TTTTTHEHEHEHEHE UUUUUPDAPDAPDAPDAPDATETETETETESan Diego Defense Lawyers Association

Spring 2003Volume 7Issue 4

False Sense of Security:Issues Confronting Attorney E-mail Communications with Clientsby Robert J. Walters

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Through the end of 2002, the bar associa-tions of only 21 states (including theDistrict of Columbia) had issued anyopinion regarding the scope of any ethicalobligations with respect to e-mail communi-cation between attorney and client. Withthe exception of one jurisdiction, thegeneral consensus is similar to the ABA’sposition.

Although the California State Bar has nottaken a position on the ethical issue, it isclear that the fact that a communicationbetween attorney and client does not loseconfidentiality solely because it is transmit-ted by fax, cellular phone or other electronicmeans. California Evidence Code §952; 18USCA §2517(4). Thus, in California, undereither state or federal law, the mere fact thatattorney and client communicate via e-maildoes not present waiver of privilege issues.However, given the duty to preserve clientconfidences inviolate,2 one may infer thatcounsel communicates with a client via e-mail at his or her own risk.

There are many ways in which confiden-tial and privileged e-mail may be compro-mised, including: compromise of lawyer e-mail account password; misdirectedconfidential communications by sending towrong e-mail address; misdirected confi-dential communications by mistakenlysending e-mail to persons in addition tointended recipient; misdirected confidentialcommunications by posting e-mail to alistserve, bulletin board, or other similarmass messaging system; attachment ofanother client’s confidential documents orcommunications to properly directed e-mailcommunications; interception of e-mailcommunications between the time sent bythe lawyer to the client; disclosure by aformer employee of the lawyer’s firm; andcompromised confidentiality after thecommunication is received by the client.

These examples suggest that the greatestdanger to electronic communicationsbetween lawyers and clients has nothing todo with malicious breaches of security.Instead, the greatest threat is the simplenegligence of the lawyer or client in quicklypreparing or responding to e-mail commu-nications and not checking or confirming

In This Issue

False Sense of Security

Bottom line

President’s Message

Brown Bag Update

Brown Bag Series

Hot Cases

SDDL Officers/Membership

Support Our Troops

Member News

Installation Dinner

that the client is indeed the person to whomthe communication is being directed.Although this type of inadvertent disclosureof attorney-client communications is notunique to e-mail, the ability of e-mail to beirretrievably transported to the wrongperson, or thousands of people, with theclick of a button, makes this type ofinadvertent disclosure more dangerous thanwith other types of communication.

Two areas of immediate concern shouldbe evident. First, how are otherwiseprotected privileged communicationsimpacted by inadvertent disclosures? Thisquestion arises not from the relative securityof e-mail communication. Rather, it is anissue needing greater attention given theincreasing use of electronic discovery.

Consider the following hypothetical:Client has exchanged e-mail communica-tions with Attorney A regarding transac-tional matters and has requested an opinionregarding possible intellectual propertyissues. Coincidentally, Client has raised thepossibility of litigation and providedAttorney A with information that is poten-tially damaging to Client’s defense oradmits some level of wrongdoing. Litiga-tion does in fact commence and Attorney Brepresents Client in the litigation.Plaintiff’s attorney subsequently makes acontinued on page 3

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Grace Brandon Hollis LLP

A few years ago, I received an e-mailfrom the general counsel of a fairly sophisti-cated corporate client that contained an e-mail notice very similar to the notices thattypically are contained in fax cover sheetsindicating that the attachments wereconfidential and privileged, as well asinstructions if the fax had been received byanyone other than the intended recipient.This immediately prompted me to inquirewhether there were any legal or ethicalobligations to e-mail communications withclients.

It came as somewhat of a surprise to methat the California State Bar had not issuedany opinion regarding the ethical obliga-tions of attorneys in utilizing e-mail as ameans of communication or transmitting(attaching) documents that otherwise wouldbe considered confidential in any othercontext (e.g., snail mail, FedEx® or fax).This issue had been addressed by theAmerican Bar Association in 1999, atwhich time, the ABA concluded that e-mailcommunications, like other forms ofcommunication, including by electronicmeans, carried a reasonable expectation ofprivacy and a lawyer would not violate anyethical obligations by e-mail communica-tions with a client.1 Specifically, theopinion stated that a “lawyer may transmitinformation relating to the representation ofa client by unencrypted e-mail sent over theInternet . . . because the mode of transmis-sion affords a reasonable expectation ofprivacy from a technological and legalstandpoint.” The ABA also did not considertechnologically available forms of securingthe communication, such as encryption, tobe required. The ABA cautioned, however,that there may be some circumstances thatdictated enhanced security or encryption,and clients should be consulted. Notwith-standing, the ABA’s position is that theattorney-client privilege is not waived andan attorney acts within permissible ethicalboundaries by unencrypted e-mail commu-nication with a client.

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Volume 7 · Issue 42

PRESIDENT’S MESSAGEBy Peter S. DoodyHiggs, Fletcher & Mack LLP

I am honored and privileged to serve asthe President of San Diego Defense Lawyersfor the year 2003. We have an outstandingand talented board which is committed toserving you, our SDDL members, for theupcoming year. In addition to providingrelevant and high quality continuingeducation programs our featured agendaitem this year is membership.

The Defense Research Institute (DRI),which keeps statistics on state and localdefense organizations, informs us that SanDiego Defense Lawyers at 320 membersstrong is one of the largest local defensegroups in the nation. We should be proudof our ranking and stature, however, insurveying the San Diego civil defenselawyer landscape, I know we can increaseour membership ranks with a little pushfrom our active members. We are an all-inclusive defense organization and we willmake it a point to reach out to our brethrenSan Diego defense lawyers small or largefirm, in-house or private practice, orgovernmental attorney. We would espe-cially like to bring in more public sectorcivil defense attorneys such as San DiegoCity Attorneys office, County Counsel andCaltrans.

