Case Title: Musser v. Provencher

Citation: 

Docket Number: S099938

State: california

Court: California Supreme Court

Date: 2002-06-27T00:00:00Z

Document:
1
Filed 6/27/02  (Publishers:  This opinion should precede the companion case, Beck v. Wecht.)
IN THE SUPREME COURT OF CALIFORNIA
SANDRA G. MUSSER,
)
)
Cross-complainant and Appellant,
)
)
S099938
v.
)
)
Ct.App. 1/2 A088934
DOUGLAS PROVENCHER et al.,
)
)
Marin County
Cross-Defendants and Respondents.
)
Super.Ct.No. 163107
                                                                                            )
Two questions are presented by this case.  The first question is whether
considerations of public policy require the adoption of a blanket rule barring
concurrent counsel or cocounsel from suing one another for indemnification of
legal malpractice damages.  We conclude public policy does not require the
adoption of such a blanket rule.  The second question is whether insurers of
attorneys sued for legal malpractice may be subrogated to the attorneys’
indemnity claims against concurrent counsel or cocounsel.  While legal
malpractice claims are not ordinarily assignable, we conclude the policy
considerations against assignment are not applicable here.
For the reasons stated, we affirm the judgment of the Court of Appeal,
which had reversed the judgment of the trial court granting a nonsuit.
2
 
I. 
FACTUAL AND PROCEDURAL BACKGROUND 1
Sandra G. Musser is an attorney who practices family law.  She represented
Pam Scott in divorce proceedings in 1992.  Musser filed a petition for spousal and
child support set to be heard on July 17, 1992.  At that hearing, Scott’s husband
declared that he had filed for bankruptcy and the support hearing was continued.
Musser arranged for [] Douglas Provencher, a bankruptcy specialist, to obtain
relief from the automatic stay imposed by the bankruptcy court.[2]  Provencher did
not obtain relief from the stay, but advised Musser that she could proceed with the
hearing to set support.  Provencher advised Musser that the support hearing would
not violate the stay if the court did not enter the support order until after the stay
was lifted.  This advice was contrary to well-established legal authority.  Musser
asserts Provencher did not even attempt to research the issue.  Acting on
Provencher’s advice, Musser continued with the hearing, although the family law
judge warned her she might be violating the automatic stay in so doing.
Thereafter, Mark Scott appealed the grant of spousal and child support and
in an unpublished opinion [], the Court of Appeal reversed the support awards on
the grounds they were void ab initio, as the hearing setting support violated the
automatic stay.
Facing punitive damages for violation of the automatic stay, Pam Scott
settled with her former husband for less than the original support order.  She then
                                                
1 
We adopt the Court of Appeal’s statement of the factual and procedural
background.  No party petitioned for rehearing to suggest that the Court of Appeal
omitted or misstated any material fact.  (Cal. Rules of Court, rule 29(b)(2).)
Empty brackets [] indicate deletions from the Court of Appeal opinion; brackets
with material enclosed (other than parallel citations) denote insertions or additions
by this court.
2 
[Elsewhere in its opinion, the Court of Appeal stated that “Musser hired
Provencher to assist with the bankruptcy aspect of the case . . . .”  However, in oral
argument before this court, counsel for Musser and for Provencher agreed that
Provencher had been retained directly by the client Pam Scott.]
3
sued Musser for malpractice and breach of contract.  Musser cross-complained
against Pam Scott for past-due attorney fees and costs.  Musser moved for
summary judgment on the ground that Scott had not sued the sole negligent party,
Provencher.  The court denied Musser’s summary judgment motion, finding
Musser was vicariously liable for Provencher’s negligence.
Musser requested that Provencher and his insurance carrier contribute to a
settlement offer to Pam Scott, but Provencher refused.  Musser then filed a cross-
complaint against Provencher for indemnity and settled the case with Pam Scott.
Mark Scott also filed a complaint against Musser for her part in the violation of
the automatic stay.  Musser again requested Provencher and his insurer to
contribute to a settlement but was again refused.  Musser then amended her cross-
complaint against Provencher to allege these additional damages, and settled with
Mark Scott.
