Friday, September 4, 2009
Court of Appeal Rules Suit Over Attorney Fee Lien Not SLAPP
By KENNETH OFGANG, Staff Writer
A suit by a Santa Monica attorney against another lawyer for failure to honor an attorney fee lien was not a strategic lawsuit against public participation, this district’s Court of Appeal ruled yesterday.
Div. Five, in an unpublished opinion by Justice Sandy Kriegler, affirmed the denial of West Los Angeles lawyer Steven L. Zelig’s special motion to strike David R. Olan’s complaint for more than $58,000 in fees and costs.
The panel also ruled that Los Angeles Superior Court Judge Lisa Hart Cole did not abuse her discretion in ruling that the defendant’s anti-SLAPP motion was frivolous, found that Zelig’s appeal was frivolous and remanded for an award of fees to the firm that represented Olan on appeal.
It was the third time that the court has sanctioned Zelig for a frivolous appeal. The two earlier awards came in dispute between the attorney and Scottsdale Insurance Company, which sued Zelig for malicious prosecution and civil conspiracy after he lost a coverage suit.
The case ruled on yesterday arose out of a personal injury action in which Olan originally represented the plaintiff, Shannon Hill. Olan filed the action in May 2005, but was substituted out in favor of Zelig nine months later.
Olan notified all counsel and the trial court that he had a lien on any recovery in the case, which was settled for $250,000 six months after Zelig took over.
In his complaint against Zelig, Olan alleged that he had endorsed the settlement checks in reliance upon Zelig’s promise to place the amount of his claimed share of the settlement in trust, but that Zelig refused to honor the lien. Olan further contended that Zelig had defamed him in communications with the client and others, claiming Olan was dishonest and had breached his fiduciary duties to Hill.
Zelig moved to strike, pursuant to Code of Civil Procedure Sec. 425.16, arguing that the suit threatened his First Amendment right to advocate on behalf of his client. Cole, finding that there was no legitimate argument that the suit implicated protected speech, denied the motion and awarded $5,000 in attorney fees.
On appeal, Kriegler rejected Zelig’s argument that the suit resulted from protected settlement negotiations in the Hill personal injury action. The justice cited California Back Specialists Medical Group v. Rand (2008) 160 Cal.App.4th 1032.
The plaintiffs in that case were medical providers who sued after an attorney disbursed the proceeds of a personal injury action without notifying the plaintiffs or honoring their liens. The attorney moved to strike under the anti-SLAPP law, claiming he had informed the plaintiffs he would not honor the liens because he disputed the reasonableness and necessity of the care provided.
The trial and appellate courts both found that the action did not arise from protected activity because the doctors were seeking to enforce their own rights against the attorney, not challenging the attorney’s advocacy on behalf of the client. The anti-SLAPP motion was found to be frivolous, and the plaintiffs were awarded attorney fees.
Kriegler said the cases were “nearly identical,” explaining:
“Olan and his firm’s complaint is based on a controversy about the validity and agreement for satisfaction of the lien. These issues were never under consideration in any court or official proceedings until Olan and his firm filed the current action. The trial court correctly determined that Olan and his firm’s claims did not arise from any act in furtherance of Zelig’s right to petition or his right to free speech. Because the complaint did not arise from protected activity, we do not need to consider the probability of prevailing.”
Attorneys on appeal were Frank E. Marchetti for Zelig, who also appeared on his own behalf, and Meghan B. Clark and Brook J. Carroll of Nordman Cormany Hair & Compton, along with Nicolas C. Vrataric, for Olan.
The case is Olan v. Zelig, B210972.
Copyright 2009, Metropolitan News Company