In Riverisland, the plaintiffs, who had fallen behind in their loan payments, sued their lender for allegedly making an oral promise that it would extend their loan for two years. In exchange for the promise to extend the term on the loan, the plaintiffs were to put up two parcels of land as additional collateral.  The lender later presented the plaintiffs with a written agreement that they signed but admittedly did not read.  The plaintiffs claimed the lender told them the term in the writing was for two years and only two parcels of land would serve as additional security.  However, the writing provided terms that were different than what plaintiffs contended they were promised by the lender.  Specically, the written agreement provided an extension of the loan term for a period of only three months and such was in exchange for pledging eight additional parcels of land as collateral for the extension.  Such was contrary to what plaintiffs claimed was orally promised by the lender.  When the bank sought to foreclose on the property prior to the expiration of the two year period, plaintiffs led suit against the lender claiming fraud.  

The trial court granted summary judgment in favor of the lender, citing the California Supreme Court decision in Bank of America v. Pendergrass.   In Pendergrass, the Court held that evidence of contradictory terms to an agreement under a showing of fraud, did not apply to a claim of promissory fraud if the alleged oral terms contradicted the express terms of the subsequently executed written agreement.  Thus, as the lender’s alleged oral promise directly contradicted the terms of the subsequently executed writing, under Pendergrass, evidence of that promise was barred by the parol evidence rule.  The plaintiffs in Riverisland appealed the trial court’s granting of summary judgment and the Court of Appeal reversed.  More recently, the Supreme Court unanimously affirmed the decision of the Court of Appeal.

The Court in Riverisland was especially critical of the Pendergrass decision, explaining  the limiting rule set forth by the Court in Pendergrass "finds no support in the language of the statute codifying the parol evidence rule and the exception for evidence of fraud.  It is di#cult to apply.  It con$icts with the doctrine of the Restatements, most treatises, and the majority of our sister-state jurisdictions…[W]hile intended to prevent fraud, [it] may actually provide a shield for fraudulent conduct. [And it] departed from established California law at the time it was decided, and neither acknowledged nor justifed the abrogation.”   The Court also pointed out how even the California courts, including the Court of Appeal in Riverisland, regularly strain to avoid application of the Pendergrass rule and construe it narrowly.

Practically speaking, the Riverisland decision simply affords a plaintiff the opportunity to prove inducement by oral fraud and that such can, if proven and reasonable, affect the ability of the other party to rely on the written agreement.  Where under Pendergrass such claims would fail typically at the summary judgment phase of litigation if they contradicted the terms of the subsequently executed writing, now, evidence of such fraud may permit such claims to move past the summary judgment stage in a case and to allow the claims to be presented to a trier of fact at trial. 

It is important to note, however, the Riverisland decision does not make a plaintiff’s burden of proof any easier in establishing the merits of a claim of promis-sory fraud.—Notably, a plainti! must still prove all the elements of fraud, including that he or she justifably relied on the oral misrepresentations about the written agreement’s express terms.  The Court in Riverisland declined to address the issue of whether there can be justifable reliance, an essential element in proving fraud, where the plaintiff fails to read a contract when he had an opportunity to do so. The e!ect that the Riverisland decision will have in actual practice remains to be seen, however, it is reasonable to anticipate changes with regards to:

Promissory Fraud - When parties challenge the validity of a contract, it may become commonplace to include an allegation for promissory fraud in an e!ort to avoid certain terms of the writing.  Under Pendergrass, despite its narrow construction by the courts, these claims were infrequent given the long standing ruling by the Court concerning written agreements and earlier stated oral terms that conflict with the writing.  Now, under Riverisland, a plaintiff may be able to breathe life into what was previously a lifeless argument.

Reasonable Review - As noted by the Court in Riverisland, no determination was made as to whether or not a party may justifiably rely on an oral misrepresentation in conflict with the written document’s terms when that party had an opportunity to read the agreement beforehand.  Parties should consider providing the other side reasonable time to review a contract prior to its execution, in order to anticipate a possible claim down the road.   Additionally, one should take care toensure the terms of the written agreement adequately reflect the discussions that took place before signing the document.  In areas where this has not always been the practice, there may be a shift in that direction by businesses and parties alike to lessen this scenario in the future.

