Judge: Armen Tamzarian, Case: BC682157, Date: 2023-10-31 Tentative Ruling

Case Number: BC682157    Hearing Date: October 31, 2023    Dept: 52

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

DEFENDANT’S MOTIONS IN LIMINE

No. 2:             Evidence Related to Mediation

            Defendant/cross-complainant Starr Indemnity and Liability Company (Starr) moves in limine to exclude any evidence or references to mediations in the underlying wrongful eviction lawsuits against plaintiffs/cross-defendants Zoriall, LLC, Anne Kihagi, and Christina Mwangi, in a federal court action by AmGuard Insurance Company regarding insurance coverage for liability in the underlying lawsuits, and in this action. 

            The Evidence Code broadly prohibits evidence of statements or writings made during mediation.  “No evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation is admissible or subject to discovery, and disclosure of the evidence shall not be compelled, in any arbitration, administrative adjudication, civil action, or other noncriminal proceeding in which, pursuant to law, testimony can be compelled to be given.”  (Evid. Code, § 1119, subd. (a).)  “No writing … prepared for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation, is admissible or subject to discovery, and disclosure of the writing shall not be compelled, in any arbitration, administrative adjudication, civil action, or other noncriminal proceeding in which, pursuant to law, testimony can be compelled to be given.”  (Id., subd. (b).) 

These rules persist “to the same extent after the mediation ends.”  (Evid. Code, § 1126.)  “Any reference to a mediation during any subsequent trial is an irregularity in the proceedings of the trial.”  (Evid. Code, § 1128.)  “In addition to the unambiguous language of the mediation confidentiality statutes, the [California Law Revision] Commission’s comments further demonstrate that the Legislature intended to apply confidentiality broadly and to limit any exceptions to confidentiality to narrowly prescribed statutory exemptions.”  (Simmons v. Ghaderi (2008) 44 Cal.4th 570, 580.)

Any evidence regarding or reference to mediation is therefore prohibited and inadmissible.  Plaintiffs’ opposition relies on Evidence Code section 1152, which concerns offers to compromise or statements made in negotiating a settlement.  That section does not limit the broad protections for mediation under Evidence Code section 1115 et seq.    

            Defendant’s motion in limine No. 2 is granted.  The court hereby excludes all evidence regarding or references to any mediation. 

No. 5:             Testimony by Plaintiff Christina Mwangi

            Defendant moves to exclude plaintiff Christina Mwangi from testifying on the grounds that she misused the discovery process by repeatedly failing to appear and testify at deposition.  Defendant successfully moved to compel Mwangi’s deposition.  Afterward, she did not appear in person on March 15, 2023, pursuant to Starr’s fourth amended notice of her deposition. 

            The fourth amended notice of Mwangi’s deposition was defective.  Code of Civil Procedure section 2025.250, subdivision (a) provides, “(a) Unless the court orders otherwise under Section 2025.260, the deposition of a natural person, whether or not a party to the action, shall be taken at a place that is, at the option of the party giving notice of the deposition, either within 75 miles of the deponent’s residence, or within the county where the action is pending and within 150 miles of the deponent’s residence.”  Defendant’s fourth amended notice of Mwangi’s deposition specified that the deposition would take place in Irvine, California, though it is undisputed Mwangi resides hundreds of miles away in Alameda County.  (Uchiyama Decl., ¶ 6.) 

Despite the deposition notice specifying that it would take place in Irvine, plaintiffs did not “serve[] a written objection specifying that error or irregularity at least three calendar days prior to the date” of the deposition.  (Code Civ. Proc., § 2025.410, subd. (a).)  Plaintiffs’ counsel erroneously “assumed the … deposition would be taken via remote video conferencing.”  (Uchiyama Decl., ¶ 8.)  Defendant’s notice of deposition thus was defective, but plaintiff failed to timely object to it.  After this final attempt to depose Mwangi, however, defendant did not file another motion to compel her deposition or a motion for discovery sanctions.  Star thus had a remedy under the Civil Discovery Act but chose not to pursue it.

