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Nichelini v. Geico Indem. Co.

Nov 27, 2017
A148610 (Cal. Ct. App. Nov. 27, 2017)




JOSEPH NICHELINI, Plaintiff and Respondent, v. GEICO INDEMNITY COMPANY et al., Defendants and Appellants.


California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Napa County Super. Ct. No. 26-67258)

Plaintiff Joseph Nichelini was in a vehicle collision with a car owned by Peter Saied and driven by Kenneth Clarence Browne (Browne or Kenneth Browne). Nichelini was seriously injured (ultimately to have shoulder surgery), and his $47,000 truck was a total loss. Saied was insured by defendant GEICO Indemnity Company, under a policy with $15,000 limits. Following brief correspondence with Nichelini's attorney—and before any litigation was filed—GEICO agreed to pay the policy limits. GEICO prepared a release in favor of Saied and Browne, and sent it and the settlement check to Nichelini's attorney, with an accompanying cover letter that said GEICO was not aware of other insurance. It turns out there was, and when Nichelini attempted to pursue that insurance, the insurer refused, based on the release.

Nichelini sued GEICO (and others), alleging against GEICO claims for reformation, fraud and concealment. GEICO filed a special anti-SLAPP motion to strike, on the basis that the complaint arose out of litigation conduct and was thus protected activity. The trial court disagreed, and denied the motion under step one of the anti-SLAPP statute, concluding that the complaint was not based on protected activity. We reach the same conclusion, and we affirm.


The Facts

On October 5, 2013, Nichelini was involved in an automobile collision with a car driven by Browne, a collision the investigators determined was Browne's fault. Nichelini was seriously injured, and his truck, valued at over $40,000, was a total loss. Nichelini retained the Kuvara Law Firm, and on October 21 Neal Kuvara sent to GEICO, attention Anh Henrick, a "standard representation letter," advising that the Kuvara firm was representing Nichelini, and asking for copies of any statements by Nichelini, identity of witnesses, validation of insurance coverage and policy limits, the address of its insured, and photographs.

On October 23, GEICO replied with a letter that confirmed it had Kuvara's representation letter and sought information required by Medicare. The next day, October 24, Henrick sent a letter to Kuvara indicating that GEICO was investigating and evaluating the claim, including to confirm the total amount of property coverage relating to the claim, and that it anticipated it would receive the needed information in 30 days.

On October 30, Henrick sent a letter to the Kuvara firm, with references that included "Policyholder: Peter Saied" and "Driver: Kenneth Browne." The letter confirmed that GEICO's "insured carried bodily limits of $15000.00 per person $30000.00 per occurrence at the time of this accident."

On November 22, Henrick wrote that GEICO was still continuing its investigation and evaluation, was still waiting for additional information, and would have it in 30 days.

On December 13, Henrick wrote: "Please send us all of the medical reports and documentation in your possession for your client. We would like to begin our evaluation of your client's injury claim." Henrick sent an identical letter five days later, on December 18.

On December 20, Henrick wrote again, with a letter identical to that of November 22.

On January 27, 2014, Kuvara sent a letter to Henrick that began as follows: "Dear Ms. Henrick: [¶] Enclosed please find the medical records and bills received to date. Treatment is ongoing and will be for some time. Given the injuries sustained including but not limited to: a tear of the supraspinatus and infraspinatus rotator cuff tendons; a tear of the biceps sheath and a superior tear of the subscapularis tendon (surgery has been recommended by Dr. Weiss and it is currently being scheduled), we would now like to explore the possibility of settlement. It would be in everyone's interest to avoid the delay and expense of litigation. We have enclosed copies of all relevant documentation." Following some exposition of basic insurance law, the letter concluded as follows:

"It is my understanding that your Insured's policy limits in this case are $15,000.00/$30,000.00. $15,000.00 is less than the special and general damages Joseph Nichelini will undoubtedly recover at the time of arbitration, however, at this time, Mr. Nichelini might be willing to accept $15,000.00 in settlement of his claim against your insured.

