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Keywords

lawsuitattorneytrialsummary judgmentcorporationgood faithjury trial

litigationattorneydiscoveryliabilitygood faithrespondentappellant

Related Cases

Tool Research & Engineering Corp. v. Henigson, 46 Cal.App.3d 675, 120 Cal.Rptr. 291

Facts

The case arose from a malicious prosecution action brought against Tool Research and its executives after they were found not liable in a federal lawsuit initiated by Southwestern Capital Corporation. The federal action claimed that Tool Research's CEO, Leo Wyler, had induced Southwestern to loan money to United Wholesale Building Supply Company without disclosing its precarious financial condition. After a jury trial in the federal court, the jury found in favor of Tool Research, leading to the malicious prosecution claim against the attorneys who represented Southwestern in that action.

The investigation and discovery also disclosed facts from which inferences favorable to appellants, Tool Research and Wyler, could be drawn, and which, if accepted by a trier of fact, would defeat the Southwestern claim.

Issue

The main legal issue was whether the attorneys for Southwestern had probable cause to pursue the federal lawsuit against Tool Research and its executives, and whether they could be held liable for malicious prosecution.

Appellants contend: (1) where a suit for malicious prosecution of a civil action is filed against a party and its counsel in a prior action under circumstances in which one of the defenses of the party may be good faith reliance upon the advice of counsel, the liability of attorney and client is joint so that any misconduct by the client is imputed to the attorney.

Rule

The court ruled that attorneys are not required to weigh evidence for and against their clients but must entertain a reasonable and honest belief that their clients have a tenable claim for which there is probable cause for representation.

An attorney has probable cause to represent a client in litigation when, after a reasonable investigation and industrious search of legal authority, he has an honest belief that his client's claim is tenable in the forum in which it is to be tried.

Analysis

The court analyzed the evidence presented and determined that the attorneys had conducted a reasonable investigation and had a good faith belief in the tenability of Southwestern's claim. The court emphasized that the existence of conflicting evidence does not negate an attorney's honest belief in the viability of a claim, and that the attorneys' actions were consistent with their duty to represent their client zealously.

The issue is consequently to be determined as one of law. We have examined the mass of material which underlay respondents' determination that Southwestern's claim was properly litigable against appellants.

Conclusion

The court affirmed the summary judgment in favor of the attorneys, concluding that they were not liable for malicious prosecution as they had probable cause to represent their client in the prior lawsuit.

The judgment is affirmed.

Who won?

The prevailing party was the attorneys representing Southwestern Capital Corporation, as the court found they acted with probable cause and in good faith.

The record establishes that respondents were not guilty of malicious prosecution within the standards applicable to counsel who represent a client in litigation.

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