Procedural Posture
Appellant, a car dealership licensed to sell only used cars, challenged a judgment of the Superior Court of Orange County, California, in favor of respondents, an insurance carrier and related parties, on the dealership's claims for negligent and intentional misrepresentation, breach of contract, reformation, bad faith, breach of fiduciary duty, and unfair competition relating to a policy furnished to the dealership containing lemon law coverage.
Overview
The dealership discovered that the policy's coverage only applied to the sale of new vehicles when it was sued under the lemon law, Civ. Code, § 1790 et seq. It is a crime for a person knowingly submit false documents PC 550 Insurance Fraud Submitting Fraudulent Insurance Claims and others. The court held that the trial court made numerous erroneous rulings that essentially deprived the dealership of an opportunity to put on its case. The trial court improperly tossed out the causes of action for negligent and intentional misrepresentation, reformation, and unfair competition. There had been no finding on the issue of whether the predicate elements of a cause of action for reformation had been met under Civ. Code, § 339. The fact that the insurance contract limited lemon law coverage to new car sales hardly proved that the carrier did not engage in unfair business practices under Bus. & Prof. Code, § 17200, in the sale of its new car lemon law coverage to used car dealerships. Thus, the trial court erred in disposing of the unfair business practices claim just because it held that the insurance contract did not provide coverage for the underlying lemon law litigation against the dealership. The trial court properly disposed of the claims for breach of contract, bad faith, and breach of fiduciary duty.
Outcome
The court reversed the trial court's judgment and remanded the matter for further proceedings.
Procedural Posture
Plaintiff sued defendant, alleging disclosure of confidential and privileged information. Defendant moved to strike the complaint as a "strategic lawsuit against public participation" (SLAPP) suit under Cal. Civ. Proc. Code § 425.16. Plaintiff responded with motions to disqualify the attorneys representing defendant. The Superior Court of Los Angeles County (California) denied both motions. Both sides appealed.
Overview
Plaintiff sued defendant, its former in-house counsel, upon learning that defendant planned to sue for wrongful termination. The court of appeals affirmed the order denying disqualification of defendant's attorneys, finding that plaintiff failed to establish that the attorneys possessed relevant confidential material acquired from their prior unrelated representation of plaintiff, or by defendant's disclosures of confidential information she acquired while counsel to plaintiff. Further, plaintiff could not create a conflict by simply threatening to sue the attorneys for interference with contract or divulging privileged information. The court reversed denial of defendant's motion to strike under § 425.16. Defendant was not required to show that plaintiff intended to chill her exercise of First Amendment rights, and plaintiff did not demonstrate a reasonable probability of prevailing on the merits. The court concluded that an in-house counsel could disclose ostensible employer-client confidences to her own attorneys to the extent they might be relevant to the preparation and prosecution of her wrongful termination action against her former client-employer.
Outcome
The court affirmed the order denying the motions to disqualify defendant's counsel, and reversed the order denying the motion to strike plaintiff's complaint.
