The Second District has decided that an attorney who retained the services of counsel to advise him about representation of his own clients cannot pursue an action for legal malpractice over his client’s objections if to do so would intrude upon the attorney-client privilege. It also decided that shareholder derivative suits for legal malpractice do not violate the rule against assignment of legal malpractice actions. Nevertheless, they are barred because shareholders cannot waive the attorney-client privilege on behalf of the corporation.
Beginning in 1993, Daniel Solin represented Edith Reich and Brigitte Jossem with respect to their involvement in International Development and Trade Service. Solin consulted with Alan Cohen of O’Melveny & Myers to determine, among other things, how to secure his fees from his clients. Solin disclosed privileged and confidential information about Reich and Jossem to Cohen that implicated them in criminal activities. Solin later sued Cohen for legal malpractice alleging that Cohen’s advice was inadequate.
Reich and Jossem intervened seeking either an order precluding disclosure of their confidences to Solin or dismissal of Solin’s action against O’Melveny. They argued that dismissal was proper even if Solin did not intend to disclose confidences because O’Melveny had taken the position that disclosure was necessary for its defense of the action.
Based on General Dynamics v. Superior Court (1994) 7 Cal.4th 1164, the court held that Solin could not prosecute a lawsuit on his own behalf because client confidences would be disclosed. General Dynamics allowed in-house counsel to sue his employer for wrongful termination under circumstances where attorney-client confidentiality is eliminated by an ethical rule or statutory exception.
Solin argued that he would not rely on evidence that disclosed his clients’ confidences. O’Melveny argued it could not defend itself without disclosing such evidence because the Solin-Cohen discussion, including disclosure of Reich and Jossem’s criminal activities, shaped Cohen’s advice to Solin. The court agreed that O’Melveny would be prejudiced if it was precluded from introducing such relevant evidence.