Judge Stephen P. Pfahler, Case 20STCV05877 2022-10-25 Tentative Ruling

OSC re: Appointment of Referee for Supervision of Deposition of Irene De La Cerda

The court takes judicial notice of the filed pleadings, but cannot consider the truth of the matter asserted.

On April 15, 2022, the court granted the motion to compel further deposition of Irene De La Cerda aka Irene Sullivan brought by Gerald De La Cerda for the limited purpose of testifying to the exhibits and addressing the privacy objections. The additional deposition session was limited to no more than four (4) hours.

Due to the conduct of the parties and counsel at the deposition, the court set an OSC re: Appointment of a Referee for Deposition Supervision in order to efficiently resolve disputes occurring during the deposition, rather than potential new motions before the court. The court invited supplemental briefs from the parties. In the meantime, the court granted the motion for judgment on the pleadings without prejudice on the Gerald cross-complaint.

Irene opposed any further deposition based on the fact that no operative cross-complaint appearing on file. Irene therefore contended without an operative complaint, at a minimum, the court should defer any determination of parameters for a future deposition, as required in any referee referral order. Gerald in support of conducting further deposition implicitly agreed to the appointment of a referee, but represents that Irene refuses to stipulate. Gerald argued the state of the operative pleading in no way barred proceeding with the deposition, as the discovery and deposition proceeded before the motion for judgment on the pleadings. Gerald also claimed prejudice as a result of the inability to complete discovery.

The court agreed that the deposition properly proceeded while the operative cross-complaint was on file. Nevertheless, given the change of the status of the pleading and required findings required for the appointment of a referee order, the court deferred consideration of the referee appointment pending status of the amended complaint. The court found nothing in the brief from Gerald establishes the necessity of the deposition if Irene is no longer a party to the cross-complaint. The court also considered the possibility that if Gerald’s cross-complaint no longer proceeds, an order for a referee constituted a potentially unnecessary expense for all parties.

The court therefore continued the OSC re: Appointment of Referee for Supervision of Deposition of Irene De La Cerda aka Irene Sullivan to July 21, 2022. Once again, the court allowed for the filing of the supplemental briefs.

Gerald’s supplemental brief reiterated the necessity of the discovery based on prior questioning before the court regarding at least in part Irene’s conduct as co-trustee, as well as the agreement of counsel for the deposition appearance. Gerald represents that no meet and confer effort occurred regarding the selection of a potential referee. Irene submits extensive quotes from the Probate court regarding the restraining order granted against Sarah. Irene then discusses certain dynamics with counsel for Gerald.

Concurrent with the July 21, 2022, hearing, the court overruled the demurrer to the first amended complaint and denied the motion to strike. The court found that the previously adjudicated claims in the probate action continue to bar Gerald seeking any form of indemnity or damages against Irene for the conduct leading to the Judgment against Gerald (and Sarah) in the underlying complaint filed by Andrew. Nevertheless, the court also found any alleged claims regarding potential future damages incurred by Gerald as a result of the conduct of Irene remains properly pled for purposes of ruling on the demurrer and therefore overruled the demurrer. The court also denied the motion to strike on grounds that the first amended complaint was in no way improperly filed.

The court however allowed Irene to potentially raise challenge the operative pleading on grounds of potential subject matter jurisdiction before the Probate Court. Because the crux of the first amended cross-complaint unequivocally seeks to conduct discovery into alleged conduct of Irene as a trustee, thereby potentially within the subject matter jurisdiction of the Probate Court, the court deferred further consideration pending the next challenge.

Nevertheless, the supplemental brief hearing was set prior to the October 6, 2022 hearing on the motion for judgment on the pleadings. At the September 29, 2022 hearing, the court limited the hearing to only considering the appointment of a discovery referee and otherwise declined to revisit the original order granting the additional deposition time. The court cited to the April 15, 2022, order granting the motion to compel the further deposition of Irene De La Cerda aka Irene Sullivan brought by Gerald De La Cerda, the court limited the deposition to of testifying to the exhibits and addressing the privacy objections.

In considering the terms for the referee appointment, counsel for Irene presented numerous arguments during the hearing regarding financial hardship, which were NOT presented in the supplemental brief before the hearing. The court once again therefore allowed for supplemental briefs strictly on the issue of financial hardship for purposes of determining a potential allocation of fees between the parties, or even the possibility of a pro bono or sitting by assignment judge referee. (Hood v. Superior Court (1999) 72 Cal.App.4th 446, 449–450; Taggares v. Superior Court (1998) 62 Cal.App.4th 94, 101-102; Solorzano v. Superior Court (1993) 18 Cal.App.4th 603, 616.)

