Judge Elaine Lu, Case BC691527 2023-01-11 Tentative Ruling

On January 30, 2018, Plaintiff Lianna Shakhnazarian (“Plaintiff”) filed the instant malpractice action. On October 22, 2021, Plaintiff filed the operative First Amended Complaint (“FAC”) against Defendants Freedman + Taitelman LLP (“F&T”), Bryan Freedman (“Freedman”), and Patricia Arias Musitano[1]. The FAC asserts two causes of action for (1) Professional Negligence and (2) Breach of Fiduciary Duty.

On September 15, 2022, Defendants F&T and Freedman (jointly “Defendants”) filed the instant motion for summary judgment. On September 21, 2022, pursuant to the parties’ stipulation, the Court ordered an advanced briefing schedule where any opposition was due by December 1, 2022 and any reply by December 22, 2022. The Court’s order allowed Defendants to move the Court Reservation System reservation to any date between December 29, 2022 and May 5, 2023. (Minute Order 9/21/22.) Pursuant to this stipulation, on September 26, 2022, Defendants filed a notice of rescheduling advancing the hearing date for the instant motion to January 11, 2023. On December 1, 2022, Plaintiff filed an opposition. On December 22, 2022, Defendants filed a reply.

Defendants jointly represented Plaintiff and her employer Mariah Carey (“Carey”)[2] against John Doe (“Doe”). (FAC ¶ 11.) “Plaintiff’s agreement for legal services (‘contract’) with Defendant [F&T] specified that Defendants would provide legal services to Plaintiff with respect to Plaintiff's allegations of misconduct against [Doe].” (FAC ¶ 14.) “Plaintiff’s contract with Defendants did not include any agreement to represent Plaintiff as to any other matters or allegations against [Carey].” (FAC ¶ 15.)

“Plaintiff executed a conflicts waiver drafted by Defendants, which allowed Defendants to jointly represent Plaintiff and [Carey] in their respective claims against John Doe. The conflicts waiver did not include a waiver of any other claims or allegations pertaining to Plaintiff’s employment with [Carey]. The conflicts waiver did not contain a representation by Plaintiff that she had no other claims against [Carey] other than a claim arising out of John Doe's misconduct.” (FAC ¶ 16.)

Defendants’ attorney-client relationship with Carey predated the attorney-client relationship with Plaintiff, and Defendants failed to fully disclose the actual and potential conflicts of interest when such conflicts arose. (FAC ¶ 17.)

Defendants drafted a settlement agreement and general release on behalf of Plaintiff and Carey to settle Plaintiff’s employment-related claims arising out of Doe’s alleged misconduct. (FAC ¶ 18.) “The release, however, also purported to settle Plaintiff’s other employment-related claims against [Carey], including claims arising out of allegations not involving John Doe. The released claims included Plaintiff’s wage and hour claims and hostile work environment claims against [Carey].” (FAC ¶ 19.)

“Plaintiff was unaware of the nature and broad scope of the release presented to her by Defendants, and it was not explained to her.” (FAC ¶ 23.) Defendants failed to disclose that the release included claims unrelated to the allegations against Doe. (FAC ¶¶ 20, 24.)

Based on Defendants’ legal advice, Plaintiff executed the settlement agreement and general release on January 30, 2017. (FAC ¶¶ 19, 25, 28.)

“Defendants failed to withdraw as Plaintiff's counsel in light of the actual conflict of interest that arose as result of the settlement and release that Defendants drafted for the benefit of [Carey] to the detriment of Plaintiff.” (FAC ¶ 27.) “Defendants improperly shared the confidential release between Plaintiff and [Carey] with John Doe’s attorney, even though John Doe was not a party to the agreement between Plaintiff and [Carey].” (FAC ¶ 32.)

As a preliminary matter, portions of the moving papers, opposition papers, and reply papers were lodged under seal. Specifically, the parties lodged under seal: exhibit 10 of Defendants’ compendium of evidence,[3] portions of Plaintiff’s opposition memorandum, the entirety of Plaintiff’s compendium of evidence in opposition including the name of exhibit 13, Defendant’s response to Plaintiff’s response to the separate statement of undisputed facts, and Defendant’s response to Plaintiff’s additional material facts.