Procedure: Because the Riverisland decision potentially opens the door to increased liability to commercial entities, parties may begin to make changes to their procedures in negotiating agreements. Internally, commercial parties may begin to more effectively streamline their procedures for dealing with consumers to ensure the policies in place for communicating with consumers is more consistent.  Additional changes might also affect form agreements, letters, and other documents, which may begin to include more specific and clear provisions indicating that no statements are binding unless and until they are reduced to a writing signed by a duly authorized agent of the party.  

The Riverisland ruling does not guarantee more litigation for everyone.  Where parties are vigilant in their efforts to avoid misstating the terms in the written agreement, and each side is permitted with sufficient time to review the agreement’s terms before signing, claims of fraud can be minimized.  This is and always was good practice, whether pre- or post-Riverisland.  

For more information on the Rivierisland case or to discuss how to guard your company from potential fraud liability, contact Jeremy Johnson via email at jjohnson@bremerwhyte.com of call (949) 221-1000 for more information.

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In United, a construction company sued a subcontractor for defense and indemnity in a negligence lawsuit filed by a Plaintiff who sustained serious injuries while riding a motorcycle through a construction zone. The construction company based its lawsuit upon a contractual indemnity clause. The indemnity clause stated, in pertinent part, that the subcontractor would indemnify, defend, and hold harmless the construction company from all claims caused in whole or in part by the subcontractor’s negligent acts or omissions. The District Court ruled in the construction company’s favor and ordered the subcontractor to reimburse the construction company for its $1,000,000.00 settlement with Plaintiff. On appeal, the Supreme Court held that the specific contractual language limited the subcontractor’s duty to defend and indemnify the construction company to claims caused by the subcontractor’s negligence. As the jury found that the subcontractor was negligent, but not the proximate cause of Plaintiff's injuries, the construction company failed to meet this burden.

The United holding affirms that the presence of  "to the extent caused" language in an indemnity provision will require the indemnitee to not only demonstrate  negligence on the part of the indemnitor, but that the negligence demonstrated was the cause of the injury in question.

Nelson Cohen is a Senior Partner in our Las Vegas Office.  He is also an AV rated attorney and member of the American Board of Trial Lawyers (ABOTA).  For more questions, please contact Nelson directly at (702) 258-6665.

THE CALIFORNIA COURT OF APPEAL ISSUES A STERN WARNING TO CARRIERS WHO FAIL TO DEFEND THEIR ADDITIONAL NAMED INSUREDS

In St. Paul Mercury Insurance Company v. Mountain West Farm Bureau Mutual Insurance Company (2012) 012 Cal. App. LEXIS 1118, the California Court of Appeal, Second Appellate District, affirmed the award of attorney's fees, costs and indemnity in favor of a primary carrier against a carrier that had an additional insured endorsement in favor of the primary carrier's insured, yet denied the duty to defend or indemnify.

The insurance dispute at issue pertains to a construction defect case involving the development of the Four Seasons Hotel and Resort, located in Teton Village, Wyoming. St. Paul Mercury Insurance Company (“St. Paul”) insured the project’s general contractor, Jacobsen Construction Company (“Jacobsen”). Mountain West Farm Bureau Mutual Insurance Company (“Mountain West”) insured Teton Builders, Inc. (“Teton”), who was the framing subcontractor on part of the project.

Pursuant to its subcontract agreement, Teton was obligated to have Jacobsen named as an additional insured on its insurance policy. Mountain West did issue such an endorsement, which was in force for nine months.

Jacobsen sued the owner for breach of contract, and the owner crosscomplained against Jacobsen for construction defects. Jacobsen then crosscomplained against various subcontractors whose scopes of work were implicated in the construction defect case, and tendered to their insurers pursuant to the additional insured endorsements. Teton was named as a cross-defendant, and Mountain West received an additional insured tender of defense and indemnity. Mountain West denied the tender.

The underlying action eventually settled in two parts. In the first portion of the settlement, the siding and drywall issues were addressed. St. Paul, on behalf of Jacobsen, paid $1 million. Although Teton's work was implicated in the siding and drywall issues, Mountain West paid nothing towards settlement one. Settlement two concerned all of the remaining issues. In settlement two, St. Paul paid $1,265,000 and Mountain West paid $100,000 on behalf of Teton.