The settlements paid to Pam and Mark Scott included $85,000 ($10,000 of
which was paid directly by Musser as her insurance policy deductible) and
$20,000 in waived legal fees and costs.  In addition, Musser and her insurer, Home
Insurance Company (hereafter Home), spent $62,000 in defending both
malpractice actions.  [Fn. omitted.]
Musser’s “First Amended Cross-Complaint for Indemnity” against
Provencher alleged three causes of action:  implied contractual indemnity,
equitable indemnity, and “tort of another.”  The first two sought as damages the
money paid by Musser and Home and the $20,000 in waived fees and costs.  [Fn.
omitted.]  The tort of another cause of action sought $62,000 expended in
defending the malpractice actions.  Provencher answered, raising several
affirmative defenses, including that Musser had violated Code of Civil Procedure
section 389 in failing to join Home as a party, since Home paid all but the $10,000
deductible toward the settlement, and that Musser had split her cause of action for
4
waived fees because Musser had failed to name Provencher in her cross-complaint
against Pam Scott for fees.  He also raised statute of limitations defenses.  In
November 1997, Musser moved for summary adjudication as to several of
Provencher’s affirmative defenses.  After hearing, Judge Gary W. Thomas ruled
that Home was “in essence” a party to the action, and was authorized to sue in
Musser’s name; that Musser had not split her cause of action, as the same cause of
action was not involved in Musser’s fee action against Pam Scott [as in] her
indemnity action against Provencher.  The court also ruled that the action against
Provencher was not barred by res judicata or collateral estoppel for the same
reason.  The judge also ruled in favor of Musser on the statute of limitations issue,
finding the indemnity causes of action within the limitations period and that the
“tort of another” cause of action was for malpractice, the statute of limitations for
which was triggered by discovery so that triable issues of fact remained as to when
Musser discovered her actual harm.
By January 1999, Provencher was represented by new counsel and the case
had been transferred to a new trial judge.  In pretrial motions in limine, Provencher
moved to bar Musser from seeking damages based on the settlements because
Home, and not Musser, had paid the settlements.  Provencher also urged that
Musser had waived her claim for fees in the settlement and that the dismissal with
prejudice following settlement barred Musser’s fee and cost claim.  Finally, he
argued that the action was in reality a legal malpractice action which could not be
assigned to Home.  Musser argued these issues had been decided in the summary
adjudication motion and that the new motion was therefore an impermissible
motion for reconsideration, made without new law or facts.
Judge Vernon F. Smith ruled that the action was in fact a legal malpractice
claim, which could not be assigned to the insurer.  Therefore, Musser could not
introduce evidence of the settlements paid by Home.  Judge Smith further found
5
that Musser could not introduce evidence of fees and costs she had waived when
she settled with Pam Scott and that the dismissal with prejudice following the
settlement included those waived fees and costs.  These rulings effectively struck
all damage claims, except for the $10,000 deductible paid by Musser personally.
Thereafter, on April 29, 1999, the trial court granted a motion for nonsuit as to the
$10,000 deductible claim, preventing that damage claim from being presented to
the jury.  On October 26, 1999, following its grant of nonsuit on all Musser’s
claims, the court entered judgment against Musser and in favor of Provencher on
Musser’s cross-complaint.  This timely appeal followed.
[The Court of Appeal rev
ersed the judgment and remanded the matter for
further proceedings.  The court held Musser was not barred from seeking
indemnification from Provencher.  The court also held the trial court erred in
ruling that Musser’s malpractice insurer could not pursue a subrogation claim
against Provencher.  The court further held the trial court erred in dismissing that
portion of Musser’s action in which she sought recovery from Provencher of fees
owed her by the client, notwithstanding Musser’s settlement with the client.
Finally, the court held the trial court erred in granting a nonsuit as to Musser’s
claim for the insurance policy deductible amount that she paid that was not
subrogated or assigned to her malpractice insurer.]
 
II. 
