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Table of Contents    Cover    MCLE Test

MCLE Article and Self-Assessment Test 


Golden Rules

A series of decisions and opinions issued in 1995 provides lawyers with clear guidance through ethical minefields. 

By James I. Ham

James I. Ham is a partner in the firm of Quinn, Kully & Morrow. Stanley W. Lamport is a partner at Cox, Castle & Nicholson, LLP. James M. Fischer is a professor of law at Southwestern University School of Law. All are members of the Los Angeles County Bar Association Committee on Professional Responsibility and Ethics. Fischer is the current chair of that committee. Lamport also serves as vice-chairman of the State Bar Standing Committee on Professional Responsibility and Conduct.
 
 

The practice of law came under prolific scrutiny in California last year from the bench, the legislature, and the ethics committees of the State Bar and the Los Angeles County Bar Association. For the legal profession, 1995 offered a wealth of guidance on complex issues, with conflicts of interest and the lawyer-client relationship at the head of the list. 

Flatt v. Superior Court1 is a particularly significant conflicts-of-interest decision. Attorney Flatt was asked by a prospective client whether she would agree to sue another lawyer for malpractice. Flatt ran a conflicts check, found that the lawyer was already a client of her firm, and informed the prospective client that she could not accept the engagement. The prospective client then waited more than a year to find another lawyer, only to discover that the statute of limitations had expired. The prospective client sued Flatt, claiming Flatt negligently failed to inform him about the statute of limitations and advise him promptly to retain counsel. 

The California Supreme Court held that Flatt did not have such a duty. Under the circumstances of the case, the court concluded that the attorney's primary duty of loyalty was to her firm's existing client. As a result, she was not required to render any further advice to the prospective client about his claims against her firm's existing client. 

Flatt reaffirms the common-law rule prohibiting representations adverse to a client without the client's informed consent.2  The court noted that in such cases, the primary duty in question is the lawyer's undivided loyalty to a client, rather than merely the protection of a client's confidential information, which is the primary duty involved in a lawyer's ethical duty to former clients. 

Is it appropriate for a lawyer representing two clients in the same matter to obtain, at the outset of the engagement, an agreement providing that in the event of an actual conflict, the lawyer may withdraw from representing one of the clients and continue to represent the remaining client against the now former client? This question was addressed in Zador Corp. v. Kwan.3 Ethics opinions from both the State Bar and the Los Angeles County Bar Association have recognized for some time that such agreements are possible provided that the clients give their informed written consent.4  The court in Zador reached the same conclusion. 

Zador arose out of a lawsuit against Zador and Kwan involving a property Zador had purchased. Kwan had been Zador's broker in the transaction. When Kwan tendered his defense to Zador, the firm representing Zador agreed to represent Kwan also. The firm had Kwan sign a fairly detailed conflict-waiver letter, which is quoted extensively in the opinion.5 The waiver letter stated that Kwan agreed, in the event of a conflict, that the firm could withdraw from representing Kwan and continue representing Zador.6 Less than two months later, the firm discovered Kwan might have engaged in improper conduct and withdrew from representing him. Kwan agreed to the withdrawal. Three years later the firm, on behalf of Zador, brought a cross-complaint against Kwan in the litigation. Kwan filed a motion to disqualify the firm, which the trial court granted. 

The court of appeal reversed based on Kwan's written initial consent and his three-year delay in seeking to disqualify the firm. The opinion contains a practical discussion about the extent of disclosure in a conflict-waiver letter. The court noted that "California law does not require that every possible consequence of a conflict be disclosed for a consent to be valid."7 The court also observed that an agreement is not invalid simply because it does not undertake "the impossible burden of explaining separately every conceivable ramification."8 Based on these principles, the court found that the letter's reference to continued representation "notwithstanding any adversity" was adequate disclosure under the circumstances. 

Buehler v. Sbardellati9 involved the joint representation of individuals in the formation of a partnership. Two individuals agreed among themselves to form a partnership and then approached a lawyer, Sbardellati, to document their agreement in conformity with California partnership law. The lawyer agreed to represent the partnership being formed rather than the individual partners. He informed the partners that he would not participate in their negotiations and that he would not advise either on matters that were contrary to the other. There was no written waiver of any conflict of interest. 

