Court of Appeal (Cal.) Says that California Statute Protecting Attorneys from Claims that They Conspired With Their Client Offered No Protection Against Rosenthal Act Claim

In Lujan v. Professional Collection Consultants, 2014 WL 6698082 (Cal.App. 1 Dist. 2014), the Court of Appeal in an unpublished case found that Civil Code § 1714.10 does not provide protection to a debt collection attorney from a Rosenthal Act claim where no conspiracy claim was alleged and where the debt collection attorney engaged in conduct external to his/her role as counsel. Civil Code § Section 1714.10 provides: “(a) 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 attorney’s 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.

Here, it is plain that the causes of action in the cross-complaint allege that Garen violated a legal duty to Lujan in furtherance of his own financial advantage. (See § 1714.10, subd. (c)(2).) As Lujan states, the cross-complaint alleges that Garen “went beyond a professional duty as an attorney for a party, and instead participated in the subject transactions in his individual capacity and as an owner and manager of Wireless, purchasing defaulted consumer credit accounts and assigning those accounts to his employer, PCC, for collection. Thus, Garen financially benefited on both sides of the transaction. On one side, Garen benefited as owner of Wireless with a financial interest in the collection of Lujan’s account. On the other side of the transaction, Garen benefited as a salaried employee of PCC by being paid for his labor in collecting Lujan’s account.” Accordingly, even if the causes of action in the cross-complaint could be described as alleging a conspiracy arising out of Garen’s legal representation, because they allege that Garen acted in excess of his representative capacity in service to his client and violated a legal duty running to Lujan in order to receive a financial advantage over and above the professional fees he earned as compensation for performance of the legal representation, those causes of action come within the subdivision (c)(2) exception to the prefiling requirements set forth in subdivision (a) of section 1714.10. (See Berg, supra, 131 Cal.App.4th at p. 833; Evans, supra, 65 Cal.App.4th at pp. 606–607; cf. Burtscher v. Burtscher (1994) 26 Cal.App.4th 720, 727 [attorney’s extreme conduct in directly participating in self-help eviction of client’s ex-wife from home went far beyond role of legal representative].) ¶ In conclusion, whether Lujan’s causes of action are viewed as being completely outside the scope of section 1714.10 or as coming within the exception found in subdivision (c)(2) of that section, we conclude the prefiling requirements of section 1714.10, subdivision (a), are not applicable here. The trial court properly overruled the demurrer and denied the motion to strike Lujan’s cross-complaint