Daily Blast May 17, 2012

Here is a nice little “favorable termination” opinion from Division Five of the Second Appellate District Court of Appeal (LA). In JSJ Limited Partnership v. Morse Mehrban (May 17, 2012; B234236) __ Cal.App.4th __, Justice Richard Mosk, with Presiding Justice Paul Turner and Justice Orville Armstrong concurring, held that the successful invocation of the defense of res judicata in the underlying claim is not a determination on the merits for purposes of a malicious prosecution action. (Slip opn., p. 14.)

The decision arose, as it often does, in an anti-SLAPP motion setting. In the underlying action, the plaintiff’s attorney, Morse Mehrban, brought two separate ADA actions against JSJ, the last of which attorney Mehrban dismissed presumably because the action was barred under the doctrine of res judicata. JSJ, the defendant in the underlying actions, sued the underlying plaintiff and attorney Mehrban alleging causes of action for malicious prosecution and abuse of process. (Slip opn. pp. 2-4.) Attorney Mehrban responded with a special motion to strike under section 425.16. The trial court denied the motion without stating a rationale. (Id. at p. 6.)

The Court of Appeal reversed finding the trial court should have granted the anti-SLAPP motion in favor of attorney Mehrban. (Slip opn. p. 16.) Obviously, the abuse of process cause of action arose from protected activity (filing of the lawsuit) and was barred by the litigation privilege. According to the court, the malicious prosecution action was a tougher call, though, because the termination of the underlying action (dismissal) must reflect on the merits. “Whether a ruling that a claim barred by . . . res judicata and dismissed based on that ruling results in a favorable termination for a malicious prosecution action is not an easy issue.” (Id. at . 12.) The court eventually found that res judicata should be viewed as “procedural” as opposed to “on the merits” since it is similar to the statute of limitations defense – both are affirmative defenses that bar claims. (Id. at p. 13.) Therefore, a dismissal based on res judicata in the underlying action is not a determination on the merits. (Id. at p. 14.)

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