Billionaire Cleared to Sue Judge

Billionaire Gets Greenlight to Sue Judge, Lawyer

July 17, 2007
By Mike McKee

The Recorder

Self-made billionaire Thomas Siebel got the green light Monday to proceed with a malicious prosecution suit against a San Mateo County, Calif., judge and a former San Francisco Bay Area lawyer.

The California Supreme Court all but opened the courthouse door for the former Silicon Valley executive by unanimously ruling that a settlement in an underlying fraud suit constituted a favorable judgment that allows Siebel to sue the attorneys who brought the case.

The high court also dismissed arguments by Siebel's opponents, Judge Carol Mittlesteadt and E. Rick Buell II, that the ruling would discourage settlements, increase malicious prosecution actions and disrupt the attorney-client relationship.

Siebel, founder of Siebel Systems Inc., sued Mittlesteadt, then a lawyer but now a judge in San Mateo, and Buell, whom the State Bar lists as a Florida resident, for malicious prosecution after Siebel's company paid to settle a fraud suit with their client, Debra Christoffers, in 1999.

Christoffers, a one-time sales director at Siebel Systems Inc., had sued Siebel -- who made this year's list of billionaires in Forbes -- claiming she had been unfairly fired, subjected to gender discrimination and defrauded out of major commissions and stock options. Only the fraud claims went to trial.

Christoffers won a jury verdict of about $234,000, but only against the company, not Siebel himself. Various issues were appealed by both sides, with a subsequent settlement agreement requiring Siebel Systems to give Christoffers $352,000 as long as she paid Thomas Siebel's $52,000 in costs.

However, the agreement -- pulled together by a third lawyer retained by Christoffers -- specifically stated it would not prevent Siebel from going after Mittlesteadt and Buell for malicious prosecution. It did prevent Christoffers from assisting her ex-lawyers during subsequent litigation.

The question before the Supreme Court was whether the settlement agreement represented a favorable termination of the underlying fraud suit for Siebel. Under California law, a malicious prosecution suit cannot stand unless the person who filed it proves the underlying case was terminated in his or her favor.

Mittlesteadt and Buell had argued that the settlement agreement created an ambiguity about the merits of the fraud suit. They claimed Siebel settled, he didn't win.

The Supreme Court didn't agree.

Neither Mittlesteadt nor her appellate lawyer, Tony Tanke of Davis, Calif., returned calls seeking comment. Buell couldn't be reached for comment and he didn't respond to an e-mail. Robin Meadow, the partner at Los Angeles' Greines, Martin, Stein & Richland who represented Siebel, said he couldn't comment without his client's permission.