“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. [Citation.] Substantive courtroom proceedings in ordinary civil cases, and the transcripts and records pertaining to these proceedings, are ‘ “presumptively open.” ’ [Citation.]” (Savaglio v. Wal-Mart Stores, Inc. (2007) 149 Cal.App.4th 588, 596–597.) As explained by the Supreme Court, “the public has an interest, in all civil cases, in observing and assessing the performance of its public judicial system, and that interest strongly supports a general right of access in ordinary civil cases.” (NBC Subsidiary, Inc. v. Superior Court (1999) 20 Cal.4th 1178, 1210.) “Openness is a presumption; it is not an absolute. The ‘presumption of openness can be overcome upon a proper showing’ compatible with the constitutional standards. [Citation.]” (McNair v. National Collegiate Athletic Assn. (2015) 234 Cal.App.4th 25, 31.)

California law authorizes the sealing of court records containing confidential information. (NBC Subsidiary, Inc., supra, 20 Cal.4th at p.1222, Fn.46.) California Rules of Court, Rule 2.551(a) provides that a record may not be filed under seal without a court order and 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(a).) The party requesting a record be filed under seal must file a motion or an application for an order sealing the record that is accompanied by a memorandum or declaration containing facts to justify the sealing. (Cal. Rules of Court, Rule 2.551(b)(1).) “The court may order that a record be filed under seal” if it finds that there is an overriding interest in favor of maintaining the confidentiality of the information. (Cal. Rules of Court, Rule 2.550(d).)

The court may order a record sealed if it finds that (1) an overriding interest exists 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 request is narrowly tailored; and (5) no less restrictive means exist to achieve the overriding interest. (Cal. Rules of Court, Rule 2.550(d); See also Savaglio, supra, 149 Cal.App.4th at p.597 [ “Therefore, before a trial court orders a record sealed, it must hold a hearing and make findings that (1) there is an overriding interest supporting sealing of the records; (2) there is a substantial probability that absent sealing, such interest will be prejudiced; (3) the sealing order is narrowly tailored to serve the overriding interest; and (4) a less restrictive means of meeting that interest is not available.”].)

“A party requesting that a record be filed under seal must file a motion or an application for an order sealing the record. The motion or application must be accompanied by a memorandum and a declaration containing facts sufficient to justify the sealing.” (Cal. Rules of Court, Rule 2.551(b)(1).) “A party that files or intends to file with the court, for the purposes of adjudication or to use at trial, records produced in discovery that are subject to a confidentiality agreement or protective order, and does not intend to request to have the records sealed, must:” lodge the unredacted document to be sealed, publicly file redacted copies of the documents to be sealed, and “[g]ive written notice to the party that produced the records that the records and the other documents lodged … will be placed in the public court file unless that party files a timely motion or application to seal the records under this rule.” (Cal. Rules of Court, Rule 2.551(b)(3).)

Here, no party has filed any motion to seal any documents in the instant action. With the notices of lodging filed by Defendants, Defendants specifically noted that the documents were being conditionally lodged under seal pursuant to Rule 2.551(b)(3) and that the unredacted documents would be transferred to the public file if a motion to seal was not timely filed. (See Notice of Lodging filed 9/15/22, 12/22/22.) Plaintiff failed to file a motion within ten days of either notice of lodging, which is deemed a concession that such documents should not be sealed. Thus, the unredacted moving and reply papers lodged with the Court on September 15, 2022 and December 22, 2022 are ordered to be publicly filed by the Clerk’s Office.

As to the documents lodged by Plaintiff, the notice of lodging merely notes that the documents lodged under seal were lodged under seal “pursuant to paragraph 17 of the subject Protective Order.” (Notice of Lodging filed 12/1/22.) Paragraph 17 of the stipulated protective order specifically notes that “[w]here any Confidential Materials, or Information derived from Confidential Materials, is included in any motion or other proceeding governed by California Rules of Court, Rules 2.550 and 2.551, the party shall follow those rules.” (Stipulation and Protective Order filed 11/15/21.) Thus, the Protective Order clearly denotes that a motion to seal is required to file such documents under seal. Moreover, a mere stipulation between parties does not exempt the parties from compliance with California Rules of Court, Rules 2.550 and 2.551.[4] (See Cal. Rules of Court, Rule 2.551(a).)