DISCUSSION
Again, we consider two questions in this case.  The central one is whether
concurrent counsel or cocounsel should be permitted to sue one another for
indemnification of legal malpractice damages.  Assuming that, under the
circumstances of this case, Musser should be permitted to sue her concurrent
counsel, Provencher, for indemnification of malpractice damages, the question
then arises whether Home, Musser’s insurer, may be subrogated to her indemnity
claim against Provencher.  We turn, first, to the indemnification question.
6
A. 
Whether Concurrent Counsel or Cocounsel May Sue One Another for
Indemnification of Malpractice Damages
In American Motorcycle Assn. v. Superior Court (1978) 20 Cal.3d 578
(AMA), this court held that, in general, one cotortfeasor may obtain partial
equitable indemnity from another on a comparative fault basis.  “[W]e concur with
Dean Prosser’s observation in a related context that ‘[t]here is obvious lack of
sense and justice in a rule which permits the entire burden of a loss, for which two
defendants were . . . unintentionally responsible, to be shouldered onto one alone,
. . . while the latter goes scot free.’  (Prosser, Law of Torts [(4th ed. 1971)] § 50,
p. 307.)  From the crude all-or-nothing rule of traditional indemnity doctrine, and
the similarly inflexible per capita division of the narrowly circumscribed
contribution statute, we have progressed to the more refined stage of permitting
the jury to apportion liability in accordance with the tortfeasors’ comparative fault.
[¶]  Accordingly, we hold that under the common law equitable indemnity
doctrine a concurrent tortfeasor may obtain partial indemnity from cotortfeasors
on a comparative fault basis.”  (AMA, at pp. 607-608.)
“Our decision in AMA expressly acknowledged ‘a number of significant
exceptions to th[e] general rule’ of indemnity, including immunity for good faith
settlements and exclusivity of workers’ compensation.  (AMA, supra, 20 Cal.3d at
p. 607, fn. 9.)  Indeed, at least one subsequent appellate court has concluded that
‘AMA makes not a rule of general application but a rule riddled with exceptions.
Partial indemnity is permitted only in appropriate cases.’  [Citations.]  Thus,
irrespective of the equities between or among multiple tortfeasors, the right is
subject to qualification; and countervailing considerations may limit recovery.
‘As suggested by Dean Prosser, the granting of indemnity in any situation
represents a judicial choice of policy’ [citation]; and courts have long recognized
that ‘the doctrine is not available where it would operate against public policy.
7
[Citation.]’ ”  (Western Steamship Lines, Inc. v. San Pedro Peninsula Hospital
(1994) 8 Cal.4th 100, 109-110, fn. omitted (Western Steamship).)
In the footnote in Western Steamship that supports the statement that
“courts have long recognized that ‘the doctrine [of equitable indemnity] is not
available where it would operate against public policy,’ ” we listed, among others,
several cases in which indemnification for malpractice was barred where a
predecessor attorney was seeking indemnification from his successor.  (Western
Steamship, supra, 8 Cal.4th at p. 110 & fn. 7.)  In such cases, which we will refer
to as predecessor/successor cases, the California Courts of Appeal, with one much
criticized exception, have barred indemnification.  (See Held v. Arant (1977) 67
Cal.App.3d 748 (Held); Gibson, Dunn & Crutcher v. Superior Court (1979) 94
Cal.App.3d 347 (Gibson, Dunn); Goldfisher v. Superior Court (1982) 133
Cal.App.3d 12 (Goldfisher); Holland v. Thacher (1988) 199 Cal.App.3d 924
(Holland); Austin v. Superior Court (1999) 72 Cal.App.4th 1126; but see Parker v.
Morton (1981) 117 Cal.App.3d 751.)
The Courts of Appeal have given various reasons for barring
indemnification in predecessor/successor cases, and they have not always
explained their reasoning fully, but an examination of their opinions reveals two
fundamental policy considerations.  The first policy consideration is avoiding
conflicts of interest between attorney and client:  The threat of an indemnification
action would arguably create a conflict of interest between the successor attorney
and the client because the greater the award the successor attorney managed to
obtain for the client in the malpractice action, the greater the exposure to the
predecessor attorney in the indemnification action.  (See, e.g., Held, supra, 67
Cal.App.3d at p. 752.)  The second policy consideration is protecting
confidentiality of attorney-client communications:  In order to defend against an
indemnification action, the successor attorney might be tempted to compromise
8
the confidentiality of communications with the client.  (See, e.g., Goldfisher,
supra, 133 Cal.App.3d at p. 22.)3
The question we must consider, therefore, is whether allowing equitable
indemnity would be contrary to public policy when one concurrent counsel or
cocounsel sues another.
