Judge: Mark A. Young, Case: 19STCV43863, Date: 2022-08-02 Tentative Ruling
Case Number: 19STCV43863 Hearing Date: August 2, 2022 Dept: M
CASE NAME: Wabisabi LLC, et al., v. the Abbot Kinney Grill LLC, et al.
CASE NO.: 19STCV43863
MOTION: (1) Motion to Quash Subpoenas to Reliant Investigations, Inc. and Vollmer-Grey Engineering Laboratories
(2) Motion to Compel Compliance
HEARING DATE: 8/2/2022
Legal Standard
Cod of Civil Procedure section 1987.1 provides in part:
If a subpoena requires the attendance of a witness or the production of books, documents, electronically stored information, or other things before a court, or at the trial of an issue therein, or at the taking of a deposition, the court, upon motion reasonably made by any person described in subdivision (b), or upon the court's own motion after giving counsel notice and an opportunity to be heard, may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare, including protective orders. In addition, the court may make any other order as may be appropriate to protect the person from unreasonable or oppressive demands, including unreasonable violations of the right of privacy of the person.
California’s standard for discovery is broad: “any party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action or to the determination of any motion made in that action, if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.” (CCP, § 2017.010.) Courts construe the right to discovery liberally to permit discovery whenever possible. (Williams v. Superior Court (1997) 3 Cal.5th 531, 541.) One of the purposes of the discovery is “to educate the parties concerning their claims and defenses so as to encourage settlements and to expedite and facilitate trial.” (Emerson Electric Co. v. Superior Court (1997) 16 Cal.4th 1101, 1107.)
Personal service of a deposition subpoena obligates the production of whatever documents or things are specified in the subpoena and to appear in any proceedings to enforce discovery. (CCP § 2020.220(c). If a nonparty disobeys a deposition subpoena, the subpoenaing party may seek a court order pursuant to CCP section 1987.1 compelling the nonparty to comply with the subpoena within 60 days after completion of the deposition record. (CCP § 2025.480(b); UnzippedApparel, LLC v. Bader (2007) 156 Cal.App.4th 123, 127.)
EVIDENTIARY ISSUES
Plaintiffs’ objections to evidence nos. 1-11 are OVERRULED.
Analysis
This discovery dispute regards AKG’s subpoenas issued to Plaintiffs’ consultants, Reliant Investigations, Inc. (“Reliant”), Vollmer-Grey Engineering Labs (“Vollmer-Grey”), and 4x Forensic Engineering Laboratories (“4x”). Plaintiffs filed a motion to quash the Reliant and Volmer-Grey subpoenas. AKG filed a motion to compel compliance as to the 4x subpoena.
Plaintiffs’ Motion to Quash
Plaintiffs move to quash the Reliant and Vollmer Grey subpoenas. Plaintiff argues: 1) the subpoena is procedurally defective as AKG failed to move to compel further production within the statutory period; 2) AKG agreed to withdraw the subpoenas; and 3) disclosure is protected by the attorney-client privilege. Plaintiffs assert that Reliant and Vollmer-Grey were brought onto the case directly by Plaintiffs and their insurer’s subrogation counsel in anticipation of litigation against Defendants. Specifically, Plaintiffs contend that after the subject fire, they (and their insurer) retained Reliant, Vollmer-Grey, and 4x to investigate the cause and origin of the fire, and the liability of third parties. (Pollack Decl., ¶¶ 3-6; Ex. A.)
1. Procedural Issues
On March 30, 2020, AKG issued deposition subpoenas for business records to Reliant and Vollmer-Grey seeking “[a]ny and all records regarding FIRE INVESTIGATION FOR INCIDENT on 12/12/2018” from Reliant and “[a]ny and all non-privileged information in your files regarding Wabisabi, LLC… from any and all dates” from Vollmer-Grey. (Pollack Decl. ¶ 8, Ex. D.) Plaintiffs’ counsel objected to both subpoenas, including objecting on the grounds that Reliant and Vollmer-Grey were Plaintiffs’ consultants and potential experts. (Id. ¶ 9.) Following a meet and confer process, Plaintiffs agreed to a first-look agreement. (Id. ¶ 10.) In line with the first-look agreement, Reliant produced non-privileged documents and an accompanying privilege log on June 24, 2020. Vollmer-Grey produced non-privileged documents and a privilege log on August 3, 2020. (Id.)
AKG agrees that prior counsel issued subpoenas to Reliant and Vollmer-Gray seeking the same records regarding their response and investigation of the subject fire. (Serpik Decl., ¶ 6.) Based on Plaintiffs’ privilege objections, AKG agreed to withdraw the subpoenas in exchange for a “first look” agreement wherein responsive documents would be first produced to Plaintiffs’ counsel, who would then withhold the documents which they believed were privileged and provide a code compliant privilege log supporting the claimed privilege. (Id.) Plaintiffs’ counsel subsequently produced records along with the privilege log. (Id., ¶ 7, Exs. D-E.)
