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Law Practice,
Ethics/Professional Responsibility,
Civil Litigation

Aug. 7, 2020

Should we revisit the ‘prior win’ standard for malicious prosecution?

A recent decision by the 4th District Court of Appeal may explain why some litigants and lawyers don’t know when to stop. As the decision rejects the only other published California opinion on the same point, the table is set for our state Supreme Court to clear up some of the misunderstandings.

Castoria louie web

Louie H. Castoria

Partner, Kaufman, Dolowich & Voluck LLP

425 California St 21st Fl
San Francisco , CA 94104

Phone: (415) 926-7601

Fax: (415) 926-7601


UC Berkeley Boalt Hall

Louie is also a private mediator at, a mandatory settlement conference officer for the San Francisco County Superior Court, an adjunct professor at Golden Gate University School of Law, and founder of the Coastal Literary Arts Movement (CLAM), a 501(c)(3) nonprofit promoting bilingual literary appreciation and independent journalism in small communities. He also finds time to write a weekly humor column.

A recent decision by the 4th District Court of Appeal may explain why some litigants and lawyers don't know when to stop. As the decision rejects the only other published California opinion on the same point, the table is set for our state Supreme Court to clear up some of the misunderstandings.

The two colliding cases are the 2nd District's JSJ Limited Partnership v. Mehrban, 205 Cal. App. 4th 1512 (2012) and the 4th District's Alston v. Dawe, 2020 DJDAR 7873 (July 27, 2020). A third case, Casa Herrera, Inc. v. Beydoun, 32 Cal. 4th 336 (Cal. 2004), is cited in both JSJ and Alston as supporting their opposite conclusions.

Alston and JSJ apply three well-worn concepts in California civil litigation: res judicata/collateral estoppel, anti-SLAPP protection for the right to advocate for redress in court, and malicious prosecution. (California Code of Civil Procedure Section 426.16 provides a "special motion to dismiss" a suit that meets any of several definitions of a "Strategic Lawsuit Against Public Participation." In an anti-SLAPP motion the moving party must prove that the advocacy at issue is protected, then the burden shifts to the opposing party to prove that it has a probability of prevailing in the case.)

Different goals, different outcomes

The varying goals of these three concepts appear to be at the root of the divergence of opinion:

• Res judicata/collateral estoppel: the same matter or issue was decided on the merits against the party to be estopped or someone in privity with that party. Their goal: finality.

• Anti-SLAPP: the defendant establishes that the lawsuit will curtail protected advocacy if it is not dismissed, and the plaintiff fails to demonstrate a probability of prevailing on the merits. Its goal: free speech.

• Malicious prosecution: (a) the underlying case was pursued to a non-procedural legal determination favorable to the legal malpractice plaintiff, (b) was brought without probable cause, and (c) was initiated with malice. Its goal: deterrence of litigation abuse.

These differing goals lead to some odd results:

In any defense counsel's ledger of wins and losses, a dismissal based on the statute of limitations goes under "wins." It has res judicata effect, but it is technically considered a "procedural" determination, in the context of a later malicious prosecution case, because the statute of limitations bars both meritorious and bogus lawsuits.

A voluntary dismissal brings finality to a case, but has no collateral estoppel effect unless a specific issue was adjudicated before the dismissal. Nor is the dismissal a "favorable adjudication" for malicious prosecution purposes, as the JSJ court held: "[T]he voluntary dismissal of a claim after a court held that the claim was barred by the doctrine of res judicata was not a favorable termination for purposes of malicious prosecution."

Or is it? The Alston court cites a 1st District case decided in 2019 -- seven years after JDJ: "[a] voluntary dismissal is presumed to be a favorable termination on the merits unless proved otherwise to a jury because the natural assumption is that one does not simply abandon a meritorious action." (Quoting Olivares v. Pineda, 40 Cal. App. 5th 343, 354 (2019)). Alston was not voluntarily dismissed, but the court raised the topic as an example of the substantive/procedural dichotomy.