Even if Star had filed a motion to compel Mwagi’s deposition or a motion for discovery sanctions, the court would not have issued an order excluding Mwagi’s testimony at trial.  This is because discovery sanctions should be imposed incrementally, “starting with monetary sanctions and ending with the ultimate sanction of termination.”  (Lopez v. Watchtower Bible & Tract Society of New York, Inc. (2016) 246 Cal.App.4th 566, 604.)  The court may only impose “suitable and necessary” sanctions “to enable the party seeking discovery to obtain the objects of the discovery he seeks,” but may not impose sanctions merely to impose punishment.  (Laguna Auto Body v. Farmers Ins. Exchange (1991) 231 Cal.App.3d 481, 488.)  Barring Mwangi from testifying at trial now would be overly harsh.  Doing so would cross the line between proper discovery sanctions and improper punitive measures.

Defendant’s motion in limine No. 5 is denied.

No. 9:             Evidence Not Disclosed in Verified Discovery Responses

Defendant moves in limine to exclude evidence “outside the scope of” plaintiffs’ “verified discovery responses.”  This motion does not adequately describe the evidence defendant seeks to exclude.  “The usual purpose of motions in limine is to preclude the presentation of evidence deemed inadmissible and prejudicial by the moving party.  A typical order in limine excludes the challenged evidence and directs counsel, parties, and witnesses not to refer to the excluded matters during trial.”  (People v. Morris (1991) 53 Cal.3d 152, 188.)  A motion in limine should be denied when it seeks “rulings which would merely be declaratory of existing law or would not provide any meaningful guidance for the parties or witnesses.”  (Kelly v. New West Federal Savings (1996) 49 Cal.App.4th 659, 670 (Kelly).)  In Kelly, a motion to “preclud[e] plaintiffs from calling any witnesses ‘not previously identified in plaintiffs’ discovery responses’ ” failed because, “[a]bsent a meaningful and expressed belief that this may occur, this was a meaningless motion unless and until plaintiffs attempted to call such witnesses.’ ”  (Id. at pp. 670-671, fn. omitted.)

Defendant does not identify what evidence plaintiffs intend to introduce that exceeds the scope of their discovery responses.  An order granting this motion would not provide meaningful guidance to the parties or witnesses. 

Defendant contends there are “substantial material differences between” different verified discovery responses by plaintiffs.  (Reply, p. 2) While those purported differences may be admissible to impeach plaintiffs’ credibility, the court declines to grant this motion in limine on that basis. 

Defendant also argues it should be permitted to read into evidence Mwangi’s verified responses to interrogatories and requests for admission.  Nothing in this ruling prevents Start from doing so if otherwise permitted by law.  (See Code Civ. Proc., § 2030.410 [“so far as admissible under the rules of evidence, the propounding party … may use any answer or part of an answer to an interrogatory only against the responding party”]; § 2033.410 [“Any matter admitted in response to a request for admission is conclusively established against the party making the admission in the pending action”]; Gonsalves v. Li (2015) 232 Cal.App.4th 1406, 1417 [“denials of RFA’s are not admissible evidence in an ordinary case”].)

Defendant’s motion in limine No. 9 is denied.

No. 11:           Documents Not Produced in Discovery

            Defendant moves in limine to prohibit plaintiffs from introducing or referring to documents they did not produce during discovery.  On May 24, 2022, the court granted defendant’s motions to compel the depositions of each plaintiff and to compel production of dozens of categories of documents requested in the notices of depositions.    

The court found plaintiffs disobeyed that order multiple times.  On January 27, 2023, the court issued an order stating, “Neither Kihagi nor Zoriall produced any documents in response to the 42 categories of documents requested in the deposition notices. …  The court will give plaintiffs one final chance to fully and in good faith comply with the court’s discovery orders.”  (Jan. 27, 2023, Order, p. 2.)  On February 27, 2023, the court again found plaintiffs disobeyed orders to produce documents.  (Feb. 24, 2023, Order, pp. 3-4.) 

