FREMONT INDEMNITY COMPANY v. Fremont General Corp.

Fremont General Corporation (Fremont General), Fremont Compensation Insurance Group, Inc. (Insurance Group), and Fremont Indemnity Company (Indemnity) are related corporations each of which retained the law firm of Morgan, Lewis & Bockius (MLB) in the past. Indemnity, by and through the Insurance Commissioner as its liquidator, sued Fremont General and Insurance Group in two separate actions alleging the misappropriation of funds. MLB appeared as counsel for defendants in both actions. The superior court granted Indemnity’s motions to disqualify MLB as counsel for defendants. Defendants appeal the disqualification orders. Defendants contend the disqualification of counsel is not justified based on either the concurrent representation of parties with conflicting interests or the successive representation of adverse parties in substantially related matters. We agree and reverse the orders.

FACTUAL AND PROCEDURAL BACKGROUND

1. Factual Background

Indemnity is a wholly owned subsidiary of Insurance Group, which is a wholly owned subsidiary of Fremont General. MLB represented Fremont General and its subsidiaries for many years. MLB represented Indemnity in a legal…