As Plaintiff failed to file a motion to seal any portion of the opposition as required, Plaintiff has conceded that Plaintiff has no basis to file such documents under seal. Moreover, Defendants did not file any motion to seal within 10 days of Plaintiff’s notice of lodging. Thus, the lodged opposition and supporting documents must be publicly filed. (Savaglio, supra, 149 Cal.App.4th at pp.596–597, [“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. [Citation.] Substantive courtroom proceedings in ordinary civil cases, and the transcripts and records pertaining to these proceedings, are ‘ “presumptively open.” ’ [Citation.]”].) Accordingly, the Court hereby orders the Clerk’s Office to publicly file the unredacted opposition papers lodged with the Court on December 1, 2022.

With their moving papers, Defendants requests that the Court take judicial notice of the following:

1. The Los Angeles Superior Court case summary for Lianna Shakhnazaryan v. Mirage Entertainment, LLC, Los Angeles Superior Court Case No. 19STCV01308

2. Plaintiff’s first amended complaint in Lianna Shakhnazaryan v. Mirage Entertainment, LLC, Los Angeles Superior Court Case No. 19STCV01308

3. Defendants Mariah Carey, Mirage Entertainment, Inc. N.Y. Mirage Entertainment, Inc. and Magic Carpet Productions, LLC’s answer to Plaintiff’s first amended complaint filed on March 30, 2021 in Lianna Shakhnazaryan v. Mirage Entertainment, LLC, Los Angeles Superior Court Case No. 19STCV01308

4. The dismissal with prejudice filed by Plaintiff and entered by the court on February 7, 2022 in Lianna Shakhnazaryan v. Mirage Entertainment, LLC, Los Angeles Superior Court Case No. 19STCV01308

As the Court may take judicial notice of its own records and records of the State, (See Evid. Code, § 452(c)(d)), Defendants’ unopposed request for judicial notice is granted. However, the Court does not take judicial notice of the truth of assertions within the court records. (See Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)

In conjunction with Defendants’ reply, Defendants object to portions of the declaration of Lianna Shakhnazarian. “In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion.” (CCP § 437c(q).) The Court declines to rule on Defendants’ evidentiary objections as they are not material to the disposition of this motion.

Defendants and Plaintiff have each submitted Undisputed Material Facts, which the court will reference as “DMF” for Defendants’ Undisputed Material Facts and “PMF” for Plaintiff’s Undisputed Material Facts.

“On January 16, 2019, Plaintiff commenced the action styled Lianna Shakhnazaryan v. Mirage Entertainment, LLC, Los Angeles Superior Court Case No. 19STCV01308 (the ‘Underlying Action’).” (DMF 1.)

“Plaintiff’s Seventh Cause of Action in Plaintiff’s operative first amended in the Underlying Action was for ‘Failure to Pay Earned Wages, Provide Rest and Meal Periods, Itemized Statements, and Overtime Pay Upon Termination of Employment [Cal. Labor Code §§ 201, 202, 203, 218, 226, 512, 1194 and 8 California Code of Regulations §11040].’” (DMF 2.)[5] “Plaintiff alleged in her first amended complaint in the Underlying Action that her employer ‘failed to provide Plaintiff with timely and accurate wage and hour statements and paystubs with the required information and failed to pay Plaintiff as agreed.’” (DMF 3.) “Plaintiff alleged in her first amended complaint in the Underlying Action that her employer ‘knowingly and intentionally failed to maintain accurate payroll records, as required by Cal. Labor Code section 226(a).’” (DMF 4.) “Plaintiff alleged in her first amended complaint in the Underlying Action that she ‘“suffered injury as a result of Defendants’ knowing and intentional failure to provide her with the wage and hour statements required by law.”’” (DMF 5.) “Plaintiff alleged in her first amended complaint in the Underlying Action that her employer ‘failed to provide Plaintiff with required meal and rest break periods as set forth under Cal. Labor Code 512 and 8 California Code of Regulations section 11040 (12).’” (DMF 6.) “Plaintiff alleged in her first amended complaint in the Underlying Action that her employer ‘willfully failed to pay Plaintiff due compensation, including earned overtime pay, due upon termination of employment as required by law.’” (DMF 7.) “Plaintiff’s Seventh Cause of Action in the Underlying Action was not limited to a specific time period, but sought relief for her entire period of employment.” (DMF 8.)

