Contract Claims For Breach Of Settlement Agreement Are Not Subject To Anti-SLAPP Motion, But Fraud Claims Based On Oral Representations Are Subject To Anti-SLAPP Motion
At issue in Praetorian Ins. Co. v. The Dunnon Law Firm, F066590 (5th Dist. March 3, 2014) (Hill, Gomes, Pena) (unpublished) was whether prelitigation settlement negotiations, resulting in a written settlement agreement, furnished a basis for an anti-SLAPP (Strategic Lawsuit Against Public Participation) motion, because the actions were privileged litigation activity. Because the focus was on privileged litigation activity, a common basis for filing an anti-SLAPP motion, the Court necessarily focused on Civil Code section 47 (privileged publications or broadcasts/exceptions).
A personal injury claimant and the party alleged to have caused the auto injury settled their dispute by mediation. Afterwards, the insurer, Praetorian, was sued for failing to satisfy the medical lien of the injured party’s health care provider, and cross-complained against the claimant’s attorneys. The insurer alleged the attorneys falsely represented to the insurer during mediation that the medical lien would be paid out of the settlement proceeds and was not.
The chief outcomes were: (1) contract claims based on the written settlement agreement were not privileged because the gravamen of the claim was that the plaintiff’s law firm and her attorneys did something wrong by failing to perform as agreed in the settlement agreement; and (2) fraud claims based on oral statements made during negotiation of a settlement agreement fell within the litigation privilege, and thus furnished a basis for a successful anti-SLAPP motion.
The mediation statutes are not discussed in the opinion. However, we note that the results are “in synch” with the mediation statutes, which allow the introduction into evidence of a written settlement agreement, assuming certain conditions for disclosure and admissibility are met, but create a confidentiality privilege for oral statements made during the course of the mediation (see Evid. Code sections 1119 to 1126). It would be hard to prove the contract claims here, unless the settlement agreement is admissible, and it would be impossible to prove the fraud claims if the oral statements are inadmissible under the Evidence Code.