St. Paul then sued a number of non-participating subcontractors and insurers for equitable contribution - Teton and Mountain West among them. After various settlements and some motion practice, only Mountain West remained in the action at the time of trial.

Prior to the beginning of trial, the trial court granted St. Paul's motion for summary adjudication as to Mountain West's duty to defend Jacobsen pursuant to the additional insured endorsement. The trial court found that the allegations in the underlying construction defect case did implicate the scope of work of Teton, the framer, and this obligated Mountain West to defend Jacobsen.

Having already determined that a duty to defend existed as against Mountain West, at trial on the remaining issues, the court found that Mountain West owed St. Paul $2,087,171.50 in defense and settlement costs, plus over $300,000 in prejudgment interest. This amount was calculated based on time on the risk as between St. Paul and Mountain West. Mountain West appealed the trial court's decision.

The California Court of Appeal affirmed the trial court's award of damages. In discussing the law of equitable contribution, the court noted that equitable contribution apportions costs among insurers covering the same insured at the same level of risk, where one insurer has paid more than its share. The purpose of equitable contribution is to equalize responsibility among co-insurers and prevent one insurer from benefitting at the expense of another.

In regard to which insurer has the burden of proof, the Court of Appeal found that the matter of Safeco Ins. Co. v. Superior Court (2006) 140 Cal. App. 874 controls. In an equitable contribution action by one insurer against a nonparticipating insurer, the participating insurer only needs to prove a potential for coverage under the non-participating insurer’s policy. The burden then shifts to the non-participating insurer to prove that no potential for coverage exists, and the lack of coverage must be plead as an affirmative defense.

During the appeal, Mountain West admitted that, pursuant to the additional insured endorsement, it had a duty to defend Jacobsen. However, Mountain West argued that it fulfilled its duty to defend to Jacobsen by defending Teton. The Court of Appeal rejected this argument, ruling that Mountain West had a separate duty to defend Jacobsen as its additional insured.

Mountain West also argued that Teton's participation in settlement two precluded St. Paul’s contribution claim, but the court disagreed as the insurers were not parties to the settlement agreement. Even more, the settlement agreement explicitly reserved Jacobsen’s insurers’ right to seek equitable contribution from other insurers.

Mountain West also argued that the additional insured endorsement limited coverage to damage “arising out of” Teton’s work for Jacobsen, and thus, a time on risk allocation was improper. The court found this wording to be broad, and Mountain West did not meet its burden of proving any limitation on indemnity coverage under the endorsement. Mountain West’s coverage applied to “property damage” during the policy period, and Mountain West failed to prove the absence of such.

After establishing that Mountain West owed a duty to defend, St. Paul's further burden was to prove that it paid more than its fair share of defense and indemnity. The court found that St. Paul, in fact, did pay more than its share. And worse for Mountain West, by failing to defend Jacobsen, the court ruled that Mountain West waived any right to challenge the reasonableness of defense or settlement payments on behalf of Jacobsen. Therefore, the Court of Appeal concluded that the trial court did not abuse its discretion by ordering Mountain West to pay 43% of defense and indemnity based on time on the risk.

The court did reverse the trial court’s award of prejudgment interest under Civil Code Section 3287, which authorizes interest where damages are certain. As the court was required to determine allocation of responsibility, St. Paul’s damages were not certain until the judgment. Thus, the Court of Appeal held the award of prejudgment interest was in error.

Consequences of the Case
In construction defect cases, the issue of whether there is "additional insured indemnity" has long been debated. Carriers for subcontractors argue that their payment of settlement monies on behalf of their primary named insured constitutes payment of monies "arising out of" the work of their primary named insured, so no additional indemnity need be paid on behalf of the additional insured. This court did not buy that argument. And worse, this court did not limit the indemnity to any allocation based on the scope of work of the subcontractor or the allegations against the subcontractor. Once the court determined that that the subcontractor's scope of work was widely implicated, the court held the additional insured carrier liable for all attorney's fees, costs and indemnity allocated based on time on risk.

It is worth emphasizing that the trial court and the Court of Appeal found it significant that Mountain West did not defend Jacobsen. If Mountain West did agree to defend Jacobsen and a later conflict developed over defense fees and/or indemnity, it is likely that the trial court would have permitted Mountain West to debate reasonableness of the defense, indemnity and allocation.

