Tag Archives: Litigation
In Alilin v. State Farm Mut. Auto. Ins. Co., No. 6:14-cv-1183-Orl-41DAB (D. for M.D. Fla., Jan. 30, 2015), Judge Carlos Mendoza denied Alilin’s challenge to the amount in controversy prong of State Farm’s removal to federal court and found that Alilin’s medical bills, which were previously submitted to State Farm with a settlement offer, were persuasive evidence that the amount in controversy exceeded $75,000. The Court also denied application of Alilin’s argument that future set-offs would reduce the medical expenses to significantly less than the jurisdictional amount, because the amount in controversy is determined at the time of removal; thus, “post-judgment ‘set-offs’ or collateral source payments are irrelevant.”
Additionally, the Court addressed State Farm’s motion to dismiss Alilin’s claim for bad faith, which was based on the premature nature of the claim. Alilin argued that the bad faith claim should be abated and not dismissed. Although the Court acknowledged that Florida courts hold such claims in abatement, the Court stated that Alilin “bears the burden of establishing the Article III prerequisites to jurisdiction” and found that Alilin’s inability to establish the bad faith claim was ripe warranted dismissal “for want of subject matter jurisdiction.”
For more information on removing actions to federal court, or any other litigation-related questions, please contact Edward Sylvester directly.
Edward Sylvester is a partner in the Miami office and is licensed to practice in all state and federal courts in both Florida and Ohio.
In Palmer v. Superior Court California’s Second District Court of Appeal upheld the in-house counsel privilege for communications concerning a dispute with a current client and, in doing so, declined to adopt the “fiduciary duty” and the “current client” exceptions to the attorney-client privilege.
Plaintiff brought a malpractice claim against an attorney and her firm as a result of their short-lived representation of him in an invasion of privacy claim. Two months into the representation, plaintiff began sending emails expressing dissatisfaction with the firm’s billings and representation. Nevertheless, plaintiff stated that he continued to rely on defendants for legal advice about his matter. Shortly thereafter, plaintiff filed a malpractice action against defendants and substituted new counsel in the underlying litigation.
During the time of representation, the attorney consulted with other attorneys in her firm — the firm’s general counsel, claims counsel, and another “deputized” attorney. The firm did not bill plaintiff for any of the other attorneys’ time. In response to deposition questions and discovery requests, the attorney invoked the attorney client privilege for internal communications between the attorney and other firm lawyers acting in their capacity as counsel for the firm and/or documents prepared in anticipation of litigation. Plaintiff filed a motion to compel, which the trial court granted. Defendant filed a petition for writ of mandate or prohibition, requesting the trial court to set aside its order and enter a new order denying the motion to compel.
On appeal, plaintiff cited mostly federal authorities — district court and bankruptcy decisions — that have adopted what have been termed the “fiduciary” and the “current client” exceptions to the attorney-client privilege. The underlying premise for both exceptions is that an impermissible conflict is created when a lawyer advises another lawyer from the same firm regarding an issue with a current client. In this circumstance, the attorney client privilege is subordinate to an attorney/firm’s ethical and fiduciary duties to its client.
Defendant cited a number of state supreme courts that rejected the exceptions’ application, including Massachusetts, Georgia, and Oregon. The Palmer court found the Oregon Supreme Court’s decision in Crimson Trace Corp. v. Davis Wright Tremaine LLP, 355 Or. 476, 326 P.3d 1181 (Or. 2014) persuasive. The attorney-client privilege in both states was created by statute, neither of which provided for the “fiduciary duty” nor the “current client” exceptions. The Palmer court, like the court in Crimson, declined to adopt implicit exceptions to those enumerated in the statute.
The court explained that it was not a foregone conclusion that an attorney’s consultation with in-house counsel regarding a client dispute will necessarily be adverse to the client. Seeking legal advice to determine how best to address the potential conflict is appropriate whether that advice comes from in-house counsel or outside counsel. Notably, the court stated although certain internal communications may be privileged, there remains a duty of disclosure. The court explained: “Preserving the privileged nature of [the] communications does not affect a law firm’s duty to provide a client with full and fair disclosure of facts material to the client’s interests.”