Following the September 29, 2022, hearing, the court denied the motion for judgment on the pleadings at to the operative cross-complaint on October 6, 2022.[1] The court therefore again finds Gerald may continue to rightfully seek the deposition of Irene within the parameters of the cross-complaint as provided by the April 15, 2022 order. Given the validity of the operative pleading for purposes of managing discovery, the court again reviews the criteria for a referee.

“When the court in any pending action determines that it is necessary for the court to appoint a referee to hear and determine any and all discovery motions and disputes relevant to discovery in the action and to report findings and make a recommendation thereon.” (Code Civ. Proc., § 639, subd. (a)(5).) Appointment requires a court finding of “exceptional circumstances.” (Code Civ. Proc., § 639, subd. (d)(2).) Absent agreement of all parties, courts may not make blanket referrals, except “in the unusual case where a majority of factors” favor reference, including: “(1) there are multiple issues to be resolved; (2) there are multiple motions to be heard simultaneously; (3) the present motion is only one in a continuum of many; (4) the number of documents to be reviewed (especially in issues based on assertions of privilege) make the inquiry inordinately time-consuming. (Taggares v. Superior Court, supra, 62 Cal. App. 4th at p. 105.) “Where one or more of the above factors unduly impact the court’s time and/or limited resources, the court is clearly within its discretion to make an appropriate reference.” (Id. at 106.)

The court continues to find the volume of motions, relationship of the parties and counsel, the previously addressed contentious conduct of counsel during the last attempted deposition, and continued requirements for supplemental briefs since the April 15, 2022 order, meets the criteria for an inordinately time consuming burden on the court. (Taggares v. Superior Court, supra, 62 Cal.App.4th. at p. 106.) The court specifically finds it cannot insure the orderly conduct of the deposition within normal court operations, and therefore finds the appointment of a referee for the limited purpose of supervising, including ruling on objections at the time of the deposition, well supported.

The appointment of the referee requires the court consider the scope of authority. California Rules of Court, rule 3.922(e) states: “If the referee is appointed under section 639(a)(5) to hear and determine discovery motions and disputes relevant to discovery, the order must state that the referee is authorized to set the date, time, and place for all hearings determined by the referee to be necessary; direct the issuance of subpoenas; preside over hearings; take evidence; and rule on objections, motions, and other requests made during the course of the hearing.” As previously stated in the April 15, 2022, order, the court orders the parties complete the second deposition session within the four-hour window on the relevant subject matter. Any and all arguments over the scope of the questions on ANY AND ALL BASES will be addressed by the referee.

Because the referee is appointed pursuant to Code of Civil Procedure section 639, the court cites to Code of Civil Procedure section 651.1, subdivision (b): “When a referee is appointed pursuant to Section 639, at any time after a determination of ability to pay is made as specified in paragraph (6) of subdivision (d) of Section 639 , the court may order the parties to pay the fees of referees who are not employees or officers of the court at the time of appointment, as fixed pursuant to Section 1023 , in any manner determined by the court to be fair and reasonable, including an apportionment of the fees among the parties. For purposes of this section, the term “parties” does not include parties' counsel.”

It is on this section of the code that the court now focuses the latest round of supplemental briefs. Irene presents the dispute as not a showing of in forma pauperis, but as one requiring consideration of the economic impacts to the respective parties. Specifically, Irene continues to pay out of pocket for counsel, while Gerald is represented by insurance coverage counsel. Irene also cites to the unreimbursed expenses incurred on behalf of Andrew. Finally, Irene requests, if the court is disinclined to allocating fees towards Gerald, then directing the court to “take advantage of the vast resources available” with the appointment of a judge sitting on assignment, or a list of voluntary mediators or arbitrators.

Gerald challenges any showing of financial hardship given Irene’s employment as a State Farm insurance agent, and title on two homes. Gerald further contends that the existence of insurance coverage should not be a basis for allocation of fees. Irene may have an entitlement to insurance coverage, but choses to pay Ms. Pechner instead. Gerald objects to imposing a “penalty” on Gerald due to the invocation of insurance coverage.

“The trial court has the responsibility to adopt a ‘fair means’ of resolving disputes which takes into consideration the financial status of parties.” (Taggares v. Superior Court (1998) 62 Cal.App.4th at p. 101.) In considering the financial status the court considers the court seeks to protect against the imposition of an unfair advantage against the party of lesser means. (Id.;

Hood v. Superior Court (1999) 72 Cal.App.4th 446, 450; Solorzano v. Superior Court (1993) 18 Cal.App.4th 603, 616.)

Irene admittedly is not presenting an argument to the court as a person of limited financial means, but due to the disparity in out of pocket costs versus insurance coverage. The court appreciates the distinction. In this particular action, the parties vociferously debate the validity of the operative cross-complaint, which the court found in the motion for judgment on the pleadings only proceeds on a “vaguely written” claim based on the possibility for alleging an indemnity claim based on trust administration expenses arising post-probate judgment. While the court understands the argument of Gerald that Irene may have been entitled to insurance coverage, but chose to pay out of pocket and accept the possibilities of protracted litigation, the court finds such a choice will not constitute a factor for determining potential allocation. It begs the question, however, of whether so much effort would have been put into fighting for a claim which may yet still belong before the probate court were it not for insurance coverage paying for the billable hours versus Gerald paying out of pocket like Irene.

