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June 12, 2012

Cole v. Patricia A. Meyer & Associates, APC (2012) 206 Cal.App.4th 1095

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The Second District holds that attorneys’ passive role as standby counsel did not insulate them from liability for malicious prosecution.

Raymond Boucher of Kiesel, Boucher, & Larson and Robert Ottilie were among several attorneys of record for plaintiffs in a shareholder derivative action against Christopher Cole and other directors of Peregrine Systems, Inc.  Cole prevailed in that action on summary judgment.

Shortly thereafter, Cole sued the shareholders’ attorneys, including Boucher and Ottilie, for malicious prosecution and defamation.  The trial court granted Boucher and Ottilie’s anti-SLAPP motions based on their representation that they did not actively participate in the shareholder action, and were associated into the case only for purposes of trial.

The Court of Appeal reversed, unable to conclude that Boucher and Ottilie could avoid liability by learning little about the shareholder case.  Both were identified in the pleadings as counsel for plaintiffs and there was no evidence that they objected to service or notified the court or opposing counsel that they did not actually represent the shareholder plaintiffs.

The Court rejected Boucher and Ottilie’s claim that their duty to make an independent probable cause determination never arose because their specific role in the shareholder action was never triggered.  As counsel of record, both attorneys had a duty of care to their clients that encompassed knowledge of the law and the obligation to exercise informed judgment.  Although they could rely to some extent on their co-counsel’s investigation of the claims, they had a duty to become informed enough about the subject matter to evaluate their co-counsel’s work.

Aside from the duties Boucher and Ottilie owed their client, they also had a responsibility to avoid frivolous or vexatious litigation.  The Court found the attorneys lent their names to all filings in the shareholder case, supporting an inference that they “presented” these filings to the court and prosecuted that action along with the primary attorney.

Comment: Attorneys voluntarily participating as co-counsel are as responsible as a primary attorney both to the client, and, where applicable, to third parties.  The decision to lend an attorney’s name to litigation should not be taken lightly.

 

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