Judge: Lee W. Tsao, Case: 23NEWCV00745, Date: 2023-12-07 Tentative Ruling

Case Number: 23NEWCV00745    Hearing Date: December 7, 2023    Dept: C

COMPLETE CLOTHING COMPANY v. BUCHALTER, a Professional Corporation, et al.

CASE NO.: 23NWCV00745

HEARING:  12/07/23

#2

TENTATIVE ORDER

PLAINTIFF’S MOTION TO COMPEL FURTHER RESPONSES IS DENIED AS TO THOSE DOCUMENTS IDENITIFIED AT ¶30(A), (B), (D), (F)-(GG) OF THE KILGORE DECLARATION FILED ON NOVEMER 22, 2023 (“KILGORE DECLARATION”). 

PLAINTIFF’S MOTION TO COMPEL FURTHER REPONSES IS GRANTED AS TO THOSE DOCUMENTS IDENTIFIED AT ¶30(C) and (E) OF THE KILGORE DECLARATION.  DEFENDANTS TO PRODUCE THESE DOCUMENTS WITHIN 10 DAYS. 

Moving party(s) to give notice.

Background

Plaintiff Complete Clothing is a fashion company specializing in women’s clothing.  Plaintiff contracted with non-party Star Ace to locate a manufacturer in China to manufacture its clothing.  Star Ace sourced Plaintiff’s clothing for manufacture by non-party Ningbo Brother Apparel Co., Ltd.  Star Ace was not paying Ningbo for the clothing manufactured for Plaintiff.  As a result, a dispute arose among all three entities, Plaintiff, Star Ace and Ningbo, regarding amounts due to Ningbo for clothing manufactured for Plaintiff. 

Plaintiff alleges Defendants Buchalter and Jeffrey Kapoor negligently provided substandard legal counsel regarding the dispute among all three entities.  As a result, Plaintiff was allegedly forced to pay significant legal fees and monies to third parties.  Plaintiff also alleges Buchalter failed to disclose its preexisting or concurrent attorney-client relationship with Oneworld, Star Ace and/or Star Ace’s principal, Young Bin Luo. 

On March 13, 2023, Plaintiff filed a complaint against Buchalter and Kapoor alleging (1) legal malpractice and (2) breach of fiduciary duty.

Analysis

          (1)  Legal Standard Applicable to Motion to Compel Further Responses to RFPs

CCP § 2031.310

(a) On receipt of a response to a demand for inspection, copying, testing, or sampling, the demanding party may move for an order compelling further response to the demand if the demanding party deems that any of the following apply:

          (1) A statement of compliance with the demand is incomplete.

          (2) A representation of inability to comply is inadequate, incomplete, or evasive.

          (3) An objection in the response is without merit or too general.

(b) A motion under subdivision (a) shall comply with each of the following:

          (1) The motion shall set forth specific facts showing good cause justifying the discovery sought by the demand.

          (2) The motion shall be accompanied by a meet and confer declaration under Section 2016.040.

          (3) In lieu of a separate statement required under the California Rules of Court, the court may allow the moving party to submit a concise outline of the discovery request and each response in dispute.

(c) Unless notice of this motion is given within 45 days of the service of the verified response, or any supplemental verified response, or on or before any specific later date to which the demanding party and the responding party have agreed in writing, the demanding party waives any right to compel a further response to the demand.

… (h) Except as provided in subdivision (j), the court shall impose a monetary sanction under Chapter 7 (commencing with Section 2023.010) against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel further response to a demand, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.

Where a party is seeking to compel further responses to requests for document production, the burden is on the moving party to show both relevance to the subject matter and specific facts justifying discovery. (CCP §2031.310(b)(1); Kirkland v. Supr. Ct. (2002) 95 Cal.App.4th 92, 98 (“Once good cause was shown, the burden shifted to Kirkland to justify his objection”); Glenfed Develop. Corp. v. Superior Court (1997) 53 Cal.App.4th 1113, 1117.)  Once good cause is established by the moving party, the burden then shifts to the responding party to justify any objections made to document disclosure. (Hartbrodt v. Burke (1996, 2nd Dist.) 42 Cal.App.4th 168, 172-174.)