Once local defense lawyers find out aboutour group, membership is an easy sell. Weoffer monthly brown bag seminars, quar-terly evening seminars which begin with

appetizers and cocktails, a web site, aninter-membership e-mail system so ourmembers can “trade-notes” with oneanother, this newsletter, a law student mocktrial competition, a Fall golf tournamentand the annual installation dinner. At anannual membership fee of $120 for privatepractitioners and $90 for governmentalattorneys SDDL remains the greatest deal intown! So… next time you are at a break ata deposition, or in court waiting to becalled on a Friday morning case manage-ment conference or at a mediation extendyour hand to a fellow San Diego defenseattorney and encourage him or her to jointhe greatest legal group in America’s finestcity, San Diego Defense Lawyers.

In other news from the board, our sisterorganization, the Association of SouthernCalifornia Defense Counsel (ASCDC) isnow offering members of SDDL to becomefirst time members of ASCDC for only $50,a substantial savings from the usual firsttime ASCDC membership fee of $95.Also, for those of you who were not alreadyaware, fellow SDDL member, Robert“Hondo” Harrison is the new President ofASCDC and his portrait graces the cover ofthe latest issue of “Verdict” magazine.

As we move forward through this yearplease feel free to contact me or other boardmembers to share any ideas regardingseminar topics or other ways we can serveour membership. Keep up the good fight.

THE BOTTOM LINE

Case Title: Troy Bucko v. State FarmGeneral Insurance Company

Court Case No.: GIC 776005Judge: Hon. Vincent P. DiFigliaNature of Case: Insurance - breach of

contract/bad-faithPlaintiff’s counsel: Andrew Dunk, Esq.

and Rebecca Lack Mowbray, Esq.Dunk & Associates

Defense counsel: Randall Nunn, Esq.,Hughes & Nunn

Type of Incident: Insurance claim for theftof personal property

Settlement Demand:Settlement Offer:Verdict: Defense (12-0)Trial Length: 5 daysJury Out: 1 ½ hours

Case Title: Russell Aidukas and KristaAidukas v. Richard Lee Fassett, M.D.;Paul R. Reeb, Jr., M.D. and Does 1through 50 inclusive

Court Case No.: GIC 758731Judge: Hon. Robert E. MayNature of Case: Medical MalpracticePlaintiff’s Counsel: Dana M. Cole,

Esq.,Cole & LoetermanDefense Counsel: Michael I. Neil, Esq.

and Jason E. Gallegos, Esq., Neil,Dymott, Perkins, Brown & Frank

Type of Incident: Myocardial InfarctionSettlement Demand: NoneSettlement Offer: C.C.P. 998 offer for a

dismissal with a waiver of costsVerdict: DefenseTrial Length: 6 daysJury Out: 1 day

Case Title: Barnes v. NunesCourt Case No.: GIC779496Judge: Hon. E. Mac Amos, Jr.Nature of Case: negligencePlaintiff’s Counsel: Gary Davis, Esq. and

Douglas Munro, Esq., Ault, David &Schonfeld, LLP

Defense Counsel: Scott D. Schabacker,Esq., Law Office of Scott D.Schabacker

Type of Incident: motorcycle vs. truckcollision

Settlement Demand: $1,400,000Settlement Offer: $250,000Verdict: DefenseTrial Length: 6 daysJury Out: 35 minutes Standing (left to right): John Farmer, Bob Gallagher, Dino Buzunis, Peter Doody,

Sean Cahill, Clark Hudson. Seated (left to right): Michelle Van Dyke, Billie Jaroszek,Coleen Lowe. Not Pictured: Chris Welsh and Ken Greenfield

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policy to all employees, or an employer canrely on the fact that its employees have beeninformed of an affirmative monitoringpolicy with regard to their e-mail thatcomes into effect when they subsequentlychoose to use the e-mail system. By usingthe system, such employees would beconsidered to have consented to the e-mailmonitoring. Another obvious consentoccurs when the employee voluntarilyagrees to the monitoring as a part of theemployment agreement.

Unless the client also happens to be theemployer of the employee, the employers’right to monitor employee e-mail communi-cations provides an argument in an un-settled legal landscape for disclosure to athird party, not the client. Obviously,lawyers also should avoid communicatingwith an individual client by e-mail at theclient’s place of business unless the client isthe proprietor. Arguably, there is not anobjectively reasonable expectation ofprivacy for an e-mail communication to anaddress that clearly does not belong to or iscontrolled by the client alone.

If clients desire or demand the immediateand convenient manner of communicationthat e-mail offers, with its acknowledgedsecurity limitations, a law firm policy toadvise of clients of attendant risks to e-mailcommunication or transferring of docu-ments in digital form, and obtaining clientconsent to its utilization, would appearwell-advised. Certainly, if the representa-tion dictates a higher level of security, theleast conservative approach would dictateclient consultation regarding an appropriatelevel of security. In between the extremes,various procedures have been suggested.

For example, the May 2001 issue of theCalifornia Bar Journal (a publication of theCalifornia State Bar Association) listed thefollowing pointers from attorneys andconsultants in an article entitled, “Manag-ing Your E-mail:”

Consult your client before using e-mail.Discuss its risks and benefits. Establish theparticular modes of communication to beused in each attorney-client relationship.

Advise clients not to forward confidentiale-mails. Ask whether your client’s e-mailaccount is a corporate account accessible tohis or her employer.

Consider seeking a client’s permission ina retainer agreement before using e-mail.Obtaining permission is “always a wiseidea” — particularly with less sophisticatedclients.continued on page 5

A second issue involves electroniccommunication with client through anemployer provided e-mail system, i.e., a sitethat is not controlled by the client, andinstead, for example, by his or her em-ployer. Accordingly, questions regardingpersons having access to the client’s e-mailsystem always should be considered. Somejurisdictions require employers to obtaintheir employees’ consent to be able tomonitor their e-mail at work, but others donot. At least one court has held that oncean employee uses a company e-mail systemto send personal messages to someone else,any reasonable expectation of privacy thatthe employee might once have had is lost.5

In the recent case of TBG InsuranceServices Corp. v. Superior Court (2002) 96Cal.App.4th 443, the Second District Courtof Appeal held that a former employee, whoagreed in writing that former employercould monitor home computer which it hadprovided for former employee’s home use,did not have a reasonable expectation ofprivacy in the computer and thus could becompelled to produce the computer fordiscovery in wrongful termination action.

