Judge: Armen Tamzarian, Case: 21STCV42444, Date: 2024-11-13 Tentative Ruling
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Case Number: 21STCV42444 Hearing Date: November 13, 2024 Dept: 52
Defendant/Cross-Complainant Michelman & Robinson, LLP’s Motion for Protective Order
Defendant/cross-complainant Michelman & Robinson, LLP (M&R) moves for a protective order appointing a discover referee at plaintiff’s expense to preside over the deposition of M&R’s person most knowledgeable. After M&R filed its motion for protective order, plaintiff Spitz Technologies Corporation (Spitz) moved to compel the deposition of M&R’s person most knowledgeable.
Motion for Protective Order
M&R does not show good cause for a protective order. A party or deponent may move for a protective order “[b]efore, during, or after a deposition.” (Code Civ. Proc., § 2025.420, subd. (a).) “The court, for good cause shown, may make any order that justice requires to protect any party, deponent, or other natural person or organization from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.” (Id., subd. (b).) Generally, “the burden is on the party seeking the protective order to show good cause for whatever order is sought.” (Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245, 255.)
M&R seeks a protective order based on purported unprofessional conduct by Spitz’s counsel. M&R contends Spitz’s counsel: (1) accused the deponent and other witnesses of lying, (2) made unprofessional gestures such as rolling his eyes or smirking, (3) interrupting the witness, and (4) rudely dismissing M&R’s counsel’s objections. The record indicates counsel for both sides and the deponent acted with incivility and unprofessionally. But there is no evidence of the kind of serious misconduct that warrants a protective order or discovery referee or that justified prematurely ending the deposition.
Code of Civil Procedure section 639, subdivision (a)(5) provides for appointing a discovery referee when the court “determines that it is necessary for the court to appoint a referee to hear and determine any and all discovery motions and disputes relevant to discovery in the action and to report findings and make a recommendation thereon.” Any order appointing a referee for this purpose must state “the exceptional circumstances requiring the reference, which must be specific to the circumstances of the particular case.” (Id., subd. (d)(2); see also Cal. Rules of Court, rule 3.920(c).)
The law implies “there ought to be a finding of something out of the ordinary before the services of a referee are forced upon a nonconsenting party.” (Hood v. Superior Court (1999) 72 Cal.App.4th 446, 449.) “[T]he statutory scheme is designed only to permit reference over the parties’ objections where that procedure is necessary, not merely convenient.” (Taggares v. Superior Court (1998) 62 Cal.App.4th 94, 105–106.) Counsel and the parties acting rudely is not an exceptional circumstance that requires a discovery referee. A discovery referee is not necessary.
Moreover, it is unclear what a discovery referee would do. An appointed referee must “file with the court a report that includes a recommendation on the merits of any disputed issue.” (Code Civ. Proc., § 643, subd. (c).) “The court may adopt the referee’s recommendations, in whole or in part, after independently considering the referee’s findings and any objections and responses thereto filed with the court.” (Code Civ. Proc., § 644, subd. (b).) Discovery referees are typically qualified professionals, often retired judges. A referee’s purpose is to resolve discovery disputes, not to enforce civility.
M&R cites a treatise stating, “ ‘[A] discovery referee may be appointed to monitor depositions where antagonism between the parties might otherwise prolong the proceedings and frustrate discovery.’ ” (Motion, p. 7.) Terminating the deposition and making this motion has prolonged the proceedings and frustrated discovery more than the antagonism between the parties at the deposition.
Motion to Compel Deposition
Plaintiff Spitz Technologies Corporation moves to compel the deposition of defendant Michelman & Robinson, LLP’s person most knowledgeable. “If, after service of a deposition notice,” a party or affiliated deponent “without having served a valid objection under Section 2025.410, fails to appear for examination, or to proceed with it … , the party giving the notice may move for an order compelling the deponent’s attendance and testimony.” (Code Civ. Proc., § 2025.450, subd. (a).)
M&R contends moving to compel its deposition is unnecessary because it never failed to appear for deposition or refused to complete a deposition. It argues that it only sought to move for a protective order before completing the deposition. A deposition may be suspended when a party or deponent “demands that the deposition officer suspend taking the testimony to enable that party or deponent to move for a protective order under Section 2025.420 on the ground that the examination is being conducted in bad faith or in a manner that unreasonably annoys, embarrasses, or oppresses that deponent or party.” (Code Civ. Proc., § 2025.470.)
Though M&R failed to proceed with the deposition of its person most knowledgeable, it did so for the purpose of seeking a protective order. Its motion was unsuccessful, but the court finds M&R acted with a good faith belief that Spitz’s counsel engaged in annoying or oppressive behavior. The court will therefore not issue an order compelling M&R’s deposition.
