Thayer v. Kabateck Brown Keller LLP: Law Firm Prevails on Anti-SLAPP Motion Against Non-Client Who Sued the Firm in Connection With Handling of Class-Action Lawsuit

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[author: Mark Hancock]

On the appeal of a ruling on an anti-SLAPP motion, the California Court of Appeal (First Appellate District, Division Two) recently held that a plaintiff had no standing to sue a law firm for its alleged improper handling of class-action settlement proceeds.  The lack of standing arose from the fact that the plaintiff was not a client of the firm she was suing, and it was not enough for her to allege that she was a third-party beneficiary of the retention agreement signed by her spouse.  The published decision is Thayer v. Kabateck Brown Kellner LLP (2012) 207 Cal.App.4th 141.

The plaintiff sued the defendant law firm for alleged conversion and falsification of documents in connection with the settlement of an underlying class action.  The law firm responded by filing an anti-SLAPP motion, arguing that the suit arose from the firm’s constitutionally protected speech and activity on behalf of clients in the class action.  Cal. Code Civ. Proc. § 425.16  The trial court denied the motion, finding no protected activity.  The Court of Appeal reversed, concluding that: (1) the lawsuit did arise out the law firm’s constitutionally-protected activity; and (2) the plaintiff failed to demonstrate a likelihood of prevailing on the merits because the plaintiff was not a client of the firm, having never signed a retention agreement.          

The plaintiff argued that she did have standing to sue the firm because she was a third-party beneficiary of the retention agreement signed by her spouse.  However, according to the Court of Appeal, that was not sufficient.  The plaintiff was a mere incidental beneficiary under the spouse’s retention agreement, rather than an intended beneficiary.  The court also cited public policy to support its holding, explaining that it was “wary about extending an attorney’s duty to persons who have not come to the attorney seeking legal advice and whom the attorney has never met.”  See Hall v. Superior Court, 108 Cal. App. 4th 706, 714 (2003).