In California, legislation concerningemployee e-mail privacy nearly became lawin 1999. Senate Bill 1016 was passed byboth houses of the California legislature,but vetoed by Governor Davis. The billwould have prohibited employers fromviewing an employee’s personal e-mail, orother computer records generated by theemployee, unless the employer had preparedand distributed a workplace privacy andelectronic monitoring policy informingemployees of the employer’s monitoringpractices. In 2000, the California Senateintroduced the Electronic Monitoring in theWorkplace Act (SB 1822), considered to beidentical to the 1999 bill, also did notbecome law in California.

On the other hand, the ElectronicCommunications Privacy Act of 1986(“ECPA”)6 is considered to precludeemployer monitoring of employee e-mail.However, the ECPA has three exceptionsthat serve to limit is applicability toemployer monitoring: (1) the providerexception – in which the employer providesthe employee with e-mail through acompany owned system, (2) the ordinarycourse of business exception – in whichbusiness related e-mail may be monitored;and (3) the consent exception.7

The consent exception generally applieswhen one party to the communication hasgiven prior consent, actual or implied, tothe interception or accession of the commu-nication. Gaining employee consent canoccur in at least two different ways: anemployer can publish an e-mail monitoring

False Senseof Securitycontinued from page 1

document production demand, which hasincluded electronically created or storeddocuments. The physical or “hard” copiesof the correspondence between client andAttorney A have been separated andidentified on a privilege log. Unknown toAttorney B, the e-mail communicationsbetween Attorney A and Client are con-tained on the hard drive of Client’s com-puter, a clone of which was produced, andwere found by Plaintiff’s counsel. Whatresult? (To coin a phrase from law school)

Fortunately, the answer may be gleanedfrom State Compensation Insurance Fund v.WPS, Inc. (1999) 70 Cal.App.4th 644,where the Second District Court of Appealstated that “[b]ased on the language ofEvidence Code section 912, we hold that‘waiver’ does not include accidental,inadvertent disclosure of privileged infor-mation by the attorney.”3 Relying on ABAFormal Opinion No. 92-368, the StateCompensation court further articulated theobligation of the attorney who receivesprivileged documents due to the inadvert-ence of another as follows:

When a lawyer who receives materialsthat obviously appear to be subject to anattorney-client privilege or otherwise clearlyappear to be confidential and privileged andwhere it is reasonably apparent that thematerials were provided or made availablethrough inadvertence, the lawyer receivingsuch materials should refrain from examin-ing the materials any more than is essentialto ascertain if the materials are privileged,and shall immediately notify the sender thathe or she possesses material that appears tobe privileged. The parties may thenproceed to resolve the situation by agree-ment or may resort to the court for guidancewith the benefit of protective orders andother judicial intervention as may bejustified. We do, however, hold thatwhenever a lawyer ascertains that he or shemay have privileged attorney-client materialthat was inadvertently provided by another,that lawyer must notify the party entitled tothe privilege of that fact.4

Although Attorney B may obtain return ofthe inadvertently produced privilegedmatter, the unfortunate reality may be that“the cat is out of the bag.” Of course, if theclient forwards a confidential communica-tion to another third person, the privilegelikely will be considered waived. Accord-ingly, clients should be cautioned regardingthe risks of waiver from his or her inadvert-ent disclosure.

www.sddl.org

Volume 7 · Issue 44

San Diego Defense Lawyer’sBrown Bag Update — Year End 2002By Kelly BoruszewskiStutz, Gallagher, Artiano, Shinoff & Holtz

The 2002 Brown Bag season ended with attorneys Lesa Wilson and Jack Sleeth, Jr., ofStutz, Gallagher, Artiano, Shinoff & Holtz, presenting “Employment Law: The year inreview and a look into 2003.” This one-hour MCLE seminar focused on legislative enact-ments, “customer service,” and prevention. Ms. Wilson and Mr. Sleeth discussed the laws ofthe past, present, and future.

A Brief Review of 2002: Assembly Bills 1068 and 2868 became Civil Code §§ 1785.16.2et seq. and § 47. There, employers may be required to give employees notice and a copy ofany background check or investigation report. Look for case law to define this complicatedissue. Bill 1015 turned into Labor Code § 96(k) and 98.6. These statutes make it illegal—criminally and civilly—to discipline an employee for conduct off duty that is otherwise legal.The employment part of Bill 25 (Labor Code § 233) related to employment law is thatdomestic partners may collect unemployment insurance if they leave the job to follow theirrelocating partner. And that domestic partner may take sick leave to care for a sick partner.Last, Bill 800 (Government Code § 12951) now makes it an unlawful employment practicefor an employer to limit the use of any language in any workplace (with some exceptions).

Opening up in 2003: Senate Bill (Code of Civil Procedure §§ 340 and 437c) extended thetime for an employee to bring an action from one year to two years and requires a 75-daynotice for filing a summary-judgment motion. With fast track, and an employer not able tobring a motion for summary judgment until discovery is completed (CCP § 437c(h)), expectto see more cases go to trial. Assembly Bill 2895 (Labor Code § 232) prohibits an employerfrom disciplining (retaliating against) an employee for disclosing the amount of wages ordiscussing working conditions. Bill 1599 added “age” to the FEHA as a protected classifica-tion, making it unlawful to discriminate or harass on the basis of age, or to lay off anemployee because of high wages in order to hire cheaper (and younger) employees. SenateBill 1730 (Civil Code § 1798.85) states that a Social Security number may not be used as anindentification number. Assembly Bill 1401 (incorporated in the Health & Safety andInsurance Code) made several changes to COBRA. Last, Senate Bill 1471 (Labor Code §234) prohibits a negative employee evaluation because an employee takes sick leave providedby law.

