United States: The Applicability Of California's Anti-SLAPP Statute To Alleged Legal Malpractice Actions

Although actions brought against attorneys by third parties for "litigation-related activities" are generally subject to California Code of Civil Procedure section 425.16 (the "anti-SLAPP statute"), actions brought against attorneys by former clients for the breach of a professional duty are not within the purview of section 425.16. (Benasra v. Mitchell Silberberg & Knupp (2004) 123 Cal.App.4th 1179; Freeman v. Schack (2007) 154 Cal.App.4th 719; PrediWave Corp. v. Simpson Thacher & Bartlett LLP (2009) 179 Cal.App.4th 1204; Castleman v. Sargaser (2013) 216 Cal.App.4th 481; Loanvest I, LLC v. Utrecht (2015) 235 Cal.App.4th 496; Jespersen v. Zubiate-Beauchamp (2003) 114 Cal.App.4th 624, 627.)

A recent appellate decision extended that rule in a previously unclear area. In Sprengel v. Zbylut (2015) 241 Cal.App.4th 140, the Court of Appeal went one step further when it held that the anti-SLAPP statute does not apply even when an attorney-client relationship between the parties has not been established.

The Sprengel matter arose from a disagreement between Sprengel and her former business partner Mohr. Sprengel and Mohr had jointly formed the LLC Purposeful Press to market one of Sprengel's books. When the business partnership fell apart, Sprengel sued Mohr for involuntary dissolution and copyright infringement. Mohr was represented by Gregory Zbylit and Leopold, Petrich & Smith. (Id. at 145.)

After the action between Sprengel and Mohr was resolved, Sprengel sued the lawyers that represented Mohr for legal malpractice, arguing that the position taken by the lawyers in the prior action was adverse to her and that she was in fact their client because the lawyers represented Purposeful Press, of which she was a 50-percent owner. The lawyers responded to the suit by filing a motion under the anti-SLAPP statute. (Id. at 145-147.)

The anti-SLAPP statute requires that a court engage in a two-step process in order to determine whether a defendant's anti-SLAPP motion should be granted. "The sole inquiry under the first prong of the anti-SLAPP statute is whether the plaintiff's claims arise from protected speech or petitioning activity." (Castleman, supra, 216 Cal.App.4th 481, 490-491.)

The Sprengel court held that the claims made by Sprengel could not be distinguished from the claims made in the Benasra, Freeman, PrediWave, Castleman and Loanvest cases. "The 'principle thrust' of Sprengel's claims is that defendants violated the duty of loyalty they owed to her as a client by aligning themselves with Purposeful Press and Mohr in the underlying...actions, in direct opposition to Sprengel's interests in those matters. Sprengel also alleges defendants breached fiduciary duties 'owed to [her] by virtue of a[n] . . . attorney/client relationship..." (Sprengel, supra, 241 Cal.App.4th 140, 155.)

Defendants attempted to distinguish this case law by arguing that "unlike the present case, the attorney defendants in [those decisions] actually represented and, were counsel of record for, the plaintiff clients at one time or another." Defendants argued further: "because there is . . . no evidence that an attorney-client relationship was ever created between Sprengel and [defendants]. . ., her claims do not arise from an attorney-client relationship and do not sound in non-petitioning legal malpractice claims." (Id. at 155-156.)

The Court of Appeal, in rejecting this argument, essentially held that merit-based arguments (evidence) should not be used to determine the first prong of section 425.16. Instead, "'[t]he sole inquiry' under the first prong of the test is whether the plaintiff's claims arise from protected speech or petition activity." Therefore, whether Sprengel and defendants actually had an attorney-client relationship was irrelevant to the court's analysis under the first prong of the test. (Id. at 156.)

In his dissent, Justice Dennis Perluss politely agreed that the case "cannot be meaningfully distinguished" from the other attorney malpractice cases cited in the opinion, but disagreed that "those cases categorically refusing to apply section 425.16 to 'garden variety malpractice actions' were properly decided." (Id. at 160.)

In disagreeing with the line of cases that refuses to apply section 425.16 to legal malpractice actions, Justice Perluss noted that the anti-SLAPP statute is expressly meant to be "construed broadly." He also pointed out that "[w]hatever the label for the former client's cause of action–professional negligence, breach of fiduciary duty or breach of contract–if those claims are based on a the lawyer's actions in litigation (or in anticipation of litigation), they arise from acts in furtherance of the right to petition. There is no more justification for a categorical exclusion of section 425.16 than for excluding malicious prosecution cases." (Id. at 162.)

The Sprengel decision is both very troublesome and important in that it takes the general exception of disallowing anti-SLAPP motions in legal malpractice and expands it to include cases where an attorney-client relationship has not been sufficiently alleged or proven. In fact, the court has essentially applied a demurrer standard to prong one. Thus, all that a plaintiff must do is allege the existence of an attorney-client relationship. This, as the dissent points out, appears to go against the purpose of broad applicability of the statute and it gives plaintiffs a simple route to essentially plead creatively around the anti-SLAPP statute.

Although the likelihood of success of future anti-SLAPP motions to cases where the plaintiff merely alleges the existence of an attorney-client relationship may appear bleak at the moment, the defendants in Sprengel have filed a petition for review to the California Supreme Court and the final word on this subject may not have been pronounced.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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