Judge: Joseph Lipner, Case: 19STCV28649, Date: 2024-12-27 Tentative Ruling

Case Number: 19STCV28649    Hearing Date: December 27, 2024    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Order on Motion to Quash:

Plaintiff and Cross-Defendant Fidelity National Title Insurance Company (“Fidelity”) moves to quash the subpoena served by Defendant and Cross-Complainant Washington Square Management, LLC (“Washington Square”) on Plaintiff’s former counsel in this action, Zi C. Lin (“Lin”). Both Plaintiff and Washington Square seek sanctions relating to this motion.

The Court GRANTS the motion to quash.

The Court DENIES sanctions.

Background

This is an insurance case.

On September 28, 2017, Fidelity underwrote a title insurance policy (the “Policy”) held by Washington Square for the real property located at 1211-1225 E Washington Boulevard, Los Angeles, California (the “Property”).

The policy also insured a parking easement described as “Parcel 5” in the description attached to the title policy. The parking easement was located on property owned by Soon Han Pak, Chung Hyuk Pak, and 1232 East Washington Blvd Property, LLC (collectively “Paks”). This easement was conveyed in 2008. The escrow company for the conveyance was Chicago Title Company (“Chicago Title”), an affiliate of Plaintiff.

A dispute arose between Washington Square and the Paks over the parking easement. Washington Square tendered a claim to Fidelity as a result.

In February 2018, Fidelity informed Washington Square that Fidelity would be retaining counsel to represent Washington Square.

In April 2018, Fidelity retained counsel at Fidelity National Law Group (“FN Law Group”), an affiliate of Fidelity, to represent Washington Square in connection with the dispute with the Paks. On behalf of Washington Square, the retained counsel filed an action for declaratory relief and quiet title relating to the parking easement (the “Pak Action”).

Washington Square contends in this action that Fidelity failed to obtain a litigation guaranty for the quiet title claim and, as a result, failed to name as defendants all persons who had a record title interest in the parking lot that was the subject of the easement. (Second Amended Cross-Complaint “SACC” ¶ 55.) One such party that Washington Square identifies is Wilshire State Bank, which Fidelity alleges held a deed of trust encumbering the parking lot.

Washington Square alleges that Fidelity failed to disclose conflicts of interest that arose over the course of the Pak Action. Washington Square alleges that Wilshire State Bank was also an insured of Fidelity.

In the Pak Action, FN Law Group issued subpoenas to Chicago Title. Washington Square alleges that Washington Square instructed FN Law Group to withdraw the subpoenas in order to protect Chicago Title, Fidelity’s affiliate. (SACC ¶ 58.)

Fidelity contends that, throughout the Pak Action, Washington Square demanded that the retained counsel bring claims in the Pak Action that were outside the scope of the Policy and outside the scope of the engagement agreement for retained counsel.

On August 8, 2019, the court in the Pak Action granted the retained counsel’s motion to withdraw as counsel due to a conflict of interest.

Fidelity subsequently terminated Washington Square’s coverage under the Policy due to what Fidelity characterizes as Washington Square’s failure to cooperate.

Fidelity filed this action on August 13, 2019.

On March 18, 2019, Washington Square filed a Cross-Complaint.

The operative cross-complaint is now the Second Amended Cross-Complaint (“SACC”), which raises claims for (1) breach of contract; (2) negligence; (3) breach of fiduciary duty; (4) negligent misrepresentation; (5) fraud and deceit; (6) breach of insurance contract; (7) breach of the implied covenant of good faith and fair dealing; and (8) violation of Penal Code, section 496.

On October 28, 2024, Washington Square served Lin with a subpoena to appear at trial.

On November 8, 2024, Fidelity filed this motion to quash the subpoena on Lin. Washington Square filed an opposition and Fidelity filed a reply.

Evidentiary Objections

The Court has reviewed Fidelity’s evidentiary objections.

The Court overrules Fidelity’s evidentiary objections without prejudice to Fidelity’s ability to raise them at trial or in its motions in limine.

Discussion

            Lin was Fidelity’s former counsel in this action. (Squire Decl. ¶ 7.) Lin was an attorney at Garret & Tully, Fidelity’s current law firm, from 2007 to 2023 and was a partner there from 2015 to 2023. (Squire Decl. ¶ 7.) Lin represented Fidelity in this matter while he was employed at Garret & Tully, and his role was solely legal. (Squire Decl. ¶ 7.)

            In addition to having represented Fidelity, Lin represented Chicago Title in a separate action. In the course of his representation of Chicago Title, Lin unsuccessfully objected to a subpoena and opposed a motion to compel served on Chicago Title. Washington Square contends that Lin opposed the motion to compel in order to conceal material information known to Fidelity, but not known to Washington Square regarding Fidelity’s conflict of interest between Washington Square and Wilshire State Bank. Washington Square contends that the discovery of that conflict of interest would have resulted in Fidelity realizing that the Paks Action was defective for failure to name Wilshire State Bank as a Washington Square.

