Metropolitan News-Enterprise


Thursday, March 20, 2014


Page 1


Concealment of Client’s Bankruptcy Is Privileged—C.A.


By a MetNews Staff Writer


An anti-SLAPP motion was properly granted to a Santa Barbara attorney who allegedly participated in the settlement of a lawsuit against his client without revealing that the client had filed bankruptcy and that there was little chance payment would be made, the Court of Appeal for this district has ruled.

The attorney is James P. Ballantine. His client was sued based on construction work he did in Ventura.

The plaintiff in that action, Peter Livingston, was not listed as a creditor in Bankruptcy Court. After the client defaulted on the settlement agreement, Livingston brought a new action, for the unpaid monies, and obtained a judgment for $41,874.

Unable to collect, it was then that he learned the defendant’s debts had been discharged in bankruptcy. Livingston sued Ballantine for having hidden from him the fact of the bankruptcy, precluding him from having filed a creditor’s claim.

Santa Barbara Superior Court Judge Thomas P. Anderle granted Ballantine’s anti-SLAPP motion, and Livingston appealed.

Justice Kenneth Yegan of Div. Six wrote the opinion, filed Tuesday, affirming the judgment of dismissal.

“We affirm on the ground that the action arises from a protected speech activity,” Yegan said, finding the first prong of the anti-SLAPP statute satisfied. Addressing the second prong, he wrote:

“Appellant cannot demonstrate a probability of prevailing on the fraud claim because the action is barred by the litigation privilege.”

Livinston insisted that the case involved concealment of a fact, not a privileged communication. Yegan responded:

“The argument fails because concealment and misrepresentation of facts by an attorney in the course of litigation falls within the litigation privilege.”

He went on to say:

“Had Ballantine told appellant that ‘no bankruptcy action is pending’ (a positive fraud), it would be a communicative act subject to the litigation privilege. The failure to disclose (a negative fraud) also comes within the litigation privilege.”

Ballantine remarked:

“I was pleased with the decision, and the excellent analysis by the Court of Appeal.

“I believe that the plaintiff’s case was wholly lacking in merit and am confident that had we gone to trial we would have won on the merits, but I am pleased that the Court of Appeal upheld the trial court’s order striking the plaintiff’s case as a SLAPP case, so that I do not have to waste further time and resources dealing with this meritless case.

“As both the trial court and the Court of Appeal found, the Plaintiff’s case was barred as a matter of law by the litigation privilege. It is hard to believe that was not obvious to the Plaintiff’s attorney from the start. This seems to me to be the classic circumstance for which the litigation privilege applies—to bar subsequent litigation by a party against his opponent’s attorney. It is hard to believe that the plaintiff would have pursued this case, and even harder to believe that his attorney would have filed it in the first place let alone appealed it.”

John F. Shellabarger, who represented Ballantine, said:

“We are very pleased with the result. The appellant tried to maneuver this rather mundane case into one that raised a new issue and further falsely accused Mr. Ballantine of committing fraud and other illegal acts. The Court of Appeal saw through the smokescreen which was clearly used to hide the lack of merit in the case and applying long-established legal standards, reached a fair and correct results upholding the trial court’s decision dismissing the case.”

The lawyer went on to say:

“The appellant apparently thought that making false allegations against Mr. Ballantine would get him to buckle under and settle this unmeritorious case. The object lesson is that suing your opponent’ s attorney (and then appealing the loss) based on acts or omissions occurring during the course of litigation that are clearly barred by the litigation privilege, will result in paying substantial attorneys fees. Indeed the attorneys fees incurred in this case, for which the appellant is liable under the statute, will likely exceed the amount of damages that the appellant was claiming in the case to start off with, making it further inexplicable as to why the appellant filed and pursued this case.

Anson M. Whitfield of Nelson, Comis, Kettler & Kinney, who represented Livingston, was reported to be out of the office and unavailable for comment.

The case is Livingston v. Ballantine, B250110.


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