United States District Court, E.D. California
ORDER ON DEFENDANT'S RULE 52(c) MOTION AND FINDINGS OF FACT AND CONCLUSIONS OF LAW (Doc. No. 73.)
ANTHONY W. ISHII, Senior District Judge.
On January 27, 2015, a bench trial began in this matter. Plaintiffs presented all of their evidence that day, and Defendant moved for a directed verdict under Rule 52(c). The Court set a briefing schedule on Defendant's Rule 52 motion. All briefing has now been received. The only cause of action at issue is for malicious prosecution under California law. For the reasons that follow, Defendant's motion will be granted and this case will close.
Defendant argues that Plaintiffs cannot establish the necessary elements of a malicious prosecution claim. First, Defendant argues that there is no vicarious liability for malicious prosecution claims, and there is no evidence that Defendant was involved in or was aware of the events in the subrogation case. Second, the underlying state court case did not have a favorable termination. Instead of a termination on the merits, the case was dismissed because Defendant could not send a representative to the settlement conference and Defendant wished to avoid sanctions. Third, based on the police report in this case, Defendant had probable cause to bring the state court case. Finally, there is no evidence that Defendant acted with malice.
Plaintiffs argue that judgment in favor of Defendant is improper. The evidence shows that Defendant knew about the lawsuit and endorsed it. Defendant was the only named plaintiff in the underlying state court proceeding. There was a favorable termination because Defendant unilaterally dismissed its case. In the Findings and Recommendations ("F&R") of January 6, 2014, it was acknowledged that Plaintiffs met this requirement. Thus, this element is no longer in contention. There was no probable cause because Plaintiffs informed Defendant and provided documentation that they were not the owners of the car that was involved in the hit and run accident. Finally, an improper motive is apparent because Defendant was aware that Plaintiffs did not own the vehicle, yet they continued to pursue a lawsuit against them.
Legal Framework - Federal Rule of Civil Procedure 52(c)
"If a party has been fully heard on an issue during a nonjury trial and the court finds against the party on that issue, the court may enter judgment against the party on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue.... A judgment on partial findings must be supported by findings of fact and conclusions of law as required by Rule 52(a)."
Legal Standard - Malicious Prosecution
A malicious prosecution plaintiff must show that a prior civil action: (1) was commenced by or at the direction of the defendant; (2) was pursued to a legal termination in the plaintiff's favor; (3) was brought without probable cause; and (4) was initiated with malice. See Casa Herrera, Inc. v. Beydoun, 32 Cal.4th 336, 341 (2004); Jay v. Mahaffey, 218 Cal.App.4th 1522, 1539 (2013); Drummond v. Desmarias, 176 Cal.App.4th 439, 449 (2009). "[A] principal who personally engages in no misconduct may be vicariously liable for an act of malicious prosecution committed by an agent within the course and scope of the agency.... Likewise, a corporation may be liable for an act of malicious prosecution committed within the scope of its agent's authority to act for and on behalf of the corporation." Downey Venture v. LMI Ins. Co., 66 Cal.App.4th 478, 513 (1998).
To determine "whether there was a favorable termination, " courts "look at the judgment as a whole in the prior action...." Casa Herrera, 32 Cal.4th at 341; Jay, 218 Cal.App.4th at 1539. "[I]n order for the termination of a lawsuit to be considered favorable to the malicious prosecution plaintiff, the termination must reflect the merits of the action and the plaintiff's innocence of the misconduct alleged in the lawsuit." Casa Herrera, 32 Cal.4th at 341-42; Jay, 218 Cal.App.4th at 1539. "If the termination does not relate to the merits-reflecting on neither innocence of nor responsibility for the alleged misconduct-the termination is not favorable in the sense it would support a subsequent action for malicious prosecution. Thus, a 2017technical or procedural [termination] as distinguished from a substantive termination' is not favorable for purposes of a malicious prosecution claim." Casa Herrera, 32 Cal.4th at 342. "Should a conflict arise as to the circumstances of the termination, the determination of the reasons underlying the dismissal is a question of fact." Oviedo v. Windsor Twelve Properties, LLC, 212 Cal.App.4th 97, 113 (2012); Sycamore Ridge Apartments LLC v. Naumann, 157 Cal.App.4th 1385, 1399 (2007). "A voluntary dismissal is presumed to be a favorable termination on the merits." Jay, 218 Cal.App.4th at 1540; Sycamore Ridge, 157 Cal.App.4th at 1400.
Findings of Fact
On June 11, 2002, Plaintiffs sold a 1987 Ford Aerostar to Jose Luis Adame. See Plaintiffs' Exhibits 1, 2.
On January 4, 2003, an accident occurred involving the 1987 Ford and a 1998 Honda Civic. See Defendant's Ex. 101.
The driver of the Ford fled the scene on foot. See id.
The driver of the Honda was insured by Defendant. See ...