Based on the evidence submitted, the Court determines that AKG agreed to modify the subpoenas to permit Plaintiffs’ counsel a “first look” at the documents after which the consultants would produce the non-privileged documents to AKG’s deposition officer. AKG did not object to the withholding of any documents. AKG did not meet and confer further on this production. Within 60 days, AKG did not file a motion to compel compliance. Instead, AKG simply re-issued the same subpoenas on April 7, 2021, which the Court concludes was unreasonable under the circumstances and contrary to the parties’ discovery agreements.
As stated, on April 7, 2021, AKG re-issued the deposition subpoenas for business records to both Reliant and Vollmer-Grey, seeking the same documents as had been sought in the March 30, 2020, subpoenas. (Pollack Decl., ¶ 12, Ex. E.) Plaintiffs objected. (Id., ¶¶ 13-14, Ex. F.) Following meet and confer efforts, AKG agreed to withdraw the subpoenas to Reliant and Vollmer-Grey. (Id. ¶ 16, Ex. G.) AKG’s counsel noted that “if circumstances change and Plaintiffs formally designate [Reliant and/or Vollmer-Grey] as experts who are expected to testify at trial, [TTK] is entitled to expert discovery.” (Id.) Following the April 2021 subpoenas, AKG failed to file a motion to compel compliance or otherwise attempt to litigate Plaintiffs’ claim of privilege. On November 9, 2021, AKG again re-issued Deposition Subpoenas for Production of Business Records to Reliant and Vollmer-Grey. (Pollack Decl., ¶ 18, Ex. H.) Despite additional meet and confer efforts through January 2022, the parties did not resolve the dispute regarding the subpoenas. (Pollack Dec. ¶¶ 25-26; Serpik Decl., ¶¶ 11-12.) This motion to quash followed in February 2022.
On this record, the Court finds that the re-issued subpoenas are unreasonable. AKG re-issued the substantially same subpoenas, despite having received full responses from the previous subpoenas more than a year prior. Simply put, AKG had multiple opportunities to litigate Plaintiffs’ claims of privilege. Instead, AKG accepted the objections and allowed production after a mutually agreeable meet and confer process. AKG then sat on that production for well over a year. AKG did not “reserve the right” to re-issue the subpoenas if “circumstances changed.” As noted, counsel stated “if circumstances change and Plaintiffs formally designate [Reliant and/or Vollmer-Grey] as experts who are expected to testify at trial, [TTK] is entitled to expert discovery.” (Emphasis added.) Plaintiffs have not designated these experts, and thus no such change of circumstances occurred.
AKG contends that it learned new information between March 2020 and November 2021 that allowed counsel to determine that Plaintiffs objections lacked merit. AKG cites to the Global Report produced by MMLK in response to discovery, as well as the Reliant inspection sign-in sheet produced by TOPA Insurance in response to discovery. (Serpik Decl., ¶ 10.) Counsel’s averment, however, is not specific enough to support AKG’s opposition. AKG does not explain when it was served with the Reports. Notably, counsel appears to skirt this issue, only referring to the fact that November 9, 2021, was “after” counsel learned of the Global Report. (Serpik Decl., Ex. C.) If AKG had access to this information prior to the April 2021 subpoenas, then counsel should be held to the April 2021 subpoena. As such, the Court cannot conclude that AKG’s November 2021 subpoenas were reasonable.
Accordingly, Plaintiffs’ motion is GRANTED.
2. Attorney-Client Privilege
Since this is a tentative decision, the Court will also address the issue of attorney-client privilege. Moreover, in AKG’s motion to compel, AKG submits that they discovered the Reliant Investigation sign in sheet on February 4, 2022, which is after the instant dispute arose. Thus, such information could not relate to the subject subpoenas that were issued prior to discovery of the sign-in sheet. However, if AKG provides evidence of when they learned of the Global Reports, then the newly discovered information could act as a reasonable basis to re-issue the subpoenas. If so, the Court would proceed to the merits of the privilege claim. Therefore, the Court addresses this issue now.
Generally, the attorney client privilege allows a client “to refuse to disclose, and to prevent another from disclosing, a confidential communication between client and lawyer . . ..” (Evid. Code §954.) A “confidential communication” is “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 . . . or to those to whom disclosure is reasonably necessary for . . . the accomplishment of the purpose for which the lawyer is consulted.” (Evid. Code § 952.)
