Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

BACKGROUND 

 This action relates to a claim for attorneys’ fees allegedly owed to Plaintiff Jacoby & Meyers Attorneys LLP.  Plaintiff alleges it was retained by Defendant Sandra Lopez Ocampo to represent her in an action against Defendant Pacific Employers Insurance’s insureds, Lion Raisins and Alan James Torosian.  Ocampo later substituted Plaintiff with Defendant McElroy Parris Trial Lawyers.   

Plaintiff filed a lien for fees and costs as well as a demand that its name be included on any settlement draft payable to Ocampo and McElroy.  Ocampo and McElroy agreed to settle the underlying suit, and Pacific paid the full settlement amount to Ocampo and McElroy without regard to Plaintiff’s alleged lien.  Plaintiff now seeks damages from Pacific, among others, arising from the alleged failure to satisfy the lien.          

Pacific has cross-complained against Ocampo based on certain defense and indemnity obligations in the settlement agreement.  Pacific now seeks to seal the underlying settlement agreement which is an attached exhibit to its cross-complaint.  Pacific argues the settlement agreement contains confidential financial information; the parties to the agreement agreed the terms would be kept confidential; the overriding interest in the privacy of this financial information outweighs any right to public access as the agreement is a private contract; the overriding interest would be prejudiced by disclosure, and there is no less restrictive means of protecting the confidential information.  Plaintiff filed a limited opposition, requesting that any sealing of the settlement agreement be limited to this filing and not preclude any future motions seeking to unseal the settlement agreement.     

LEGAL STANDARD 

An application to seal must be accompanied by a declaration containing facts sufficient to justify sealing. (Cal. Rules of Court, Rule 2.551(b)(1).)  Plaintiff has submitted the declaration of Brandon Howerton explaining the facts which justify sealing.     

A court may order records to be filed under seal when the following conditions are met: “(1) [t]here exists an overriding interest that overcomes the right of public access to the record[s]; (2) [t]he overriding interest supports sealing the record[s]; (3) [a] substantial probability exists that the overriding interest will be prejudiced if the record[s are] not sealed; (4) [t]he proposed sealing is narrowly tailored; and (5) [n]o less restrictive means exist to achieve the overriding interest.”  (Cal. Rules of Court 2.550(d).) 

In ruling on a motion to seal, the court must identify (1) the specific information claimed to be entitled to protection from public disclosure, (2) the nature of the harm threatened by disclosure, and (3) any countervailing considerations. (H.B. Fuller Co. v. Doe (2007) 151 Cal.App.4th 879, 894.) Therefore, in order to prevail on his or her motion, the moving party must present a specific enumeration of the facts sought to be withheld and the specific reasons for withholding them. (Id. at 904.) 

The California Supreme Court has held that the First Amendment provides “a right of access to ordinary civil trial and proceedings.” (NBC Subsidiary (KNBC-TV), Inc. v. Superior Court (1999) 20 Cal.4th 1178, 1212.)  The court further noted its belief that “the public has an interest, in all civil cases, in observing and assessing the performance of its public judicial system.”  (Id. at 1210.)  There is a presumption of openness in civil court proceedings. (Id. at 1217.)  Therefore, it is up to this Court to determine if that presumption has been overcome. 

Courts must find compelling reasons, prejudice absent sealing and the lack of less-restrictive means, before ordering filed documents sealed. (Hurvitz v. Hoefflin (2000) 84 Cal.App.4th 1232, 1246; KNBC-TV, 20 Cal.4th at 1208-1209 n. 25; Champion v. Superior Court (1988) 201 Cal.App.3d 777, 787.)   

A compelling reason could include the party’s right to privacy in financial records.  (Valley Bank of Nevada v. Superior Court¿(1975) 15 Cal.3d 652, 656-657 (there is a constitutional right to privacy in financial information); Cassidy v. California Board of Accountancy¿(2013) 220 Cal.App.4th 620,625¿(finding that there existed an¿overriding interest in a company’s right of privacy and confidentiality in its tax and¿financial records supporting the¿sealing of such records and the company's right of privacy and confidentiality to its tax and¿financial records¿will be prejudiced if these documents are not sealed).)  

A proposed sealing must also be narrowly tailored to serve the overriding interest, such as by sealing only portions of pleadings or redacting particular text that refer to the confidential information. (In re Marriage of Burkle (2006) 135 Cal.App.4th 1045, 1052, 1070.)   

DISCUSSION 

Pacific seeks to file under seal a settlement agreement which contains confidential financial information.  The settlement agreement also includes a confidentiality provision. 

There is an overriding interest in protecting personal financial information and confidential settlement agreements.  This overriding interest overcomes the right of public access especially where as here, the settlement agreement is a private contract, and the parties agreed the contract would be kept confidential.  ¿ NBC Subsidiary, supra, 20 Cal.4th at p. 1222, fn. 46 (“enforcement of binding contractual obligations not to disclose” information is an example of an overriding interest); Universal City Studios, Inc. v. Superior Court¿(2003) 110 Cal.App.4th 1273, 1283 ¿(defendant’s “contractual obligation not to disclose can constitute an overriding interest within the meaning of” the predecessor to¿rule 2.550(d)).)  

In Monster Energy Co. v. Schechter¿(2019) 7 Cal.5th 781, 793, 795, the California Supreme Court held that “[t]he privacy of a settlement is generally understood and accepted in our legal system, which favors settlement and therefore supports attendant needs for confidentiality.  Routine public disclosure of private settlement terms would chill the parties’ ability in many cases to settle the action before trial.  Such a result runs contrary to the strong public policy of this state favoring settlement of actions.” 

Pacific’s overriding interest in maintaining the confidential financial information and settlement terms would be prejudiced if the agreement were disclosed.  Additionally, the sealing order is properly tailored to seal only the document that reveals the confidential information.  And there is no less restrictive means to protect the parties’ privacy interests because the parties to the settlement agreement intended the entire contract to be confidential.   

For these reasons, the Court grants Pacific’s motion to seal the settlement agreement for purposes of this filing only and without prejudice to any party’s future motion to unseal.   

CONCLUSION 

For the foregoing reasons, the Court GRANTS Pacific Employers Insurance Company’s motion to seal the settlement agreement.   

IT IS SO ORDERED. 

 

DATED: March 4, 2024 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court