How have courts dealt with the element of malice in a malicious prosecution action?

The underlying action did not resolve the element of malice. That the prior lawsuit was based on a contract found to violate the Insurance Code, and that defendants were found to have continued to pursue their claim after they had received an amount equal to 10 percent of the settlement, does not mean that the previous court necessarily found they acted with malice. In Starkweather v. Eddy (1930) 210 Cal. 483, 487-490, a malicious prosecution action arising from an unsuccessful attempt to prosecute the plaintiff for assault with a deadly weapon, the court reversed a judgment in favor of the defendants after concluding the court as the trier of fact had made several findings that were unsupported by the evidence. Among the court's errors was giving binding effect to a prior judgment in a quiet title action that established the plaintiff was not on the land lawfully; even assuming that prior judgment was binding on the issue of whether he was trespassing, "how that fact could be conclusive on the issue of whether the defendant acted without malice and with probable cause in charging the plaintiff with an assault with a deadly weapon, does not appear. To state the proposition is to answer it. Any such theory was and is incorrect." (Id. at p. 489.) As in Starkweather, the prior suit did not address malice and cannot be given preclusive effect on that issue.

In Aronow v. LaCroix (1990) 219 Cal.App.3d 1039, 1049-1053, by contrast, the court properly gave preclusive effect to a prior lawsuit in which it was found that a party acted without malice in bringing the prior action. The prior judgment resolved the same specific issue that was presented in the litigation before the court. Here, defendants' malice (or lack thereof) was not litigated or resolved in the underlying proceeding.