Defendant now identifies numerous specific documents plaintiffs produced long after the court ordered them to do so.  (Supp. Mandegary Decl., ¶¶ 14-15, Ex. 3.)  Plaintiffs produced new documents as recently as May 8, 2023.  (Id., Ex. 3, p. 7.)  Plaintiffs’ misuse of the discovery process prevented defendant from having an adequate opportunity to conduct discovery about these documents, such as by deposing witnesses with knowledge about them. 

Defendant’s motion in limine No. 11 is granted.  The court hereby excludes the following exhibits: Nos. 4–5, 7, 9–10, 13–16, 18–19, 21-27, 29-30, 36–40, 51, 53, 56–64, 66, 71-72, 74-75, 80-82, 86, 92-93, 95, 97-102, 104–106, 109-111, 120-127, 129, 131-141, and 144-146.

No. 12:           Evidence Regarding Cumis Counsel
            Defendant moves to exclude evidence regarding the issue of independent Cumis counsel to represent plaintiffs in the underlying actions.  (See San Diego Federal Credit Union v. Cumis Ins. Society, Inc. (1984) 162 Cal.App.3d 358, 364; Civ. Code, § 2860.)  Any such evidence is irrelevant because plaintiffs did not allege in their operative complaint that defendant is liable for failing to provide them with independent counsel.  A trial concerns “questions of fact or of law put in issue by pleadings, for the purpose of determining the rights of the parties.”  (Adams v. Superior Court of Orange County (1959) 52 Cal.2d 867, 870, italics added.)  Plaintiffs’ first amended complaint alleges various grounds for its claim for breach of the implied covenant of good faith and fair dealing (FAC, ¶ 45.A-D), breach of contract (¶ 50), and declaratory relief (¶¶ 54-56)—not including failure to provide independent counsel.  In their opposition, plaintiffs assert they “allege that Defendant Starr breached its Insuring Agreement and its duty to defend ‘fully and completely’ by denying its insureds independent ‘Cumis’ counsel in the Duncan Lawsuits and the Smyth Lawsuits.”  (Opp., p. 9.)  They do not identify any part of their pleadings that makes such an allegation.

For the same reason, the likelihood that this evidence will result in undue consumption of time or undue prejudice substantially outweighs its probative value.  (Evid. Code, § 352.) 

            Defendant’s motion in limine No. 12 is granted.

No. 13:           Evidence Regarding Competence of Insureds’ Counsel

            Defendant moves in limine to exclude evidence or argument regarding the competence of the attorneys who represented the insured in the underlying actions.  The arguments on both sides mirror those made on defendant’s motion in limine No. 12.  Like evidence regarding Cumis counsel, evidence that the insureds’ counsel in the underlying action were incompetent is irrelevant because it concerns an issue not raised in the pleadings.  Plaintiffs’ first amended complaint alleges various grounds for its causes of action.  (FAC, ¶¶ 45.A-D, 50, 54-56.)  It does not, however, allege Starr retained incompetent counsel to defend plaintiffs.  For the same reason, the likelihood that evidence will result in undue consumption of time or undue prejudice substantially outweighs its probative value.  (Evid. Code, § 352.) 

            Defendant’s motion in limine No. 13 is granted.

No. 18:           Evidence Regarding Harassment of Plaintiffs

            Defendant moves to exclude evidence and argument regarding purported harassment of plaintiffs related to the underlying wrongful eviction actions.  This evidence is irrelevant.  Plaintiffs’ opposition asserts evidence of the “factual background of the tenant harassment experienced by Plaintiffs” and “the political nature of the” case against them by the City and County of San Francisco is relevant because it shows the strength of the underlying wrongful eviction cases against the insured.  (Opp., pp. 13-14.)  That context has no bearing on the merits of the underlying wrongful eviction cases or on whether Starr acted in good faith.

