Members of the Colorado Supreme Court considered on Wednesday how easily defendants who win their civil lawsuits should be able to turn around and sue the plaintiffs for allegedly entangling them in baseless litigation.

A person may sue for malicious prosecution when someone knowingly initiates a criminal or civil legal proceeding that lacks merit and the case ends in the person’s favor. Among other things, the party alleging malicious prosecution must establish there was no probable cause to initiate the original proceeding in the first place.

However, the question for the Supreme Court revolved around how heavily trial judges should rely on the original proceeding when looking at probable cause. Specifically, if a judge in the original proceeding opted to advance the lawsuit all the way to a jury trial, does that automatically suggest probable cause existed all along?

During oral arguments, Justice Richard L. Gabriel observed there can be many reasons a judge will deny a civil defendant’s request for summary judgment, which would end the case in their favor without a trial. And the reasons for putting the lawsuit in front of a jury may not be entirely transparent.

“I did business litigation for a long time and there was one judge — I’m not gonna say who or where — I filed a fulsome motion for summary judgment,” he said, “and the judge’s practice was to write ‘denied’ on the cover every time.”

Gabriel added some judges will always be hesitant to decide that a defendant should prevail as a matter of law, without the need for a jury to adjudicate conflicting facts.

“Particularly in a commercial litigation where you’ve got hundreds of pages of exhibits on both sides and it is not unreasonable for judge to say, ‘There’s gotta be a fact question here somewhere,'” he said.

How much weight a judge should place on what happened in a prior civil case could incentivize the filing of malicious prosecution lawsuits, prevent successful defendants from seeking accountability for bad-faith litigation or, conceivably, alter behavior within individual cases.

In the case at hand, Patricia Ann Scott originally sued Steamboat Springs real estate broker Kaylee Schnelle, accusing Schnelle of professional negligence for the way she marketed Scott’s commercial property. Schnelle moved for summary judgment, but a judge believed there were disputed issues for a jury to resolve. 

At trial, Schnelle also moved for a directed verdict in her favor after Scott presented her case, but the judge similarly denied that motion. The jury ultimately sided with Schnelle.

Schnelle then sued Scott and Scott’s lawyers for malicious prosecution. The defendants moved to dismiss, focusing on one of the elements of malicious prosecution: lack of probable cause. By rebuffing Schnelle’s motions to end the professional negligence case, they reasoned, the original trial judge found probable cause of Schnelle’s wrongdoing — even if she ultimately prevailed.

Chief Judge Michael A. O’Hara III, who was also the judge in the original civil case, noted there were two schools of thought from courts around the country. Some states’ courts treat the denial of a defendant’s summary judgment motion or directed verdict as generally fatal to a later claim of malicious prosecution. Other states use it as “just a factor” to consider. O’Hara opted to treat the prior rulings as a factor and declined to dismiss Schnelle’s malicious prosecution claim.

A Court of Appeals panel agreed with that approach. Judge Christina F. Gomez expressed concerns about giving significant weight to a pretrial ruling in another case — which “almost certainly wasn’t subject to any potential appellate review” — when deciding whether to bar a later malicious prosecution lawsuit.

The defendants in Schnelle’s case appealed to the Supreme Court, arguing the Court of Appeals’ decision would make it easier to pursue retaliatory lawsuits and increase legal costs.

Attorney John M. Palmeri told the justices that if a judge previously allowed a lawsuit to proceed to a jury verdict, there should be a presumption that probable cause existed, which the person bringing the malicious prosecution lawsuit needs to rebut to keep their claim viable.

“If we’re going to allow a case to get to a jury, it has to mean something,” he said.

“A lot of trial judges are gonna say, ‘We’re gonna let the jury decide and if there’s something that came up on the back end, I’ll clean it up,'” said Justice Maria E. Berkenkotter, a former trial judge. “How do you know kind of what the trial judge was thinking?”

Clark L. Davidson, the attorney for Schnelle, argued both jury trials and malicious prosecution lawsuits are rare. He noted his client’s case was also unusual in that the same judge who let the original lawsuit go to trial also believed Schnelle’s malicious prosecution claim was viable.

Based on the circumstances and the evidence, Davidson believed Schnelle would succeed even if the higher standard applied to her.

“But what about all the cases that follow? What about all the people behind her?” he asked.

The case is Cantafio et al. v. Schnelle.