Unreported decisions offer novel concepts

Karpman

By Diane Karpman

Unreported decisions cannot be cited, but they often provide keen insight into a particular judge's viewpoint, present novel applications of the law and yield a bounty of information. They are available on both Lexis and Westlaw. Incidentally, Lexis recently became the official publisher of California case law. The "deal" involves the posting of all state opinions since 1850 free to "the public." Last time I checked, lawyers were still members of the public. A couple of recent unpublished decisions present interesting concepts.

Poway Land Inc. v. Hillyer & Irwin (2002 Cal. App. Unpub. LEXIS 10786) is a legal malpractice case based on the inadvertent fax transmittal of settlement options. The breach of fiduciary duty claim by the client was founded on the disclosure of confidential information in a fax the law firm erroneously sent the opposing party. The lawsuit was justifiably dismissed because there was no coverup by the firm to protect itself. The firm fully disclosed to the client the fax, which created a conflict of interest, and advised the client to seek independent counsel. The recipient lawyer promptly notified the sender, which is required in California.

California follows ABA Opinion 92-368 as to the duty of the receiver to notify the sender of an inadvertent facsimile. (See WPS below.) How-ever, that highly controversial ABA opinion was not based on ethics rules, lacks citations, is inconsistent with the law governing waiver of attorney-client privilege, and requires actions by the receiving lawyer which directly prejudice the rights of his or her client.

In addition to all that, it was arguably repealed in 2002 by the modifications to ABA Model Rule 4.4. That rule now only requires that the recipient of privileged documents notify the sender, which means that now you can read and use the information.

Bad ethics opinions can create true mischief. For example, in Holland v. Gordy Co., 2003 Mich. App. LEXIS 1065, a case involving inadvertently produced privileged files, the court, in footnote 20, states: "ABA Formal Opinion 92-368 may also be applicable because the ABA's interpretations are binding on ABA members and several of plaintiffs' counsel are members of the ABA." What a remarkable idea!

Like you, I am a member of lots of associations, which according to the Michigan footnote, would now be potentially binding upon my conduct. "'Although not binding, opinions of ethics committees in California should be consulted . . . for guidance . . .' [ABA Model Rules] may be considered as a collateral source, particularly in areas where there is no direct authority in California . . ." State Compensation Insurance Fund v. WPS Inc. (1999) 70 Cal. App. 4th 644, 656. The problem is that you have to read the inadvertent fax to determine the existence of a privilege, which triggers notification. That means that the proverbial bell is already rung.

Often ABA rules conflict with California rules. California rules govern. However, maybe we should all check our memberships in organizations (NRA, AARP, garden clubs and the PTA), because no longer does "membership have its privileges."