TRANSPORT INS. CO. v. TIG INS. CO.
202 Cal.App.4th 984 (2012)
Court of Appeals of California, First District, Division Two.
January 13, 2012.
In late 1996, Nalepa retained counsel at a second law firm, Deborah Cohen of Pepper Hamilton & Scheetz (Pepper Hamilton), which had assisted Transport in another matter. As his letter to Ms. Cohen put it: "We are getting
involved in this effort because of [a prior] litigation you have filed .... I've spoken to Eve Rosen and she has blessed our involvement at this point. I am hopeful that your office will be able to assist Transport further in recovering what appears to be long overdue reinsurance proceeds." Nalepa's letter ends with this: "This file is troublesome from a number of aspects and your considered legal opinion will be helpful."3
By November 1996, Pepper Hamilton had drafted a complaint against another of Transport's reinsurers, and a note on the front of the draft asked whether other reinsurers, such as Unigard, Seaton's predecessor, should be added as a defendant.
Ms. Cohen communicated with Transport several times about the statute of limitations, including, for example, in a July 1997 memorandum where she expressed concern about the possible application of the statute of limitations, and advised that the issue could "not sit." A November 19, 1997 letter from Ms. Cohen was similar, expressing "concern about the statute of limitations on some of these billings."
Following the December 1997 Supreme Court decision in Aerojet, supra, 17 Cal.4th 38, Ms. Cohen wrote Nalepa, advising Transport that it should update its billing to TIG, "provide a reasonable time period" for questions, and then demand payment, and "[i]f payment is not made, litigation should be commenced...." In July 1998, Transport sent updated bills to TIG for expenses, stating that "all billings are due 30 days after receipt."
In June 1999, Transport sent another bill to TIG, accompanied by a cover letter drafted by Ms. Cohen, which letter she described as follows: "I have tried to `wordsmith' the letter to set this up for litigation."
Following the September 1999 settlement with Aerojet, Transport brought in a third law firm, Luce Forward, Hamilton & Scripps (Luce Forward), to allocate the settlement between the Aerojet sites and between loss and expense, in order to bill the reinsurers. Some issues arose as to just how to apportion, and one attorney at Luce Forward told Transport that "it is unlikely that anyone is just going to write a check" regarding the proposed allocation, and another that his "expectation was that the matter was likely to go to litigation at the end of the day." They also warned Transport regarding the
statute of limitations.4 Transport's Rosen "understood [in 1999] that ultimately there was going to be some litigation." Indeed, in September 1999, attorneys at Luce Forward drafted a complaint by Transport against TIG and Seaton.5
It was not until many years later that Transport filed any lawsuit.