“Plaintiff’s Eighth Cause of Action in Plaintiff’s operative first amended [complaint] in the Underlying Action was for ‘Breach of Oral Contract and Violation of Cal. Labor Code Section 2802 For Reimbursement Of Expenditures.’” (DMF 9.) “Plaintiff alleged in her first amended complaint in the Underlying Action that ‘[a]t the request of DEFENDANTS, Plaintiff made many purchases over the course of her employment with DEFENDANTS, and submitted forms for reimbursement in accordance with the agreement between Plaintiff and DEFENDANTS that Plaintiff would be entitled to full reimbursement for such purchases/expenditures.’” (DMF 10.) “Plaintiff alleged in her first amended complaint in the Underlying Action that she had not been reimbursed for these expenditures.” (DMF 11.) “Plaintiff’s Eighth Cause of Action in the Underlying Action was not limited to a specific time period, but sought relief for her entire period of employment.” (DMF 12.)

“The Ninth Cause of Action in Plaintiff’s operative first amended in the Underlying Action was for ‘Rescission of Contract Based on Fraud in the Inducement, Undue Influence, Unilateral Mistake, as against Defendant Mariah Carey.’” (DMF 14.) “Plaintiff alleged in her first amended complaint in the Underlying Action that ‘[o]n or about January 30, 2017, with the advice and representation of Freedman and Taitelman, LLP, Plaintiff and CAREY and DOES 1 through 50, inclusive, and each of them, entered into a written Settlement Agreement and General Release (“Release”) . . . .’” (DMF 15.)

“Plaintiff alleged in her first amended complaint in the Underlying Action that ‘the Release contained certain terms and conditions which related to claims completely unrelated to Plaintiff’s claims against J.P., and instead operated to release claims Plaintiff held against Freedman and Taitelman, LLP’s other client, CAREY.’” (DMF 16.) “Plaintiff alleged in her first amended complaint in the Underlying Action that she was caused to ‘execute the Release without any knowledge of such terms, specifically the term releasing claims against CAREY,’ based on fraud, undue influence, and mistake.” (DMF 17.)

“On February 7, 2022, Plaintiff dismissed her affirmative claims in the Underlying Action with prejudice.” (DMF 18.)

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) CCP § 437c(c) “requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)

As to each claim as framed by the complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element or to establish a defense. (CCP § 437c(p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

Defendants’ notice of motion solely seeks summary judgment – not summary adjudication. Accordingly, the existence of a single triable issue requires a denial of the motion as the Court cannot summarily adjudicate claims unless specifically requested in the notice of motion. (Homestead Savings v. Superior Court (1986) 179 Cal.App.3d 494, 498.)

Defendants contend that all of Plaintiff’s claims in the FAC fail because (1) Plaintiff cannot establish proximate causation as a matter of law, (2) Plaintiff is barred from suing Defendants because her dismissal with prejudice of the underlying action is a retraxit, and (3) Plaintiff’s refusal to divulge the terms on which she settled the underlying action bars her from proceeding.

“[T]he pleadings determine the scope of relevant issues on a summary judgment motion.” (Nieto v. Blue Shield of California Life & Health Ins. Co. (2010) 181 Cal.App.4th 60, 74.) On a motion for summary judgment, or adjudication, a defendant need only “negate plaintiff's theories of liability as alleged in the complaint; that is, a moving party need not refute liability on some theoretical possibility not included in the pleadings.” (Hutton v. Fidelity National Title Company (2013) 213 Cal.App.4th 486, 493.)

Here, the FAC asserts two causes of action for legal malpractice and breach of fiduciary duty. Proximate causation is an element of both causes of action.

“To state a cause of action for legal malpractice, a plaintiff must plead ‘(1) the duty of the attorney to use such skill, prudence, and diligence as members of his or her profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the breach and the resulting injury; and (4) actual loss or damage resulting from the attorney's negligence.’ [Citation.]” (Kumaraperu v. Feldsted (2015) 237 Cal.App.4th 60, 66.)

