Judge: Stephen I. Goorvitch, Case: BC712758, Date: 2022-07-25 Tentative Ruling

Case Number: BC712758    Hearing Date: July 25, 2022    Dept: 39

Green Solar Technologies, Inc. v. Raymond McElfish, et al.

Case No. BC712758

Court’s Tentative Order – Motions in Limine

Cross-Complainant’s Motion in Limine #1 – Granted in Part; Denied in Part

            The McElfish Law Firm seeks to preclude Nicki Zvik and Shay Yavor from testifying whether its legal work was reasonable or necessary, and whether their rates were reasonable, because they are not expert witnesses.  The motion is granted in part and denied in part.  Zvik and Yavor may testify as percipient witnesses concerning the firm’s services and billing.  Permissible topics would include: (1) For what purpose they hired the firm and whether the firm failed to perform those tasks; (2) Whether they were satisfied with the firm’s performance and, if not, why not; (3) What advice the firm provided; and (4) What billing arrangement they had with the firm and whether the firm honored that arrangement.  Zvik and Yavor may not testify as expert witnesses.  Impermissible topics would include: (1) Whether the firm performed work that was not legally necessary; (2) Whether the firm’s performance fell below the appropriate standards of practice; (3) Whether the firm’s advice was inappropriate or legally deficient; and (4) Whether the billing arrangement was unreasonable given the prevailing rates in the community. 

Defendants’ Motion in Limine #1 – Granted

            The Court orders that all non-party witnesses are excluded from the courtroom during trial.

Defendants’ Motion in Limine #2 – Denied without Prejudice

            Defendants seek to exclude any evidence not produced during discovery.  The motion is denied because it does not identify a “particular, identifiable body of evidence.”  (Boston v. Penny Lane Centers, Inc. (2009) 170 Cal.App.4th 936, 950.)  Moreover, the issue is not ripe.  The Court cannot exclude witnesses or evidence not identified or produced during discovery unless there was a violation of a court order or willful misconduct.  (New Albertsons, Inc. v. Superior Court (2008) 168 Cal.App.4th 1403, 1422-1434; see also Mitchell v. Superior Court (2015) 243 Cal.App.4th 269, 272; Saxena v. Goffney (2008) 159 Cal.App.4th 316, 334.)  The Court cannot make those findings in advance of an issue arising.  Therefore, the motion is denied without prejudice. 

Defendants’ Motion in Limine #3 – Granted

            The Court orders that any evidence that Defendants have insurance shall be excluded during trial. 

Defendants’ Motion in Limine #4 – Granted in Part and Denied in Part

            Defendants seek to “exclude any reference to evidence that cannot be introduced during trial.”  The Court grants the motion with respect to evidence Defendants have insurance, settlement discussions in Case Number BC712758 and Case Number 18STCV01765, and other lawsuits in which Raymond McElfish and the McElfish Law Firm may be defendants.  The motion is denied without prejudice in all other respects because Defendants do not identify any specific evidence to be excluded. 

Defendants’ Motion in Limine #5 – Granted in Part and Denied in Part

            Defendants seek to exclude evidence of settlement negotiations and offers to settle.  The motion is granted with respect to settlement discussions/offers in Case Number BC712758 and Case Number 18STCV01765.  In other words, the motion is granted with respect to the cases proceeding to trial. 

            However, the motion is denied with respect to the underlying cases forming the basis of Plaintiffs’ malpractice action: Case Number BC524165 and Case Number BC550798.  Plaintiffs allege that they retained Raymond McElfish and his firm to represent them, and the plaintiff in that case offered to settle the case for $175,000.  They relied on McElfish’s advice that they “could do no worse if they went to trial.”  Plaintiffs allege that they proceeded to trial on that advice, and the judgment was $230,000.  Moreover, Plaintiffs allege that McElfish did not advise them that they could be liable for attorney’s fees, which were $248,547.  Because the settlement discussions in Case Number BC524165 are relevant to Plaintiffs’ case, the motion is denied in that respect. 

Defendants’ Motion in Limine #6 – Granted in Part and Denied in Part

            Defendants seek to preclude parties and lay witnesses from proffering expert testimony.  The Court adopts its ruling on the cross-complainant’s motion in limine #1 to preclude Nicki Zvik and Shay Yavor from offering expert testimony.  The Court denies the motion without prejudice in all other respects, as the issue is not yet ripe.  The Court will resolve any such issues at trial.

Defendants’ Motion in Limine #7 – Granted

The Court orders that any evidence of any prior, present, or subsequent lawsuits against Raymond McElfish or the McElfish Law Firm shall be excluded at trial, per Evidence Code section 352.  The Court finds that there is little, if any, probative value, and any probative value is greatly outweighed by the prejudice.  However, the Court will revisit this ruling if the McElfish parties make arguments or introduce evidence, i.e., “open the door,” and this changes the Court’s analysis under Evidence Code section 352. 

Defendants’ Motions in Limine #8 & #9 – Denied without Prejudice

            Defendants seek to exclude Plaintiff from calling undesignated expert witnesses, and to preclude the designated experts from testifying beyond the substance of their disclosed testimony.  This issue is not ripe, so the motion is denied without prejudice.  The Court will address any such issues at trial.

Defendants’ Motion in Limine #10 – Denied

            Defendants seek to preclude Plaintiffs from introducing any evidence or opinion testimony regarding any potential insurance coverage in the underlying actions.  Plaintiffs’ complaint—which was filed on July 3, 2018—asserts a professional negligence claim against the McElfish parties. 

