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Kroll & Tract v. Paris & Paris6/24/1999
Appeal from a judgment of the Superior Court of Orange County, James H. Poole, Judge. Affirmed.
Barton, Klugman & Oetting and Charles J. Schufreider for Cross-complainants and Appellants. Wilner, Klein & Siegel, Edward E. Wallace and Patrick M. Malone for Cross-defendants and Respondents.
Sound policy reasons prohibit an attorney sued for malpractice by a former client from cross-complaining for indemnity against the client's successor attorney. Here, we are asked to decide whether these same concerns should bar an indemnity cross-complaint between two independent attorneys who concurrently represented the dissatisfied client, one as insurance defense counsel and one as Cumis counsel, where the client subsequently sued only one of the attorneys. We hold that public policy considerations preclude such a cross-complaint for indemnity and affirm the trial court's order sustaining the demurrer without leave to amend.
FACTS
Charles Giguere and his company, San Jose Crane & Rigging, Inc. (collectively, San Jose Crane) were sued by the purchasers of an allegedly defective crane. San Jose Crane's personal counsel, Paris & Paris, filed a demurrer to the complaint; the defense was then tendered to the company's liability insurer. Kroll & Tract was retained by the insurer to provide a defense under a full reservation of rights, and it associated as counsel with Paris & Paris. Five months later, Paris & Paris filed a cross-complaint on behalf of San Jose Crane against the purchasers, seeking recovery of the unpaid portion of the crane's purchase price. Kroll & Tract was not involved with the prosecution of the cross-complaint.
Both firms actively participated in the defense of San Jose Crane until 10 days before trial, when Paris & Paris asked Kroll & Tract to take on the full defense. San Jose Crane lost the lawsuit and sued Kroll & Tract for legal malpractice, alleging that the firm mishandled the defense. The company did not name its personal counsel, Paris & Paris, as a defendant in the malpractice action.
Kroll & Tract cross-complained against Paris & Paris for comparative equitable indemnity. Paris & Paris successfully demurred on the grounds that public policy considerations bar the requested relief. The demurrer to the first amended cross-complaint was sustained on the same grounds without leave to amend, and judgment for Paris & Paris was entered. Kroll & Tract appeal.
DISCUSSION
On an appeal following a demurrer sustained without leave to amend, the appellant bears the burden of demonstrating either (1) the demurrer was sustained erroneously as a matter of law on the facts pleaded, or (2) the court abused its discretion by failing to grant leave to amend. (Lewis v. Purvin (1989) 208 Cal.App.3d 1208, 1213; Pollack v. Lytle (1981) 120 Cal.App.3d 931, 939.) Kroll & Tract has failed to carry either burden.
In American Motorcycle Assn. v. Superior Court (1978) 20 Cal.3d 578, the Supreme Court enunciated the principle that "liability for an indivisible injury caused by concurrent tortfeasors will be borne by each individual tortfeasor `in direct proportion to respective fault.'" (Id. at p. 598.) However, a well-recognized exception to the ordinary rules of implied equitable indemnity has been established: A cross-complaint will not be permitted where an attorney sued for malpractice by a former client seeks indemnification from a successor attorney hired by the client to extricate him or her from the situation allegedly caused by the first attorney. (Holland v. Thacher (1988) 199 Cal.App.3d 924; Copenbarger v. Internation
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