Judge Mark H. Epstein, Case 19SMCV01618 2023-02-10 Tentative Ruling

Judge: Mark H. Epstein, Case: 19SMCV01618, Date: 2023-02-10 Tentative Ruling

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Case Number: 19SMCV01618 Hearing Date: February 10, 2023 Dept: R

The motion for judgment on the pleadings is GRANTED IN PART AND DENIED IN PART.

Plaintiffs Sam Hakim (“Hakim”) and Aitan Segal (“Segal”) filed separate actions that were eventually consolidated against defendants Mauricio Umansky, UMRO Realty Corporation, Mauricio Oberfeld, and 3620 Sweetwater Mesa for issues surrounding the sale of a property. They have since added other parties, one of whom is not a party to this motion but has brought a similar motion. The following recitation of facts is solely meant as a summary of Hakim and Segal’s respective pleadings; it is not meant as an evidentiary summary to be taken as true.

The basic facts in the two actions are the same and the property at issue is 3620 Sweetwater Mesa in Malibu (“the Property”). The Property was originally purchased and owned by Obiang, the Vice President of Equatorial Guinea. The DOJ filed a lawsuit against Obiang claiming corruption and as part of the settlement Obiang and the DOJ agreed that Obiang would liquidate the property with none of the sale proceeds going to him. Rather the proceeds would be divided between the DOJ and Equitorial Guinea to compensate the country for Obiang’s alleged misdeeds. The DOJ and Obiang chose UMRO and Umansky as their licensed real estate agent for the sale of the Property. Umansky did not list the property for sale but presented it to a select client base.

According to the plaintiffs’ respective allegations, Hakim learned the Property was for sale in about May 2015 and engaged Aitan Segal to act as his agent. Segal contacted the DOJ and stated he had a pre-qualified buyer who was interested in the Property. Hakim claims the DOJ directed him to contact Umansky, which Segal did. Segal provided documentation to Umansky regarding Hakim’s proof of funds but Umansky delayed until a few months later, when Umansky informed Segal that the asking price was $32 million. Hakim alleges that Segal submitted a Residential Purchase Agreement and Joint Escrow Instructions on behalf of Hakim for the full asking price that same day. Hakim claims that Umansky was further informed that he would pay up to $40 million (and maybe up to $45 million) for the Property. Segal and Hakim met with Umansky at the Property on August 1, 2015, during which time plaintiffs claim that Hakim made an oral offer of $40 million. Plaintiffs contend that Umansky acknowledged this offer but told Hakim not to put it in writing because the seller was not motivated by sale price (due to the settlement agreement). Umansky allegedly stated, however, that he would convey the higher offer to the seller. In reliance on this statement, Hakim did not provide a formal written offer to purchase the Property for $40 million.

According to plaintiffs, Umansky provided Hakim (through Segal) a Seller Multiple Counteroffer No. 1 for $33.5 million in December 2015. Umansky purportedly reiterated that the seller was not motivated by the sale price and, relying on that representation, Hakim did not provide a formal written offer to purchase the Property for $40 million. Instead, he accepted the $33.5 million counteroffer and provided the executed version to Umansky that same day. Unbeknownst to plaintiffs, however, Umansky was allegedly acting as a dual agent by also representing Oberfeld in his capacity as a buyer and also by agreeing with Oberfeld that they would form an entity to purchase the property, renovate it, and then sell it for a large profit (in which Umansky would share). The plaintiffs assert that this is the real reason Umansky told them not to make a formal offer at the higher price. And, of course, Umansky was in the unusual position of profiting more from a lower sale price than he would from a higher one (generally, a broker is paid a commission, so the higher the price, the higher the commission). Umansky allegedly had Oberfeld accept the counteroffer of $33.5 million and persuaded the DOJ to approve Oberfeld as the buyer.

After learning Hakim had not been selected as the buyer, Hakim met with Oberfeld. Hakim had told Umansky that he was willing to pay $8 million to take over Oberfeld’s position as buyer (which would take the effective purchase price to $41.5 million). This was purportedly met by a counter-offer of $15 million, which Hakim rejected.

In about April 2016, Oberfeld bought the Property for $32.5 million. Hakim alleges that at the time of the sale, he was unaware of who bought the property and the final sale price and was further unaware of the Umansky/Oberfeld relationship. The Property was sold by Umansky and Oberfeld for $69.9 million in April 2017 after significant renovations were made. That led to a number of lawsuits against Umansky and Oberfeld. Hakim eventually became aware of at least one of them, which caused Hakim and Segal to bring the instant action.