After the venture failed, one of the two partners, Buehler, sued Sbardellati claiming the lawyer had a conflict of interest in representing Buehler and his partner that prevented Sbardellati from representing Buehler properly. At trial, the jury was instructed that the representation did not give rise to a conflict of interest if the partners had sought to accomplish a common plan and engaged the lawyer's services to implement their joint plan. The court of appeal held the instruction was proper. The court also held that Sbardellati could properly pursue the representation as attorney for the partnership. 

Buehler is an important decision for a number of reasons. First, it is a good example of how to structure an engagement involving the drafting of an agreement between two clients that does not give rise to a conflict of interest. This is a difficult area. Counsel representing an entity, particularly one to be formed, must be careful not to create expectations that counsel also represents the parties individually. Second, it establishes that a lawyer can act as counsel for a joint enterprise between two clients even before the clients' business entity has been formally created.10 Finally, the opinion indicates that under the California Rules of Professional Conduct in effect prior to 1989, informed written consent was not required when the joint representation of two or more clients involved only a potential conflict of interest.11 Informed written consent in such cases is now required under Rule 3-310(C)(1), which took effect September 14, 1992. 

Stanley v. Richmond12 is one of the few decisions examining the circumstances in which a lawyer may have an interest in the subject matter of a representation. Although the facts may be somewhat unique, the case provides a good example of the analysis a lawyer should undertake regarding such a conflict. The case arose out of a marital dissolution in which the lawyer, Richmond, represented the wife. During the course of the engagement, Richmond began to form a law partnership with the opposing lawyer who was representing the husband in the divorce. There was further evidence that Richmond encouraged her client to agree to an unfavorable property settlement that would conclude the matter and allow Richmond to open the new law office with the opposing counsel. 

The court of appeal held the plaintiff established a prima facie case of breach of fiduciary duty and professional negligence. The court found that when Richmond decided to share her law practice with her opposing counsel and began to take steps in that direction, Richmond acquired an interest in the subject matter of the representation, which she failed to fully disclose to her client. The court also concluded that by implementing the agreement to merge her practice with opposing counsel, Richmond arguably would have had a lawyer-client relationship with the husband that would have produced a separate conflict of interest. 

Metro-Goldwyn-Mayer, Inc. v. Tracinda Corp. (MGM), a Second District decision13, illustrates the problems that can arise when cases in which a law firm may not have a conflict of interest are consolidated with lawsuits in which the law firm does have a conflict. Since related cases may be consolidated on the trial court's own motion, MGM teaches that lawyers must anticipate the conflicts that will emerge in that event. The case arose out of the merger of MGM/UA and Pathe Communications Co. in 1990, which resulted in the formation of Metro-Goldwyn-Mayer, Inc. (MGM). Law Firm A represented MGM/UA in the merger, which was funded through a foreign bank. 

In 1992 MGM, through new counsel, Law Firm B, sued Tracinda and other principal shareholders of MGM/UA, alleging that they had falsely represented the company's financial condition prior to the merger. The Tracinda defendants retained yet another firm, Law Firm C, to represent them. Shortly after the MGM suit was filed, Law Firm B, on behalf of the bank, filed a separate lawsuit against Tracinda and others claiming the defendants made false representations to induce the loan. Law Firm A was retained to represent Tracinda and other defendants in the second lawsuit. At the time the bank commenced its action, Law Firm A was representing MGM in one other matter, a lawsuit that the firm characterized as "long dormant." 

Sometime after Law Firm A appeared in the bank lawsuit, the trial court consolidated the MGM and bank lawsuits for trial. Following the consolidation, MGM and the bank moved to disqualify Law Firm A. Relying on Flatt, the court held that as a result of the consolidation, Law Firm A was adverse to its client MGM. It noted that both pending cases were based on the same factual allegations, and the practical effect of both lawsuits was to challenge the merger. The court concluded that every time Law Firm A tried to disprove the bank's claims at trial, it would necessarily be disproving MGM's claims against the same defendants. 

