Is Submission of Insurance Claims Always Protected Prelitigation Conduct Under First Amendment ?

In People ex rel. 20th Century Ins. Co. v. Building Permit Consultants, Inc. (2000) 86 Cal.App.4th 280, the defendants prepared earthquake damage and repair estimates as part of a fraudulent scheme to obtain insurance payments. (Id. at p. 282.) They "cold called" and sent direct mail to earthquake victims to persuade them to enter into illegal contracts. (Ibid.) When sued for a violation of the Insurance Code, the defendants brought a motion to strike under section 425.16, claiming the cold calling and direct mail solicitation of victims and preparation of fraudulent reports and estimates was in furtherance of their free speech rights. (20th Century Ins. Co., at pp. 283-284.) The court held that defendants failed to make a prima facie showing the lawsuit was brought to chill their First Amendment rights because the damage reports and estimates were not created before or "'in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law.'" (Id. at pp. 284-285.) The court held there was no issue pending before or under consideration in an official proceeding when the reports and estimates were prepared. (Id. at p. 285.) Division Four of the Second Appellate District considered whether the submission of documents to an insurer in support of a claim constitutes protected prelitigation activity. The defendants had been sued for preparing false and fraudulent damage reports and repair estimates, which were submitted to an insurer. If the insurer did not pay on the claims, the claims were taken to the appraisal process and, if necessary, litigation was commenced. (BPC, supra, 86 Cal.App.4th at p. 282.) The defendants brought an anti-SLAPP motion, arguing that the damage reports were prelitigation conduct as they were prepared for submission to clients, who ultimately submitted them in support of their insurance claims. The defendants declared that " 'the majority of these damage reports were prepared in anticipation of litigation.' " (Id. at p. 284.) The trial court denied the anti-SLAPP motion, and the Court of Appeal affirmed. The court stated: "Here, the damage reports were sent to the insurer to demand performance on the insurance contract. At the time defendants created and submitted their reports and claims, there was no 'issue under consideration' pending before any official proceeding. If we protect the reports and claims under Code of Civil Procedure section 425.16 because they eventually could be used in connection with an official proceeding, we would effectively be providing immunity for any kind of criminal fraud so long as the defrauding party was willing to take its cause to court. Defendants have cited nothing to us that demonstrates the anti-SLAPP law embraces such actions. We are satisfied it does not." (Id. at p. 285.)