Coretronic Corp. v. Cozen O'Connor
192 Cal. App. 4th 1381
| Cal. Ct. App. | 2011Background
- Plaintiffs manufactured and distributed plasma televisions and tendered defense to INA, INA’s liability insurer, for the underlying E&S action.
- INA hired Cozen as coverage counsel to evaluate coverage and defense, with confidential information exchanged by plaintiffs to aid that evaluation.
- Cozen simultaneously represented INA and, in June 2008, began representing E&S in an unrelated suit, without plaintiffs’ knowledge.
- Partos, a Cozen attorney, reviewed Coretronic’s files for INA and later disclosed to plaintiffs that Cozen was also representing E&S.
- Plaintiffs moved for terminating sanctions in the E&S action; the trial court denied, and plaintiffs filed this action for fraud, concealment, and related claims.
- The trial court granted a special motion to strike under § 425.16, which the appellate court later denied, holding the complaint did not arise from protected activity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the complaint arise from protected activity under § 425.16? | Coretronic contends actions were protected petitioning activity by Cozen's litigation work. | Defendants argue the claims arise from protected activity in defending/advocating in litigation. | No; the claims do not arise from protected activity. |
| Is the gravamen of the complaint based on concealment regarding dual representation rather than protected speech? | Plaintiffs rely on Cozen’s dual representation as the basis of concealment and fraud claims. | Defendants argue the conduct is within attorney advocacy in litigation. | Gravamen is non-protected; not rooted in protected activity. |
| If protected activity is present, do plaintiffs show a probability of prevailing? | Plaintiffs contest that the alleged misconduct harmed their interests. | Defendants contend any alleged misconduct would be incidental to protected activity and merits do not override the anti-SLAPP threshold. | Not reached; prong one fails. |
| Should the appellate court apply Seltzer Freeman/BenSra reasoning to determine whether this is a SLAPP? | Plaintiffs argue these cases show attorney misconduct not arising from protected activity. | Defendants rely on Seltzer to require showing unlawful or non-protected conduct. | Appellate analysis rejects reliance on those cases to require proof of unethical conduct as basis for anti-SLAPP first prong. |
Key Cases Cited
- Equilon Enterprises v. Consumer Cause, Inc., 29 Cal.4th 53 (Cal. 2002) (protects petitioning activity; two-step anti-SLAPP analysis)
- Wilcox v. Superior Court, 27 Cal.App.4th 809 (Cal. App. 1994) (prima facie showing required; first prong not a merits inquiry)
- Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP, 133 Cal.App.4th 658 (Cal. App. 2005) (gravamen controls whether protected activity is invoked)
- Seltzer v. Barnes, 182 Cal.App.4th 953 (Cal. App. 2010) (protected vs. illegal conduct; limits of anti-SLAPP in attorney misconduct)
- Freeman v. Schack, 154 Cal.App.4th 719 (Cal. App. 2007) (duty of loyalty; non-SLAPP where misconduct is core claim)
- Benasra v. Mitchell Silberberg & Knupp LLP, 123 Cal.App.4th 1179 (Cal. App. 2004) (duty of loyalty breach not arising from protected arbitration activity)
- Gallimore v. State Farm Fire & Casualty Ins. Co., 102 Cal.App.4th 1388 (Cal. App. 2002) (not a SLAPP when claims based on handling practices, not protected communications)
- Beach v. Harco National Ins. Co., 110 Cal.App.4th 82 (Cal. App. 2003) (bad faith delay not SLAPP when arising from claims handling)
- Marlin v. Aimco Venezia, LLC, 154 Cal.App.4th 154 (Cal. App. 2007) (injunctive remedy not recharacterizing a SLAPP cause of action)