State Compensation Insurance Fund v. WPS, Inc.

Introduction

Adam J. Telanoff, counsel for WPS, Inc., received copies of State Compensation Insurance Fund’s (State Fund) internal documents containing privileged attorney-client communications because State Fund’s outside lawyers inadvertently sent them along with other documents produced for use at trial. Adam Telanoff gave some of the privileged documents to an expert witness he consulted for the WPS matter. The expert witness then provided those documents to another lawyer who was adverse to and pursuing a different claim against State Fund. When State Fund’s counsel discovered the error and requested that the documents be returned, Adam Telanoff refused. The trial court found that such conduct was in bad faith and contrary to the ethical standards governing the legal profession. Accordingly, the trial court imposed monetary sanctions against appellants WPS, Inc., Telanoff & Telanoff, Adam Telanoff, and Ronald M. Telanoff, in favor of respondent State Fund pursuant to Code of Civil Procedure section 128.5. Appellants filed this appeal.

Although we agree in principle with the trial court, we vacate the award of sanctions because, as respondent concedes, there is no…