Judge: Jon R. Takasugi, Case: 23STCV02085, Date: 2024-11-13 Tentative Ruling

Case Number: 23STCV02085    Hearing Date: November 13, 2024    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

QUANTGENE, INC., et al.

            vs.

SEBASTIAN DONOVAN, et al.

Plaintiffs’ motion to compel is MOOT. The Court declines to award sanctions at this time.

On 1/31/2023, Plaintiffs Sebastian Donovan and Arconex (collectively, Plaintiffs) filed suit against Quantgene, Inc. and Johannes Bhakdi (collectively, Defendants), alleging: (1) breach of contract; (2) breach of implied covenant of good faith and fair dealing; (3) unjust enrichment; (4) intentional misrepresentation; (5) negligent misrepresentation; and (6) violation of Business and Professions Code section 17200.

            On 3/3/2023, Cross-Complainants Quantgene, Inc. and Johannes Bhakdi filed a cross-complaint (XC) against Cross-Defendants Sebastian Donovan and Arconex, alleging: (1) breach of contract; (2) breach of implied covenant of good faith and fair dealing; (3) false promise; (4) intentional misrepresentation; (5) concealment; (6) negligent misrepresentation; (7) conversion; (8) unjust enrichment; (9) intentional interference with contractual relations; and (10) unfair business practices.

            On 9/26/2024, Plaintiffs moved to compel production of materials improperly withheld as privileged, and requested monetary sanctions in connection with the motion.

Discussion

            Plaintiffs argue that Defendants have improperly withheld two categories of documents on the alleged basis of attorney-client privilege: (1) Defendants withheld communications that include an adverse third party, which defeats any claim of privilege notwithstanding the presence of lawyers on the emails; and (2) Defendants withheld communications with Harry Nelson, an individual who is both a lawyer and a shareholder in Quantgene, which involve Mr. Nelson’s attempt to broker a resolution of the dispute between the parties prior to the filing of this litigation.

            In opposition, Defendants represent that upon the filing of Plaintiffs’ motion, they immediately addressed the issues raised. More specifically, Defendants contend that they immediately produced 4 JAMS arbitration documents which involved Quantgene and a former employee. Because they were directed to JAMs, Defendants’ counsel agreed that they were not privileged.

Defendants also contend that they immediately addressed the issue over Harry Nelson’s emails with Johannes Bhakdi. More specifically:

Defendants’ counsel reviewed each of the privilege log items that Plaintiffs identified and substantively addressed them in an email with Plaintiff’s counsel later that same day the Motion was filed. (Woo Decl., ¶ 9, Ex. B, 9/26/24, 7:44 p.m. email). Based on that review and summary of the issues, Defendants agreed to produce, and the next day, produced (1) a single email where it appeared Mr. Bhakdi was communicating with Mr. Nelson as an intermediary to pass along a message to Mr. Donovan, (3) three emails where the content was merely setting up conference calls between Mr. Bhakdi, Mr. Weiss and Mr. Nelson (which were produced on the agreement that they did not constitute a waiver of the privilege), and (3) an email from Mr. Nelson forwarding to Mr. Bhakdi a demand letter from Plaintiffs’ counsel sent to Mr. Nelson in December 2022 (this particular email was not even on Plaintiff’s identified list of items requested to be produced, but was reviewed as part of double checking every logged entry in this general time frame where Mr. Bhakdi and Mr. Nelson communicated). (Woo Decl., Ex. B - 9/26/24, 7:44 p.m. email).

As to the specific Harry Nelson items identified by Plaintiffs for which Defendants maintained the original assertion of privilege and did not produce the communication, gave specific reasons for each item (see Woo Decl., Ex. B - 9/26/24, 7:44 p.m. email), noted that Quantgene’s in-house counsel Mr. Weiss was involved in providing substantive responses to inquiries from Mr. Bhakdi, and asserted that the inclusion of Mr. Nelson did not waive the privilege. Defendants also maintained the privilege over invoices which detailed legal advice and work product performed by the Nelson Hardiman firm for Quantgene. (Woo Decl., Ex. C - 9/27/24, 4:12 p.m. email).

(Opp., 8: 1-22.)

After review, the Court is persuaded that Plaintiffs’ motion is now substantively moot. Moreover, meet-and-confer was inadequate here, and it appears the discovery issues could have been resolved informally without motion practice. Accordingly, the Court declines to award sanctions at this time.

Based on the foregoing, Plaintiffs’ motion to compel is moot. The Court declines to award sanctions at this time.

It is so ordered.

Dated:  November    , 2024

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  For more information, please contact the court clerk at (213) 633-0517.