Opinion ID: 1600021
Heading Depth: 1
Heading Rank: 3

Heading: advice of counsel as constituting probable cause

Text: If a defendant in a malicious prosecution action, in good faith sought the advice of an attorney before commencing or maintaining the civil proceeding against plaintiff and made a full, fair and complete disclosure to the attorney of all the pertinent and material facts of which the defendant had knowledge tending to prove or disprove the civil allegations and thereafter defendant acted upon the advice of the attorney and in the belief of plaintiff's civil liability, then probable cause existed for commencing or maintaining a civil proceeding against plaintiff. Bucher v. Staley, 297 N.W.2d 802 (S.D.1980); Terminal Grain Corp. v. Freeman, supra ; McIntyre v. Meyer, 81 S.D. 417, 136 N.W.2d 351 (1965). Both Rudolph and Hayes are licensed attorneys in South Dakota. In an action for malicious prosecution the court determines whether a defendant had probable cause for initiating the proceedings, except when there is a dispute over the circumstance under which the proceedings were initiated. Bucher v. Staley ; Restatement (Second) of Torts § 673(1)(c), (2)(a) (1977); see also Modla v. Miller, 344 Mich. 21, 73 N.W.2d 220 (1955); Petrie v. Roberts, 242 Wis. 539, 8 N.W.2d 355 (1943). Here the circumstances surrounding the decision to sue Kaarups were undisputed. Kaarups argue that defendants' attorneys knew the mortgage was void and so advised their clients; therefore, an issue of fact remains on whether defendants in good faith believed in Kaarups' civil liability on the mortgage. Yet a quantifiable chance of success is not the measure by which to determine good faith reliance. When the proceedings are civil, the advice of counsel is a protection even though it consists merely of an opinion that the facts so known or believed afford a chance, whether great or small, that the claim asserted in civil proceedings may be upheld. Restatement (Second) of Torts § 675 comment g (1977) (emphasis added). This rule applies even if facts perceived at the time the advice was given turn out to be contrary to what was believed and even if the attorney's legal advice was mistaken. See McIntyre v. Meyer, supra ; Kunz v. Johnson, supra . Kaarups contend that First Federal was not entitled to rely upon Rudolph's advice, because he was also the President of the Board of Directors, thus he was more than merely an attorney giving a client advice. It has been held that a defendant in an action for malicious prosecution is not precluded from relying on the advice of counsel defense merely because such counsel is regularly retained or employed by the defendant. Truman v. Fidelity & Casualty Company of New York, 146 W.Va. 707, 123 S.E.2d 59 (1961); Miller v. American Nat. Bank in Little Falls, 216 Minn. 19, 11 N.W.2d 655 (1943). Kaarups offered no proof that Rudolph's actions were performed in a capacity other than as First Federal's attorney. Kaarups lastly insist that the attorneys' actions in not disclosing to the courts the legal status of the mortgage and the pendency of the malpractice action, constitutes bad faith attributable to St. Paul and First Federal. This not a case where an attorney's judgment or ethics is the issue. Neither First Federal, St. Paul nor Hepner took any action which was not requested by the lawyers who represented them. The law does not require clients to reevaluate their lawyer's legal opinions, but only that they reasonably believe the opinion allows them to proceed. The facts concerning the state of the mortgage are undisputed; it is only the legal significance of those facts which were left for evaluation. The lawyers were in a far better position to do that than their clients. We find nothing in the record to suggest that defendants improperly sought or relied on the advice of their attorneys. Affirmed. WUEST and HENDERSON, JJ., and McKEEVER and DOBBERPUHL, Circuit Judges, concur. KONENKAMP, Circuit Judge, for AMUNDSON, J., disqualified. McKEEVER, Circuit Judge, for MILLER, C.J., disqualified. DOBBERPUHL, Circuit Judge, for SABERS, J., disqualified.