The court also excludes this evidence because the likelihood that it will result in undue consumption of time and undue prejudice substantially outweighs any probative value.  (Evid. Code, § 352.)  This evidence has no probative value.  Plaintiffs’ opposition refers to evidence that plaintiffs were “defamed by certain deputy city attorneys.”  (Opp., p. 14.)  Whether government officials defamed plaintiffs is far afield from the issues in this action.  Admitting evidence about that could open the door to lengthy distractions from the proper focus of the trial.  The large number of exhibits on this subject also demonstrates that the evidence will necessitate undue consumption of time.  Finally, there is a substantial probability this evidence will inflame the jury in a way that causes them to improperly sympathize with plaintiffs, resulting in undue prejudice against Starr.  For example, plaintiffs label Exhibit No. 24 “article about Kihagi re: being Black landlord can be a crime in S.F.”

    Defendant’s motion in limine No. 18 is granted.  The court hereby excludes Exhibit Nos. 4-5, 7, 9-10, 12-13, 15-16, 18-19, 21-27, 29-30, 37, 53, 56-67, 69, 72, 74-75, 80-82, 90, 93, 95, 100-102, 104-106, 109-111, 120-122, 124-127, and 131-135.

No. 20:           Evidence Regarding Settlement of Smyth Lawsuits

Defendant moves to exclude evidence and arguments regarding settlement of the Smyth 1 and Smyth 2 actions.  Defendant argues this evidence is inadmissible under Evidence Code section 1152.  Section 1152, subdivision (a) provides that evidence of settlement offers and negotiations are “inadmissible to prove [the offeror’s] liability for the loss or damage or any part of it.”  Section 1152, subdivision (b) includes an exception for settlement offers “in an action for breach of the covenant of good faith and fair dealing or violation of subdivision (h) of Section 790.03 of the Insurance Code.”  This is such an action.  “In insurance litigation, ‘[t]he language of this section does not preclude the introduction of settlement negotiations if offered not to prove liability for the original loss but to prove failure to process the claim fairly and in good faith.’ ”  (Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 915.)  This evidence is admissible, relevant, and probative as to whether Starr processed plaintiffs’ insurance claims in bad faith.

Defendant also argues this evidence is irrelevant and should be excluded under Evidence Code section 352.  (Motion, pp. 3-4.)  But defendant’s arguments mirror its argument on Evidence Code section 1152, relying on the premise that the evidence is not relevant or probative because it cannot be used to prove Starr’s liability.

            Defendant’s motion in limine No. 20 is denied.

No. 21:           Relitigating Matters in Duncan Lawsuits
            Starr moves to preclude plaintiffs from “relitigating or challenging the evidence, findings, determinations, and judgment” in the underlying Duncan 1 and Duncan 2 lawsuits.  Starr contends plaintiffs are collaterally estopped from doing so. 

Collateral estoppel will bar plaintiffs from relitigating issues previously decided in the Duncan 1 and Duncan 2 lawsuits.  “Collateral estoppel precludes the relitigation of an issue only if (1) the issue is identical to an issue decided in a prior proceeding; (2) the issue was actually litigated; (3) the issue was necessarily decided; (4) the decision in the prior proceeding is final and on the merits; and (5) the party against whom collateral estoppel is asserted was a party to the prior proceeding or in privity with a party to the prior proceeding.”  (Zevnik v. Superior Court (2008) 159 Cal.App.4th 76, 82.) 

On May 9, 2023, the court issued an order finding Starr established all but the fourth element of collateral estoppel: that the decision in the prior action was final and on the merits.  The judgment in Duncan was not yet final and binding due to a pending appeal.  On October 19, 2023, the Court of Appeal issued an opinion affirming the trial court’s order denying a motion to vacate the judgment.  (Duncan v. Kihagi (Oct. 19, 2023, No. A164470) 2023 WL 6887149.)  Upon remittitur, the judgment in the Duncan actions will be final and binding.  Plaintiffs will therefore be collaterally estopped from relitigating issues including, for example, that they wrongfully evicted Dale Duncan and Marta Munoz Mendoza.   