            “ ‘[T]he practice of taking the deposition of opposing counsel should be severely restricted, and permitted only upon showing of extremely good cause ....’ (Fireman's Fund Ins. Co. v. Superior Court (1977) 72 Cal.App.3d 786, 790.) That decision, and others, did permit such deposition in an insurance bad faith case, where ‘an attorney for a party is the sole, or principal, negotiator and in which bad faith is alleged and punitive damages are sought based upon that allegation of bad faith.’ (Id. at p. 790)” (Spectra-Physics, Inc. v. Superior Court (1988) 198 Cal.App.3d 1487, 1493.) “However, even where depositions are permitted in insurance bad faith litigation, the attorney-client privilege nevertheless applies and limits the questions which may be asked of counsel, unless the insurer directly relies on advice of counsel as a defense to the bad faith charge.” (Id. at p. 1494.)

            Washington Square contends that Lin’s testimony is necessary to establish:

            (1) Fidelity’s awareness of the financial importance of Washington Square and Wilshire State Bank’s potential claims against Fidelity and Chicago Title;

            (2) That the alleged undisclosed conflicts were highly material;

            (3) Why Fidelity and FN Law Group failed to name Wilshire State Bank as a defendant in the Paks Action or obtain a litigation guaranty;

            (4) Fidelity and FN Law Group’s motivation for failing to name Wilshire State Bank as a defendant in the Paks Action or obtain a litigation guaranty;

            (5) That the undisclosed conflicts of interest undermined Fidelity’s use of the Paks Action as a curative lawsuit; and

            (6) Why Lin was directed by Fidelity to move to quash Washington Square’s subpoena to Chicago Title.

            Each of these purposes for calling Lin has problems with it. As to the first, it does not appear that Lin would have personal knowledge of this information because he was Fidelity’s counsel in this action, and does not appear to have been involved in the Paks Action. Moreover, this subject appears to implicate attorney-client privileged information.

As to the second, Washington Square argues that Lin’s litigation conduct in opposing the subpoena and motion to compel against Chicago Title demonstrates that Fidelity was acting in bad faith to hide the conflict of interest. But this argument goes to Chicago Title’s reason for opposing the subpoena, which Lin would only know from communications subject to the attorney-client privilege. The same is true for the sixth purpose, which is essentially a further explanation of the second.

The third, fourth, and fifth purposes are all issues of FN Law Group’s litigation conduct and Washington Square’s claim that Fidelity inappropriately directed FN Law Group to act against Washington Square’s best interests in the Paks Litigation. But Washington Square does not explain why Lin would have had access to any of this information. Lin does not appear to have been involved in the representation of Washington Square in the Paks Action. If Washington Square’s argument is that Fidelity would have told Lin the relevant information in connection with this action, then those communications are subject to attorney-client privilege.

In addition to these problems, Washington Square’s effort to call Lin as a witness at trial is at best of such tangential relevance that any benefit of calling him is outweighed by the undue use of trial time and the undue prejudice caused by calling Fidelity’s former counsel. For those reasons, the Court excludes Lin’s testimony under Evidence Code Section 352.

The Court therefore grants the motion to quash. The Court denies sanctions.

Orders on Motions In Limine

The Court DENIES Fidelity’s and Washington Square’s motions in limine with the following exceptions:

The Court GRANTS IN PART Fidelity’s Motion in Limine No. 11 as follows.  Mr. Keller shall not be permitted to testify at trial as to any opinion he did not offer at the time of his deposition.  As to those opinions, the Court may hold a hearing under Evidence Code Section 402 to determine whether such opinions are admissible.

The Court GRANTS Fidelity’s Motion in Limine No. 13.  Neither party shall produce evidence of the $6,000 discovery sanctions against Chicago Title Co.  Such evidence would require an undue use of trial time and is more prejudicial than probative.  The Court excludes such evidence under Evidence Code Section 352.

With respect to Washington Square’s Motion in Limine No. 16, the Court admonishes Fidelity to avoid questions of Mr. Zimmerman that seek to elicit information covered by the attorney-client privilege or work product doctrine.

“In limine motions are designed to facilitate the management of a case, generally by deciding difficult evidentiary issues in advance of trial.”  (Eng v. Brown (2018) 21 Cal.App. 5th 675, 698 [citation omitted].) “What in limine motions are not designed to do is to replace the dispositive motions prescribed by the Code of Civil Procedure.  It has become increasingly common, however, for litigants to utilize in limine motions for this purpose.” (Amtower v. Photon Dynamics, Inc. (2008) 158 Cal.App.4th 1582, 1593 [emphasis in original].)   

With very few exceptions, both parties have attempted to use the in limine process as a substitute for dispositive motions. Fidelity has filed nineteen motions in limine. Washington Square has filed seventeen.  Almost all of them ask the Court to decide some fact issue in favor of one of the parties, or issue summary adjudication or directed verdict on some large or small issue in the case.  The Court declines to rule on case-dispositive or issue-dispositive legal matters at the in limine stage, on the eve of trial, without the benefit of the appropriate procedure under California law. The parties could have raised such issues at the pleading stage or on summary judgment. They may raise them if appropriate at the directed verdict or post-judgment stage or in the context of jury instructions.  They are not an appropriate use of the in limine procedure.

Certain of the in limine motions have other problems, such as being too general (e.g., Washington Square’s Motion in Limine No. 6) or raising issues that appear to be uncontroversial and thus evidencing a failure to meet and confer on these issues (e.g., Fidelity’s Motion in Limine No. 4 and Washington Square’s Motions in Limine Nos 13 and 15).

For these reasons, except as noted, the Court denies the in limine motions.