McMorgan & Co. v. First California Mortgage Co.

Plaintiff McMorgan & Company is an investment manager and fiduciary for several pension trust funds, which are subject to the Employee Retirement Income Security Act, 29 U.S.C. § 1001 , et seq. (“ERISA”). Defendant First California Mortgage Company sold the trust funds a number of residential construction loans, upon which it retained loan servicing obligations. After borrowers defaulted on some of the construction loans, Plaintiff sued Defendant under ERISA for an accounting and for breach of fiduciary duty, as well as for breach of contract and other state law claims. Plaintiff alleges that Defendant committed fraud and negligence in servicing the loans.

Asserting the joint client exception to the attorney-client privilege, Defendant moves to compel discovery of privileged communications between the law firm Payne, Thompson, Walker & Taaffe (“Payne Thompson”) and Plaintiff or the trust funds. Defendant claims it is entitled to “all documents relating or referring to” Payne Thompson’s represen tation of Defendant, Plaintiff or the trust funds “on any issue relating to the construction loans serviced by” Defendant.

Because this is a federal question case, the Court applies…