Summarizing, explaining and commenting on legal developments impacting California professionals
The Second District holds that a delayed motion to disqualify filed after counsel had achieved partial success on the merits, and premised on unrelated prior representation, was properly denied.
Liberty National Enterprises, L.P. (Liberty) retained Donald McDougal to sue its title insurer, Chicago Title Insurance Company (Chicago), for bad faith. After two years of litigation and Liberty’s success in phase one of a three phase trial, Chicago moved to disqualify McDougal. Chicago claimed that McDougal had learned confidential information about its claims policies when McDougal represented its insureds more than fifteen years earlier. Chicago also claimed that McDougal’s role as a witness disqualified him.
The Fourth District holds that a “framework” fee agreement designed to expedite future engagements did not create an open-ended disqualifying attorney-client relationship.
Banning Ranch Conservancy (Conservancy) retained Shute, Mihaly & Weinberger (the Shute firm) to challenge the City of Newport Beach’s (City) plan to build a four-lane divided highway on its land. The City filed a motion to disqualify Shute based on prior representations as well as two identical fee agreements signed several years prior that the City claimed established a current attorney-client relationship. The trial court granted the motion to disqualify, determining that the City remained the Shute firm’s current client under the fee agreements.
The Second District holds that the statute of limitations for claims made by non-clients against attorneys acting in their professional capacity is governed by C.C.P. § 340.6
Sassan Vafi and Kathleen Keller filed counter suits against each other in connection with a trademark dispute. Vafi lost his claims on the pleadings and Keller later dismissed her action with prejudice. More than a year later Vafi filed a malicious prosecution action against Keller and her counsel, Heather McCloskey and the law firm of Ervin, Cohen & Jessup, LLP (McCloskey). McCloskey filed a motion to strike under C.C.P. § 425.16, the anti-Strategic Lawsuit Against Public Participation (anti-SLAPP) statute. McCloskey alleged her petitioning activity was constitutionally protected and Vafi could not show a reasonable probability of prevailing on the merits because his action was barred by the statute of limitations for actions against attorneys, C.C.P. § 340.6. The trial court granted the motion.
The Second District holds that claims against an attorney premised on illegal wiretapping are not subject to the anti-SLAPP statute because the activity is not constitutionally protected.
When Robert Pfeifer sued his former employer for wrongful termination, his ex-girlfriend Erin Finn was deposed and supported an allegation of drug use. Pfeifer’s counsel hired investigator Anthony Pellicano to investigate Finn, ostensibly in her role as a witness in Pfeifer’s civil action. Pfeifer subsequently retained Gaims, who communicated with Pellicano. Gaims also represented Pfeifer in a domestic harassment injunction filed by Finn, a collection matter filed against Finn, and a tort claim filed against Finn.
The Second District holds that a case alleging ethical violations was not subject to the anti-SLAPP statute because the gravamen of the claims was unrelated to protected activity.
Coretronic Corporation, Optoma Technology, Inc., and Technical Service Corporation (Coretronic) were sued by E & S International Enterprises, Inc. (E & S) in a trade dispute. Coretronic’s carrier, INA, retained Cozen O’Connor (Cozen) to provide an opinion about whether the claims were covered. Coretronic provided Cozen attorneys with confidential information related to the defense of the E & S action to evaluate coverage. At the same time, Cozen began representing E & S in a separate lawsuit. Cozen informed Coretronic when it realized E & S was the same entity in both lawsuits. Cozen withdrew its representation of E & S, but continued to represent INA.
The Second District holds that under basic contract principles, a referring attorney’s breach of his agreement to pay the source of his referrals was a breach of the fee sharing agreeing and disallowed recovery. In addition, neither the referring nor the accepting attorney could enforce a fee sharing contract that did not comply with the ethical rules of California or the state where the underlying action was litigated.
Non-attorney Paul Ross referred James Brown some Texas personal injury cases. Milton Grimes agreed to handle the cases and share the fees with Brown. Grimes agreed to pay Brown a high percentage with the understanding that Brown would compensate Ross. The clients signed Grimes’s fee agreement addendum acknowledging the Brown fee division, but no percentages were stated.
The First District holds attorneys representing putative class members in one case, and objecting class members in a related case, were not disqualified for representing conflicting interests in the two cases.
Qualls & Workman, L.L.P. (Q & W) successfully prosecuted an appeal on behalf of three objectors, including Crystal Echeverria, of a trial court order approving a settlement in the case of Kullar v. Foot Locker Retail, Inc., a class action. Q & W represented Echeverria in a partially overlapping putative class action against Foot Locker and others in another county, as well as a third action in the same county, both of which were stayed. After remand and the presentation of additional evidence, the Kullar trial court again approved the settlement over Echeverria’s objections. Echeverria dismissed her first action and the stay was lifted on her second action.
The Third District holds that attorney-client communications transmitted from an employer’s computer are not privileged.
Shortly after Gina Holmes began working for Paul Petrovich as his executive assistant, she announced her pregnancy. After an e-mail exchange about the issues with her employer, she used her company e-mail account to communicate with her counsel about what she perceived to be workplace pregnancy discrimination.
The California Supreme Court holds that mediation confidentiality encompasses private discussions between attorney and client.
Michael Cassel retained Wasserman, Comden, Casselman & Pearson, L.L.P. (WCCP) to represent him in a trademark infringement dispute over a clothing label. Cassel sued WCCP claiming that his attorneys insisted he remain at a mediation, and pressured him to accept an insufficient settlement offer. WCCP successfully moved in limine under the mediation confidentiality statutes (C.C.P. §§ 1115 et. seq.) to exclude all evidence of communications between Cassel and WCCP that were related to the mediation, including matters discussed at the pre-mediation meetings and while the mediation was under way.
