Judge: Anne Richardson, Case: 21STCV13920, Date: 2023-05-09 Tentative Ruling

Case Number: 21STCV13920    Hearing Date: May 9, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

Plaintiff/Cross-Defendant Randall L. Bort sues Defendants/Cross-Complainants KBS Holdco, LLC, Brian Kennedy (KBS’s owner), and Does 1-50 pursuant to claims of (1) Breach of Contract, (2) Promissory Estoppel, (3) Quantum Meruit, and (4) Account Stated. The claims are based on allegations that the Defendants (KBS and Kennedy) entered into a written Agreement with Plaintiff Bort to employ his professional services to perform various tasks—including obtaining financing—for the Defendants’ asset purchase of a company named Regency Outdoor Advertising (“Regency”), with Plaintiff Bort to be paid a Retainer Fee of $50,000 or relevant Success Fee of $1,470,000 if the Regency Project was structured as an asset purchase. Plaintiff Bort claims his efforts helped the Defendants successfully purchase Regency on February 2, 2021 but that the Defendants breached the Agreement by only paying Plaintiff Bort a $10,000 downpayment and no other monies, causing Bort damages of $1,460,000.

Defendants KBS and Kennedy bring a Cross-Complaint against Plaintiff Bort and Roes 1-10 pursuant to claims of (1) Breach of Contract, (2) Rescission, (3) Unfair Competition, and Declaratory Relief. The claims are based on allegations that Defendant Kennedy—an 82-year-old individual—acquired Regency through use of his own funds and that Plaintiff Bort breached the Agreement by failing to secure the financing contemplated by the parties’ contract, for which reason a rescission of the Agreement is merited and Plaintiff Bort is not entitled to the $1,460,000 sought in the Complaint.

On April 7, 2023, KBS and Kennedy filed a motion for summary judgment or adjudication of the Complaint’s first through fourth causes of action. The motion is set for hearing on June 22, 2023.

On April 12, 2023, KBS and Kennedy filed a motion to seal an exhibit to the Declaration of Nannina L. Angioni filed in support of KBS and Kennedy’s summary judgment or adjudication motion, involving excerpts of the deposition transcript of a Mr. Philip Berardi and the declaration of attorney Henry L. Whitehead. The exhibit was lodged with the Court on the same day, with a hearing calendared for May 9, 2023.

On April 26, 2023, Plaintiff Bort opposed the motion to seal.

On May 2, 2023, KBS and Kennedy replied to the April 26th opposition.

The motion to seal is now before the Court.

Motion to Seal: DENIED.

Legal Standard

“The public has a First Amendment right of access to civil litigation documents filed in court and used at trial or submitted as a basis for adjudication.” (Savaglio v. Wal-Mart Stores, Inc. (2007) 149 Cal.App.4th 588, 596 [citing NBC Subsidiary (KNBC-TV), Inc. v. Superior Court (1999) 20 Cal.4th 1178, 1208-1209, fn. 25].) Therefore, before a trial court orders a record sealed, it must hold a hearing and make express findings set forth in California Rules of Court, rule 2.550, subdivision (d), finding that (1) there exists an overriding interest that overcomes the right of public access to the record, (2) the overriding interest supports sealing the record, (3) a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed, (4) the proposed sealing is narrowly tailored, and (5) no less restrictive means exist to achieve the overriding interest. A court’s order allowing documents to be filed under seal must contain express factual findings establishing these five factors. (Cal. Rules of Court, rule 2.550, subd. (d).)

A record must not be filed under seal without a court order. The court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties. (Cal. Rules of Court, rule 2.551, subd. (a).)

Analysis

In their motion, KBS and Kennedy present three arguments for why sealing excerpts of the deposition transcript of Mr. Philip Berardi connotes an overriding interest that overcomes the right of public access to the record: (1) “[t]he Berardi Declaration contains business-sensitive information relating to his negotiation of and obtaining financing for the Regency purchase”; (2) “the parties early-on agreed to a protective order to safeguard such confidential information, and this portion of the Berardi transcript was designate[d] confidential at the time of his deposition”; and (3) “maintaining this record under seal will in no way impact the pending motion for summary judgment, in which it was submitted as an exhibit.” (Mot., pp. 4-5.) KBS and Kennedy also argue rather conclusorily that the remaining requirements pursuant to California Rules of Court, rule 2.550, subdivision (d) have been met. (Mot., pp. 5-6.)