Bremer Whyte Brown & O’Meara, LLP is a full service law firm. If you have any questions or comments, please feel free to contact John O'Meara at 818-712-9800, or at jomeara@bremerwhyte.com.

Medicare was established by Congress in 1965 (part of President Lyndon Johnson's "Great Society" legislation) in order to establish Federal health insurance to pay medical expenses for persons over 65 years of age or having a specified disability.

Initially, Medicare paid virtually all expenses for eligible participants. However, in 1980, in an effort to curb inappropriate Medicare spending, Congress passed the Medicare Secondary Payer Act (MSP). The MSP was designed to prevent cost shifting to Medicare from persons or entities who might be responsible for, or have caused, the beneficiary’s injury or illness that resulted in a Medicare payment.

Under the MSP, responsible parties are called “primary payers.” The concept is simple. Whoever caused the Medicare beneficiary's injury (or their insurer) should pay the Medicare beneficiary's medical expenses before Medicare has the obligation to do so, and to reimburse Medicare when a payment has already been made. The "primary payers" include providers of liability insurance, self-insurance, and no fault insurance.¹ Where Medicare was formally the primary payer, Medicare became the secondary payer.

While the law was well intentioned, primary payers were not rushing to reimburse Medicare for the billions of dollars that it was paying Medicare recipients. There was simply no built-in enforcement and penalty mechanism to encourage voluntary compliance. In search of additional revenue to fund the rapidly depleting Medicare Trust Fund, on December 29, 2007, President George Bush signed into law the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA).² Medicare’s recovery rights under the MSP remained unchanged, but Center for Medicare Services ("CMS") obtained the means to enforce its rights through a dramatic series of remedies and penalties.

Under the recent ruling in In Re Avandia Marketing, Sales and Products Liability, No. 11-2664, 2-12 WL 2433508 (3rd Cir. June 28, 2012) the Third Circuit of the United States Court of Appeals found that the Medicare Secondary Payer Statute’s (MSP) private cause of action provision is available to Medicare Advantage Organizations (MAOs). The result of this ruling is that MAOs can now file actions seeking statutory damages against primary payers.

Factual Background

In 1965, Medicare was first enacted into law. In its original form, which at the time was just Medicare Parts A and B, all Medicare benefits were provided by the Federal government. In 1997, Part C was added, allowing beneficiaries to receive Medicare benefits from private insurers by way of HMOs, PPOs, and other related options. This new addition has since become known as “Medicare Advantage” (MA). A fourth part, Part D, was added in 2006, providing limited benefits for outpatient prescription drugs.

Case Overview

Avandia is a class action suit involving alleged injuries suffered by patients using the drug Avandia to treat diabetes. In relation to this claim, Humana, an MAO, filed an action against GlaxoSmithKline (“Glaxo”). As part of its claim, Humana requested double damages under the MSP’s private cause of action provision. In response, Glaxo filed a motion to dismiss Humana’s suit on the grounds that Humana was an MAO, and as such was not entitled to private cause of action rights under the MSP.

Stating that the Medicare Act did not provide MAOs with a private cause of action right, the district court granted Glaxo’s motion to dismiss. Humana subsequently appealed to the United States Court of Appeals (Third Circuit).

Holding

In its ruling, the United States Court of Appeals (Third Circuit) held that the Medicare Act, and the specific provision dealing with the private cause of action rights in particular, includes MAOs. As such, MAOs have the right to bring the same private cause of action against primary payers as Medicare can.

The Court of Appeals applied statutory interpretation, and also made mention of a CMS memorandum which states that “CMS regulations at 42 C.F.R. §422.108(f) describes [sic] MSP procedures for MAOs to follow when billing for covered Medicare services for which Medicare is not the primary payer. These regulations also assign the right (and responsibility) to collect for these services to MAOs.” The court felt that this memorandum solidified that it was the belief of CMS that MAOs should have the private cause of action right.

In addition, in reviewing the legislative history, the Court found that Congress’ main goal in creating the Medicare Advantage Program was to design a program that would “curb skyrocketing health costs and preserve the fiscal integrity of the Medicare system.”³ In the court’s view, preventing MAOs from having private cause of action rights would hinder this goal in that MAOs would be “unable to exert the same pressure [as Medicare] and thus [be] forced to expend more resources collecting from such payers.” Additionally, when an MAO recovers from primary payers it is able to save costs which it can then use to add further benefits to its members.