Claims made by concurrent counsel or cocounsel against one another for
damages arising from their joint representation of a mutual client have been the
subject of four published opinions by the Court of Appeal.
Equitable indemnity was the theory upon which relief was sought in two of
the four cases, and in both of those cases relief was barred.  (Kroll & Tract v.
Paris & Paris (1999) 72 Cal.App.4th 1537 (Kroll & Tract); Shaffery v. Wilson,
Elser, Moskowitz, Edelman & Dicker (2000) 82 Cal.App.4th 768 (Shaffery).)
Breach of fiduciary duty was the theory in the other two cases.  (Joseph A.
Saunders, P.C. v. Weissburg & Aronson (1999) 74 Cal.App.4th 869; Pollack v.
Lytle (1981) 120 Cal.App.3d 931.)  In those two cases, the underlying premise—
that concurrent counsel or cocounsel owe one another a fiduciary duty not to
handle their mutual client’s case in such a way as to reduce or eliminate their
anticipated attorney fees—was accepted by one court (Pollack) and rejected by the
other (Saunders).
                                                
3 
A third policy consideration identified by some courts is protecting the
right of clients freely to choose their attorneys:  The threat of an indemnification
action might deter the successor attorney from representing the client in the
malpractice action because the successor attorney would be handicapped in
defending against the indemnification claim by his duty to maintain the
confidentiality of the client communications.  (See, e.g., Holland, supra, 199
Cal.App.3d at pp. 930-931.)  However, the few courts that invoked this policy did
not accord it as much weight as the other two policies.  (See id. at p. 930 [“may
not be a controlling consideration”]; Gibson, Dunn, supra, 94 Cal.App.3d at p. 352
[not “controlling”; of “secondary importance”].)
9
In a companion case, Beck v. Wecht (June 27, 2002, S099665) ___ Cal.4th
___, we consider the latter question—whether one concurrent counsel or
cocounsel may sue another for breach of fiduciary duty on the theory that the
latter’s malpractice in handling their mutual client’s case reduced or eliminated the
fees the former expected to realize from the representation.  In this case, we will
confine ourselves to the question whether concurrent counsel or cocounsel may
sue one another for indemnification of malpractice damages.
In Kroll & Tract, supra, 72 Cal.App.4th 1537, the client, who had been
jointly represented by insurance counsel (Kroll & Tract) and Cumis4 counsel (Paris
& Paris), sued insurance counsel for malpractice, and insurance counsel cross-
complained against Cumis counsel for equitable indemnity.  Insurance counsel
argued that the policy grounds on which equitable indemnity is barred in
predecessor/successor cases were inapplicable because (1) the two lawyers had
shared responsibility in the underlying action in which the client claimed the
malpractice occurred and (2) neither of the lawyers was representing the client in
the malpractice action.  (Id. at p. 1542.)  The Court of Appeal rejected the
argument, although it suggested that the question whether a claim for equitable
indemnity should be allowed in concurrent counsel or cocounsel cases should be
decided by examining, on a case-by-case basis, whether the policy considerations
for barring such a claim applied.  (Id. at pp. 1542-1545.)
Under the facts presented in that case, the Court of Appeal held, the policy
considerations for barring an indemnity claim did apply.  (Kroll & Tract, supra, 72
Cal.App.4th at p. 1542.)  Although the two counsel “shared the common goal of
defending [the client] in the underlying lawsuit,” the Court of Appeal observed,
                                                
4 
See San Diego Federal Credit Union v. Cumis Ins. Society, Inc. (1984) 162
Cal.App.3d 358 (Cumis).