"This offer to accept your insured's policy limits of $15,000.00 is subject to two conditions.

"1. Along with your draft and release, we must receive a statement from an authorized representative of Geico Direct that $15,000.00 is all the coverage available and that there is no other coverage available by way of excess or umbrella coverage.

"2. The other condition is that we must receive a statement signed by Peter Saied under penalty of perjury, verifying that he has no other insurance to cover this loss and he was not working in the course of his employment at the time of the accident.

"This offer to settle Joseph Nichelini's claim shall remain open for fifteen (15) days from the date of this letter. If by that time, we have not received the draft in the amount of $15,000.00, the above referenced statement from a Geico representative and the above statement from your insured, we will view this as a case where Geico had a reasonable opportunity to settle this claim and that it failed to do so, however, please let me know if you need additional time."

On February 6, Henrick mailed Kuvara a settlement check for $15,000 and faxed a release releasing all claims against Saied and Browne, advising that the check could not be cashed until the release was signed. The letter also stated this: "[o]ur insured bodily injury coverage limit is $15,000.00 per person. As of the date of this letter, we are not aware of any other coverage available by the way of excess or umbrella coverage. However, we have not been able to confirm if the driver of our vehicle carried any auto insurance coverage."

That same day, Kim Protheroe, a senior paralegal at the Kuvara firm, sent Henrick a fax that read as follows: "I am in receipt of the Release you faxed to our office. Please forward a copy of the dec page confirming the $15,000.00 limits and have your insured sign the attached Declaration." The attached declaration read in substantive part as follows: "I have no excess liability, umbrella, or other insurance coverage with any other company covering me for the automobile accident myself and/or my vehicle was involved in on October 5, 2013 with Joseph Charles Nichelini other than the policy with Geico Indemnity Company with liability limits of fifteen thousand/thirty thousand (15/30) and I was not working on the job at the time of the accident."

On February 11, Henrick returned Saied's signed declaration to the Kuvara firm.

On February 13, Nichelini signed the release, which provided that he would "forever discharge Peter . . . Saied & Kenneth Clarence Avery Browne."

The same day, Kuvara sent a demand letter to "Kenneth C. Avery." The letter was entitled, "FINAL NOTICE BEFORE INITIATION OF LEGAL ACTION." The letter stressed: "Your failure to comply . . . within the next five (5) days, will result in a lawsuit being filed against you (see attached)." The letter enclosed a draft lawsuit.

On February 25, Geico received a fax from Allstate, the insurer for Avery Browne, which stated: "Our insured Kenneth Browne received notice that the Kuvara Law Firm will be serving a lawsuit. [¶] Is Geico going [to] afford a defense of our insured in this matter? Kenneth was a permissive user of your policy holder's vehicle." The fax concluded: "It appears that the plaintiff attorney may have no cause for action against our insured because you have obtained a fully executed release."

The Proceedings Below

The Complaint

On September 9, 2015, represented by attorney Daniel Slijepcevich at the Kuvara firm, Nichelini filed a complaint naming four defendants: Avery Browne, Kenneth Browne, GEICO, and Saied. It is not in the record. According to Nichelini's brief, GEICO demurred to the complaint, which was sustained with leave to amend.

On January 7, 2016, Nichelini filed a first amended complaint (FAC), the complaint in issue here. The FAC named the same four defendants, and alleged three causes of action: (1) motor vehicle; (2) reformation of contract; and (3) fraud. All defendants were named in the first and third causes of action; all but Avery Browne were named in the second.

The complaint generally alleged the vehicle accident on October 5, 2013; that Saied owned the vehicle; that Kenneth Browne was driving it; and that Saied and Avery Browne entrusted the vehicle to Kenneth Browne.

