D. I. Chadbourne, Inc. v. Superior Court of City and County of San Francisco

Decision Date30 January 1964
Citation60 Cal.2d 723,388 P.2d 700,36 Cal.Rptr. 468
Parties, 388 P.2d 700 D. I. CHADBOURNE, INC., Petitioner, v. The SUPERIOR COURT OF the CITY AND COUNTY OF SAN FRANCISCO, Respondent; William Harrison SMITH et al., Real Parties in Interest. S. F. 21439.
CourtCalifornia Supreme Court

Cresswell, Davis & Church and R. T. Cresswell, Oakland, for petitioner.

Dunne, Bledsoe, Smith, Phelps, Cathcart & Johnson and Robert A. Seligson, San Francisco, as amici curiae on behalf of petitioner.

No appearance for respondent.

Hoberg, Finger, Brown & Abramson, Michael J. Kennedy, John H. Finger and James B. Werner, San Francisco, for real parties in interest.

Hersh & Hadfield and Le Roy Hersh, San Francisco, as amici curaie on behalf of real parties in interest.

PETERS, Justice.

The sole question presented by this mandate proceeding is whether a certain written statement, obtained by a representative of petitioner's insurance carrier and delivered to its attorney, was privileged as a matter of law, 1 and so protected from discovery, or whether the issue presented was purely factual. We have concluded that the statement of the witness was not privileged as a matter of law, and that a factual issue was presented to the trial court as to the existence of the privilege. 2 This being so, the determination of the trial court is binding upon us.

The pertinent facts are that William and Constance Smith, the real parties in interest, commenced an action for personal injuries in which they alleged that Constance was injured when she fell upon a sidewalk, as a result of the negligence of defendant E. I. Chadbourne, Inc., the petitioner. In response to interrogatories served upon it by the real parties, petitioner admitted that it had obtained the written statement of one John Makuszi, a person 'who performed work on the sidewalk referred to in the complaint.' When the real parties moved for an order allowing inspection of that statement (pursuant to § 2031 and subd. (b) of § 2016), petitioner opposed the motion solely on the ground that the statement was protected by the attorney-client privilege. Each party filed a declaration and a memorandum of points and authorities in support of their respective contentions. The respondent court ordered petitioner to allow inspection and copying of Makuszi's statement, setting forth therein that the order was predicated on 'good cause appearing therefor.' 3

The declaration filed in support of the motion for inspection showed: that Makuszi had performed work on the sidewalk both before and after the accident, and had information relevant to the cause of action; that petitioner had obtained written statements from Makuszi and others and had allowed the real parties to inspect all of such statements other than that of Makuszi; that petitioner refused to allow inspection of Makuszi's statement; and, that petitioner had failed to produce Makuszi for a noticed deposition, indicating that he was (and is) on duty with the Armed Forces in Germany. 4

In opposition to the motion, petitioner filed the declaration of one Louis Rovens, showing that: declarant was an investigator and adjuster for a firm employed by petitioner's insurance carrier for the purpose of investigating accidents which are likely to lead to litigation involving persons or firms insured by such carrier; that the attorneys now appearing for petitioner were (and are) the attorneys for such insurance carrier, and the latter had directed declarant's firm to investigate all such accidents and transmit their reports 'to their attorneys'; that the policy issued by such carrier to petitioner required the latter to cooperate and furnish to declarant's employer (as agents for the insurance company) all information incidental to the defense of claims; that Makuszi's statement 'was taken by me (declarant) as part of the investigation and preparation for defense, and * * * after plaintiff herein had engaged the services of her attorneys and the said statement * * * was intended to be confidential and made for the purpose of being transmitted to and was transmitted to * * * (the insurance carrier) for transmission to (its) attorneys, * * * and said statement was given to me and not to D. I. Chadbourne, Inc., the employer of the witness and the defendant herein.'