In California, the work product doctrine provides that “[a] writing that reflects an attorney’s impressions, conclusions, opinions, or legal research or theories is not discoverable under any circumstances.” (CCP, § 2018.030 (a); see also Nacht & Lewis Architects, Inc. v. Superior Court (1996) 47 Cal.App.4th 214, 218 [referring to this type of work product as “absolute work product”].) All other attorney work product is qualified work product, which is similarly privileged, but this privilege can be overcome with a showing of unfair prejudice or injustice. (CCP, § 2018.030(b).)
The common interest doctrine allows “parties who possess common legal interests [to] share privileged information without losing the protection afforded by attorney-client privilege.” (Oxy Resources Calif. LLC v. Superior Court (2004) 115 Cal.App.4th 874, 888.) “The privilege does not require complete unity of interest among the participants, and it may apply where the parties’ interests are adverse in substantial respects.” (United States v. Bergonzi (N.D.Cal. 2003) 216 F.R.D. 487, 495.)
Generally, communications between the insured and the attorney retained by the insurer will be privileged even though it was made in the presence of the insurer. Courts recognize that, absent a conflict of interest, the insurer and insured enter into a tripartite “insurer-attorney-insured” relationship when an insurance company retains an attorney to defend its insured under the insurer’s contractual obligation. (Gafcon, Inc. v. Ponsor & Associates (2002) 98 Cal.App.4th 1388, 1406; see American Mut. Liab. Ins. Co. v. Superior Court (1974) 38 Cal.App.3d 579 [discussing obligations owing to an insured by an attorney selected by an insurance carrier]; see also Bank of America, N.A. v. Superior Court of Orange County (2013) 212 Cal. App. 4th 1076, 1090-1101 [discussing “tripartite attorney-client relationship” which arose when a title insurer retained counsel “to prosecute an action on behalf of the insured pursuant to the title policy”].) The party claiming the privilege has the burden to show that the communication sought to be suppressed falls within the terms of the claimed privilege. (Behunin v. Superior Court (2017) 9 Cal.App.5th 833, 844-45.)
Unless the party holding the attorney-client privilege allows it, there can be no in camera inspection of documents to determine whether the privilege exists. (Lipton v. Superior Court (1996) 48 Cal.App.4th 1599, 1619.) However, in camera inspection is the proper procedure to evaluate the applicability of the work product doctrine to specific documents and categorize whether each document should be given qualified or absolute protection. (BP Alaska Exploration, Inc. v. Superior Court (1988) 199 Cal.App.3d 1240, 1261.)
Here, Plaintiffs’ counsel fails to provide sufficient foundation for the claim of privilege, such as the existence of the tripartite attorney client relationship. Courts have held that retention of an attorney to represent an insured is sufficient to establish a tripartite attorney-client relationship, and thus the attorney-client privilege. (Bank of America, supra, 212 Cal.App.4th at 1090; Gafcon, supra, 98 Cal.App.4th 1388, 1406 [“In California, it is settled that absent a conflict of interest, an attorney retained by an insurance company to defend its insured under the insurer's contractual obligation to do so represents and owes a fiduciary duty to both the insurer and insured”]; Gulf Ins. Co. v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (2000) 79 Cal.App.4th 114, 127 [“Counsel retained by an insurer to defend its insured has an attorney-client relationship with the insurer.”]; State Farm Mutual Automobile Ins. Co. v. Federal Ins. Co. (1999) 72 Cal.App.4th 1422, 1429 [“Between the attorney and the insurer who retained the attorney and paid for the defense, there exists a separate attorney-client relationship endowed with confidentiality.”].)
Plaintiffs provide little information regarding the retention of the subrogation counsel or the purpose of the consultant’s investigations. Plaintiffs argue that because their insurer and subrogation counsel were “all preparing for claims and litigation against Defendants in this action and brought Reliant and Vollmer-Grey and the other consultants on to assist and act as their ‘consultants/agents,’” there was indisputably an expectation of the confidential nature of the communications and the privilege would apply to their consultant’s work. However, the evidence presented only shows that plaintiffs’ current counsel exchanged emails with Nationwide/Amco general adjuster, Adrian Filip, and its subrogation counsel, Cozen O’Connor, asserting that it was Plaintiffs’ position that the joint nature of the investigation undertaken by Nationwide/Amco and Plaintiffs was in anticipation of litigation. (See Pollack Decl., ¶¶ 3-4, Ex. A.) This evidence contains no information regarding the retention or purpose of Mr. Filip’s representation. Likewise, Plaintiffs do not support their assertions that they, their insurance carrier, and subrogation counsel retained the consultants for any particular purpose. As such, Plaintiffs fail to support their claim of privilege with sufficient factual evidence. (see State Farm Fire & Casualty Co. v. Superior Court (1997) 54 Cal.App.4th 625, 640–42 [factual assertions underpinning a claim of privilege must be substantiated with evidence].)
