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California Court of Appeal Reaffirms Common Interest Doctrine
Construction Practices Newsletter
Because there are numerous players involved in a construction project with varying interests (both common and adverse) including the owner, the design professionals, construction managers, contractors, subcontractors, and bonding companies, this California appellate court opinion has import to construction litigation. In Meza v. H. Muehlstein & Co. (Aug. 18, 2009) 176 Cal.App.4th 969, the court held that defense counsel communications constitute protected attorney work product if the communications pertain to the common interests of different defendants under the common interest doctrine. The court did so in the context of a motion to disqualify an attorney.
Teresa Meza's law firm hired an attorney who had been a member of the joint defense group in the Meza case. The court had dismissed the case but an appeal was pending in response to that dismissal. Prior to changing firms, the attorney had participated in joint defense communications, and exchanged information and documents with defense counsel to advance defendants' common interests. Upon learning that Meza's law firm had hired the attorney, the defendants moved to disqualify the law firm on the grounds that the attorney had information that was protected under the attorney work product privilege. Meza argued that defense counsel had waived the attorney work product privilege because defense counsel represented defendants with adverse interests in the litigation.
The trial court disagreed and granted the motion. The court of appeal affirmed and stated that the common interest doctrine protects defense counsel's communications when: (1) the disclosure relates to a common interest of the attorneys' respective clients; (2) the disclosing attorney has a reasonable expectation that the other attorneys will preserve confidentiality; and (3) the disclosure is reasonably necessary for the accomplishment of the purpose for which the disclosing attorney was consulted. An additional factor was that the case management order governing the case included an expectation that defense counsel could share work product related to issues of common interest without waiving the privilege.
In arriving at its holding, the court noted that there was no evidence that the attorney disclosed any work product to his new employer. Nonetheless, the court found that the mere appearance of impropriety was sufficient to impute knowledge to the entire firm, thereby resulting in its disqualification.
This reaffirmation of the common interest privilege in California has particular application to a number of litigation scenarios surrounding the construction industry. For example, a contractor and various subcontractors could have a common interest vis a vis litigation against a project owner with respect to allegations of delay, impact claims, or differing site conditions. Another example is the common interest between a contractor and its bonding company, be it either with respect to payment or performance bond claims.
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