The court also held Law Firm A should be disqualified because it had been MGM's counsel during the merger transaction that was the subject of the litigation. The court relied on decisions holding that a lawyer who represents a corporation must refrain from taking part in disputes among shareholders in matters arising out of the lawyer's role as counsel for the company.14

In Cho v. Superior Court,15 the Second District took on another important conflict-of-interest issue later in the year after its MGM decision. Cho involved the disqualification of a firm because it had employed a retired judge who had presided over the litigation at issue and had received ex parte confidences from the parties in the course of settlement conferences. The judge retired from the bench in December 1994 and joined the firm as a part-time, of-counsel employee in March 1995. The firm substituted into the case in February 1995 and shortly thereafter learned that the judge had presided over the case. In an effort to avoid disqualification, the firm imposed a "cone of silence" around the judge when he joined the firm. For this procedure, a memorandum was circulated in the firm directing all personnel that the judge was not to be involved in the lawsuit, the lawsuit was not to be discussed in his presence, and he was not to have any access to the files for the litigation. 

There was no dispute in the case that the judge was precluded from participating in the lawsuit. The issue was whether the firm could avoid disqualification as a result of its efforts to screen the judge. Although the California Rules of Professional Conduct are silent on this point, California courts ruling on law-firm disqualification have long held that if one lawyer in a firm has a conflict involving a risk of disclosure of material confidences, all lawyers in the firm are deemed to have the conflict and thus are ineligible to represent the party.16 The doctrine is based on the presumption that attorneys in a law firm will consult with each other and share their clients' confidences.17 

Cones of silence and other screening devices generally have been viewed as a means to rebut the presumption that information is being shared among lawyers in a firm. In California, courts have uniformly held that when a lawyer joining a firm was directly involved in the matter at issue, screening is not available.18 However, an anomaly occurred in Higdon v. Superior Court, a 1991 case, when the court held that a firm could hire a retired commissioner who had presided over a matter being handled by the firm, provided the former commissioner was screened from any participation in the matter.19

Joining the line of cases disallowing screening, the Cho court found that the procedure, no matter how thorough, could not overcome the imputed-knowledge presumption that required the firm to be disqualified because the judge had participated in settlement conferences where he had communicated with the opposing party in confidence. The court distinguished Higdon on the basis that the retired commissioner had not been privy to any confidential communications, and screening mechanisms had been put in place in order to avoid the appearance of impropriety that might result from the commissioner's participation in the case. The court also emphasized the practical impossibility of verifying whether a law firm's screening techniques were in force at all times.20

Although some still urge the adoption of a rule that would allow firms to screen tainted lawyers, the strong policy language in Cho leaves the efficacy of such a rule in some doubt. Screening may still be useful when a client has consented to it or as a means to provide further assurances to a court when a lawyer changing firms has not actually received confidential information in his or her former employment. However, when lawyers joining a firm bring an adverse party's confidential information with them, Cho indicates that no amount of screening will save the firm from disqualification. 

Cho is also important because the court did not attach any significance to the fact that the judge was a part-time, of-counsel employee. Of-counsel status has undergone significant change over the last decade, encompassing everything from partners-in-waiting to contract lawyers. Cho's holding suggests the imputed-knowledge rule will apply to any lawyer who is an employee of the firm, even when the employment is part-time. 

In addition to these decisions, the State Bar's Standing Committee on Professional Responsibility and Conduct issued two formal opinions addressing conflict-of-interest issues. In Formal Opinion 1995-140, the committee addressed the conflicts that arise when an estate planning lawyer refers clients to a life insurance agent who has promised to compensate the lawyer with a rebate or commission on any life insurance the agent sells to the client. As a result of the compensation arrangement, the committee concluded that the lawyer had a business or financial interest in the subject matter of the representation that must be disclosed in writing to the client.21 The committee also concluded that the lawyer must comply with Rule 3-300, which applies when a lawyer enters into a business transaction with a client or acquires certain interests adverse to a client. 

