Posted by Mike B. on 1/07/08

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San Diego courts look like a bad place to cry the "SLAPP"
defense.

Metropolitan News-Enterprise

Tuesday, December 18, 2007

Page 1

C.A. Reinstates Malicious Prosecution Claim Against Law Firm

New Counsel May Be Held Responsible for Unsupported
Allegations in Prior Pleading, Divided Panel Says

By STEVEN M. ELLIS, Staff Writer

A law firm that entered a case well after it was underway
and played a limited role may still be the subject of a
malicious prosecution action, the Fourth District Court of
Appeal ruled yesterday.

Partially reversing an order of San Diego Superior Court
Judge Jay M. Bloom, Div. One ruled that the law firm of
LeFave & Rice’s late entry and limited role in a suit by a
tenant against her former landlord for failure to maintain
apartments in a habitable condition was not sufficient to
insulate the firm from a subsequent malicious prosecution
action by the landlord because the underlying complaint
pled numerous unsupported causes of action.

Writing for the majority, Justice Cynthia Aaron said that
Sycamore Ridge Apartments LLC had presented sufficient
evidence to withstand an anti-SLAPP motion filed by LaFave
because the firm, by associating into the case, became the
proponents of all of the tenant’s claims, and had an
obligation to take immediate steps to dismiss claims it
knew or should have known were without merit.

Assertions Insufficient

As a result, Aaron said, LaFave’s assertions that it had a
limited role, lacked input in deciding when and what to
file, and believed that the lawsuit was not being
prosecuted by malice or ill will were insufficient to
withstand Sycamore’s prima facie showing that the firm
lacked probable clause to pursue the tenant’s claims.

However, in a sharp dissent, Justice Richard D. Huffman
complained that the majority was adopting a principle
whereby an attorney would be charged with knowledge of
defects in a case “at the very moment of a formal
appearance.”

“I cannot accept the proposition that a lawyer who
associates into ongoing litigation to provide a limited
service and does nothing else can be said to have ‘pursued’
a malicious prosecution,” he said. “[T]here must be some
evidence of conduct other than signing an association of
counsel form before one acquires liability for the acts
which have gone before.”

The case arose after another tenant of the apartment
complex contacted the law firm of Naumann & Levine LLP to
complain about the complex’s conditions. According to the
Court of Appeal, an investigation allegedly revealed high
airborne readings of aspergillus/penicillium spores,
maintenance deficiencies, roof leaks, vermin infestations,
and flying termites at the complex.

Unsolicited Letters

The Naumann firm sent unsolicited letters to tenants of the
complex, including contingency fee agreements to be signed
and returned by those who wished to be represented in
future litigation, and ultimately filed a complaint against
the complex on behalf of 45 individual plaintiffs, setting
forth 18 causes of action arising out of the allegations of
poor living conditions and unfair business practices.

One of the tenants included in the litigation was Shirley
Powell, who indicated that she had suffered health problems
as a result of living in the apartment. However, when the
complex sent interrogatories to Powell regarding the
alleged health problems, she failed to indicate any mental
or emotional distress that she had suffered, or any other
breaches in her rental agreement that rendered the
apartment “unsuitable to live in.”

Nevertheless, the Naumann firm filed a statement of damages
which included $20,000 in damages for emotional distress,
$2,000 for destruction of property, and $50,000 in punitive
damages on Powell’s behalf.

The LaFave firm then joined the action by making an
appearance on behalf of the plaintiffs on Oct. 5, 2004,
after having previously filed an association of counsel
firm with the court. The firm claimed to have joined to
provide assistance only with regard to the mold exposure
aspect of the litigation.

Powell, who by that time had missed two scheduled
depositions, decided to dismiss her portion of the case
shortly thereafter.

Almost one year later, Sycamore filed a complaint for
malicious prosecution against both the Naumann and LaFave
firms, as well as individual attorneys, alleging that they
had filed and maintained Powell’s portion of the suit in
bad faith, maliciously, and without probable cause. The
defendants both filed special motions to strike under the
state’s anti-SLAPP statute, with the LaFave defendants
citing their late involvement, their limited participation,
and their lack of direct contact with Powell.

The trial court denied the Naumann defendants’ motion,
ruling that their was a triable issue as to whether they
had probable cause to prosecute Powell’s claims, but
granted the LeFave defendants’ motion after finding no
evidence that they had participated in the lawsuit.

On appeal, all three members of the court voted to affirm
the trial court’s decision as to the Naumann defendants.
However, the panel reversed the trial court’s decision that
the LaFave defendants could not escape potential liability
because the entered the case late, and only shortly before
it was dismissed.

“Before agreeing to become attorney of record in a pending
case, an attorney should, at a minimum, be familiar with
his client’s claims and should have made a preliminary
determination whether probable cause exists to support the
asserted claims or defenses,” Aaron said.

Counsel for Sycamore did not return calls seeking comment.

Robert F. Semmer, counsel for LaFave, called the majority’s
opinion “very problematic in terms of exposure for
associating attorneys.” He said that his client was still
reviewing his options in terms of how to proceed.

Aaron was joined in her opinion by Justice Alex C. McDonald.

The case is Sycamore Ridge Apartments LLC v. Naumann, 2007
S.O.S. 7334.

Copyright 2007, Metropolitan News Company

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