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If a California attorney has good reason to suspect that a lawsuit has no merit after it has been filed, he would be wise to get out while the gettin’s good. On Monday, the state Supreme Court, in a case of first impression, ruled unanimously that lawyers could be sued for malicious prosecution if they continue to pursue a case after learning it isn’t supported by probable cause. “Continuing an action one discovers to be baseless harms the defendant and burdens the court system just as much as initiating an action known to be baseless from the outset,” Justice Janice Rogers Brown wrote. “As the court of appeal in this case observed, ‘It makes little sense to hold attorneys accountable for their knowledge when they file a lawsuit, but not for their knowledge the next day.’” The ruling reinstates a malicious prosecution suit filed by Woodland Hills lawyer Jerome Zamos against former client Patricia Brookes and her subsequent attorney, James Stroud. Zamos accused the two of persisting in pursuing a fraud action against him in spite of strong evidence that he had done nothing wrong. Brookes had accused Zamos of misrepresenting her in a foreclosure suit in which she received a settlement of nearly $167,000. Zamos offered documents from court hearings, indicating that he had not misled Brookes in any manner: Los Angeles County Superior Court Judge Stephen Petersen even told Brookes she “couldn’t have had a better lawyer” than Zamos. L.A.’s 2nd District Court of Appeal backed Zamos last year, even though the same court had held in two separate cases in 2002 that malicious prosecution was limited to the initiation of a suit, not the continuation. In Monday’s opinion, the Supreme Court disapproved of both those cases — Swat-Fame Inc. v. Goldstein, 101 Cal.App.4th 613, and Vanzant v. DaimlerChrysler Corp., 96 Cal.App.4th 1283. “Confining the tort of malicious prosecution to the initiation of a suit without probable cause would be, we conclude, without support in authority or in principle,” Brown wrote. Brown noted that for 25 years the law — as stated in the Restatement Second of Torts — has held that anyone who continues a civil proceeding after learning there is no probable cause “becomes liable as if he had then initiated the proceeding.” In addition, Brown pointed out, 13 states have agreed, including Colorado as long ago as 1932, and Pennsylvania back in 1900. Stroud, the lawyer sued for malicious prosecution, had argued that a ruling favoring his opponent would be unworkable — it would prevent lawyers from zealously representing their clients. Many attorneys, he argued, would continually second-guess the merits of their litigation and fear retaliation. The Supreme Court spurned Stroud, saying the legal hurdle for a malicious prosecution action would be high. “Only those actions that any reasonable attorney would agree are totally and completely without merit may form the basis for a malicious prosecution suit,” Brown wrote. “The same standard will apply to the continuation as to the initiation of a suit.” Zamos said he was pleased by the court’s decision and felt it was significant that the justices followed “what has been the law in virtually every other jurisdiction.” He also said he hopes the ruling makes lawyers “think more seriously when they are provided with clear evidence that whatever they’re pursuing is meritless.” Stroud, a partner in Van Nuys’ Stroud & Do, said he fears that the opinion will place hundreds of lawyers in his shoes, and leave them wondering where to draw the line in vigorously litigating a case. “They’ve created a new tort, and it just surprised me they would do this,” he said. “The bright line that made it clear for everybody is gone.” Paul Larsen, who represented the Association of California Insurance Companies as an amicus curiae, was less worried than Stroud, even though he argued in court papers that an opinion expanding the grounds for malicious prosecution could leave lawyers in the lurch if new information comes up during litigation. Larsen, a partner in Pasadena’s Milam & Larsen, said the high court simply held that “under the right kind of facts,” there could be a basis for a malicious prosecution suit. “Every time the Supreme Court has spoken about that,” he added, “they have talked in terms of how malicious prosecution is really reserved for the exceptional case.” The ruling is Zamos v. Stroud, 04 C.D.O.S. 3369.

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