In Formal Opinion 1995-141, the committee analyzed the ethical issues that arise when a lawyer or a law firm provide nonlegal services to a client directly, through a nonlawyer employee or through an entity in which the lawyer has an ownership interest.22 The term "nonlegal services" refers to services that are not performed as part of the practice of law and may be performed by nonlawyers without constituting the practice of law, such as real estate brokerage, accounting, or business management services. 

The opinion concludes that the provision of these services arising out of the lawyer-client relationship constitutes a business transaction with a client subject to Rule 3-300. In addition, Rule 3-310(B) requires written disclosure to the client if the performance of the nonlegal services gives the lawyer a legal, business, financial, or professional interest in the subject matter of the representation or if the person or entity performing the service for the lawyer or law firm is involved in, or substantially affected by, the lawyer's representation of the client. 

Attorney-client relationships combined with insured-insurer conflicts offer fertile ethical terrain for the courts. Last year two distinct situations were addressed: 1) counsel acting as independent Cumis counsel ; and 2) counsel appointed by the insurer to represent the insured.23 In both cases, the insurer was allowed to sue the attorney for malpractice, although the duty element supporting each claim is significantly different. 

The court in Assurance Co. of America v. Haven24 held that an attorney acting as Cumis counsel can face malpractice exposure to the insurer for breach of the statutory duties imposed by Civil Code Section 2860. Assurance contended counsel for its insured failed to timely assert defenses on the insured's behalf, thereby requiring the insurer to accept a statutory settlement offer without a determination of the merits of the defenses. The court did reaffirm prior authority that no lawyer-client relationship exists between independent Cumis counsel and the insurer.25

However, it also held the attorney had a duty to inform and consult with the insurer, exchange nonprivileged information, and cooperate in exchanging information with the insurer's counsel. Given the relatively oblique meaning of some of Civil Code Section 2860's provisions and the lack of precedent interpreting them, attorneys serving in the role as independent Cumis counsel must be especially alert to any dispute over counsel's statutory obligations to provide information to the insurer. 

The scope of potential malpractice liability is enhanced when counsel is retained by the insurer to represent its insured, the interests of the insurer and the insured do not conflict, and the defense is provided without a reservation of rights. Counsel owes a duty of care to the insurer that supports the insurer's independent right to bring a legal malpractice action for negligent acts committed in the representation of the insured. The basis of this liability, according to the court in Unigard Insurance Group v. O'Flaherty & Belgum,26 is counsel's dual attorney-client relationship with both the insurer and the insured. In Unigard, the law firm had been retained by the insurer to defend its insured in a personal-injury action. The firm failed to assert the defenses of workers'-compensation exclusivity and the right to setoff. 

Earlier decisions involving the relationship between retained defense counsel and the insured suggested that the primary duty of care was owed to the insured.27 Now counsel must certainly consider that the duties owed to the insured and insurer are on a potentially more equal footing. Counsel previously might have been justified in following the insured's preferred strategy, with the insurer obliged to defer. But Unigard raises the question whether disagreements over strategy and tactics, and other matters previously considered unworthy of actual or apparent conflict status, may now implicate the attorney's duties of loyalty, owed equally to insured and insurer, and thus increase malpractice exposure based on a breach-of-loyalty theory. 

The line between nonclients and clients, and the duties owed to each, was further blurred in Meigan v. Shore,28 a case involving a husband and wife. The couple met with an attorney in the attorney's office to discuss a medical malpractice action on behalf of the husband. The husband signed the retainer agreement, and the action was brought in his name. Subsequently, new counsel substituted in and advised the husband and wife of her loss-of-consortium claim, but by this time the action was time-barred. The wife sued the first attorney for failing to advise her of her claim. 

