Freidberg v. Cox

• Citation: 242 Cal.Rptr. 851,197 Cal.App.3d 381
• Court: California Court of Appeals Court of Appeals
• Decision Date: 30 December 1987
• Parties: Edward FREIDBERG et al., Plaintiffs and Appellants, v. James E. COX et al., Defendants and Respondents. Civ. C000379.

Page 851

242 Cal.Rptr. 851

197 Cal.App.3d 381

Edward FREIDBERG et al., Plaintiffs and Appellants, v. James E. COX et al., Defendants and Respondents.

Civ. C000379.

Court of Appeal, Third District, California.

Dec. 30, 1987.

Review Denied March 16, 1988.

C. Jean Cain and Marjorie E. Manning, Freidberg Law Corp., and Law Office of Gessford & Abbott, Inc., Sacramento, for plaintiffs and appellants.

Thomas S. Clifton, Lewis, D'Amato, Brisbois & Bisgaard, San Francisco, and Robert H. Zimmerman and Lawrence S. Giardina, Weintraub Genshlea Hardy Erich & Brown, Sacramento, for defendants and respondents.

PUGLIA, Presiding Justice.

In this action for malicious prosecution, plaintiff appeals from a summary judgment entered on motion of defendant. The sole issue on appeal is whether the action allegedly prosecuted maliciously by defendants was terminated favorably to plaintiffs and appellants. We conclude it was not and shall therefore affirm.

The instant action is the third in a series of related lawsuits which began with a case entitled Ritter v. Bard. Taggert Ingraham is an attorney and a defendant in the action in which this appeal is taken. Ingraham represented Ritter in an action by Ritter against Dr. Bard for medical malpractice. Ingraham and Ritter entered into a contingent fee contract, whereby Ingraham would receive as attorney's fees 50% of any recovery by Ritter. Edward Freidberg is an attorney experienced in medical malpractice litigation and is a plaintiff in the action in which this appeal is taken. Freidberg accepted Ingraham's offer to act as co-counsel in the Ritter lawsuit. Thereafter the Ritter medical malpractice action was settled, resulting in attorney's fees in the amount of $86,000.

When Freidberg and Ingraham could not agree on a division of fees, Ingraham brought an action against Freidberg. James E. Cox and Dan L. Garrett, Jr., also defendants in this action, represented Ingraham in his suit to recover attorney's fees. Ingraham's second amended complaint, which set out two theories upon which he sought recovery of a share of the attorney's fees, alleged: (1) Ingraham and Freidberg entered into a joint venture to act as co-counsel in the Ritter malpractice action; the joint venture agreement did not specify how profits were to be apportioned between the joint venturers; Ingraham is therefore entitled to $43,000, being one-half of the profits of the venture; Freidberg fraudulently breached his fiduciary duty to his co-venturer, Ingraham, entitling Ingraham to punitive damages of $500,000; (2) Ingraham was entitled to recover $43,000, being the reasonable value of the services he rendered as co-counsel in the malpractice action. An amendment to the second amended complaint setting out a third theory of recovery alleged: Freidberg tortiously and maliciously induced Ritter to breach the contingency fee contract which by its terms obligated Ritter to pay Ingraham personally from the settlement proceeds all sums due for attorney's fees and litigation costs advanced; as a result Ritter paid such sums directly to Freidberg, depriving Ingraham of his rightful share of the attorney's fees and entitling Ingraham additionally to $500,000 in punitive damages.

At trial of Ingraham's law suit to recover attorney's fees, the trial court granted Freidberg's motion for nonsuit, removing from jury consideration Ingraham's theories of joint venture and tortious interference with contract. The case went to the jury solely on the contract theories asserted by Ingraham. In a special interrogatory, the jury found there was no agreement between Freidberg and Ingraham for a division of attorney's fees. However, the jury did find Ingraham was entitled to recover the reasonable value of legal services he rendered in the malpractice action, and awarded damages in the amount of $12,900.

Freidberg paid the damages and a satisfaction of judgment was recorded.

Freidberg then brought the underlying action for malicious prosecution, alleging the joint venture and tortious interference with contract theories asserted by Ingraham and his attorneys, Cox and Garrett, were prosecuted maliciously without reasonable belief in the merit of those claims. Freidberg sought damages for the reasonable value of attorney's fees and costs incurred in defending against these alleged specious claims and also sought recovery of punitive damages.

Ingraham, Cox and Garrett (defendants) moved for summary judgment on the basis termination of the action for attorney's fees was not favorable to Freidberg because Ingraham recovered damages in that action. The trial court agreed and entered summary judgment in favor of defendants.

