Attorney-Client Privilege May Be Passed On To A Bankrupt Corporation’s Insurer.

A bankrupt corporation which purportedly only existed as a shell through which personal injury claims were passed on to its insurer for resolution was sued for personal injury. Pursuant to its reorganization plan, the action was submitted to its insurers, who provided a defense. When discovery was propounded to the corporation, the corporation’s attorney (who had been provided by the insurers) filed substantive responses to the discovery, but represented to the court that the responses could not be verified, as the corporation had no officer, director, employee, or agent who could verify the discovery responses. The personal injury plaintiff challenged the sufficiency of the discovery responses. The trial court agreed that, under the circumstances, no individual existed who could verify the responses, and, at the corporation’s request, simply deemed them verified. The appellate court granted the plaintiff’s petition for extraordinary writ, stating “the law provides that an attorney can verify responses on behalf of a corporation, although such an act constitutes a limited waiver of the attorney-client and work product privileges with respect to the identity of the sources of the information contained in the response. In this case, the attorney argued that she could not verify the discovery responses because the corporation was the holder of the attorney-client privilege, but had no officer or director who could waive it. We conclude that the court could have directed that further effort be made to have a director elected or appointed on behalf of the corporation. It may, however, be that the corporation no longer exists and no director can be elected or appointed. If that is the case, we believe that the corporation’s attorney-client privilege would be passed to its insurers, the de facto assignee of its policies and the claims against them.” Melendrez v. Sup. Ct. (Special Electric Company) (Cal. App. Second Dist., Div. 3; April 30, 2013) 215 Cal.App.4th 1343.