Newton Center, Inc., et al. v. Berliner Cohen, et al.		CASE NO. 114CV259581
DATE: 11 September 2014	TIME: 9:00	LINE NUMBER: 19

This matter will be heard by the Honorable Judge Socrates Peter Manoukian in Department 19 in the Old Courthouse, 2nd Floor, 161 North First Street, San Jose. Any party opposing the tentative ruling must call Department 19 at 408.808.6856 and the opposing party no later than 4:00 PM Thursday 11 September 2014.  Please specify the issue to be contested when calling the Court and counsel.

Continued from 29 August 2014: On 11 September 2014, the motion of plaintiffs Newton Center, Inc., Newton-The Children’s Learning Center, Inc., Isaac Soncino and Celine Tamir (collectively “Plaintiffs”) for clarification of the Court’s order of 22 July 2014, further relief, and for monetary sanctions was argued and submitted. Defendants Berliner Cohen and Ralph Swanson (“Defendants” or “Berliner Cohen”) filed a formal opposition to the motion.

Factual and Procedural Background

The facts and procedural history of this legal malpractice action were set forth in detail in the Court’s order of 22 July 2014. Given the Court’s and the parties’ familiarity with the facts and history of this case, the Court will provide a condensed version of the facts.

Isaac Soncino, Celine Tamir (“Celine”), and Yoram Tamir (“Yoram”) are co-founders of Newton Center, Inc., Newton-The Children’s Learning Center, Inc. (the “Newton Center”), and Musicart, Inc. Mr. Soncino and Celine are brother and sister and, at the time the business entities were created, Yoram and Celine were husband and wife. In May 2011, Celine filed a petition for marital dissolution in the San Mateo County Superior Court. (In re Tamir, San Mateo County Superior Court Case No. FAM0113496.) During the dissolution proceedings a dispute arose as to Yoram, Celine, and Mr. Soncino’s interests in the Newton Center. Yoram took the position that Mr. Soncino was and had always been an employee of Newton Center as opposed to a co-owner.

On 19 September 2011, Mr. Soncino instituted a civil action against Yoram and the Newton Center in San Mateo County Superior Court, asserting an ownership interest in the Newton Center. (Isaac Soncino v. Yoram Tamir, et al., San Mateo County Superior Court Case No. CIV 508495.) Based upon the finding that Mr. Soncino’s claims were intertwined with the adjudication of Yoram and Celine’s community property in the dissolution proceeding, the civil action was joined with the dissolution proceeding and the court conducted an evidentiary hearing on the issue of the parties’ interests in the Newton Center.

During the joint proceedings, Yoram and the Newton Center were represented by the law firm Berliner Cohen. Pursuant to the powers of the family court to protect community assets, and assuming that Yoram was acting in the role of a fiduciary of the Newton Center as an owner of the company, the trial judge authorized Berliner Cohen to receive payment from the Newton Center for the purpose of defending the business against Mr. Soncino’s claims.

Berliner Cohen’s representation of the Newton Center and Yoram is memorialized in an engagement letter dated 23 January 2012. The engagement letter provides that “[t]his letter will confirm Berliner Cohen’s representation of Newton-The Children’s Learning Center, Inc., [] Musicart Inc. [] and you [Yoram], individually, in connection with the above-referenced lawsuit filed against each of you by Celine Tamir and Isaac Soncino.” (Decl. of Ralph Swanson in Support of Def.s’ Special Mot. to Strike Pl.s’ Compl., ¶ 6.) Yoram signed the agreement for legal services three times, once for himself, once as CEO of the Newton Center, and once as CEO of Musicart. The agreement further provides that, “[y]our execution of this letter indicates your agreement and understanding that you are jointly and severally responsible with the corporation for all services rendered to and costs incurred on behalf of the corporations.” (Id.)

Ultimately, the San Mateo County Superior Court found that Mr. Soncino was in fact a 1/3 owner of the Newton Center and Yoram relinquished his ownership interests in the company to Celine as part of the divorce proceedings.

On 24 January 2014, based upon allegations that Berliner Cohen was not authorized to represent the Newton Center in the joint proceedings and that Berliner Cohen was negligent in the representation it provided to the company, the Newton Center, Mr. Soncino, and Celine filed an action in this Court against Berliner Cohen, asserting causes of action for (1) professional malpractice, (2) breach of fiduciary duty, (3) constructive fraud, (4) violation of Business and Professions Code, section 17200, (5) interference with business relations, (6) rescission, and (7) unjust enrichment.