“‘The elements of a cause of action for breach of fiduciary duty are: (1) the existence of a fiduciary duty; (2) the breach of that duty; and (3) damage proximately caused by that breach.’” (IIG Wireless, Inc. v. Yi (2018) 22 Cal.App.5th 630, 646, [internal citation omitted].) “The relationship between an attorney and client is a fiduciary relationship of the very highest character, and attorneys have a duty of loyalty to their clients.” (Kotlar v. Hartford Fire Ins. Co. (2000) 83 Cal.App.4th 1116, 1123.)

Defendants concede that “Plaintiff’s claims are premised on the notion that the Release damaged her by preventing her from pursuing claims against Ms. Carey / her former employer.” (Motion at p.13:22-24.) In the Underlying Action, Plaintiff did pursue these claims against Carey. (DMFs 2-12; Samani Decl. ¶ 8, Exh. 5 [First Amended Complaint in Underlying Action].) On February 7, 2022, Plaintiff dismissed the Underlying Action with prejudice. (DMF 18; Samani Decl. ¶ 10, Exh. 7 [Dismissal with Prejudice].)

Defendants contend that “Ms. Carey and her affiliated entities did not plead the affirmative defense of release when confronted with Plaintiff’s wage and hour / reimbursement claims. Necessarily, then, Plaintiff cannot demonstrate that Defendants’ conduct damaged her. If Plaintiff decided to voluntarily abandon claims despite the non-assertion of the Release as an affirmative defense, that does not give rise to damage attributable to Defendants.” (Motion at p.14:7-11.)

Defendants are correct that a Release is an affirmative defense that must be raised. (Ladd v. Warner Bros. Entertainment, Inc. (2010) 184 Cal.App.4th 1298, 1309 [“The statute of limitations is an affirmative defense, as is a settlement and release.”]; Green v. Healthcare Services, Inc. (2021) 68 Cal.App.5th 407, 415 [“An affirmative defense must be alleged in the answer or it is waived.”].) However, contrary to Defendants’ claims, Carey did assert the Release as an affirmative defense in the underlying action. In Carey’s answer to Plaintiff’s first amended complaint in the Underlying Action, which Defendants cite, Carey explicitly pleads that “[t]he FAC [in the Underlying Action] is barred, in whole or in part, because [Plaintiff] released all claims against [Carey] from before January 1, 2017 in a settlement agreement.” (Samani Decl. ¶ 9, Exh. 6 [Defendants Mariah Carey, Mirage Entertainment, Inc. N.Y. Mirage Entertainment, Inc. and Magic Carpet Productions, LLC’s answer to Plaintiff’s first amended complaint filed in the Underlying Action ¶ 16].) Though this allegation is within an affirmative defense labeled as an affirmative defense of mootness, Carey’s answer clearly and explicitly raises the release as an affirmative defense to the Underlying Action. (See e.g., North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764, 773 [“Irrespective of the labels attached by the pleader to any alleged cause of action, we examine the factual allegations of the complaint, to determine whether they state a cause of action on any available legal theory.”].) At the very least, there is a triable issue as to whether Carey asserted settlement and release as an affirmative defense.

Therefore, there is at least a triable issue as to whether Carey raised the release as an affirmative defense to the Underlying Action, and on the record before it, the Court cannot find that Plaintiff, as a matter of law, “decided to voluntarily abandon claims despite the non-assertion of the Release as an affirmative defense[.]” (Motion at p.14:7-11.) To the extent Defendant contends that Plaintiff does not have evidence of proximate causation, the instant motion fails to show as such.

A defendant moving for summary judgment must show either that one or more elements of the cause of action cannot be established, or that there is a complete defense to that cause of action. (CCP § 437c(p)(2).) This means that if the plaintiff bears the burden of preponderance of the evidence at trial, then the defendant in a summary adjudication motion “must present evidence that would require a reasonable trier of fact not to find any underlying material fact more likely than not—otherwise, [the defendant] would not be entitled to judgment as a matter of law, but would have to present his evidence to a trier of fact.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 851 (Aguilar).) To meet this burden, a defendant must show not only “that the plaintiff does not possess needed evidence” but also that “the plaintiff cannot reasonably obtain needed evidence.” (Id. at p.854.) It is insufficient for the defendant to merely point out the absence of evidence. (Gaggero v. Yura (2003) 108 Cal.App.4th 884, 891.) The defendant “must also produce evidence that the plaintiff cannot reasonably obtain evidence to support his or her claim.” (Ibid.) The supporting evidence can be in the form of affidavits, declarations, admissions, depositions, answers to interrogatories, and matters of which judicial notice may be taken. (Aguilar, supra, 25 Cal.4th at p.855.)

