A & O's challenge to the trial court's treatment of the probable cause element in this case implicates four interrelated issues: (1) the respective roles of the court and the jury in the determination of this element; (2) whether probable cause is to be tested by an objective or a subjective standard, or some combination of the two; (3) whether the adequacy of a defendant attorney's investigation or legal research is relevant to the probable cause determination; and (4) whether expert testimony is admissible on the issue. As we shall see, past California malicious prosecution decisions have not been consistent in their discussion and treatment of these issues. We take up each of these issues in turn, and then consider whether, on the facts of this case, the trial court should have granted judgment in A & O's favor.
A. Role of Court and Jury in the Probable Cause Determination
A & O's initial and broadest contention is that the trial court committed a fundamental error in effectively leaving the determination of the probable cause issue to the jury rather than resolving that question itself. We conclude that the objection is well taken.
As noted above, in a malicious prosecution action, the plaintiff, in addition to establishing that the prior action was terminated in its favor, must prove both (1) that the prior action was brought without probable cause and (2) that the action was initiated with malice. (See, e.g., Bertero v. National General Corp., supra, 13 Cal.3d at p. 50, 118 Cal.Rptr. 184, 529 P.2d 608.)
The "malice" element of the malicious prosecution tort relates to the subjective intent or purpose with which the defendant acted in initiating the prior action, and past cases establish that the defendant's motivation is a question of fact to be determined by the jury. (See, e.g., Runo v. Williams (1912) 162 Cal. 444, 450, 122 P. 1082; see generally Rest.2d Torts, s 681B, subd. (2)(b).)
By contrast, the existence or absence of probable cause has traditionally been viewed as a question of law to be determined by the court, rather than a question of fact for the jury. As this court stated emphatically in the leading case of Ball v. Rawles (1892) 93 Cal. 222, 227, 28 P. 937; "Malice is always a question of fact for the jury, but whether the defendant had or had not probable cause for instituting the prosecution is always a matter of law to be determined by the court. If the facts upon which the defendant acted are undisputed, the court, according as it shall be of the opinion that they constituted probable cause or not, either will order a nonsuit (or direct a verdict for the defendant), or it will submit the other issues to the jury; but whether admitted or disputed, the question is still one of law to be determined by the court from the facts established in the case." (See generally Rest.2d Torts, ss 674, com. h, 681B, subd. (1)(c); Annot. (1963) 87 A.L.R.2d 183, 186-188; 1 Harper et al., The Law of Torts, supra, ss 4.5, 4.8, pp. 441-442, 476; Prosser & Keeton on Torts (5th ed. 1984) s 119, p. 882.)
An important policy consideration underlies the common law rule allocating to the court the task of determining whether the prior action was brought with probable cause. The question whether, on a given set of facts, there was probable cause to institute an action requires a sensitive evaluation of legal principles and precedents, a task generally beyond the ken of lay jurors, and courts have recognized that there is a significant danger that jurors may not sufficiently appreciate the distinction between a merely unsuccessful and a legally untenable claim. To avoid improperly deterring individuals from resorting to the courts for the resolution of disputes, the common law affords litigants the assurance that tort liability will not be imposed for filing a lawsuit unless a court subsequently determines that the institution of the action was without probable cause. (See, e.g., Ball v. Rawles, supra, 93 Cal. 222, 228-229, 28 P. 937; Grant v. Moore, supra, 29 Cal. 644, 654; Williams v. Coombs (1986) 179 Cal.App.3d 626, 635-637, 224 Cal.Rptr. 865; Hernon v. Revere Copper & Brass, Inc. (8th Cir.1974) 494 F.2d 705, 707; Annot., supra, 87 A.L.R.2d 183, 186-187, 192.) If the court determines that there was probable cause to institute the prior action, the malicious prosecution action fails, whether or not there is evidence that the prior suit was maliciously motivated. (See, e.g., Grant v. Moore, supra, 29 Cal. 644, 656-657; Potter v. Seale (1857) 8 Cal. 217, 220; Crescent Live Stock Co. v. Butchers' Union (1887) 120 U.S. 141, 148-149, 7 S.Ct. 472, 476, 30 L.Ed. 614. See generally Prosser & Keeton on Torts, supra, s 119, p. 876.)
In the present case the trial court refused to resolve the probable cause question when the matter was submitted to it by a motion in limine, and instead submitted the probable cause issue to the jury under a rather elaborate instruction. [FN6] Sheldon Appel defends the trial court's handling of the matter in this fashion on the ground that the court's instruction did not leave the ultimate probable cause issue to the jury, but simply required the jury to resolve the disputed "factual underpinnings" of the probable cause question.
Indeed, the impropriety of such an instruction was recognized by this court nearly a century ago in the Ball decision quoted above. As Ball put it, "[it is not] competent for the court to give to the jury a definition of probable cause, and instruct them to find for or against the defendant according as they may determine that the facts are within or without that definition. Such an instruction is only to leave to them in another form the function of determining whether there was probable cause. The court cannot divest itself of its duty to determine this question, however complicated or numerous may be the facts. It must instruct the jury upon this subject in the concrete, and not in the abstract, and must not leave to that body the office of determining the question, but must itself determine it...." (Ball v. Rawles, supra, 93 Cal. at p. 228, 28 P. 937; see also Williams v. Coombs, supra, 179 Cal.App.3d 626, 635-638, 224 Cal.Rptr. 865.)
