“As you are aware, I have been retained to represent Media Print & Copy (‘Media’). We are in the process of uncovering the substantial fraud, conversion and breaches of contract that your client has committed on my client. . . . To date we have uncovered damages exceeding $75,000, not including interest applied thereto, punitive damages and attorneys’ fees. If your client does not agree to cooperate with our investigation and provide us with a repayment of such damages caused, we will be forced to proceed with filing a legal action against him, as well as reporting him to the California Attorney General, the Los Angeles District Attorney, the Internal Revenue Service regarding tax fraud, the Better Business Bureau, as well as to customers and vendors with whom he may be perpetrating the same fraud upon [sic].” The letter goes on to list Mendoza’s alleged transgressions, including failure to pay Media’s employees, sales taxes and bills.
Ouch. The threats. The insinuations. The money. Wait, criminal prosecution?
Well, Mendoza, the recipient of the above attorney demand letter, did not take this lying down. He sued the attorney, Hamzeh, for extortion, intentional infliction of emotional distress and unfair business practices.
But aren't demand letters protected speech? And can't a lawyer sued for sending a demand letter use the "Anti-SLAPP" statute so they are not sued for representing their clients aggressively?
Yes. Most of the time. In this case, though, the attorney's letter exceeded the protections of the anti-SLAPP statute. Why? Because there is no anti-SLAPP protection for threatening criminal prosecution unless the target pays money (i.e., extortion):
The threat to report a crime may constitute extortion even if the victim did in fact commit a crime. The threat to report a crime may in and of itself be legal. But when the threat to report a crime is coupled with a demand for money, the threat becomes illegal, regardless of whether the victim in fact owed the money demanded. (Flatley, supra, 39 Cal.4th at pp. 326-327.) “‘The law does not contemplate the use of criminal process as a means of collecting a debt.’ [Citations.]” (Ibid.) “Attorneys are not exempt from these principles in their professional conduct. Indeed, the Rules of Professional Conduct specifically prohibit attorneys from ‘threaten[ing] to present criminal, administration, or disciplinary charges to obtain an advantage in a civil dispute.’ (Cal. Rules of Prof. Conduct, rule 5-100(A).)” (Id. at p. 327.)Again, most attorneys know better. And most attorney demand letters are protected from retaliatory lawsuits. But, in my experience, some attorneys go too far with their letters. Perhaps it's enough to simply lay out the facts and explain why there is the potential for legal liability without calling the defendant a criminal, and without demanding money to refrain from reporting a crime.
If the demand goes too far, as in this case, the lawsuit alleging extortion against the would be plaintiff's counsel is not a SLAPP, but it could be painful. ::rimshot:::
The case is Mendoza v. Hamzeh, and the opinion is here.
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