            Defendants’ counsel represents: “Plaintiffs did not identify any insurance coverage in the underlying actions in response to defendants’ discovery.”  (Defendants’ Motion in Limine #10, p. 3:21.)  Defendants’ counsel states in his declaration: “The first time that my office learned that plaintiffs claimed there was any alleged negligence in the underlying actions regarding insurance coverage or a failure to tender their defenses was when it received plaintiffs’ expert witness designation on August 12, 2021.”  (Declaration of William G. Sorkin, ¶ 6.)  That is, quite simply, not correct.  In Plaintiffs’ discovery responses—which were served on or about July 2, 2021—Plaintiffs made clear that their professional negligence case relies in part on their allegation that McElfish’s representation “fell below the standard of care by failing to tender the Lunger Action to the Responding Party’s insurance company.”  Plaintiffs produced a copy of the insurance policy at issue on July 8, 2021.  Defendants had ample opportunity to designate experts and take expert discovery between July 8 and September 6, 2021, when expert discovery closed in advance of trial date on September 21, 2021. 

            Defendants argue that Plaintiffs have no evidence in support of their theory.  Again, Defendants are incorrect.  Plaintiffs designated an expert witness, David A. Gauntlett, who will address the relevant issues.  Mr. Gauntlett is qualified to opine whether McElfish’s representation fell below the standard of care by failing to investigate whether there was insurance coverage and failing to tender the case.  Mr. Gauntlett also is qualified to opine whether Plaintiffs’ insurance carrier had a duty to defend and a duty to indemnify Plaintiffs relating to the underlying litigation.  This latter issue is relevant because Plaintiffs must prove that their damages were caused by McElfish’s alleged failure to investigate whether his clients had insurance and alleged failure to tender the case.  Indeed, McElfish’s counsel has represented previously that he intends to argue that the policy covered only personal injury and property damage, and therefore McEflish was not required to tender the case and, at best, any failure to do so was harmless error.  More important, the Court is not persuaded that McElfish necessarily is correct, as the underlying actions appear to have involved allegations of defective construction, which may qualify as “property damage.”     

            Based upon the foregoing, the Court denies Defendants’ motion in limine.  The evidence is probative and relevant to the issues, and the Court cannot conclude that there is any prejudice that would greatly outweigh this probative value, per Evidence Code section 352.  The Court finds that Plaintiffs’ experts possess sufficient qualifications and foundation to testify.   

Defendants’ Motion in Limine #11 – Denied

            Defendants seek to exclude Plaintiffs’ evidence that McElfish’s legal work was not reasonable or necessary with respect to the underlying case.  The Court addresses the issue with respect to percipient witness testimony in its ruling on Defendants’ motion in limine #1.  The Court interprets this motion as addressing expert testimony only.

            Business and Professions Code section 6148 states:

            In any case not coming within Section 6147 in which it is reasonably foreseeable that total expense to a client, including attorney’s fees, will exceed one thousand dollars ($1,000), the contract for services in the case shall be in writing.  At the time the contract is entered into, the attorney shall provide a duplicate copy of the contract signed by both the attorney and the client, or the client’s guardian or representative, to the client or to the client’s guardian or representative. . . .  Failure to comply with any provision of this section renders the agreement voidable at the option of the client, and the attorney shall, upon the agreement being voided, be entitled to collect a reasonable fee. 

(Bus. & Prof. Code, § 6148.) 

            McElfish relies on a written retainer agreement that states: “Green Solar Technologies, Inc. and Nicki Zvik . . . hire Attorney to provide legal services in regards to the Los Angeles Superior Court case Yaakov Lunger v. Nicki Zvik (dba Nick Zvik), et al. etc. LASC Csae No. BC 524165.”  However, McElfish failed to comply with section 6148 because he never signed the contract, and therefore, he never provided Zvik—whom McElfish represented as an individual—a “copy of the contract signed by both the attorney and the client . . . to the client . . . .”  (Ibid.)  Therefore, McEflish is entitled only to a “reasonable fee” with respect to his representative of Zvik as an individual.  The jury is entitled to hear evidence whether McElfish’s fees and the hours he billed were “reasonable.” 

            Retainer agreements with corporations are not subject the same requirements, per Business and Professions Code, section 6148(d)(4).  Nevertheless, the retainer agreement was not signed on behalf of Green Solar Technologies, Inc. (“Green Solar”).  It was signed only by Zvik as an individual.  Because the retainer agreement was never signed, the parties each will have to present their own evidence concerning their agreement concerning McElfish’s fees and work.  Because Green Solar was not a defendant in Case Number BC524165 and only was a cross-complainant, presumably, witnesses from Green Solar will testify that McElfish only was authorized to perform work relating to the cross-complaint.  This provides a basis for Plaintiffs to present evidence that McElfish performed unnecessary or unreasonable work.

            Even if the retainer agreement was valid, Plaintiffs still are entitled to present evidence that McElfish performed unnecessary work in order to increase the legal fees.  The contract itself states that McElfish “will perform those legal services reasonably required to represent [the] Clients.”  Therefore, Plaintiffs are entitled to present evidence that his legal services were not “reasonably required” to handle the underlying litigation.

            McElfish cites Pech v. Morgan (2021) 61 Cal.App.5th 841, in which the Second District held that a valid retainer agreement controls even if the fee would be unreasonable under a lodestar analysis.  The Court recognized nevertheless that “the attorney’s performance under the fee agreement must be consistent with the implied covenant of good faith and fair dealing.”  (Id., p. 847.)  This case does not preclude a client from introducing evidence that an attorney knowingly performed unnecessary work in order to increase the legal fees. 

            Based upon the foregoing, Defendants’ motion in limine #11 is denied. 

Defendants’ Motion in Limine #12 – Granted

            The Court grants Defendants’ motion in limine #12 and orders that no party may involve “the Golden Rule” argument at trial.