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Olan v. Zelig

California Court of Appeals, Second District, Fifth Division
Sep 3, 2009
No. B210972 (Cal. Ct. App. Sep. 3, 2009)



APPEAL from an order of the Superior Court of Los Angeles County, Lisa Hart Cole, Judge, No. SC097080

Law Offices of Frank E. Marchetti, Frank Marchetti; Brentwood Legal Services and Steven L. Zelig, in pro. per., for Defendant and Appellant.

Nordman Cormany Hair & Compton, Meghan B. Clark, Brook J. Carroll; Law Offices of Nicolas C Vrataric and Nicolas C. Vrataric for Plaintiffs and Respondents.


Defendant and appellant attorney Steven L. Zelig appeals from an order denying a special motion to strike the complaint of plaintiffs and respondents David R. Olan and Olan Law Corporation under Code of Civil Procedure section 425.16. As the former attorneys of Zelig’s client in a personal injury action, Olan’s firm filed a lien on any recovery. Zelig contends: (1) his communications with Olan concerning the validity and payment of the lien were a protected activity, because they constituted settlement negotiations related to the underlying action; and (2) the trial court abused its discretion by awarding attorney fees against him for filing a frivolous anti-SLAPP motion. We find Zelig was not engaged in a protected activity and the trial court did not abuse its discretion in awarding attorney fees. Therefore, we affirm.

All statutory references are to the Code of Civil Procedure unless otherwise stated. Section 425.16 is commonly referred to as the anti-SLAPP (strategic lawsuit against public participation) statute. (California Back Specialists Medical Group v. Rand (2008) 160 Cal.App.4th 1032, 1034.)

Olan and his firm’s request that we take judicial notice of the unpublished appellate court opinion in Scottsdale Ins. Co. v. Zelig (2008 WL 962921) is denied as irrelevant. (See Navellier v. Sletten (2002) 29 Cal.4th 82, 87, fn. 5.)


Allegations of the Complaint

On February 14, 2008, Attorney Olan and his law firm filed a complaint against Attorney Zelig that alleged several causes of action, including breach of an oral contract, enforcement of an attorney’s lien and constructive trust, interference with prospective economic advantage, fraud, declaratory relief, conversion, and defamation per se. The complaint alleged as follows. On December 8, 2003, Olan and his firm entered into a contingency fee agreement with Shannon Hill to prosecute her personal injury claims. The agreement granted Olan and his firm a lien on Hill’s claim and any recovery she obtained. On May 3, 2005, Olan and his firm filed a complaint on Hill’s behalf and conducted discovery. On February 13, 2006, Zelig substituted in as Hill’s counsel. Olan and his firm filed lien notices with the trial court and all counsel in the case. In August 2006, Hill settled her claims for $250,000.

On August 30, 2006, Olan met with Zelig. Hill’s settlement checks could not be cashed without Olan’s endorsement. Zelig promised that he would honor Olan’s lien and place the disputed fees in a separate trust account. Olan agreed to endorse the settlement checks, which allowed funds to be disbursed to Hill, on the express condition that his lien would be honored and the disputed fees would be put in a separate trust account.

After Olan fully performed, Zelig stated on several occasions that he does not intend to honor the lien and threatened to file a baseless malpractice action. On October 16, 2006, Zelig sent a letter to Olan, Hill, and other people, containing false and defamatory statements about Olan, including statements that Olan was dishonest, untrustworthy, had committed fraud, breached fiduciary duties, and engaged in criminal conduct.

Zelig has refused to pay the fees, costs, and expenses due to Olan and his firm pursuant to the lien. The amount owed for work performed during the firm’s representation of Hill is more than $58,000. Olan and his firm requested damages and the imposition of a constructive trust over the settlement proceeds.

Anti-SLAPP Motion

On May 30, 2008, Zelig filed a motion to strike the complaint pursuant to section 425.16 on the grounds that it was retaliatory and oppressive litigation to discourage Zelig’s right to petition the court on behalf of his client, and concerned written or oral statements made while trying to settle litigation on behalf of Hill. In addition, he argued that Olan and his firm cannot establish a reasonable probability of prevailing. Zelig requested an award of $5,988.50 for his attorney fees and costs incurred to bring the motion.