The court held that the first attorney had the duty to advise the wife of her loss-of-consortium claim even though it was undisputed that 1) the wife understood that the first attorney was not representing her and she never thought that he was; 2) the wife did not seek, and the first attorney did not offer, legal advice to her about a potential lawsuit on her behalf; and 3) the wife did not sign a retainer agreement with the first attorney. The court noted that the first attorney had several conversations with the wife in which they discussed legal matters and in which the first attorney repeatedly gave the wife legal advice about the medical malpractice action on behalf of the husband.29

The court extensively reviewed California authorities on the attorney's duty of care to nonclients.30 On the critical issue of whether a duty to nonclients should be recognized, the court opted for a more liberal reading than other recent decisions. Nonetheless, the court did suggest that its holding was circumscribed by several critical facts: it was the wife who sought out and arranged the initial meeting with counsel; the wife was unaware of her loss-of-consortium claim, but the first attorney was not; the husband and wife had a community property interest in each other's cause of action; the two claims were so tightly interwoven that the loss of the husband's lawsuit would have barred the wife's claim.31

Meigan thus has something for everyone. In its treatment of California precedent, the decision suggests a movement away from a recent trend to construe narrowly exceptions to the privity requirement for legal malpractice actions. On its facts, it suggests a more restrained interpretation of an attorney's duties to nonclients. The decision does suggest that attorneys exercise additional care when representing members of a family if other family members have derivative or related causes of action. At a minimum, attorneys in such circumstances should advise the nonclient family member of the possibility that the person may have a claim, the effect the client's litigation may have on the nonclient's claim, the fact that claims are subject to time bars, and the desirability that the nonclient contact another counsel if the nonclient wishes to pursue the matter further. 

For clues to the current parameters of actionable lawyer conduct, Hendricks v. Calderon,32 a criminal case, offered an approach that may be adapted to civil matters. In Hendricks, a criminal defendant contended he received ineffective assistance of counsel because his attorney did not adequately investigate the possibility of a mental-health defense. The attorney had consulted two mental-health experts and both concluded after examining the client that there was no basis for the defense.33 The court found this was sufficient, noting counsel was entitled to rely on the opinions of the experts.34 Most important, the court noted that counsel did not have an independent duty, absent a request for information from the expert, to enlarge the information base the expert uses.35 The court found no Sixth Amendment duty to second-guess experts. 

Attorneys in civil cases regularly rely on experts to assist in advising clients. Unless the attorney can rely on the expert's advice, the attorney must engage in an infinite series of validations with no end in sight. Hendricks provides support for attorney reliance on experts as a shield against claims of negligent representation as well as claims of ineffective assistance of counsel. 

There was movement in the area of attorney privilege as well. Civil Code Section 47(b) codifies the common law privilege that attaches to communications made in connection with judicial proceedings.36 This litigation privilege has been liberally applied in favor of attorneys. Last year, however, the statute was amended to except from its scope "any communication made in a judicial proceeding knowingly concealing the existence of an insurance policy or policies."37 Although the language of Section 47(b)(3) is limited to "concealing the existence" of an insurance policy, the legislative history reveals that the amendment may be intended to have a broader scope. 

Section 47(b)(3) was enacted to reverse a court of appeal decision, California Dredging Co. v. Ins. Co. of N. America,38 which had treated as absolutely privileged a statement misrepresenting the existence of policy renewals and an excess policy.39 The claimant had agreed to limit its recovery to applicable insurance policies, if any.40 INA, on behalf of its insured, misrepresented in response to formal and informal discovery that there was only a single policy with a $100,000 limit.41 In fact, that policy had been renewed twice and was backed up with a $5-million excess policy, also issued by INA.42 Based on the misrepresentation, the claimant settled for $100,000. Later, when the claimant learned the true facts, it rescinded the settlement, entered into a new round of negotiations, and settled for a larger sum.43 Thereafter, the claimant and its surety sued INA for fraudulently concealing the existence of the renewal and excess policies and sought as damages the excess attorneys' fees incurred in litigating the matter. 

What is problematic about the new statutory language is whether it is limited to cases where the existence of the entire policy itself is misrepresented or whether it includes situations where only the policy limits are misrepresented. The facts of California Dredging support both conclusions. While the majority characterized the case as involving concealment of coverage (renewals and excess), the dissent characterized the matter as involving a misrepresentation of available limits.44 The amendment awaits further clarification, but counsel should tread carefully. The amendment requires that the misrepresentation be made knowingly. Even if the communication is privileged under a literal application of Section 47(b)(3), counsel may still be subject to sanctions45 or State Bar discipline46 for making a knowing misrepresentation of coverage to an interested person. 

