Opinion ID: 768122
Heading Depth: 3
Heading Rank: 2

Heading: The Reservation of Rights and Conflict of Interest

Text: 22 DeGrassi argues that a genuine issue of material fact exists over whether the terms on which the City offered to defend her created a conflict of interest between her and the City. Her argument is that the lawyers who prepared the City's offer to provide her a defense were the same lawyers who would have defended her. She sought discovery to show that other city employees were provided a defenseon different terms. Pointing to Government Code section 996.4, she asserts that the Legislature enacted this section to eliminate . . . possible conflict of interest and . . . to assure that deserving public employees will be defended at public expense. 23 But section 996.4 has no application here. That section applies when a public entity fails or refuses to provide a requested defense. See Cal. Gov't Code Ann.S 996.4 (West 1995 & Supp. 2000). In that situation, an employee who retains her own attorney is entitled to recover reasonable fees, costs and expenses necessarily incurred in the defense of the action. See id. Here, the City offered to provide DeGrassi with a defense on terms which, as the foregoing discussion shows, were consistent with the provisions of the Government Code. Because the City neither refused nor failed to provide DeGrassi with a defense, section 996.4 does not apply. 24 Moreover, there is no authority entitling DeGrassi to retain independent counsel on the strength of her unilateral assertion of a conflict of interest involving the City. Section 995.2(a)(3) permits the public entity to refuse to provide a defense if it determines that the defense would create a conflict of interest between the entity and the employee. See id. That section does not entitle the employee to independent counsel simply because she asserts the existence of a conflict of interest. In Laws v. County of San Diego, the Court of Appeal rejected county employees' claims that a conflict of interest existed between them and the county where the county's defense offer included a reservation of rights clause. See 267 Cal. Rptr. at 928. The court held that the county had no duty to provide independent counsel, and that the California Tort Claims Act provided adequate protection of the employees' defense and indemnification rights. See id.