Facts Giving Rise to the Present Motion

On 19 December 2012, more than a year before Plaintiffs instituted this action, Mr. Soncino (on behalf of the Newton Center) wrote a letter to Berliner Cohen, informing the firm that he had been found by the court to be the managing member of the Newton Center, indicating that Berliner Cohen was not authorized to represent the Newton Center, and stating that, to the extent there was an agreement between the Newton Center and Berliner Cohen, the Newton Center was terminating the representation. Mr. Soncino also demanded that the firm provide the client files to the Newton Center “for all matters in which you were purportedly engaged.”

On 8 January 2013, Plaintiffs made another demand that Berliner Cohen produce the client files. Berliner Cohen’s initial response was that it would provide the client files. Following additional requests for the client files, Berliner Cohen changed positions, indicating that the files would not be produced. Berliner Cohen asserted that Yoram had instructed the firm not to produce the files.

On 24 January 2014, as noted above, Plaintiffs instituted this action.

On 17 April 2014, Defendants filed a motion to compel arbitration and special motion to strike. The motion was set to be heard on 10 June 2014.

On 3 June 2014, based upon Plaintiffs’ assertion that they could not respond to the motion to compel arbitration and special motion to strike until after Berliner Cohen produced the client files, the parties stipulated to continuing the hearing until the Court could rule on the client file issue. In the stipulation, the parties agreed that Berliner Cohen would file a motion for a protective order in the discovery department and that, “[i]n the event that Defendants are ordered to produce the Client Files . . . Defendants shall deliver the documents to Plaitniffs’ counsel in such manner so as to ensure delivery within four calendar[] [days] of such order by the Court.” (Def.’s Request for Judicial Notice, Ex. H.) The stipulation was approved by Judge Zepeda on 3 June 2014. (Id.)

On 5 June 2014, Berliner Cohen filed a motion for a protective order, asking the Court to declare that the law firm was not required to produce the files. At the time Berliner Cohen filed its motion, it was not made clear to the discovery department that the parties had stipulated to the Court resolving the client file issue.

On 26 June 2014, the Court posted a tentative ruling on the motion. Given that the Court was not aware of the parties’ stipulation, the Court first noted that the motion was procedurally problematic because the law firm had brought it under Code of Civil Procedure (“CCP”) section 2031.060, which authorizes motions for protective orders after requests for the production of documents have been served under the Civil Discovery Act, but no such requests had actually been served in this case. In other words, the code section cited as the basis for the law firm’s motion was not technically applicable. However, because the parties appeared to agree that the motion was properly before the Court, the Court addressed the merits of the parties’ arguments, tentatively finding that, pursuant to California Rules of Professional Conduct, rule 3-700, “the Newton Center is entitled to the client files generated by Berliner Cohen in its prior representation of the company.” (Order dated 22 July 2014, at p. 8.) Based upon that finding, the Court indicated that it was inclined to deny Berliner Cohen’s motion for a protective order.

As a further result of the Court not being aware of the parties’ stipulation, in a footnote on the last page of the tentative ruling, the Court stated that, because Plaintiffs had not filed a motion to compel the production of the files, “the Court [wa]s not in a position to order Berliner Cohen to produce anything—only to deny the motion based upon the finding that the law firm ha[d] not demonstrated good cause for the relief sought.” (Id., at p. 8, fn. 5.)

The parties appeared for a hearing on the matter on 27 June 2014. During the hearing, it became clear that the focus of the parties dispute was over whether Berliner Cohen should have to turn over communications between Yoram and the law firm. The law firm did not take issue with the proposition that it had represented the Newton Center or that, generally speaking, rule 3-700 requires law firms to relinquish client files upon request. Berliner Cohen argued, however, that it not only represented Yoram in his capacity as a corporate officer of the Newton Center, but also as an individual. According to the law firm, because Yoram was represented in an individual capacity, any communications he made to the law firm were protected by the attorney-client privilege.

At the conclusion of the hearing on 27 June 2014, the Court took the matter under submission, indicating that it wanted to give more thought to the attorney-client privilege issue. Following the hearing, both parties submitted supplemental authorities on the issue and the Court found good cause to hold another hearing on the matter.

On 10 July 2014, the parties executed a second stipulation, again agreeing to the continuance of the hearing on Defendants’ motion to compel arbitration and special motion to strike, and again agreeing to the Court ruling on the client file issue. (Id., Ex. O.) The stipulation stated that, “[i]n the event that Defendants are ordered to produce the Client Files, the files shall be produced within four days of such order . . . [and] Defendants shall deliver the documents to Plaintiffs’ counsel in such manner as to ensure delivery within four calendar days of such order by the Court.” (Id., ¶ 3.)