The court, however, does not find adequate grounds to grant this motion.  In its reply brief, defendant identifies numerous exhibits by number and asserts, “It is evident by these exhibits that the Kihagi Parties intend on trying to challenge those final findings and judgments.”  (Reply, p. 2.)  Though plaintiffs may not challenge final findings and judgments in the prior actions against them, defendant does not establish that is the purpose for which plaintiffs seek to introduce those exhibits.  Moreover, defendant does not show that this evidence would not be admissible for any other purpose.  Finally, though defendant identifies evidence it seeks to exclude, this motion largely seeks an order about the merits of this action that are “not properly the subject of motions in limine.”  (Kelly, supra, 49 Cal.App.4th at p. 670.)   

Defendant’s motion in limine No. 21 is denied. 

No. 22:           Testimony by Insureds’ Attorneys Greer, Nong, and Zfaty

Defendant moves to exclude testimony from or evidence regarding plaintiffs’ former attorneys Douglas Arne Greer, Julie Nong, and Isaac Raymond Zfaty.  Courts may exclude a party from presenting testimony at trial when that party asserted privilege on the same matters during discovery.  (In re Marriage of Hoffmeister (1984) 161 Cal.App.3d 1163, 1171; A & M Records, Inc. v. Heilman (1977) 75 Cal.App.3d 554, 566.)  Courts may prohibit a party from using “privilege as a ‘shield and as a sword.’ ”  (Dwyer v. Crocker National Bank (1987) 194 Cal.App.3d 1418, 1432.) 

Plaintiffs successfully moved to quash the depositions of Greer and Zfaty.  As a result, defendant was unable to depose them.  Permitting Greer and Zfaty to testify at trial would constitute unfair surprise.

As for Nong, the court denied defendant’s motion to compel her deposition and production of documents.  The court found the deposition subpoena was unduly burdensome.  But the court did not prevent defendant from deposing Nong at all.  Defendant could have narrowed its subpoena to seek a deposition with reasonable limits.  It did not do so.  The court finds that permitting Nong’s testimony would not result in unfair surprise or prejudice to defendant.

            Defendant’s motion in limine No. 22 is granted as to witnesses Greer and Zfaty.  The court hereby excludes Douglas Arne Greer and Isaac Raymond Zfaty from testifying at trial.  The motion is denied as to Julie Nong.

PLAINTIFFS’ MOTIONS IN LIMINE

No. 1:             Evidence of Other Lawsuits Involving Plaintiffs

            Plaintiffs/cross-defendants Zoriall, LLC, Anne Kihagi, and Christina Mwangi move to exclude evidence regarding other lawsuits by or against them.  Evidence of the existence and nature of the other lawsuits is relevant and admissible for the purpose of proving plaintiffs’ knowledge of laws regulating landlords in San Francisco.  Evidence Code section 1101, subdivision (b) provides that the statute prohibiting character evidence does not “prohibit[] the admission of evidence” of a person’s conduct “when relevant to prove some fact (such as … knowledge…) other than his or her disposition to commit such an act.” 

Plaintiffs move to exclude evidence of lawsuits that concerned the San Francisco Rent Ordinance.  (Mandegary Decl., Ex. 1, responses to special interrogatories Nos. 36, 37, 40, 44.)  The San Francisco Rent Ordinance provides enhanced penalties “if the trier of fact finds that the landlord acted in knowing violation of” the law.  (S.F. Admin. Code, §§ 37.9(f), 37.10B(c)(5).) 

Plaintiffs’ knowledge of the San Francisco Rent Ordinance is pertinent to an issue in this case.  Defendant asserts the underlying lawsuits constitute “a loss caused by the wilful act of the insured.”  (Ins. Code, § 533.)  “A wilful act within the meaning of section 533 …  means something more than the intentional doing of an act constituting ordinary negligence or the violation of a statute.”  (Downey Venture v. LMI Ins. Co. (1998) 66 Cal.App.4th 478, 500 (Downey).)  Downey describes three categories of “wilful” acts: (1) those “deliberately done for the express purpose of causing damage”; (2) “intentionally performed with knowledge that damage is highly probable or substantially certain to result; and (3) “an intentional and wrongful act in which ‘the harm is inherent in the act itself.’ ”  (Ibid.)   Evidence that plaintiffs knew about the San Francisco Rent Ordinance can support defendant’s theory that they were found liable for acting “in knowing violation” of that ordinance, which may constitute a “wilful act of the insured” under Insurance Code section 533.