Importantly, the Palmer court noted that the privilege only attaches where the firm establishes a “genuine attorney-client relationship.” The Palmer court relied upon the Massachusetts Supreme Court’s decision in RFF Family Partnership, LP v. Burns & Levinson, LLP, 465 Mass. 702 (2013) in making this determination:
(1) the law firm must have designated, either formally or informally, an attorney or attorneys within the firm to represent the firm as in-house or ethics counsel…; (2) where a current outside client has threatened litigation against the law firm, the in-house counsel must not have performed any work on the particular client matter or a substantially related matter; (3) the time spent on the in-house communications may not have been billed to the client; and (4) the communications must have been made in confidence and kept confidential.
Ultimately, the court found that based on the facts, certain communications at issue were not privileged because they were between lawyers in the firm who were handling the case for the client.
Significance of Opinion
This decision is significant because the issue of whether California should adopt the “fiduciary” or “current client” exceptions in the context of intra-firm communications was one of first impression for a California appellate court. In rejecting those exceptions, the decision reinforces the in-house counsel privilege in California courts — an increasingly important safeguard as firms continue to grow and become more inclined to rely on in-house counsel for day-to-day ethics and claims advice.
Originally posted by Hinshaw & Culbertson’s Lawyers for the Profession® Alert
Four insurance companies sued the California Department of Insurance, claiming the agency has become “increasingly aggressive” in its efforts to enforce the state’s Unfair Insurance Practices Act.
The companies say the department is trying to enforce the UPA beyond the scope of the original statute, by wanting to impose “millions of dollars in monetary penalties” against insurance companies.
In statute form, the UPA outlines 16 unfair claims settlement practices that companies must avoid in order to be compliant with the law. Prohibited practices include misrepresenting pertinent facts or policy revisions to clients, compelling insured clients to pursue litigation to recover amounts due, and attempting to settle a claim for less than a “reasonable” amount.
But the four plaintiffs known as the Torchmark group of companies said the department has been adding to the original 16 practices, creating 25 “categories of acts” that outline specific conduct to be followed or prohibited in the settlement of claims.
The Torchmark group includes Globe Life and Accident Insurance Company, American Income Life Insurance Company, United American Insurance Company and United Investors Life Insurance Company and is represented in the suit by Robert Hogeboom of the Los Angeles firm Hinshaw & Culbertson.
READ MORE at Courthouse News Service
By David McMahon and Robert G. Levy
Companies doing business internationally no doubt have heard about the rise in claims brought by government agencies against companies and individuals under the Foreign Corrupt Practices Act (FCPA). Our last articl…
As a result of the filing of a Writ of Mandate and Declaratory Relief Action by Barger & Wolen LLP Senior Regulatory Counsel Robert W. Hogeboom and Litigation Partner John Holmes, the California Department of Insurance (“CDI”) agreed to…
The chapter features many new practice tips on such diverse matters such as:
- Filing for litigation despite the equitable tolling rule;
- Tolling agreements;
- The notice-prejudice rule;
- Quiet title actions;
- The trigger of tripartite relationships;
- The attorney-client privilege;
- Attorney claims adjusters;
- Informal representations about the status of title;
- Bad faith actions;
- Undisclosed liens or encumbrances;
- Failure to file an amended title report;
- Posting collateral for an indemnification agreement;
- Access to property rights and the title report;
- Equitable subrogation; and
- “Hand-crafted” endorsements.
Barger & Wolen partners Gregory Eisenreich and John Holmes recently updated Chapter 13 of the California Insurance Law & Practice, Claims Handling and the Duty of Good Faith.
The chapter revisions include:
The nature and scope …
Barger & Wolen partners David McMahon, Robert Levy and John (Jack) Pierce authored the second edition of Insurance Practices and Coverage in Liability Defense (formerly Defending the Insured).
Intended for legal practitioners, researchers, co…
Barger & Wolen LLP Secures Summary Judgment On Behalf of Client
District Court Reaffirms “Genuine Dispute Doctrine,” Precludes Bad Faith Claim
LOS ANGELES –On November 29, 2013, United States District Court Judge Margaret M. Morro…
A recent California Court of Appeal opinion, Yanez v. Plummer, provides a cautionary tale for in-house counsel or outside attorneys who jointly represent their institutional client’s employees or agents in depositions. If handled inappropriately,…