Working directly with employers of all sorts, Ms. Wilson and Mr. Sleeth closed theirpresentation discussing what has become a hot issue in 2003: Fitness of Duty Evaluations.May an employer require an employee to have a fitness-for-duty medical examination with adoctor of the employer’s choice? The answer, generally yes. But it is dependent on the pointin the relationship. Before hire, the ADA forbids medical examinations and inquiries thatmay focus on disabilities, but may permit it where an inquiry is made to all employees andlimited in determining whether the employee can perform job-related functions. (42 U.S.C.§ 12112(c)(2).)

After an offer of employment, but before commencement, the ADA permits an examina-tion if all applicants are examined and the results are collected and maintained on separate,confidential files—not in the employee’s personnel file. Further, the examination must bejob related in that there is a business necessity for it.

After employment has commenced, the ADA specifically permits an employer to require afitness-for-duty medical examination in order to determine whether an employee who hassuffered an injury or illness is physically capable of returning to work. (39 C.F.R. §1630,14(c).) An employee who refuses to undergo examination may be terminated. (See,Watson v. City of Miami Beach (9th Cir. 1999) 177 F.3d 932.

The seminar concluded with discussion a of FEHA, FMLA, and Workers’ Compensation.Much has changed in the past year, and much more is to come in 2003 and 2004. If theabove information wets your appetite, give Ms. Wilson or Mr. Sleeth a call. They would behappy to forward their seminar materials to you.

Bottom Line

Case Title: Wells v. HornCourt Case No.: IC 787618Judge: Hon. Ronald StynNature of Case: Personal Injury - AutoPlaintiff’s Counsel: J.R. Ros, Esq.Defense Counsel: Gina C. Haggerty,

Esq., Farmer & CaseType of Incident: Auto AccidentSettlement Demand: $12,000.00Settlement Offer: $8,242.54Verdict: DefenseTrial Length: 3 daysJury Out: 3 hours

Case Title: Sipho Rasana v. San DiegoTransit

Court Case No.: IC756525Judge: Hon. Charles R. HayesNature of Case: Personal InjuryPlaintiff’s Counsel: Kenneth L.

Simpkins, Esq. and Suzanne Mindlin,Esq.

Defense Counsel: Constantine D.Buzunis, Esq., Neil, Dymott, Perkins,Brown & Frank

Type of Incident: Auto v. Bus rearendaccident (admitted liability)

Settlement Demand: Initially$750,000.00 with $250,000.00 CCP998Offer prior to trial

Settlement Offer: $10,000.00 CCP 998Offer

Verdict: DefenseTrial Length: 10 daysJury Out: 2 hours 10 minutes

Case Title: Sinasohn v. Brian Krogstad, et.al.

Court Case No.: GIC 752522Judge: Hon. Vincent J. DiFigliaNature of Case: Interference with

contracts/business tortsPlaintiff’s Counsel: James Miller, Esq.

and Melissa Cross, Esq., Miller &Ledebur

Defense Counsel: Jennifer N. Lutz, Esq.,Klinedinst Attorneys at Law

Type of Incident: Alleged Interferencewith contract

Settlement Demand: $21,000Settlement Offer: $8,333Verdict: DefenseTrial Length: 2 daysJury Out: 1 hour

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False Senseof Securitycontinued from page 3

Remember that e-mail provides a writtenrecord and may be subject to discoveryrequests.

Remember that previous e-mail commu-nications easily can be forwarded to others(watch out for e-mails that contain priorcommunications – e.g., e-mails that containa trail of communications with the client orexpert that are inadvertently forwarded toopposing counsel).

Consider encrypting confidential client-related e-mail.

Consider including a disclaimer on all e-mail, noting its confidentiality.

Use software that helps manage your e-mail. For example, “filters” automaticallycan file certain e-mails, redirect spam orsend automatic replies.

Develop firm-wide policies for using theInternet and e-mail. Address such issues ase-mail retention, inappropriate material,personal e-mail, the alteration of third-partye-mail and accessing co-workers’ e-mailaccounts.

Write clearly, concisely and carefully.Without body language and verbal cues, thetone of a written message easily can bemisconstrued.

The California Practice Guide forProfessional Responsibility also makes thefollowing observations: “It is good practiceto discuss the means by which you willcommunicate confidential information withyour clients. Establish procedures to ensurethe confidential handling of information—both within your firm and in the client’sorganization. Before communicating by e-mail, ascertain who has access to theclient’s e-mail messages; and, specificallywho is permitted to read or retrieve them.Consider sending the client a ‘test’ e-mailthat does not contain confidential informa-tion and confirm its receipt. Add a confi-dentiality notice to your e-mail that themessage is confidential and only intendedto be read by the recipient.”8

Even though the ABA and many state barassociations consider unencrypted e-mail areasonable and acceptable means ofattorney-client communication, and even ifcourts treat e-mail messages just like otherdocuments that may be protected by theattorney-client privilege, attorneys still needto be aware of their ethical and professionalresponsibilities in relation to e-mail. Anawareness of those responsibilities allowsattorneys to make decisions that affordmaximum protection of confidentialinformation and communications. One mayalso predict that over time, the ethicalobligations may become standard of careissues.

