LOS ANGELES - A state Court of Appeal has ruled the West Los Angeles entertainment litigation firm Christensen Glaser can be sued for wrongful termination by a legal secretary who claims she was fired for refusing to inflate client bills.

The decision, by the 2nd District in Los Angeles, is just the latest news to beset the firm that recently changed its name to Christensen, Glaser, Fink, Jacobs, Weil & Shapiro after partner Louis R. "Skip" Miller bolted to start his own shop. Managing partner Terry Christensen currently is under indictment in the Anthony Pellicano wiretapping scandal.

On Wednesday, name partner Patricia Glaser denied the firm padded its legal bills.

Reversal of Trial Judge

"We don't engage in any funny billing, ever," she said.

The appellate decision, handed down Thursday, reverses summary judgment by Judge Maureen Duffy-Lewis, of the Los Angeles Superior Court. The 2nd District, however, upheld summary judgment in favor of name partner Robert Shapiro because he did not hire secretary Pauletta James.

The appeals court found that James could sue the high-profile firm for "wrongful termination in violation of public policy and intentional infliction of emotional distress."

Not Hired by Shapiro

"We conclude that the trial court erred when it ruled that (1) James could not identify a public policy sufficient to support her cause of action for wrongful termination in violation of public policy, and (2) the intentional infliction of emotional distress cause of action is barred by the exclusivity provision of the workers' compensation scheme," the court wrote. "However, James failed to show that the trial court erred when it ruled that Shapiro was not her employer."

Justice Judith M. Ashmann-Gerst wrote the opinion; Justices Victoria M. Chavez and Kathryn D. Todd concurred.

James claims she witnessed attorney Shapiro and former attorney Sara Caplan fabricating legal bills that were then sent to clients. She claims she was terminated, on Jan. 28, 2003, after reporting the alleged illegal activity to firm management.

Lawyers for the firm and Shapiro claim in court documents that James was legitimately terminated due to poor performance. She talked too much to her colleagues and was difficult to work with, they say. Lawyers for the firm say they also learned James ran into difficulties at other firms where she worked after she was terminated from the Christensen firm.

The appeals court rejected that assertion as irrelevant but returned the case to Duffy-Lewis to consider Christensen Glaser's motion for summary judgment on James's request for punitive damages.

Christensen has been involved in some of Hollywood's most bruising brawls of the last decade. They won judgments against the Walt Disney Co. and actress Nicole Kidman. The firm represents billionaire Kirk Kerkorian in many matters. Terry Christensen is accused in a federal indictment of hiring Pellicano to wiretap Kerkorian's ex-wife in the middle of a nasty child support proceeding.

James' lawsuit is not the first time the firm has been accused of fraudulent billing practices. In 1998 former partner Andrew White testified in court that a colleague had come to him with concerns Miller was inflating client bills. The firm denied those allegations.

On Wednesday, Glaser vehemently defended the firm.

"People are just looking for ways to make stories, and you can put any spin on that you want, but the firm has done nothing wrong," she said.