          (2)  Parties’ Positions

Plaintiff propounded largely identical RFPs on Defendants Buchalter and Kapoor on April 14,2 023.  Defendants provided responses on May 16, 2023.  On July 7, 2023, Defendants provided their privilege log, which identified documents being withheld to RFP Nos. 2, 4, 9-12. 

Plaintiff filed this motion to compel further responses on grounds that the documents listed on the privilege log are not protected by the attorney-client privilege or work product, and any confidential communications are subject to the protective order and must be produced.  Plaintiff argues the attorney-client privilege and work product protection do not apply to this action for legal malpractice. 

In opposition, Defendant argues that after the IDC before the Court on October 6, 2023, only 125 documents on the log remain in dispute.  Defendant argues the remaining documents cannot be produced, because they (1) involve confidential communications with clients other than Plaintiff; (2) are protected by the mediation privilege; and (3) are work product prepared for purposes other than Defendants’ representation of Plaintiff. 

In reply, Plaintiff argues Defendants did not raise the mediation privilege when it initially responded and they have produced mediation documents.  Plaintiff argues Defendants have withheld communications that were created long before any mediation was scheduled and not materially linked to the mediation.  Plaintiff argues any documents withheld based on the attorney-client privilege arising from Defendant Buchalter’s attorney-client relationship with Star Ace’s principal, Luo must be produced, because Defendant failed to timely raise the objection and Kapor voluntarily produced communications between Luo and himself to the  third party.  Finally, Plaintiff argues work product protection does not exist in legal malpractice actions. 

          (3)  Mediation Privilege

Evidence Code §1119

Except as otherwise provided in this chapter:

(a) No evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation is admissible or subject to discovery, and disclosure of the evidence shall not be compelled, in any arbitration, administrative adjudication, civil action, or other noncriminal proceeding in which, pursuant to law, testimony can be compelled to be given.

(b) No writing, as defined in Section 250, that is prepared for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation, is admissible or subject to discovery, and disclosure of the writing shall not be compelled, in any arbitration, administrative adjudication, civil action, or other noncriminal proceeding in which, pursuant to law, testimony can be compelled to be given.

(c) All communications, negotiations, or settlement discussions by and between participants in the course of a mediation or a mediation consultation shall remain confidential.

Evidence Code §1120

Evidence otherwise admissible or subject to discovery outside of a mediation or a mediation consultation shall not be or become inadmissible or protected from disclosure solely by reason of its introduction or use in a mediation or a mediation consultation.

A “writing” for purpose of the mediation privilege includes photographs, videotapes and written witness statements.  (Ev.C. §250.) 

Mediation cannot be used as a pretext to shield materials from discovery. Evidence otherwise subject to discovery outside of a mediation is not protected from disclosure “solely by reason of its introduction or use in a mediation.”  (Ev.C. §1120(a); Rojas v. Sup.Ct. (Coffin) (2004) 33 Cal.4th 407, 417; Ev.C. §1120(b)(4) (implementing rule of Lappe v. Sup.Ct. (Lappe) (2014) 232 Cal.App.4th 774, 784-785 (no mediation confidentiality protection for statutorily-mandated financial disclosure declarations exchanged in mediation because they were required by Family Code to be exchanged in parties' marital dissolution action and thus would have existed regardless of parties' participation in mediation).) 