10
“they filled separate roles.”  (Ibid.)  Kroll & Tract was hired by the insurer, who
provided a defense under a reservation of rights, while Paris & Paris was the
client’s personal counsel and remained as Cumis counsel.  “The insurance defense
attorney is placed in a position of conflict . . . when issues of coverage are asserted
by the insurer through a reservation of rights.  Addressing this problem, the court
in San Diego Federal Credit Union v. Cumis Ins. Society, Inc., supra, 162
Cal.App3d 358, held that an insurance company must pay for independent counsel
for its insured when there are divergent interests of the insured and insurer brought
about by the insurer’s reservation of rights to deny coverage under an insurance
policy.  This holding was codified in Civil Code section 2860 in 1987.  [¶]  The
Cumis doctrine requires ‘complete independence of counsel’ [citation], who
represents ‘solely the insured’ [citation].  ‘Since it is almost unavoidable that, in
the course of investigating and preparing the insured’s defense to the third party’s
action, the insured’s attorney will come across information relevant to a coverage
or similar issue, it is quite difficult for an attorney beholden to the insurer to
represent the insured where the insurer is reserving its rights regarding coverage
. . . .’  [Citation.]”  (Kroll & Tract, at pp. 1542-1543.)  “[T]he issues of undivided
loyalty, self-protective tendencies, and the preservation of the attorney-client
privilege,” the Kroll & Tract court concluded, “remain under these
circumstances.”  (Id. at p. 1542.)
The Kroll & Tract court then contrasted concurrent representation cases
with Crouse v. Brobeck, Phleger & Harrison (1998) 67 Cal.App.4th 1509
(Crouse), a case in which the policy considerations barring indemnification in
predecessor/successor cases were held inapplicable to an indemnity claim by a
successor attorney against his predecessor.  (Kroll & Tract, supra, 72 Cal.App.4th
at p. 1544, fn. 4.)  The Crouse court had found that “[t]he former attorney is not
subject to any conflict of interest and has no continuing privileged
11
communications or work product to protect.”  (Crouse, at pp. 1545-1546.)  The
Kroll & Tract court entered a reservation:  “We are not prepared to agree with the
Crouse court’s sweeping statement for all purposes.”  (Kroll & Tract, at p. 1544,
fn. 4.)  However, Kroll & Tract continued, “the particular facts in Crouse showed
there were no conflicting duties during the former attorney’s representation of the
dissatisfied client; thus, the court’s result was correct.”  (Ibid.)
With regard to concern that allowing the cross-complaint might lead to
breach of client confidences, Kroll & Tract contended the commencement of the
malpractice action as to one attorney operated as a waiver of the privilege as to
both attorneys regarding communications relevant to the joint representation.
“But that,” the Court of Appeal observed, “is not the law.  The client is the holder
of the attorney-client privilege (Evid. Code, § 952), and [the client] expressly
preserved the privilege as to Paris & Paris by choosing not to sue it for
malpractice.  [Citation.]  If the indemnity action were allowed, Paris & Paris
would be unable to defend itself to the extent that its actions depended on client
communications.”  (Kroll & Tract, supra, 72 Cal.App.4th at p. 1544.)  “Where
there is doubt about [the application of the attorney-client privilege], we will
construe it liberally.  [Citation.]”  (Id. at p. 1545.)
In Shaffery, supra, 82 Cal.App.4th 768, an insurer filed a malpractice action
against an attorney whom the insurer had hired to represent the insured in an
employee’s action brought against the insured for sexual harassment, and the
attorney filed a cross-complaint for equitable indemnity against the law firm hired
by the insurer to act as monitoring counsel in the underlying action.  After
reviewing the cases, the Court of Appeal barred indemnity.  “In substance if not in
form, we find the case before us analytically indistinguishable from [Kroll &
Tract], and conclude the result must be the same.”  (Shaffery, at p. 778.)
12
The Court of Appeal here agreed with the suggestion made in Kroll &
Tract that the question whether a claim for indemnity is allowable in concurrent
counsel or cocounsel cases should be decided on a case-by-case basis (Kroll &
Tract, supra, 72 Cal.App.4th at pp. 1542-1545), and the court concluded that the
public policy considerations underlying the majority rule barring indemnification
in predecessor/successor cases are not implicated by the facts of this particular
case.  We agree with the Court of Appeal on both points.