The second cause of action realleged some of the facts noted above, including GEICO's coverage of Saied, that the policy limit was $15,000, and that the driver of the car was Kenneth Browne. This cause of action then alleged this:

"19. In covering Kenneth Browne under Saied's policy, GEICO, in the underwriting stage, would have had knowledge of Browne's additional policy. Also in response to Plaintiff's claim, GEICO had a duty to investigate all activities related to the determination of coverage, liability, and the nature and extent of loss claimed. Through conversations with its insured and/or Kenneth Browne, such information is exclusively within Defendants knowledge and Plaintiff has no knowledge of what actually was said in these conversations.

"20. GEICO knew that Kenneth Browne was not a named insured and was only an additional driver on Mr. Saied's policy.

"21. GEICO, through its investigation and conversations with Defendants knew that Kenneth Browne was an additional driver on another insurance policy through Allstate. Again, Plaintiff has no knowledge of what was specifically said in these conversations."

The second cause of action then alleged that the Kuvara firm sent a demand to GEICO "which incorporated chiropractic, medical and radiological bills in the amount of approximately $70,000.00, which was far in excess of GEICO's . . . bodily limits of $15,000.00" and that shortly after this demand, Michael Protheroe of the Kuvara firm advised Henrick that plaintiff was still investigating additional insurance coverage and would be pursuing Kenneth Browne. Finally, the second cause of action alleged this:

"27. On February 6, 2014, GEICO offered their insured's policy limits $15,000.00 to settle the claim, along with a Release In Full of All Claims. The Release did not reflect the true intent of the parties in that Plaintiff only intended to release the policyholder Peter Faragmeharib Saied.

"28. GEICO knew or should have suspected, based upon the earlier conversation between Mr. Protheroe and Ms. Henrick, that GEICO had made a mistake in putting Kenneth Browne's name on the Release and that Plaintiff would be making a mistake if he signed the Release.

"29. On February 6, 2014, along with the Release, Ms. Henrick stated in a letter that as of the date of this letter, GEICO had not been able to confirm if the driver of their insured's vehicle carried any auto insurance coverage. This was a misrepresentation and GEICO knew that was false, and was made with the intent to induce justifiable reliance on Plaintiff's part in signing the Release.

"30. On or about February 6, 2014, Plaintiff's counsel sent a letter to defendant Kenneth Clarence Avery Browne, the driver of the vehicle involved in the subject accident, requesting his insurance information. Another letter requesting Defendant Kenneth Clarence Avery Browne's insurance information along with a draft complaint naming him was sent by Plaintiff's counsel on February 14, 2014.

"31. On or about February 13, 2014, Plaintiff signed the Release In Full with GEICO. The Release named Peter Faragmeharib Saied and Kenneth Clarence Avery Browne. Plaintiff had not intended to release Kenneth Clarence Avery Browne, which was the result of a mistake by Plaintiff and his counsel as well as GEICO and/or fraud on the part of Defendants.

"32. GEICO knew or suspected at the time they received the signed Release that a unilateral or mutual mistake had been made.

"33. Unbeknownst to Plaintiff and his counsel, Defendants knew that Kenneth Clarence Avery Browne had additional insurance through his father Avery Browne, but fraudulently withheld that information from Plaintiff with the intent to induce him to sign the Release when they had a duty to provide the insurance information.

"34. On February 21, 2014, Allstate Insurance sent a letter referencing claim for their insured Avery Browne. Plaintiff did not submit a demand to Avery Browne until August 27, 2015 due to the fact that Plaintiff had a second shoulder surgery on July 22, 2015. Allstate Insurance has now denied Plaintiff's claim based upon the fact that Kenneth Clarence Avery Browne was named in the GEICO release when he is also a permissive user on their insured, Avery Browne's insurance policy."

The third cause of action alleged misrepresentation and concealment, essentially the misrepresentation that "there was no other insurance available under another policy" and the concealment that defendants knew that Kenneth Browne "had additional insurance through his father," Avery Browne.

