17.5 Favorable Termination

• Jurisdiction: Arizona

17.5 Favorable Termination. A “favorable termination” means that the underlying suit which serves as the basis of the malicious prosecution was decided on the merits.³⁵ That is, when a suit is terminated because of a procedural issue, this may be insufficient to satisfy this element.³⁶ For example, termination of a suit because of a statute of limitation is not a “favorable termination” sufficient to maintain a malicious prosecution claim.³⁷

In some cases, a plaintiff may maintain a suit for malicious prosecution if the underlying case settled, provided it settled favorably for the plaintiff.³⁸ Since there are many motivations for a party to settle besides a party’s concern about the merits of its case, the plaintiff bears the burden to show that the settlement of the suit was motivated by a lack of merit, as opposed to other factors, including insufficient funds, cost-benefit of proceeding, and a decision by the prosecuting party to “forgive and forget.”³⁹ When...