SHERMAN WAY TOWNHOMES v. Superior Court

Hill, Farrer & Burrill and Scott L. Gilmore, Los Angeles, for Real Parties in Interest.

Review Transferred to Court of Appeal May 23, 2001.

CURRY, J.

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.

The third amended complaint [1] 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…