The ability of third parties to eavesdrop on telephone conversations conducted via cellular or cordless phones has raised questions whether such conversations are reasonably believed to be confidential-a requirement for application of the attorney-client privilege. The legislature resolved those questions by amending Evidence Code Section 952 to provide expressly that communications between attorney and client conducted by facsimile or cellular or cordless telephones are deemed confidential for purposes of the privilege.47

Both the U.S. Supreme Court and the California Supreme Court rendered decisions last year on lawyer advertising, a frequent ethical hot potato. In Florida Bar v. Went For It, Inc.,48 the U.S. Supreme Court upheld a Florida restriction prohibiting lawyers from sending targeted, direct-mail solicitations to victims and their relatives for a period of 30 days following an accident or disaster. The Court distinguished its prior decision in Shapero v. Kentucky Bar Ass'n.,49 which struck down a state bar restriction on targeted direct mail on First Amendment grounds, by noting that Shapero had not specifically addressed the privacy concerns that provided the foundation for Florida's 30-day rule. 

Perhaps the most significant aspect of the Court's decision in Florida Bar was its acceptance of survey and anecdotal evidence that the 30-day rule was protective of the privacy interests of potential recipients of targeted direct mail. The Court specifically rejected a requirement that restrictions on lawyer advertising be supported by "empirical data." This decision may herald a more deferential attitude by the Court towards restrictions on lawyer advertising enacted by states. 

In Ivan O. B. Morse,50 the California Supreme Court increased the level of discipline of a lawyer found to have engaged in misleading advertising concerning the filing of homestead declarations. The supreme court agreed with the State Bar Court that the lawyer had violated Rule 1-400(D) of the Rules of Professional Conduct, because the lawyer's advertising materials tended to mislead the recipient into believing that the solicitation was from the recipient's lender. The package of materials was sent to the recipients by bulk mail in plain white envelopes with plastic windows. Only the name of the recipient's mortgage lender and the recipient's own name and address were visible. This decision illustrates that lawyers must be especially careful to ensure that their advertising is not misleading by act or omission. The morals of the marketplace do not define what is permitted lawyer advertising. 

Last year California became the last state to adopt a professional rule of conduct governing lawyer speech. On September 14, 1995, the California Supreme Court added Rule 5-120 to the Rules of Professional Conduct. Rule 5-120 prohibits a member who is participating or has participated in the investigation or litigation of a matter from making an extrajudicial statement that a reasonable person would expect to be disseminated by means of public communication if the member knows or reasonably should know that it will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter.51 Rule 5-120 does contain a number of safe harbors.52 

The courts weighed in on lawyer speech as well. In Standing Committee on Discipline v. Yagman,53 the Ninth Circuit held that statements of rhetorical hyperbole by a lawyer impugning the integrity of a judge were not sanctionable. The court noted that statements by a lawyer imputing specific criminal or improper activity could subject the lawyer to sanction, even if the statement were phrased as an opinion, if the statements were shown to be false or if they obstructed the administration of justice or presented a clear and present danger of doing so. 

The Ninth Circuit similarly held in United States v. Wunsch54 that in order for "sexist" comments contained in a letter sent by a male lawyer to a female lawyer to warrant judicial sanctions, the comments needed to interfere with the administration of justice. The court also held that Business and Professions Code Section 6068(f), which admonishes lawyers not to exhibit an "offensive personality," was unconstitutionally vague. 

It seems that no area of attorney ethics was left uncovered last year. For example, attorneys handling their own collection lawsuits should not expect to collect attorneys' fees under a fee provision in their fee agreements. The supreme court held in Trope v. Katz55 that an attorney litigating in propria persona to enforce a contract containing an attorneys' fee provision cannot recover "reasonable attorneys' fees" under Code of Civil Procedure Section 1717. The court declined to confer a special status on pro per attorneys litigating their own claims. 