The court will not impose sanctions against either party. Spitz acted with substantial justification in making this motion. M&R did not have an adequate reason to terminate the deposition. M&R did, however, act with substantial justification in opposing this motion. As M&R argues, this motion was likely unnecessary. M&R moved for a protective order 20 days before Spitz filed this motion. M&R’s motion for protective order was likely to fully resolve this dispute without any separate motion to compel deposition.
Disposition
Defendant/cross-complainant Michelman & Robinson, LLP’s motion for protective order is denied.
Plaintiff/cross-defendant Spitz Technology Corporation’s motion to compel deposition is denied.
The parties are ordered to meet and confer by videoconference or in person within seven days regarding scheduling the continued deposition of Michelman & Robinson, LLP’s person(s) most knowledgeable.
Counsel for both parties are admonished for their discourteous conduct.
Carole Crotty’s Demurrer to Second Amended Cross-Complaint
Requests
for Judicial Notice
Cross-defendant Carole Crotty
requests judicial notice of four exhibits.
All four are court records subject to judicial notice for their
existence and contents. (Evid. Code, §
452, subd. (d).)
The court grants Crotty’s
request for judicial notice of exhibits 1-4.
Demurrer
Cross-defendant
Carole Crotty demurs to all three causes of action against her in the second amended
cross-complaint by cross-complainant Michelman & Robinson, LLP (M&R). M&R asserts claims for: (1) equitable
indemnity, (2) comparative contribution, and (3) declaratory relief.
Public
Policy Concerns
Crotty
relies on authority that, in malpractice actions, public policy sometimes bars
cross-complaints by the defendant counsel against cocounsel for the plaintiff
client. “[I]n general, one cotortfeasor
may obtain partial equitable indemnity from another on a comparative fault
basis.” (Musser v. Provencher
(2002) 28 Cal.4th 274, 279–280 (Musser).) But courts have held “indemnification for
malpractice was barred where a predecessor attorney was seeking indemnification
from his successor.” (Id. at p.
280.)
Courts
have also applied this rule to concurrent counsel or cocounsel. There
is no “blanket rule barring concurrent counsel or cocounsel from
suing one another for indemnification of legal malpractice damages.” (Musser, supra, 28 Cal.4th at p.
276.) Prohibiting such claims turns on “whether
the policy considerations that underlie the rule barring indemnification claims
in attorney representation situations will obtain in a particular fact
situation and whether it would be unjust to deny cocounsel an opportunity to
seek indemnity or contribution from a joint tortfeasor.” (Forensis Group, Inc. v. Frantz, Townsend
& Foldenauer (2005) 130 Cal.App.4th 14, 26 (Forensis).)
This exception to the general rules of equitable
indemnity arises from “two fundamental policy considerations. The first policy consideration is avoiding
conflicts of interest between attorney and client: The threat of an
indemnification action would arguably create a conflict of interest between the
successor attorney and the client because the greater the award the successor
attorney managed to obtain for the client in the malpractice action, the
greater the exposure to the predecessor attorney in the indemnification action.
[Citation.] The second policy consideration is protecting
confidentiality of attorney-client communications: In order to defend
against an indemnification action, the successor attorney might be tempted to
compromise the confidentiality of communications with the client.” (Musser, supra, 28 Cal.4th at p. 281.)
Musser
analyzed two Court of Appeal cases barring indemnity claims against concurrent
counsel. (Musser, supra, 28
Cal.4th at pp. 281-284.) In Kroll
& Tract v. Paris & Paris (1999) 72 Cal.App.4th 1537 (Kroll &
Tract) the court barred an insurer’s counsel’s indemnity claim against the
insured’s personal counsel and Cumis counsel. (See Musser at pp. 282-283.) In Shaffery v. Wilson, Elser, Moskowitz,
Edelman & Dicker (2000) 82 Cal.App.4th 768 (Shaffery), the court
barred a claim for indemnity by counsel hired by an insurer to represent the
insured against the firm acting as the insurer’s “monitoring counsel.” (See Musser at p. 284.)
In Musser, a client hired attorney Musser to
represent her in a divorce proceeding.
(28 Cal.4th at p. 277.) “Musser arranged
for Douglas Provencher, a bankruptcy specialist, to obtain relief from the
automatic stay imposed by the bankruptcy court.” (Ibid.) “Provencher did not obtain relief from the
stay, but advised Musser that she could proceed with the hearing to set support.” (Ibid.) That “advice was contrary to well-established
legal authority.” (Ibid.) The client “sued Musser for malpractice,” who
“then filed a cross-complaint against Provencher for indemnity and settled the
case with” the client. (Ibid.)
