Karl D. Belgum
Partner

Practice Areas

Experience

Karl Belgum is an experienced business litigator with a track record of successfully representing clients in complex, high-stakes lawsuits.

Karl has served as trial counsel in several cases where the amounts in dispute were very significant, including one in which his client obtained settlements and judgments in excess of $875 million. He has represented directors, officers, and issuers in securities fraud cases and related actions for directors’ and officers’ insurance coverage. He has also represented

• insurance receivers in fraud, breach of fiduciary duty, and contract cases;
• insurers in major environmental liability cases;
• defendants in asbestos wrongful death cases;
• witnesses in SEC investigations; and
• an array of other clients in a wide variety of business litigation matters, including trade secret and corporate governance disputes.

Karl has been recognized as a “Super Lawyer” by the publishers of the Northern California Super Lawyers magazine for 2009. Inclusion in Super Lawyers is based on a peer-review survey.

Representative cases

Recent trials

• Commissioner v. Rampino, et al. No. BC357691 (Super. Ct. Los Angeles County) (2006–2009)—Prosecuted breach of fiduciary duty claims against seven former directors and officers of Fremont Indemnity Company, an insolvent California workers compensation insurer, on behalf of the California Insurance Commissioner as statutory liquidator. Allegations included breach of duty of good faith by directors, improper underwriting, and breach of duty of utmost good faith to the company’s reinsurers, resulting in the commutation of three layers of treaty reinsurance at a substantial loss to Fremont. Tried case for six months to the court in 2008–09. Case settled favorably after trial for $22 million.
• Sloan v. Oakland Police Dept., (N.D. Cal.) (2007)—Represented plaintiff in a Section 1983 action against two Oakland police officers for use of excessive force in making an arrest, resulting in serious injuries to the arrestee. Jury trial in January 2007.
• Garamendi v. Altus Finance, et al. No. CV 99-02829 AHM (CWx) (C.D. Cal.) (1999–2006)­—Prosecuted fraud and unjust enrichment claims on behalf of the California Insurance Commissioner as statutory liquidator of Executive Life Insurance Company (“ELIC”), an insolvent California life insurer, against Credit Lyonnais SA, Francois Pinault, Artemis S.A., and a number of other French and U.S. defendants. Defendants were alleged to have made misrepresentations to the Commissioner in connection with the sale of ELIC’s $2 billion junk bond portfolio, and the licensing, ownership, and control of a newly created California insurer. The case involved extensive foreign discovery. A five-month jury trial was conducted in federal court in Los Angles in 2005. The Commissioner obtained pre-trial settlements in excess of $700 million and an unjust enrichment judgment for $240 million after trial.

Banking and Financial Services Litigation

• Mechanics Bank of Richmond v. Sorani, No. C-90-02460 (Super Ct. Contra Costa County) (1990-1991)—Represented bank in claims against borrower; defended bank in fraudulent transfer action.
• National Healthcare Litigation (1990s)—Represented consortium of six national bank in investigating claims related to loans allegedly fraudulently obtained by bankrupt borrower.
• Central Bank v. Aetna Casualty & Surety Company, (Super Ct. San Francisco County) (1989)—Represented bank in action on fidelity bon related to alleged improper issuance of import letter of credit.
• Ridgewood Savings Bank v. International Trading Group, et al., No. 88-1360 (N.D. Cal.) (1988-1989)—Represented bank suing commodities trading firm in connection with embezzlement by bank employee and subsequent trading in embezzled funds. Case settled.