Effect of this Ruling

There are many important takeaways from the holding in Avandia. First, and perhaps most important, the Avandia holding expands the recognized recovery rights of MAOs. MAOs now have a stronger position from which to pursue legal action against primary payers. With the threat of double damages at the forefront, MAOs may become more tenacious in their quest to recover payments.

Primary payers need to be mindful of this change and be sure to amend their procedures accordingly. Among these amendments, primary payers should be sure to identify all instances where an MA plan is involved and have a thorough comprehension of its compliance requirements as to MA plans, including all statutory regulations and case law.

In light of the infancy of this legal issue and its potentially disastrous consequences, it is recommended that any primary payer consult with counsel that has a deep understanding of this arena and the ramifications of this new case law on the handling and resolution of personal injury litigation. Feel free to contact the author at jomeara@bremerandwhyte.com.

¹ Workers’ Compensation insurance has been a primary payer since the original 1965 Medicare Act.
² MMSEA Amended Section 1862(b) of the Social Security Act (42 U.S.C. 1395y(b)) by adding these requirements in paragraph 8.
³ In re Avandia Marketing, No. 11-2664, 2012 WL2433508, at *8, citing Fanning v. United States, 346 F.3d 386, 388 (3d Cir. 2003).

It has been several months since the new temporary Code of Civil Procedure Section 437c provision has taken effect and there remains little prospect of it being as useful a tool as anticipated.¹  The latest subsection (s) provides for summary adjudication of a “legal issue or a claim for damages.”²   This change to 437c is significantly different from the previously existing summary adjudication motion because it is not restricted to adjudicating causes of action, affirmative defenses, claims for damages, or issues of duty.³   Further, under the previously existing 437c(f) a motion shall be granted only if it provides for complete disposition of the foregoing whereas the new provision does not.⁴   In essence, the 437c statute has undergone a subsection Botox injection presenting itself as an attractive option for parties seeking summary adjudication. 

The possibilities of the new summary adjudication procedure are seemingly endless as the plain meaning of the statute allows for adjudication of a “legal issue” without qualification.  One manner of utilizing this new procedure could be to seek early determinations of admissible evidence.  Another possible way to use the new motion procedure could be to seek adjudication of recoverable medical expenses.  And creative lawyering will undoubtedly attempt to stretch the bounds of the adjudication procedure. 

As attractive as the new provision may be to lawyers, however, seeking to exclude evidence early on or to set the parameters of recoverable damages, upon closer examination the new subjection is more cosmetic than practical.  The new motion differs considerably at the onset of its prerequisite procedures due to its requirement of a joint stipulation by the affected parties.⁵   This condition is also a major shortcoming for rather apparent reasons.  Naturally, if a party intends to oppose the motion aimed at an adverse outcome that party can easily short circuit the motion by refusing to stipulate.  Sure there are occasions where both parties agree to disagree and would prefer to defer to the court.  But such instances are far and few between.  In reality this is simply not going to be common motion practice.  Instead, when a plaintiff is presented with a proposed stipulation to rule on a significant legal issue, if there is any merit on the defense’s position, the plaintiff will not stipulate.  Likewise, if there are questionable claims for damages and the defense requests a stipulation, the plaintiff will not stipulate. Further, the new subsection continues to provide additional hurdles to the would-be moving party before the motion is even to be filed.

An entirely new 437c will come into effect in 2015 in essentially the same form and substance as the previously existing 437c (i.e., without the novel summary adjudication procedure).   Thus, like Botox, 437c(s)’s temporary effect on motion practice will be brief.  In the meantime, it will be interesting to see the creative legal issues that are presented to the court for adjudication.

1 Cal. Civ. Proc. Code § 437c (First of two; Repealed Jan. 1, 2015) (2012).  All references to § 437 are to Cal. Civ. Proc. Code.
2 § 437c(s) (First) (2012) (repealing § 437c (2011)).
3 § 437c(f)(s) (First) (2012).
4 Ibid.
5 § 437c(s) (First) (2012).

