A Florida appellate court has opened the door a little wider for aggrieved parties to sue when they are the targets of frivolous litigation.
Litigation can be expensive and aggravating, and the courts, in principle, discourage meritless lawsuits that are intended only to punish a defendant by forcing the expenditure of time and money. The law allows subjects of frivolous lawsuits to sue the offending party for “malicious prosecution,” and a court can award attorney fees for the underlying litigation and even punitive damages.
“These suits are rare, but clearly the law supports them in the right circumstances,” says Joseph K. “Joey” Naberhaus, a litigator in Dean Mead’s Viera office. Naberhaus says Florida sets the bar high for winning such a lawsuit, requiring the plaintiff to prove that a claim clearly lacks factual or legal merit and was brought or continued with malice. He adds that even if a party can prove that the opposing party was partially motivated by malice, so long as the underlying claim involves a bona fide legal dispute, the party would not have a claim for malicious prosecution.
Realizing that malicious prosecution claims could flood the courts and themselves be frivolous, the courts have set the bar high, placing several procedural hurdles such as requiring an adverse outcome in the underlying litigation. For instance, a settlement agreement between the parties in the underlying litigation, no matter how frivolous the claims, defeats any claim for malicious prosecution since it is not an “adverse outcome.”
Lawyers and their clients also have relied on the litigation privilege as a defense when they are sued for malicious prosecution. That’s the principle, enshrined in Florida law, that lawyers and other parties have absolute immunity for the good-faith actions they take in the course of litigation, including filing a lawsuit and anything they say or do related to their advocacy. Taken to its extreme, the litigation privilege would seem to bar almost all malicious prosecution claims.
Litigation Privilege Limits – But Does Not Bar – Malicious Prosecution
But the litigation privilege has limits, according to a January 2018 ruling by the First District Court of Appeal of Florida. The case, Inlet Beach Capital Investments LLC v. David Pearson, involves a condo association and unit owner. The condo association foreclosed on an owner and continued the litigation for more than a year after being aware there was no valid cause of action. When the condo association finally dismissed the action voluntarily, the owner sued for malicious prosecution. Suddenly, the original plaintiff had become the defendant.
The condo association and its law firm asserted the litigation privilege, claiming that it is an absolute bar to malicious prosecution. The defendants cited a long line of state Supreme Court decisions that affirmed the litigation privilege as a protection to judges, lawyers, parties and witnesses.
The appeals court, relying on a 2017 Florida Supreme decision, Debrincat v. Fischer, ruled that the litigation privilege is not an absolute bar to such claims and allowed the suit to go forward. The Debrincat court said that “malicious prosecution could never be established if causing the commencement or continuation of an original proceeding against the plaintiff were afforded absolute immunity under the litigation privilege.” The court ruled that the defendants would have to address the malicious prosecution allegation based on the facts of the case, rather than lean on a blanket immunity.
By no means does this indicate the lawsuit will be successful, but it is a cautionary note to parties who continue to pursue claims when there are clear indications they will not be successful.
Don’t Let Emotions Control Litigation Decisions
The takeaway is this, says Naberhaus: “Don’t let your emotions get the best of you. If you are using litigation solely to punish your adversary with no realistic prospect of winning, you may open yourself up to a malicious prosecution claim.” If you are a member of a condominium or homeowners association board, beware. Board members can be sued individually for malicious prosecution if they participated in the board’s decision to bring or maintain the underlying litigation. Naberhaus adds that D&O insurance policies, which protect board members from personal liability for decisions made on behalf of the association, may exclude coverage for this type of lawsuit.
The litmus test is your lawyer’s enthusiasm for the litigation, Naberhaus says. If a seasoned litigator tells you there is not a valid case, respect the advice. Lawyers often will withdraw from representation if a client insists on going forward with frivolous litigation. If your lawyer threatens to withdraw or strongly advises not to continue a lawsuit, ignore that advice at your peril.