Deposition of business owner (California)

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Deposition of business owner (California)

Postby wcscout on Wed Feb 15, 2012 8:58 pm

Does the attorney representing insurance company for business X have any attorney-client relationship w/ that businesses owner?
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Re: Deposition of business owner (California)

Postby davidd on Thu Feb 16, 2012 3:21 am

short answer is "no"
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Re: Deposition of business owner (California)

Postby gaiassoul1@yahoo.com on Thu Feb 16, 2012 11:12 am

long answer is that once an employer submits a workers' compensation claim to their insurance company, they become a disposable party to the claim - Except for self-insured employers.
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Re: Deposition of business owner (California)

Postby ozzie on Thu Feb 16, 2012 10:45 pm

Yes there is an attorney-client privilege. The attorney represents both the employer and the carrier. The carrier can file a pleading to let the employer out of the loop, so to speak, on pleadings, etc., but I've never seen anyone do this in 27 years of practice representing carriers and employers.
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Re: Deposition of business owner (California)

Postby davidd on Fri Feb 17, 2012 12:27 pm

Ozzie - I don't think this is correct.

See Canton Poultry v. Stockwell, Harris, et. al., 109 Cal.App.4th 1219 (2003):

*39
Here, plaintiffs' complaint alleges that pursuant to the workers' compensation policy, California Indemnity was obligated to undertake plaintiffs' defense when Duran filed his claim, and California Indemnity retained Stockwell to defend against that claim. It is reasonable, in such a situation, for an employer to believe that the attorney is looking out for the employer's interests. Indeed, it is because of the attorney's efforts that the employer is dismissed from the case.
*40
However, after the employer has been dismissed from the workers' compensation case and the case proceeds solely against the insurer, the employer has no reasonable basis to believe that it is still in an attorney-client relationship with the attorney, absent developments in the workers' compensation case itself that require the attorney to protect or defend the interests of the employer (Canton Poultry gives the example of the employer being deposed in the compensation case if it does not settle, or prior to settlement). An employer's reasonable belief at that point in time must necessarily be that the attorney represents the party who has been substituted in place and stead of the employer, and who remains involved in the case--the insurance carrier.
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Re: Deposition of business owner (California)

Postby gaiassoul1@yahoo.com on Fri Feb 17, 2012 12:57 pm

thanks David, I was looking for that, because I worked at Cal Indemnity as an adjuster when that case came down.

Also there was a billing dispute at one firm I worked for where the employer had a high deductible and was constantly contacting the attorneys. We billed them directly, because it was not at the direction of their administrator and we had no authorization to bill the carrier for the employer's constant micromanagement. We used that exact case as our justification for billing them directly.

We did do a mass dismissal of an employer at one point because they were becoming obstructive to case handling, but other than that, have never seen it done.
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Re: Deposition of business owner (California)

Postby fara on Sun Feb 19, 2012 7:34 am

I don’t believe that the Canton Poultry case states that there isn’t an ongoing attorney-client privilege in work comp cases. Actually, that case indicates that such a privilege did not exist on the civil case because the comp attorney did not represent the employer in that suit. So, that case does not indicate that the privilege absolutely ceased to exist for the comp case...look at the exception of “absent developments in the workers' compensation case itself that require the attorney to protect or defend the interests of the employer.” Considering that every case affects an employer’s premium, they always have an interest in the outcome.
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Re: Deposition of business owner (California)

Postby stewshe on Sun Feb 19, 2012 10:29 am

Ginger,

You mentioned an employer with a "high deductible." I used to adjust claims for an insured in Fresno with a one million dollar deductible, as I recall. They paid us $1.25 for every dollar spent on claims. Perhaps reserves were set aside as well. I don't really know. They were essentially self insured.

I also recall calling (30 plus years ago) Mr. Brophy of "Hanna and Brophy" and asking him if we/they were in "self-insured" territory and did we have any problems re the regs? He didn't think so, but didn't want to be quoted on the subject. We had a couple of conversations and spoke for a half hour or so. Bottom line? I still don't know.

For what it's worth, he was VERY energetic, and must have been around 80 at the time. I'm close to 70 myself, and just as I told my wife when we got married when I was 29, I still feel like a kid. She replied, "Yeah, but in another 11 years you'll be 40!" Looking back, that seems young now, but at the time she couldn't have surprised me more if she'd slapped me!

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Re: Deposition of business owner (California) (California)

Postby ozzie on Tue Feb 21, 2012 6:24 pm

The Canton Poultry case supports exactly what I said before: the attorney retained by the carrier represents BOTH the carrier and the employer, UNTIL the proper pleading is filed under LC 3755; and it is only after that event that the employer is out of the loop. Until then, the employer is in. Quoting from the case:

"Labor Code section 3755 provides that when an employer carries workers' compensation insurance and the compensation carrier serves notice on a workers' compensation claimant that the carrier has agreed to pay to the claimant such compensation as the claimant's employer is liable for, the employer is relieved of liability for that compensation once a copy of that notice is filed with the workers' compensation appeals board. Then the insurer is substituted in place of the employer in any proceeding instituted by the claimant to recover such compensation, and the employer is dismissed from [***14] such proceeding. The proceedings then continue against the insurer instead of the employer. The employer is thus out of the picture for purposes of those workers' compensation proceedings."

"Up until the dismissal of the employer, the claimant and his or her attorney are on one side of the litigation, and the employer, its insurer, and the attorney hired by the insurer to handle the compensation claim are on the other."

Read the highlighted portions of the case which I will attempt to upload here.

The sole issue in the Canton case was whether the Attorney still represented the employer and could be sued by the employer on a sort of malpractice situation, and the C/A made it very, very clear that until the 3755 pleading was filed the attorney represented both the carrier and the employer.

As other postings, and mine, in this forum have made clear, the filing of a 3755 is EXTREMELY rare. Hence, it can be concluded that in almost every case the attorney continues to represent both the carrier and the employer.
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CantonPoultry AttyRpresnts employer or carrier issues.doc
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Last edited by ozzie on Tue Feb 21, 2012 7:00 pm, edited 1 time in total.
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Re: Deposition of business owner (California)

Postby ozzie on Tue Feb 21, 2012 6:36 pm

Getting back to the question at hand: until and UNLESS the attorney retained by the carrier files under LC 3755, that attorney does represent both the IC and the employer, and other than the Canton Poultry case, I have never heard of that having been done, and have never - despite having been employed by Stockwell, the firm in Canton - as well as other "big name" firms, even heard of it being used, despite the fact that under many situations, it would be very, very wise for the attorney to do so; but subject to very critical review, and approval by the carrier, and, in my never too humble opinion, by the employer, who may be understandably upset at being abandoned, so to speak, by the attorney and the carrier; in many cases it has been my experience that the carrier would be extremely upset if the attorney did such a thing without their approval and the resulting possible loss of their insured as a future client.

So if the issue is, can you take the deposition of the insured business owner and if you do, can that owner claim attorney-client privilege as to communications between that owner and the attorney hired by the carrier, the answer is "maybe, if there was a filing by the attorney/carrier under LC 3755."

HOWEVER, that does not end the discussion! Let's suppose that the owner, for example, asked the carrier about terminating the employee in part because of the comp claim having been filed. That would still be attorney-client privileged if it had been done before the 3755 filing; there could be other matters which would come under that privilege and each would depend upon the facts.
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