Zurich American Insurance v. Superior Court

Zurich American Insurance Co. (Zurich) contends the trial court and the discovery referee whose reports it adopted used the wrong standard in overruling its claim of attorney-client privilege in this discovery dispute with Watts Industries, Inc. (Watts). We agree that the challenged orders employed an overly restrictive definition of the attorney-client privilege, and grant relief on that basis. We decline to consider the privacy argument raised by Zurich for the first time in this court.

FACTUAL AND PROCEDURAL SUMMARY

Watts admitted many of the allegations of Zurich’s petition for mandate. We take much of our factual and procedural summary from those uncontested facts.

The parties have been embroiled in litigation for the last nine years over the underlying actions, State of Cal. ex rel. Armenia v. James Jones Co. and Los Angeles Dept. of Water & Power ex rel Armenta v. James Jones Co. (collectively, the Armenta litigation). The instant action, Watts Industries, Inc. v. Zurich American Ins. Co. (Super. Ct. L.A. County, 2004, No. BC245144) was brought by Watts. It pleads various causes of action arising out of Zurich’s allegedly bad faith breach of its duty to defend…