Siebel v. Mittlesteadt, 41 Cal. 4th 735 (2007)

Thomas M. Siebel, the CEO of Siebel Systems, Inc. (SSI), sued Carol L. Mittlesteadt and E. Rick Buell, II (the “Lawyers”), for malicious prosecution based on their representation of Debra Christoffers, a former SSI employee. Through the Lawyers, Christoffers sued Siebel (individually) as well as SSI for wrongful termination, fraud, unpaid compensation and discrimination. Most of Christoffers’ claims were dismissed before trial, but she did obtain a verdict against SSI in the amount of $193,000 for unpaid commissions and was awarded costs and attorneys’ fees attributable to that portion of the action. Because Christoffers had failed to recover from Siebel personally, he was awarded his litigation costs. In the settlement agreement that followed, Siebel expressly preserved any claims that he might have against the Lawyers. In this malicious prosecution action, Siebel alleged that the Lawyers “willfully and purposely prosecuted” baseless discrimination claims against him in order to coerce a settlement. Among other things, Siebel argued that he was immune to many of Christoffers’ claims because SSI, not Siebel, was her employer. Although the trial court granted the Lawyers’ motion for summary judgment, the Court of Appeal reversed, holding that Siebel could establish a “favorable termination” because the parties had not agreed to modify the underlying judgment, which encompassed a disposition entirely in Siebel’s favor. The California Supreme Court affirmed the judgment of the Court of Appeal.