Here, Defendants have failed to identify in its separate statement any evidence that demonstrates that Plaintiff cannot prove proximate causation. (City of Pasadena v. Superior Court (2014) 228 Cal.App.4th 1228, 1238, Fn. 4, [“ ‘[t]his is the Golden Rule of Summary Adjudication: if it is not set forth in the separate statement, it does not exist.’ ”].) Similarly, the memorandum fails to cite any evidence demonstrating that Plaintiffs cannot establish proximate causation. (See Cal. Rules of Court, Rule 3.1113(b).)^{^[6]}

Accordingly, Defendants fail to meet their moving burden in showing that Plaintiff cannot show proximate causation as a matter of law.

“At common law, a ‘retraxit’ was ‘an open and voluntary renunciation of the suit in open court.’” (Rice v. Crow (2000) 81 Cal.App.4th 725, 733.) “A dismissal with prejudice is the modern name for a common law retraxit.” (Ibid.) “‘[A] dismissal with prejudice [is] a retraxit constituting a decision on the merits invoking the principles of res judicata.’” (Ibid.)
“‘Res judicata’ describes the preclusive effect of a final judgment on the merits. Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them. Collateral estoppel, or issue preclusion, ‘precludes relitigation of issues argued and decided in prior proceedings.’” (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896.) Res Judicata has been used to refer to both claim and issue preclusion. (Ibid., Fn. 7.) The doctrine has two aspects: it applies to both a previously litigated cause of action, referred to as claim preclusion, and to an issue necessarily decided in a prior action, referred to as issue preclusion. (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 828; Teitelbaum Furs, Inc. v. Dominion Ins. Co. (1962) 58 Cal.2d 601, 604.)

This distinction is essential to understanding the analysis below, as courts have oft-noted the “seemingly ineradicable confusion over the distinctions between ‘res judicata’ (claim preclusion) and ‘collateral estoppel’ (issue preclusion).” (Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 541, Fn. 21.)

Issue preclusion applies only to issues that were actually litigated in the earlier matter; whereas claim preclusion extends to all legal theories, proofs, and demands for relief that might have been presented in the first matter, provided both suits assert the same cause of action. (Ibid. citing Landeros v. Pankey (1995) 39 Cal.App.4th 1167, 1171; Gottlieb v. Kest (2006) 141 Cal.App.4th 110, 148; Mycogen Corp. v. Monsanto Corp. (2002) 28 Cal.4th 888, 897; Burdette v. Carrier Corp. (2008) 158 Cal.App.4th 1668, 1687.) “Res judicata [claim preclusion] bars the relitigation not only of claims that were conclusively determined in the first action, but also matter that was within the scope of the action, related to the subject matter, and relevant to the issues so that it could have been raised” and includes ‘matters which were raised or could have been raised, on matters litigated or litigable.’” (Burdette v. Carrier Corp. (2008) 158 Cal.App.4th 1668, 1674-1675; accord Mark v. Spencer (2008) 166 Cal.App.4th 219, 229 [bars claims that parties had a fair opportunity to litigate].) Claim preclusion applies as a bar to splitting a cause of action for partial, later litigation, or relitigation of the same cause of action based upon on another legal theory or associated with different relief, that could have been sought in the prior action. (Noble v. Draper (2008) 160 Cal.App.4th 1, 10; Hamilton v. Asbestos Corp., Ltd. (2000) 22 Cal.4th 1127, 1146.) Its purpose is “to preserve the integrity of the judicial system, promote judicial economy, and protect litigants from harassment by vexatious litigation.” (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 829.)

The prerequisite elements for applying the doctrine to either an entire cause of action or one or more issues are the same: (1) A claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding. (Ibid.)

Here, Defendants contend that Plaintiff’s dismissal of the underlying action with prejudice on February 7, 2022 in the Underlying Action constitutes a retraxit of the claims in the instant action. (DMF 18; Samani Decl. ¶ 10, Exh. 7 [Dismissal with Prejudice].) The Court disagrees.

