Developments of Interest

New Cases of Interest - September 15, 2015

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Hartford Casualty Insurance Co. v. J.R. Marketing, LLC (2015) 61 Cal.4th 988.  This was a case in which an insurer defended its insureds and several individual defendants subject to a reservation of rights.  A coverage action was brought against the insurer who then filed a cross-complaint seeking to recover from cross-defendants a significant portion of defense fees and expenses it paid to Cumis counsel.  The trial court found that it was against public policy for the insurer to be allowed to bring a cross-complaint suing Cumis counsel, which the Supreme Court reversed.  The Supreme Court found instead that the equitable principles of restitution and unjust enrichment allowed the insurer to seek reimbursement for what were alleged to be unreasonable and unnecessary defense fees incurred by Cumis counsel and directly sue Cumis counsel.  Cumis counsel's own conduct in this case further supported a conclusion that it was not unjust to allow the insurer to pursue its reimbursement action directly against counsel.

Newark Unified School District v. Superior Court (2015) 239 Cal.App.4th 33.  In this case a school district produced records that it subsequently contended were encompassed by the attorney-client privilege and the attorney work product doctrine pursuant to a request which had been made under the California Public Records Act.  The Court issued a peremptory writ determining that harmonizing the Public Records Act with Evidence Code § 912 should not be done in a way as to effect a waiver of the attorney-client privilege and the work product doctrine from an inadvertent disclosure and the Court further concluded that the Public Records Act did not apply to an inadvertent release of privileged documents, specifically referring to Government Code § 6254.5.

Coldren v. Hart, King & Coldren, Inc. (2015) 239 Cal.App.4th 237.  In this case the trial court initially disqualified a law firm that represented both the corporation and its primary shareholder in defending against an involuntary dissolution action brought by a minority shareholder.  The Court of Appeal however reversed, finding that the minority shareholder did not have standing to seek disqualification of the law firm because an involuntary dissolution action does not create conflicts which might be found in a derivative action which it felt was illustrated by the absence of a conflict in the buyout procedure in Corporations Code § 2000(a) finding that the rule allowing vicarious standing in derivative actions did not apply.  No actual conflict existed between the corporation and its majority shareholder. 

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