Fees as Damages: Attorneys Asserting Claim For A Client In Order To Collect Some Of Their Attorney’s Fees Does Not Constitute Improper Purpose To Sustain A Malicious Prosecution Claim

Kentucky Supreme Court So Holds In July 2020 Published Opinion.

            Malicious prosecution, in California and most jurisdictions, has an improper purpose element with respect to filing or prosecuting a claim—with Kentucky labeling malicious prosecution as a wrongful use of civil proceedings claim.  The Kentucky Supreme Court, in Seiller Waterman, LLC, et al. v. RLB Properties, Ltd., Nos. 2018-SC-0538-DG and 2018-SC-0558-DG (Ky. July 9, 2020), petn. for rhg. denied, September 24, 2020, faced the issue of whether improper purpose for purposes of a malicious prosecution claim could be based on allegations that a client’s attorneys filed claims against an adversary litigant in order to recoup its professional fees (“extort fees,” as colorfully used in the pleadings).  It concluded that this theory could not support a malicious prosecution claim.  “. . . an attorney seeking to collect an attorney fee in the usual course of representing a client is not acting for an improper purpose, a necessary element of the wrongful use of civil proceedings claim.  Even if the attorney acts without probable cause to believe the client’s claim will succeed, the improper purpose which may subject an attorney to liability to a nonclient must be something other than simply earning a fee.”  (Slip Op. at p. 15.)  For readers wanting to review this opinion, it is available over the Internet at justia.com.