ITT Industries, Inc. v. Rayonier, Inc.
Rayonier Inc., Southern Wood Piedmont Inc. (Southern Wood), ITT Industries, Inc., and ITT Fluid Technology Corporation (ITT Fluid) are plaintiffs in an action against several insurers seeking to establish duties to defend and indemnify relating to the investigation and remediation of environmental contamination. Rayonier formerly was a wholly owned subsidiary of ITT. Southern Wood is a subsidiary of Rayonier. ITT Fluid is a wholly owned subsidiary of ITT. The same counsel represented Rayonier, Southern Wood, ITT, and ITT Fluid in this litigation for many years. After counsel moved to be relieved as counsel for Rayonier and Southern Wood, Rayonier and Southern Wood moved to disqualify the same attorneys as counsel for ITT and ITT Fluid. The court granted the motion to be relieved as counsel but denied the motion to disqualify counsel, based on laches and other grounds. Rayonier and Southern Wood challenge the latter order and a subsequent order sustaining objections to evidence submitted in support of their motion. They have filed both an appeal (case No. B187238) and a petition for a writ of mandate (case No. B187829).
This insurance litigation so far has resulted in over $112 million in settlements for the plaintiffs and may result in further recoveries through settlement or judgment. Rayonier and Southern Wood, on the one hand, and ITT and ITT Fluid, on the other, have disputed the division of settlement proceeds and entered into agreements providing for binding arbitration to resolve their dispute. Rayonier and Southern Wood contend the plaintiffs had and continue to have conflicting interests with respect to the division of settlement proceeds, despite their agreements with each other and their common interests vis a vis the defendants. Rayonier and Southern Wood contend disqualification is required because counsel (1) concurrently represented clients with conflicting interests without having obtained the clients' informed written consent and (2) improperly counseled and acted on behalf of ITT and ITT Fluid in connection with the settlement division dispute. Rayonier and Southern Wood also contend the court had no jurisdiction to sustain objections to evidence submitted in support of their motion to disqualify after they had filed a notice of appeal from the denial of their motion.
Court conclude that the trial court properly found that Rayonier and Southern Wood unreasonably delayed their motion to disqualify counsel and are barred by laches. As a result their challenge to the order sustaining evidentiary objections is moot. Court therefore affirm the order denying the motion to disqualify and deny the petition for writ of mandate.
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