Wednesday, January 30, 2013
C.A. Affirms Ruling in Lawyers’ Malicious Prosecution Battle
Panel Declines to Retroactively Apply Prior Decision on Statute of Limitations
By KENNETH OFGANG, Staff Writer
A 2011 Court of Appeal ruling that rejected prior case law in holding that a plaintiff has one year, not two, to bring a malicious prosecution suit against a lawyer does not apply to suits brought before the ruling was handed down, the Court of Appeal for this district has ruled.
Div. One Monday certified for publication its Dec. 31 opinion affirming a $300,000 judgment won by Valley Village attorney Martina A. Silas against James E. Arden, who practices in North Hollywood.
A Los Angeles Superior Court jury awarded the money, including $125,000 in punitive damages, finding that Arden had improperly pursued a meritless malpractice case against Silas on behalf of her former client, Ross Gunnell.
Gunnell, an unskilled laborer, had worked at Metrocolor Laboratories, which processed movie and television film. He suffered injuries, and became unable to work, after being doused with a chemical solvent used as a cleaner.
He sued several defendants, including Metrocolor, in 1995. Silas, as his attorney, settled with two of the defendants but went to trial against the former employer.
Silas originally proceeded against Metrocolor based on two asserted exceptions to workers’ compensation exclusivity—willful assault and fraudulent concealment. She subsequently dropped the fraudulent concealment theory, she said, because it was clear from discovery that Gunnell had complained about skin problems he knew were related to the solvent months before the incident that led to the suit.
Silas argued that the willful assault exception applied because the company had exposed Gunnell to harmful substances without his consent. The jury returned a verdict for $6.5 million, including $5 million in punitive damages, but the judge ruled that the exception did not apply and granted the defendant’s JNOV motion.
The Court of Appeal affirmed, reasoning that the exception only applies when an employer intentionally and without cause directs physical force against its employee.
Gunnell subsequently sued Silas, originally representing himself before retaining Arden. The complaint alleged that Silas was negligent in not pursuing the fraudulent concealment theory, and that she had, without authorization, retained the proceeds of the earlier settlements.
Silas responded that she had concluded the fraudulent concealment theory was without merit when documentation surfaced during discovery regarding Gunnell’s treatment for skin irritation. As for the settlement monies, she explained that she was entitled to retain them—pursuant to the retainer agreement—because Gunnell was liable for costs and the settlements were less than the costs.
She also noted that she had given Gunnell $2,500 from the $20,000 in settlements, even though not required to do so, and that Gunnell had signed the checks and the settlement documents before a notary.
Silas won the malpractice suit on summary judgment, then sued Arden for malicious prosecution in early 2008, about 18 months after the remittur issued on the affirmance of the judgment.
In 2011, after closing arguments at the malicious prosecution trial, Arden filed an amended answer, arguing that the suit was untimely under Vafi v. McCloskey (2011) 193 Cal.App.4th 874 which held that under Code of Civil Procedure Sec. 340.6, a one-year statute of limitations applied to a malicious prosecution action against an attorney.
Silas said she had relied on several prior cases, one as recent as 2006, applying a two-year statute to such actions. Judge Kenneth Freeman agreed that the longstanding prior rule should not be applied retroactively, and denied Arden’s motion for JNOV.
Justice Jeffrey Johnson, writing for the Court of Appeal, agreed with the trial judge. Assuming that Vafi was correct, an issue the panel found unnecessary to decide, Silas’ reliance on the prior case law “was manifestly reasonable” given the “unforeseen change wrought by Vafi,” the justice said.
Johnson went on to say that the jury’s findings of lack of probable cause and malice were supported by substantial evidence. There was no reason for the attorney to continue to pursue the malpractice case once it was clear that the law and the facts did not support it, he said.
The case is Silas v. Arden, 13 S.O.S. 423.
Copyright 2013, Metropolitan News Company