The California Supreme Court held that public policy
did not bar Musser’s cross-complaint against concurrent counsel Provencher. On the first policy of avoiding “conflict
between an attorney’s duty to the client and the attorney’s self-interest,”
the Court concluded, “Provencher gives us no reason, and we have not discovered
any reason ourselves, to believe that an attorney’s self-interest will interfere
with loyalty to the client just because the attorney, as a joint tortfeasor,
may face an indemnification claim if the client sues the attorney’s concurrent
counsel or cocounsel for malpractice.” (Musser,
supra, 28 Cal.4th at p. 284.) The
Court then found the second policy of “protecting the confidentiality of
attorney-client communications” did not apply because the client, “in her
settlement with Musser, expressly waived her attorney-client privilege with
respect to Provencher’s representation of her.”
(Ibid.)
A. Conflict of Interest
The second amended cross-complaint’s claims against
Crotty raise the possibility of a conflict of interest between Crotty and
Spitz. Among the most typical defenses against
a malpractice suit is to assert lack of causation. “In a litigation malpractice action, the
plaintiff must establish that but for the alleged negligence of the defendant
attorney, the plaintiff would have obtained a more favorable judgment or
settlement in the action in which the malpractice allegedly occurred.” (Viner v. Sweet (2003) 30 Cal.4th
1232, 1241.) Generally, “a determination
of the merits of the underlying lawsuit must be made in order to adjudicate the
elements of causation and damages.” (Gutierrez
v. Girardi (2011) 194 Cal.App.4th 925, 934.) “ ‘This method of presenting a legal
malpractice lawsuit is commonly called a trial within a trial.’ ” (Ibid.) A cross-defendant thus may defend itself by
arguing the client’s “case had no substantive merit.” (Forensis, supra, 130 Cal.App.4th at
p. 37.)
Crotty’s duty of loyalty to Spitz limits her ability
to defend herself against M&R’s cross-claims. Crotty’s self-interest in defending herself may
conflict with Spitz’s interests in its action against M&R. Crotty could serve her own interests by
negating both the viability of Spitz’s underlying patent infringement action
and of Spitz’s malpractice claim against M&R. If so, those interests are directly adverse
to Spitz’s.
M&R argues the second amended cross-complaint
does not allege Crotty currently works for Spitz. Crotty argues the court should disregard
those omissions under the sham pleading doctrine. (See McAllister v. Los Angeles Unified
School Dist. (2013) 216
Cal.App.4th 1198, 1206–1207.) The court
does not reach the issue. Even if Crotty
no longer works for or represents Spitz, that may not eliminate her duties to
Spitz. “[T]he duties of loyalty
and confidentiality … continue[] in force even after the representation”
ends. (Oasis West Realty, LLC v.
Goldman (2011) 51 Cal.4th 811, 821.)
“ ‘[A]n attorney is forbidden to do either of two things after severing
[the] relationship with a former client.
[The attorney] may not do anything which will injuriously affect [the]
former client in any matter in which [the attorney] formerly represented [the
client] nor may [the attorney] at any time use against [the] former client
knowledge or information acquired by virtue of the previous relationship.’
” (Ibid.)
As M&R argues, Crotty relies primarily on cases
where the cross-complaint was against the attorney who represented the joint
client in the malpractice action against the defendant/cross-complainant. Here, Crotty does not and has never
represented Spitz in this action against M&R. That mitigates, but does not eliminate, the
potential conflict of interest. Crotty
does not personally seek to recover an award against M&R on Spitz’s
complaint for malpractice. She still,
however, has adverse interests in defending herself by undermining either Spitz’s
claims in the underlying patent case or Spitz’s current claims in the malpractice
action against M&R.
B. Duty of Confidentiality
M&R’s claims against Crotty may also implicate
the fundamental policy in favor of “protecting the confidentiality of
attorney-client communications.” (Musser,
supra, 28 Cal.4th at p. 284.) “The
concern is that the law firm from which indemnification is sought may be unable
to defend itself without revealing privileged client communications.” (Ibid.) That concern did not apply in Musser
because the client “expressly waived her attorney-client privilege” with the
cross-defendant attorney. (Ibid.)
M&R alleges facts showing that, as to some
communications, Spitz waived its attorney-client privilege with Crotty. The second amended cross-complaint alleges,
“Throughout the entire pendency of the Underlying Action, Crotty often
participated in strategy, status and decision-making meetings with [Spitz]
without M&R lawyers present. These
meetings and communications involved all aspects of the Underlying Action.” (SACC, ¶ 60.)
It further alleges that Spitz “waived the attorney-client privilege with
respect to all of these meetings and communications” because it “has produced
thousands of pages of documents, including notes and emails between Crotty and
members of STC, wherein M&R was not a party to, nor present for, those
communications. Moreover, Crotty
repeatedly revealed to M&R the substance of various communications she had
with members of [Spitz] regarding her opinions, advice, observations and
related thoughts with respect to the Underlying Action as well as her opinions,
advice, observations and related thoughts with respect to [Spitz] and its
affiliated individuals.” (Ibid.)
