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Luna v. Allstate Insurance Co.3/28/2003
Moses Luna appeals from a judgment that dismissed his complaint against Allstate Insurance Company (Allstate) after the trial court sustained a demurrer without leave to amend. Luna argues that he stated a cause of action for intentional interference with prospective economic advantage. We agree and reverse.
Luna is an attorney who represented a personal injury client (Renteria) against insureds of Allstate. Luna and the client entered into a written contract that provided for a contingency fee and gave Luna a lien on the proceeds of any settlement or judgment.
Luna was discharged, a new attorney (Donahue) was engaged, and he won a jury verdict for the client. While a new trial motion was pending, the case was settled. The insurance company issued a settlement check payable to the client, Donohue, and Luna. Donohue requested a check payable only to the client and himself, leaving Luna out.
Alllstate's counsel told Donohue, in a letter, that he knew Luna had a lien on the proceeds of any settlement. He said the company had to honor Luna's lien, and their only alternatives were a check to all three parties, or a separate check payable to Luna for his interest. A week later, Allstate's counsel sent Donohue a letter he had received from Luna. Luna had advised Allstate he had previously represented the personal injury plaintiff, claimed a lien on the settlement proceeds, and demanded that his name be included on the settlement check.
Donohue threatened to walk away from the settlement unless Allstate issued its check payable only the client and himself. According to the complaint, he convinced the client to sign a false declaration that stated the client never had a retainer agreement with Luna, and Luna had no lien. Allstate, having abandoned the new trial motion in reliance on the settlement, was in a bind. It prepared a new settlement check that omitted Luna, and closed the settlement. This action followed.
Luna's first amended complaint sets out numerous causes of action against Donohue, Allstate's attorneys, and Allstate. The sixth cause of action is for intentional interference with prospective economic advantage by Allstate, its attorneys, and Donohue. The facts alleged are as stated above. Allstate and its attorneys demurred on the ground that the complaint fails to allege they had notice of Luna's lien. The trial judge sustained the demurrers without leave to amend, and without explanation. Luna appeals only from the order sustaining Allstate's demurrer.
The elements of a cause of action for interference with prospective economic advantage are: (1) an economic relationship between plaintiff and another that has a probability of future economic benefit; (2) defendant's knowledge of the relationship; (3) intentional, wrongful conduct designed to interfere with the relationship; (4) disruption; and (5) damages. (Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 380, fn. 1, 392-393.)
We do not understand how Allstate can argue the complaint fails to allege it knew of Luna's lien. Paragraph 55 alleges Allstate's lawyer told Donohue he knew Luna had a lien, and Allstate had to honor it. Paragraph 57 alleges Luna wrote to Allstate to advise it he previously represented the plaintiff in the action against its insured, and he had a lien on any settlement proceeds. Allstate's brief omits reference to these paragraphs, but we cannot similarly ignore them.
Since the complaint adequately pleads the elements of a cause of action against Allstate, its demurrer should have been overruled. The judgment appealed from is reversed. Appellant is entitled to costs on appeal.
WE CON
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