1. Sheldon Appel
2. Definition of Malicious Prosecution

An intentional tort arising from the institution instigation of unjustifiable and unreasonable civil or criminal litigation.

An action for malicious prosecution can be brought against underlying case's plaintiff, plaintiff's counsel and/or advisors.

Sheldon Appel

In one of California's leading cases, its Supreme Court granted review in Sheldon Appel "to consider a number of issues relating to the proper determination of the probable cause element in a malicious prosecution action, including the question whether a plaintiff may establish an absence of probable cause by proving that its former adversary attorney failed to perform adequate legal research before filing the prior action." (Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3dat pp.867-868.) To that end, the Court determined "that the most promising remedy for excessive litigation does not lie in an expansion of malicious prosecution liability" (id. at p. 873) and thus found it was not "advisable to abandon or relax the traditional limitations on malicious prosecution recovery." (Id. at p.874.) It was from that perspective that the Court analyzed the specific questions presented in Sheldon Appel.

  • First, the Supreme Court determined the issue of probable cause is one for the court, not a jury. (Sheldon Appel, supra, 47 Cal.3d at pp.874-877) Thus, where there are no disputed questions of fact relevant to the probable cause issue, the matter may be determined by summary judgment(or on appeal by de novo review). Id. at pp.884-886.
  • Second, the Supreme Court determined that, where (as in Sheldon Appel) "the facts known by the attorney are not in dispute, the probable cause issue is properly determined by the trial court under an objective standard; it does not include a determination whether the attorney subjectively believed that the prior claim was legally tenable."(Sheldon Appel, supra, 47 Cal.3d at p.881)

The Perceived and Objective Tenability of a Claim

To avoid confusion, the Court "strongly emphasize[d]" that it did not mean to "suggest that an attorney who institutes an action which he does not believe is legally tenable is free from the risk of liability for malicious prosecution. If the trial court concludes that the prior action was not objectively tenable, evidence that the defendant attorney did not subjectively believe that the action was tenable would clearly be relevant to the question of malice. Inasmuch as an attorney who does not have a good faith belief in the tenability of an action will normally assume that a court is likely to come to the same conclusion, the malicious prosecution tort will continue to deter attorneys from filing actions which they do not believe are legally tenable.

"Furthermore, the probable cause element, as so defined, imposes improper or unjustified hardship on a malicious prosecution plaintiff. If a court finds that the initial lawsuit was in fact objectively tenable, the court has determined that the fundamental interest which the malicious prosecution tort is designed to protect -- 'the interest in freedom from unjustifiable and unreasonable litigation' -- has not been infringed by the initial action. Under such circumstances, it is not unfair to bar a plaintiff's suit for damages even if the plaintiff can show that its adversary's law firm did not realize how tenable the prior claim actually was, since the plaintiff could properly have been put to the very same burden of defending an identical claim if its adversary had simply consulted a different, more legally astute, attorney. This is a classic case of 'no harm, no foul.'" (Sheldon Appel, supra, 47 Cal.3d at pp.881-882)

In reaching this conclusion, the Supreme Court discussed a number of malicious prosecution cases in which the attorney-defendants had been specifically charged with knowledge of the falsity of the claim asserted in the underlying action, e.g., Bertero v. National General Corp. (1974)13 Cal.3d 43, Franzen v. Shenk (1923) 192 Cal. 572, and Albertson v. Raboff (1956) 46 Cal.2d 375. As the Supreme Court put it in Sheldon Appel, in each of those cases the "plaintiff's contention was that the prior action had been prosecuted 'with knowledge of the falsity of the claim . . . .'" (Sheldon Appel, supra, 47 Cal.3d at p.880, incl fn. 8)

The Reevaluation of Probable Cause

Moreover, the "fundamental interest" protected by the malicious prosecution tort is "'freedom from unjustifiable and unreasonable litigation." Sheldon Appel, supra, 47 Cal.3d at p. 882. For this reason, even under the subjective belief standard rejected in Sheldon Appel (the question used to be whether the attorney had an "honest belief" that his client's claim was tenable, e.g. Tool Research & Engineering Corp. v. Henigson (1975) 46 Cal.App.3d 675, 683), a jury verdict in the client's favor in the underlying case was "conclusive evidence of the existence of probable cause even though subsequently reversed." (Cowles v. Carter(1981) 115 Cal.App.3d 350, 356.) That rule was based on the notion that persons who initiate civil proceedings should not thereafter be subjected to malicious prosecution litigation unless it could be shown that they acted without probable cause -- and that if probable cause had been determined by the trier of fact in the prior proceedings, it was not subject to reevaluation even when the jury's determination was reversed. (Ibid; see also Gause v. McClelland (1951) 102 Cal.App.2d 762,764; Black v. Knight (1919) 44 Cal.App. 756, 770; Lucchesi v. Giannini &Uniack (1984) 158 Cal.App.3d 777, 785-788.)

The several references in Sheldon Appel to freedom from "unjustifiable" and "unreasonable" litigation suggest the continuing validity of the rule that a prior determination of "probable cause" cannot be second-guessed in a malicious prosecution action even where the judgment in the underlying action is reversed on appeal. It follows necessarily that where the record in the underlying action is equally complete (albeit with a different ending), it constitutes all the evidence needed to determine whether the underlying action was objectively tenable when it was filed. Accordingly, there are no disputed facts concerning the record in the underlying action, the trial court may by summary judgment determine the probable cause issue, and the attorney's knowledge is entirely irrelevant.

Standard for Determining Objective Tenability

After holding that an attorney's "reasonable" research and "industrious" investigation are legally irrelevant to the determination of probable cause, (Sheldon Appel, supra, 47 Cal.3d at pp.882-883), and that expert testimony is not admissible on the question of probable cause (id. at p. 884), the Supreme Court concluded with the articulation of a standard for determining whether the underlying action was objectively tenable when filed.