Corporate and securities

• In re Pacific Bancorp Securities Litigation, No. CV09-06501 RGK (PLAx) (C.D. Cal.) (and related cases) (2009–2010)—Successful defense of investment bank in Rule 10b-5 class action brought by purchasers of shares in bank holding company. Allegations included misrepresentation in the issuance of analyst reports. Prevailed on motion to dismiss. Also represented investment bank in related shareholder derivative litigation, from which client was dismissed.
• Copia Claims, LLC v. California Infrastructure and Economic Development Bank, et al, No. 2:09-CV-01610-GEB-DAD (E.D. Cal.) (2009)—Defended indenture trustee and bond insurer in Rule 10b-5 class action alleging misrepresentations in connection with bond offering for Copia: the American Center for Wine, Food, and the Arts in Napa, California. Client dismissed from action.
• Garamendi v. Altus Finance, et al. No. CV 99-02829 AHM (CWx) (C.D. Cal. (1999– 2006)—Prosecuted fraud and unjust enrichment claims on behalf of the California Insurance Commissioner as statutory liquidator of Executive Life Insurance Company (“ELIC”), an insolvent California health insurer, against Credit Lyonnais SA, Francois Pinault, Artemis S.A., and a number of other French and U.S. defendants. Defendants were alleged to have made misrepresentations to the Commissioner in connection with the sale of ELIC’s $2 billion junk bond portfolio, and the licensing, ownership, and control of a newly created California insurer. The case involved extensive foreign discovery. A five-month jury trial was conducted in federal court in Los Angles in 2005. The Commissioner obtained pre-trial settlements in excess of $700 million and an unjust enrichment judgment for $240 million after trial.
• Martinez v. Ryan, No. 324989 (Super Ct. San Francisco County) (2002)— Action by one shareholder against another for damages and to compel transfer of shares. Settled successfully.
• Katz v. Blech and Degulis v. LXR Biotechnology, Inc., No. 95 Civ. 4204 (S.D.N.Y.) (1999–2002)—Represented directors, officers, and issuer in securities class action; negotiated D&O coverage on behalf of clients; obtained favorable settlement within coverage limits.
• In re Informix Derivative Litigation, No. 410818 (Super. Ct. San Mateo County) (1999)—Advised special litigation committee of the board in connection with derivative litigation; prepared SLC report.
• Almeida v. Peat Marwick Mitchell & Company, No. 668436-9 (Super. Ct. Alameda County) (1990-1993)—Defended bank holding company and coordinated defense of director and officer defendants in securities class action. Successfully defended liquidation plan against class plaintiffs’ attack in Delaware Chancery Court, and settled class action litigation.
• Atari Corp. v. Ernst & Whinney, No. C 88-20556 (N.D. Cal.) (1988–1989)—Defended accounting firm in federal securities case. Summary judgment granted for defendants.
• Bily v. Arthur Young & Co. (In re Osborne Computer Securities Cases), No. 536562 and 546814 (Super. Ct. Santa Clara County) (1987)—Represented venture capital firms prosecuting fraud and negligent misrepresentation claims against the firm that audited Osborne Computer. Thirteen-week jury trial resulted in plaintiff’s verdict on negligent misrepresentation claim.

Directors and officers litigation

• Tognazzini v. NBOR Corporation, et al., No. RG09-429378 (Super. Ct. Alameda County) (2009)—Counsel to special litigation committee in shareholder’s derivative action against founder and principle shareholder of software company.
• Commissioner v. Rampino, et al. No. BC357691 (Super. Ct. Los Angeles County) (2006–2009)—Prosecuted breach of fiduciary duty claims against seven former directors and officers of Fremont Indemnity Company, an insolvent California workers compensation insurer, on behalf of the California Insurance Commissioner as statutory liquidator. Allegations included breach of duty of good faith by directors, improper underwriting, and breach of duty of utmost good faith to the company’s reinsurers, resulting in the commutation of three layers of treaty reinsurance at a substantial loss to Fremont. Tried case for six months to the court in 2008–2009. Case settled favorably after trial for $22 million.
• Chen v. Knabb, No. RG07310978 (Super. Ct. Alameda County) (2007–2008)—Defense of director in stockholder’s derivative action alleging breach of fiduciary duty and waste.
• VPIC v. General Fire and Casualty Co., No. CV 05-8425 (C.D. Cal.) (2005–2006)—Represented directors and officers of insurer against securities and breach of fiduciary duty counterclaims. Claims included alleged violation of Rule 13e-3 related to “going private” merger transaction. Settled on favorable terms.

Insurance Coverage

• Montrose Chemical Corporation of California v. Canadian Universal Insurance Company, et al., No. C594148 (Super. Ct. Los Angeles County) (1999–2003); Aventis CropScience USA Inc. v. American Motorists Insurance Company, No. C597389 (Super. Ct. Los Angeles County) (1999–2002); Firestone Tire & Rubber Company v. AIU Insurance Company, et al., No. CV-89-01-0158 and Bridgestone/Firestone v. First State Insurance Company, et al., No. CV-94-06-2057 (Court of Common Pleas, Summit Co., Ohio) (1998); Rhone-Poulenc v. International Insurance Company, et al., No. 94-CV-3303 (N.D. Ill.) (1995–97). See 877 F. Supp. 1170 (N.D. Ill. 1995); 71 F.3d 1299 (7 th Cir. 1995)—Defended environmental impairment liability (“EIL”) insurance program in a series of large coverage cases involving cleanup costs at significant industrial, waste disposal, and superfund sites. Issues included policy terms, exclusions, and conditions; defenses based on insured’s representations in application process; other insurance; excess insurance; and other issues. All were successfully settled after extensive litigation.

