Fri Sep 4, 2009 10:21pm EDT
Attorneys for First American Title Insurance Co. Were Disqualified From Four
Class Action Lawsuits in One Day
Alleged Ethical Conflict Bars Chicago Law Firm from Continuing to Defend First
LOS ANGELES, Sept. 4 /PRNewswire/ — Today, counsel for both sides in four
class action lawsuits received a sealed ruling from Los Angeles Superior Court
judge Anthony J. Mohr, of the complex litigation panel. According to an
unsealed minute order issued by Judge Mohr earlier in the week, the sealed
ruling received today grants plaintiffs’ motions, brought in all four class
actions, to disqualify the international law firm of Sonnenschein, Nath &
Rosenthal, and all of the firm’s attorneys, from continuing to represent the
defendants – First American Title Insurance Company and related entities.
First American Title traces its history to 1889 and is one of the world’s
largest title insurance companies. Its parent is First American Corporation,
a Fortune 500 company, publicly traded on the New York Stock Exchange.
The Sonnenschein law firm, founded more than a century ago, is one of the
largest full service law firms in the U.S., with 800 lawyers in 13 offices in
the U.S. and Europe, and has a “global reach throughout the Americas, Asia and
the Middle East,” according to its web site. The firm “serves the needs of
many of the world’s best known and most admired businesses,” according to its
The are four California class actions against First American in which First
American’s counsel were disqualified:
1. Jeffrey Sjobring v. First American Title, et al, LASC Case No. BC329482
2. Elizabeth Wilmot , Jason Munro v. First American Title, et al, LASC
3. Patrick Kirk v. First American Title, et al, LASC Case No. BC372797
4. Kaufman v. First American Title, et al, LASC Case No. BC382826
Sonnenschein attorneys who were direct subjects of the disqualification motion
include partners Charles Newman and Jason Maschmann of the St. Louis office,
partner Joel Siegel of the Los Angeles office, and partner Gary M. Cohen of
the San Francisco office. Until 2007, Gary Cohen was Deputy Commissioner and
General Counsel at the California Department of Insurance, where he served as
chief legal advisor to Commissioners Steve Poizner and John Garamendi,
according to his biography on the Sonnenshein web site.
First American Title was represented in the disqualification proceedings by
“special counsel” — attorneys Peter Q. Ezzell and Nancy E. Lucas, of the
Haight, Brown & Bonesteel firm, as well as by Sonnenschein partner Ronald D.
Lead counsel for plaintiffs and class members in all four cases are Los
Angeles attorneys Steven Jay “Bernie” Bernheim of The Bernheim Law Firm, and
Taras Kick of The Kick Law Firm. Bernheim , an insurance litigator for 20
years, is a past recipient of California Lawyer ‘s Attorney of the Year
(“CLAY”) award, and was nominated by Trial Lawyers for Public Justice as a
finalist for National Trial Lawyer of the Year. Kick is one of California’s
leading consumer class action litigators.
The disqualification ruling was the end result of a six month procedure,
during which Judge Mohr held six separate hearings, conducted an in- camera
examination of confidential documents, and reviewed nearly three feet of
briefing, declarations and documentary evidence.
“One thing that both sides can doubtless agree on is that Judge Mohr was
extremely thorough and careful in his consideration of these sensitive
motions,” Bernheim observes.
Immediately after issuing the ruling disqualifying Sonnenschein from all four
cases, Judge Mohr began a three month assignment as a temporary justice of the
Second Appellate District.
According to the court’s records, First American was originally represented in
the litigation by the St. Louis and Los Angeles offices of the Bryan, Cave law
firm. The First American defense team at Bryan Cave included attorneys
Newman, Maschmann and Siegel, who eventually left Bryan Cave to become
partners at Sonnenschein in February 2009. They took the First American
litigation with them to Sonnenschein. Gary Cohen was already a partner at
Sonnenschein at this time.
According to publicly available portions of plaintiffs’ disqualification
papers, before Mr. Cohen became a partner at Sonnenschein, plaintiffs counsel
Bernheim and Kick had on several occasions communicated with Mr. Cohen about
retaining/employing Mr. Cohen to work on behalf of plaintiffs in the First
American litigation. In so doing, plaintiffs counsel communicated extensive
confidential work product information to Mr. Cohen, according to the publicly
When Mr. Cohen became a Sonnenschein partner, plaintiffs’ counsel again
contacted Mr. Cohen, expressing interest in retaining him through the firm,
according to plaintiffs’ publicly filed papers. According to the publicly
filed papers, Mr. Cohen caused a conflict check to be run at Sonnenschein. He
reported that there was a conflict, and that he and the firm could not work
with plaintiffs against First American in this litigation.