(1) Recordings of witness interviews conducted by investigators employed by an attorney's counsel; and,
(2) Information concerning the identity of witnesses from whom an attorney had obtained statements.

Coito involves the alleged wrongful death of a 13 year old boy who drowned in the Tuolumne River. The victim's parents sued the State of California, among others. The witness statements at issue were recordings of state investigators' interviews with the boy's friends who were present at the time of the drowning. The investigators were hired by attorneys from the California Department of Justice, and they were provided with a list of questions that counsel wanted answered. Plaintiff served the State with demands for the recorded interviews and also served California Judicial Council form interrogatories seeking the names, addresses and telephone numbers of all witnesses who had been interviewed. The defendants objected. The trial court relied on the often cited case of Nacht & Lewis Architects, Inc. v. Superior Court (1996) 47 Cal.App.4th 214, 217 (1996), and held that the information was privileged work product.

Plaintiff filed a writ of mandate, and the Court of Appeal overturned the trial court, holding that the work-product privilege did not apply.

The Supreme Court reversed the Court of Appeal, and also laid out some rules for how the California work-product privilege is intended to operate in the context of witness interviews. Specifically, the court states:

"[W]e hold that the recorded witness statements are entitled as a matter of law to at least qualified work product protection. The witness statements may be entitled to absolute protection if defendant can show that disclosure would reveal its 'attorney's impressions, conclusions, opinions, or legal research or theories.' (§ 2018.030, subd. (a).) If not, then the items may be subject to discovery if plaintiff can show that 'denial of discovery will unfairly prejudice [her] in preparing [her] claim . . . or will result in an injustice.' (§ 2018.030, subd. (b).)

As to the identity of witnesses from whom defendant's counsel has obtained statements, we hold that such information is not automatically entitled as a matter of law to absolute or qualified work product protection. In order to invoke the privilege, defendant must persuade the trial court that disclosure would reveal the attorney's tactics, impressions, or evaluation of the case (absolute privilege) or would result in opposing counsel taking undue advantage of the attorney's industry or efforts (qualified privilege)." In rendering its opinion, the Supreme Court expressly overruled a number of longstanding
cases which are relevant to the issues:

"In sum, we disapprove Fellows v. Superior Court, supra, 108 Cal.App.3d 55, People v. Williams, supra, 93 Cal.App.3d 40, Rodriguez v. McDonnell Douglas Corp., supra, 87 Cal.App.3d 626, and Kadelbach v. Amaral, supra, 31 Cal.App.3d 814 to the extent they suggest that a witness statement taken by an attorney does not, as a matter of law, constitute work product. In addition, Greyhound, supra, 56 Cal.2d 355, which was decided before the Legislature codified the work product privilege, should not be read as supporting such a conclusion. At the same time, we reject the dicta in Nacht & Lewis, supra, 47 Cal.App.4th at page 217 that said 'recorded statements taken by defendants' counsel would be protected by the absolute work product privilege because they would reveal counsel's 'impressions, conclusions, opinions, or legal research or theories' . . . . [Citations.]' Instead, we hold that a witness statement obtained through an attorneydirected interview is entitled as a matter of law to at least qualified work product protection. A party seeking disclosure has the burden of establishing that denial of disclosure will unfairly prejudice the party in preparing its claim or defense or will result in an injustice. (§ 2018.030, subd. (b).) If the party resisting discovery alleges that a witness statement, or portion thereof, is absolutely protected because it 'reflects an attorney's impressions, conclusions, opinions, or legal research or theories' (§ 2018.030, subd. (a)), that party must make a preliminary or foundational showing in support of its claim. The trial court should then make an in camera inspection to determine whether absolute work product protection applies to some or all of the material."

On the issue of the identity of witnesses from whom statements were collected by or at the behest of counsel:

"The Court of Appeal reasoned that, because the recorded witness statements themselves were not entitled to work product protection, defendant could not refuse to answer form interrogatory No. 12.3. In so concluding, the majority disagreed with Nacht & Lewis, which held that the information sought by form interrogatory No. 12.3 is entitled as a matter of law to qualified work product protection to the extent it consists of recorded statements taken by an attorney. (Nacht & Lewis, supra, 47 Cal.App.4th at p. 217.) Justice Kane, in his separate opinion below, identified a third approach. He would have adopted a default rule requiring parties to respond to form interrogatory No. 12.3, while permitting parties to make a showing that the responsive material is entitled to qualified or absolute protection. As explained below, the approach suggested by Justice Kane is most consistent with the policies underlying the work product privilege."