Olan and his firm filed an opposition on the ground that Zelig’s actions were not a protected exercise of his constitutional rights. They requested attorney fees and costs of $6,462.50 incurred to oppose the motion.

Hearings were held on July 10 and 15, 2008. Olan and his firm argued that the motion to strike was frivolous and designed solely to cause unnecessary delay, because Zelig could not make out a prima facie case that he had engaged in protected speech. The trial court agreed that there was no protected speech and it was not even a close case. The court found no relationship to cases in which a party to a settlement subsequently brought a lawsuit. Zelig responded that although it was not a settlement negotiation as to the underlying action, it was a settlement negotiation of a lien filed in the underlying action. The court denied the motion and awarded Olan and his firm attorney fees and costs of $5,000 as against Zelig. Zelig filed a timely notice of appeal from the July 15, 2008 minute order.


Standard of Review

“Analysis of an anti-SLAPP motion requires a two-step process. ‘First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity.... If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim.’ (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) We review these legal determinations de novo. (Healy v. Tuscany Hills Landscape & Recreation Corp. (2006) 137 Cal.App.4th 1, 5.)” (California Back Specialists Medical Group v. Rand (2008) 160 Cal.App.4th 1032, 1036 (CBSMG), disagreed with on another point in Salma v. Capon (2008) 161 Cal.App.4th 1275, 1288, fn. 5.)

“The anti-SLAPP statute was enacted ‘to provide a procedural remedy to dispose of lawsuits that are brought to chill the valid exercise of constitutional rights.’ (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055-1056.) To that end, the statute is liberally construed. (§ 425.16, subd. (a).)” (CBSMG, supra, 160 Cal.App.4th at p. 1036.)

No Protected Activity

Zelig contends his communications with Olan concerning the attorney fee lien constituted settlement negotiations related to the underlying action, which is considered to be protected litigation activity under California case law. This is incorrect.

“A cause of action is subject to an anti-SLAPP motion to strike only if it arises from an act ‘in furtherance of the person’s right of petition or free speech under the United States or California Constitution in connection with a public issue....’ (§ 425.16, subd. (b)(1).) An act in furtherance of the right to petition includes ‘any written or oral statement or writing made in connection with an issue under consideration or review by a... judicial body, or any other official proceeding authorized by law....’ (Id., subd. (e).) The principal thrust or gravamen of a cause of action determines whether the anti-SLAPP statute applies. (Wang v. Wal-Mart Real Estate Business Trust (2007) 153 Cal.App.4th 790, 802.) ‘The anti-SLAPP statute’s definitional focus is not the form of the plaintiff’s cause of action but, rather, the defendant’s activity that gives rise to his or her asserted liability-and whether that activity constitutes protected speech or petitioning.’ (Navellier v. Sletten (2002) 29 Cal.4th 82, 92.) The anti-SLAPP statute does not apply where protected activity is only collateral or incidental to the purpose of the transaction or occurrence underlying the complaint. (Wang, [supra, ] at p. 794.)” (CBSMG, supra, 160 Cal.App.4th at pp. 1036-1037.)

“Not all attorney conduct in connection with litigation, or in the course of representing clients, is protected by section 425.16. (Freeman v. Schack (2007) 154 Cal.App.4th 719 [contract and tort action against attorney for representing adverse interests in litigation not subject to the anti-SLAPP statute]; Benasra v. Mitchell Silberberg & Knupp, LLP (2004) 123 Cal.App.4th 1179 [action against attorney for breach of duty of loyalty arising from representation of clients with conflicting interest not subject to the anti-SLAPP statute]; Moore v. Shaw (2004) 116 Cal.App.4th 182 [action against estate planning attorney for participation in breach of trust not subject to anti-SLAPP motion].)” (CBSMG, supra, 160 Cal.App.4th at p. 1037.)

