And Because The Malicious Prosecution Plaintiff Cannot Win, An Anti-SLAPP Motion By Defendant Succeeds.
The holding of Dorit v. Noe, A157433 (1/3 5/26/20) (Brown, Pollak, Tucher) is that a malicious prosecution cause of action cannot be based on a mandatory fee arbitration act (MFAA) arbitration. Along the way to its conclusion, the case teaches about arbitration, MFAA arbitration, malicious prosecution, and anti-SLAPP motions.
Dorit, an attorney, represented Noe, who was unhappy with his representation and who brought an MFAA fee arbitration against Dorit. Noe did not recover any fees from his attorney, and the arbitrator required Noe to pay the filing fee. Neither party appealed within 30 days for a trial de novo in the Superior Court, and thus the arbitration award became final.
Dorit then sued Noe in Superior Court for malicious prosecution, and Noe brought an anti-SLAPP motion against Dorit, arguing that the MFAA would not support a malicious prosecution claim. The trial court denied the motion, ruling that, while Noe's MFAA arbitration arose from protected activity, Dorit's claim had more than minimal merit -- the two-pronged analysis that must be made when evaluating anti-SLAPP motions.
The Court of Appeal agreed that the MFAA arbitration arose from protected activity, because it was an official proceeding established by statute, and once the client chooses the proceeding as an alternative to filing a lawsuit against the attorney, the attorney is required to participate.
The attorney reasoned that if the matter is in the nature of an official proceeding, then it should support a cause of action for malicious prosecution. The problem with this argument is that MFAA arbitrations are neither fish nor fowl: they have aspects of litigation, as well a of voluntary arbitration. And so the question whether an MFAA arbitration will support a claim for malicious prosecution, which is a question of first impression, turns out to hinge on policy.
The interests promoted by a cause of action for malicious prosecution are to prevent baseless lawsuits from being filed, and to prevent injury to the victims of malicious prosecution. In the case of MFAA arbitrations, however, the arbitration is an alternative to litigation encouraged by the legislature, because it is thought to even the playing field between attorney and client, and to be speedy, cost effective, and efficient. A party unhappy with the outcome of the fee arbitration can proceed de novo to the Superior Court, something that did not happen here. And while the attorney may suffer injury from a meritless fee arbitration, the Court of Appeal explained that the injury is likely to be slight, because the attorneys typically does not go out and hire another attorney. Here, in fact, Dorit represented himself, and the proceeding was confidential.
Comment: The Court of Appeal also found a technical and more obscure reason for holding that the MFAA arbitration would not support a claim for malicious prosecution. In order to prove malicious prosecution, the plaintiff must be able to show that the plaintiff prevailed. At first blush, it would appear that Dorit prevailed in the MFAA arbitration, because Noe was denied relief and had to pay filing fees. However, the outcome of the MFAA arbitration cannot be used in court, except for the very limited purpose of establishing whether the party seeking a de novo trial in Superior Court did better or worse than that party did in the fee arbitration, an issue relevant to whether fee shifting can occur. Given that there was no appeal to the Superior Court here, the evidence of Dorit's success was technically inadmissible, and thus the attorney could not have established that he prevailed -- even though we know he did.
Comments