Monday, April 27, 2009
‘Extortive’ Complaint to State Bar Not Protected Activity—C.A.
By STEVEN M. ELLIS, Staff Writer
This district’s Court of Appeal held Friday that one attorney’s complaint to the State Bar against another attorney with whom he was in a fee dispute was not protected under the state’s anti-SLAPP statute because it was extortion.
Ruling Encino attorney Michael S. Brown’s false complaint was not a valid exercise of the rights of petition or free speech because it was illegal, Div. Three affirmed an order rejecting his motion to strike Pasadena attorney Arlan A. Cohen’s subsequent lawsuit.
Cohen, who is also a medical doctor, agreed in 2007 to associate in and assist Brown by handling medical experts in a personal injury suit arising from a vehicular collision.
However, he claimed that after he made a proposal concerning fee sharing in the event the case went to trial, Brown terminated the agreement and filed the complaint with the State Bar to force Cohen to sign off on a settlement check.
Cohen sued Brown for intentional misrepresentation, breach of contract and extortion, among others, alleging that Brown falsely represented that he was an experienced trial attorney who had handled thousands of cases, and that he had properly prepared the case to that point.
Instead, Cohen claimed, Brown had only handled three or four trials over 25 years, all of smaller scope, and failed to conduct discovery, prepare expert witnesses or develop a coherent theory of damages, leaving Cohen to do the majority of the work preparing the case.
The attorneys had agreed that Cohen would receive half of any fees received by Brown if the case settled for up to $1.5 million plus 25 percent of Brown’s fees for any settlement above that amount, and that a further agreement would be reached on fee-sharing if the case did not settle.
When Cohen concluded he would likely have to try the case himself, he sent Brown a fee-sharing proposal, but Brown e-mailed him back telling him the proposal was not acceptable and that Cohen’s services were terminated.
Cohen said he then filed an attorney’s lien on the case for his fees after his offer to continue to assist through an upcoming mediation was rebuffed.
The case eventually settled for $2 million.
Cohen alleged Brown subsequently informed him he was not entitled to any portion of the $800,000 in fees realized from the settlement because the client, Sydney Zerah, never signed an agreement to the fee division as required by Rule 2-200 of the California Rules of Professional Conduct.
Brown also accused Cohen of abandoning the case, Cohen contended, and then threatened to file a complaint with the State Bar unless Cohen signed off on the settlement check and allow all fees to go to Brown.
Cohen offered to place the disputed fees in escrow pending determination of the fee dispute, but Brown declined, saying he was only willing to deposit what he thought was the maximum amount to which Cohen would be entitled if the agreement was enforced.
Brown then filed a false complaint with the State Bar over Zerah’s name, Cohen alleged, and sent Cohen an e-mail essentially saying Cohen would live to regret the complaint against him and should immediately sign the check.
Within 48 hours after the complaint was filed, Zerah retained new counsel who later sued Brown on Zerah’s behalf after Brown again declined to place the disputed fees in escrow so Zerah could collect his award.
Motion to Strike
When Cohen sued, Brown moved to strike the complaint under California’s law prohibiting strategic lawsuits against public participation. He maintained that Cohen’s fee-sharing proposal was an attempt to change the fee division agreement, and renewed his claim that Cohen abandoned the case.
But Los Angeles Superior Court Judge Edward C. Simpson denied the motion. Concluding that the State Bar complaint was in furtherance of Brown’s goal of obtaining an advantage in the fee dispute, Simpson said Cohen’s complaint filed in an “extortive context” was illegal as a matter of law and not a protected activity.
The Court of Appeal agreed, and affirmed in an opinion by Justice H. Walter Croskey.
Joined by Presiding Justice Joan D. Klein and Justice Richard D. Aldrich, Croskey also wrote that the issue of whether Brown’s conduct was protected by the litigation privilege was irrelevant where Brown failed to establish that his conduct arose from protected activity and the burden never shifted to Cohen to show a likelihood of prevailing.
The justice further opined that attorneys can recover in quantum meruit despite the absence of a written Rule 2-200 agreement, and that a client’s consent to a fee-sharing arrangement may be obtained after the work is done.
The case is Cohen v. Brown, 09 S.O.S. 2289.
Copyright 2009, Metropolitan News Company