Veronica McRae filed a claim with the U.S. Department of Labor (DOL) for death benefits as the alleged widow of a deceased worker who had been injured at the Port of Oakland and later passed away. Homeport Insurance, the insurer for the employer, participated in mediation and reached a settlement with McRae. Pursuant to an application under federal law, an administrative law judge (ALJ) issued an order approving the settlement, requiring Homeport to pay McRae $425,000 for all claims related to disability, medical, and death benefits, and an additional $30,000 directly to her attorneys – Philip Weltin, Daniel Weltin, and their firm, Weltin, Streb & Weltin, LLP – for fees and costs.
Approximately nine months later, the decedent’s daughter informed Homeport that her father had not been married to McRae at the time of his death. Homeport’s investigation revealed a 2010 judgment dissolving the marriage between McRae and the decedent, as well as McRae’s unsuccessful 2022 motion to set aside that default judgment. Homeport then moved with the DOL to vacate the ALJ’s order, alleging it was procured through McRae’s fraud.
While that motion was pending, Homeport initiated a state court lawsuit in Alameda County Superior Court against McRae and her attorneys asserting claims for conversion, imposition of a constructive trust, unjust enrichment, and injunctive and declaratory relief. It also sued McRae separately for fraud.
The attorneys filed a special motion to strike Homeport’s complaint under California’s anti-SLAPP statute (Code Civ. Proc., § 425.16), arguing that the claims arose from their protected petitioning activity in representing McRae in the administrative proceeding. They contended Homeport could not prevail because it had no ownership interest in the attorney fees (which were ordered paid directly by the ALJ), the litigation privilege (Civ. Code, § 47) barred liability, and the economic loss rule applied. Homeport opposed the motion, arguing it was untimely, the claims did not arise from protected activity (but rather McRae’s fraud, which was not a public issue), the illegality exception to anti-SLAPP applied, and it had a probability of prevailing based on evidence of McRae’s misrepresentation and its right to the funds.
The trial court granted the attorneys’ anti-SLAPP motion and struck Homeport’s complaint in its entirety. The Court of Appeal affirmed the trial court’s order striking the complaint in the unpublished case of Homeport Insurance v. McRae -A172243 (December 2025).
The Court of Appeal conducted a de novo review, applying the two-prong anti-SLAPP framework. On prong one (protected activity), the court focused on whether the attorneys’ conduct giving rise to liability fell under section 425.16, subdivision (e) – statements or writings in judicial or official proceedings. It concluded that Homeport’s claims, particularly the conversion claim (from which the others derived), arose from the attorneys’ prosecution of McRae’s allegedly fraudulent LHWCA claim and the procurement of the ALJ order.
The court emphasized that the “wrongful act” element of conversion was tied to these petitioning activities, not merely the receipt of funds. It distinguished cases like Drell v. Cohen (2014) and Optional Capital, Inc. v. DAS Corp. (2014), where protected activity was incidental, and analogized to Rusheen v. Cohen (2006), where noncommunicative acts (like levying on property) were protected if necessarily related to privileged communications.
The court rejected Homeport’s argument that the attorneys failed to identify specific protected acts, as the claims were not “mixed” but entirely based on protected conduct. It also dismissed the illegality exception from Flatley v. Mauro (2006), finding no conclusive evidence that the attorneys knowingly made false representations under the LHWCA’s fraud provision (33 U.S.C. § 931(a)).
On prong two (probability of prevailing), the court held that Homeport failed to meet its burden. It noted Homeport forfeited any challenge to the litigation privilege by not addressing it in its opening brief, but even on the merits, the privilege applied to communications and related acts in the administrative proceeding, including receipt of fees under the ALJ order. Drawing again from Rusheen, the court reasoned that the attorneys’ retention of funds was not an independent wrong but stemmed from the privileged prosecution of the claim.
Homeport also failed to show conversion, as it lacked evidence of a right to the fees or wrongful possession by the attorneys. The court dismissed Homeport’s reliance on a temporary restraining order against McRae (obtained before the attorneys appeared) and other undeveloped arguments, such as public interest concerns or comparisons to New York and Texas law.
The court remanded for the trial court to determine the attorneys’ appellate attorney fees and costs under section 425.16, subdivision (c), as prevailing defendants are entitled to them..