued in Supreme Court (not intended for publication with opinion):
Jerome ZamosLaw Offices of Jerome Zamos
5228 Campo Road
Woodland Hills, CA 91364-1927
(818) 348-7151
James T. Stroud
Stroud & Do
14541 Hamlin Street
Van Nuys, CA 91411
(818) 994-0347
21
Date: | Docket Number: |
Mon, 04/19/2004 | S118032 |
1 | Stroud, James T. (Defendant and Respondent) Represented by James T. Stroud Stroud & Do 14541 Hamlin St Van Nuys, CA |
2 | Zamos, Jerome (Plaintiff and Appellant) Represented by Jerome Zamos Law Offices of Jerome Zamos 5228 Campo Road Woodland Hills, CA |
3 | Okojie, Odion L. (Plaintiff and Appellant) Represented by James T. Stroud Stroud & Do 14541 Hamlin St Van Nuys, CA |
4 | Brookes, Patricia A. (Defendant and Respondent) |
5 | Do, Van T. (Defendant and Respondent) Represented by James T. Stroud Stroud & Do 14541 Hamlin St Van Nuys, CA |
6 | Stroud & Do (Defendant and Respondent) Represented by James T. Stroud Stroud & Do 14541 Hamlin St Van Nuys, CA |
7 | Taylor, Carl A. (Defendant and Respondent) Represented by James T. Stroud Stroud & Do 14541 Hamlin St Van Nuys, CA |
8 | Peterson, Nancy M. (Defendant and Respondent) Represented by James T. Stroud Stroud & Do 14541 Hamlin St Van Nuys, CA |
9 | Association Of California Insurance Companies (Amicus curiae) Represented by Paul A. Larsen Milam & Larsen LLP 234 E Colorado Blvd #620 Pasadena, CA |
Disposition | |
Apr 19 2004 | Opinion: Affirmed |
Dockets | |
Aug 5 2003 | Petition for review filed Respondents James T. Stroud, Van T. Do Stroud and Stroud Do |
Aug 6 2003 | 2nd petition for review filed appellant Jerome Zamos |
Aug 6 2003 | Record requested |
Aug 13 2003 | 2nd record request |
Aug 13 2003 | Received Court of Appeal record one doghouse sending overnight |
Sep 17 2003 | Petition for Review Granted (civil case) Respondents' petition for review GRANTED. Appellants' petition for review DENIED. Kennnard, J., was absent and did not participate. Votes: George, C.J., Baxter, Werdegar, Chin, Brown & Moreno, JJ. |
Sep 17 2003 | Letter sent to: both counsel enclosing a copy of the order granting review and the Certification of Interested Entities or Persons Form |
Oct 17 2003 | Opening brief on the merits filed respondents James T. Stroud, etal |
Nov 17 2003 | Answer brief on the merits filed appellants Jerome Zamos and Odion L. Okojie |
Dec 8 2003 | Request for extension of time filed reply brief/merits to 12-18-03>>respondents James T. Stroud |
Dec 10 2003 | Note: Prepared order granting e.o.t. as requested. |
Dec 12 2003 | Extension of time granted To December 18, 2003 to file Respondents' Reply Brief on the Merits. No further extensions of time will be granted. |
Dec 16 2003 | Request for extension of time filed to file reply brief/merits to 1-5-04>>respondents Jerome Zamos |
Dec 23 2003 | Extension of time granted Respondents' reply brief on the merits to and including January 5, 2004. No further extensions of time will be granted. |
Jan 5 2004 | Reply brief filed (case fully briefed) by respondents James T. Stroud, et al. |
Feb 4 2004 | Received application to file amicus curiae brief; with brief Association of California Insurance Companies in support of defendants and respondents |
Feb 10 2004 | Case ordered on calendar 3-9-04, 9am, S.F. |
Feb 13 2004 | Permission to file amicus curiae brief granted Association of California Insurance Companies in support of respondents. An answer threto may be served and filed by any party within twenty days of the filing of the brief. |
Feb 13 2004 | Amicus curiae brief filed Association of California Insurance Companies in support of respondents. |
Feb 26 2004 | Response to amicus curiae brief filed to ac Calif Insurance Companies>>appellants Jerome Zamos, etal |
Mar 9 2004 | Cause argued and submitted |
Apr 19 2004 | Opinion filed: Judgment affirmed in full Majority Opinion by Brown, J. -- joined by George, C. J., Kennard, Baxter, Werdegar, Chin, Moreno, JJ. |
Apr 26 2004 | Received: Letter from Ammirato & Palumbo, LLP (non-party) dated 4-21-2004/ |
May 4 2004 | Filed: modification of opinion>>respondents James T. Stroud, etal |
May 4 2004 | Received: Letter from Lewis Brisbois Bisgaard & Smith LLP (NON-PARTY) re: suggested modification of opinion. |
May 7 2004 | Time extended to consider modification or rehearing Finality of the Opinion in hereby extended to and including June 18, 2004. |
May 12 2004 | Received: letter from aplt. Zamos re modification requests |
Jun 9 2004 | Opinion modified - no change in judgment |
Jun 9 2004 | Remittitur issued (civil case) |
Jun 21 2004 | Received: Receipt for remittitur from Second District, Division Five, signed for by Z. Heraldez, Deputy Clerk. |
Briefs | |
Oct 17 2003 | Opening brief on the merits filed |
Nov 17 2003 | Answer brief on the merits filed |
Jan 5 2004 | Reply brief filed (case fully briefed) |
Feb 13 2004 | Amicus curiae brief filed |
Feb 26 2004 | Response to amicus curiae brief filed |