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July 6, 2020

Roche v. Hyde (2020) 51 Cal.App.5th 757

After Ram’s Gate Winery dismissed an action it had brought against Roche for breach of contract, fraud, and negligent nondisclosure, Roche sued Ram’s Gate for malicious prosecution. The trial court denied Ram’s Gate’s anti-SLAPP motions and Ram’s Gate appealed.

The Court of Appeal affirmed, holding that Roche met the prima facie burden in a malicious prosecution action of proving that the underlying action was terminated in his favor. The dismissal constituted a favorable termination for Roche because “the underlying suit was unilaterally dismissed by Ram’s Gate in the face of a terminating sanctions motion that was almost certainly going to be granted for discovery abuse, and . . . the dismissal was accompanied by a negotiated payment of some but not all of Roche’s attorney fees—with Roche signing no settlement agreement, releasing no claims, and expressly reserving his rights . . . .”

The court held that a favorable termination does not occur merely because a party complained against has prevailed in an underlying action. The termination must further reflect on that party’s innocence of the alleged wrongful conduct. If the termination does not relate to the merits (i.e., reflecting on neither innocence of nor responsibility for the alleged misconduct), the termination is not favorable in the sense that it would support a subsequent action for malicious prosecution. Here, the underlying substance and effect of what the court determined to be a unilateral dismissal—not its form—was the determining factor in persuading the court that the dismissal was a favorable termination for Roche.