The Fourth District holds that unless an attorney is aware of specific factual errors, he or she will not be liable for malicious prosecution for initiating an action based on a client’s version of events.
Cynthia Ping (Ping) purchased a condominium from the Morrisons. She claimed that after she took possession of the condominium, she noticed construction defects and learned that the Home Owners’ Association (HOA) was initiating construction defect litigation against the builders. Ping was unable to pay for necessary repairs, and the defects and the litigation precluded a sale. After Ping lost the property in foreclosure, the HOA sued her for unpaid assessments. Ping cross-complained against the HOA and the Morrisons for fraud and negligent misrepresentation.
After the Morrisons obtained summary judgment on Ping’s cross-complaint, they sued Ping’s attorneys, Haight, Brown & Bonesteel and George Rudolph (“Rudolph”) for malicious prosecution. Rudolph obtained summary judgment on the issue of probable cause to file the cross-complaint.
The Court of Appeal agreed with the trial court. Rudolph had set forth undisputed facts to establish an objectively reasonable basis for the cross-complaint because Ping told Rudolph that the Morrisons had failed to disclose defects in the condominium and that she would not have purchased the property had the disclosures been made. The Court agreed with the reasoning of Swat-Fame v. Goldstein (2002) 101 Cal.App.4th 613 (PL Update No. 136) and held that Rudolph was entitled to rely upon the facts communicated by his client, absent notice of specific mistakes.
The Court also relied upon and thus revived Tool Research & Engineering Corp. v. Henigson (1975) 46 Cal.App.3d 675, (disapproved on other grounds in Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863.) The Tool Research court held that an attorney may vigorously pursue litigation even where it is unclear whether the client or the client’s adversary is truthful “so long as that issue is genuinely in doubt.” Because there was no evidence that Rudolph had notice of a specific factual mistake in Ping’s account, he was entitled to rely on her version of events when initiating the action against the Morrisons.
Comment: Morrison, like Swat-Fame, establishes yet another protection against malicious prosecution liability for attorneys. The ability of attorneys to rely on a client’s version of events allows attorneys to comply with ethical rules mandating vigorous advocacy on behalf of a client.