Friday, June 7, 2013

Verification on behalf of a dissolved or non-existent corporation

Can a non-existent or a dissolved corporation verify its discovery responses? Even if there is no human agent or officer left around? Court in a recent decision in Melendrez v. Los Angeles Sup. Ct. (In re: Special Electric Co.)215 Cal.App.4th 1343 (2013), says "yes" and comes up with no less than three alternative solutions.

Attorneys for Special Electric ("SECO") argued that (a) there was no corporate officer or agent left, and (b) attorney may not be such an agent, because if she verifies the responses, the work product privilege would be waived and it would open a "slippery slope" for further discovery requests, propounded on that attorney.

Court disagreed and held that an attorney could indeed be an agent for SECO and that her verification would provide only for a limited waiver of privileges, "concerning the identity of the sources of the information contained in the response." Court further identified two more alternative solutions for SECO, one was to elect a new director, who would, in turn, be a person to verify responses, or, to pass the duty to verify to SECO's insurers, who were held as de facto assignees for SECO.

The court, essentially, did not fully agree with either of the parties. It did not let SECO to escape from verifying the responses, but also did not side with the discovery-requesting plaintiff on the proposal that the privilege "simply evaporates." Rather, the privilege was held to be passing to the SECO's assignees, its insurers.

Decision is full of useful citations, contains a concise restatement of applicable rules for discovery verifications, waivers of attorney-client and work product privileges, difference between a dissolved and a non-existent corporation.

[7-5-13 update] A couple of more recent cases on LLC personhood were covered in this post.

More litigation posts

No comments:

Post a Comment