Judge: Upinder S. Kalra, Case: 22STCV02427, Date: 2023-01-05 Tentative Ruling
Case Number: 22STCV02427 Hearing Date: January 5, 2023 Dept: 51
Tentative Ruling
Judge Upinder S.
Kalra, Department 51
HEARING DATE: January
5, 2023
CASE NAME: Timed
Out, LLC, v. Chippewa dba Much and House Public Relations and Marketing
Management
CASE NO.: 22STCV02427
MOTION
TO DISQUALIFY COUNSEL
MOVING PARTY: Defendant Chippewa
RESPONDING PARTY(S): Plaintiff Timed Out, LLC
REQUESTED RELIEF:
1. An
order disqualifying counsel for Plaintiff Timed Out, LLC
TENTATIVE RULING:
1. Motion
to Disqualify Counsel for Plaintiff Timed Out, LLC is DENIED.
STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:
Plaintiff Timed Out LLC (“Plaintiff”) filed a complaint
against Defendant Chippewa dba Much and House Public Relations and Marketing
Management (“Defendant”) on January 20, 2022. The complaint alleged two causes
of action: (1) Implied Contractual Indemnity and (2) Equitable Indemnity or
Contribution. The complaint alleges that Defendant entered into a contract with
non-party Prisma to perform marketing services. Prisma then posted pictures of
Models without their consent and Defendant failed to inform Prisma of this lack
of consent. Plaintiff filed a complaint against Prisma, which then filed a
Cross-Complaint against Defendant for indemnity and contribution. Prisma and
Plaintiff later entered into a settlement agreement, where Prisma assigned
claims against Chippewa to Plaintiff, which included indemnity and
contribution.
On March 17, 2022, the parties proposed a stipulation to
stay the case pending the resolution of a related case and appeal, which was
DENIED.
On April 11, 2022, Defendant filed a Demurrer, which was
OVERRULED.
On September 2, 2022, Defendant filed an Answer and
Cross-Complaint.
On October 28, 2022, Cross-Defendants Prisma Entertainment,
LLC, and Timed Out, LLC, each filed a Special Motion to Strike Cross-Complaint.
The current Motion to Disqualify all Current and Former
Counsel of Record for Timed Out, LLC, was filed on November 2, 2022.
Plaintiff’s Opposition was filed on December 21, 2022. Defendant’s Reply was
filed on December 28, 2022.
LEGAL STANDARD:
“A judge’s authority to disqualify an attorney has its
origins in the inherent power of every court in the furtherance of justice to
control the conduct of ministerial officers and other persons in pending
judicial proceedings.”¿(Neal v. Health
Net, Inc.¿(2002) 100 Cal.App.4th 831, 840;¿see also¿Code Civ. Proc., § 128,
subd. (a)(5)
[“Every court shall have the power to . . . control in furtherance of justice,
the conduct of its ministerial officers, and of all other persons in any manner
connected with a judicial proceeding before it, in every matter pertaining
thereto”].) “The power is frequently exercised on a showing that
disqualification is required under professional standards governing avoidance
of conflicts of interest or potential adverse use of confidential
information.”¿(Responsible Citizens v.
Superior Court¿(1993) 16 Cal.App.4th 1717, 1723-1724.)
“Motions to disqualify counsel present competing policy
considerations. On the one hand, a court must not hesitate to¿disqualify an
attorney when it is satisfactorily established that he or she wrongfully
acquired an unfair advantage that undermines the integrity of the judicial
process and will have a¿continuing effect on the proceedings before the court.
[Citations.] On the other hand, it must be kept in mind that disqualification
usually imposes a substantial hardship on the disqualified attorney’s innocent
client, who must bear the monetary and other costs of finding a replacement. A
client deprived of the attorney of his [or her] choice suffers a particularly
heavy penalty where ... his [or her] attorney is highly skilled in the relevant
area of the law.”¿(Gregori v. Bank of
America (1989) 207 Cal.App.3d 291, 300.) “The paramount concern must be to
preserve public trust in the scrupulous administration of justice and the
integrity of the bar. The important right to counsel of one’s choice must yield
to ethical considerations that affect the fundamental principles of our
judicial process.”¿(People ex rel. Dept.
of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135,
1145.) Generally, the disqualification of an attorney vicariously disqualifies
his or her firm.¿(William H. Raley Co. v.