The Anti-SLAPP Motion

On March 16, 2016, GEICO filed a special motion to strike pursuant to Code of Civil Procedure section 425.16 (anti-SLAPP), seeking to strike the second and third causes of action. The motion was accompanied by a 15-page memorandum of points and authorities, and a brief declaration of GEICO claims examiner Henrick, attached to which were 11 exhibits. Henrick testified that the claim was assigned to her in late October 2013, and she handled it until it was reassigned to McKenna Fuller in late February 2014. Henrick's declaration also authenticated the exhibits attached to her declaration, much of the correspondence and faxes mentioned above. There was no testimony that she or GEICO expected any lawsuit.

All further undesignated statutory references are to this code. --------

Nichelini filed opposition to the anti-SLAPP motion. It included declarations from Nichelini, Kuvara firm paralegal Kim Protheroe, and Michael Protheroe, who assisted the Kuvara firm in connection with the claim.

Kim Protheroe's declaration attached and authenticated various correspondence mentioned above. It confirmed the serious injury to Nichelini's shoulder, and that two surgeries had occurred. It also confirmed the value of Nichelini's lost truck, attaching a letter from Nichelini's truck insurer, Liberty Mutual, stating it had declared his truck a total loss in the amount of $47,163.64, for which, Protheroe testified, Liberty Mutual "would be seeking reimbursement from GEICO . . . ." Kim Protheroe's declaration concluded with this:

"12. On December 18 and 20, 2013, I received letters from Ms. Henrick concerning medical records and the property damage issue. Mike Protheroe was assisting me in the handling of the Nichelini claim. . . .

"13. Due to the amount of the medical bills, the medical treatment, the need for surgery, I knew that the GEICO policy would not be sufficient to fully compensate Mr. Nichelini. I intended to find other available insurance or resort to Mr. Nichelini's under-insured policy limits, which were $1,000,000.00.

"14. When the policy limits demand was sent on January 27, 2014, there was no intention of filing a lawsuit against GEICO and Ms. Henrick knew this. Simply because a policy limits demand was made with a time limit does not mean a lawsuit would have been filed after expiration of the time limit. GEICO has, in the past, routinely asked for extensions and they are always granted. No such extension was requested by Ms. Henrick.

"15. In covering Kenneth Browne under Saied's policy, GEICO, in the underwriting stage, would have had knowledge of Browne's additional policy. Also in response to Plaintiff's claim, GEICO had a duty to investigate all activities related to the determination of coverage, liability, and the nature and extent of loss claimed. Through conversations with its insured and/or Kenneth Browne, such information is exclusively within Defendants knowledge and Plaintiff has no knowledge of what actually was said in these conversations.

"16. On February 6, 2014, a letter was sent to the driver of the GEICO vehicle requesting his insurance information, which was followed up with another letter on February 13, 2014. . . .

"17. When the GEICO Release was received, it mistakenly named Kenneth Clarence Avery Browne. Through my inadvertent error, I failed to give it to the managing attorney for review. It was sent to Mr. Nichelini for signature.

"18. Kenneth Browne, upon information and belief, in response to the letters sent to him, contacted his other insurance company, Allstate. Sandra Manzo, the claims representative for Allstate sent an acknowledgment letter and a follow-up letter was sent to Allstate. . . ."

Michael Protheroe's declaration testified that he assisted in the resolution of Nichelini's claim, in connection with which he "had a discussion with . . . Henrick," which he detailed as follows: "In mid-December, . . . . I spoke with Ms. Henrick concerning that claim and also advised her that Mr. Nichelini was surgical and since the GEICO policy was minimal, the Kuvara Law Firm would be pursuing other insurance coverage." And—and of particular significance to the issue here—Michael Protheroe provided detailed testimony concerning the Kuvara law firm's extensive involvement with GEICO. It was as follows:

"4. The Kuvara Law Firm is a paperless firm. As a result, I am able to access the database to determine every claim that has been filed with GEICO going back to 1998, until February of 2014, which is when the Nichelini claim was settled.

"5. Over the years, I have personally dealt with Ms. Ahn Henrick . . . , as well as other adjusters, supervisors and claims managers.

"6. From 1998 until February of 2014, the Kuvara Law Firm has had 594 bodily injury claims with GEICO.