Defendant also raises some issues with the expectation of confidentiality. AKG provides the report of Keith Marshall of EFI Global Inc., which demonstrates that Reliant readily offered the supposed confidential information to third parties. This contradicts Plaintiffs’ bald assertions that the consultants’ reports were intended to be confidential.
The subpoena requests are otherwise not overbroad. Plaintiffs do not justify this generic objection with sufficient argument. In any event, the subpoenas reasonably seek: (1) all documents related to the Investigators investigation of the Subject fire, including reports, logs, notes, recordings, communications and photographs; and (2) all documents related to Wabi Venice including plans, specifications, structural calculations, drawings, and inspection reports. (Serpik Decl., ¶ 10, Ex. G.) Plaintiffs do not show how such requests would not potentially lead to the discovery of admissible evidence.
AKG’s Motion to Compel Compliance
The Court likewise finds AKG’s motion untimely and unreasonably duplicative of prior subpoenas. As noted above, if a nonparty disobeys a deposition subpoena, the subpoenaing party may seek a court order pursuant to Code of Civil Procedure section 1987.1 compelling the nonparty to comply with the subpoena within 60 days after completion of the deposition record. (CCP § 2025.480(b); UnzippedApparel, LLC v. Bader (2007) 156 Cal.App.4th 123, 127.)
Plaintiffs argue that the motion is untimely and duplicative of the prior denied motion to compel. AKG argues that this motion is not untimely or unreasonable, since AKG issued the instant subpoena in the TOPA action on April 1, 2022, a separate action from the other 4x subpoenas in the Wabisabi Action. (Sepik Decl., ¶¶ 12-13.) They also state that the prior motion was a Motion to Compel Plaintiffs to produce withheld documents related to 4x Forensics, rather than Motion to Compel 4x Forensics to Comply with the subpoena.
The record demonstrates that AKG issued a substantially identical subpoena on April 7, 2021, to 4x Forensic in the Wabisabi Action, seeking records regarding 4x Forensics’ response and investigation of the subject fire. On April 27, 2021, Plaintiffs served objections to the subpoena, arguing that the investigation files were protected by the attorney work product privilege. (Serpik Decl., ¶ 6.) AKG agreed to a “first look” agreement wherein responsive documents would be first produced to Plaintiffs’ counsel, who would then withhold the documents which they believed were privileged and provide a code compliant privilege log supporting the claimed privilege. (Id., ¶ 7.) On October 7, 2021, Plaintiffs’ counsel produced records and a privilege log, which indicated that more than 50 pages of documents were being withheld based on privilege. (Serpik Decl., ¶ 8, Ex. D.) The parties engaged in numerous meet and confer discussions regarding the withheld documents and deficient privilege log. As a result of these efforts, Plaintiffs provided a new privilege log on January 31, 2022. (Serpik Decl., ¶ 9.)
AKG then filed its own motion to compel Plaintiffs to produce the withheld 4x documents. (Serpik Decl., ¶ 11, Ex. F.) Thus, AKG timely filed a motion to compel compliance as to a substantively identical subpoena here. The Court vacated the hearing date because the parties did not comply with the Court’s IDC order, and because the matter was designated as a motion to compel initial production and not further production. (Serpik Decl., ¶ 11, Ex. G.)
On February 4, 2022, TOPA Insurance produced a Reliant Investigation sign in sheet from the January 2019 joint inspection. (Serpik Decl., ¶ 3, Ex. B.) On April 1, 2022, upon learning that TOPA Insurance had access to Reliant’s (not 4x) work product, AKG issued subpoenas (in the TOPA Action) including the subject subpoena directed at 4x, indicating a production date of April 26, 2022. (Serpik Decl., ¶ 13, Ex. H.) On April 22, 2022, Plaintiffs filed and served written objections to AKG’s subpoena to 4x. (Serpik Decl., ¶ 15, Ex. I.) 4x continued to withhold responsive records. (Serpik Decl., ¶ 17.) AKG followed with the instant motion on June 21, 2022.
Technically, AKG filed this motion 60 days from Plaintiffs’ written objections to the April 2022 4x subpoena. However, this was after the Court denied AKG’s motion to compel compliance as to an admittedly substantively identical subpoena. The Court finds that AKG’s re-issuance of the same subpoena in a related action was an unreasonable attempt to avoid the 60-day window that should have ran from February 14, 2022, per the parties agreement. (Serpik Decl., ¶¶ 9-11.)
Accordingly, AKG’s motion is DENIED.
Sanctions
Code of Civil Procedure § 1987.2 provides that the court may in its discretion award the amount of the reasonable expenses incurred in making a motion to quash, including reasonable attorney’s fees. The Court will exercise its discretion and deny the issuance of sanctions.