Copenbarger v. International Ins. Co.

• Decision Date: 30 May 1996
• Docket Number: No. G014315,G014315
• Citation: 46 Cal.App.4th 961,54 Cal.Rptr.2d 1
• Court: California Court of Appeals Court of Appeals
• Parties: , 96 Cal. Daily Op. Serv. 4606, 96 Daily Journal D.A.R. 7244 Lloyd G. COPENBARGER et al., Plaintiffs and Appellants, v. INTERNATIONAL INSURANCE COMPANY et al., Defendants and Respondents.

Page 1

54 Cal.Rptr.2d 1

46 Cal.App.4th 961, 96 Cal. Daily Op. Serv. 4606,

96 Daily Journal D.A.R. 7244

Lloyd G. COPENBARGER et al., Plaintiffs and Appellants, v. INTERNATIONAL INSURANCE COMPANY et al., Defendants and Respondents.

No. G014315.

Court of Appeal, Fourth District, Division 3, California.

May 30, 1996.

Rehearing Denied July 12, 1996.

[46 Cal.App.4th 962] Copenbarger & Associates, Paul D. Copenbarger, Richard Oberruter and Nikki A. Presley, Santa Ana, for Plaintiffs and Appellants.

Haight, Brown & Bonesteel, Roy G. Weatherup, John W. Sheller, Jon M. Kasimov, and Jeffrey C. Bogert, Santa Monica, for Defendants and Respondents.

OPINION

RYLAARSDAM, Associate Justice.

Lawyers, sued for malpractice, filed an action for indemnity against the lawyers who subsequently represented their dissatisfied client. The action for indemnity was dismissed. In a subsequent action for the malicious institution of the indemnity action, the court determined there was probable cause for instituting and maintaining the action and entered judgment for defendants. Appellants, plaintiffs in the action for malicious institution, contend this determination was error since an action for indemnity against successor lawyers is clearly prohibited. We affirm.

FACTS

This case represents a daisy chain of litigation which started with Mrs. Nelson's divorce some 15 years ago. The firm of Hewitt and Marshall (H & M) initially agreed to represent her. Alas, the relationship between H & M and Mrs. Nelson soon took the same course as the relationship between Mr. and Mrs. Nelson, causing H & M to substitute out as her attorneys. Shortly thereafter H & M sued Mrs. Nelson to recover legal fees. Mrs. Nelson countered by filing a cross-complaint charging H & M with legal malpractice in the handling of her divorce action. The cross-complaint was defended by the firm of Luce, Forward, Hamilton & Scripps (LFH & S) under a legal malpractice policy issued by International Insurance Company, whose claims were being adjusted by Crum & Forster Managers Corporation (collectively "insurer"). This malpractice suit was eventually settled.

After H & M ceased to represent her in the divorce action, Mrs. Nelson substituted Richard J. Annis, one of appellants herein, as her attorney of record. She also retained Copenbarger & Copenbarger (C & C), another appellant, to defend the H & M action for fees and to prosecute the malpractice action against H & M. The parties dispute whether Annis and C & C represented Mrs. Nelson in the divorce action, before H & M substituted out. Eventually Annis, and allegedly C & C, assisted Mrs. Nelson in entering into a settlement in the Nelson divorce action.

H & M moved for leave to file a cross-complaint against Annis and C & C (for indemnity and contribution) contending their negligence contributed to Mrs. Nelson's losses. The trial court denied this motion. Not to be deterred, H & M filed a new lawsuit against Annis, C & C and Mrs. Nelson, asserting the same claims for indemnity and contribution. This action was dismissed as to Nelson and summary judgment was granted in favor of Annis. Later H & M dismissed the entire indemnity action.

Now came Annis and C & C's turn. Together with Mrs. Nelson, they filed an action for the malicious institution of the indemnity action against H & M, LFH & S, and insurer. The liability of insurer was alleged to be predicated on a conspiracy with the other defendants in the malpractice action to commence and maintain the underlying suit. H & M was dismissed from this action and LFH & S eventually settled, leaving the action to proceed against insurer.

As a defense to the action for the malicious institution of the indemnity action, insurer contended there had been probable cause for the institution and maintenance of the suit. At the commencement of trial, the parties stipulated that issue was to be determined by the trial court before a jury was to be selected. Pursuant to the stipulation, the trial court reviewed documents, including declarations and extracts from depositions, as well as some stipulated facts, and ruled that there had been probable cause as a matter of law. This resulted in a judgment of nonsuit against Nelson, Annis and C & C, from which they now appeal.

DISCUSSION

Lack of probable cause is an essential element of a cause of action for the malicious institution of a civil proceeding. ¹ (Klein v. Oakland Raiders, Ltd. (1989) 211 Cal.App.3d 67, 73, 259 Cal.Rptr. 149.) Presence or lack of such probable cause is to be determined as a matter of law and by an objective standard. (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 875, 254 Cal.Rptr. 336, 765 P.2d 498.) The test to be used by the court is whether "any reasonable attorney would have thought the claim tenable." (Id. at p. 886, 254 Cal.Rptr. 336, 765 P.2d 498.)

The trial court determined there was probable cause for the institution of the indemnity action, based on a number of findings. All of these were well supported by the evidence and the law. Most significantly the court found, "The law of indemnity in connection with claims against successor legal counsel was far from clear at the time the underlying action for indemnity was filed."

The issue of whether a lawyer sued for malpractice may seek indemnity from a lawyer who subsequently represented the plaintiff-client vexed the courts for some time. Where it was contended the conduct of the successor lawyer contributed to plaintiffs's loss, general rules of indemnity and contribution (see, e.g., Herrero v. Atkinson (1964) 227 Cal.App.2d 69, 75, 38 Cal.Rptr. 490) argue in favor of permitting cross-complaints or actions for contribution or indemnity by the original lawyer, now being sued. At least since American Motorcycle Assn. v. Superior Court (1978) 20 Cal.3d 578, 146 Cal.Rptr. 182, 578 P.2d 899, our courts have enunciated the principle that "liability for an indivisible injury caused by concurrent tortfeasors will be borne by each individual tortfeasor 'in direct proportion to [his] respective fault.' " (Id. at p. 598, 146 Cal.Rptr. 182, 578 P.2d 899) American Motorcycle provided the procedural mechanism to permit one tortfeasor to obtain contribution from another who contributed to the damage by permitting a tort defendant either to file a cross complaint or a separate action for indemnity or contribution against another who allegedly contributed to the damage for which the defendant may be liable.

In the case of a lawyer sued for malpractice, however, there are policies which militate against permitting the assertion of indemnity and contribution claims against the successor lawyer. Since the successor lawyer frequently is the very lawyer representing plaintiff in the malpractice action, permitting such a claim to proceed...