If the facts set forth in the two declarations support petitioner's contention that Makuszi's statement was privileged as a matter of law, respondent court was required to deny the motion for inspection (§ 2016, subd. (b)). If, however, the claimed privilege does not appear as a matter of law, but presented a question of fact, then the determination of the trial court may not be set aside. When the facts, or reasonable inference from the facts, shown in support of or in opposition to the claim of privilege are in conflict, the determination of whether the evidence supports one conclusion or the other is for the trial court, and a reviewing court may not disturb such finding if there is any substantial evidence to support it (Holm v. Superior Court, 42 Cal.2d 500, 507, 267 P.2d 1025, 268 P.2d 722; San Diego Professional Ass'n. v. Superior Court, 58 Cal.2d 194, 202, 23 Cal.Rptr. 384, 373 P.2d 448). The party claiming privilege carries the burden of showing that the evidence which it seeks to suppress is within the terms of the statute. (Tanzola v. De Rita, 45 Cal.2d 1, and cases cited at p. 6, 285 P.2d 897, and cases cited at p. 899; see also, Brotsky v. State Bar, 57 Cal.2d 287, 303, 19 Cal.Rptr. 153, 368 P.2d 697.) It follows that the writ should not issue unless privilege appears, as a matter of law, from the undisputed facts set forth in the declarations.

In support of its contention that it has met the burden required of it, petitioner relies almost exclusively upon the authority of Gene Compton's Corp. v. Superior Court, 205 Cal.App.2d 365, 23 Cal.Rptr. 250, and several appellate cases following it. Compton's does hold that 'report(s) and statements of employees concerning an accident on the employer's premises sent, pursuant to the terms of an insurance policy, to the employer's insurance carrier, (are) privileged.' (205 Cal.App.2d at p. 366, 23 Cal.Rptr. at p. 251.) That broad statement, followed in several later cases, would sustain the claim of privilege, as a matter of law, in every situation wherein a plaintiff in a personal injury action seeks the statement of a witness who is also an employee of an insured defendant. The correctness of that concept is the problem with which we are concerned. It has never, heretofore, been passed on by this court.

Compton's involved facts substantially similar to those now before us. There the appellate court held that in Greyhound Corp. v. Superior Court, 56 Cal.2d 355, 15 Cal.Rptr. 90, 364 P.2d 266, this court had placed its stamp of approval upon that portion of Holm v. Superior Court, supra, 42 Cal.2d 500, 267 P.2d 1025, 268 P.2d 722, which had held the attorney-client privilege extended to the accident report of a bus driver, required by his employer (S. F. Municipal Ry.) to be executed at the time of the accident, and that such holding sustained the broad statement above quoted. That portion of the Compton's decision errs in several respects. In the first place, it fails to take cognizance of both the factual and legal distinctions involved in the Holm and the Compton's cases. In Holm, the employee (who was also a defendant) made his report directly to his employer under a standing rule requiring the same; and at the time plaintiff attempted to obtain such report, the employee was represented by the same attorney (the city attorney) to whom the employer had sent the report. Also, in Holm, this court held that whether or not the privilege existed must be determined after first ascertaining the dominant purpose of requiring the accident report in the first instance, and that the trial court must make that determination from the facts presented to it. In Compton's the employee was not a defendant, and was not even a person who could, under the facts, have been held responsible for plaintiff's injuries. At no point did that court discuss the employee's dominant or other purpose in making the report. Another error in the Compton's case lies in its assumption that this court, in Greyhound, supra, 56 Cal.2d 355, 15 Cal.Rptr. 90, 364 P.2d 266, gave unqualified endorsement to the rule as stated in Holm. Greyhound dealt with the written statements of independent witnesses, and was not concerned with the statement or accident report of an employee. Because it was one of the first decisions interpreting the attorney-client privilege in light of the then new discovery statutes, it was deemed necessary, in that opinion, to review the basic rules and decisions which existed prior to the enactment of those statutes. In discussing Holm, the Greyhound opinion noted this factual distinction and, while it inferentially approved the rule that where a report is made for more than one purpose its confidential nature (and hence its privilege) must be determined by the dominant purpose, it expressly refrained from approving or disapproving the determination that the employee's accident report was protected by the attorney-client privilege. Thus, the basis of the Compton's decision is without the foundation claimed for it. But the greatest evil in Compton's lies neither in its reasoning nor in its result. The broad language used therein (a portion of which is quoted above), taken together with the fact that it reversed the trial court's order authorizing inspection, suggests the interpretation that all accident reports and statements obtained by the representative of an insurance carrier from the employees of a corporate insured are privileged as a matter of law. Whether or not Compton's actually so held is of no moment; the point is that it has been so applied on several occasions.

No petition for hearing was filed in Compton's. The...

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