Superior Court (1983)¿149 Cal.App.3d 1042, 1048–1049.)
REQUEST FOR JUDICIAL NOTICE:
The Court may take judicial notice of the
existence of the records, but not the truth of matters asserted in such
records. (Sosinsky v. Grant (1992) 6
Cal.App.4th 1548, 1565). As a result, although the court may take judicial
notice that the documents exists, the Court may not take judicial notice of the
truth of the facts in the documents.
Additionally,
Evidence Code only allows the Court to take judicial notice of certain types of
documents. The court may take judicial notice of “official acts of the
legislative, executive, and judicial departments of the United States and of
any state of the United States,” “[r]ecords of (1) any court of this state or
(2) any court of record of the United States or of any state of the United
States,” and “[f]acts and propositions that are not reasonably subject to
dispute and are capable of immediate and accurate determination by resort to
sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c),
(d), and (h).) The Evidence Code does not allow the Court to take judicial
notice of discovery responses or parts of cases, such as depositions.
Defendant’s Request:
Defendant requests that the
Court take judicial notice of Appellant’s Appendix Volumes 1 – 4, which was
previously lodged in support of Defendant’s demurrer. Previously, this court
denied this request, stating that while it can take judicial notice of certain
documents, it cannot take notice of the truth of the matter asserted in those
documents. As the Defendant requests the court take judicial notice of the same
documents, the Court DENIES Defendant’s request.
ANALYSIS:
Defendant moves to disqualify
counsel, all current and former counsel, for Plaintiff Timed Out, LLC.
As
background, Plaintiff Timed Out, LLC and Cross-Defendant Prisma Entertainment,
LLC entered into a Settlement Agreement in January 2020. As a result of these
agreements, Cross-Defendant Chippewa was dismissed. However, in the agreements
between Timed Out and Prisma, the terms included the transfer of
attorney-client and work-product privileged information that Prisma had
received from Chippewa during their joint defense. (RJN 1, Motion 14: 14-19.)
Defendant
argues that counsel for Timed Out must be disqualified as it knowingly
disclosed privileged information without party’s consent. Unlike a situation,
as in Rico, where a party
inadvertently receives privileged information, the parties here explicitly
agreed that Prisma will waive any attorney-client as well as work-product
privileges. Defendant also argues that Chippewa had an expectation of
confidentiality as Prisma and Defendant worked together as co-defendants.
(Motion 17: 21-27.)
Plaintiff
Timed Out argues that this motion should fail for three main reasons. First,
Defendant misinterprets the settlement agreement. This agreement between Prisma
and Timed Out was for Prisma’s reasonable cooperation, whereby Prisma would
waive its own privileged information. (Opp. 12: 25-27.) Additionally, the
agreement indicates that this was an exchange of information that would be “reasonably
necessary” for indemnity claims against Defendant. Moreover, Timed Out argues
that it did not have knowledge that there was a common interest between Prisma
and Chippewa. (Opp. 14: 12-24.)
Second, the common interest
doctrine is inapplicable because the elements detailed in Meza v. H. Muehlstein & Co., Inc., have not been met. In Meza, the Court stated that the
privileged information can be disclosed to a separate client without waiving
work product privilege applies when “(1) the disclosure relates to a common
interest of the attorneys' respective clients; (2) the disclosing attorney has
a reasonable expectation that the other attorney will preserve confidentiality;
and (3) the disclosure is reasonably necessary for the accomplishment of the
purpose for which the disclosing attorney was consulted.” (Meza v. H. Muehlstein & Co., Inc. (2009) 176 Cal.App.4th 969,
981.) Here, Defendant argues that there was no ”full common cause,” as the
common interest concerned damages and liability. (Opp. 16: 10-15.) Second, there
was no expectation of privileged information being kept confidential as the two
parties were adversaries, as Prisma sued Chippewa for indemnity. (Opp. 16:
25-28.) Lastly, Chippewa’s information being sent to Prisma would not be
“reasonably necessary to advance” Chippewa’s case because it would be be used
against Chippewa. (Opp. 17: 6-9.)