"7. Due to GEICO not disclosing their insureds' limits, I am unable to determine the exact number of those 594 cases that had minimal policy limits. However, based upon the data, of those 594 cases, there were at least 15 claims where the claim settled for of [sic] $15,000. . . .

"8. In addition to the cases of the known minimal policy limits, there were another 145 claims that settled for less than $15,000.

"9. Of the 594 claims, 15 of them did not settle and a lawsuit was filed. . . . Only 2.5% of claims with GEICO reach the stage of litigation. None of those cases that where [sic] the lawsuit was filed had minimal policy limits.

"10. I have had several conversations with GEICO management specifically addressing the issue of amicably resolving claims, as evidenced by the data described herein. I have been invited to San Diego to speak with management and the claims department to discuss ways in which we can improve upon our 'track record' and further resolve claims."

GEICO filed a reply brief. There was no supplemental declaration from Henrick, no testimony she or anyone at GEICO expected litigation.

The anti-SLAPP motion came on for hearing on April 20, 2016, against the background that the trial court had issued a tentative ruling granting the motion. The Kuvara firm contested it, and the court heard extensive argument, at the conclusion of which it took the motion under submission.

On April 21, the trial court filed a comprehensive, six-page order denying the motion, which began with a discussion of the anti-SLAPP law and how it operates. Following that, the order analyzed and decided the issue before it, as follows:

"Geico contends the protected activity at issue here is its right to engage in settlement negotiations after plaintiff's threat of proposed litigation. Geico points to a January 27, 2014 letter from plaintiff's attorney seeking to settle any claims for $15,000. 'Although the statutory language refers to litigation then pending, it has been interpreted to apply to prelitigation statements.' (People ex rel. Fire Ins. Exch. v. Anapol (2012) 211 Cal.App.4th 809, 824 ('Anapol'), citing Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, 1266.) 'If a prelitigation statement concerns the subject of the dispute and is made in anticipation of litigation contemplated in good faith and under serious consideration, it falls within the scope of Code of Civil Procedure section 425.16.' (Id., citing Bailey v. Brewer (2011) 197 Cal.App.4th 781, 789-90.) '[W]hen an attorney seriously and in good faith contemplates litigation, and sends the opposing party a demand letter, the demand letter has been held to constitute a protected prelitigation statement.' (Id. at p. 825, citing Aronson v. Kinsella (1997) 58 Cal.App.4th 254, 270.)

"In the case at bar, Geico has failed to establish a prima facie showing that the January 27, 2014 letter was submitted in anticipation of litigation contemplated in good faith and under serious consideration. The January 27, 2014 letter was sent to Geico in order to settle any claims against Geico's insured, Peter Faragmeharib Saied ('Saied'). The letter unequivocally states plaintiff was 'willing to accept 15,000.00 in settlement of his claim' against Geico's 'insured.' Although it is true that the letter contains language containing the word 'litigation' and a fifteen day deadline in which to accept the offer to settle, settlement as to Saied, the insured, is all that is contemplated in the settlement demand. The sentence referencing litigation alone is not sufficient to show legal action was under serious consideration. The good faith and under serious consideration requirement does not encompass 'hollow' threats of litigation. (Anapol, supra, 211 Cal.App.4th at p. 824, citing Feldman v. 1100 Park Lane Associates (2008) 160 Cal.App.4th 1467, 1487.)

"Moreover, there is evidence that the January 27, 2014 demand letter was not sent with litigation in mind. [Slijepcevich declaration] ¶¶ 6-10 [providing evidence that litigation was not seriously considered because in the 594 bodily injury claims with Geico, plaintiff's law firm never reached the litigation stage in 97.5% of those claims, and that none of the claims with minimal policy limits, such as the claim here, ever resulted in litigation]; Exh. B, ¶ 14 [stating that when the January 27, 2014 letter was sent, there was no intention of filing a lawsuit against Geico].) This is an important point because Geico would have this Court infer that litigation was considered via a single sentence in the demand letter. Yet, the evidence supports a contrary conclusion: that no litigation actually had been threatened or contemplated when the letter was sent.