All discussions conducted in preparation for a mediation, as well as all mediation-related communications that take place during the mediation itself, are protected from disclosure by Ev.C. § 1119(a).  (Cassel v. Sup.Ct. (Wasserman, Comden, Casselman & Pearson, L.L.P. (2011) 51 Cal.4th 113, 128 (law firm defending malpractice action could assert mediation confidentiality to prevent disclosure of allegedly negligent advice given client before and during mediation); Amis v. Greenberg Traurig LLP (2015) 235 Cal.App.4th 331, 339 (mediation confidentiality provisions effectively block client's legal malpractice action based on advice given in mediation).)  Mediation briefs are protected from disclosure by Ev.C. § 1119(b).  (Wimsatt v. Sup.Ct. (Kausch) (2007) 152 Cal.App.4th 137, 158.) 

Courts have recognized that the mediation privilege may prevent a client from bringing a malpractice action against his or her attorney based on the attorney's alleged malpractice in connection with the settlement of the case; the balancing of conflicting policy concerns is a matter left to the Legislature, not the courts. (Cassel, supra, 51 Cal.4th at 122, 132, 136 (mediation confidentiality statutes may negatively affect the client's ability to prove a legal malpractice claim against the lawyers); Amis, supra, 235 Cal.App.4th at 339-340 (protecting attorneys from malpractice claims is an “unintended consequence” of mediation confidentiality); Wimsatt, supra, 152 Cal.App.4th at 162-163 (participation in mediation in effect relinquishes client's claims for new and independent torts arising from mediation, including legal malpractice).)

Any reference at trial to the mediation or statement of nonagreement is ground for new trial (or a mistrial) as an “irregularity in the proceedings.”  (CCP § 1775.12.) 

Defendants are withholding documents based on the mediation privilege.  Defendants argue the documents relate to the mediation between Ningbo and Plaintiff that was originally scheduled to take place on March 24, 2022 but was postponed to May 4, 2022.  The parties first agreed to mediate on October 28, 2021. 

Of the remaining documents being withheld based on mediation privilege, the Court denies the motion to compel further responses.  Defendants sufficiently establish that these documents are protected under Evidence Code §1119 and Plaintiff fails to raise any points that would call into question application of the mediation privilege to them.  The documents identified fall within the time period after Ningbo agreed to mediation and after the parties May 2, 2022 mediation, are communications relating to the mediation, were prepared for mediation or forwarded documents protected by the mediation privilege after the May 4, 2022 mediation and include the actual mediation brief. 

Plaintiff’s Motion to Compel Further Responses is DENIED as to those documents identified at ¶30(F)-(BB), (DD)-GG) of the declaration of Sarah Kelly-Kilgore. 

          (4) Attorney-Client Privilege

Section 952 defines a confidential attorney-client communication: “[A] ‘confidential communication between client and lawyer’ means information transmitted between a client and his or her lawyer in the course of that relationship and in confidence by a means which, so far as the client is aware, discloses the information to no third persons other than those who are present to further the interest of the client in the consultation or those to whom disclosure is reasonably necessary for the transmission of the information or the accomplishment of the purpose for which the lawyer is consulted, and includes a legal opinion formed and the advice given by the lawyer in the course of that relationship.”

Section 912, subdivision (d), similarly addresses whether disclosure of an attorney-client communication to a third person waives the privilege: “A disclosure in confidence of a communication that is protected by a privilege provided by Section 954 (lawyer-client privilege) ..., when disclosure is reasonably necessary for the accomplishment of the purpose for which the lawyer...was consulted, is not a waiver of the privilege.”

The burden of establishing the applicability of the attorney-client privilege depends on the specific facts of the case.  “Generally, the burden of establishing that a particular matter is privileged is on the party asserting the privilege.  There is an exception:  Whenever a privilege is claimed on the ground that the matter sought to be disclosed is a communication made in the course of the lawyer-client relationship, the communication is presumed to have been made in confidence and the opponent of the claim of privilege has the burden of proof to establish that the communication was not confidential.”  (Behunin v. Supr. Ct. (2017) 9 Cal.App.5th 833, 844-845.)