The facts of CBSMG are nearly identical to the instant matter. In CBSMG, an attorney represented plaintiffs in an underlying personal injury action. (CBSMG, supra, 160 Cal.App.4th at pp. 1035-1036.) The plaintiffs received services from medical providers who filed liens on any recovery in the action. The action was resolved and the attorney disbursed the proceeds without notifying the lien holders or satisfying the liens. The lien holders filed an action against the attorney for breach of contract, breach of fiduciary duty, conversion, unjust enrichment, and money had and received. The attorney moved to strike the complaint as a SLAPP suit. He submitted evidence that he had informed the lien holders that he would not honor the liens because he doubted the reasonableness and necessity of the care provided. The CBSMG court found that the complaint did not arise from a protected activity, because “CBSMG’s complaint is based on the underlying controversy between private parties about the validity and satisfaction of the liens. These issues were never under consideration in any court or official proceedings until CBSMG filed the current action.” (Id. at p. 1037.) In addition to affirming the order denying the anti-SLAPP motion, the CBSMG court affirmed the trial court’s award of attorney fees for filing a frivolous motion. (Id. at pp. 1037-1038.)

Olan and his firm’s complaint is based on a controversy about the validity and agreement for satisfaction of the lien. These issues were never under consideration in any court or official proceedings until Olan and his firm filed the current action. The trial court correctly determined that Olan and his firm’s claims did not arise from any act in furtherance of Zelig’s right to petition or his right to free speech. Because the complaint did not arise from protected activity, we do not need to consider the probability of prevailing. (§ 425.16, subd. (b)(1).)

Trial Court’s Award of Attorney Fees

Zelig contends the trial court abused its discretion by awarding attorney fees to Olan and his firm, because the anti-SLAPP motion was not frivolous. We disagree.

“Before awarding attorney fees to a plaintiff who has successfully opposed an anti-SLAPP motion, the court must find that the motion to strike was ‘frivolous or is solely intended to cause unnecessary delay,’ and the court must comply with the procedural provisions of section 128.5. (§ 425.16, subd. (c).)” (CBSMG, supra, 160 Cal.App.4th at pp. 1037-1038.)

Based on case law, the trial court’s conclusion that the motion was clearly frivolous was not an abuse of discretion.

Attorney Fees Request on Appeal

Olan and his firm have filed a motion requesting an award of attorney fees on appeal on the ground that Zelig’s appeal is frivolous. “Section 425.16, subdivision (c) provides that a prevailing defendant is entitled to recover attorney fees and costs, and does not preclude recovery on appeal. [Citation.]” (Dowling v. Zimmerman (2001) 85 Cal.App.4th 1400, 1426.) Therefore, an award of appellate attorney fees is authorized by the statutory provision based on a finding that Zelig’s appeal was frivolous. (Ibid.) There is clear case law holding that the anti-SLAPP statute does not apply to an attorney’s communications concerning a lien on the recovery in a personal injury action. Moreover, the case law clearly held that it was not an abuse of discretion to find the motion to strike in that case was frivolous and award attorney fees. Accordingly, Olan and his firm are awarded a reasonable attorney fees on this appeal, the amount of which is to be determined by the trial court upon remand.


The order denying the motion to strike under section 425.16 and awarding attorney fees is affirmed. Respondents David R. Olan and Olan Law Corporation are awarded their attorney fees and costs on appeal. The cause is remanded for a determination by the trial court of the amount of reasonable attorney fees and costs that Olan and Olan Law Corporation shall recover from Zelig under the provisions of section 425.16, subdivision (c).

We concur: TURNER, P. J., MOSK, J.

Summaries of

Olan v. Zelig

California Court of Appeals, Second District, Fifth Division
Sep 3, 2009
No. B210972 (Cal. Ct. App. Sep. 3, 2009)
Case details for

Olan v. Zelig

Case Details

Full title:DAVID R. OLAN et al., Plaintiffs and Respondents, v. STEVEN L. ZELIG…

Court:California Court of Appeals, Second District, Fifth Division

Date published: Sep 3, 2009


No. B210972 (Cal. Ct. App. Sep. 3, 2009)