Aerojet-General Corp. v. Transport Indemnity Insurance

The law firm of Lasky, Haas, Cohler & Munter (appellant) appeals from an order imposing monetary sanctions against it in connection with its representation of Aerojet-General Corporation and Cordova Chemical Company (collectively, Aerojet or plaintiffs) in the underlying action. The sanction order is based on the conduct of Scott DeVries, an attorney who at all times relevant to this action was a member of appellant law firm. DeVries was an innocent recipient of privileged documents prepared by counsel representing several of the defendants. The sanction order was based on the trial court’s conclusion that DeVries acted unethically and in bad faith in failing to immediately notify opposing counsel of his receipt of the documents, and using information contained therein to his own advantage.

Facts

This lawsuit by Aerojet against several of its liability insurers involves an insurance coverage dispute arising from widespread contamination of property at and near Aerojet’s Sacramento facility. (See Aerojet-General Corp. v. Superior Court (1989) 211 Cal.App.3d 216 [ 258 Cal.Rptr. 684 ].)

Sometime between July 1988 and August 1989, when all discovery was stayed because of a…