A malicious prosecution complaint filed by the California Association of Realtors against attorney David Barry and his client can proceed to trial, after a decision denying Barry’s motion to dismiss the case was affirmed by a state appeals court.
CAR filed suit against the San Francisco attorney and his client, former Realtor Arleen Freeman, in September 2005, after successfully defending itself in two antitrust cases.
The lawsuits alleged antitrust violations and price fixing by a San Diego-area multiple listing service run by five local Realtor associations, which were CAR members.
The association claims Barry has filed more than a dozen lawsuits against CAR and other Realtor groups, winning only one judgment on a “narrow legal issue” regarding a settlement.
Tuesday’s ruling by the Fourth Appellate District of the California Court of Appeal upholds a previous decision by a San Diego Superior Court Judge that CAR’s lawsuit against Barry and his clients is not precluded by the state’s anti-SLAPP statute, which aims to protect individuals from unfounded lawsuits intended to silence them.
“The defendant’s underlying antitrust action had not only been dismissed, but the claims raised in that action had themselves been the subject of still earlier unsuccessful litigation,” the Fourth District Court of Appeal said in the opinion. CAR has therefore “met its burden of demonstrating a probability it will prevail in this action.”
CAR President Colleen Badagliacco said the decision puts the group “in a very favorable position” for a trial, in which it will seek to recoup its legal fees in Barry’s most recent lawsuit against the group.
“State law prohibits malicious prosecution such as when litigants re-file the same matter against the same defendants, causing the defendants to incur attorneys’ fees and costs to get it dismissed,” Badagliacco said in a statement. “At some point, litigation is supposed to be conclusive.”
Barry was in court Wednesday and could not be reached for comment by press time.
CAR’s malicious prosecution complaint against Barry has its roots in several antitrust lawsuits filed by Barry alleging antitrust violations and price fixing by a San Diego-area multiple listing service, Sandicor.
The first lawsuit, which was filed in state court in 1997 and did not name CAR as a defendant, was dismissed, and the dismissal upheld on appeal.
In the second lawsuit, filed in U.S District Court, Barry represented real estate agents Arleen Freeman and James Alexander. The suit alleged antitrust violations and price fixing by Sandicor, naming the MLS, the five local Realtor organizations that ran it, and CAR as defendants.
In 2003, the Ninth Circuit Court of Appeals agreed that Sandicor had “adopted an anti-competitive pricing scheme,” but dropped CAR as a defendant. Although CAR had provided legal advice on Sandicor’s MLS fee structure and helped pay for its legal defense, it did not violate antitrust law, the Court of Appeals ruled.
“CAR’s financial support certainly explains plaintiffs’ desire to sue it, but it’s hardly illegal,” the court ruled in a March 10, 2003, opinion.
The lawsuit was returned to federal district court for a decision on Barry’s demand for an injunction, and for a ruling on his request for class action status to recover damages on behalf of other agents.
In January 2004, the trial court issued an injunction against price-fixing by Sandicor and its five member Realtor associations. But Barry was unsuccessful in his repeated attempts to gain class-action standing in order to recover more than $10 million in damages on behalf of agents who were allegedly overcharged.
Barry sued CAR again in 2005, seeking $24 million on behalf of his clients in the first case. The antitrust suit alleged that the association, its attorneys and others engaged in a conspiracy to conceal an alternative pricing scheme, IntelliQuick, during the earlier trial, while arranging a settlement with the agents Barry had sought to represent.
The case was dismissed, a decision upheld in a June 14, 2005, opinion by the Ninth Circuit Court of Appeals. The opinion noted that although information was “wrongfully withheld from discovery,” in the earlier trial, the court sanctioned the defendants and ordered a new discovery period. There was no evidence of a “sham defense” intended to facilitate a settlement, the opinion said.
“Discovery misconduct, subornation of perjury and witness intimidation are, of course, serious matters,” the Ninth Circuit Court said of Barry’s allegations. “Had they not been brought to light in time, it is entirely possible that they would have infected the defense of the lawsuit as to make it a sham. But we need not decide that question today because it was clear that the defense here was not a sham.”
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