(Footnotes)1 See, ABA Form. Op. No. 99-413.2 The California Supreme Court stated that“[p]rotecting the confidentiality of communicationsbetween attorney and client is fundamental to our legalsystem [and t]o this end, a basic obligation of everyattorney is ‘[t]o maintain inviolate the confidence, andevery peril to himself or herself to preserve the secrets,of his or her client.’” People ex rel. Dept. of Corpora-tions v. SpeeDee Oil Change Systems, Inc.(1999) 20Cal.4th 1135, 1145.3 California Evidence Code section (“EC §”) 912(a)provides that “the right of any person to claim aprivilege provided by [Evidence Code] Section 954[lawyer- client privilege] . . . is waived with respect to acommunication protected by such privilege if anyholder of the privilege, without coercion, has discloseda significant part of the communication or has

consented to such disclosure made by anyone. Consentto disclosure is manifested by any statement or otherconduct of the holder of the privilege indicatingconsent to the disclosure, including failure to claim theprivilege in any proceeding in which the holder has thelegal standing and opportunity to claim the privilege.”4 Id. at 656-657.5 See, e.g., Smyth v. Pillsbury Co., 914 F.Supp. 97, 101(E.D. Pa. 1996).6 18 U.S.C. §§2510-2521 (1986).7 See, 18 U.S.C. §§2511(2)(a)(i), (d) and 2510(5)(a),respectively.8 Vapneck, et al., RUTTER CAL. PRAC. GUIDE P ROF. RESP.,Duty to Maintain Client Confidence and Secrets underState Bar Act, Ch. 7-B, §7:157 (2000).

SAN DIEGO DEFENSE LAWYERSBROWN BAG SERIESRecent Developments inSummary Judgment Law in California

Presented by Robert J. WaltersGrace Brandon Hollis LLPFebruary 20, 2003

The presentation by Mr. Robert J. Walters of GraceBrandon Hollis, LLP, provided invaluable informationregarding the recent changes to law regarding thefiling of Motions for Summary Judgment, togetherwith insights as to the requirements of such motions.Included in the handouts, Mr. Walters brings us up-to-datewith his presentation, “Changes in Latitude, Changes in Attitude.”

Mr. Walters reminds us that an initial step in preparing an MSJ, is looking to Aguilarv. Atlantic Richfield Co. (2001) 25 Cal.4th 826. Aguilar clarifies the burden of proofand allows the moving party to determine whether the evidence meets the standard setforth in the case. If it does, and the opposing party is unable to produce evidence that atriable issue(s) exists, the filing of a Motion for Summary Judgment is appropriate.

Mr. Walters further asserts that those wishing to file MSJ’s should also look to SanDiego Watercrafts, Inc. v. Wells Fargo Bank (2002) 102 Cal.App.4th 308, a local case inwhich the Fourth District Court of Appeal held that a court could consider evidence thatwas not referenced in the separate statement; however, the court is not obligated toconsider such evidence.

As far as the new procedural requirements are concerned, Senate Bill 688 alteredmany of the requirements as set forth in CCP §437c. Mr. Walters cautioned to pay closeattention to the amendments, especially to CCP §437c(a) which extends the noticeperiod for MSJ/MSA from 28 to 75 days. As most are probably aware, different depart-ments, at least in San Diego County, are handling the notice period differently. Somemay consider Orders Shortening Time in order to allow for the filing of a motion, whileothers may consider trial continuances to allow for compliance with the new noticeperiod. Look for a ruling to come down soon on this issue in a case entitled EdMcMahon v. Superior Court.

For appellate related reasons, Mr. Walters stressed that parties should pay closeattention to CCP §437c(m)(2), which establishes the appellate court’s powers or obliga-tions. He suggests that the Appellate issues should be kept in mind when arguing anMSJ/MSA, as the moving party should seek to preserve and build a good record at thelower level, thereby forcing the court to make a good ruling.

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Volume 7 · Issue 46

HOT CASES!!!

Bussard v. Minimed,Inc., 2003 Daily Journal D.A.R. 913

(1/27/03)

In a case recently dealing with allegedapplication of the “going-and-coming rule”,the California Court of Appeal held that anemployer may be held liable for an accidentcaused by an employee driving home afterthe employee left work because of illnessdue to pesticide fumes in the workplace.

In Brussard, the plaintiff sued thedefendant employee and the defendantemployer (Minimed, Inc.) for negligence inconnection with an auto accident involvingthe defendant employee. The accidentoccurred after the defendant employee hadleft work early because she felt sick due tothe pesticide fumes that had been sprayedthe previous night at her workplace. Afterindicating that she felt sick, the employee’ssupervisors asked if she wanted to see adoctor and she declined. They asked if shewas okay to drive herself home, and sheanswered affirmatively. She drove herselfhome, and en route caused an auto accident,from which the plaintiff suffered injuries.

The plaintiff’s cause of action against theemployer was based on a theory of respon-deat superior. Employer moved forsummary judgment on the ground that the“going-and-coming” exception applied tobar a respondeat superior theory of liability.The trial court granted the motion, and theplaintiff appealed. The Court of Appealreversed on the grounds that the “going-and-coming” rule did not apply because theaccident occurred because of a condition atwork, namely the presence of the pesticidefumes.

An employer may be held to be vicari-ously liable for the acts of its employees ifthe acts are committed within the normalcourse and scope of employment. Theemployer is held to bear the costs of therisks inherent in or created by the enter-prise.

Typically, an employee is held to beoutside the scope of her employment whencommuting to and from work. This goingand coming rule has exceptions. One suchexception applies when an employeeendangers others with a risk arising from orrelated to work. This endangerment isgoverned by a foreseeability test; the risk isforeseeable if the employee’s conduct isneither startling nor unusual. Foreseeabil-ity of a risk arising from or connected towork requires no more than a causalconnection between a work-related eventand the employee’s subsequent act causinginjury.

Here the court ruled that an employeemight not be fit to drive after breathinglingering pesticide fumes for several hours;such condition is not such a startling orunusual event that a car accident occurringon the employee’s commute home would beunforeseeable. Evidence of a causalconnection between the work-related eventand the subsequent injury existed, therefore,the trial court’s ruling on the defendant’smotion for summary judgment was re-versed.