Claim preclusion is clearly inapplicable to the instant case. Plaintiff’s claims in the Underlying Action for employment and Labor Code violations are not the same as her claims for malpractice and breach of fiduciary duty in the instant action. Thus, only issue preclusion could potentially apply.

“The threshold requirements for issue preclusion to apply are: (1) the issue sought to be precluded from relitigation is identical to that decided in a prior proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the issue was necessarily decided in the former proceeding; (4) the decision in the former proceeding is final and on the merits; and (5) the party against whom preclusion is sought is the same as, or in privity with, the party to the former proceeding.” (Bullock v. City of Antioch (2022) 78 Cal.App.5th 407, 415–416.) “These elements are conjunctive, meaning that if just one is unsatisfied, issue preclusion cannot apply. Moreover, even where each element is satisfied, ‘a court must consider whether application of the issue preclusion doctrine would comport with the doctrine's core policies, namely the preservation of the integrity of the judicial system, the promotion of judicial economy, and the protection of litigants from harassment by vexatious litigation.’ [Citation.]” (Tukes v. Richard (2022) 81 Cal.App.5th 1, 21.)

Here, issue preclusion fails as a matter of law on the second prong as the issues sought to be precluded from relitigation were not actually litigated. “‘[T]he dominant rule in this state is that an issue that has been settled by a voluntary dismissal with prejudice does not constitute an issue that has been ‘actually litigated’ for collateral estoppel purposes.’ [Citation.]” (Tukes, supra, 81 Cal.App.5th at p.21.) “We … adopt the dominant rule.” (Id. at p.22.) “[T]he bare pre-trial dismissal of a lawsuit with prejudice does not result in the ‘actual litigation’ of any issues for issue preclusion purposes.” (Id. at p.23.)
Here, Plaintiff voluntarily dismissed the Underlying Action with prejudice. (DMF 18; Samani Decl. ¶ 10, Exh. 7 [Dismissal with Prejudice].) Thus, no issues in the Underlying Action were “actually litigated” for purposes of issue preclusion as a matter of law. Accordingly, Defendants fail to meet their moving burden in showing that Plaintiff is barred from suing Defendants.

Defendants’ Moving Burden: Refusal to Divulge Settlement Terms of the Underlying Action

Defendants contend that because Plaintiff has refused to divulge the settlement terms of the Underlying Action, Plaintiff is barred from bringing the instant action. Here, the settlement agreement of the Underlying Action was provided redacted to Defendants. (Samani Decl. ¶ 13, Exh. 10.) The accompanying privilege log provided was provided partially redacted based on the right of privacy and as offers to compromise. (Samani Decl. ¶ 11, Exh. 8 [Privilege Log].)

As previously noted by this Court in compelling Plaintiff’s further response, “[t]he parties have not presented the redacted discovery to the Court, and the Court declines to opine as to whether the specific redactions are warranted. If necessary, Defendants may move to compel compliance and in that context move to compel Plaintiff to produce the documents in unredacted form.” (Order 9/13/22.) Defendants have not moved to compel Plaintiff to produce the settlement agreement for the Underlying Action in an unredacted form.

As noted in the authority upon which Defendants rely, if Defendants had made the proper showing, the remedy would be for the Court to overrule the asserted privileges and order the production of unredacted copies of the settlement for the Underlying Action – not summary judgment as Defendants propose. (See e.g., Steiny & Co., Inc. v. California Electric Supply Co. (2000) 79 Cal.App.4th 285, 292 [“When a party asserting a claim invokes privilege to withhold crucial evidence, the policy favoring full disclosure of relevant evidence conflicts with the policy underlying the privilege. Courts have resolved this conflict by holding that the proponent of the claim must give up the privilege in order to pursue the claim. Where privileged information goes to the heart of the claim, fundamental fairness requires that it be disclosed for the litigation to proceed.”].) Defendants fail to cite any authority that would warrant a grant of summary judgment in the instant circumstance.

For example, in Solin v. O'Melveny & Myers, LLP (2001) 89 Cal.App.4th 451 – upon which Defendants rely:

[A]n attorney (Solin) retained a law firm (O'Melveny) to obtain advice regarding Solin's representation of his clients. (Id. at p. 453.) In seeking this advice, Solin revealed confidential information to O'Melveny that implicated his clients in criminal activities. (Ibid.) Solin later sued O'Melveny for professional malpractice. (Ibid.) The clients intervened in the action and sought dismissal of Solin's lawsuit in order to prevent disclosure of the confidential information. (Id. at p. 454.) The trial court dismissed the action, and the Court of Appeal affirmed. (Ibid.)

