Judge: Gary Y. Tanaka, Case: 20TRCV00464, Date: 2023-01-11 Tentative Ruling

Case Number: 20TRCV00464    Hearing Date: January 11, 2023    Dept: B

LOS ANGELES SUPERIOR COURT – SOUTHWEST DISTRICT

Honorable Gary Y. Tanaka                                                                               Wednesday, January 11, 2023

Department B                                                                                                                            Calendar No. 8

PROCEEDINGS

2221 Park Place Partners LLC v. 2221 Park Place Tenants LLC, et al.

            20TRCV00464

1.      2221 Park Place Tenant LLC and WeWork Companies, LLC’s Motion Challenging Claw Back of Documents and Seeking Sanctions

TENTATIVE RULING

            2221 Park Place Tenant LLC and WeWork Companies, LLC’s Motion Challenging Claw Back of Documents and Seeking Sanctions is denied.

Background

Plaintiff 2221 Park Place Partners LLC (“Landlord”) filed its original Complaint on June 30, 2020. Plaintiff operative Fourth Amended Complaint was filed on November 29, 2021. Plaintiff alleges the following facts. Plaintiff was the landlord and Defendant 2221 Park Place Tenant LLC (“Tenant”) was the tenant on the subject property located at 2221 Park Place, El Segundo, California. Defendant WeWork Companies, LLC (“Defendant” or “guarantor”) was the guarantor on the lease. Plaintiff alleges that the tenant breached the lease by failing to take possession of the subject premises and repudiating the lease. Plaintiff also alleges that Defendant guarantor breached its obligations under the Springing Guaranty. In the First Amended Complaint, Plaintiff set forth causes of action for Breach of Lease against the tenant and Breach of Guaranty against the guarantor.

On February 11, 2021, Defendant guarantor’s demurrer to the sole cause of action alleged against it, the second cause of action, was sustained with 20 days leave to amend. On March 3, 2021, Plaintiff filed a Second Amended Complaint alleging the following causes of action: 1. Breach of Lease; 2. Breach of Guaranty; 3. Inducement of Breach of Contract; 4. Intentional Interference with Contractual Relations; 5. Breach of the Implied Covenant of Good Faith and Fair Dealing; 6. Breach of Lease. The third through sixth causes of action were added without first obtaining leave to amend to add these new causes of action.

On June 2, 2021, WeWork’s demurrer to the Second Amended Complaint was sustained with leave to amend as to the second cause of action and without leave to amend as to the third through sixth causes of action. On August 17, 2021, following court leave to file a Third Amended Complaint, Plaintiff filed the Third Amended Complaint restating the causes of action which were included in the Second Amended Complaint. On November 8, 2021, WeWork’s demurrer to the Third Amended Complaint was sustained with leave to amend, in part, and overruled, in part. The Fourth Amended Complaint sets forth the following causes of action: 1. Breach of Lease; 2. Inducement of Breach of Contract; 3. Intentional Interference with Contractual Relations; 4. Breach of Lease.

Requests for Judicial Notice

Defendants’ requests for judicial notice are granted pursuant to Evidence Code section 452(d).

Motion Challenging Claw Back of Documents

Code Civ. Proc., § 2031.285 states:

“(a) If electronically stored information produced in discovery is subject to a claim of privilege or of protection as attorney work product, the party making the claim may notify any party that received the information of the claim and the basis for the claim.

(b) After being notified of a claim of privilege or of protection under subdivision (a), a party that received the information shall immediately sequester the information and either return the specified information and any copies that may exist or present the information to the court conditionally under seal for a determination of the claim.

(c)(1) Prior to the resolution of the motion brought under subdivision (d), a party shall be precluded from using or disclosing the specified information until the claim of privilege is resolved.

(2) A party who received and disclosed the information before being notified of a claim of privilege or of protection under subdivision (a) shall, after that notification, immediately take reasonable steps to retrieve the information.

(d)(1) If the receiving party contests the legitimacy of a claim of privilege or protection, he or she may seek a determination of the claim from the court by making a motion within 30 days of receiving the claim and presenting the information to the court conditionally under seal.

(2) Until the legitimacy of the claim of privilege or protection is resolved, the receiving party shall preserve the information and keep it confidential and shall be precluded from using the information in any manner.”

Defendants move for an order from the Court to reject Plaintiff’s request to claw back of allegedly non-privileged documents and for an order of sanctions against Plaintiff and Plaintiff counsel in the amount of $14,185. The Court notes that Defendants, in the Notice of Motion, did not explicitly identify the specific documents upon which they seek the determination of the legitimacy of the claim of privilege. On page 7 of the motion, it is first revealed that the motion apparently disputes the legitimacy of six e-mail chains. Of course, however, there are numerous correspondences embedded within each email chain. However, in neither the notice of motion, or, within the body of the motion, itself, do Defendants request the Court to make a determination as to each communication. In fact, Defendants dispute the legitimacy of the assertion of the privilege as to each of the six identified “documents.” Thus, of course, if there is, at least, one attorney/client protected communication within each of the documents, the Court must deny the motion.

Attorney communications with agents and employees of a client are protected by the attorney/client privilege. The privilege extends to lower-level personnel who reasonably need to know of the communication in order to act for the organization, even if they had no direct contact with the lawyer. Zurich American Ins. Co. v. Superior Court. (2007) 155 Cal.App.4th 1485, 1499-1500.  Zurich Am. Ins. Co. v Superior Court (2007) 155 Cal.App.4th 1485, 1495-1503 provides the following guideline to determine whether the attorney/client privilege is waived by disclosing a confidential document to third persons: (1) A document is only privileged if it contains confidential advice that the attorney has given in the course of the attorney-client relationship; (2) There is no waiver when such a document is disclosed to third persons if that disclosure is reasonably necessary to further the purpose of the legal consultation, even if those third persons were not present during the legal consultation and did not participate in that consultation. Id.

On page 17 of the motion, Defendants appear to, finally, provide a proper identification of the six “documents” to which the motion is addressed. Defendants identify them as: (1) Platform11182–91; (2) Platform12193-95; (3) Platform12592-94; (4) Platform02452-53; (5) Platform07354-55; (6) Platform12539-43. These documents are attached as Exhibits 32-37 to the declaration of Jacob A. Dean.

The Court has reviewed the subject email threads attached as Exhibits 32-37. The Court determines that within each of the email threads, at least, one, if not more protected attorney/client communications exist. In fact, Defendants appear to acknowledge this fact in its own motion. (Memorandum of Points and Authorities, pages 17-18). The Court makes no comment as to whether each and every email that is reflected in each of the email threads are protected by the attorney/client privilege as this is not necessary for purposes of the ruling on this motion. Defendants challenged the assertion of the attorney/client privilege as to each of the documents noted above and not as to each or any specific communication within the documents.

Again, the notice of motion is vague as to what specific documents that Defendants seek a determination as to Plaintiff’s attempt to claw back. Again, within the body of the motion, it is apparent that the motion is directed to the entire body of the email threads reflected in Exhibits 32 to 37. The Court determines that in each of the identified documents, at least, one attorney-client protected communication exists, and, therefore, the instant motion must be denied.

Therefore, the Court finds that Defendants have failed to establish that the documents upon which Plaintiff has attempted to claw back as being attorney/client protected, is, in fact, not subject to the attorney/client privilege.

 Defendants’ Motion to Challenge Claw Back of Documents and Request for Monetary Sanctions is denied.

Plaintiff is ordered to give notice of this ruling.