CA: Attorney client relationship
Facts: Plaintiff, a former in-house attorney, sued Defendant for wrongful termination. Defendant filed a cross-complaint alleging breach of confidence, fiduciary duty, and ethical obligations, and claimed that after Plaintiff was discharged, he informed the California Insurance Commissioner that Defendant was improperly selling artwork belonging to a subsidiary, which was in liquidation. Plaintiff moved to strike the cross-complaint under the anti-SLAPP statute. The trial court granted Plaintiff’s motion and Defendant appealed.
The court held that the litigation privilege may not be used to protect an attorney from liability to a former client for alleged breach of professional duties. The Superior Court, Los Angeles County struck cross-complaint as a strategic lawsuit against public participation (SLAPP), which is intended to intimidate an adversary against pursuing a lawsuit or other action. Employer appealed.
Issue: Can litigation privilege be used to protect an attorney from liability to a former client for the breach of professional duties?
Ruling: No. In this case, Plaintiff’s statements to the Insurance Commissioner in connection with the liquidation proceeding were not protected by the litigation privilege. The court reasoned that if the litigation privilege were to apply, it would preclude essentially any action by a former client against an attorney and would undermine the attorney-client relationship.
Lesson: Information learned while acting as counsel for a party may not be divulged.