13th Sep 2013

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Litigation may be against a dissolved corporation that also filed for bankruptcy. The bankrupt/dissolved corporation may be covered by liability insurance purchased before bankruptcy and/or dissolution. The bankruptcy of an insured does not release the insured’s liability insurer from its defense obligations nor its obligation to indemnify. See Insurance Code § 11580(b)(1). See § B4 BANKRUPTCY [§ B4:1 Bankruptcy of insured: procedure for claimant to collect on liability policy].

In such litigation plaintiff may undertake discovery proceedings. Tort actions will be defended by the liability insurer who appoints defense counsel. The dissolved corporation may not have in existence any officers, directors, employees or agents. When plaintiff undertakes discovery the following types of issues may arise and exist:

(1) Can the attorney appointed by the insurer verify the responses to request for admissions? See CCP § 2033.240(b);

(2) Can the attorney verify responses to written interrogatories? See CCP § 2030.050(b);

(3) If an attorney verifies responses to discovery requests, can the attorney waive the attorney-client privilege?;

(4) Who is the holder of the privilege for the attorney-client privilege and the work product privilege? See Evidence Code § 953(d). [Melendrez v. Superior Court (2013) 215 Cal.App.4th 1343, 1354] Who holds the privilege when corporation is no longer in existence and has no existing officers or directors? [Melendrez v. Superior Court (2013) 215 Cal.App.4th 1343, 1356] What is the court procedure for obtaining the limited waiver of the attorney-client privilege? [Melendrez v. Superior Court (2013) 215 Cal.App.4th 1343, 1357-1358]

Verification by attorney

An unverified response is tantamount to no response at all. [Melendrez v. Superior Court (2013) 215 Cal.App.4th 1343, 1348]

Individual

An attorney cannot verify a response on behalf of an INDIVIDUAL PARTY. [Melendrez v. Superior Court (2013) 215 Cal.App.4th 1343, 1351]

Corporation

An attorney may verify a response as officer or agent of a corporation. [CCP § 2030.250(b); 2033.260(b)] Doing so however will constitute a limited waiver of the attorney-client and work product privileges during any subsequent discovery from that attorney concerning the identity of the sources of the information contained in the response. [CCP § 2030.250(b); 2033.260(b); Melendrez v. Superior Court (2013) 215 Cal.App.4th 1343, 1351 (describing the reasons for the limited waiver)]

The statutes narrowly circumscribe the waiver; the privileges are only waived during any subsequent discovery from the attorney concerning the identity of the sources of the information contained in the response. The statutes do not provide for permitting lengthy further discovery from a verified attorney. Further, there is no indication that a deposition of the verifying attorney would ever be necessary in any particular case. [Melendrez v. Superior Court (2013) 215 Cal.App.4th 1343, 1352-1353]

Request for admissions; against dissolved corporation; procedure

Appointed defense counsel may respond to request for admissions by forwarding unverified responses. Appointed counsel may be reluctant to verify responses on account of the attorney-client privilege. What procedure must be undertaken to obtain verified answers to all request for admissions even those specific requests that are not limited to request for identification of document? Procedures are:

1. Make a motion for order compelling the giving of verified responses or in the alternative to obtain verification from the appointed defense counsel to those requests regarding specific described documents. Coupled with these requests is a separate request that the dissolved corporation appoint an officer or director who can answer and verify the responses. [Melendrez v. Superior Court (2013) 215 Cal.App.4th 1343, 1355, 1357]

2. If the dissolved corporation acting through appointed counsel elects not to choose or appoint an officer or director and chooses not to waive the attorney-client privilege, the court should proceed on the motion as if it would on any discovery motion when the responses are not verified. [Melendrez v. Superior Court (2013) 215 Cal.App.4th 1343, 1357-1358]

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