On 9 July 2010, the Court posted a second tentative ruling on the motion for a protective order. The second tentative ruling posed nine questions that the Court wanted the parties to address at the hearing. The next day, 10 July 2010, the parties appeared at the hearing and addressed the Court’s questions. At the conclusion of the hearing, the Court once again took the matter under submission. On 22 July 2014, the Court entered an order, adopting the first tentative ruling in its entirety, and denied Berliner Cohen’s motion for a protective order. Due to an administrative oversight, footnote 5, which was included when the Court remained unaware of the parties’ stipulations, was left in the order.

On 24 July 2014, counsel for Plaintiffs contacted counsel for Berliner Cohen to discuss the production of the client files. On 28 July 2014, counsel for Berliner Cohen indicated that it would not be producing the files because the Court had not technically ordered the firm to do so and the 22 July 2014 order failed to address the attorney-client privilege issue.

On 4 August 2014, based upon Berliner Cohen’s refusal to produce its client files, Plaintiffs filed the present motion, asking the Court to clarify that, under the 22 July 2014 order, Berliner Cohen must produce the files.

Berliner Cohen filed an opposition to the motion on 18 August 2014. Plaintiffs filed their reply brief on 22 August 2014.

Discussion

I.             Requests for Judicial Notice

Both parties request that the Court take judicial notice of several documents.

Plaintiffs request that the Court take judicial notice of the following documents: (1) Defendants’ Motion for a Protective Order dated 5 June 2014; (2) Plaintiffs’ Opposition dated 16 June 2014; (3) Defendants’ Reply dated 21 June 2014; (4) Plaintiffs’ supplemental response to Defendants’ Late Arguments dated 30 June 2014; and (5) the Court’s order of 22 July 2014.

Defendants request that the Court take judicial notice of the following documents: (1) the Case Report from Tamir v. Tamir, San Mateo Superior Court, Case No. FAM0113496 (the “divorce proceeding”); (2) the Case Report from Soncino v. Tamir et al., San Mateo Superior Court, Case No. CIV508495 (the “underlying civil proceeding”); (3) the Complaint filed in the underlying civil proceeding; (4) the Declaration of John H. Feeney in Support of Defendants’ Motion for Protective Order; (5) the Findings and Order After May 15, 2012 Hearing filed in the divorce proceeding; (6) the Judgment entered in the divorce proceeding on 4 February 2012; and (7) Plaintiffs’ Opposition to Defendants’ Special Motion to Strike filed 28 May 2014; (8) the parties’ Stipulation and Order Regarding Protective Order filed on 3 June 2014; (9) Defendants’ Motion for Protective Order dated 5 June 2014; (10) Plaintiffs’ Opposition to the motion for a protective order; (11) Defendants’ Reply in support of their motion for a protective order; (12) the Court’s 26 June 2014 tentative ruling; (13) Plaintiffs’ Response to Defendants’ Late Arguments filed on 30 June 2014; (14) the Reporter’s Transcript from the 10 July 2014 hearing on the motion for a protective order; (15) the Second Stipulation and Order to continue the hearing on Berliner Cohen’s motion to strike until the Court rules on the client file issue, dated 10 July 2014; and (16) the Court’s 22 July 2014 order.

The above listed documents constitute records of the superior court subject to judicial notice under Evidence Code section 452, subdivision (d). (See Stepan v. Garcia (1974) 43 Cal.App.3d 497, 500 [the court may take judicial notice of its own file].) They are also relevant to the matter presently before the Court. (Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301 [information subject to judicial notice must be relevant to the issue at hand].) Accordingly, Plaintiffs’ and Defendants’ respective requests for judicial notice are GRANTED.[1]

II.            Plaintiffs’ Motion for Clarification

Based upon Berliner Cohen’s continued refusal to produce the client files, Plaintiffs seek clarification of the order entered on 22 July 2014. More specifically, Plaintiffs ask the Court to declare that, under the order, Berliner Cohen must produce the files.[2] Berliner Cohen opposes the motion on several grounds, arguing that the motion is procedurally improper, that the order entered on 22 July 2014 did not require the production of the files, and that the files remain subject to the attorney-client privilege because Yoram was represented in his individual capacity and he has not waived the privilege.