"Geico makes much of [the] fact that 'had it not complied with Plaintiff's demands, there is little doubt' that plaintiff would have brought litigation. (Reply at p. 2:13-16.) This argument is misplaced. 'While litigation for failure to pay the claim is a possibility, it is no more of a possibility than in any case where one party to a contract requests the other party to perform its duties under the agreement. That possibility of litigation in the event of nonperformance is not enough to conclude the claim is made in anticipation of litigation contemplated in good faith and under serious consideration.' (Anapol, supra, 211 Cal.App.4th at p. 828.)

"Geico further maintains there is 'even more compelling evidence of anticipated litigation' because plaintiff sent a letter with a draft complaint to defendant Kenneth Clarence Avery Browne ('Browne') threatening suit. (Mem. at p. 5:19-20; Henrick Decl., Ex. K.) What Geico fails to mention is that this letter was sent on February 13, 2014, which was after plaintiff mistakenly signed the release of all claims against both Saied and Browne. (Henrick Decl., Ex. J.) The signing of the release sent in response to the January 27, 2014 letter is the catalyst for the entire case. Plaintiff's claims are based on the fallout of signing a release of claims for two separate individuals as well as the statements purportedly made as to the availability of additional insurance coverage. The timeline of events renders the threatening letter to Browne insufficient to demonstrate that a lawsuit was under serious consideration prior to the signing of the release."

The order concluded that "Geico has not met its burden of showing that the causes of action in the FAC arose from protected conduct. Accordingly, the burden of showing a probability of prevailing on his claims does not shift to plaintiff, and the Court need not discuss the second prong of section 425.16."

Geico filed a timely appeal from the order denying the anti-SLAPP motion.


SLAPP and the Standard of Review

We described the SLAPP law and its operation in Hecimovich v. Encinal School Parent Teacher Organization (2012) 203 Cal.App.4th 450, 463-464:

"Subdivision (b)(1) of section 425.16 provides that '[a] cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.' Subdivision (e) of section 425.16 elaborates [on] the four types of acts within the ambit of a SLAPP, including, as pertinent here, any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.

"A two-step process is used for determining whether an action is a SLAPP. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity, that is, by demonstrating that the facts underlying the plaintiff's complaint fit one of the categories spelled out in section 425.16, subdivision (e). If the court finds that such a showing has been made, it must then determine the second step, whether the plaintiff has demonstrated a probability of prevailing on the claim. (Navellier v. Sletten (2002) 29 Cal.4th 82, 88.)

" 'The Legislature enacted section 425.16 to prevent and deter "lawsuits [referred to as SLAPP's] brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances." (§ 425.16, subd. (a).) Because these meritless lawsuits seek to deplete "the defendant's energy" and drain "his or her resources" [citation], the Legislature sought " 'to prevent SLAPPs by ending them early and without great cost to the SLAPP target' " [citation]. Section 425.16 therefore establishes a procedure where the trial court evaluates the merits of the lawsuit using a summary-judgment-like procedure at an early stage of the litigation.' (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192.)

"Finally, and as subdivision (a) of section 425.16 expressly mandates, the section 'shall be construed broadly.'

"With these principles in mind, we turn to a review of the issues before us, a review that is de novo. (Grewal v. Jammu (2011) 191 Cal.App.4th 977, 988.)"

The Complaint Is Not Based on Litigation-Related Activity

Statements and writings made during judicial proceedings are protected by the anti-SLAPP statute as "indisputably . . . 'statement or writing made before a judicial . . . proceeding.' " (Navellier v. Sletten, supra, 29 Cal.4th at p. 90.) This includes pleadings, statements, and writings "in connection with" civil litigation. (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1123 (Briggs).) And a statement or writing is "in connection with" litigation if it "relates to the substantive issues in the litigation and is directed to persons having some interest in the litigation." (Neville v. Chudacoff, supra, 160 Cal.App.4th at p. 1266; Seltzer v. Barnes (2010) 182 Cal.App.4th 953, 962.)