Third, Timed Out never received
privileged information. Additionally, Chippewa cannot demonstrate that any
privileged information was given to Timed Out.
The Court finds that
disqualification is not appropriate. The Court of Appeal in State Compensation Ins. Fund stated
while “mere exposure” to confidential information by itself does not require
disqualification, “however, we do not rule out the possibility that in an
appropriate case, disqualification might be justified if an attorney
inadvertently receives confidential materials and fails to conduct himself or
herself in the manner specified above, assuming other factors compel
disqualification.” (State Compensation
Ins. Fund v. WPS, Inc. (1999) 70 Cal.App.4th 644, 657.) In Rico, the court granted disqualification
because counsel received confidential information, though inadvertently, and
then used that information going forward, such as in depositions. Here,
however, even though the Agreement contains the waiver clause, there is no
evidence that indicates Prisma provided any confidential information to Timed
Out, LLC, or that any confidential information was used against Defendant in
any manner. The clause in question, paragraph 10 of the settlement agreement,
was limited to “fees, costs, and expenses incurred.” In other words, evidence related
to damages that Prisma suffered as a result of the “Plan B Case” (BC633581) and
not based upon privileged or confidential communications, trial strategy or the
like.
As stated
above, motions to disqualify are disfavored as it places a large burden on the
client to find and replace counsel, and get counsel acquainted with all the
information.
The Court takes no position on the
defense of collusion.
Therefore, the Motion to
Disqualify Counsel is DENIED without prejudice.
Conclusion:
For
the foregoing reasons, the Court decides the pending motion as follows:
Motion to Disqualify Counsel is DENIED.
Moving party is to give notice.
IT IS SO ORDERED.
Dated: January
5, 2023 __________________________________ Upinder
S. Kalra
Judge
of the Superior Court
MOTION
TO DISQUALIFY COUNSEL
MOVING PARTY: Defendant Chippewa
RESPONDING PARTY(S): Cross-Defendant Prisma
Entertainment, LLC
REQUESTED RELIEF:
1. An
order disqualifying counsel for Cross-Defendant Prisma Entertainment, LLC
TENTATIVE RULING:
1.
Motion to Disqualify Counsel for
Cross-Defendant Prisma Entertainment, LLC is DENIED.
STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:
Plaintiff Timed Out LLC (“Plaintiff”) filed a complaint
against Defendant Chippewa dba Much and House Public Relations and Marketing
Management (“Defendant”) on January 20, 2022. The complaint alleged two causes
of action: (1) Implied Contractual Indemnity and (2) Equitable Indemnity or
Contribution. The complaint alleges that Defendant entered into a contract with
non-party Prisma to perform marketing services. Prisma then posted pictures of
Models without their consent and Defendant failed to inform Prisma of this lack
of consent. Plaintiff filed a complaint against Prisma, which then filed a
Cross-Complaint against Defendant for indemnity and contribution. Prisma and
Plaintiff later entered into a settlement agreement, where Prisma assigned
claims against Chippewa to Plaintiff, which included indemnity and
contribution.
On March 17, 2022, the parties proposed a stipulation to
stay the case pending the resolution of a related case and appeal, which was
DENIED.
On April 11, 2022, Defendant filed a Demurrer, which was
OVERRULED.
On September 2, 2022, Defendant filed an Answer and
Cross-Complaint.
On October 28, 2022, Cross-Defendants Prisma Entertainment,
LLC, and Timed Out, LLC, each filed a Special Motion to Strike Cross-Complaint.
The current Motion to Disqualify all Current and Former
Counsel of Record for Timed Out, LLC, was filed on November 2, 2022.
