Scottsdale Ins. Co. v. The Law Offices of Steven Zelig

Filed 5/2/06 Scottsdale Ins. Co. v. The Law Offices of Steven Zelig CA2/2

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

APPEAL from orders of the Superior Court of Los Angeles County. John Shepard Wiley, Jr., Judge. Affirmed.

Lawrence P. House; Law Offices of Steven L. Zelig and Steven L. Zelig, for Defendant and Appellant.

Breidenbach, Huchting & Hamblet, Gary A. Hamblet, Joni L. Gaudes and Gary A. Collis for Plaintiff and Respondent.

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The trial court denied the motion of appellant, The Law Offices of Steven Zelig (Zelig), to dismiss the complaint of respondent, Scottsdale Insurance Company (Scottsdale), for malicious prosecution pursuant to Civil Code section 1714.10^[1] for failure to obtain court approval prior to alleging a conspiracy between Zelig and a former client. The trial court also denied Zelig's motion to dismiss under the anti-SLAPP (Strategic Lawsuit Against Public Participation) statute, Code of Civil Procedure section 425.16, in which Zelig claimed retaliation for his representation of clients against Scottsdale in prior actions. Because we agree that a conspiracy was not alleged against Zelig and his former client and that Scottsdale met its burden under the anti-SLAPP statute of showing probable success on its malicious prosecution claim, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

The Prior Lawsuit

On January 17, 1994, Regency Royale Homeowners Association (Regency) allegedly sustained damage in the Northridge earthquake. Five months later, Regency submitted an application to Scottsdale for earthquake insurance and represented that it was insured through Homestead Insurance Company and had sustained no losses during the previous five years. Scottsdale relied on those representations in issuing policy No. CIS 026699 to Regency providing coverage from July 1, 1994 to July 1, 1995.

On December 26, 2001, Regency's public insurance adjuster, Kapilow & Son (Kapilow), requested that Scottsdale assign an adjuster to investigate Regency's claim of earthquake damage under policy No. CIS 026699. On December 31, 2001, Zelig filed an insurance claim in Los Angeles Superior Court against Scottsdale on behalf of Regency, entitled Waldman et al. v. Golden Bear et al., case No. BC265308 (Waldman). The complaint was filed under Code of Civil Procedure section 340.9, which revived time-barred Northridge earthquake insurance claims provided the insured had contacted his insurer prior to January 1, 2000 and the lawsuit was filed prior to January 1, 2002. Zelig had received the Regency file from Kapilow with insufficient time prior to the filing deadline under the revival statute to undertake an independent investigation of whether Scottsdale was the proper insurer. Zelig relied on Kapilow's representation that Scottsdale insured Regency for the earthquake risk in filing the complaint. Kapilow likewise had not independently investigated whether Scottsdale was the proper insurer.

In January 2002, Scottsdale informed Kapilow that Regency's policy did not provide coverage until six months after the Northridge earthquake and that Homestead Insurance was likely the proper insurer. Scottsdale also advised that Regency had not initiated a claim prior to January 1, 2000 as required under the revival statute. In March and May 2002, Scottsdale again advised Kapilow that the Scottsdale policy was not in effect during the earthquake.

Nevertheless, Zelig served the Waldman complaint on Scottsdale on July 8, 2002. In October 2002 Scottsdale responded to Regency's request for documents in part by producing the declarations page of the insurance policy it had issued to Regency for inception six months after the earthquake. In November 2002, Zelig's office was informed by Kapilow that Farmers and State Farm carried coverage on the Regency property at the time of the earthquake.

Pursuant to the trial court's order, Scottsdale obtained permission to proceed with a motion for summary judgment by making a preliminary showing that Scottsdale did not insure Regency at the time of the Northridge earthquake and that Regency otherwise did not meet the revival statute's requirements. Scottsdale had additional communications with Zelig in April and July asserting it had not insured the risk of the earthquake. After Scottsdale filed its motion for summary judgment, new counsel, associated in on behalf of Regency, acknowledged that Scottsdale was not the proper insurer. That counsel dismissed Scottsdale without prejudice before the summary judgment hearing. Scottsdale incurred in excess of $30,000 in attorney fees in the evaluation and defense of the Waldman action.

The Underlying Lawsuit

Scottsdale filed the underlying complaint for malicious prosecution and civil conspiracy against Zelig, Regency and Kapilow on September 10, 2004 to recoup attorney fees and costs expended in the prior lawsuit and punitive damages. The complaint contains â€