Thursday, July 3, 2003
C.A. Reinstates Malicious Prosecution Suit Against Valley Lawyer
Div. Five, Rejecting Recent Holding by Div. Seven, Says Attorney May Be Liable for Continuing Suit After Learning It Is Unjustified
By KENNETH OFGANG, Staff Writer/Appellate Courts
A lawyer who files suit in good faith has a duty to dismiss it if he or she subsequently learns that it is not supported by probable cause, and faces malicious prosecution liability for not doing so, the Court of Appeal for this district has ruled.
Acknowledging that its decision is in conflict with recent decisions by other panels, Div Five Tuesday reinstated a suit by Woodland Hills attorneys Jerome Zamos and Odion L. Okojie against Van Nuys lawyer James T. Stroud. Los Angeles Superior Court Judge Stephen D. Petersen had ordered the suit stricken as a strategic lawsuit against public participation.
Zamos and Okojie, practicing as the Law Offices of Jerome Zamos, sued over Stroud’s handling of a suit charging them with fraud. The plaintiff in that action was Patricia Brookes, who remains a defendant in the malicious prosecution suit and was not a party to the appeal.
The Zamos firm’s ex-client, Brookes, claimed that Zamos lied to her when he persuaded her to settle a wrongful foreclosure suit for $250,000, payable by some of the defendants.
In the suit filed by Stroud, she alleged that Zamos promised to continue representing her against the remaining defendants, would represent her in a malpractice suit against attorneys who had previously handled the case, and would have the house returned to her—and that he had no intention of keeping those promises.
After that suit was filed, Zamos sent to Stroud the transcripts of three hearings on the foreclosure suit. The transcripts indicated that Brooks was told and agreed that she was releasing all claims to the house, that she was told that Zamos would not represent her in the malpractice suit, and that Brookes did not object to having Zamos relieved as counsel with regard to the claims against the non-settling defendants, who had defaulted.
The fraud suit went to trial after a motion for summary judgment was denied. Zamos won on a nonsuit, then filed his malicious prosecution suit.
Justice Richard Mosk, writing for the Court of Appeal, said earlier decisions by this district’s Div. Seven and the Fourth District’s Div. One—holding that malicious prosecution liability will not lie against an attorney who had probable cause to bring suit according to facts known at the time of filing—were wrong.
“Instead, in conformity with Supreme Court dictum and the Restatement Second of Torts, we hold that an attorney may be liable for malicious prosecution if the attorney continues to prosecute a lawsuit after discovery of facts that establish that the lawsuit has no merit,” he wrote.
Any other rule makes no sense, Mosk concluded.
“It makes little sense to hold attorneys accountable for their knowledge when they file a lawsuit, but not for their knowledge the next day,” the justice wrote. “There is no logic in immunizing attorneys from liability for malicious prosecution simply because the attorneys think there is probable cause when they file the lawsuits, if shortly thereafter they discover the lawsuits have no merit but they continue to prosecute them.”
Applying that reasoning to Zamos’ suit against Stroud, Mosk said the anti-SLAPP motion should have been denied because Zamos demonstrated a probability of winning on the merits, even though malicious prosecution is a “disfavored cause of action.”
Once he read the transcripts, Mosk wrote, Stroud should have known that the alleged fraudulent promises to try to get Brookes’ house back and to represent her in a suit against her previous lawyers were never made. And while there was no conclusive proof that Zamos did not promise to represent her against the non-settling defendants, the transcript suggests that he made no such promise, and there was evidence of damage even if he did, Mosk said.
The fact that summary judgment was denied does not establish that there was probable cause, Mosk reasoned. Summary judgment likely would have been granted had Stroud not submitted opposing papers that included statements by Brookes that the transcripts showed to be “demonstrably false.”
Mosk was joined by Justice Orville Armstrong. Justice Margaret Grignon dissented, arguing that the cases rejected by Mosk were persuasive.
Zamos and Stroud both represented themselves on appeal.
The case is Zamos v. Stroud, 03 S.O.S. 3500..
Copyright 2003, Metropolitan News Company