Although we conclude that the trial court erred in leaving the probable cause decision to the jury, in fairness to the trial court we must recognize that the court's error was in large part a product of long-standing confusion in the case law over both the substantive content of the probable cause standard and the underlying facts which are relevant to the probable cause determination. While, as we have just discussed, the probable cause determination has always been considered a question of law for the court, the cases have also made clear that if the facts upon which the defendant acted in bringing the prior action "are controverted, they must be passed upon by the jury before the court can determine the issue of probable cause.... 'What facts and circumstances amount to probable cause is a pure question of law. Whether they exist or not in any particular case is a pure question of fact. The former is exclusively for the court, the latter for the jury.'" (Ball v. Rawles, supra, 93 Cal. 222, 227, 28 P. 937. See Rest.2d Torts, s 681B, subd. (2)(a).)
The trial court and Court of Appeal, relying on a number of Court of Appeal decisions which we discuss below, concluded that under the probable cause standard enunciated in those decisions there were controverted factual questions in this case relevant to the probable cause determination which had to be submitted to the jury. Because we find that the decisions in question set forth an erroneous definition of the probable cause element, we conclude that a reassessment of those decisions is in order.
B. Objective or Subjective Nature of Probable Cause Element
The instruction on probable cause given in this case was derived from much-quoted dictum contained in the Court of Appeal opinion in Tool Research & Engineering Corp. v. Henigson (1975) 46 Cal.App.3d 675, 120 Cal.Rptr. 291. In that case, the Court of Appeal affirmed summary judgment for the defendant, an attorney, in a malicious prosecution action, concluding that the trial court had correctly found that the plaintiff had failed to establish that the prior action had been instituted without probable cause. The Tool Research court quite properly rejected the plaintiff's contention that probable cause to institute an action exists only if an attorney is "convinced that the trier of fact would accept the evidence in favor of the cause [he represents]" (46 Cal.App.3d at p. 683, 120 Cal.Rptr. 291), making it clear that the appropriate question is simply whether the prior action was legally "tenable." (Ibid.)
In the course of rejecting that contention, however, the Tool Research court included broad dictum which purported to set forth a general definition of the probable cause element for all cases in which an attorney is the subject of a malicious prosecution action. The court stated in this regard: "An attorney has probable cause to represent a client in litigation when, after a reasonable investigation and industrious search of legal authority, he has an honest belief that his client's claim is tenable in the forum in which it is to be tried. [Citations.] The test is twofold. The attorney must entertain a subjective belief in that the claim merits litigation and that belief must satisfy an objective standard." (Emphasis added.) (Tool Research, supra, 46 Cal.App.3d at p. 683, 120 Cal.Rptr. 291.) [FN7]
As discussed above, the "probable cause" element in the malicious prosecution tort plays a role quite distinct from the separate "malice" element of the tort. Whereas the malice element is directly concerned with the subjective mental state of the defendant in instituting the prior action, the probable cause element calls on the trial court to make an objective determination of the "reasonableness" of the defendant's conduct, i.e., to determine whether, on the basis of the facts known to the defendant, the institution of the prior action was legally tenable. The resolution of that question of law calls for the application of an objective standard to the facts on which the defendant acted. (See generally Dobbs, Belief and Doubt in Malicious Prosecution and Libel (1979) 21 Ariz.L.Rev. 607.) Because the malicious prosecution tort is intended to protect an individual's interest "in freedom from unjustifiable and unreasonable litigation" (see 1 Harper et al., The Law of Torts, supra, s 4.2, p. 407), if the trial court determines that the prior action was objectively reasonable, the plaintiff has failed to meet the threshold requirement of demonstrating an absence of probable cause and the defendant is entitled to prevail.
The Tool Research "subjective belief" dictum (46 Cal.App.3d at p. 683, 120 Cal.Rptr. 291) alters the probable cause element in a fundamental respect. Under that dictum, even if a trial court finds that, on the basis of the facts known to the defendant attorney, the prior lawsuit was objectively reasonable -- and thus that the malicious prosecution plaintiff was not subjected to an unjustified lawsuit -- the court could not properly terminate the action in favor of the defendant so long as the plaintiff presented any evidence raising a question as to whether the defendant attorney subjectively believed in the tenability of the claim. And because the issue of the attorney's subjective belief or nonbelief in legal tenability would rarely be susceptible of clear proof and, when controverted, would always pose a factual question, the dictum would in many cases effectively leave the ultimate resolution of the probable cause element to the jury, rather than to the court.