Again, one of the two policy considerations that led courts to prohibit
indemnification claims brought by a predecessor attorney against a successor
attorney was that such a claim could create a conflict of interest for the client’s
new attorney.  The conflict of interest we are concerned about is not a conflict
between an attorney’s duty to the client and the attorney’s purported duty to
concurrent counsel or cocounsel, as we make clear in the companion case, Beck v.
Wecht, supra, __ Cal.4th __.  Rather, the conflict of concern is a conflict between
an attorney’s duty to the client and the attorney’s self-interest.  Provencher gives
us no reason, and we have not discovered any reason ourselves, to believe that an
attorney’s self-interest will interfere with loyalty to the client just because the
attorney, as a joint tortfeasor, may face an indemnification claim if the client sues
the attorney’s concurrent counsel or cocounsel for malpractice.
The other relevant policy is protecting the confidentiality of attorney-client
communications.  The concern is that the law firm from which indemnification is
sought may be unable to defend itself without revealing privileged client
communications.  (Kroll & Tract, supra, 72 Cal.App.4th at p. 1544.)  In Kroll &
Tract, the Court of Appeal held that by choosing not to sue the law firm that was
the subject of the indemnification claim, the client “expressly preserved the
privilege” as to that firm.  (Ibid.)  That is not true in this case.  As the Court of
Appeal observed, Pam Scott, in her settlement with Musser, expressly waived her
13
attorney-client privilege with respect to Provencher’s representation of her in the
bankruptcy portion of the dissolution action.
In conclusion, because the policy considerations that underlie the rule
barring indemnification claims in predecessor/successor cases do not obtain in this
concurrent counsel case, it would be unjust to deny Musser an opportunity to seek
indemnity or contribution from Provencher when Musser has been sued by Pam
Scott for damages allegedly attributable to Provencher’s tortious conduct.
B. 
Whether Home, Musser’s Insurer, May Be Subrogated to Her
Indemnity Claim Against Provencher
The trial court ruled against Home on the ground that legal malpractice
claims are not assignable (1 Mallen & Smith, Legal Malpractice (5th ed. 2000)
§ 7.12, pp. 720-721, and cases cited at fn. 12) and that subrogation is an implied
assignment (Fifield Manor v. Finston (1960) 54 Cal.2d 632, 640).
While conceding that legal malpractice claims are generally not assignable
in this state, the Court of Appeal found this case distinguishable on the ground that
the insurer “is not seeking to succeed to the rights of the client against counsel, but
to its insured attorney’s right to seek indemnity from counsel for the proportional
fault of the latter.”  “The rule against assignability and subrogation of legal
malpractice actions,” the Court of Appeal concluded, “should be contained by the
context in which the rule arose—that of a third party (including the client’s
insurer) attempting to succeed to the client’s legal malpractice action against the
client’s former attorney.”
We agree.  As the Court of Appeal pointed out, Goodley v. Wank & Wank,
Inc. (1976) 62 Cal.App.3d 389 (Goodley) “is the seminal case which articulates
the policy considerations underlying the rule [against the assignment of legal
malpractice actions], which relate to the uniquely personal nature of the attorney-
client relationship.”
14
In Goodley, the defendant attorneys allegedly committed malpractice in a
divorce case, their client assigned her malpractice claim to the plaintiff, and “[t]he
crux of the issue” before the Court of Appeal was “whether a cause of action for
legal malpractice is assignable.”  (Goodley, supra, 62 Cal.App.3d at p. 393, fn.
omitted.)  Important policy reasons, the Goodley court held, dictated against
assignment of the client’s malpractice claim.  “It is the unique quality of legal
services, the personal nature of the attorney’s duty to the client and the
confidentiality of the attorney-client relationship that invoke public policy
considerations in our conclusion that malpractice claims should not be subject to
assignment.”  (Id. at p. 397.)
