Houston General Insurance v. Superior Court

*961 Opinion

In this discovery matter transferred to us by the Supreme Court, petitioner, Houston General Insurance Company, defendant in an action for damages for bad faith refusal to defend its insured (hereafter Houston), seeks a writ of mandate to compel respondent court to vacate an order requiring the production of excised portions of its claims file designated as a “file activity log” and directing Houston’s representatives and attorney to be further deposed respecting matters disclosed by the log. The excised portions of the log allegedly contain notes of three telephone conversations had on October 19, 1977, between Houston’s representative DeGuzman in Ft. Worth, Texas, and Houston’s West Coast counsel Arnold in San Francisco concerning Houston’s obligation to defend an action filed against its insured, Bevco Construction Company, by real party in interest, James Thomsen, plaintiff in this action (hereafter Thomsen). We have concluded that to compel disclosure of the excised portions of the log would violate Houston’s lawyer-client privilege, 1 and that Houston’s petition must be granted.

In 1974, Thomsen was injured in an accident in his home, allegedly due to the…

I dissent.

The heart of petitioner’s argument is its claim that during the critical period, October 18 and 19, 1977, its attorney-client relationship with Ernest Arnold, Esq., was exclusive. Petitioner, the insurer, claims this exclusivity shields certain parts of the petitioner’s “file activity log” from discovery by the real party in interest, successor to the insured.

The trial court, on the other hand, held that this attorney-client relationship was tripartite including petitioner (Houston Insurance Company), Attorney Arnold, and the insured. There is substantial evidence to support this view.

The already known and discovered portions of insurer’s “file activity log” indicate: (1) employees of petitioner met and “agreed that coverage exist [sic] in this loss”; (2) insurer’s employee notation: “appears we may be involved and coverage of this loss exist.. .”; (3) a description of the injuries claimed; (4) assignment of case to Attorney Arnold; (5) ba *968 sic facts of case discussed; and (6) petitioner’s potential portion, $33,000, of the $105,000 suggested settlement was noted and reserved. Further, petitioner discussed with insured’s initial attorney, Dwight Bishop, both…

John F. MacGregor for Real Party in Interest.

OPINION

TAYLOR, P.J.

In this discovery matter transferred to us by the Supreme Court, petitioner, Houston General Insurance Company, defendant in an action for damages for bad faith refusal to defend its insured (hereafter Houston), seeks a writ of mandate to compel respondent court to vacate an order requiring the production of excised portions of its claims file designated as a "file activity log" and directing Houston's representatives and attorney to be further deposed respecting matters disclosed by the log. The excised portions of the log allegedly contain notes of three telephone conversations had on October 19, 1977, between Houston's representative DeGuzman in Ft. Worth, Texas, and Houston's West Coast counsel Arnold in San Francisco concerning Houston's obligation to defend an action filed against its insured, Bevco Construction Company, by real party in interest, James Thomsen, plaintiff in this action (hereafter Thomsen). We have concluded that to compel disclosure of the excised portions of the log would violate Houston's lawyer-client privilege, [1] and that Houston's petition must be granted.

In 1974, Thomsen was…