Cases

A real estate LLC retained GMSR’s law firm client to represent its managers in a suit brought by one of the LLC’s investors. Arbitrators ultimately held that the managers had not acted in good faith which, among other things, arguably negated the LLC’s obligation to pay for their defense. The investor then sued its opposing counsel, GMSR’s law firm client, for fraudulent conveyance and conversion for accepting payment of legal fees for services actually rendered. The trial court ruled that a party’s claims against opposing counsel for accepting payment of fees arise out of protected petitioning activity and therefore the anti-SLAPP statute applies.

The Court of Appeal affirmed. It held that there was no fraudulent conveyance because the lawyers had provided reasonable value in return for being paid and that the lawyers did not have to guess whether, in the future, their clients’ acts would be deemed not in good faith or to abandon their clients once an initial such finding was made. As long as the LLC had a putative obligation to pay for the managers’ representation, the lawyers could not be liable for fraudulent conveyance.

Case Briefs

• California Court of Appeal Opinion - View Document