Plaintiff’s Opposition was filed on December 21, 2022. Defendant’s Reply was
filed on December 28, 2022.
LEGAL STANDARD:
“A judge’s authority to disqualify an attorney has its
origins in the inherent power of every court in the furtherance of justice to
control the conduct of ministerial officers and other persons in pending
judicial proceedings.”¿(Neal v. Health
Net, Inc.¿(2002) 100 Cal.App.4th 831, 840;¿see also¿Code Civ. Proc., § 128,
subd. (a)(5)
[“Every court shall have the power to . . . control in furtherance of justice,
the conduct of its ministerial officers, and of all other persons in any manner
connected with a judicial proceeding before it, in every matter pertaining
thereto”].) “The power is frequently exercised on a showing that
disqualification is required under professional standards governing avoidance
of conflicts of interest or potential adverse use of confidential
information.”¿(Responsible Citizens v.
Superior Court¿(1993) 16 Cal.App.4th 1717, 1723-1724.)
“Motions to disqualify counsel present competing policy
considerations. On the one hand, a court must not hesitate to¿disqualify an
attorney when it is satisfactorily established that he or she wrongfully
acquired an unfair advantage that undermines the integrity of the judicial
process and will have a¿continuing effect on the proceedings before the court.
[Citations.] On the other hand, it must be kept in mind that disqualification
usually imposes a substantial hardship on the disqualified attorney’s innocent
client, who must bear the monetary and other costs of finding a replacement. A
client deprived of the attorney of his [or her] choice suffers a particularly
heavy penalty where ... his [or her] attorney is highly skilled in the relevant
area of the law.”¿(Gregori v. Bank of
America (1989) 207 Cal.App.3d 291, 300.) “The paramount concern must be to
preserve public trust in the scrupulous administration of justice and the
integrity of the bar. The important right to counsel of one’s choice must yield
to ethical considerations that affect the fundamental principles of our
judicial process.”¿(People ex rel. Dept.
of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135,
1145.) Generally, the disqualification of an attorney vicariously disqualifies
his or her firm.¿(William H. Raley Co. v.
Superior Court (1983)¿149 Cal.App.3d 1042, 1048–1049.)
REQUEST FOR JUDICIAL NOTICE
The Court may take judicial notice of the
existence of the records, but not the truth of matters asserted in such
records. (Sosinsky v. Grant (1992) 6
Cal.App.4th 1548, 1565). As a result, although the court may take judicial
notice that the documents exists, the Court may not take judicial notice of the
truth of the facts in the documents.
Additionally,
Evidence Code only allows the Court to take judicial notice of certain types of
documents. The court may take judicial notice of “official acts of the
legislative, executive, and judicial departments of the United States and of
any state of the United States,” “[r]ecords of (1) any court of this state or
(2) any court of record of the United States or of any state of the United
States,” and “[f]acts and propositions that are not reasonably subject to
dispute and are capable of immediate and accurate determination by resort to
sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c),
(d), and (h).) The Evidence Code does not allow the Court to take judicial
notice of discovery responses or parts of cases, such as depositions.
Defendant
requests that the Court take judicial notice of Appellant’s Appendix
Volumes 1 – 4, which was previously lodged in support of Defendant’s demurrer.
Previously, this court denied this request, stating that while it can take
judicial notice of certain documents, it cannot take notice of the truth of the
matter asserted in those documents. As the Defendant requests the court take
judicila notice of the same documents, the Court DENIES Defendant’s request.
Evidentiary Objections:
Plaintiff’s Objections to Raquel Vallejo’s Declaration
Sustained:
Overruled: 4, 5,
6, 7, 8, 9, 10, 11
ANALYSIS:
Defendant moves to disqualify
counsel, all current and former counsel, for Plaintiff Timed Out, LLC.
As
background, Plaintiff Timed Out, LLC and Cross-Defendant Prisma Entertainment,
LLC entered into a Settlement Agreement in January 2020. As a result of these
agreements, Cross-Defendant Chippewa was dismissed. However, in the agreements
between Timed Out and Prisma, the terms included the transfer of
attorney-client and work-product privileged information that Prisma had
received from Chippewa during their joint defense. (RJN 1, Motion 14: 14-19.)