"To establish a cause of action for the malicious prosecution of a civil proceeding, a plaintiff must [show] the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination in his, plaintiff's, favor [citations]; (2) was brought without probable cause [citations]; and (3) was initiated with malice [citations]." (Bertero v. National General Corp. (1974) 13 Cal.3d 43, 50, 118 Cal.Rptr. 184, 529 P.2d 608.)

We are here concerned only with the first of the elements cited above--favorable termination of the underlying action in favor of plaintiff. "It is hornbook law that the plaintiff in a malicious prosecution action must plead and prove that the prior judicial proceeding of which he complains terminated in his favor. [Citations.]" (Babb v. Superior Court (1971) 3 Cal.3d 841, 845, 92 Cal.Rptr. 179, 479 P.2d 379.) The rationale for this requirement is simple: "The theory underlying the requirement of favorable termination is that it tends to indicate the innocence of the accused, and coupled with the other elements of lack of probable cause and malice, establishes the tort, that is, the malicious and unfounded charge ... against an innocent person. If the accused were actually convicted, the presumption of his guilt or of probable cause for the charge would be so strong as to render wholly improper any action against the instigator of the charge." (Jaffe v. Stone (1941) 18 Cal.2d 146, 150, 114 P.2d 335.) "Although the original proceeding in Jaffe was criminal, the gist of the statement is equally applicable to cases ... where the main action is civil." ( Babb v. Superior Court, supra, 3 Cal.3d at p. 846, 92 Cal.Rptr. 179, 479 P.2d 379.)

Plaintiff asserts that the element of favorable termination is satisfied by dismissal of that part of the action for attorney's fees premised on theories of joint venture and interference with contract. We disagree.

"[T]he criterion by which to determine which party was successful in the former action is the decree itself in that action. The court in the action for malicious prosecution will not make a separate investigation and retry each separate allegation without reference to the result of the previous suit as a whole...." (52 Am.Jur.2d, Malicious Prosecution, § 42, p. 211.) "[T]he question whether the original suit was successfully prosecuted against the plaintiff is to be determined by the judgment or decree therein upon the final adjudication, and not by the separate allegations and charges and the proof for and against each...." (See Annot. (1958) 58 A.L.R.2d 1422, 1429.)

Murdock v. Gerth (1944) 65 Cal.App.2d 170, 150 P.2d 489, is closely analogous if not precisely on point. Murdock commenced an action against Wolf for dissolution of partnership and to quiet title. Gerth was the attorney for Wolf. Thereafter, Murdock and Wolf, attempting to settle their differences, entered into a series of contracts involving the dissolution of the partnership. For our purposes, two contracts are relevant: a June 21, 1937 agreement and an agreement dated July 6, 1937. Later, Wolf and Murdock could not agree on interpretation of the contracts and Gerth filed suit on behalf of Wolf against Murdock. Wolf sought damages totaling $5050, predicated on the June 21, 1937 contract. After trial of the action, the court entered judgment in favor of Wolf, awarding him $200 in damages. The judgment, however, was based not on the June 21, 1937 contract, but on the July 6, 1937 contract, an agreement not plead or relied upon by Wolf in his complaint. (Id., at pp. 172-176, 150 P.2d 489.)

Murdock then filed suit for malicious prosecution, alleging Gerth sought maliciously to enforce the provisions and terms of the June 21, 1937 contract. Murdock prevailed and Gerth appealed. (Id., at pp. 176-177, 150 P.2d 489.) The appellate court reversed, stating, "Before an action for malicious prosecution can be maintained, it is essential that the proceeding complained of should have been finally terminated, and terminated in favor of the plaintiff. [Murdock] urges that the judgment in favor of [Wolf] was not predicated upon the contract of June 21, 1937, upon which [Wolf's complaint] relied but was based upon another agreement set forth in amendments to the answer filed by [Murdock], viz. the agreement of July 6, 1937. While it is true that the judgment was not based upon the allegations of the complaint prepared by appellant, nevertheless, we are persuaded that, in determining whether a proceeding alleged to have been maliciously prosecuted has been terminated in favor of the party injured by such proceeding, consideration should be given to the judgment as a whole. To hold otherwise would defeat the purpose of the rule which seeks to prevent collateral attack upon judgments of duly constituted courts. Hence, the decree or judgment itself in the former action is the criterion by which to determine who was the successful party in such proceeding. In the instant case, it is at once apparent that the plaintiff in the action complained of actually obtained a judgment against Dr. Murdock, plaintiff in the instant malicious prosecution case for $200. True, such sum was only a small part of the amount sued for. Nevertheless, it is conclusive proof that there was...