Jimenez v. Superior(T.M. Cobb), (2002) 29 Cal. 4th

473, 127 Cal. Rptr. 2d 614, 58 P. 3d 450

In a case impacting construction defectdefense practitioners which representmanufacturers and suppliers of productsincorporated into works of construction, theCalifornia Supreme Court has held that, inCalifornia, a manufacturer, distributor orretailer of a defective product is strictlyliable in tort for any resulting harm to aperson or to property other than the productitself.

Plaintiffs Filipina and Nestor Jimenez,owners of a Gallaria Home built by Devel-oper McMillan Scripps II in 1988, in theScripps Ranch area of San Diego, broughtan action against window manufacturersViking Industries, T.M. Cobb, and Medal-lion Industries and Minnoch Supply Co.,

HOT CASES!!!Bottom Line

Case Title: Stephenson v. San DiegoTransit Corporation

Court Case No.: GIC 778085Judge: Hon. William R. Nevitt, Jr.Nature of Case: Personal InjuryPlaintiff’s Counsel: James D. Hoey, III,

Esq., Hoey & MorganDefense Counsel: Norman A. Ryan, Esq.,

Wingert, Grebing, Brubaker & RyanType of Incident: Neck and back injuries

as well as an exacerbation of pre-existing psychiatric problems

Settlement Offer: Defendant submitted astatutory offer to compromise of$25,000.00 which was rejected

Settlement Demand: Plaintiff counteredwith an offer of $150,000.00.

Verdict: DefenseTrial Length: 5 daysJury Out: 1/2 day

Case Title: Gomez v. North CountyOBGYN Medical Group, Inc.

Court/Case No.: GIC 711968Judge: Hon. Charles R. HayesNature of Case: Medical MalpracticePlaintiffs Counsel: David Miller, Esq.

and Nick King, Esq.Defense Counsel: Clark Hudson, Esq.,

Neil, Dymott, Perkins Brown & FrankType of incident: Alleged wrongful life of

Downs Syndrome child, inappropriatesterilization of mother followingdelivery.

Demand: None CertainOffer: Waiver of CostsVerdict: DefenseTrial Length: 8 daysJury Out: 1 and ½ days

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Defendants argument that subjectingthem to liability would nullify the Califor-nia Legislature’s intent when it enactedCCP §337.15, was not considered as it wasnot raised in the Trial Court, Court ofAppeal or in their petitions for review to theSupreme Court.

Defendants further argued that subjectingmanufacturers to strict liability would “openthe litigation floodgates.” The Court statedit was not convinced by this argumentindicating that the burden of increasedlitigation is outweighed by the policyreasons favoring strict products liability inaddition to the incentives for improvedproduct safety.

La Jolla Village and Casey v. OverheadDoor Corp., (1999) 74 Cal.App.4th 112,were disapproved to the extent they areinconsistent with the holding in Jimenez.

Economic Loss RuleIn Seely v. White Motor Co. (1965) 63

Cal.2d 9, it was held that recovery underthe doctrine of strict products liability doesnot include economic loss, which includes“damages for inadequate value, costs ofrepair and replacement of the defectiveproduct or consequent loss of profits-without any claim of personal injury ordamages to other property...” SacramentoRegional Transit Dist. v. Grumman Flexible(1984) 158 Cal.App.3d 289.

The Economic Loss Rule allows aplaintiff to recover in strict productsliability in tort when a product defect causesdamage to “other property,” that is, propertyother than the product itself. To apply therule, the product at issue must first bedetermined. Defendants asserted that the“product” is the entire house in which theirwindows were installed, and that thedamage caused to other parts of the houseby the allegedly defective windows isdamage to the product itself within theeconomic loss rule, thus precluding applica-tion of strict liability. Citing Aas v. Supe-rior Court (2000) 24 Cal.4th 627, the Courtstated that the duty of a manufacturer toprevent property damage does not necessar-ily end when the product is incorporatedinto a larger product. The Court held thatunder California decisional law, theeconomic loss rule does not bar ahomeowner’s recovery in tort for damagethat a defective window causes to otherparts of the home in which is has beeninstalled.

There were concurring and dissentingopinions which should be consulted.

who had supplied and installed the win-dows. Plaintiffs asserted that the defen-dants had “designed, developed, manufac-tured, produced, supplied and placed intothe stream of commerce” defective windowsinstalled in the Gallaria and Renaissancehomes and that the defects caused propertydamage.

Cobb moved for summary adjudication onthe strict liability cause of action arguingthat the manufacturer of a product installedin a mass-produced home, unless is hasownership or control of the development,cannot be held strictly liable to a home-owner for a defective or dangerous condi-tion in the home. Cobb prevailed on themotion and the court ordered that the rulingalso applied to Viking. The Court ofAppeal issued a writ after petition, directingthe Trial Court to vacate its order, holdingthat the doctrine of strict products liabilityapplied to manufacturers of defectivecomponent parts installed in mass-producedhomes, and that this strict liability extendedto damage to other parts of the house inwhich the defective component was in-stalled. The California Supreme Courtgranted review.

Strict Products Liability of Com-ponent Manufacturers

Defendants relied on La Jolla VillageHomeowners’ Assn. v. Superior Court(1989) 212 Cal.App.3d 1131 (La JollaVillage), contending that merely supplyingcomponent parts of mass-produced homes,not the completed homes themselves,should not subject them to strict productsliability. Furthermore, they argued thatsubjecting them to liability would beimproper because they had no physicalcontrol over the windows at the time of thealleged harm. The Court ruled that forpurposes of strict liability, there are “nomeaningful distinctions” between, on theone hand, component manufacturers andsuppliers and, on the other hand, manufac-turers and distributors or complete prod-ucts; for both groups, the “overriding policyconsiderations are the same.” Kriegler v.Eichler Homes, Inc. (1969) 269 Cal.App.2d224.

Defendants further maintained, relyingon language in subdivision (1)(b) of section402A of the Restatement 2d of Torts, thattheir windows are shipped in parts, as-sembled by others and installed by others.A substantial change in the product relievesthe manufacturer of liability. The Courtdetermined that the mere assembly of aproduct that is sold in parts is not a “sub-stantial change” in the product within themeaning of the Restatement.