M&R also alleges Spitz “has produced notes and
email communications revealing Crotty's communications to and from [Spitz]
regarding opinions, advice, observations and related thoughts with respect to [Spitz’s]
claims against M&R” and that “Crotty repeatedly revealed to M&R the
substance of various communications she had with members of [Spitz] regarding
her opinions, advice, observations and related thoughts with respect to the
Underlying Action as well as her opinions, advice, observations and related
thoughts with respect to [Spitz] and its affiliated individuals.” (SACC, ¶ 61.)
If Spitz fully waived its attorney-client privilege,
the duty of confidentiality would not support barring M&R’s claims against Crotty. At this stage, the court cannot determine the
extent of Spitz’s alleged waiver of attorney-client privilege. Doing so requires extrinsic evidence.
C. Determining the Issue on Demurrer
Despite
the public policy concerns Crotty raises, the court cannot decide the question
on demurrer. “[W]hether a claim for
indemnity is allowable in concurrent counsel or cocounsel cases should be decided
on a case-by-case basis.” (Musser,
supra, 28 Cal.4th at p. 284 [reviewing order granting motion for
nonsuit].) “It is necessary to decide
these public policy issues on a case-by-case basis, and on the entire record as
presented.” (Forensis, supra, 130
Cal.App.4th at p. 29 [reversing order granting summary judgment].)
Based
solely on the pleadings and matters subject to judicial notice, the court
cannot conclude that fundamental public policy bars M&R’s claims for
indemnity and contribution against Crotty.
Further development of the record will likely clarify how strongly each
public policy applies here.
1st Cause of Action: Allegations of Fault
Crotty
also demurs on the basis that M&R does not adequately allege Crotty was at
fault or is responsible for any damages to Spitz as required for equitable
indemnity. “‘The elements of a cause of
action for [equitable] indemnity are (1) a showing of fault on the part of the
indemnitor and (2) resulting damages to the indemnitee for which the indemnitor
is ... equitably responsible.’ ” (C.W.
Howe Partners Inc. v. Mooradian (2019) 43 Cal.App.5th 688, 700, alterations
in original.)
The second amended cross-complaint alleges, “Many of
the strategic decisions for which [Spitz] now blames M&R, were in fact
decisions made in close consultation with concurrent counsel Crotty, and often
times at Crotty’s direction.” (¶
56.) It alleges Crotty “vetted,
contributed to, collaborated, advised and/or approved all” of Spitz’s filings,
legal theories and strategies, other “litigation related activity”,
“investigation of, retention and/or use of experts,” and “market analysis
and/or damages” with respect to the underlying patent action. (¶ 57.)
M&R further alleges it “did not make any
decision nor file any document without Crotty’s direction, input, approval and
ratification. Every strategy decision was
made at Crotty’s direction, input, approval and/or ratification.” (SACC, ¶ 58.)
“[E]ach and every allegation advanced by Plaintiff against M&R with
respect to the handling of the Underlying Action involved activity that was
undertaken pursuant to Crotty’s express direction, input, approval and
ratification.” (Ibid.)
These allegations suffice to constitute fault by
Crotty that resulted in (or may result in) damages to M&R in Spitz’s
malpractice action for which Crotty is responsible.
3rd
Cause of Action for Declaratory Relief
M&R
does not allege sufficient facts for declaratory relief. When
the “issues invoked in” a cause of action for declaratory relief “already [are]
fully engaged by other causes of action,” “declaratory relief [is] unnecessary
and superfluous.” (Hood v.
Superior Court (1995) 33 Cal.App.4th 319, 324.)
The third cause of action seeks only declarations
about issues fully engaged by the other causes of action. M&R seeks declarations that “as and
between M&R and” Crotty, “responsibility for the damages alleged by STC”
against M&R “lies entirely or partially on” Crotty (SACC, ¶ 94(a)) and that
Crotty is “obligated to indemnify M&R” (¶ 94(d)). That is the subject of the first two causes
of action. M&R also seeks a
declaration “[t]hat M&R breached no duty” to Spitz (¶ 94(b)) and “M&R
did not cause [Spitz] any damages” (¶ 94(c)).
Spitz’s claims against M&R and M&R’s claims against Crotty fully
engage those issues. An independent
cause of action for declaratory relief is unnecessary.
M&R
does not meet its burden of showing it can cure this defect by amending the
cross-complaint. Its opposition does not
address this basis for the demurrer. The
court therefore will sustain the demurrer to the third cause of action without
leave to amend.
Disposition
Cross-defendant
Carole Crotty’s demurrer to cross-complainant Michelman & Robinson, LLP’s second
amended cross-complaint is overruled as to the first and second causes
of action. The demurrer is sustained
without leave to amend as to the third cause of action for declaratory
relief. Crotty shall answer the second
amended cross-complaint’s first and second causes of action within 20 days.