Although past decisions of our own court are not as clear as they might be with respect to the "objective" versus "subjective" nature of the probable cause element (see Franzen v. Shenk (1923) 192 Cal. 572, 221 P. 932; Albertson v. Raboff (1956) 46 Cal.2d 375, 382, 295 P.2d 405; Bertero, supra, 13 Cal.3d 43, 55, 118 Cal.Rptr. 184, 529 P.2d 608) we find that, properly understood, the decisions do not support the Tool Research court's conclusion that the defendant's subjective belief in the legal tenability of the prior action is a necessary element of probable cause. As we explain, while our decisions do indicate that in some cases the defendant's subjective belief may be relevant to the probable cause issue, in all of the cases the "belief" in question related to the defendant's belief in, or knowledge of, a given state of facts, and not to the defendant's belief in, or evaluation of, the legal merits of the claim.
Franzen v. Shenk, supra, 192 Cal. 572, 221 P. 932, contains the most extensive discussion of the issue. In Franzen, the plaintiff, Mabel Franzen, instituted a malicious prosecution action against A.M. Shenk, a man with whom she had apparently had an affair, alleging that Shenk had maliciously instituted a prior proceeding seeking to have her declared insane. In defense of his conduct in instituting the prior proceeding, Shenk testified at the malicious prosecution trial that Franzen had made serious threats against his children and his wife, that he had reported those threats to his attorney, a prosecutor and a justice of the peace, and that he had thereafter instituted the sanity proceeding on their advice. Franzen testified, however, that she had never made any threats against Shenk's children or wife. On that state of the record, the trial court had granted a directed verdict in favor of Shenk.
On appeal, the Franzen court reversed the directed verdict in Shenk's favor, finding that because Shenk had testified that Franzen's threats against his family were the only basis for his belief in Franzen's insanity and because Franzen's and Shenk's testimony created a direct conflict on whether such threats had in fact ever been made, the trial court had erred in directing the verdict for Shenk without having the jury determine whether or not the threats had or had not been made. (Franzen v. Shenk, supra, 192 Cal. at p. 582, 221 P. 932.) In reaching this conclusion, the court explained, inter alia: " ' "Although the question of probable cause, as we have seen above, is a question of law, yet the belief of the defendant in a state of facts is itself a fact which it is proper to submit to the jury for its consideration; and whenever the good faith of the defendant, or his knowledge or belief in an existing state of facts, is an element in determining whether there was probable cause, the court should submit that question to the jury...." ' " (Id. at pp. 576-577, 221 P. 932, emphasis added.) Because the evidence left open the possibility that Shenk may have testified falsely about Franzen's alleged threats -- the crucial fact upon which the initial sanity proceeding was ostensibly based -- the Franzen court concluded that the trial court could not properly determine that probable cause existed without having the jury resolve the conflict in the testimony with regard to such facts.
At the same time, however, the Franzen court made clear that it was not suggesting it would be necessary to submit any aspect of the probable cause issue to the jury if the relevant facts on which Shenk had acted were not in dispute. In this regard, Franzen expressly reaffirmed a line of prior decisions which had specifically established that "if there is no dispute concerning the existence of the facts relied upon to show probable cause, the trial court must then determine as a matter of law whether such undisputed facts do or do not warrant an inference of probable cause." (Franzen v. Shenk, supra, 192 Cal. at p. 578, 221 P. 932, emphasis added.)
Although in another passage Franzen itself speaks of evidence from which the jury could have inferred that Shenk "did not in fact believe that [Franzen] was insane" (192 Cal. at p. 582, 221 P. 932), and subsequent opinions in this court have sometimes referred to the defendant's subjective belief "in the validity of the claim asserted" as a component of probable cause (see Bertero, supra, 13 Cal.3d at p. 55, 118 Cal.Rptr. 184, 529 P.2d 608; Albertson, supra, 46 Cal.2d at p. 382, 295 P.2d 405), in each of the cases what was disputed was not the defendant's subjective belief in the legal tenability of his claim, but rather the state of the defendant's knowledge of the facts on which his claim was based. [FN8] In essence, in each case the plaintiff's contention was that the prior action had been prosecuted "with knowledge of the falsity of the claim...." (Albertson, supra, 46 Cal.2d at p. 382, 295 P.2d 405, emphasis added.)
When there is a dispute as to the state of the defendant's knowledge and the existence of probable cause turns on resolution of that dispute, Franzen, supra, 192 Cal. 572, 221 P. 932, and similar cases hold that the jury must resolve the threshold question of the defendant's factual knowledge or belief. Thus, when, as in Franzen, there is evidence that the defendant may have known that the factual allegations on which his action depended were untrue, the jury must determine what facts the defendant knew before the trial court can determine the legal question whether such facts constituted probable cause to institute the challenged proceeding. As Chief Justice Taft's explanation of the probable cause element indicates, however, the jury's factual inquiry into the defendant's belief or knowledge is not properly an inquiry into "whether [the defendant] thought the facts to constitute probable cause" (Director General, supra, 263 U.S. 25, 28, 44 S.Ct. 52, 53, 68 L.Ed. 146); when the state of the defendant's factual knowledge is resolved or undisputed, it is the court which decides whether such facts constitute probable cause or not.