Currently before the court is defendants Mauricio Oberfeld, 3620 Sweetwater Mesa, LLC, Matthew Dugally, The Dugally Group LLC, Oberfeld Development Corporation, and Sweetwater Holdings LLC (collectively “Oberfeld defendants”) motion for judgment on the pleadings as to Hakim’s third through sixth causes of action and Segal’s fifth cause of action, or alternatively, a motion in limine excluding evidence of plaintiffs’ “lost profits” damages or entitlement to a constructive trust on the Oberfeld defendants’ profits. Plaintiffs oppose.

Initially, the court dispenses with the argument that the motion ought to be denied as untimely. Code of Civil Procedure section 438 allows a statutory motion for judgment on the pleadings no later than when a pretrial conference order is entered or 30 days before the initial trial date, whichever is later. The initial trial date has come and gone, so arguably, the motion is untimely. In addition to Code of Civil Procedure section 438, there is the common law motion for judgment on the pleadings. There is an interesting question as to whether the Legislature intended generally to preempt the common law motion by way of the statute as opposed to clarify that such a motion did exist and to provide the right to bring the motion under certain circumstances. The court, however, will exercise its discretion (which is given under the statute) to allow the motion. The bottom line is that if the motion is well taken, better to decide it now than later.

With that, the court will turn to the motion’s merits.

Preliminarily, the plaintiffs complain that this is an improper motion for reconsideration where the court has already rejected this argument before and there is no change in the law. That means, they assert, it cannot be re-raised on a motion for judgment on the pleadings. As a legal matter, plaintiffs are right that a prior unsuccessful demurrer can act as a bar to an identical motion for judgment on the pleadings. “The motion provided for in this section may be made even though either of the following conditions exist: (1) The moving party has already demurred to the complaint or answer, as the case may be, on the same grounds as is the basis for the motion provided for in this section and the demurrer has been overruled, provided that there has been a material change in applicable case law or statute since the ruling on the demurrer.” (Code Civ. Proc., § 438, subd. (g)(1).) And it is true that Umansky and UMRO raised this argument in their demurrers to the First and Second Amended Complaints. But that said, some of the moving defendants did not make this argument (or were even parties at the time).

Beyond that, it is true that in its prior ruling the court stated that it was not persuaded by the argument, but it did so in a more general and generic way. Specifically, the court held that it “is aware that defendants have moved on a number of other grounds. The [c]ourt is not persuaded by any of them. . . [¶] The [c]ourt disagrees with defendants that plaintiffs have not alleged a loss. Their view is that the property was worth more than the $40 million Hakim was prepared to pay. The difference between the property's actual value and the $40 million is a loss and it is sufficient to withstand a pleading challenge.” (Hakim RJN, Exh. 2, p. 8:6-8, 8:15-19.) While the court acknowledges that it previously said it was not convinced, it did so in the context of Umansky’s position as the moving party. Umansky (and UMRO)’s position is materially different from that of the other defendants. And what applies to Umansky, does not necessarily apply to the others. Further, this was not the main or major point raised in the demurrer, which principally addressed the statute of limitations. And, finally, even if the court had given a full and careful analysis of this point in the demurrer context, if the court was in error, little purpose is served by compounding the problem.

On the merits, the court GRANTS the motion as to Hakim’s fraud and negligent mispresentation causes of action but DENIES the motion to all the other claims. On the fraud and negligent misrepresentation claims, the court agrees that Civil Code section 3343, subdivision (a)(4) applies. That statute states: “One defrauded in the purchase, sale or exchange of property is entitled to recover the difference between the actual value of that with which the defrauded person parted and the actual value of that which he received, together with any additional damage arising from the particular transaction, including any of the following: [¶] Where the defrauded party has been induced by reason of the fraud to purchase or otherwise acquire the property in question, an amount which will compensate him for any loss of profits or other gains which were reasonably anticipated and would have been earned by him from the use or sale of the property had it possessed the characteristics fraudulently attributed to it by the party committing the fraud, provided that lost profits from the use or sale of the property shall be recoverable only if and only to the extent” the three listed circumstances (inapplicable here) apply.