“ ‘Goodley noted the attorney owes a duty of undivided loyalty and
diligence in representing the client.  Such duty is personally owed by the attorney
and may not be delegated to others, and is owed solely to the client, [the
attorney’s] one intended beneficiary.  Assignability would encourage
commercialization of claims, and would force attorneys to defend themselves
against persons to whom no duty was ever owed.  Moreover, the legal profession
is debased by such commercialization, because it could (1) encourage unjustified
lawsuits; (2) generate increased malpractice lawsuits, burdening the profession,
the court system and (to the extent malpractice premiums would inevitably rise
and be passed to the consumers) the public; and (3) promote champerty.
[Citation.]  Assignability could conceivably reduce the public’s access to legal
services, since the ever present threat of assignment by irresponsible clients
(seeking quick financial gain) could cause lawyers to evaluate more selectively the
desirability of representing a particular client.  [Citation.]’  (Kracht v. Perrin,
Gartland & Doyle [(1990)] 219 Cal.App.3d [1019,] 1023-1024.)”  (Fireman’s
Fund Ins. Co. v. McDonald, Hecht & Solberg (1994) 30 Cal.App.4th 1373, 1379
(Fireman’s Fund).)
15
“The policy considerations underlying the Goodley decision usually have
been persuasive for the courts that have considered the issue.”  (1 Mallen & Smith,
supra, § 7.12, p. 720, fn. omitted.)
As the Court of Appeal here observed, “The foregoing policy concerns
underpin the rule prohibiting a third party from succeeding to the client’s cause of
action for legal malpractice against his or her former attorney.  They have no
application here, where the insurer is not seeking to succeed to the rights of the
client against counsel, but to its insured attorney’s right to seek indemnity from
[concurrent counsel] for the proportionate fault of the latter.”
Provencher relies upon Fireman’s Fund, supra, 30 Cal.App.4th 1373, in
support of his argument that the rule against subrogation of legal malpractice
claims applies here.  In Fireman’s Fund, insurers paid more than $10 million to
settle a lawsuit against their developer insureds by homeowners alleging
misrepresentations in the sales of residential units.  The developer insureds then
filed a legal malpractice case against their attorneys for causing those
representations to be made.  Later, the insurers joined the malpractice lawsuit as
plaintiffs under a theory of subrogation.  (Id. at p. 1376.)  The Court of Appeal
affirmed the dismissal of the insurers as plaintiffs, holding that legal malpractice
claims are not assignable or subject to subrogation absent express statutory
authorization.  (Id. at p. 1384.)
The insurer subrogee argued that its “interests were ‘aligned’ or ‘virtually
identical’ with (and indeed ‘derivative’ of) the [insured client’s] interests against
the attorney.”  (Fireman’s Fund, supra, 30 Cal.App.4th at p. 1380.)
Acknowledging that the insurer’s policy arguments “have substance,” the
Fireman’s Fund court nevertheless pointed out that the prohibition on assignment
was “ ‘well settled’ ” (id. at p. 1381) and explained that “we are not the proper
tribunal to depart from established law” (id. at p. 1380).  “California courts have
16
consistently held legal malpractice claims are nonassignable to protect the
integrity of the uniquely personal and confidential attorney-client relationship.
[Citations.]  Further, under principles of stare decisis we are bound to follow the
Supreme Court’s holding in Fifield Manor v. Finston, supra, 54 Cal.2d 632, that
absent express statutory authorization nonassignable claims are not subject to
subrogation.  (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d
450, 455.)”  (Fireman’s Fund, at p. 1383, fn. omitted.)
As the Court of Appeal here observed, however, the “critical distinction
from Fireman’s Fund is that Musser (the party to whose rights Home is
subrogating) is not the client.”
In summary, the policy considerations underlying the rule against
assignment and subrogation of legal malpractice claims do not obtain in this case,
where the subrogor is not the client, but the defendant attorney held liable to the
client for negligence at least partially attributable to concurrent counsel.
 
III. 
DISPOSITION
The judgment of the Court of Appeal is affirmed.
BROWN, J.
WE CONCUR:
GEORGE, C.J.
BAXTER, J.
WERDEGAR, J.
CHIN, J.
MORENO, J.
1
CONCURRING OPINION BY KENNARD, J.