Trope does not purport to decide the availability of fee awards to pro per attorney litigants under other circumstances.56 The decision suggests, however, that pure attorneys' fee awards may be barred under many existing statutory exceptions but might be available under at least some court-made equitable exceptions.57 For example, in Abandonato v. Coldren,58 the court distinguished Trope because sanctions awarded under Code of Civil Procedure Section 128.5 were not necessarily equal to the amount of attorneys' fees expended. The court also observed that Section 128.5 sanctions had been awarded previously to the litigants as compensation for lost time.59 The court reasoned that compensation to a pro per attorney was needed to further the intent of Section 128.5 and that depriving the attorney of an award would "create a separate and artificial category of litigants who would be inadequately protected against another party's bad faith tactics."60 

Does a law firm's failure to include notice of the client's right to arbitrate a fee dispute require dismissal of its complaint for unpaid fees? This notice is required by Business and Professions Code Section 6201. However, the court in Richards, Watson & Gershon v. King61 concluded that dismissal is discretionary, not mandatory.62 The court did not catalogue the factors to be considered by the trial court in exercising discretion, but it did note that a client's level of sophistication and knowledge of statutory arbitration rights were significant.63

The sheer volume and scope of the important decisions involving lawyer ethics in 1995 cannot be overemphasized. A fair measure of the significance of last year is reflected in the relatively few decisions of similar import rendered this year or prior to 1995. Lawyers will live with the ramifications of 1995's rulings for many years to come. 