               A.           Nature of the Motion

Plaintiffs cite CCP section 1008 as the statutory basis for their motion. Section 1008 governs motions for reconsideration and renewal and is the exclusive statutory mechanism for a party to call upon a court to revisit interim rulings. (See CCP, § 1008, subd. (e); see also Standard Microsystems Corp. v. Winbond Electronics Corp. (2009) 179 Cal.App.4^th 868, 885.)

Berliner Cohen argues that Plaintiffs have not satisfied the requirements to seek relief under CCP section 1008. The law firm is correct. CCP section 1008, subdivision (a), requires motions for reconsideration to be (1) filed within 10 days after service upon the party of written notice of entry of the order for which reconsideration is sought, (2) supported by new or additional facts, circumstances of law, and (3) accompanied by an affidavit detailing the circumstances of the first motion and the respects in which the new motion differs from the first. Berliner Cohen correctly points out that Plaintiffs have not supplied the Court with new or additional facts warranting relief under CCP section 1008.

However, while there is no express statutory authority supporting a motion for clarification, it is well-settled that the trial courts have inherent power to correct and clarify prior orders. (See Bodega Bay Concerned Citizens v. County of Sonoma (2005) 125 Cal.App.4^th 1061, 1067, fn. 5 (“Bodega Bay”); see also Le Francois v. Goel (2005) 35 Cal.4^th1094, 1107.)

Plaintiffs have presented the Court with facts justifying clarification of order entered on 22 July 2014. Accordingly, the Court will consider the motion under its inherent authority to correct and clarify prior orders. (See Le Francois, supra, 35 Cal.4^th at 1107.)

               B.           The Attorney-Client Privilege Issue

Berliner Cohen asserts that the 22 July 2014 order denying its motion for a protective order did not expressly address (or reject) the law firm’s contention that Yoram’s communications are protected by the attorney-client privilege. The Court disagrees with the contention that it did not reject the argument on that issue. The issue was one of the bases for the protective order, it was fully briefed, and it was addressed at two separate hearings. By denying the motion for a protective order, the Court thought it clear that those arguments were being rejected. With that said, Berliner Cohen is correct that the issue was not fully fleshed out in the 22 July 2014 order. This was due in large part to the parties’ failure to direct the Court to on-point legal authorities. The Court will take the time here to fully flesh out the issue and put this matter to rest.

As Berliner Cohen points out, the Court recognized at the second hearing on this matter that the issue is a “tough” one. Indeed, the United States Supreme Court has recognized that “[t]he administration of the attorney-client privilege in the case of corporations . . . presents special problems.” (Commodity Futures Trading Comm’n. v. Weintraub (1985) 471 U.S. 343, 348.) This is due to the fact that corporations are inanimate entities that cannot speak directly to their lawyers and must do so through agents, which are necessarily actual natural persons. (Id.)

Part of the problem in this case is that the parties have not clearly articulated the issue to be addressed. The Court sees the issue as follows:

In a case where a law firm jointly represents a corporation and one of the corporation’s officers, following termination of the lawyer-client relationship between the law firm and the corporation, can the firm refuse to provide the corporate client with the entity’s client file based upon the assertion that the file contains privileged communications of the individual officer that relate to the firm’s representation of the person in his or her individual capacity?

Admittedly, this is not a simple question, and it does not appear that there are any California cases addressing the issue. However, having now reviewed this issue for a third time, the Court has found that there are several federal cases that directly address the issue.[3]

The question appears to arise in the federal courts most often in the bankruptcy context. For example, in In re Bevill, Bresler & Schulman Asset Mgmt. Corp. (3d Cir. 1986) 805 F.2d 120 (“Bevill”), a corporation filed for bankruptcy and a trustee was appointed by the federal bankruptcy court. Under federal law, in Chapter 7 bankruptcy proceedings, the trustee is able to waive the attorney-client privilege as to pre-bankruptcy communications between the debtor corporation and its counsel. (See Weintraub, supra, 471 U.S. at pp. 353-354.)  Based upon the waiver rule, the trustee moved for an order directing the corporation’s attorney to testify. The attorney refused, asserting that he had represented not only the corporation, but also individuals within the corporation in their individual capacity, and the testimony sought by the trustee implicated privileged communications made by the individuals. (Bevill, supra, 805 F.2d 120, 124.) In other words, the individuals contended that, “because their personal legal problems were inextricably intertwined with those of the corporation, disclosure of discussions of corporate matters would eviscerate their personal privileges.” (Id.)