In opposition, Randall Bort’s counsel provides a declaration asking that this motion be denied because, among other reasons, KBS and Kennedy “failed to comply with California Rule of Court, Rule 2.551(b)” insofar as KBS and Kennedy “failed to serve upon Plaintiff copies of the lodged records” and “failed to give any notice to Plaintiff and the Court of exactly what is proposed to be sealed” by, for example, providing “page and line number[s]” for the proposed sealing. (Opp’n, Dreibholz Decl., ¶¶ 4-5, italics in original; see Opp’n, Dreibholz Decl., ¶¶ 1-11.) Counsel also stated that he attended all depositions in this action and nothing in those depositions was confidential. (Opp’n, Dreibholz Decl., ¶ 11.)

In reply, KBS and Kennedy argue several points. First, they argue that “Plaintiff’s counsel never reached out to Defendants regarding this issue, or to request a copy of the documents provisionally lodged under seal” and that “Defendants always intended to serve Plaintiff with a copy of the stamped received version of the documents lodged under seal, which are still in process.” (Reply, p. 2.) Second, KBS and Kennedy argue that “immediately upon receipt of Plaintiff’s Opposition, Defendants served Plaintiff with a copy of the documents provisionally lodged under seal.” (Reply, p. 2.) Third, KBS and Kennedy argue that Plaintiff Bort’s opposition is misplaced, where “[a]t most, the Court should continue the hearing on this Motion to Seal (perhaps to the same date as the June 22, 2023 hearing on the motion for summary judgment or alternatively summary adjudication to which it relates), and give the parties an additional opportunity to oppose the Motion (and file a reply), given the service of the under seal exhibit to Plaintiff”—with KBS and Kennedy having attempted to meet and confer on this issue to no avail. (Reply, p. 2.) Fourth, KBS and Kennedy argue that Bort’s counsel’s argument that nothing in the four deposition transcripts in this action can be confidential for the purpose of this motion is self-serving and ignores that the “portions of the deposition transcript [at issue] were designated confidential at the time of the deposition, [where] Plaintiff’s counsel did not object to such designation at the time, or within thirty days as called for under paragraph 6 of the parties’ stipulated [October 28, 2021] protective order.” (Reply, pp. 2-3.) Last, KBS and Kennedy argue that “[t]he testimony at issue … [involves] disclos[ure] [of] the reasons for Defendants’ retaining Plaintiff, and Plaintiff’s performance, [as well as] disclosure of confidential business dealings in which Defendants’ then-counsel was involved,” where “[t]he sensitive nature of the business dealings being discussed warrant sealing.” (Reply, p. 3.)

The Court finds that KBS and Kennedy’s motion is not sufficiently elaborated as to why the deposition at issue raises questions of, for example, trade secrets or other proper grounds for sealing the record. Indeed, their motion merely makes vague references to “business-sensitive information relating to [Plaintiff’s] negotiation of and obtaining financing for the Regency purchase” but do not properly elaborate how this information relates to an overriding interest that overcomes the right of public access to the record. (Mot., pp. 4-5.) Further, any argument that this record should be sealed based on the parties’ protective order and their agreements regarding confidentiality is completely undercut by California Rules of Court, rule 2.551, subdivision (a), providing that “[t]he court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.” (See Mot., p. 5.) Last, whether or not “maintaining this record under seal will in no way impact the pending motion for summary judgment” is irrelevant. (See Mot., p. 5.) The relevant question is, in part, whether KBS and Kennedy, through their motion, have shown an overriding interest that overcomes the right of public access to the record. (Cal. Rules of Court, rule 2.550, subd. (d)(1).) The Court finds that no such interest is shown by KBS and Kennedy’s motion or its supporting papers.

KBS and Kennedy’s motion is accordingly DENIED.

For these reasons, the Court does not find it necessary to (1) reach Plaintiff Bort’s arguments related to KBS and Kennedy’s failure to provide unredacted copies of the deposition transcript to be sealed with their motion to seal, something that is required by California Rules of Court, rule 2.551, subdivision (b)(2) (see Opp’n, Dreibholz Decl., ¶¶ 4-5), or (2) consider a continuance of this motion to allow the parties to draft and file an opposition and reply on the merits of the contents of the Berardi deposition excerpts (Reply, p. 2).

Conclusion

Defendants/Cross-Complainants KBS Holdco, LLC and Brian Kennedy’s Motion to Seal is DENIED because KBS and Kennedy have failed to show that the deposition transcript at issue connotes an overriding interest that overcomes the right of public access to the record.