An object lesson in thinking twice before suing for malicious prosecution

No one likes to be sued. Defendants who win their cases often want to pursue a malicious prosecution suit in retribution for being sued in the first place. The desire to get even is understandable, powerful and generally wrongheaded.

There are several reasons not to sue an unsuccessful plaintiff for malicious prosecution, including the need to litigate the initial suit to a favorable termination on the merits, the difficulty of establishing that the plaintiff had no probable cause to bring the original suit against the defendant, and the general unavailability of attorney fees in malicious prosecution cases.

A recent 2nd District Court of Appeal decision in JSJ Limited Partnership v. Mehrban, 2012 DJDAR 6459 (Cal. App. 2nd Dist., May 17, 2012), is an epic example of reasons not to sue for malicious prosecution. Instead of winning its malicious prosecution case, the original defendant, which had won and was home free, now instead may well wind up owing attorney fees to the lawyer for the original plaintiff.

Attorney Morse Mehrban represented Alfredo Garcia in two suits against restaurant operator JSJ concerning disabled access. Garcia alleged that he could not walk and was confined to a wheel chair.

Garcia alleged in his first suit that he had visited JSJ's restaurant five times, but had been unable to use the restroom paper towels or toilet seat cover dispensers because they were mounted too high, and was unable to use the toilet itself because there were no grab bars. JSJ won that court trial.

Garcia alleged in his second suit that there was not proper disabled parking at the restaurant. The trial court sustained a demurrer to this second suit under res judicata because both suits asserted ADA violations based on architectural barriers. Garcia then voluntarily dismissed that case.

So far so good. JSJ had a defense judgment, a dismissal final beyond appeal and an opportunity to head off further litigation by fixing the alleged ADA violations. Time to walk away from the table?

No. JSJ sued Mehrban and Garcia for malicious prosecution and abuse of process in connection with the second suit. The complaint alleged that the sustained demurrer was a favorable termination; quoted the trial court as saying the second pleading "appears to be a sham"; claimed the complaints in the two cases directly contradicted each other; and accused Mehrban of "contriving the second lawsuit for retribution because JSJ prevailed in the first lawsuit."

Enter California's anti-SLAPP law, which allows a person sued for certain public acts to require that the defendant show a likelihood of prevailing in order for the suit to go forward. Mehrban filed an anti-SLAPP motion to strike under Code of Civ. Proc Section 425.16 contending that the second complaint was a "protected activity," that the sustained demurrer to the second complaint was not a favorable termination, and that he had probable cause to bring the second case based on sworn statements by Garcia. The trial court denied the anti-SLAPP motion without explanation, but the Court of Appeal reversed and ordered the trial court to grant the motion to strike. Adding insult to injury, the appellate court also ordered the trial court to consider whether Mehrban was entitled to attorney fees for prevailing on its anti-SLAPP motion.

The Court of Appeal ruled that filing a complaint is "protected activity" under California law, so that the likelihood of prevailing had to be examined under the anti-SLAPP law. This is rather obvious under the statute and existing case law. The subjective intent or motivation of someone filing a complaint is irrelevant; a complaint is a written statement in a judicial proceeding and thus eligible for review under the anti-SLAPP statute.

Then, the Court of Appeal turned to the two causes of action to determine if JSJ had a likelihood of prevailing on the merits - the requirement for overcoming an anti-SLAPP motion to strike. As for abuse of process, the litigation privilege found in Civil Code Section 47(b) prevents the examination of the plaintiff's motive required for an abuse of process finding. This is an absolute privilege barring all torts except malicious prosecution. Thus, even if the purpose of a complaint is to improperly extort a settlement, it cannot be the basis of abuse of process.

The malicious prosecution cause of action fared no better. Malicious prosecution requires a favorable termination on the merits and the voluntary dismissal, even following the trial court's sustaining the demurrer with scathing comments about the complaint, was deemed to be procedural and not on the merits, barring a malicious prosecution claim. This was viewed by the Court of Appeal to be a close question, but the court pointed out that a res judicata defense does not speak to the underlying merits of the case, just to a flaw in procedure, namely bringing the same case twice.

Thus there was no merits-based favorable termination. If JSJ had wanted to proceed for malicious prosecution, it needed to "eschew the procedural defense" and contest the 2009 case on the merits. The case was remanded for a dismissal and to determine if Mehrban is entitled to an award of attorney fees under the anti-SLAPP statute.

JSJ arguably should have quit while it was ahead, even if it was out for fees. In many cases, the best course is to open a bottle of champagne, celebrate, and maybe throw a few darts at the plaintiff's picture, but move on. As tough as the restaurant business is, the malicious prosecution business seems to be tougher.