In Casa Herrera, a contract/fraud case, the underlying plaintiff's defeat at trial was based on the parol evidence rule, not a finding of bad behavior on plaintiff's part. Isn't it odd that a rule that knocks out one piece of evidence is "substantive," though not reflecting on the proffering party's ethics, while the statute of limitations, which throws the whole case out of court is "procedural"?

The never-ending lawsuit

Alston presents a 12-page summary of a 1L Civil Procedure final exam fact pattern from hell. (Pardon the redundancy.) Two partners bought an office building, their interests split 50/50, with one partner designated to do the property management work, and the other, who was also a tenant in the building, in charge of the legal work. Manager-partner hired counsel to sue Lawyer-partner for unpaid rent.

Alston ran the litigation gamut on the issue of Manager-partner's authority: arbitration, judicial confirmation, trial on damages, appeal, motion to disqualify counsel, affirmance, second lawsuit (declaratory relief), anti-SLAPP motion based on collateral estoppel, ruling on the first appeal, third lawsuit (malicious prosecution), mutual anti-SLAPP motions, appeal. The cumulative burden on judicial resources is striking.

From the scene of battle there emerged a suggested way out of the procedural briar patch. As the courts in Alston and Casa Herrera noted, "the termination must reflect the merits of the action and the plaintiff's innocence of the misconduct alleged in the lawsuit.'"

Applying a fault-based definition of a previous "win" for malicious prosecution purposes is fine when the fault is the underlying plaintiff's, but what if the "malice" is on plaintiff's counsel's part, with the plaintiff "along for the ride" rather than driving the bus? The lay plaintiff's innocence or culpability is irrelevant to the lawyers'.

When the trial court has already assessed the complaining party's culpability, as could occur in a ruling on the second prong of the anti-SLAPP test, the record may make the court's task in the malicious prosecution case easy. But if the record is sparse, as is usually so in cases dismissed on statute of limitations grounds, the court in the legal malpractice case must follow the familiar and onerous process of "case within a case" fact finding.

After the Alston court examined such scenarios for guidance, it directly addressed the procedural setting before it -- whether a termination of the underlying action on collateral estoppel grounds is "favorable" -- and concluded, "It depends[,]" stating the test upon which courts should decide future cases: "If that earlier case involved a determination on the merits of a particular issue, and if the party's culpability on that issue was argued, litigated, and decided in that earlier case, then the termination of the second case on collateral estoppel grounds is reflective of the merits of that case and qualifies as a favorable termination[.]"

Applying this test to the case at hand, the court noted that the original determination by the arbitrator, that Manager-partner had authority to retain attorney Alston to sue Lawyer-partner B had been confirmed by the trial court and left undisturbed on appeal. It was a favorable determination: "Thus, the dismissal of Case 2 on collateral estoppel grounds was not purely procedural; it reflected the merits (or lack thereof) of Case 2."

There is more to the case than the above snippet conveys, but standing alone it doesn't sound like a reproach of Lawyer-partner B for "culpable" behavior. Being on the losing side of a contested issue doesn't make one culpable, just incorrect.

How much process is due?

This being an op-ed piece, the author may perhaps be forgiven for stating his opinions.

The Alston court's fault-based focus preserves the fact-finder's determination, thus thwarting a collateral attack on a settled point. We could stop there, and have a simple framework for future cases. Characterizing the collateral estoppel ruling as "not purely procedural" would not be needed, though the court was constrained to fit its decision into the substantive/procedural rubric that has been used for decades.

The current state of the law gives the practicing litigator little notice of what conduct may be subject to or safe from malicious prosecution actions. With three appellate districts reaching different outcomes, two specifically on collateral estoppel and a third on a voluntary dismissal, perhaps it's time for a clarification from on high. 

This article does not provide legal advice. The views expressed are the author's and not necessarily the firm's or its clients'.


Ben Armistead

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