Other business litigation

• Contractors Access Program of California (2010)—Represent conservator of group self-insurer appointed by Director of the California Department of Industrial Relations.
• Rainbow Disposal Co. v. CR&R Incorporated, No. 30-2008 00108048 (Super. Ct. Orange County) (2009–2010)—Represented waste disposal firm in cross-claim seeking accounting for profits between joint venture partners.
• Commissioner v. Concentra Managed Care Services, Inc., No. BC320-596 (Super. Ct. Los Angeles County) (2009)—Represented the California Insurance Commissioner as statutory liquidator of an insolvent insurer in prosecuting breach of contract claims against medical bill review company. Case settled in 2009.
• Anderson v. Four Star Erectors, Inc., (Super Ct. Alameda County) (2002–2003)—Action for breach of contract and ownership dispute among promoters of new construction company. Settled on favorable terms.
• Wunderlich v. United States of America, (N.D. Cal. and 9th Cir.), 281 F.3d 1078 (9th Cir. 2002)—Represented taxpayer in $2 million tax refund action based on interpretation of provisions of tax code relating to generation skipping transfers by irrevocable trusts. Prevailed for taxpayer on appeal and obtained full refund, making new law in the Ninth Circuit.
• Waste Management of Alameda County, Inc. v. GSF Energy, LLC, No. C-01-03649 (N.D. Cal.) (2001)—Defended landfill gas operator in litigation related to termination of gas lease. Defeated multiple applications for emergency temporary restraining orders aimed at preventing client from closing down landfill gas operation. Settled case on favorable terms for client.
• Pall Corporation v. New Logic International, No. C. 99 3006 (N.D. Cal.) (1999–2000)— Defended claim for breach of technology license agreement. Litigation involved claim that licensee had failed to use best efforts to develop and promote the technology. Successful settlement obtained after discovery and motion for summary judgment.
• Mengler v. Newport Internet Marketing Corp., No. 307090 (Super. Ct. San Francisco
• County) (1999–2000)—Represented defendant in action for trespass based on spam e-mail marketing campaign. Obtained dismissal at no cost to client.
• Timberland v. Albert S.A., No. 99 E 0037 (Super. Ct. Rockingham County, N.H.) (1999)—Defended TRO action against clothing manufacturer over breach of license.
• West Coast Information Systems, Inc. v. Caldwell, (JAMS/Endispute arbitration) (1996)— Represented party in contract dispute. Prevailed on all claims behalf of client.

Products Liability

• Ney v. Raybestos-Manhattan, Inc, et al, No. 947114 (Super. Ct. San Francisco County) (1994); Frost v. Abex Corporation, et al., No. 948397 (Super. Ct. San Francisco County) (1994); and others­—Defended asbestos mesothelioma cases on behalf of a major construction company defendant. Two cases were tried to verdict. Obtained a defense verdict in one case; prevailed on appeal in the other. Defended a number of other cases that settled before trial.
• Defense counsel for Merrell-Dow Pharmaceuticals in Bendectin litigation in the 1980s.

Published opinions

• Garamendi v. Altus Finance SA, 136 F.Supp.2d 113 (C.D. Cal. 2001)
• Bachler (Estate of Murielle Wunderlich) v. United States of America, 281 F.3d 1078 (9th Cir. 2002)
• Rhone Poulenc Inc. v. International Insurance Company, 877 F.Supp. 1170 (N.D. III 1995)
• Bily v. Arthur Young, 3 Cal.4th 370 (Cal. 1992)

Publications and presentations

• “Dodd-Frank Act Alters Preemption Rules for National Banks and Federal Thrifts,” Banking and Financial Services Litigation Alert, July 28, 2010
• “Senate Financial Reform Bill Increases Risk of Consumer Rights Litigation For Banks, Increases Regulation,” Banking and Financial Services Litigation Alert, June 2, 2010
• “Ninth Circuit Holds that Failure to Disclose Statistically Non-Significant Anecdotal Reports of Product Problems May Support Rule 10b-5 Liability,” Securities Litigation Alert, November 3, 2009
• “Ninth Circuit Refuses to Recognize an ‘Integrity of the Market’ Theory for Rule 10b-5 Class Actions,” Securities Litigation Alert, August 20, 2009
• “The Application of Business & Professions Code 17200 to Securities Transactions—Will Bowen v. Ziasun Technologies Survive?” Mealey's California Section 17200 Report, Vol. 2, No. 10, 2004
• “Business & Professions Code 17200 Reform Proposals, Past, and Future,” Mealey's California Section 17200 Report, Vol. 3, No. 2, 2004
• “Who Leads at Halftime? Three Conflicting Visions of Internet Privacy Policy,” Richmond Journal of Law & Technology, Vol. VI, Issue 1, 1999

Admissions

Karl is admitted to practice in California and New York.

Education

Georgetown University Law Center, J.D., magna cum laude (Editor, Georgetown Law Journal )
University of Wisconsin, B.A., Phi Beta Kappa

Affiliations

American Bar Association, Business Law Section
State Bar of California, Section on Litigation
Association of Business Trial Lawyers
ARIAS (AIDA Reinsurance & Insurance Arbitration Society)
IAIR (International Association of Insurance Receivers)