Defendant
argues that counsel for Prisma must be disqualified as it knowingly disclosed
privileged information without party’s consent. Unlike a situation, as in Rico, where a party inadvertently
receives privileged information, the parties here explicitly agreed that Prisma
will waive any attorney-client as well as work-product privileges. Defendant
also argues that Chippewa had an expectation of confidentiality as Prisma and
Defendant worked together as co-defendants. (Motion 17: 21-27.)
Cross-Defendant
Prisma argues that Defendant has a high burden of proof for the current motion
as motions to disqualify are disfavored. (Opp. 1: 22-24.) However, Defendant
has failed to provide any grounds that would warrant disqualification and the
motion lacks merit. First, Defendant did not establish any contractual
relationship with Prisma’s counsel. Prisma argues that the activities, such as
retaining experts, and coordinating pre-trial documents does not create a joint
defense or confidential relationship. Even still, there was no written or
verbal “joint defense agreement.” (Opp. 9-13.) Additionally, Prisma argues that
Defendant’s reliance on Rico is inapposite as there was no inadvertent
disclosure of confidential material. (Opp. 6: 13-18.) Prisma also argues that
Defendant has failed to establish that there was a transfer of privileged
information. (Opp. 8: 23-26.)
Lastly,
Prisma argues that the doctrine of laches bars the current motion to
disqualify. Specifically, Prisma argues that the current motion is in response
to Prisma’s anti-SLAPP motion that was filed on October 28, 2022, prior to this
motion being filed on November 2, 2022.
Similarly to a companion motion filed
as to Plaintiff Timed Out, LLC, the Court find that disqualification is
inappropriate. The Court of Appeal in State
Compensation Ins. Fund stated while “mere exposure” to confidential
information by itself does not require disqualification, “however, we do not
rule out the possibility that in an appropriate case, disqualification might be
justified if an attorney inadvertently receives confidential materials and
fails to conduct himself or herself in the manner specified above, assuming
other factors compel disqualification.” (State
Compensation Ins. Fund v. WPS, Inc. (1999) 70 Cal.App.4th 644, 657.) In Rico, the court granted disqualification
because counsel received confidential information, though inadvertently, and
then used that information going forward, such as in depositions. Here,
however, even though the Agreement contains the waiver clause, there is no
evidence that indicates Prisma provided any confidential information to Timed
Out, LLC, or that any confidential information was used against Defendant in
any manner.
Additionally, there is insufficient
evidence to establish the common interest defense. The Court in OXY Resources stated “f]or the common
interest doctrine to attach, most courts seem to insist that the two parties
have in common an interest in securing legal advice related to the same
matter—and that the communications be made to advance their shared interest in
securing legal advice on that common matter.” (OXY Resources California LLC v. Superior Court (2004) 115
Cal.App.4th 874, 891.) Here, while the declaration of Raquel Vallejo argues that Prisma and Chippewa had a
common interest, as the parties were involved in joint trial preparations,
discussing trial strategy, reviewing pre-trial documents, participating in
conference calls with expert witnesses, and conferring with jury consultants,
(Dec. Vallejo ¶ 5) these types of instances would not be considered common
interest. Defendant’s belief that it considered Prisma a co-defendant is
inconsistent with the fact that in that action, Prisma sued Defendant for
indemnity.
As stated
above, motions to disqualify are disfavored as it places a large burden on the
client to find and replace counsel, and get counsel acquainted with all the
information.
The Court takes no position on the defense of collusion.
Therefore, the Motion to
Disqualify Counsel is DENIED without prejudice.
Conclusion:
For
the foregoing reasons, the Court decides the pending motion as follows:
Motion to Disqualify Counsel is
DENIED.
Moving party is to give notice.
IT IS SO ORDERED.
Dated: January
5, 2023 __________________________________ Upinder
S. Kalra
Judge
of the Superior Court