Because the anti-SLAPP statute is to be construed broadly, courts have held that lawsuits predicated on statements or writings prior to litigation may be subject to an anti-SLAPP motion. As Briggs put it, " '[j]ust as communications preparatory to or in anticipation of the bringing of an action or other official proceeding are within the protection of the litigation privilege of Civil Code section 47, subdivision (b) [citation], . . . such statements are equally entitled to the benefits of section 425.16.' " Thus, Briggs held that some of the allegedly defamatory statements protected by section 425.16 were in connection with a potential complaint to HUD and a potential small claims case—neither of which had been filed. (Briggs, supra, at pp. 1109-1110, 1114-1115.) Other cases are to the same effect, holding that actions based on prelitigation statements or writings may be within the SLAPP statute. (See, e.g., Neville v. Chudacoff, supra, 160 Cal.App.4th at p. 1266 [letter to employer's customers accusing ex-employee of misappropriation of trade secrets and threatening to file litigation]; CKE Restaurants, Inc. v. Moore (2008) 159 Cal.App.4th 262, 271 [statements made in 60-day notice of intent to sue required by Prop. 65]; Digerati Holdings, LLC v. Young Money Entertainment, LLC (2011) 194 Cal.App.4th 873, 887-888 [letter to film distributors asserting that film was not authorized and threatening to sue].) Indeed, we applied this principle in Comstock v. Aber (2012) 212 Cal.App.4th 931, holding that a sexual harassment plaintiff's prelitigation complaints to defendant employer's human resources manager, made to address potential affirmative defense that plaintiff failed to take advantage of employer's internal remedial procedures, were protected as statements prior to litigation or other proceedings. (Id. at pp. 944-945.)

The effect of all the above is that prelitigation communications may be within the ambit of the anti-SLAPP statute. But not all such communications, only if litigation is threatened in good faith. And under serious consideration—actually contemplated.

As Briggs indicated, the anti-SLAPP law and the litigation privilege in Civil Code section 47 overlap. As one Court of Appeal has described it, "Clauses (1) and (2) of Section 425.16, Subdivision (e) Are Coextensive with the Litigation Privilege." (A.F. Brown Electrical Contractor, Inc. v. Rhino Electric Supply, Inc. (2006) 137 Cal.App.4th 1118, 1124.) And as to the litigation privilege, the Supreme Court has said this:

"As described below, courts have developed a test for determining when a communication regarding prospective litigation is subject to the litigation privilege. Because this test involves a question of fact, it is impossible to conclude, as the Court of Appeal did, that every action brought pursuant to the notice provision necessarily would be barred by the litigation privilege."

"A prelitigation communication is privileged only when it relates to litigation that is contemplated in good faith and under serious consideration. [Citations.]

"The policy supporting the litigation privilege is furthered only if litigation is seriously considered . . . ." (Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1251.)

As one Court of Appeal has distilled it, "the privileged communication must have some relation to an imminent lawsuit or judicial proceeding which is actually contemplated seriously and in good faith to resolve a dispute, and not simply as a tactical ploy to negotiate a bargain." (Edwards v. Centex Real Estate Corp. (1997) 53 Cal.App.4th 15, 36.)

So, the litigation must be actually contemplated. It must be under serious consideration. GEICO has not shown that here, which is hardly surprising given the facts: clear liability against its insured; property damage of over $47,000; medical expenses approaching six figures; and $15,000 limits. It is hard to imagine any litigation actually occurring, hard to imagine GEICO letting it happen—as the Kuvara firm's history with GEICO demonstrated.

As noted, the Kuvara firm presented uncontradicted evidence that it had made 594 bodily injury claims against GEICO insureds, and had settled 97.5 percent of those claims before filing a lawsuit. This, the court noted, was an "important point because Geico would have this Court infer that litigation was considered via a single sentence in the demand letter. Yet, the evidence supports a contrary conclusion: that no litigation actually had been threatened or contemplated when the letter was sent." GEICO has not demonstrated that this setting here was different. In short, we agree with the trial court that GEICO did not demonstrate that the demand letter was sent "with litigation in mind."

