Attenuated Contacts Support Law Firm's Disqualification.

Conceding that the case was one of those "gray area" situations with no clear answers, the California Court of Appeal, First District, has held that a trial court exercised its discretion correctly in disqualifying a law firm from representation on the ground of conflicts of interest. Morrison Knudsen Corp. v. Hancock, Rothbert & Bunshoft LLP, 81 Cal.Rptr.2d 425 (1999).

The trial court barred the Hancock firm from representing the Contra Costa Water District in any dispute with Morrison Knudsen Corp. or Centennial Engineering Corp., a wholly owned Morrison subsidiary, with respect to some construction projects. Hancock had not represented either Morrison or Centennial, but it was retained by Morrison's primary comprehensive insurer to monitor the defense attorneys Morrison retained on errors and omissions claims. As "monitoring counsel," Hancock received detailed confidential communications from Morrison's defense counsel.

Affirming the disqualification order, the court of appeals emphasized that it reviewed on an abuse of discretion standard In an opinion by Justice Hanlon, it concluded that the...