Court Opinion

ID: 9750638
Source: CourtListenerOpinion
Date Created: 2023-08-28 15:14:58.54269+00
Date Added: 2024-06-11T07:26:15.482432
License: Public Domain

DIBIASO, Acting P. J., Concurring.
My vote to reverse is registered with reluctance. I find persuasive many of the reasons advanced in favor of the *1436principle that the relationship between an insurer and counsel selected to defend the insured is not one of attorney-client. (See, e.g., Pepper, Applying the Fundamental of Lawyers’ Ethics to Insurance Defense Practice (1997) 4 Conn. Ins. L.J. 27; Silver, Does Insurance Defense Counsel Represent the Company or the Insured? (1994) 72 Tex. L.Rev. 1583; O’Malley, Ethics Principles for the Insurer, the Insured, and Defense Counsel: The Eternal Triangle Reformed (1991) 66 Tul. L.Rev. 511, 512; Winiarski, Walking the Fine Line: A Defense Counsel’s Perspective (1993) 28 Tort & Ins. L.J. 596, 597; see also Atlanta Intern. Ins. Co. v. Bell (1991) 438 Mich. 512 [475 N.W.2d 294].) However, the adherence by the courts of this state to the contrary rule, in a variety of contexts, has been of long-standing consistence. It is thus for the Supreme Court or the Legislature, and not for this court, to overturn this history of authority, if it is to be overturned.
In addition, I am not convinced the concept of implied consent is of relevance solely to cases involving successive representation. At least one court (In re Lee G. (1991) 1 Cal.App.4th 17, 27 [1 Cal.Rptr.2d 375]) has not foreclosed the application of the theory where concurrent representation is in issue. I realize that a federal district court, applying its view of California law, has held that implied consent (based upon inaction and delay) may be raised only when the representation is successive (Blecher & Collins, P. C. v. Northwest Airlines, Inc. (C.D.Cal. 1994) 858 F.Supp. 1442, 1455), but I would be prepared in a proper case to critically examine the district court’s conclusion.
However, the subject is moot here because the record is simply insufficient to prove that Federal was aware McCormick was acting on behalf of State Farm when it referred the Pinion and other cases to McCormick (Pinion v. Clark-Stebbins, Inc. (Super. Ct. Tulare County, 1996, No. 96177104)). There is no evidence that any responsible official of Federal had actual knowledge that McCormick was representing State Farm in the coverage dispute at any time before State Farm brought its action against Federal. There is also no evidence to support the imputation to Federal under agency law of the knowledge possessed by Federal’s counsel in the coverage matter, because the facts do not establish the necessary duty on the part of counsel to inform Federal of the identity of the law firm representing State Farm. (Rest.2d Agency, §§ 272, 275; see generally, 2 Witkin, Summary of Cal. Law (9th ed. 1987) Agency and Employment, § 99, pp. 97-98, § 101, pp. 98-99.)1
Moreover, even assuming actual or imputed knowledge on the part of Federal, I do not find in this record a basis for a conclusion that Federal *1437impliedly consented to the conflict by reason of inaction and delay, because extreme prejudice is not demonstrated by the evidence relevant to the motion. (In re Complex Asbestos Litigation (1991) 232 Cal.App.3d 572, 599-600 [283 Cal.Rptr. 732].) At most, State Farm has shown that granting the disqualification motion will hamper the progress of its lawsuit against Federal, deprive it of knowledgeable, experienced counsel, and cause it to incur the expenses of engaging and educating new counsel. These effects do not prove extreme prejudice. (Ibid.)
Respondent’s petition for review by the Supreme Court was denied September 29, 1999. Werdegar, J., and Chin, J., were of the opinion that the petition should be granted.

This is not to say the record is silent with respect to purposeful affirmative conduct by Federal. To the contrary, I might find it difficult to join the majority opinion if the trial court’s *1437decision could be sustained under a standard of appellate review that required a “hunch” rather than substantial evidence. The facts in some of the declarations produced in connection with the motion give off a whiff of a suggestion that Federal’s reference of the injury cases to McCormick was a step in a plan calculated to put McCormick in the position to be disqualified as counsel for State Farm, but an inference of evidentiary value to such effect cannot be drawn from these facts. Therefore, the hypothesis that Federal consented to the conflict by engaging McCormick with knowledge of McCormick’s representation of State Farm, so as to gain an advantage in connection with the coverage dispute, is on the record only a speculative scenario.