The Court determined that while some protections exist, on the whole, attorneys should produce the names of witnesses that they have interviewed, specifically referencing California Judicial form interrogatory 12.3, which is as follows:

"Have YOU OR ANYONE ACTING ON YOUR BEHALF obtained a written or recorded statement from any individual concerning the INCIDENT? If so, for each
statement state:

(a) the name, ADDRESS, and telephone number of the individual from whom the statement was obtained;
(b) the name, ADDRESS, and telephone number of the individual who obtained the statement;
(c) the date the statement was obtained; and
(d) the name, ADDRESS, and telephone number of each PERSON who has the original statement or a copy."

The Supreme Court states:
"Because it is not evident that form interrogatory No. 12.3 implicates the policies underlying the work product privilege in all or even most cases, we hold that information responsive to form interrogatory No. 12.3 is not automatically entitled as a matter of law to absolute or qualified work product privilege. Instead, the interrogatory usually must be answered. However, an objecting party may be entitled to protection if it can make a preliminary or foundational showing that answering the interrogatory would reveal the attorney's tactics, impressions, or evaluation of the case, or would result in opposing counsel taking undue advantage of the attorney's industry or efforts. Upon such a showing, the trial court should then determine, by making an in camera inspection if necessary, whether absolute or qualified work product protection applies to the material in dispute."

The California Supreme Court acknowledged that the work-product privilege is intended to"…prevent an attorney from free-riding on the industry and efforts of opposing counsel" (C.C.P. § 2018.020(b)). However, the court reiterated the distinction between information that is absolutely privileged, and information that only receives a qualified privilege. "Absolute protection" is provided to writings reflecting "an attorney's impressions, conclusions, opinions, or legal research or theories." (C.C.P. § 2018.030 (a).) These materials are not discoverable "under any circumstances." Any other work product receives "qualified protection" and "is not discoverable unless the court determines that denial of discovery will unfairly prejudice the party seeking discovery in preparing that party's claim or defense or will result in an injustice." (C.C.P.§ 2018.030 (b).)

CONCLUSION:
This case highlights the unmistakable truth that counsel should become involved in matters as early as possible in order to cloak witness interviews in the work-product privilege. Interviews should be conducted at the behest of counsel in order to be able to make the strongest argument that such investigation is privileged. The court specifically stated that non-derivative information, such as the identity and location of physical evidence or witnesses, as well as
witness statements not obtained through the involvement of counsel, are not subject to the workproduct doctrine and are not entitled to protection from discovery. It seems clear that statements taken by insurance investigators or by others who were not engaged and instructed by legal counsel may not be entitled to any protection.

This Aspatore legal title provides an authoritative, insider’s perspective on practicing family law in the state of California. Written by experienced family law partners from across the state, including Nicole Whyte, this book guides the reader through recent legislative and judicial developments in California family law. From custody and support to equitable distribution and enhanced earning capacity, these top lawyers analyze the issues that arise during a family law case and present proven solutions for addressing them.

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In this ever changing political and legal climate, same-sex partners face a host of legal issues.  Same-sex couples who have become Registered Domestic Partners and couples who married in California between June and November of 2008 face legal separation or divorce, spousal support, property division, child custody and visitation, in the same court process as heterosexual couples.  Same-sex couples may also need to address issues of adoption, surrogacy, reproductive assistance technologies, and establishing parental relationships.

Complications arise when couples move to a state that does not recognize their marital status or Registered Domestic Partnership and courts are forced to unwind undefined same-sex relationships without statutory structure to determine the distribution of income, assets, debts, retirement plans, and real property.  Same-sex couples may have difficulty with state agencies recognizing attendant marital status benefits and may even be denied access to the courts for divorce or resolution of their family law issues.  The state may refuse to recognize same-sex couples’ intentions regarding their joint property or emergency room wishes.