However, if the communications in question involve a third party, the burden of proof in litigating attorney-client privilege changes.  (Id. at 844.)  “Where a third party is present, no presumption of confidentiality obtains, and the usual allocation of burden of proof, resting with the proponent of the privilege, applies in determining whether confidentiality was preserved under §952.”  (Id.)

“The attorney-client privilege may be claimed only by the holder of the privilege, a person who is authorized by the holder to claim the privilege or the person who was the lawyer at the time of the confidential communication. (Evid.Code, § 954.) As relevant here, the ‘holder of the privilege’ is defined as the client.  The lawyer who received or made a privileged communication is obligated to claim the privilege whenever he is present when the communication is sought to be disclosed and is authorized to claim the privilege under Evidence Code section 954.”  (Kerner v. Superior Court (2012) 206 Cal.App.4th 84, 111–112.) 

A waiver of the attorney-client privilege occurs “if any holder of the privilege, without coercion, has disclosed a significant part of the communication or has consented to disclosure made by anyone. Consent to disclosure is manifested by any statement or other conduct of the holder of the privilege indicating consent to the disclosure, including failure to claim the privilege in any proceeding in which the holder has the legal standing and opportunity to claim the privilege.”13 (Evid.Code, § 912, subd. (a).) Failure to claim the privilege constitutes consent to disclosure and a waiver of the privilege only if the holder, in a proceeding in which he or she has the legal standing and opportunity to claim the privilege, fails to claim the privilege knowing that the disclosure of privileged information is sought.  If these conditions are satisfied, the holder's failure to assert the privilege through his or her attorney constitutes a waiver if the holder had an opportunity to consult with the attorney.”  (Id.)  

Defendants are withholding several documents based on attorney-client privilege based on their attorney-client privilege with “Rainbow” Luo, a client of Defendants who is not affiliated with Plaintiff.  Plaintiff’s claim that Defendants previously produced 2 binders of privileged documents does not establish waiver.  Plaintiff fails to establish that those binders contained the specific documents currently being withheld based on privilege, and there is nothing indicating that waiver was done with Luo’s knowledge or consent.  Plaintiff also cannot deny that Luo was a client of Defendants.  Plaintiff alleges that Luo was a client in the complaint.  (Complaint, ¶28.)  Defendants withholding of the documents based on “confidential communication” initially does not render the privilege objection untimely.  Defendants sufficiently raised a general objection on attorney-client privilege at the outset that was clarified through informal meet and confer efforts, including the IDC. 

Plaintiff’s Motion to Compel Further Responses is DENIED as to those documents identified at ¶30(A)-(D) and (CC) of the Kilgore Declaration.

          (5) Work Product

No work product protection exists in litigation between an attorney and client on matters “relevant to an issue of breach by the attorney of a duty to the client arising out of the attorney-client relationship.”  (CCP § 2018.080.)  Lawyers sued for malpractice or any other “breach of duty” may not withhold their research notes or other documents as “work product.” Moreover, the statute is not limited to malpractice actions. Even fee disputes or actions involving business dealings between attorney and client may involve “duties” owed by the attorney arising out of the attorney-client relationship (e.g., duty not to charge “unconscionable” fees; CRPC 1.5).

Defendants’ claim of work product protection over the 4/8/2019 (Kilgore Dec., Ex. A, Amended Privilege Log, Items 5-7) draft email re: Complete, Star Ace, Ningo and the draft document dated 8/28/19 (Kilgore Dec., Ex. A, Amended Privilege Log, Item 12) are directly related to the breach of fiduciary duty and legal malpractice alleged in this action.  Plaintiff claims Defendants breached their fiduciary duty and provided substandard legal counsel in the dispute and litigation among Plaintiff, Star Ace and Ningo.  The titles of the draft documents refer expressly to these three parties and were drafted April and August 2019, when the relevant events occurred. 

Plaintiff’s Motion to Compel Further Responses is GRANTED as to Items (C) and (E) identified in ¶30 of the Kilgore Declaration.  Defendants to produce these documents within 10 days. 

[Conclusion]