Thursday, September 18, 2003
S.C. to Rule on Malicious Prosecution Suit Against Lawyer
Case Poses Issue of Whether Attorney Can Be Sued Based on Facts Discovered After Filing Suit
By KENNETH OFGANG, Staff Writer/Appellate Courts
The California Supreme Court agreed yesterday to decide whether an attorney who, after filing suit, learns facts establishing that the action lacks probable cause may be held liable for malicious prosecution.
The court voted to grant a petition by Los Angeles attorney James T. Stroud and the firm of Stroud & Do for review of the ruling by this district’s Div. Five in Zamos v. Stroud, 110 Cal.App.4th 60.
The panel said that Woodland Hills attorney James Zamos can proceed with his suit against Stroud and his firm. Zamos claims Stroud engaged in malicious prosecution by continuing to represent a former client of Zamos’ in a baseless suit.
Zamos had represented Patricia Brookes in a wrongful foreclosure suit that went to trial. When it appeared that jurors were deadlocked, a settlement was reached with some of the defendants, who paid Brookes $250,000.
Allegations of Complaint
Brookes later retained Stroud to sue Zamos. Her complaint alleged the Valley lawyer falsely represented that he would continue to represent her against the non-settling defendants, that he would represent her in a malpractice suit against her previous counsel, and that he would have her house returned to her.
Zamos alleges that he provided Stroud with transcripts of hearings in the foreclosure suit, showing that the client had released all claims to the house as part of the settlement, had acknowledged that Zamos would not represent her in the malpractice suit, and had agreed in open court to Zamos’ withdrawal as counsel with respect to the remaining claims against the non-settling defendants.
Stroud did not dismiss the underlying suit, which went to trial, resulting in a nonsuit. Zamos then sued Stroud, his firm, and two witnesses whom Zamos claimed lied at the trial.
Los Angeles Superior Court Judge Stephen D. Petersen ruled that Zamos was unlikely to prevail against any defendant, and ordered the case stricken on an anti-SLAPP motion. The Court of Appeal affirmed as to the witnesses, but reinstated the claim against the lawyers.
In doing so, the justices rejected the reasoning of Div. Seven in Swat-Fame, Inc. v. Goldstein (2002) 101 Cal.App.4th 613. The Swat-Fame court relied on language in earlier decisions to conclude there is a “long-standing rule in California...that, if probable cause exists at the outset of he action, the party acting with probable cause is insulated from liability for malicious prosecution.”
Justice Richard Mosk, writing for Div. Five in Zamos, said there is no such longstanding rule, concluding that the earlier cases had not squarely presented the issue.
“It makes little sense to hold attorneys accountable for their knowledge when they file a lawsuit, but not for their knowledge the next day,” Mosk 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.”
The ruling, Mosk said, would “encourage voluntary dismissals of meritless claims at the earliest stage possible.”
The high court’s vote to grant review was 6-0, with Justice Joyce L. Kennard not participating. By an identical vote, the court denied Zamos’ petition to review the dismissal of his suit against the witnesses.
Copyright 2003, Metropolitan News Company