California Civil Conspiracy Law
Civil conspiracy is not an independent tort. (See Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 511.)
"Standing alone, a conspiracy does no harm and engenders no tort liability. It must be activated by the commission of an actual tort." (Ibid.)
" 'The major significance of a conspiracy cause of action "lies in the fact that it renders each participant in the wrongful act responsible as a joint tortfeasor for all damages ensuing from the wrong ... regardless of the degree of his activity. " ' The essence of the claim is that it is merely a mechanism for imposing vicarious liability; it is not itself a substantive basis for liability. Each member of the conspiracy becomes liable for all acts done by others pursuant to the conspiracy, and for all damages caused thereby." (Berg & Berg Enterprises, LLC v. Sherwood Partners, Inc. (2005) 131 Cal.App.4th 802, 823; see Applied Equipment Corp. v. Litton Saudi Arabia Ltd., supra, 7 Cal.4th at pp. 510-511 conspiracy is "a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration".)
" 'The basis of a civil conspiracy is the formation of a group of two or more persons who have agreed to a common plan or design to commit a tortious act.' The conspiring defendants must also have actual knowledge that a tort is planned and concur in the tortious scheme with knowledge of its unlawful purpose. However, actual knowledge of the planned tort, without more, is insufficient to serve as the basis for a conspiracy claim. Knowledge of the planned tort must be combined with intent to aid in its commission." (Kidron v. Movie Acquisition Corp. (1995) 40 Cal.App.4th 1571, 1582.)
Knowledge and intent " 'may be inferred from the nature of the acts done, the relation of the parties, the interest of the alleged conspirators, and other circumstances.' " (Ibid.)
"It is the settled rule that 'to render a person civilly liable for injuries resulting from a conspiracy of which he was a member, it is not necessary that he should have joined the conspiracy at the time of its inception; every one who enters into such a common design is in law a party to every act previously or subsequently done by any of the others in pursuance of it.' " (de Vries v. Brumback (1960) 53 Cal.2d 643, 648.)
Civil Code section Section 1714.10 establishes special procedural requirements that must be satisfied before certain types of claims can be asserted against an attorney based on an alleged conspiracy between the attorney and his or her client.
Section 1714.10, subdivision (a), provides, "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. The court may allow the filing of a pleading claiming liability based upon such a civil conspiracy following the filing of a verified petition therefor accompanied by the proposed pleading and supporting affidavits stating the facts upon which the liability is based. The court shall order service of the petition upon the party against whom the action is proposed to be filed and permit that party to submit opposing affidavits prior to making its determination. The filing of the petition, proposed pleading, and accompanying affidavits shall toll the running of any applicable statute of limitations until the final determination of the matter, which ruling, if favorable to the petitioning party, shall permit the proposed pleading to be filed."
Section 1714.10 was originally enacted in 1988 in response to the Court of Appeal's decision in Wolfrich Corp. v. United Services Automobile Assn. (1983) 149 Cal.App.3d 1206, which held, although an insurance company's attorneys could not be sued directly for violating Insurance Code section 790.03, they could be sued for conspiring with their client to commit unfair or deceptive acts or practices prohibited by the code. (Wolfrich, at p. 1211.)
To prevent the assertion of conspiracy claims against attorneys "as a tactical ploy, particularly in actions against insurance companies" (College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 718), former section 1714.10 required a prefiling judicial determination of probable merit for any claim against an attorney alleging the attorney had conspired with his or her client. (Stats. 1988, ch. 1052, 1, pp. 3407-3408; see Pavicich v. Santucci (2000) 85 Cal.App.4th 382, 390-391.)
Enacted as part of the same legislation (Sen. Bill No. 2337 (1987-1988 Reg. Sess.)) that created the special motion to strike for cases arising from constitutionally protected petitioning and speech activity (Code Civ. Proc., 425.16), the provisions were intended to " 'screen out meritless cases at an early stage' " by requiring the plaintiff to demonstrate a probability of success on the merits. (College Hospital Inc., at p. 718.)
In 1989, however, the Supreme Court in Doctors' Co. v. Superior Court (1989) 49 Cal.3d 39 260 Cal. Rptr. 183, 775 P.2d 508 (Doctors' Co.) disapproved Wolfrich, holding no claim for conspiracy to violate the Insurance Code could be maintained against an attorney retained by an insurance company to assist in the defense of an insured against a third party claim. (Id. at p. 41.)
The court relied on the doctrine, commonly referred to as the "agent's immunity rule," that "a cause of action for civil conspiracy may not arise ... if the alleged conspirator, though a participant in the agreement underlying the injury, was not personally bound by the duty violated by the wrongdoing and was acting only as the agent or employee of the party who did have that duty." (Id. at p. 44.)
The court held, "because the noninsurer defendants are not subject to the only statutory duty toward plaintiff claimed to have been breached and were acting merely as agents of the insurer 'and not as individuals for their individual advantage' , 'they cannot be held accountable on a theory of conspiracy.' " (Id. at p. 45.)
