Business attorneys in California

Petitioner insured attorney sought a writ of mandate to compel the Superior Court of Los Angeles County (California) to require respondent insurer to produce its records relating to its liability reserves together with respondent's corresponding reinsurance records. Petitioner asserted that the records were relevant to the prosecution of his bad faith claim against respondent insurer.

Petitioner insured business attorneys in California sought a writ of mandate to compel the trial court to require respondent insurer to produce its records relating to liability reserves, which petitioner claimed were established in a malpractice action that was brought against him. Petitioner also sought respondent's reinsurance records. Petitioner claimed that the records were relevant to the prosecution of his bad faith claim against respondent. The trial court found that the records were not relevant. In issuing the mandate, the court held that, for purposes of discovery, loss reserve information was not, a priori, irrelevant because it could lead to the discovery of evidence admissible on the issues raised by petitioner. The court stated that petitioner was entitled to discovery of the documents unless the trial court concluded, as a matter of law, as to each separate item, that it was not relevant or would not lead to discovery of relevant information. The court directed the trial court to conduct an in camera review of each item sought in order to determine whether it was relevant or would lead to relevant information.

The court issued the writ of mandate directing the trial court to conduct in camera review of the documents petitioner insured attorney requested. The trial court was directed to determine whether they were relevant and not privileged, and issue separate findings on each item. For purposes of discovery, respondent insurer's loss reserve and reinsurance information was not irrelevant because it could lead to the discovery of admissible evidence.

Plaintiff appealed a summary judgment from the Superior Court of Los Angeles County (California) holding plaintiff's settlement and dismissal with prejudice of a legal malpractice action against his former attorneys arising from their representation of him constituted a retraxit barring plaintiff's suit against defendant business associates.

Plaintiff filed malpractice action against defendant attorneys. The matter was settled and voluntarily dismissed with prejudice. The court of appeal found the trial court erred by holding an attorney-defendant in a legal malpractice action stepped into the shoes of the original offending defendant (by virtue of the case-within-a-case doctrine). Dismissal with prejudice of the malpractice action thus did not operate as a retraxit barring suit against the original offending defendants. Since defendant business associates were not parties to the malpractice action against a prior attorney, nor in privity with them, defendants could not invoke res judicata on their behalf. Since the malpractice action was settled and not tried, collateral estoppel did not bar litigating any issue in the underlying action. The court held the settlement and dismissal of the legal malpractice action did not bar plaintiff's action against defendant business associates.

Judgment reversed and remanded because plaintiff's settlement and dismissal of a legal malpractice action against his former attorneys arising from their representation of him earlier in the proceedings did not constitute a retraxit barring plaintiff's action against defendants, plaintiff's former business associates.

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