Thayer v. Kabateck Brown Kellner LLP
207 Cal. App. 4th 141
Cal. Ct. App.2012Background
- Plaintiff Thayer sues Kabateck Brown Kellner LLP and Richard Kellner for handling Abercrombie & Kent settlement proceeds, though Thayer was not a party to that action.
- Defendants moved to strike under CCP 425.16 (anti-SLAPP); trial court denied the motion at step one and did not reach step two.
- Abercrombie & Kent litigation settled for about $53.17 million; settlement funds were distributed under a steering committee and a special master; Thayer’s spouse acted as representative, not Thayer.
- Thayer’s verified complaint alleges, among other things, breach of contracts, misallocation of funds, and a ‘Fraud Fund’ deduction from net recoveries, premised on the conduct in the Abercrombie & Kent litigation.
- Thayer contends she is a third-party beneficiary and seeks damages and equitable relief; defendants contend the action targets protected litigation-related activity and fails on merits.
- On appeal, the court reverses the denial of the anti-SLAPP motion, grants the motion to strike, and remands for fee determination.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the action arise from protected activity under 425.16? | Thayer claims the suit targets misconduct in the Abercrombie & Kent litigation. | Kabateck contends the claims arise from protected litigation activity by attorneys. | Yes; action arises from protected litigation activity. |
| Did Thayer prove a likelihood of prevailing on the merits? | Thayer argues there are triable issues and damages related to the Fraud Fund and disbursements. | Kabateck argues the claims fail on the merits, including lack of client-attorney relation and absence of third-party beneficiary status. | No; Thayer fails to show likelihood of prevail. |
| Is Thayer a proper third-party beneficiary with standing? | Thayer asserts spouse’s contracts affect Thayer and that she is a beneficiary of settlement funds. | Kabateck contends there was no express contract for Thayer’s benefit and no attorney-client relationship. | No; Thayer cannot show third-party beneficiary status and lacks standing. |
Key Cases Cited
- Kashian v. Harriman, 98 Cal.App.4th 892 (Cal. App. 2002) (expansive view of litigation-related activities within SLAPP scope)
- Rusheen v. Cohen, 37 Cal.4th 1048 (Cal. 2006) (causes of action arising from litigation may be subject to anti-SLAPP)
- Navellier v. Sletten, 29 Cal.4th 82 (Cal. 2002) (minimal merit standard for anti-SLAPP step two)
- PrediWave Corp. v. Simpson Thacher & Bartlett LLP, 179 Cal.App.4th 1204 (Cal. App. 2009) (nonclients against attorneys may be within SLAPP; limitations for certain client-based actions)
- Jespersen v. Zubiate-Beauchamp, 114 Cal.App.4th 624 (Cal. App. 2004) (malpractice-like discovery/ orders claim not within SLAPP)
- Stewart v. Rolling Stone LLC, 181 Cal.App.4th 664 (Cal. App. 2010) (putative class actions may not be exempt from anti-SLAPP)
- Applied Business Software, Inc. v. Pacific Mortgage Exchange, Inc., 164 Cal.App.4th 1108 (Cal. App. 2008) (breach of settlement agreement post-action not within protected activity)
- Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP, 133 Cal.App.4th 658 (Cal. App. 2005) (minimal merit standard referenced in SLAPP analysis)