In describing the basis for the trial court's dismissal, the Court of Appeal stated that O'Melveny intended to offer in evidence handwritten notes (the Notes) drafted by one of its lawyers (Cohen) during his initial meeting with Solin, at which Solin disclosed the confidential information. (Solin, supra, 89 Cal.App.4th at p. 461, [“the factual underpinnings of Solin's claim and O'Melveny's defense, including the latter's intention to examine witnesses concerning all of the matters discussed in the Solin/O'Melveny consultation and to introduce the Notes into evidence to corroborate Cohen's testimony, had been revealed at the time that the trial court ruled on the Clients' motion to dismiss”].) The Solin court further noted that the confidential information was critical to O'Melveny's defense[.]

Acknowledging that the confidential information was critical to O'Meleveny's defense, the Solin court noted that the trial court would nevertheless have been required to exclude the evidence because the evidence was subject to the attorney-client privilege between Solin and the clients. (Solin, supra, 89 Cal.App.4th at p. 463.)

(Dietz v. Meisenheimer & Herron (2009) 177 Cal.App.4th 771, 788–789 [Summarizing Solin].)

Here, in the instant action, the confidential information does not involve attorney-client privilege held by a third party seeking to dismiss the instant action. Thus, Solin does not stand for the proposition that the instant case should be dismissed.

In sum, Defendants fail to meet their burden in showing that Plaintiff’s redactions of the settlement agreement in the Underlying action bars Plaintiff from proceeding in the instant action.

Based on the foregoing, Defendants Freedman + Taitelman LLP, and Bryan Freedman’s motion for summary judgment is DENIED.

The Documents Lodged with the Court on September 15, 2022, December 1, 2022, and December 22, 2022 are ordered to be publicly filed by the Court Clerk.

[1]Pursuant to an oral request by Plaintiff, Defendant Patricia Arias Musitano was dismissed without prejudice on November 17, 2021.

[2] The Court notes that the FAC refers to Mariah Carey as Jane Doe but the numerous public filings denote that Jane Doe is Mariah Carey, including the papers for the instant motion. To avoid any confusion by use of the names Jane Doe and John Doe the Court will refer to Jane Doe as Mariah Carey.

[3] Despite the notice of lodging, the Court is not in receipt of Exhibit 10 of Defendants’ compendium of evidence.

[4] For example, Cal. Rules of Court, Rules 2.550-2.551 – “do not apply to discovery motions and records filed or lodged in connection with discovery motions or proceedings.” (Cal. Rules of Court, Rule 2.550(a)(3).) Thus, as to discovery motions, the parties’ agreement can be a sufficient basis to file documents under seal in conjunction with discovery motions.

[5] For DMFs 2-12, 15, and 18 Plaintiff notes the facts as undisputed and disputed to the extent that they imply a complete and final resolution of the Underlying action or imply that Defendants did not commit malpractice. These responses are improper as they do not unequivocally state whether the fact is disputed or undisputed. California Rules of Court, Rule 3.1350(f)(2) requires that “[o]n the right side of the page, directly opposite the recitation of the moving party's statement of material facts and supporting evidence, the response must unequivocally state whether that fact is ‘disputed’ or ‘undisputed.’” (Ibid., [bold and italics added].) Moreover, a dispute to the implication of a fact is a legal argument -- not a factual dispute. Accordingly, the Court will consider these facts as undisputed.

[6] California Rules of Court, rule 3.1113(b) provides that “[t]he memorandum must contain a statement of facts, a concise statement of the law, evidence and arguments relied on, and a discussion of the statutes, cases, and textbooks cited in support of the position advanced.” The Court has “no obligation to undertake its own search of the record ‘backwards and forwards to try to figure out how the law applies to the facts’ of the case.” (Quantum Cooking Concepts, Inc. v. LV Associates, Inc. (2011) 197 Cal.App.4th 927, 934; see also Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 52 [where appellant's motion was supported by deficient memorandum, trial court was justified in denying the motion on procedural grounds].)

Superior Court of California

County of Los Angeles

Department 26