While dicta suggests the use of a sitting judge or pro bono authority as an option for persons of limited means, the court finds no basis of authority presented by Irene to compel this option. Furthermore, given Irene specifically disclaims any claim of in forma pauperis, the court finds no justification for the shifting of costs dependent on court resources for the completion of discovery by the appointment of a judge sitting on assignment. The court however grants the parties leave to seek out options for presentation to the court.

Should the parties otherwise pursue a paid arbitrator, the court considers fee reallocation. The court again acknowledges the exceptionally high contentious nature of the parties’ relations and the inordinate hours spent by the court and several months of briefing and hearings over a four hour deposition window to rightfully conduct discovery into an issue repeatedly found valid by the court. The sheer volume of motions and hearings alone inevitably prompted numerous additional billable hours by Ms. Pechner, which likely even exceeds the cost of the referee and hours spent completing the deposition. Regardless, the court treats the subject situation only in context of the deposition window.

Ms. Pechner concedes to the reasonableness of attorneys and retired judges conducting referee work for $50 to $100 per hour. [Supp. Pechner Dec., ¶5.] Gerald proposes retired Judge Andrew Kauffman with Alternative Resolution Center (ARC) who charges a represented rate of $250/hour. The court finds this rate reasonable, and the ARC group reputable. The court, however, remains weary of allocating costs in that such an order could lead to future arguments regarding allocation in cases of disparity outside the determination of a person’s limited financial means. Still, as addressed above, the court cannot deny the impact of insurance coverage on the continued driving of a “vaguely” presented claim. The court therefore, in its discretion, finds the circumstances support a modification of the normal even split allocation.

In making an order, the court must specify the maximum hour rate and hours spent. (Cal. Rules Ct., rule 3.922(f)(1).) The April 2022 order provides for up to four hours of additional deposition time. In addition to the four hours of actual deposition time, the court also allows for additional time for the referee to review the history of the action and become familiar with the issues. Assuming argument and objection further delaying the deposition, the court adds in additional time for completion of the deposition within a single session. The court therefore finds that a seven (7) hour maximum amount of hours for preparation and conduct of the deposition will provide sufficient time. The parties may also stipulate for an expansion of hours, if necessary. Any return to the court due to the inability to complete the deposition within the allocated time and refusal to stipulate will lead to an OSC re: Referee and Monetary Sanctions against the Obstreperous Party. The court also caps fees at $250 per hour. The parties may agree to Judge Kauffman or find another referee for an equal or lower rate. The total amount of fees shall therefore not exceed $1,750, and may certainly fall below the cap. As for allocation, the $100/hour acceptable rate for Irene versus the $250/hour suggested by Gerald leads to a disparity of $150/hour. Under an equal split, total fees would exceed no more than $875 each, or $125/hour per party multiplied by seven hours.

The court finds the $100 per hour agreement from Ms. Pechner as a baseline of reasonable, and presumably takes into account the additional billable rate. The court therefore allows for a maximum cap rate of $100 per hour assigned to Irene, within the remaining balance, up to $150/hour assigned to Gerald. While Ms. Pechner may argue that the $100/hour rate represents a willingness to spend $50 per person, the court declines to cap the rate at a lower level, given the lack of any in forma pauperis claim, and the short duration of the deposition.

The parties are ordered to select a referee, and submit the identification of the referee to the court within 10 calendar days of this order. If the parties are unable to agree on a referee, the court will appoint a referee based on the submission of two names—one from each side.. The parties will submit their preferred person within five court days of the lapse of the ten court day period provided by the court for the parties to voluntarily select a referee. Thus, the submission of names for the appointment of a referee will occur no later than 15 court days from the date of this order. The court will select one of the two names, if necessary.

Upon the selection of a referee, Gerald is ordered to draft and submit an order both incorporating the referenced requirements, time limitations, as well as provision of the hourly rate for the appointed referee in compliance with California Rules of Court, rule 3.992(f)(1). “The fees of referees are such reasonable sum as the court may fix for the time spent in the business of the reference; but the parties may agree, in writing, upon any other rate of compensation, and thereupon such rates shall be allowed.” (Code Civ. Proc., § 1023.) The court expects the deposition to be completed within a reasonable time before the trial date, certainly no later than 50 days before trial.

[1]Counsel for Irene indicated an intention to take a writ on the denied motion for judgment on the pleadings. The court docket shows no such filing and will continue to proceed with the hearing on grounds that the operative cross-complaint remains valid and before the court for purposes of the subject hearing.