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Sherman Way Townhomes12/5/2000
CERTIFIED FOR PUBLICATION
ORIGINAL PROCEEDINGS in mandate. Mary Ann Murphy, Judge. Writ denied.
The trial court overruled petitioners' demurrer to the third amended complaint of real parties in interest, which contains a single claim for malicious prosecution. We conclude that when, as alleged here, parties initiate a cross-action in the superior court, their subsequent stipulation to resolve this cross-action by arbitration does not shield them from a claim for malicious prosecution, and thus we deny the petition for writ of mandate on its merits.
FACTS
The third amended complaint alleges the following facts. Real party in interest Eugene H. Twarowski III (Twarowski) is the sole shareholder of real parties in interest Eugene H. Twarowski, III, Inc., (Inc.) and Buzco Construction Co., Inc., (Buzco). Petitioner Sherman Way Townhomes, Inc., (Townhomes) is a condominium association located in Reseda. Petitioner Gerald N. Silver acted as Townhomes's counsel during the pertinent period.
In April 1995, Townhomes engaged Inc. to provide insurance appraisal services concerning an earthquake loss to Townhomes. After Townhomes refused to pay Inc.'s invoices for services provided, Inc. filed an action against Townhomes in the superior court to recover its fees. Silver represented Townhomes in this action. Townhomes subsequently filed a cross-complaint against Inc., Buzco, and Twarowski for, inter alia, breach of contract, negligent misrepresentation, bad faith, professional negligence, breach of fiduciary duty, fraud in the inducement, rescission, and an accounting. Upon receipt of the cross- complaint, real parties in interest advised Townhomes that most of the claims in the cross-complaint were barred by the doctrine of arbitral immunity.
Before trial, the parties agreed to resolve the action and cross-action by binding arbitration pursuant to a written stipulation. The stipulation provided in pertinent part: "`1. It is the intent of the parties that this action shall be disposed of by way of binding arbitration and subsequent judgment thereon. . . . [ ] 6. Except as modified by this Stipulation between the parties, the arbitration shall be governed by the California Code of Civil Procedure. The arbitrator shall be empowered to try the case and hear all pre-trial and post-trial motions as if he were a sitting judge of the Superior Court. The arbitrator shall issue a Statement of Decision upon the conclusion of the arbitration, and the provisions of California Code of Civil Procedure, Section 632, and California Rules of Court, Rule 232, shall apply.'" Real parties in interest entered into the stipulation to avoid a lengthy delay in trial before the superior court and to reduce expenses in prosecuting the action and defending against the cross- complaint.
The parties agreed that the arbitration would proceed before retired Judge Arthur Baldonado. Prior to evidentiary hearings on the complaint and cross-complaint, Judge Baldonado granted real parties in interest's motion for summary judgment on all of Townhomes's claims, with the exception of its claims for fraud in the inducement and rescission. Following evidentiary hearings in October 1998 and June 1999, Judge Baldonado found in favor of Inc. on its complaint, and against Townhomes with respect to its remaining claims in the cross- complaint. On November 15, 1999, the superior court granted Twarowski's petition to confirm Judge Baldonado's award with respect to all matters material here.
RELEVANT PROCEDURAL HISTORY
Inc., Buzco, and Twarowski subsequently filed an action for malicious prosecution against Townhomes and Silver. In addition to the facts a
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