The subdivision provides that a defrauded party in a real estate transaction can only recover lost profits where it purchases the property. Hakim did not purchase the property. For that reason, he cannot recover any lost profits, which are the only damages pled. (SAC, ¶¶67-73, 78-85.) In response, plaintiffs contend that section 3343 was meant to provide a remedy, not take one away. Specifically, they argue that the statute gives a right of recovery to one who is defrauded into buying property, but says nothing about one who is fraudulently induced not to buy property. However, the Oberfeld defendants cite Kenly v. Ukegawa (1993) 16 Cal.App.4th 49. In Kenly, plaintiffs were investors who sued the owner of particular property. They alleged, and a jury found, fraud. Specifically, they claimed that the property in question was in default. To avoid the default, defendant stated that he would sell the land for the amount of the debt. Defendant said that the buyer would have to get $416,000 before the foreclosure to pay off the senior note. The buyer did not have the money, but found another investor (also a plaintiff) who did. Ultimately, the consortium agreed that plaintiff would buy the property for $2 million—the amount of the debts. The seller, however, had no intention to sell. All the defendant wanted to do was to have plaintiff advance the money needed to stave off the foreclosure. Plaintiff bought the senior note, but he never actually bought the underlying property (a farm). When the seller refused to sell the farm, plaintiffs sued, seeking the lost profits they would have made had they been able to purchase the property for the $2 million that had been discussed. The trial court awarded that amount, but the Court of Appeal reversed, holding that even though they had been defrauded, plaintiffs could recover only their out-of-pocket losses and not the profits they would have made had they bought the property. The court’s discussion on the availability of lost profits to a defrauded party who did not obtain the property in question is controlling here: “An examination of the language of section 3343 supports the conclusion that Kenly is not entitled to lost profits on a property he never acquired. Section 3343, subdivision (a)(4) permits a party who is fraudulently induced to ‘purchase or otherwise acquire the property in question’ to realize profits which would have been earned had ‘the property’ possessed the characteristics attributed to it. That language clearly contemplates that the party actually acquire the property in question, i.e., the property from which profits were to be realized. Here, the property in question was the farm, which was to yield profits. The farm was never acquired. The only property acquired was the note, and the profits awarded were not based on the sale of the note but on the farm to be acquired in the future.” (Id. at p. 55, emphasis in original.) The theory is that the only harm to the defrauded plaintiff is the money actually spent in reliance on the lie, not the profits that would have been realized if the lie had been true. So here. Hakim’s damages for fraud are measured by how much worse off he is because of the lie itself, not by how much worse off he is had the lie been true. That is the difference between out-of-pocket damages and benefit of the bargain damages. And in a fraud case, at least where the underlying property is not actually purchased, only the former is available.

The court is aware of the general tort damages statute, section 3333, which is designed to compensate a tort victim for all “detriment proximately caused” by the tort. The key is the word “detriment.” Lost profits are not identical to “detriment” in the sense of the statute. And in that way, the loss of future profits is a different measure than an actual out of pocket loss. Lost future profits are rife with the potential for speculation as to the amount of the lost profits and whether there are actually any lost profits at all. A person who is the victim of fraud, as a general rule, is compensated by being awarded the out of pocket loss rather than the hoped-for profits.

Another way to look at it is the difference between tort and contract. Contract law is all about enforcing knowing agreements between parties. The parties enter into an agreement that each assumes will be profitable for it, and the other knows of the expected profit. The risks are knowingly allocated (or at least they can be). If one party breaches, the other party is entitled to the benefit of the bargain—that is what the contract was all about and everyone entered into it with eyes open. The benefit must have been foreseeable—otherwise the eyes were not open—but other than that, the point is to give the non-breaching party the profits it expected to make. On the flip side, though, the damages must have been foreseeable, with few exceptions there is no emotional or non-economic damage component, and punitive damages are unavailable. Tort, on the other hand, is all about making a party whole that has been subjected to a civil wrong. The parties to the tort never agreed to anything; that is the point. As a result, the law attempts to put the plaintiff in the same position as the plaintiff would have been in had the tort not occurred. That is not measured by profits or expectation damages; it is measured by loss. For example, had the fraudster not induced the plaintiff to buy the magic beans, plaintiff never would have parted with the $100,000 purchase price. Plaintiff can get the $100,000 back—those are plaintiff’s damages and it puts plaintiff precisely where plaintiff would have been had the fraudster never appeared on the scene. What the plaintiff cannot get is the $1 million that the beans would be worth had they actually been magic. In Kenly, that is what happened. Kenly was placed back to the position he would have been in had he never met the defendant, but he could not recover for the position he would have been in had defendant’s promises been true. So here, with an important exception discussed below, Hakim cannot recover for the benefit of the bargain he would have struck with Obiang and the DOJ but for the fraud; rather, at least on the fraud cause of action simpliciter, he can only recover for the position he would have been in had defendants never appeared at all. Because the only damages plaintiffs assert are benefit of the bargain damages, they have no fraud damages at all. Civil Code section 3343 sets forth an exception to that limitation in certain situations—where the plaintiff is induced to buy the property based on a promise about it by the fraudster. But it is an exception to the more general limitation.

