Developments of Interest

New Cases of Interest - February 28, 2011

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Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357.  This was an action that the plaintiff brought for declaratory relief in response to accusations that the defendant had made that plaintiff was breaching a Services Agreement.  The defendant demurrered under C.C.P. §1061 and the Court upheld the trial court’s action in sustaining the demurrer.  In doing so, the Court found that a trial court is granted discretion within C.C.P. §1061 in a declaratory relief action to determine whether the timing of the declaratory relief action suggests that a certain amount of gamesmanship and strategy is being engaged in, rather than a genuine concern for judicial guidance, and the court can accordingly decline to provide such guidance in the appropriate circumstances by not offering the declaratory relief order sought.

Cassel v. Superior Court (2011) 51 Cal.4th 113.  In this California Supreme Court decision, the Court holds that mediation related discussions are confidential as fruits of the mediation process itself which is statutorily confidential under Evidence Code §1119.  No exception to this confidentiality exists when a client seeks to use confidential communications provided during the mediation process in a subsequent legal malpractice action against the client’s attorney, contending that the attorney had unduly pressured the client into reaching a settlement during the course of mediation.

Holms v. Petrovich Development Company LLC (2011) 191 Cal.App.4th 1047.  This case arises in the context of a wrongful termination action, but perhaps what is most significant about the case is that the Court holds that e-mails sent by an employee to the employee’s attorney, but using the computer system of the employer, were not protected by the attorney-client privilege and were, the court felt by definition, not confidential communications within the meaning of Evidence Code §952.  The Court reasoned that the employer’s policies provided that the employer had a right to access all such e-mail communications using the employer’s computer so there was no reasonable expectation of privacy or confidentiality when the employee used the employer’s computer system to consult with the employee’s attorney.  The Court analogized this to an individual consulting an attorney in a conference room in a loud voice with the door open, finding that under such circumstances there could be no reasonable expectation that they conversation would be confidential and not overheard.

Estate of McQueen (2011) 191 Cal.App.4th 1162.  This is an interesting decision on the collateral source rule which provides that damages should not be reduced by the amount of recovery from other sources of compensation which are independent of the parties against whom damages are awarded.  In this case the Court holds that government payments could not be used to offset the plaintiff’s damage claims.  Plaintiff had been a beneficiary of a life estate in a residence, but without the plaintiff’s knowledge, her family members had sold the family residence.  She was receiving Federal governmental benefit payments which the defendants sought to offset against any jury award and the Court held that such an offset under the collateral source rule was not appropriate.

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