  1. Flatt v. Superior Court, 19 Cal. 4th 275 (1995).        
  2. See Truck Ins. Exchange v. Fireman's Fund Ins. Co., 6 Cal. App. 4th 1050, 1056 (1992); Jeffrey v. Pounds, 67 Cal. App. 3d 6, 10 (1977).        
  3. Zador Corp. v. Kwan, 31 Cal. App. 4th 1285 (1995).        
  4. See State Bar Formal Opinion 1989-115; Los Angeles County Bar Association Formal Opinion No. 471 (1993).        
  5. Zador, 31 Cal. App. 4th at 1289-90.        
  6. Id. at 1290.        
  7. Id. at 1301.        
  8. Id.        
  9. Buehler v. Sbardellati, 34 Cal. App. 4th 1527 (1995).        
  10. Id. at 1540-41. See James Fischer, Representing Partnerships: Who Is/Are the Clients?, 26 Pac. L. J. 961 (1995).        
  11. Buehler, 34 Cal. App. 4th at 1540-41.        
  12. Stanley v. Richmond, 35 Cal. App. 4th 1070 (1995).        
  13. Metro-Goldwyn-Mayer, Inc. v. Tracinda Corp., 36 Cal. App. 4th 1832 (1995).        
  14. See Goldstein v. Lees, 46 Cal. App. 3d 614 (1975); Woods v. Superior Court, 149 Cal. App. 3d 931 (1983).        
  15. Cho v. Superior Court, 39 Cal. App. 4th 113 (1995).        
  16. It has long been recognized that knowledge obtained by one member of a firm is imputed to all other members. Rosenfeld Construction Co. v. Superior Court, 235 Cal. App. 3d 566, 573 (1991).        
  17. Employers Ins. v. Albert D. Seeno Constr. Co., 692 F. Supp. 1150, 1163 (N.D. Cal. 1988); see also Trone v. Smith, 621 F. 2d 994, 999 (9th Cir. 1980).        
  18. Henriksen v. Great American Savings & Loan, 11 Cal. App. 4th 109 (1992); Dill v. Superior Court, 158 Cal. App. 3d 301 (1984).        
  19. Higdon v. Superior Court, 227 Cal. App. 3d 1667, 1680 (1991).        
  20. Cho, 39 Cal. App. 4th at 125.        
  21. See California Rules of Professional Conduct, Rules 3-310(A)(1) and (B)(4) (client's written consent waiving the conflict is not required).        
  22. See Los Angeles County Bar Association, Formal Opinion No. 477 (1994) (ethical issues arising when a lawyer/physician refers patients to a medical clinic in which the lawyer/physician is a part owner; same conclusions as the State Bar opinion regarding conflicts of interest).        
  23. Under the standard liability insurance policy, the insurer usually is allowed to select defense counsel to represent the insured. In some cases, conflicts of interest between the insured and the insurer permit the insured to select defense counsel who is paid by the insurer. Such counsel are referred to as "independent" in the sense that they are the insured's choice. In California, such counsel are often referred to as "Cumis counsel" after San Diego Navy Fed. Credit Union v. Cumis Ins. Soc'y, Inc., 162 Cal. App. 3d 358 (1984). The matter is now extensively covered by statute. See Civ. Code Section 2860.        
  24. Assurance Co. of America v. Haven, 32 Cal. App. 4th 78 (1995).        
  25. Id.        
  26. Unigard Insurance Group v. O'Flaherty & Belgum, 38 Cal. App. 4th 1229 (1995).        
  27. See State Bar of California Standing Committee on Professional Responsibility and Conduct, Formal Opinion 1995-139 (collecting authorities). See also Charles Silver & Kent Syverud, The Professional Responsibilities of Insurance Defense Counsel, 45 Duke L. J. 255 (1995) (reviewing and criticizing primary- client rule).        
  28. Meigan v. Shore, 34 Cal. App. 4th 1025 (1995).        
  29. Id. at 1033.        
  30. Id. at 1037-42 (although some might take issue with the court's reconciliation of prior cases to the Biankanja standard; see Biankanja v. Irving, 42 Cal. 647 (1958)).        
  31. Meigan, 34 Cal. App. 4th at 1043.        
  32. Hendricks v. Calderon, 64 F. 3d 1340 (9th Cir. 1995).        
  33. Id. at 1345.        
  34. Id. at 1346.        
  35. Id.        
  36. See Kelli L. Sager, The Perils of Prime Time, Los Angeles Lawyer, Sept. 1995, at 34 (discussing the scope of the privilege as applied to communications between lawyers and the media about a lawyer's client and the client's case).        
  37. Civ. Code Section 47(b)(3) (Supp. 1995).        
  38. California Dredging Co. v. Ins. Co. of N. America, 22 Cal. Rptr. 2d 461 (1993), rev. granted.        
  39. See 1994 Cal. Stat. Section 1, C.700 (SB 1457), reprinted at 6 West's Ann. Civ. Code 38, Historical and Statutory Notes (Supp. 1995).        
  40. California Dredging, 22 Cal. Rptr. 2d at 463.        
  41. Id.        
  42. Id.        
  43. Id.        
  44. Id. at 470 (King., J. dissenting).        
  45. See Code Civ. Proc. Section 128.5 (Supp. 1995) (attorneys subject to sanctions for engaging in bad faith or frivolous tactics).        
  46. See Bus. & Prof. Code Section Section 6068(c),(d).        
  47. Evid. Code Section 952 (Supp. 1995).        
  48. Florida Bar v. Went For It, Inc., 115 S. Ct. 2371 (1995).        
  49. Shapero v. Kentucky Bar Ass'n, 486 U.S. 466 (1988).        
  50. Ivan O. B. Morse, 11 Cal. 4th 184 (1995).        
  51. Cal. Rules of Professional Conduct, Rule 5-120(A).        
  52. Cal. Rules of Professional Conduct, Rule 5-120(B).        
  53. Standing Committee on Discipline v. Yagman, 55 F. 3d 1430 (9th Cir. 1995).        
  54. United States v. Wunsch, 54 F. 3d 579 (9th Cir. 1995), reh'g granted, opinion withdrawn and new opinion issued, 1996 WL 275005, 96 Daily Journal D.A.R. 6025 (May 1996). Compare Bradley v. Hall, 64 F. 3d 1276 (9th Cir. 1995) (prisoner may not be punished for using hostile, sexual, abusive, or threatening language in a written grievance).        
  55. Trope v. Katz, 11 Cal. 4th 274 (1995).        
  56. E.g., when fees are shifted by statutory exception or under the court-made equitable exceptions of the "common fund," "substantial benefit," or "private attorney general" theories of recovery. Id. at 279.        
  57. Id. at 284-86.        
  58. Abandonato v. Coldren, 41 Cal. App. 4th 264 (1995).        
  59. Id. at 268.        
  60. Id. at 269.        
  61. Richards, Watson & Gershon v. King, 39 Cal. App. 4th 1176 (1995).        
  62. Id. at 1180.        
  63. Id. 


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