Opinion
G028909.
11-24-2003
RUS, MILIBAND & SMITH, Cross-Complainant and Appellant, v. CONKLE & OLESTEN, Cross-Defendant and Respondent.
Rus, Miliband & Smith, Ronald Rus, Randall A. Smith and Jay B. Wallace for Cross-Complainant and Appellant. Conkle & Olesten, William C. Conkle and Eric S. Engel for Cross-Defendant and Respondent.
This is a companion case to G030325. That case should be read first, since it provides the lengthy factual background leading to this appeal. By way of orientation, however, the procedural background of this case merits a brief synopsis: Rus, Miliband & Smith, whom we will call the Rus firm, has sued its erstwhile client, the accounting firm of Goodrich, Goodyear & Hinds, asserting that it is entitled to a portion of a $1.875 million settlement obtained by the accountants in a bad faith suit against their malpractice insurer. That suit is completely disposed of in G030325. In a word, we hold there that under the circumstances of the Rus firms voluntary withdrawal from the bad faith case against the malpractice insurer, it is not allowed to assert a claim for fees.
But in the same suit the Rus firm has also sued the law firm of Conkle & Olesten, who have represented the accountants all along. Indeed, at one point, when the Rus firm was still prosecuting the bad faith claim against the malpractice insurer, the accountants had two separate sets of lawyers, the Rus firm and the Conkle firm, somewhat analogous to the situation where, in a lawsuit against an insured, the insured will have two sets of lawyers: one provided in the regular course by the insurance company to be lead counsel in defending the suit, and another set selected only by the insured, whose purpose it is to look out solely for the insureds interest, including any interests the insured has which are adverse to its insurer. (See generally San Diego Federal Credit Union v. Cumis Ins. Society, Inc. (1984) 162 Cal.App.3d 358.)
The basis of the Rus firms suit against the Conkle firm is interference with contract or prospective economic advantage. Those causes of action, in their intentional and negligent permutations, are set forth in the second, third, fourth, and fifth causes of action to the complaint. At root of each cause of action are a series of similar allegations, essentially saying that the Conkle firm inveigled the accountants into forcing the Rus firm to withdraw from the case, and thereby jeopardize the contingency fee to which the Rus firm would otherwise be entitled. (E.g., "without just cause, Conkle & Olesten induced GG&H to force the withdrawal of RM&S"; "As a proximate result of such inducement by Conkle & Olesten, GG&H took actions which forced RM&S to withdraw as counsel"; "Defendants breached their legal duty of care by taking actions alleged herein that induced GG&H to terminate its agreement with RM&S, and thereby forced the withdrawal of RM&S"; "Conkle & Olesten with malicious intent to induce GG&H to terminate its agreement with RM&S without just cause, induced GG&H to force the withdrawal of RM&S"; Conkle & Olesten "breached their legal duty of care by taking actions alleged herein [to induce] GG&H to terminate its agreement with RM&S.")
The four economic interference causes of action against Conkle & Olesten were dismissed by the trial court in response to a motion brought pursuant to Civil Code section 1714.10, which allows attorneys sued for civil conspiracy to bring what are in effect premature summary judgment motions. In that sense the statute does for attorneys sued for conspiring with their clients what the SLAPP statute does for First Amendment defendants.
Civil Code section 1714.10 was enacted in 1988 in response to Wolfrich Corp. v. United Services Automobile Assn. (1983) 149 Cal.App.3d 1206. In Wolfrich, an insured sued an insurance company and its attorneys for conspiracy to violate section 790.03 of the Insurance Code. Wolfrich held that because they were not in the insurance business, they could not be sued for violating the Insurance Code directly, but could be sued for conspiring with their clients to violate the code. Concerned that conspiracy claims might be used to gain an unfair tactical advantage in a lawsuit (for one thing, it would force a defendant to hire a new set of lawyers), the Legislature enacted Civil Code section 1714.10 to narrow the holding of Wolfrich by "requiring a prefiling judicial determination of a reasonable probability that the conspiracy claim was meritorious." (See Pavicich v. Santucci (2000) 85 Cal.App.4th 382, 390-391.)
For our purposes now we need not address the question of whether the trial court was right in dismissing the Rus firms economic interference claims against the Conkle firm. Even if the trial court applied Civil Code section 1714.10 incorrectly, those claims lose any viability in light of our holding in the companion appeal, G030325. Specifically, as our opinion there makes clear, the accountants never "forced" the Rus firm to withdraw — the Rus firm withdrew under strictly permissive portions of the rules of professional conduct. In fact, the Conkle firm represented the accountants in opposing the Rus firms withdrawal motion. Moreover, not only was the withdrawal permissive, but (as explained at length in G030325) it was permissive under circumstances which preclude any recovery by the Rus firm.
As with all other torts, the elements of the economic interference torts include causation. (E.g., Youst v. Longo (1987) 43 Cal.3d 64, 71, fn. 6 [elements include intentional acts on the part of the defendant to disrupt the relationship, the actual disruption of the relationship, and economic harm caused by the intentional acts].) Here, the Rus firm thus cannot prove causation — any loss it sustained was its own doing.
The judgment of dismissal must, accordingly, be affirmed. The respondent shall recover its costs on appeal.
We concur: OLEARY, J. and MOORE, J. --------------- Notes: Civil Code section 1714.10, subdivision (a) states, in pertinent part, "No cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute, and which is based upon the attorneys representation of the client, shall be included in a complaint or other pleading unless the court enters an order allowing the pleading that includes the claim for civil conspiracy to be filed after the court determines that the party seeking to file the pleading has established that there is a reasonable probability that the party will prevail in the action."