SDDL Officers

President : Peter S. DoodyVice-President: Robert E. Gallagher

Secretary: Clark R. HudsonTreasurer: Billie J. Jaroszek

Directors: Constantine D. Buzunis,Sean T. Cahill, John T. Farmer,

Kenneth N. Greenfield,Coleen H. Lowe, Michelle Van Dyke,

Christopher J. Welsh

Membership Information

Membership is open to any attorneywho is primarily engaged in thedefense of civil litigants. Membershipdues are: $ 90 for attorneys in practiceless than one year and $120 forattorneys in practice more than oneyear. Applications are available on theweb at www.sddl.org.

THE UPDATE is published for the mutualbenefit of the SDDL membership, a non-profitassociation composed of defense attorneys, judgesand persons allied with the profession assuppliers of goods or services.

Views and opinions expressed in THE UPDATEare those of the authors and not necessarily thoseof SDDL. Products and services adver tised arepaid advertisements and not endorsed by SDDL.

We welcome the submission of articles by ourmembers on topics of general interest to ourmembership. Please submit material to:

John T. Farmer - Farmer & Case402 West Broadway, Suite 1100San Diego, CA 92101Phone: 619.338.0300Fax: 619.338.0180E-mail: jfarmer@farmercase.com

www.sddl.org

Volume 7 · Issue 48

Bottom Line

Case Title: Manuel Bustamante, M.D.and Carolina Bustamante v. LanceAltenau, M.D.

Case No.: GIC 780976Judge: Hon. Vincent P. DiFigliaPlaintiff Counsel: Lawrence Rudd, M.D.,

J.D.; Cohen & RuddDefense Counsel: Clark Hudson, Esq.,

Neil, Dymott, Perkins, Brown & FrankType of Incident: Alleged Medical

Malpractice. C-6 Quadriplegiafollowing C-6/C-7 spinal fusion

Settlement Demand: 998 offer by Dr.Bustamante - $1,750,000.00. 998 offerby Mrs. Bustamante - $249,999.00.Request to Jury, $625,865 pasteconomic loss, $817,000 future medicalexpenses (Present Value). Unspecifieddemand for past and future pain andsuffering , and loss of consortium.

Settlement Offer: NoneTrial Type: JuryTrial Length: Eight daysVerdict: Defense 11-1Jury out: One day

Case Title: Philip Baum v. J. ByronWood, M.D.

Court Case No.: GIN 014084Judge: Hon. Marguerite WagnerNature of Case: Medical MalpracticePlaintiff’s Counsel: Christine A. Carlino,

Esq., Law Offices of Christine A.Carlino

Defense Counsel: Kendra A. Ball, Esq.,Neil, Dymott, Perkins, Brown & Frank

Type of Incident: Alleged negligence inlaparoscopic hernia repair and lack ofinformed consent

Settlement Demand: $100,000Settlement Offer: waiver of costsVerdict: DefenseTrial Length: 5 daysJury Out: 2 hours

Each year members of the Koeller Nebeker Carlson & Haluck firm, along with kids (thisyear’s crew included the Carlson, Amundson and Hallman children), spouses and significantothers participate in the Torrey Pines Pardee Run for Knowledge. This year’s race was heldon Sunday, February 23rd. There were medals all around and great fun was had by all!

An Opportunity to Support Our Troops!

San Diego Defense Lawyers members and their firm personnel now have anopportunity to support our troops in a very up-front and personal way.

Dino Buzunis has learned from Reserve Marine Colonel Dave Brown, who iscurrently serving in Kuwait, that our service men and women in Kuwait andAfghanistan could use a variety of sundries which are difficult to come by there.Following is a “Top 10” list of items you can contribute. All items will be boxedand shipped overseas to our men and women in the war zone.

• disposable razors shaving cream magazines• moist towelettes toothbrushes toothpaste• small soaps shampoo/rinse candy bars• pre-paid calling cards

Or, if you prefer you may make a $25 contribution (check payable to SDDL)which will buy a care package containing several items including a pre-paidcalling card, disposable camera, toiletries and sunscreen.

Please mail checks or drop off items to be shipped to: Dino Buzunis,Neil, Dymott, Perkins, Brown & Frank, 1010 Second Avenue, 25th Floor,San Diego, CA 92101

Here is an opportunity to show support and make a difference to our troops!

Volume 7 · Issue 4

www.sddl.org

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Royce, Grimm, Vranjes, McCormick &Graham announced that on January 31stGene Royce left the firm to become a fulltime mediator. The firm is now Grimm,Vranjes, McCormick & Graham LLP.

Martha Dorsey was recently made apartner at Koeller, Nebeker, Carlson &Haluck, LLP. Ms. Dorsey joined the firm in1991, the same year she graduated LoyolaLaw School. Additionally, the firm hashired Doug Barish as an associate. Mr.Barish completed his undergraduate work atUCLA and received his J.D. from USCwhere he served as Senior Editor of TheSouthern California Review of the Law andWomen’s Studies. He also clerked in theLos Angeles office of the U.S. Attorneyworking in both the civil and criminaldivisions. Mr. Barish’s practice is generaldefense litigation.

Grace Brandon Hollis, LLP has recentlytaken over 6000 additional square feet ofspace in The Design Center on FifthAvenue. Coincidentally, that building hasjust been acquired by the firm’s partners.Additionally, Cari Brundy and Daniela-Reali Ferrari were admitted to the bar inDecember and have joined the firm asassociates. Ms. Brundy’s background is inhealth care and she continues to pursue thatinterest in the defense of physicians. Ms.Ferrari is primarily working in the area ofconstruction defense.

Shewry & Van Dyke LLP has addedMatthew B. Butler as an associate.

