Discovery Issues
California Court Finds "Common Interest Doctrine" Did Not Waive Attorney-Client Privilege PDF Print
Discovery Issues
Written by CBM   
Sunday, 30 August 2009 16:00

In Meza v. H. Muehlstein & Co., Case No. B201427, 2009 WL 2507424, --- Cal.Rptr.3d ---- (Cal. Ct. App. Aug. 18, 2009) (Croskey, J.), a California appellate court applied the “common interest doctrine” in finding that defense attorneys“ did not waive the attorney work product privilege by communicating with each other regarding their respective clients' common interests.”  The court noted that “a defendant's attorney's disclosure of work product relating to the defendants' adverse interests results in a waiver” but only as to the specific communications that do not involve a common interest. 

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 Meza[ ]121 Kb
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Federal Court In California Finds Reserves Discoverable; Reinsurance Not Discoverable PDF Print
Discovery Issues
Friday, 07 August 2009 13:11

In The Flintkote Co. v. Gen. Acc. Ass. Co. of Canada, 2009 U.S. Dist. LEXIS 44066 (N.D. Cal. May 26, 2009), the court held that reserves were discoverable in connection with a policyholder’s bad faith failure-to-pay claim.  The court held that reinsurance information was not relevant to bad faith and therefore was not discoverable.  The court further held that the attorney-client privilege applies only where the insurer produces direct evidence that documents reflect communications with counsel. 

Insolvent policyholder Flintkote sought coverage from its insurers for liabilities arising from its mining and distribution of asbestos and asbestos-containing products.  In support of its bad faith claim against its insurer, Flintkote sought discovery of reserves and reinsurance information.  Flintkote also requested an in camera review of purportedly privileged documents.

Reserves:  The court held that, generally, reserves information is discoverable “when it may shed light on what an insurer actually thought regarding merits of an insured’s claims where there is a ‘self-conscious disconnect’ between the insurer’s payment of benefits and its evaluation of the scope of loss.”  At *8-9.  According to the court, the discoverability of reserves information depends upon the nature of the bad faith conduct the policyholder alleges.  Here, the policyholder alleged the insurer unreasonably failed to defend despite knowledge that the claims were potentially covered, willfully ignored repeated requests for defense and indemnity, and failed to timely disclose documents relevant to its intentional strategy of failing to cover the claims.  The court found these allegations warranted discovery of reserves because the reserves could indicate a disconnect between what the insurer thought it might have to pay and what it communicated to the policyholder.

Reinsurance: With much less analysis, the court held that reinsurance is not discoverable because insurers obtain reinsurance based solely on business considerations.

Privileged Documents: The court held that the attorney-client privilege applies only (1) to direct written communications to and from counsel, and (2) communications where the attorney is named and what was said is clearly indicated.  (It is unclear, but a party may be able to comply with point (2) by submitting a log indicating the attorney and subject matter of the communication.)  The court also declined to permit the insurer to assert a privilege of “confidential business communication” with respect to the documents reviewed in camera, though the court did not directly preclude the possibility of asserting such a privilege.

The court followed a fairly well established line of California authority allowing discovery of reserves and disallowing discovery of reinsurance.  The court noted that not all bad faith claims necessarily render reserves discoverable.  Nevertheless, under this court’s holding, reserves will be discoverable with respect to any bad faith claims alleging an insurer withheld payment for claims it thought might be covered.  Consequently, most if not all bad faith claims alleging a failure to defend or indemnify will make reserves discoverable. 

 

 
New California Law on Discovery of Electronically Stored Information PDF Print
Discovery Issues
Thursday, 16 July 2009 14:34

On June 29, 2009, California Governor Arnold Schwarzenegger signed California Assembly Bill 5, the California Electronic Discovery Act ("the Act"), into law.  The Act, which requires immediate compliance from all litigants in California courts, amends and adds to the California Code of Civil Procedure ("CCP") to provide a series of procedures for a litigant to discovery or object to discovery of electronically stored information ("ESI").

With this act, California has joined 22 other states in adopting some form of statewide rules to govern electronic discovery in litigation.  Significantly, the Act incorporates into the CCP many of the same provisions regarding ESI found in the Federal Rules of Civil Procedure after the 2006 amendments addressing e-discovery.

Attachments:
 CA Elec. Disc. Act.pdf[ ]108 Kb
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CA Supreme Court: No Discovery of Insurer's Reinsurance Information PDF Print
Discovery Issues
Written by CBM   
Wednesday, 29 August 2007 17:00

In Catholic Mutual Relief Society v. Superior Court (Roman Catholic Archdiocese of San Diego), No.S134545 (Aug. 27, 2007), the Calfornia Supreme Court found that section 2017.210 of the California Code of Civil Procedure does not permit a plaintiff to discover a defendant insurer's reinsurance information.  The Court reasoned that, unlike insurance, reinsurnace does not increase the money available to fund settlement, and thus, is not discoverable by an underlying plaintiff.

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