Although written agreements cannot change a couple's legal status, the couple can determine how they would like to address the implications of their relationship in the uncertainty of the changing law.  Agreements like premarital agreements become essential in undefined relationships and same-sex couples are desirous of agreements regarding: what property is considered separate, what property is considered joint, what their interests are in real property owned, who does income belong to, who is responsible for debt and how is debt to be paid, how will taxes be filed and paid, and who will use which tax status and claim which exemptions.

Agreements can further set forth the parties' relationship with children, and in the event of a break-up, how property will be divided, what provisions, if any, will be made for spousal support, and what security, enforcement and remedies apply in the event of breach.  Wills and trusts are equally important to delineate distribution of estates upon death and carry out the parties' intentions.  Power of Attorney and Advance Health Care Directives hold special significance in the lives of same-sex couples in the event that one partner becomes incapacitated, the other partner has the ability to make critical decisions regarding children, medical treatment and hospital visitation.

For more information about an agreement that would protect your interests and suite your goals, please contact Nicole Whyte or Vanessa Novak at (949) 221-1000.

As many litigators have no doubt noticed throughout Los Angeles County and beyond, Courtrooms are simply disappearing.  Departments are being consolidated, judges are being asked to take on more work, Court staffs are being shuffled around, and so forth.  While Los Angeles County has made some recent headlines (150 more workers laid off this month), this is far from an LA problem.  As our State continues to suffer massive budgetary and spending problems, the Court system is yet another target for the chopping block. 

What does this mean to you?  Well, it means you are not going to trial anytime soon.  Those eager to get their “day in Court” will simply have to wait longer and longer, and people need to be upfront about it. 

What do you do about it?  Lawyers, talk honestly with your clients.  Early resolution efforts are a must for every case.  No one wants litigation on their books, and reasonable early resolution of a claim benefits all parties.  Plaintiffs especially must take this into account.  While your case may be “worth” a high value - certainly to you, and perhaps under an evaluation of simpler times – your case is simply not worth anything until you get that judgment (if even then) or resolution, and these time factors must be taken into consideration.  Like a property owner who laments their home’s decline in value from but a few years ago; litigators too must recognize the realities of today and take the same into serious consideration. 

Both sides of the case must realize, consider and ultimately accept what’s going on here… your “justice” is on hold and its time to come to the table in good faith to seek a resolution outside of the clogged judicial system.  Those without means need to take advantage of free resolution programs; those with means need to attend private mediation.  When that fails, think about arbitration or other options.  You’re not getting to a jury anytime soon, so determine what your case is really worth now, and seek a resolution.  This problem will get worse, before it gets better.

Although we use the term loosely, what is a legal guardianship?  When may a guardianship be necessary, who can be a guardian, and what are the responsibilities and consequences of a guardianship?  How can a guardianship be terminated?

A guardianship is a legal process whereby an adult is given the legal authority and duty to care for and protect a child under 18 years old and/or the child’s assets or both.  A guardianship may be convenient or necessary when a child’s parents are away, unable or unwilling to care for the child, when the parents are deceased, or when parental custody would be detrimental.

A guardian’s fundamental responsibilities include providing food, clothing, shelter, education, medical and dental care for the child.  A guardianship allows the guardian to enroll the child in school or handle school matters, provide health insurance or handle medical issues, and receive assets or benefits on the child’s behalf.  The guardian possesses full legal and physical custody of the child and is responsible for all decisions relating to the child.

Under a guardianship, the child’s parents are no longer able to make decisions for the child as the parents’ rights are suspended.  Either the guardian or the court may grant visitation to the parents.  However, the child’s parents remain obligated to support the child financially and a guardian may obtain a court order from the parents to pay child support.

Relatives, family friends, or other interested persons may petition the court to be appointed a guardian.  In appointing a guardian, the court looks to the best interests of the child.  The court must give first preference to the person(s) in whose home the child has been living in a wholesome and stable environment, and then to any other person(s) deemed by the court to be suitable and able to provide adequate and proper care and guidance for the child.

A guardianship generally lasts until the child turns 18 years old, is adopted, marries, or dies.  It may also be terminated by the court if it is shown that the guardianship is no longer necessary or that termination is in the child’s best interests.  While a guardian, parent, or child may petition the court to terminate the guardianship, there must be an appropriate adult to take over the care and custody of the child before termination.

For more information about family law related issues, please contact Nicole Whyte or Vanessa Novak at (949) 221-1000.