Monday, October 29, 2012
Court Revives Cross-Complaint in Dispute Between Lawyers
Spat Among Attorneys Over Malpractice Liability Not Covered by Anti-SLAPP Law, Justices Say
By KENNETH OFGANG, Staff Writer
A cross-complaint by an attorney, who responded to a malpractice complaint by suing other lawyers whom he claims actually gave the client the bad advice she was suing over, was not a strategic lawsuit against public participation, the Court of Appeal for this district has ruled.
Div. Five, in a 2-1 decision Thursday, reversed Los Angeles Superior Court Judge Luis Lavin and reinstated the cross-complaint by Hillel Chodos against Dana M. Cole and Michael D. Dempsey and Stephen Johnson of the Los Angeles firm of Dempsey & Johnson.
Chodos brought the cross-complaint for equitable indemnification after he and Hugh John Gibson sued Navabeh Borman, whom Chodos and Gibson had represented in connection with her divorce from former Todd Shipyards chairman and chief executive Burton Borman, and Borman—represented by Dempsey & Johnson—cross-complained for malpractice.
Chodos and Gibson alleged that Borman owed them more than $3 million in legal fees and costs, while Borman claimed that the lawyers failed to prepare, persuaded her to enter into an unfavorable settlement by misrepresenting the terms, failed to enforce interim court orders, and otherwise misadvised her.
In his cross-complaint against Cole and Dempsey & Johnson, Chodos claimed that Borman had stopped taking his advice and had retained the cross-defendants, and that if she suffered any malpractice damages, it was their fault, not his, even though he and Gibson remained counsel of record.
The defendants filed anti-SLAPP motions.
Cole declared that he was consulted by Borman, who said she was having difficulty communicating with Chodos. His role, he said, was limited to having “independently advised” the client regarding what Chodos was doing on her behalf and “facilitated communication” between them.
He added that he had no communication with opposing counsel because Chodos insisted that there be no such contact.
Johnson said in his declaration that he was retained because Chodos and Gibson “failed to…protect her interests,” but did not represent her in the divorce proceedings because Chodos barred him from doing so and because Chodos and Gibson had botched the trial preparation so badly that his firm could not ready the case for trial by the scheduled date.
The client, he said, ultimately agreed to a settlement under “duress” after being bullied by Chodos, whom she fired a month after signing the agreement.
Chodos responded that the cross-complaint did not implicate protected activity, and that he was in any event likely to prevail.
Lavin granted the motions and awarded the cross-defendants $88,000 in costs and fees.
Justice Richard Mosk, however, writing for the Court of Appeal, said the cross-complaint was not a SLAPP because it involved professional duty, not protected litigation activity.
The justice acknowledged that a number of cases have found actions taken as part of litigation to involve the rights to speak freely and to petition. But he distinguished the cases by pointing out that they did not involve suits alleging that an attorney had breached a duty owed to a client, and that the Court of Appeal has held on numerous occasions that such cases are not covered by the statute.
Chodos’ cross-complaint, he went on to say, is akin to a client’s suit against his or her former attorney.
“For purposes of the anti-SLAPP statute, a claim by an attorney against other attorneys for equitable indemnity in connection with a claim of attorney malpractice is not distinguishable from a client’s claim against an attorney for malpractice,” the justice wrote. “The claim for indemnity is still grounded in allegations of attorney malpractice. Indemnity and malpractice may be different causes of action, but that does not mean that the claim for indemnification based on malpractice should be treated differently than a malpractice claim for purposes of whether the anti-SLAPP statute is applicable.”
Justice Orville Armstong concurred, but Presiding Justice Paul A. Turner dissented.
Turner argued that the cross-complaint implicates the cross-defendants’ litigation activity, and that the cases involving attorney-client disputes cited by Mosk are inapplicable because there was no attorney-client relationship between the parties to the cross-cross complaint.
The presiding justice also concluded that the cross-complaint lacks the “minimal merit” required to satisfy the second prong of the anti-SLAPP analysis, saying Chodos’ claims are barred by the litigation privilege, and that Dempsey & Johnson, as counsel for Borman on the malpractice claim, cannot be sued by Chodos because they would have to disclose attorney-client communications in order to defend themselves.
Chodos represented himself on appeal. Cole was represented by Ronald Richards and Nicholas Bravo, while Steven J. Joffe, Robert Cooper and Craig C. Hunter of Wilson, Elser, Moskowitz, Edelman & Dicker represented Dempsey & Johnson.
The case is Chodos v. Cole, 12 S.O.S. 5448.
Copyright 2012, Metropolitan News Company