I agree with these two holdings by the majority:  (1)  There is no legal
barrier precluding concurrent counsel or cocounsel from suing one another for
indemnification of damages incurred in a legal malpractice action, and (2) the
insurer of the attorney sued for legal malpractice may be subrogated to the
attorney’s indemnity claims against concurrent counsel or cocounsel.
I express no view, however, on the scope of indemnity between predecessor
and successor counsel (see maj. opn., ante, at p. 7) because that is not an issue in
this case.  Nor do I express a view on whether a client suing one of the client’s
attorneys but not the other has waived the attorney-client privilege as to both
attorneys or only as to the attorney being sued.  (Id. at p. 11.)  This issue too is not
presented here.  I would leave resolution of these difficult questions for another
day when, having been properly raised, they require resolution.
KENNARD, J.
I CONCUR:
BAXTER, J.
1
CONCURRING OPINION BY BROWN, J.
I agree, of course, that the considerations of public policy that have led a
majority of the Courts of Appeal to bar indemnification claims in the
predecessor/successor cases—avoiding conflicts of interest between attorney and
client and protecting the confidentiality of attorney-client communications—do
not require the adoption of a blanket rule barring indemnification claims in
cocounsel cases.  However, out of a concern for judicial economy, I would have
preferred to have adopted such a blanket rule.
The case-by-case approach, which we adopt in the majority opinion, may
result in more justice for lawyers, but less for the general public, because we will
continue to squander scarce judicial resources, at both the trial and appellate level,
on these cases.  The exorbitant number of published Court of Appeal opinions
devoted to them was tallied in a puckish footnote by Justice Miriam A. Vogel.
“This opinion, our fourth, means we now have the lead for the number of published
opinions on this issue.  Division One of the Fourth District is second with three
published opinions.  Division Three of the Fourth District is third with two
published opinions.  Divisions Two, Four and Seven of our District, Division Two
of the Fourth District, and Divisions Two and Three of the First District, are all tied
for fourth place with one opinion each.  We like to keep track of these things.”
(Shaffery v. Wilson, Elser, Moskowitz, Edelman & Dicker (2000) 82 Cal.App.4th
768, 778, fn. 2, italics added.)  What will now be the critical issue in cocounsel
cases where indemnification is sought for malpractice damages—whether
the policy of protecting attorney-client confidentiality would be served by barring
indemnification under the circumstances of the particular case—is so fact bound
2
that minitrials will be required, the losing party will always appeal, and the resulting
appellate decisions will provide little guidance.  The one certainty is that the
adoption of the case-by-case approach will afford other divisions of the Court of
Appeal ample opportunity to overtake Division One of the Second District in the
race for the number of published opinions devoted to these questions.
BROWN, J.
3
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Musser v. Provencher
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 90 Cal.App.4th 545
Rehearing Granted
__________________________________________________________________________________
Opinion No. S99938
Date Filed: June 27, 2002
__________________________________________________________________________________
Court: Superior
County: Marin
Judge: Vernon F. Smith
__________________________________________________________________________________
Attorneys for Appellant:
Murphy, Pearson, Bradley & Feeney, James A. Murphy, Harlan B. Watkins  and Alexander J. Berline for
Cross-complainant and Appellant.
Stephan, Oringher, Richman & Theodora, Harry W. R Chamberlain II, Robert M. Dato and Brian P.
Barrow for California Society of Certified Public Accountants as Amicus Curiae on behalf of Cross-
complainant and Appellant.
__________________________________________________________________________________
Attorneys for  Respondent:
Lanahan & Reilley, Christopher R Miller, Cheryl P. Martinsen and Noreen M. Evans for Cross-defendants
and Respondents.
4
Counsel who argued in Supreme Court (not intended for publication with opinion):
James A. Murphy
Murphy, Pearson, Bradley & Feeney
88 Kearny Street, 10th Floor
San Francisco, CA  94108-5530
(415) 788-1900
Harry W. R. Chamberlain II
Stephan, Oringher, Richman & Theodora
2029 Century Park East, 6th Floor
Los Angeles, CA  90067
(310) 557-2009
Noreen M. Evans
Lanahan & Reilley
3558 Round Barn Boulevard, Suite 300
Santa Rosa, CA  95403
(707) 524-4200