The court explained, however, "it remains true, of course, that under other sets of circumstances 'attorneys may be liable for participation in tortious acts with their clients, and such liability may rest on a conspiracy' . For example, an attorney who conspires to cause a client to violate a statutory duty peculiar to the client may be acting not only in the performance of a professional duty to serve the client but also in furtherance of the attorney's own financial gain." (Doctors' Co., supra, 49 Cal.3d at p. 46.) Additionally, a claim may lie "against an attorney for conspiring with his or her client to cause injury by violating the attorney's own duty to the plaintiff." (Id. at p. 47.)
Following the decision in Doctors' Co., the Legislature debated whether the need for section 1714.10 had been eliminated. (See Sen. Com. on Judiciary, com. on Sen. Bill No. 820 (1991-1992 Reg. Sess.) May 7, 1991, p. 4 "it is unknown whether there is a need for pleading hurdles to protect attorneys from the type of civil conspiracy claims permitted under the Doctors' Company rationale"; Pavicich, supra, 85 Cal.App.4th at p. 393.)
Ultimately, the statute was amended in 1991 to apply only to situations in which it was alleged an attorney had engaged in a conspiracy with his or her client "arising from any attempt to contest or compromise a claim" (Stats. 1991, ch. 916, 1, p. 4108) and to create, in a new subdivision (c), exceptions from the procedural requirements of section 1714.10 for the two situations described in Doctors' Co.: "where (1) the attorney has an independent legal duty to the plaintiff, or (2) the attorney's acts go beyond the performance of a professional duty to serve the client and involve a conspiracy to violate a legal duty in furtherance of the attorney's financial gain." (See generally Pavicich, supra, 85 Cal.App.4th at pp. 393-394 discussing legislative history of 1991 amendment to 1714.10.)
As the phrase is used in section 1714.10, subdivision (c), an attorney's "independent legal duty to the plaintiff" includes the "duty to abstain from injuring the plaintiff through express misrepresentation." (Doctors' Co., supra, 49 Cal.3d at p. 48 describing Younan v. Equifax Inc. (1980) 111 Cal.App.3d 498 169 Cal. Rptr. 478 in which "agents were held subject to liability for conspiracy to commit actual fraud ..."; see Pavicich, supra, 85 Cal.App.4th at p. 397 plaintiff permitted to sue attorney for conspiring with client because attorney had a duty to plaintiff to not commit fraud; Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone, supra, 107 Cal.App.4th at p. 84 plaintiffs permitted to sue attorney for conspiring with insurance company to commit actual fraud because attorney "had a duty to refrain from injuring plaintiffs through express misrepresentation".)
The net effect of the agent's immunity rule as articulated in Doctors' Co., supra, 49 Cal.3d 39, and the statutory exceptions to the section 1714.10 procedural requirements now contained in subdivision (c) is to render that section practically meaningless.
If the plaintiff seeks to assert a conspiracy claim against an attorney based on the violation of a duty owed by the client, but not the attorney, and the attorney was acting within the scope of his or her professional responsibilities, the claim has no merit.
The petition under section 1714.10 will be denied; but, in the absence of the statute, a demurrer would properly be sustained without leave to amend. Section 1714.10, at best, provides the attorney with only an additional procedural safeguard against meritless claims.
If the plaintiff seeks to plead a conspiracy claim against an attorney based on fraud or virtually any other common law tort theory, the claim falls within section 1714.10, subdivision (c)(1); the procedural requirements of section 1714.10, subdivision (a), do not apply (that is, the plaintiff need not demonstrate a probability of prevailing on the merits); and the statute serves no screening function whatsoever. Similarly, even if the duty allegedly breached is one owed by the client but not the attorney (for example, the client has a fiduciary duty to the plaintiff), if the plaintiff alleges facts (or provides a factual description in the petition for leave to file the complaint) sufficient to negate the agent immunity rule at the pleading stage (by averring the attorney was acting outside his professional capacity and for his own personal gain), section 1714.10, subdivision (c)(2), excepts the pleading from subdivision (a)'s evidentiary requirements; and the statute again does not allow any preliminary evaluation of the merits of the case. (See Panoutsopoulos v. Chambliss (2007) 157 Cal.App.4th 297, 304 68 Cal. Rptr. 3d 647 "the exceptions in section 1714.10, subdivision (c) have the effect of exempting any viable attorney-client claims from section 1714.10's requirements"; Pavicich, supra, 85 Cal.App.4th at p. 395 "When an attorney is acting in his or her official capacity, there are only the situations articulated in Doctors' Co., in which an attorney could be liable for conspiring with his or her client. Of course, these situations are specifically excepted from section 1714.10's scope."; Berg, supra, 131 Cal.App.4th at p. 818 1714.10's "gatekeeping function applies only to attorney-client conspiracy claims that are not viable as a matter of law in any event".)