Judge: Glenn R. Salter, Case: 22-1264671, Date: 2022-10-06 Tentative Ruling

Plaintiff and cross-defendant Danny Ryan, as Trustee of the Ryan Revocable Living Trust, filed a motion to quash a deposition subpoena of a “third-party” attorney, Kenneth August, for business records.

The motion claims the subpoena seeks documents protected by the attorney-client privilege—essentially the attorney-client files of the moving party.  These files were allegedly generated during negotiations between the plaintiff and defendant Kelvin Severino and his counsel over the sale of the stock of plaintiff’s construction business, a sale that is at the heart of this dispute.

The plaintiff asserts August was, among other things, his personal attorney at all relevant times.  The defendants contend in response that they are not seeking the plaintiff’s personal files, but only those attorney-client files that belong to the business defendant, the business they bought.  The subpoena tries to maintain this distinction.

Although hearsay, there is some evidence that August may concede that he was counsel for the plaintiff and for the business.  His letters to opposing counsel are not entirely clear, but that seems the reasonable inference.  And there is no evidence that he has varied from that position.

The court notes that August was not served with the motion to quash.  Whether he needs to be served with it is not entirely clear.  The plaintiff claims that he is the holder of the privilege and thus August may not produce the files without his consent.  If such is the extent of the relationship, then it appears August would stand in the shoes of the plaintiff for purposes of the motion and thus no service on him would possibly be required.

But one week prior to the filing of the motion to quash, the defendants filed a First Amended Cross-complaint that, for the first time, named August and his firm, August Law Group, as cross-defendants.  The Twelfth Cause of Action therein alleges that August and his firm breached their fiduciary duty to the cross-complainants by, among other things, performing legal work for both the plaintiff and the cross-complainant business.

Although Rule 3.110 of the California Rules of Court requires prompt service of the summons and complaint on all cross-defendants, it does not appear that either August or his law firm have been served.  They have not appeared.  And there is no suggestion in the court’s file that they will anytime soon.

We know that August has indicated that he was intending to consult with counsel about his ethical duties relative to production of the files.  (But this was before he was named a party.)  There are, however, no declarations in the court’s file from him or any legal consultant.

On the court’s own motion, and for good cause, the plaintiff’s motion to quash the deposition subpoena is CONTINUED to October 27, 2022, at 1:30 pm, to be heard with defendants’ demurrer to the First amended Complaint that is already scheduled for that date and time.  Under the circumstances related above, it appears that August and his firm should be given a fair and reasonable opportunity to appear in the action and weigh in on the motion because of the potential ethical implications.

The parties may submit further briefing, declarations, and additional evidence no later than October 20, 2022.  The court is inclined at this point to decide the matter only after August and his firm have appeared and have addressed the issue raised.

The plaintiff shall give notice.