July 2012 Vol. 9, No. 2

9.2.14

Anti-SLAPP, CCP § 425.16 – Attorney Activity Covered By; Rule 3-110, Duty of Competence

Case:

Cole v. Patricia A. Meyers & Associates, APC (2012) 206 Cal.App.4th 1095, 2012 WL 2106364

Issue:

Can co-counsel be held liable for malicious prosecution where they had no role in the underlying case other than to be trial counsel if the case were tried, but where their names appeared as co-counsel of record on all pleadings/filings and were served with all filings in the case?

Holding:

Yes.  Plaintiff had been sued in an underlying shareholder fraud and securities action for alleged insider trading and inappropriate sale of stock, among other things.  These claims were terminated via summary judgment, and this ruling was affirmed on appeal in Bains v. Moores (2009) 172 Cal.App.4th 445.  In the subsequent malicious prosecution action, plaintiff sued the attorneys who had prosecuted Bains.  The defendant attorneys filed anti-SLAPP motions to strike (C.C.P. § 425.16), and the trial court granted the motion as to some and denied it as to others.  The trial court agreed with certain defendant-attorneys’ argument that they had been associated in the case only for purposes of trial and should not be held liable for malicious prosecution if the underlying claims lacked merit.  Plaintiff appealed the granting of the motion and certain defendant-attorneys cross-appealed the denial of their motion.

The Court of Appeal reversed as to the motion that had been granted and affirmed as to the motion that had been denied finding that plaintiff had made the requisite prima facie showing of malicious prosecution. (Id. at *1.)  As they had in the trial court, the passive associated trial counsel argued that they could not be liable for malicious prosecution because they had not taken an active part in the underlying case and reasonably relied on the other defendant–attorneys' decision to sue plaintiff in the prior action.  The Court rejected this argument.

“On the parties' respective showings, we cannot conclude as a matter of law that these attorneys may avoid liability for malicious prosecution by learning nothing or close to nothing about the [underlying] case, throughout which they allowed themselves to be consistently identified as counsel of record for the plaintiffs.” (Id. at *13.)  The Court noted that the defendant-co-counsel were identified in the pleadings in the underlying case as “[a]ttorneys for [p]laintiffs” along with the other defendant-attorneys, that they apparently were listed as counsel for the plaintiffs on all filings, including the appellate briefs filed after the summary judgment, and that they were served with all filings from opposing counsel without any objection and had not notified the trial court or opposing counsel that they did not actually represent the underlying plaintiffs. (Ibid.)  Although defendant-attorneys’ submitted various declarations to the effect that they did not sign, draft, review or prepare the pleadings, did not participate in the case in any way, and did not have the requisite securities law expertise to determine whether the underlying claims had merit, the Court reasoned that as “counsel of record, the [defendant-attorneys] had a duty of care to their clients that encompassed ‘both a knowledge of the law and an obligation of diligent research and informed judgment.’ ” (Ibid.) 

Defendants’ reliance on California Rule of Professional Conduct 3-110(C), which allows an attorney who lacks sufficient learning/skill for competent representation to associate with or consult another lawyer reasonably believed to be competent, was of no moment.  California law certainly allows such association of counsel and division of duties in handling a case. “This does not mean, however, that an associated attorney whose name appears on all filings in a case and who is served with all documents filed by the other side need not know anything about the case with which he or she is associated.  Nor should an associated attorney whose name appears on all filings be able to avoid liability by intentionally failing to learn anything about a case that may turn out to have been maliciously prosecuted in whole or in part.” (Id. at *13-14.) 

Further, Code Civ. Pro., § 128.7(b) provides that an attorney who presents a pleading, motion or similar paper to a court impliedly certifies its legal and factual merit.  Thus, willful ignorance of the merits of allegations made against a party is no defense. (Id. at *14.)  The Court relied on the Fourth District, Division One opinion in Sycamore Ridge Apartments LLC v. Naumann (2007) 157 Cal.App.4th 1385 as authority “for holding an attorney liable for the very act of associating into a case containing frivolous claims.” (Id. at *15.)

Note:

The Court of Appeal explained how attorneys may avoid malicious prosecution liability in similar circumstances.  “Attorneys may easily avoid liability for malicious prosecution without having to engage in premature work on a case if they refrain from formally associating in it until their role is triggered. Attorneys may also avoid liability if they refrain from lending their names to pleadings or motions about which they know next to nothing.”  (Id. at *16)

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