The California Court of Appeals, Fifth Appellate District, recently upheld a trial court’s order denying a motion to strike a malicious prosecution action filed by a defendant in a previous asbestos lawsuit dismissed on the eve of trial. In Tulare Sag, Inc. v. Keller, Fishback & Jackson, LLP, F064726 (Sup. Ct. No. VCU244256, September 30, 2013), the Appellate Court considered the merits of a malicious prosecution claim filed against the law firm that filed an asbestos wrongful death claim against an automotive dealership (Lampe Dodge).
In the underlying asbestos litigation, the plaintiff alleged that the decedent was exposed to asbestos during his career as an automobile mechanic. In the 15 causes of action contained in the original lawsuit, the plaintiff alleged that Lampe Dodge was directly liable for the decedent’s death as a seller of asbestos-containing automotive parts used in decedent’s mechanical work. The evidence discovered during the original litigation showed that Lampe Dodge had no direct liability as a seller of asbestos-containing products because of a series of corporate sales agreements. More than 2½ years before trial, Lampe Dodge requested that the plaintiff and his attorneys dismiss Lampe Dodge from the complaint. At that time, Lampe Dodge explained that it had acquired the selling dealership through an asset purchase that did not create liability for the plaintiff’s claims. Lampe Dodge further suggested that a failure to voluntarily dismiss the plaintiff’s claims could give rise to a malicious prosecution claim.
On the day before trial, the plaintiff’s counsel advised the court that there was no evidence to support the claims against Lampe Dodge as a direct seller of asbestos-containing automotive parts. The only theories of liability that would be pursued at trial rested on the contention that Lampe Dodge was the successor-in-interest to the previous seller, but the complaint did not allege successor liability. On the first day of trial, the plaintiff moved to amend the complaint to include successor liability allegations against Lampe Dodge, but the trial court denied the motion to amend and dismissed the action.
Lampe Dodge subsequently filed a complaint for malicious prosecution against Keller Fishback regarding the asbestos litigation. Keller Fishback moved to dismiss the malicious prosecution complaint as a Strategic Lawsuit Against Public Participation (SLAPP). To survive a SLAPP motion to dismiss, the plaintiff must show that the complaint is legally sufficient and present a prima facie case. A malicious prosecution claim lies where the plaintiff shows that the prior action terminated favorably to the plaintiff, the prior action was brought or continued without probable cause, and the prior action was initiated with malice. The Appellate Court denied Keller Fishback’s motion to dismiss, finding that Lampe Dodge met its burden of showing a probability of prevailing on its malicious prosecution claim.
The Court of Appeals found that the prior asbestos action terminated favorably because the trial court dismissed the complaint in the absence of any evidence of Lampe Dodge’s direct liability as a seller of asbestos-containing products. The trial court’s dismissal constituted an implicit recognition that the prior action was wholly untenable and meritless. Further, the Court of Appeals noted that Keller Fishback did not have probable cause to maintain the prior action because the plaintiff sought to recover on a theory of liability that was meritless. Finally, the appellate court found that Keller Fishback prosecuted the prior claim with malice because it continued to prosecute a lawsuit after becoming aware that the action lacked probable cause. The opinion noted that a prosecution may be malicious if it was initiated for the purpose of forcing a settlement unrelated to the merits of the claim.
The court’s ratification of the malicious prosecution action implicitly raises the bar for plaintiffs pursuing causes of action relating to asbestos exposure. The Tulare Sag case should serve as a warning to asbestos claimants that frivolous lawsuits may result in subsequent malicious prosecution litigation. Keller Fishback has filed a petition for rehearing with the Fifth District Court of Appeal, but the days of plaintiffs proceeding to the courthouse steps with nothing more than scant evidence and an unsupported theory may be coming to an end.