In Sheldon Appel, supra, 47 Cal.3d at p. 868, the California Supreme Court held that where "there is no dispute as to the facts upon which an attorney acted in filing the prior action, the question whether there was probable cause to institute the prior action is purely a legal question, to be determined by the trial court on the basis of whether, as an objective matter, the prior action was legally tenable or not. If the court determines that the prior action was not objectively tenable -- and thus concludes that the action was brought without probable cause -- evidence of the extent of an attorney's legal research may be relevant to the further question of whether the prior action was instituted with malice, but if the court finds that the prior action was, in fact, tenable, probable cause is established -- and the malicious prosecution action fails -- without regard to the adequacy or inadequacy of the attorney's legal research efforts."

Consideration of the actual holding of Sheldon Appel and of the reasons the Supreme Court adopted an objective standard persuade that the repeated references in the opinion to the attorney's knowledge were included because, in the factual context of that case, reference to the attorney's knowledge was the only way to determine whether the underlying action was objectively tenable when it was filed. Where undisputed evidence establishes an objectively reasonable basis for instituting the underlying action, a "dispute" about what the attorney knew or did not know at the time she filed the underlying action is irrelevant.

The Court expressly rejected the more stringent "prudent attorney" test (where the question is whether a prudent attorney, after such investigation of the facts and research of the law as circumstances reasonably warrant, would have considered the action to be tenable on the theory advanced), adopting instead the less stringent "reasonable attorney" formulation of In re Marriage of Flaherty (1982) 31 Cal.3d637, 650, the definition applied to court-imposed sanctions for frivolous appeals "'to avoid a serious chilling effect on the assertion of litigants' rights. . . . Counsel and their clients have a right to present issues that are arguably correct, even if it is extremely unlikely that they will win . . . .'" Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3d at p.885, quoting In re Marriage of Flaherty, supra, 31 Cal.3d at p.650. As the Court put it, there is no "reason to afford litigants and their attorneys less protection from subsequent tort liability than [there] is to shield them from court-imposed sanctions within the initial action." Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3d at p.885.

Modified to the malicious prosecution context, the standard is "whether any reasonable attorney would have thought the claim tenable" (Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3d at p.886), a standard that is satisfied if the issues presented in the underlying action were arguably correct, even if it was extremely unlikely the client would win(id. at p.885)

Reasonable Limitations on Malicious Prosecution Actions

The theoretical underpinnings of Sheldon Appel is the imposition of reasonable limitations on malicious prosecution actions to avoid the serious chilling effect on the assertion of litigants' rights, by permitting lawyers and their clients to present issues that are arguably correct, even if it is extremely unlikely that they will win. Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3d at p.885.

  • Denial of a motion for summary judgment in the underlying action does not itself preclude a subsequent malicious prosecution claim. Lucchesiv. Giannini & Uniack, supra, 158 Cal.App.3d at p.787.
  • The standard of proof on a motion for summary judgment for the plaintiff in the underlying action may differ from the standard applied to the lawyer for the plaintiff in the underlying action. (Leonardini v. Shell Oil Co. (1989) 216 Cal.App.3d 547, 569, fn.7, cert. denied (1990) 498U.S. 919.)

In Sheldon Appel, a lis pendens was filed in the underlying case (an action for declaratory relief). When the lis pendens was expunged, that meant the declaratory relief action had "terminated in Sheldon Appel's favor." (Sheldon Appel, supra, 47 Cal.3d at p. 869.) Thus, the malicious prosecution defendant's knowledge at the time the underlying action was initiated was the only way to determine whether the prior action was objectively tenable when filed. (See also Leonardini v. Shell Oil Co., supra, 216 Cal.App.3d at pp.563, 567-570; Klein v. Oakland Raiders, Ltd. (1989) 211 Cal.App.3d 67, 71, 75-76; Sheldon Appel, supra, 47Cal.3d at p.886.)

Definition of Malicious Prosecution

MALICIOUS PROSECUTION, or MALICIOUS ARREST: torts, or remedies. These terms import a wanton prosecution or arrest, made by a prosecutor in a criminal proceeding, or a plaintiff in a civil suit, without probable cause, by a regular process and proceeding, which the facts did not warrant, as appears by the result.

This definition will be analyzed by considering:

  1. The nature of the prosecution or arrest.
  2. Who is liable under it.
  3. What are malice and probable cause.
  4. The proceedings.
  5. The result of the prosecution and afterwards.
  6. The remedy.

The Nature of the Prosecution

Where the defendant commenced a criminal prosecution wantonly and in other respects against law, he will be responsible. The prosecution of a civil suit, when malicious, is a good cause of action, even when there has been no arrest. But no action lies for commencing a civil action, though without sufficient cause.

Who Is Liable

The action lies against the prosecutor and even against a mere informer, when the proceedings are malicious. But grand jurors are not liable to an action for a malicious prosecution, for information given by them to their fellow jurors, on which a prosecution is founded. Such action lies against a plaintiff in a civil action who maliciously sues out the writ and prosecutes it but an action does not lie against an attorney at law for bringing the action, when regularly employed.

Malice and Probable Cause

There must be malice and want of probable cause.

The Proceedings

The proceedings under which the original prosecution or action ashed, must have been regular, in the ordinary course of justice, and before a tribunal having power to ascertain the truth or falsity of recharger, and to punish the supposed offender, the now plaintiff. When the proceedings are irregular, the prosecutor is a trespasser.

The Result

The malicious prosecution or action must be ended, and the plaintiff must show it was groundless, either by his acquittal or by obtaining a final judgment in his favor in a civil action.

The Remedy

The remedy for a malicious prosecution is an action on the case to recover damages for the injury sustained.