August 10, 2017

Supreme Court reaffirms limit on malicious prosecution actions

Reaffirming and strengthening the “interim adverse judgment rule,” the Supreme Court today holds in Parrish v. Latham & Watkins that plaintiffs who defeat a summary judgment motion on the merits cannot later be sued for malicious prosecution even if, after denying the motion, the superior court finds the plaintiffs’ action was brought in bad faith because it lacked evidentiary support.

The summary judgment denial is normally conclusive that the plaintiffs had probable cause to file the lawsuit, which defeats a subsequent malicious prosecution action.  The court’s unanimous opinion by Justice Leondra Kruger states the denial establishes that the plaintiffs’ “position had arguable merit, whether or not, after trial, the court wished it had ruled against them.”

Not every summary judgment denial has that effect, however.  The court explains that “the interim adverse judgment rule does not apply when the adverse judgment in question has been ‘shown to have been obtained by fraud or perjury.'”  But the opinion keeps the exception narrow, saying the general rule still applies even when “litigants or their lawyers inadvertently submit ‘materially false facts’ . . . in support of their claims.”

The court affirms the Second District, Division Three, Court of Appeal.

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