Balestreri, Pendleton and Potocki ispleased to announce that senior associateAndra Deroian was elected Vice Chairper-son of the Construction Law Section of SanDiego County Bar Association. Ms.Deroian’s background and experience wereimportant factors in her election. Prior toattending law school, Ms. Deroian workedas a construction project manager and costestimator in New York. She has significantexposure to toxic waste cases and otherextremely complex engineering-legalmatters. She received her Juris Doctoratefrom the University of San Diego School ofLaw in 1994 after completing foreign studyprograms in Sydney, Australia, London,England, and Nairobi, Kenya. She receivedher Bachelor of Science in ConstructionManagement from Pratt Institute in NewYork.

Kleindinst Attorneys at Law haspromoted Jennifer Lutz to shareholder.Ms. Lutz represents employers in all aspectsof employment disputes. She has success-fully litigated disputes involving issues ofdiscrimination, wrongful termination,harassment, and defamation. Jennifercommunicates legislative updates andeducates her clients through speakingengagements, publishing articles andtraining on issues such as wage and hourlaw compliance, employee privacy, familyand medical leave, reductions in force, andcontract disputes.

Rebecca Cady of Grace Brandon Hollis,LLP has been appointed Editor in Chief ofthe Journal of Nursing Administration’sHealthcare Law, Ethics, and Regulation, anursing publication. The journal’s mainaudience is nurse executives and she invitesmembers of San Diego Defense Lawyers,with expertise in these areas to submitarticles for publication. Please contact her atrcady@gbhlaw.com if you have a submis-sion.

William P. Volk was elected to themembership of the American Board of TrialAdvocates (A.B.O.T.A.) by the NationalBoard of Directors in San Francisco onJanuary 18, 2003. ABOTA’s website statesthat “Only the most qualified defense andplaintiff attorneys with courtroom experi-ence are invited to join ABOTA. To qualifyfor membership courtroom experience mustbe verified. However, more than the numberof trials is considered. High personalcharacter and an honorable reputation areparamount to qualify for ABOTA.” Con-gratulations Bill!

Andrew Blackburn has recently ac-cepted a position with Aiken & Boles. Mr.Blackburn graduated California WesternSchool of Law in 1995 and has focusedlargely on construction defect and productliability litigation. Mr. Blackburn’s firsttrial was the Aas v. Superior Court case inwhich he represented a sheet metal com-pany. Additionally, he wrote one of theSupreme Court briefs.

Stutz, Gallagher, Artiano, Shinoff &Holtz, is pleased to welcome educationattorney Christina Dyer as a partner to thefirm. In a legal career spanning threedecades in the education field, Ms. Dyer hasserved as Assistant County Counsel, SchoolSection of the Imperial County Counsel’sOffice; School Section Chief, San DiegoCounty Counsel’s Office; and GeneralCounsel, San Diego Unified School District.Ms. Dyer’s extensive experience as a schoolattorney will now serve the firm’s publicagency clients. In her role as generalcounsel, Ms. Dyer advises clients in suchareas as certificated and classified person-nel, ADA, FMLA, employment discrimina-tion, charter schools, Proposition 39,facilities, construction, environmentalissues, contracts, labor law, finance,legislation, student rights, special educa-tion, Section 504, Proposition 227, andmore. During the 1996 teachers’ strike, Ms.Dyer acted as media spokesperson for theSan Diego Unified School District, repre-senting the District on local and nationalmedia, and calling on her knowledge ofcertified and classified employment andcollective bargaining. Most recently sheassumed the position of Vice-Chair for theK-12 Schools Accrediting Commission forthe Western Association of Schools andColleges.

Member News

Thank YouSan Diego Defense Lawyers

would like to thankBrenda Peterson

of Peterson & Associatesfor sponsoring our

Brown Bag Luncheon programsheld in her offices at:

530 “B” Street · Suite 350San Diego · CA · 92101 ·

www.sddl.org

Volume 7 · Issue 410

18th Annual18th Annual

Volume 7 · Issue 4

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11

Installation DinnerOn February 1, 2003, San Diego Defense Lawyers held its Eighteenth Annual Installation

Dinner at the Manchester Hyatt San Diego. Mike Neil of Neil, Dymott, Perkins, Brown &Frank presented Dan White of White, Noon & Oliver with the San Diego Defense Lawyers

2002 SDDL Lawyer of the Year award and Bob Gallagher presented his partner Sid Stutz of Stutz,Gallagher, Artiano, Shinoff & Holtz with the 2002 SDDL Honoree Award.

Past president, John Clifford, was recognized by current president Pete Doody, for his tremendousefforts this past year and for bringing the association forward in membership development andeducation. Also receiving awards for service to the association were outgoing board members,Treasurer Anna T. Amundson of Koeller, Nebeker, Carlson & Haluck, LLP; Secretary Dennis Aikenof Aiken & Boles, along with board members Timothy D. Lucas of Parker Stanbury and Norman A.Ryan of Wingert, Grebing, Brubaker & Ryan.

Incoming officers President, Peter S. Doody of Higgs, Fletcher & Mack; Vice-President Robert E.Gallagher of Stutz, Gallagher, Artiano, Shinoff & Holtz; Secretary, Clark R. Hudson of Neil, Dymott,Perkins, Brown & Frank; Treasurer, Billie J. Jaroszek of Fredrickson, Mazeika & Grant as well asDirectors Coleen H. Lowe of Grace Brandon Hollis, Chris J. Welsh of Cal Trans, Sean Cahill ofBalestreri, Pendleton & Potocki, Dino Buzunis of Neil, Dymott, Perkins, Brown & Frank, JohnFarmer of Farmer & Case, Michelle Van Dyke of Shewry & Van Dyke and Ken Greenfield of TheLaw Offices of Kenneth L. Greenfield were introduced.

“Night Shift” provided the rock & roll for the post dinner dance and many members took thatopportunity to “shake a leg” and mingle with fellow party goers.

Installation Dinner

www.sddl.org

Volume 7 · Issue 412

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