The cases Hakim cites do not change the outcome. Hartman v. Shell Oil Co. (1977) 68 Cal.App.3d 240 concerns a situation where the defrauded party bought the property in question. In fact, that is the opening sentence of the opinion and right away establishes that it is not factually apposite here. “Plaintiff Hartman was induced by false representations, made to him by Donald McFarlin, to purchase a Shell Oil station located on the southeast corner of the intersection of Pomerado and Poway Roads in Poway, California.” (Id. at p. 242.)

Ward v. Taggart (1951) 51 Cal.2d 736 is also not to the contrary. The Ward Court only discusses what is now the opening portion of subdivision (a). (Ward, supra, 51 Cal.2d at p. 740.) Further, Ward held that the plaintiff could recover more than out-of-pocket damages because Taggart violated his duty as a broker. “Even though Taggert was not plaintiff's agent, the public policy of this state does not permit one to ‘take advantage of his own wrong.’ (Civ.Code, s 3517), and the law provides a quasi-contractual remedy to prevent one from being unjustly enriched at the expense of another. Section 2224 of the Civil Code provides that one ‘who gains a thing by fraud * * * or other wrongful act, is unless he has some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it.’ As a real estate broker, Taggart had the duty to be honest and truthful in his dealings. See Bus. & Prof. Code, ss 10150, 10176; Rattray v. Scudder, 28 Cal.2d 214, 222-223. The evidence is clearly sufficient to support a finding that Taggart violated this duty. Through fraudulent misrepresentations he received money that plaintiffs would otherwise have had. Thus, Taggart is an involuntary trustee for the benefit of plaintiffs on the secret profit of $1,000 per acre that he made from his dealings with them.” (Id. at pp. 741–742, parallel citations omitted.) In particular, in that case Taggert told Ward that he had found property available for sale in which Ward would be interested. He falsely said that a seller was found that would sell the property for $5000/acre and that he had the listing. In fact, however, Taggert never had the listing. Rather, he planned to buy the property himself for the $4000 Ward had suggested was the price he wanted to pay and then re-sell the property to Ward for $5000, earning a tidy $1000 profit per acre. He then lied repeatedly about the paperwork to hide the fact that Ward was not buying the property from the real seller, but was buying it from Taggert’s business associate. Ward was awarded the $1000 difference (plus punitive damages). Taggert, through fraud, received money from plaintiffs that plaintiffs otherwise would have kept. That was enough to give rise to a constructive trust. But it is not enough in the instant case. Defendants here did not receive any money from plaintiffs (unlike Taggert). They simply cut plaintiffs out of a deal that might have been profitable. Indeed, Justice Schauer’s concurring and dissenting opinion makes just this point. His concern was that the general tort limitation on fraud recovery was too severe and he would just as soon rewrite it. He concurred because the majority found an elegant way of getting the plaintiff the money that Justice Schauer thought should be awarded.

