Commercial Standard Title Co. v. Superior Court

In Commercial Standard Title Co. v. Superior Court (1979) 92 Cal.App.3d 934, the plaintiff filed suit against two title insurance companies for negligently or fraudulently issuing a defective lot book guarantee upon which the plaintiff had relied in entering into a transaction involving the exchange of real property. The defendant title insurance companies filed a cross-complaint against the plaintiff's attorney asserting that the attorney's negligence in advising the plaintiff to rely upon the lot book guarantee, which purported to limit liability of the insurers to $ 100, caused or contributed to the plaintiff's injury. A majority of the court upheld the trial court's dismissal of the cross-complaint, apparently on at least three separate bases. First, it was apparently concluded that the defendant title companies and the cross-defendant attorney were not really joint tortfeasors within the contemplation of the American Motorcycle decision because the attorney could not be held responsible for the entire loss. (92 Cal.App.3d at pp. 941-943.) Secondly, it was reasoned that the defendant title companies and the cross-defendant attorney were not joint tortfeasors within the purview of the American Motorcycle decision because their alleged wrongs were independent and did not arise from violation of a common duty. (92 Cal.App.3d at pp. 943-944.) Finally, reliance was placed on the "undivided loyalty to client" rationale of Held v. Arant, 67 Cal.App.3d at page 752, and Goodman v. Kennedy, 18 Cal.3d at page 344. (92 Cal.App.3d at pp. 945-946.) In respect to the latter basis, however, although the majority did say that "the lawyer's duty in re full and frank discussion and disclosure could not help but be affected by this overhanging threat of a lawsuit brought by a person about whom the lawyer is advising his client," it gave to the asserted interference with the attorney-client relationship a new twist. It said: "If suit were to be permitted against the current acting attorney for plaintiff, such rule would effectively allow a defendant to require plaintiff's now-sued attorney for multiple reasons to recuse himself . . . . There is inherent in proposed extension of the American Motorcycle rule the seeds of irresponsible cross-lawsuits motivated by naught but spite and a desire to spread confusion, dissention in the opponent's camp." (92 Cal.App.3d at p. 945.)