The federal trial court ordered the attorney to respond and the attorney filed an appeal. On appeal, the United States Court of Appeals for the Third Circuit began with the well-settled rule that “any privilege that exists as to a corporate officer’s role and functions within a corporation belongs to the corporation, not the officer.” (Id., at p. 124.) Thus, “[a] corporate official [] may not prevent a corporation from waiving its privilege arising from discussions with corporate counsel about corporate matters.” (Id., at p. 125.) This is consistent with California law. ( McDermott, Will & Emery v. Superior Court (2000) 83 Cal.App.4^th 378, 383 [“It is the corporation, and not the shareholder, who is the holder of the privilege.”].) The general rule, however, did not resolve the issue because the attorney claimed that the communications did not concern corporate matters.

Addressing this complication, the Third Circuit held that, when an individual corporate officer seeks to assert a personal claim of attorney-client privilege, he or she must affirmatively show five factors:

“First, they must show they approached counsel for the purpose of seeking legal advice. Second, they must demonstrate that when they approached counsel they made it clear that they were seeking legal advice in their individual rather than in their representative capacities. Third, they must demonstrate that the counsel saw fit to communicate with them in their individual capacities, knowing that a possible conflict could arise. Fourth, they must prove that their conversations with counsel were confidential. And fifth, they must show that the substance of their conversations with counsel did not concern matters within the company or the general affairs of the company. “  (Id., at pp. 123, brackets omitted and emphases added.)

Because the individual corporate officers failed to establish each of the above facts, the Third Circuit affirmed the decision of the trial court.

The five-factor test articulated in Bevill is consistent with the rule in California that the party asserting the privilege bears the burden to establish whatever preliminary facts are essential to the claim. (Clark v. Superior Court (2011) 196 Cal.App.4^th 37, 49.) The rule also has been expressly adopted and applied by the Ninth Circuit Court of Appeals in a case arising in the U.S. District Court for the Central District of California.[4] (United States v. Graf (9^th Cir. 2010) 610 F.3d 1148, 1157.)

Applying the five-factor test in this case, assuming that the communications at issue in the client files are in fact attorney-client communications, neither Berliner Cohen nor Yoram have supplied the Court with information that would satisfy the fifth factor, i.e., that the substance of the communications did not concern matters within the company or the general affairs of the company. While it is true as a general matter that courts cannot delve into the substance of an attorney-client communication to determine whether the communication is in fact privileged, (see Costco Wholesale Corp. v. Superior Court (2009) 47 Cal.4^th 725, 736-738), under the circumstances of this case, such a showing is foundational. If the communications did relate to matters concerning the corporation, then Yoram is not the holder of the privilege and cannot assert the claim in the first instance. (See McDermott, Will & Emery, supra, 83 Cal.App.4^th at p. 383; see also Moeller v. Superior Court (1997) 16 Cal.4^th 1124, 1135 [the ban on reviewing contents of allegedly privileged communications does not preclude the court from conducting hearings to etermine the facts asserted as the basis for the privilege, e.g., whether the communication was intended to be confidential, whether it was made in the course of an attorney-client relationship, etc.].)

The above discussion is admittedly somewhat abstract. The analysis can, however, be put in much simpler terms. Given the facts of this case, if Berliner Cohen billed the Newton Center for the time spent preparing documents that now exist in the Newton Center’s client file, they must be produced. This would include emails sent from Yoram to the law firm as well as oral communications Yoram made to the law firm that were later memorialized and billed to the Newton Center.

Frankly, the Court is at a loss to see how a law firm could bill a corporate client for time spent communicating with a corporate officer and then refuse to disclose the communication to the corporate client based on the assertion that the communication is unrelated to the firm’s representation of the corporate entity. If the communication was not related to the representation of the corporate client it should not have been billed to that entity in the first instance.

Along these lines, Berliner Cohen has made no showing that it ever billed Yoram separately for the firm’s representation of him in his individual capacity. Indeed, the engagement letter expressly states that the parties to the agreement (Yoram, the Newton Center, and Musicart, Inc.) are jointly and severablly liable for expenses incurred by the law firm. In sum, the absence of evidence that Berliner Cohen billed Yoram separately for the work the firm did on his behalf is another reason the files should be produced.

It also should be noted that Berliner Cohen claims that the attorney-client privilege issue is not ripe. In other words, Berliner Cohen argues that Plaintiffs should have to seek relief from the stay of discovery, which was put in place when Defendants filed their special motion to strike, and then serve requests for the production of documents. According to Berliner Cohen, these steps are necessary to properly put the privilege issue before the Court. This argument is not well-taken. The issue was ripe when Berliner Cohen filed its motion for a protective order. At that time, the law firm had the burden to establish the existence and applicability of the attorney-client privilege before the burden shifted to Plaintiffs to refute the assertion. Moreover, Berliner Cohen has executed two stipulations in which it assented to the Court disposing of the client file issue.