Green Wood Industrial Co. v. Forceman International. Development Group, Inc. (2007) 156 Cal.App.4th 766 is also unpersuasive for many reasons the court itself lists (in distinguishing that case from Kenly):

Kenly, supra, 16 Cal.App.4th 49 is inapposite for several reasons. First, in cases within the scope of California Uniform Commercial Code section 2721, damages may be calculated on a benefit-of-the-bargain basis. Second, unlike in Kenly, Green Wood was not fraudulently induced to purchase different property than the property it intended to resell for profit. Green Wood was fraudulently induced to purchase the goods, and it entered into a contract to resell the goods. Nor was the recovery in this case based upon Green Wood's mere intention to resell those very goods, as it was in Kenly. Rather, Green Wood had a resale contract in place. Finally, this is not a case in which an award of lost profits would put Green Wood in a better position than it would have been had the fraud not occurred. The evidence was undisputed that Green Wood was in the business of buying and selling scrap metal, had purchased from other suppliers in the past, and had a buyer in place for the goods. Accordingly, had Richshine and its co-conspirators not defrauded Green Wood, Green Wood presumably could have obtained the goods from an alternative source and realized a profit by reselling the goods so obtained. Because the scrap metal market was rising rapidly, the fraud perpetrated by defendants deprived Green Wood of the ability to do so. Having received only the monies it paid and its lost profits, Green Wood is not in a better economic position than it would have been had the fraud not occurred.

Kenly is therefore not determinative of whether lost profits were available to Green Wood under California Uniform Commercial Code section 2721.

(Green Wood, supra, 156 Cal.App.4th at p. 775, emphasis in original.)

Thus, the motion is GRANTED as to Hakim’s third and fourth causes of action for fraud and negligent misrepresentation. T

But that does not end the inquiry, for Hakim sues on other theories as well. The motion is DENIED to the remaining claims, including Segal’s interference claim. Civil Code section 3343 is the measure of damages for fraud involving real estate. The Oberfeld defendants have not cited any authority applying section 3343 to interference claims. In fact, damages for interference claims include benefit-of-the-bargain damages; indeed, that is the whole point. “The measure of damages for intentional interference with contractual relations or prospective economic advantage is ‘an amount that will reasonably compensate plaintiff for all loss or harm, providing that you find it was [or will be] suffered by plaintiff and caused by the defendant's conduct.’ (BAJI No. 7.89; see also Youst v. Longo (1987) 43 Cal.3d 64, 71, fn. 6 [damages for interference with prospective economic advantage are ‘economic harm to the plaintiff proximately caused by the acts of the defendant’].) The amount of such harm or loss includes ‘[t]he financial loss of the benefits of the [contract] [or] [the prospective economic relationship].’ (BAJI No. 7.89.)” (Sole Energy Co. v. Petrominerals Corp. (2005) 128 Cal.App.4th 212, 232–233, parallel citations omitted.) The entire basis of the tort is that the plaintiff would have enjoyed an economic advantage but for the defendant’s wrongful conduct, and, for that reason, it is those economic advantages define the damages obtainable.

True, the underlying independently wrongful act alleged here is fraud. But for this cause of action at least, fraud is not the tort at issue. The tort at issue is the interference with both plaintiffs’ prospective economic advantage. The California Supreme Court has held that an independently wrongful act is required to differentiate wrongdoing from legitimate business activities and to narrow the scope of the tort, not to define the nature of damages. “It is this independent wrongfulness requirement that makes defendants' interference with plaintiff's business expectancy a tortious act. Because we have determined that the act of interference with prospective economic advantage is not tortious in and of itself, the requirement of pleading that a defendant has engaged in an act that was independently wrongful distinguishes lawful competitive behavior from tortious interference. Such a requirement ‘sensibly redresses the balance between providing a remedy for predatory economic behavior and keeping legitimate business competition outside litigative bounds.’ (Della Penna, supra, 11 Cal.4th at p. 378.)” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1159–1160, parallel citations omitted.) Nor does this eviscerate section 3343, as defendants suggest. Interference requires an additional element of proof, and a not insignificant one at that. The plaintiff alleging such a tort must plead and prove the economic relationship as well as show that the economic relationship was sufficiently solid that it would have come to pass but for the defendant’s wrongful conduct. For that reason, there ought not to be multiple tort victims (at least of this tort) in the real estate context. It simply is not true that every potential buyer could recover lost profit damages. Only a prospective buyer who is able to show that the relationship would have come to fruition but for defendant’s wrong can recover, and where we are talking about the sale of real property, there can only be one party (at most) who will be able to make out such a claim. Putting this in the context of the earlier discussion, the point here is that but for the evil deed, the plaintiff would have enjoyed the expectation damages of the independent financial relationship and advantage. It is because the defendant interfered with the prospective relationship between plaintiff and another that the expectation/benefit of the bargain damages are recoverable.