Three weeks after that, Sonnenschein filed a substitution of attorney and
became counsel of record against plaintiffs in the very same litigation
plaintiffs counsel had discussed with Sonnenshein partner Cohen. Sonnenschein
was now adverse to a party in the very litigation where they had nearly been
retained only weeks before, and where a conflict check had revealed there was
indeed a conflict, according to the publicly available documents filed by
plaintiffs in Superior Court.
Plaintiffs filed the motion to disqualify Cohen and the entire Sonnenschein
firm in early March 2009. Defendants responded by representing they had built
an “ethical wall” around Mr. Cohen at Sonnenschein. In court-filed documents,
defendants alleged that the wall prohibited communications pertaining to these
cases between Mr. Cohen and the Sonnenschein (formerly Bryan Cave) litigation
About six weeks later, according to public records in the court file, the
Sonnenschein defense team submitted to Judge Mohr a trial court order from
another judge in another First American Title case. The Sonnenschein defense
team (Mr. Newman, Mr. Maschmann, Mr. Siegel, et al) urged J. Mohr to dismiss
these cases based on that order. They stated that the order in the other case
was “directly relevant” to the cases before Judge Mohr.
In court-filed papers, plaintiffs stated that —
— Gary Cohen was in fact one of the lawyers working on this other
“directly relevant” case.
— Gary Cohen’s work in that “directly relevant” case was
adverse to plaintiffs’ interests here.
— Gary Cohen did that work despite having received confidential
information from plaintiffs, and did that work despite
Sonnenschein’s representation that Mr. Cohen would abide by their
In a publicly filed declaration, First American Title’s in-house counsel, Mr.
Timothy P. Sullivan, Esq., testified that the Sonnenschein lawyers hold
“unique and irreplaceable knowledge” pertaining to the litigation. He also
testified that these class actions “are the most aggressively litigated and
complex proceedings that I have experienced in my 35 years of practice.”
Mr. Sullivan testified that First American has incurred more than $5,500,000
in attorney’s fees and $1,000,000 in additional expenses in defending them.
Plaintiffs’ litigation claims include the following, as set out in public
documents in the court file:
— that First American Title charged California consumers higher premiums
for title insurance than allowed under the rates First American had
filed with the California Department of Insurance.
— that this is unlawful; a title insurance company is only allowed to
charge premiums calculated according to the filed rates.
— that First American Title filed a special rate benefiting
who had First American’s extended coverage “Eagle Owners”
policy. This special filed rate entitled these homeowners to a lower
premium when paying for the additional title coverage usually required
by mortgage lenders. However, First American Title typically charged
this class of consumers more for the lender coverage than the rates
— that First American clearly stated in an internal memorandum written
when the Eagle Owners policy was created that this “was filed with
the Department of Insurance in its extended form,” not as
“standard coverage.” As contained in a public court document,
a very senior First American Title executive testified that “we
were informing the Department of Insurance and everybody else that
issued in that form [the Eagle Owners policy] provides extended
Despite this, in court-filed documents, First American has recently
represented to the superior court the exact opposite: “Nothing states that
the Eagle Owner’s policy is ‘extended coverage’; the Eagle Owner’s policy is
necessarily ‘standard coverage’.”
“First American Title is apparently talking out of both sides of its mouth,”
observes class representative Jeffrey Sjobring.
“In this litigation, the consumers also allege that First American’s rates,
were, at best, ambiguous,” states class counsel Kick.
Everyday there home sales transactions in California in which the home seller
pays First American Title for a title policy that protects the home buyer.
Often, especially in Southern California, a home seller, like class
representative Patrick Kirk, will use an independent escrow company to carry
out the transaction. One of First American Title’s defenses, stated in
court-filed documents, is that First American Title has no duty to advise
these home sellers about which title policy to buy, or about the appropriate
pricing of the policies.
As part of their defense to the litigation, First American states in publicly
available court papers that home sellers like Mr. Kirk are simply not
“customers” or “consumers” – despite the fact that they pay for the title
As stated in court-filed documents, the First American title officer for two
of the class representatives, Mr. Kirk and Mr. Sjobring, testified that First
American had, in just five years with the company, paid her $1.5 million in
compensation, most of it in commissions. She also testified that “the more
premium the buyers, sellers and refinancers of homes pay to First American,”
the more money she personally makes.
SOURCE The Bernheim Law Firm
Plaintiffs’ counsel, Steven Jay “Bernie” Bernheim, Esq. of The Bernheim Law
Firm, +1-310-975-4728, or +1-818-995-8530, Bernielaw1@aol.com; or Plaintiffs’
counsel, Taras Kick, Esq. of The Kick Law Firm, +1-213-624-1588,
Taras@Kicklawfirm.com; or Charles Newman, Esq. of Sonnenschein,
+1-314-259-5399, firstname.lastname@example.org; or Timothy P. Sullivan, Esq. of
First American, +1-714-250-3000