Not all evidence on this subject, however, is admissible.  The probative value of evidence regarding the merits of past lawsuits involving plaintiffs is substantially outweighed by the probability it will necessitate undue consumption of time and create substantial danger of undue prejudice. 

Plaintiffs’ motion in limine no. 1 is granted in part as to evidence and argument regarding the merits of other lawsuits against them.  The motion is denied in part as to evidence of the existence and subject matter of other lawsuits against them. 

No. 2:             Evidence Regarding AmGuard Insurance Policy

            Plaintiffs move in limine to exclude evidence or arguments about AmGuard Insurance Company and their policy from AmGuard Insurance Company.  Starr argues this evidence is relevant and probative for its affirmative defense that plaintiffs failed to cooperate with Starr by not disclosing the AmGuard policy to Starr.  Plaintiffs’ argument that the evidence is irrelevant and unduly prejudicial relies on the premise that this evidence is insufficient to prove Starr’s affirmative defense.  Plaintiffs did not move for summary adjudication of that defense.  They have not shown that, as a matter of law, Starr cannot prove that defense.  This evidence is relevant and admissible to support Starr’s affirmative defense.   

Plaintiffs also argue the collateral source rule bars this evidence.  It does not.  “[T]he collateral source rule applies to tort damages, not to damages for breach of contract.”  (Bramalea California, Inc. v. Reliable Interiors, Inc. (2004) 119 Cal.App.4th 468, 472.)  Plaintiffs do not provide authority supporting their position that the collateral source rule applies in this action against their insurer. 

Moreover, plaintiffs do not establish the basis for applying the evidentiary aspect of the collateral source.  “The collateral source rule operates both as a substantive rule of damages and as a rule of evidence.  As a rule of evidence, it precludes the introduction of evidence of the plaintiff being compensated by a collateral source unless there is a ‘persuasive showing’ that such evidence is of ‘substantial probative value’ for purposes other than reducing damages.”  (Arambula v. Wells (1999) 72 Cal.App.4th 1006, 1015.)  Starr does not seek to introduce evidence that AmGuard Insurance Company is compensating plaintiffs.  AmGuard Insurance Company has not done so.  This evidence also has substantial probative value for Starr’s affirmative defenses as discussed above. 

Plaintiffs’ motion in limine no. 2 is denied. 

No. 3:             Evidence of Starr’s Coverage Evaluations

            Plaintiffs move to exclude evidence from Starr’s coverage file or other evidence about its coverage evaluations that it did not produce in discovery.  While Starr produced some evidence of its coverage evaluations in discovery, it maintains that the attorney-client privilege applies to communications between it and its coverage counsel, Jamie Vels. 

In substance, this motion in limine seeks an evidence sanction pursuant to Code of Civil Procedure section 2023.030, subdivision (c).  Plaintiffs do not show defendant engaged in any misuse of the discovery process as required for such a sanction.  Nor do they establish that defendant disobeyed any order compelling it to provide discovery.

Plaintiffs’ motion in limine No. 3 is denied.

No. 4:             Evidence of Plaintiffs’ Comparative Fault or Breach of Contract

Plaintiffs move to exclude evidence that Starr may use to show “the Insureds’ comparative fault is a defense to the bad faith case against Starr, or that any minor breaches of contract that could not actually void the Policy constitute a defense to the bad faith case.”  This motion puts the cart before the horse.  Breach of contract by the insured can constitute a defense to an insurance bad faith action.  (Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390, 408-411.)  Plaintiffs have not established that the evidence Starr seeks to introduce is insufficient to support that affirmative defense.  Plaintiffs did not move for summary adjudication of that defense.  This evidence is relevant and admissible to support Starr’s affirmative defense that plaintiffs breached the insurance contract.

Plaintiffs’ motion in limine No. 4 is denied.       

                                                            IT IS SO ORDERED

Date:   October 31, 2023