Thus, the motion is DENIED as to both plaintiffs’ claims for interference.

That leaves Hakim’s request for a constructive trust. That, as Hakim notes, is a remedy, not a cause of action. The court is not a fan of remedies being separately stated as claims, which leads to confusing motions such as this. But that does not mean the motion is properly granted as to the remedy. It is premature to decide this issue. “ ‘A constructive trust is an involuntary equitable trust created by operation of law as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner. [Citations.] The essence of the theory of constructive trust is to prevent unjust enrichment and to prevent a person from taking advantage of his or her own wrongdoing. [Citations.]’ (Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 990.) Imposition of ‘[a] constructive trust is an equitable remedy to compel the transfer of property by one who is not justly entitled to it to one who is. [Citation.]’ (Habitat Trust for Wildlife, Inc. v. City of Rancho Cucamonga (2009) 175 Cal.App.4th 1306, 1332; accord, Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 457.) It is not ‘a substantive claim for relief.’ (PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 398; see Embarcadero Mun. Improvement Dist. v. County of Santa Barbara (2001) 88 Cal.App.4th 781, 793 [‘[a] constructive trust is not a substantive device but merely a remedy . . .’].) The issue whether to impose a constructive trust is an equitable issue for the court. (See Fowler v. Fowler (1964) 227 Cal.App.2d 741, 747 [‘it is for the trial court to decide whether’ the plaintiff has proven entitlement to a constructive trust].)” (American Master Lease LLC v. Idanta Partners, Ltd. (2014) 225 Cal.App.4th 1451, 1485, emphasis omitted.) While it is true that the verbiage more comfortably belongs in the prayer than as a cause of action, the court well enough understands that a constructive trust will not be awarded unless the pre-requisites have been proven. For now, the allegations do no harm and the motion is DENIED. (The court notes, though, that plaintiffs own cases present them with a hurdle here. Ward is a good example. A constructive trust existed there because the defendant received from plaintiff money to which he was not entitled. That money was held in constructive trust. There are no similar allegations here.) The court will construe the constructive trust “cause of action” as a ill-placed part of the prayer.

As one can see, the complaint is narrowing, but still viable. The court is aware that there are other dispositive motions looming, but unless one is granted, plaintiffs will get to a jury on their claim.

On the ex parte, the court will issue its ruling on the claw back motion later today.

The court has reviewed the GF Bunting material. It chiefly concerns a series of communications dealing primarily with how to respond to news stories in the WW case. A few documents contained therein are potentially attorney client, but not many. The claim here is attorney work product. Without putting too fine a point on it, the bulk of the documents are communications between counsel, client, and publicity companies drafting responses to press inquiries and discussing how to respond to information that was being circulated at the time. Not surprisingly, a lot of the information was at the intersection of how to deal with an ongoing lawsuit and how to deal with the press. The court agrees with the defense that the communications do seem largely covered by attorney work product. Attorney work product comes in two forms: (1) absolutely protected work product, which goes to counsel’s impressions and ideas and the like (such as a note as to whether a lawyer found a particular potential witness to be credible); and (2) qualifiedly protected work product, which consists of other things that are the result of the attorney’s efforts. The policy underlying the work product doctrine is that the opposing party ought not benefit from the other side’s counsel’s work efforts. Although it is distinct from the attorney-client privilege, it is not unrelated. Often, the strategies to be employed will spring directly from attorney-client communications.

Here, the court believes that the communications concerning how to respond to the press, in light of the fact that there was ongoing litigation, falls within the doctrine. Counsel was closely involved in crafting the potential responses, and the effect of the responses on the litigation looms large. The court is inclined to find that defendants are correct that the documents are subject to the work product protection—mostly the qualified protection. That said, the court would like defendants to provide a (shorter) stack of documents in which the attorney was not in the loop. The court might have a different view of a communication from a defendant to the PR agency that was not even copied to the attorney. Of course, the lack of such a copy is not necessarily dispositive—the communication could be in furtherance of the attorney work product—but it is different in kind from a group communication in which the attorney was an active participant based on legal strategy.

With that, the court will grant the application to continue the hearing to arrive at a reasonable briefing schedule and hearing date and will discuss that with counsel. The court will also discuss a trial date in the event that the summary judgment motion is denied. Although the court hates to say it, though, it might have to continue the scheduling part of today’s discussion to another day given the timing of today’s calendar.