For the reasons set forth above, Berliner Cohen failed to establish that the communications sought to be withheld were made in Yoram’s individual capacity as opposed to his capacity as an officer of the Newton Center. In other words, Berliner Cohen failed to demonstrate the applicability of the attorney-client privilege. For that reason, and because the Court inadvertently retained footnote 5 from the tentative ruling in the final order on the motion, the Court will clarify the 22 July 2014 order to indicate that Berliner Cohen is under an ethical obligation to produce (and shall produce within four calendar days after the entry of the present order) the Newton Center’s client file.

               C.           Request for Monetary Sanctions

Plaintiffs request that monetary sanction be imposed against Defendants in the amount of $7,000 pursuant to Government Code section 68608, subdivision (b), which provides authority to award sanctions in cases were a party fails to comply with the Trial Court Delay Reduction Act.

Unlike most of the provisions contained in the Civil Discovery Act that authorize the imposition of sanctions, which are mandatory and require the imposition of sanctions under various circumstances, the imposition of sanctions under Government Code section 68608 is discretionary. (Drum v. Superior Court (2006) 139 Cal.App.4^th 845, 853.)

Plaintiffs are not entitled to sanctions. As the Court has indicated on multiple occasions, the attorney-client privilege issues in this case are quite complicated and appear to present a question of first impression in this state. Moreover, while the Court finds Berliner Cohen’s reading of the Court’s 22 July 2014 order somewhat strained, the Court is not convinced that the law firm’s failure to supply the client files was motivated by a desire to violate the Trial Court Delay Reduction Act.

Accordingly, Plaintiffs’ request for monetary sanctions is DENIED.

Conclusion and Order

Plaintiffs’ request for judicial notice is GRANTED.

Defendants’ request for judicial notice is GRANTED.

Plaintiffs’ motion for clarification is GRANTED, and the Court’s Order entered on 22 July 2014 shall be modified and clarified as follows. First, footnote 5 appearing on the final page of the order shall be stricken from the order. Second, in recognition of the fact that the parties have stipulated to the Court adjudicating the client file issue, Berliner Cohen shall produce all client files in its possession, including communications to attorneys from Yoram, that were generated as a result of the law firm’s representation of the Newton Center. Berliner Cohen shall produce the files within 4 calendar days of the entry of this Order. None of the documents in the client files should be redacted.

Plaintiffs’ request for monetary sanctions is DENIED.

 

 

________________­­­____________ DATED:

_________________________­­­________________________ HON. SOCRATES PETER MANOUKIAN Judge of the Superior Court County of Santa Clara

 

[1] As to the records that the parties request judicial notice of (other than the order entered by this Court on 22 July 2014 and the orders entered by the San Mateo Superior Court), the Court only takes judicial notice of the existence of the documents—not the truth of the facts asserted therein. (See Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882 [holding that courts cannot take judicial notice of hearsay allegations as being true, just because they are part of a court record or file].)

[2] Plaintiffs also seek “further relief” in the form of several declarations from the Court related to the client files, such as a declaration “[t]hat Defendants’ continued failure to provide client files to be in violation of Rule 3-700 of the Professional Rules of Conduct.” (Pl.s’ Mot. for Clarification, at p. 10.) Because the Court is ultimately ordering Berliner Cohen to produce the client files, rulings on the requested declaratory relief is unnecessary.

[3] The Court is cognizant of the fact that, “[u]nlike the federal courts, ‘[t]he courts of this state . . . are not free to create new privileges as a matter of judicial policy and must apply only those which have been created by statute.’” (OXY Resources Cal. LLC v. Superior Court (2004) 115 Cal.App.4^th 874, 888, quoting Dickerson v. Superior Court (1982) 135 Cal.App.3d 93, 99; see also Evid. Code, § 911.) However, as articulated in the main text, there is nothing in the federal law relied upon in this order that is inconsistent with California law governing the attorney-client privilege.

[4] The five-factor Bevill test has also been adopted or cited favorably by six other federal circuit courts. (See Graf, supra, 610 F.3d at p. 1160 [noting that the Bevill test has been adopted in the First, Second, Sixth, and Tenth Circuits, and cited with approval in the D.C. and Fourth Circuits].)