Miller Marital Deduction Trust v. Zurich American Insurance Co.Annotate this Case
The Miller Trust is the successor owner of property previously owned by spouses Jack (now deceased) and Helen. The trustees sued previous owners including the Estate of Jack Miller and a lessee, DuBois, seeking redress for environmental contamination that originated from a dry cleaning business that operated on the property in 1956-1985. DuBois filed a counterclaim. Zurich determined it had a duty to defend and retained counsel to represent the Estate. The trustees tendered the Dubois counterclaim for defense, asserting that they were additional insureds under the Estate's Zurich policies. Zurich agreed subject to an extensive reservation of rights but denied the trustees' request for independent counsel based on conflicts of interest. The trustees sued Zurich in state court, alleging breach of the contract and of the implied covenant of good faith and fair dealing. Zurich unsuccessfully filed an "anti-SLAPP" (strategic lawsuit against public participation) special motion to dismiss, Code of Civil Procedure 425.16, asserting that the claims “arise from allegations about the conduct of attorneys representing Zurich’s insured in the” federal action and that the trustees could not demonstrate a probability of prevailing because that conduct was protected by the litigation privilege. The court of appeal affirmed, in favor of the trustees. Zurich met its burden of demonstrating the applicability of the anti-SLAPP statute but the trustees met their burden of demonstrating a probability of prevailing on the merits. A bad faith action can be subject to the anti-SLAPP statute where the basis for liability is judicial communications.