Tuesday, February 16, 2010
C.A. Tosses Dispute Between San Francisco Attorneys as SLAPP
By a MetNews Staff Writer
The First District Court of Appeal has thrown out a San Francisco attorney’s causes of action for fraud and intentional infliction of emotional distress against the lawyer who negotiated a settlement agreement on behalf of her insurer, resulting in the partial dismissal of a cross-complaint against her.
Div. Five in an unpublished decision Thursday ruled that the trial court erred in concluding Margaret A. Seltzer’s claims did not arise from Michael A. Barnes’ protected speech or petitioning activity in negotiating the settlement, and directed the trial court to strike the complaint as a strategic lawsuit against public participation.
Seltzer, of the Seltzer Law Group, owned a condominium unit located in a Marin City development managed by the Headlands Homeowners Association and the Eugene Burger Management Corporation Association.
In March 2003, she filed suit against both associations, seeking to enjoin a range of alleged unlawful conduct. The homeowners association cross-complained, asserting that Seltzer had committed a trespass by damaging trees within the development and had failed to pay certain assessments.
Seltzer tendered the cross-complaint to her homeowner’s insurance provider, Allstate Insurance Company, which retained Barnes to provide advice concerning coverage for the cross-complaint under Seltzer’s insurance policies.
Through Barnes, Allstate informed Seltzer it would defend her against the cross-complaint, subject to a reservation of rights to deny coverage. Allstate took the position that the assessment claims in the cross-complaint were not covered under Seltzer’s policies.
Barnes eventually negotiated a settlement of the trespass claims with the homeowners association, under which Allstate would pay $37,500 and the association would dismiss those causes of action and any other claims for “bodily injury,” “personal injury” or “property damage.”
About five months later, Seltzer filed suit against Barnes, the Burger association, the homeowners association and its attorney, alleging that the defendants had colluded to defraud her, defeat her coverage under her insurance policies and convert the proceeds of her insurance policies to the homeowners association.
In her causes of action for fraud and emotional distress, Seltzer accused Barnes of having “collude[ed],” “secretly communicat[ed]” and “secretly negotiat[ed]” with counsel for the homeowners association to reach the settlement agreement; having “offer[ed] to pay to dismiss the suit to avoid the cost of defending it”; and having “offer[ed] money to reconfigure the pleadings so as to attempt to eliminate coverage.”
Barnes demurred and filed a special motion to strike the claims against him. Marin Superior Court Judge Lynn Duryee sustained the demurrer with leave to amend, but denied the anti-SLAPP motion.
Writing for the appellate court, Justice Mark B. Simons reasoned that GeneThera, Inc. v. Troy & Gould Professional Corp. (2009) 171 Cal.App.4th 901—which held that an attorney’s communication with opposing counsel on behalf of a client regarding pending litigation directly implicates the right to petition and thus is subject to a special motion to strike—was directly on point and controlling.
Although he commented that Seltzer’s contentions “raise[d] questions about the propriety of how the settlement negotiations were conducted,” Simons said Barnes’ negotiations with the homeowners association constituted petitioning activity on behalf of Allstate, which had ultimate authority over settlement of the covered claims.
“Seltzer’s brief on appeal includes several poorly developed arguments that the settlement negotiations were unlawful, but she fails to demonstrate the absence of relevant factual disputes,” the justice added, noting evidence submitted by Barnes that the ultimate settlement was preceded by disclosure to Seltzer and an opportunity for her to express her preference regarding options to settle the cross-complaint.
Simons also concluded that Seltzer could not demonstrate a probability of prevailing on her claims because the litigation privilege provided Barnes with an affirmative defense to her action as a matter of law.
Justices Henry E. Needham Jr. and Terence L. Bruiniers joined Simons in his decision.
The case is Seltzer v. Barnes, A123784.
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