Ray

This appeal concerns the element of favorable termination in the tort of malicious prosecution. The question presented is whether an action is favorably terminated if the trial court grants summary judgment to the defendant based on the statute of limitations, a procedural ground not bearing on the merits, but the reviewing court then affirms the judgment on grounds the action lacks intrinsic merit as a matter of law. We conclude that in such circumstances favorable termination has occurred. Accordingly, we affirm the order under review, which granted a new trial to the plaintiff in a malicious prosecution case.

Facts

Respondent David L. Ray is the receiver of a law firm variously known as McKenna, Conner & Cuneo and McKenna & Fitting (McKenna). McKenna served as outside counsel to appellant First Federal Bank of California (bank), in an inverse condemnation lawsuit which the bank ultimately dismissed voluntarily. An individual who had acquired from the bank the property that had been the subject of the inverse condemnation action sued the bank for breach of contract on account of the dismissal. Represented by appellants Epport & Richman and Stephen Richman, the bank…