Curtis M. Caton to Robert A. Boardman on Indemnifying Vandiver Brown, with Wondie Russell's Memo (1982)

A letter of January 7, 1982, from Curtis M. Caton of the San Francisco law firm Heller, Ehrman, White & McAuliffe to Robert A. Boardman, a Johns-Manville attorney in Denver, about indemnifying and representing former J-M employees, officers and directors. Caton encloses an October 19, 1981, memo by his associate Wondie Russell, written after she worked on the investigation that followed what he calls the "resurrection" of Vandiver Brown, J-M's longtime attorney. Caton writes that her points about what J-M "must" do under Delaware law may be "over broad," but that her warning about "ultra vires" acts (acts beyond the company's legal powers) deserved attention.

What it shows

Russell's memo reports that in Speake v. J-M, J-M had resisted a motion to produce its correspondence with Vandiver Brown "and/or his guardians and attorneys," arguing that it was protected by attorney-client and work product privilege. She notes there was "some question" whether the letter J-M relied on actually supported that claim, but the court had accepted it. Part of the argument rested on J-M's by-law on indemnification. She advises that if J-M meant to defend and indemnify Brown for his past duties, it should take the formal steps Delaware law requires (a board vote, a written opinion of independent counsel, or a stockholder vote), and that the same question applied to J-M's representation of "Galbraith and Woodard in Wise v. J-M." Brown's old correspondence had become evidence in the asbestos suits by then; see the memo on Clark Burnham's trip to Waco to learn about Vandiver Brown and Earl Parker's letter reaffirming J-M's indemnification policy.

In Johns-Manville's chronology

Johns-Manville's own chronology of what the company knew describes this document as follows:

Letter to Robert A. Boardman from Curt M. Caton of Heller, Ehrman, White & McAuliffe, dated 1/7/82, Caton attaches a memorandum which was written by Wondie Russell after she became involved in the investigation which followed the resurrection of Vandiver Brown. Russell's memorandum suggests the things which J-M arguably "must" do if it wishes to provide indemnification to Vandiver Brown. Russell suggests that certain actions could be ultra vires.