As one of the cases cited by the trial court observed, " '[T]he submission of contractual claims for payment in the regular course of business' is not an act in furtherance of the right of petition" and thus not protected either by the anti-SLAPP statute. (Anapol, supra, 211 Cal.App.4th at p. 827, quoting Kajima Engineering & Construction, Inc. v. City of Los Angeles (2002) 95 Cal.App.4th 921, 932.) While this was not a contractual claim, the letter was in the regular course of the Kuvara firm's business. Measured in this light, the dealings between the Kuvara firm and GEICO revealed an ordinary claim both sides expected to settle, nothing more than routine correspondence over a claim that would be resolved without suit.

One factor that courts have held could bear on whether a communication is in anticipation of litigation is whether the lawsuit is brought quickly after the statement is made. (See Beach v. Harco National Ins. Co. (2003) 110 Cal.App.4th 82, 94.) Nichelini's suit was not filed until September 2015, over 19 months after the January 27, 2014 letter.

GEICO argues that the trial court improperly sued a "[s]ubjective [s]tandard" to determine if the January 27 letter was in anticipation of litigation. The trial court, however, properly focused on what the January 27 letter said, as opposed to the intent behind the letter. The letter used the word "litigation" only once. And it called on GEICO to act in good faith, to remind GEICO that it had an obligation to settle the Nichelini claim without a lawsuit.

GEICO also argues that the trial court focused on the intent of the wrong party in deciding if litigation was anticipated. According to GEICO, the court looked only at Nichelini's intent as expressed by his lawyers, and instead should have considered GEICO's intent. Not only does this argument contradict GEICO's argument that the intent of the parties is irrelevant, GEICO presented no declaration from Henrick—or anyone else—that it expected litigation.

GEICO also attacks the trial court's decision to rely on evidence that the Kuvara law firm had settled 97.5 percent of its claims against GEICO insureds without litigation. But an insurance company's actions in handling other claims can establish its practices and policies. (Colonial Life & Accident Ins. Co. v. Superior Court (1982) 31 Cal.3d 785, 791-792.)

GEICO also points out that on February 13, 2014, Kuvara sent a letter to Avery Browne that threatened litigation and enclosed a draft complaint. Again, the trial court's observation is apt: "this letter was sent on February 13, 2014, which was after plaintiff mistakenly signed the release of all claims . . . ." "The timeline of events renders the threatening letter to Browne insufficient to demonstrate that a lawsuit was under serious consideration prior to the signing of the release."

Beyond all the above, we note that Nichelini's complaint is based on more than just communications, but on GEICO's activity and representations in connection with the release, including releasing Kenneth Browne and its reference in its February 6 letter that "we have not been able to confirm if the driver of our vehicle carried any other insurance coverage." This lawsuit is based on more than "communications." (See Beach v. Harco National Ins. Co., supra, 110 Cal.App.4th at p. 93 [Insurance company was sued for bad faith due to its handling of an uninsured motorist claim. The Court of Appeal concluded section 425.16 was inapplicable because "[t]he bad faith behavior ascribed to [the] defendant involve[d] nonaction and delays" and because the complaint did not refer to any actionable communications.].)


The order denying the anti-SLAPP motion is affirmed. Nichelini shall recover his costs on appeal.


Richman, J. We concur: /s/_________
Kline, P.J. /s/_________
Stewart, J.

Summaries of

Nichelini v. Geico Indem. Co.

Nov 27, 2017
A148610 (Cal. Ct. App. Nov. 27, 2017)
Case details for

Nichelini v. Geico Indem. Co.

Case Details

Full title:JOSEPH NICHELINI, Plaintiff and Respondent, v. GEICO INDEMNITY COMPANY et…


Date published: Nov 27, 2017


A148610 (Cal. Ct. App. Nov. 27, 2017)