Case Number: BC532786 Hearing Date: June 06, 2018 Dept: 61

Plaintiff and Cross-Defendant Orange Grove Services, Inc.’s Motion to Destroy a Privileged Email and Prohibit Its Use is GRANTED.

MOTION TO DESTROY AND PRECLUDE USE OF PRIVILEGE MATERIALS

When a lawyer who receives materials that obviously appear to be subject to an attorney-client privilege or otherwise clearly appear to be confidential and privileged and where it is reasonably apparent that the materials were provided or made available through inadvertence, the lawyer receiving such materials should refrain from examining the materials any more than is essential to ascertain if the materials are privileged, and shall immediately notify the sender that he or she possesses material that appears to be privileged. The parties may then proceed to resolve the situation by agreement or may resort to the court for guidance with the benefit of protective orders and other judicial intervention as may be justified.

(State Compensation Ins. Fund v. WPS, Inc. (1999) 70 Cal.App.4th 644, 656–57.)

The privileged communication involved here is an email chain between OGSI and its attorney Alex Gareeb, attached as an exhibit to Kaladjian’s SAXC and Bates-stamped FL000222–223. (Motion at p. 1; SAXC Exh. E.) This email was produced to Defendants and Cross-Complainants on August 18, 2016, as part of Plaintiffs’ discovery responses. (Lesowitz Decl. ¶ 2.) There is no dispute that the communication was within the attorney-client privilege, at least when initially made. (See Evid. Code § 954 [privilege applies to “a confidential communication between client and lawyer”].)

“A trial court called upon to determine whether inadvertent disclosure of privileged information constitutes waiver of the privilege must examine both the subjective intent of the holder of the privilege and the relevant surrounding circumstances for any manifestation of the holder’s consent to disclose the information.” (State Compensation Ins. Fund, supra, 70 Cal.App.4th at pp. 652–53.) Here, Arturo Flores, the President of OGSI, has declared that he had no intention of disclosing any privileged materials. (Flores Decl. ¶ 2.) OGSI’s counsel has stated that the production of the document was inadvertently included in discovery responses. (Lesowitz Decl. ¶ 3.) The court thus concludes that the production of the email chain was inadvertent.

Brown argues that OGSI waived the privilege by failing to timely object to the disclosure or use of the communication, even after it was attached as an exhibit to Kaladjian’s cross-complaint and other documents. (Brown Opposition at pp. 4–5.)

A holder of the privilege may waive the privilege “by manifesting through words or conduct consent that the communication may be disclosed by another.” (State Compensation Ins. Fund, supra, 70 Cal.App.4th at p. 652.) Conduct indicating waiver includes “failure to claim the privilege in any proceeding in which the holder has legal standing and the opportunity to claim the privilege.” (Evid. Code § 912, subd. (a).)

The communication here was produced on August 18, 2016. (Lesowitz Decl. ¶ 2.) Its first use in this case was evidently Kaladjian’s August 31, 2016 Opposition to OGSI’s motion for leave to file its SAC. (Lesowitz Decl. ¶ 5.) In Reply to that Opposition, OGSI included the sentence, “And the cited evidence (which is privileged and should not have been included in the Opposition, and Plaintiffs move to strike it) does not even support his assertion that he was misled.” (9/14/2016 Reply at p. 1.) Kaladjian then filed a Cross-Complaint, which included the privileged email as an exhibit. OGSI filed a Demurrer on March 7, 2017, which included the argument, “Exhibit E is privileged, was produced inadvertently, and should be ignored by the court.” (3/7/2017 Demurrer at p. 7.) When Kaladjian filed a First Amended Cross-Complaint, OGSI reiterated its prior objection in another demurrer. (6/13/2017 Demurrer at p. 7.) It thus appears that OGSI has outwardly objected several times to the use of this email chain.

Brown and Kaladjian argue that, notwithstanding these objections, the privilege was waived by OGSI’s referral to the email chain in its responses to interrogatories. (Brown Opposition at p. 4; Kaldjian Opposition at p. 6.) The relevant interrogatories asked OGSI to identify documents evidencing the agreement with Kaladjian that they claimed had been disrupted by Brown, and the documents supporting their claim that Brown had interefered. (Owen Decl. Exh. B, Responses Nos. 6, 40, 44.) The responses identified documents, including the Bates numbers for the emails at issue, FL000222–223. (Ibid.)

After the party claiming the privilege has satisfied its burden of showing that it applies, the burden shifts to the party challenging the privilege to show that it does not, or has been waived. (See Roman Catholic Archbishop of Los Angeles v. Superior Court (2005) 131 Cal.App.4th 417, 442.) “When determining whether an inadvertent disclosure waived the attorney-client privilege, a trial court must examine both the subjective intent of the privilege holder and any manifestation of the holder’s intent to disclose the information. Other relevant considerations include the precautions the holder took to ensure the privilege was maintained and the promptness with which the holder sought return of the inadvertently disclosed document.” (McDermott Will & Emery LLP v. Superior Court (2017) 10 Cal.App.5th 1083, 1101–02.) The conduct constituting a waiver must demonstrate an “intention to voluntarily relinquish a known right.” (State Compensation Ins. Fund, supra, 70 Cal.App.4th at p. 653.)

The court here finds no intentional relinquishing of a known right. OGSI has consistently objected to the communication’s use in this case. Although the Bates number for the document was cited in OGSI’s interrogatories in March 2017, OGSI renewed its objections in its June 2017 demurrer and at the October hearing for the same. Given the context of the objections surrounding the interrogatories at issue, as well as Flores’s declaration that he has authorized no disclosure of privileged communications in this case, the court finds that Brown and Kaladjian have not met their burden of showing that OGSI voluntarily relinquished its privilege to the documents at issue.

Kaladjian offers several other objections to the motion which are without merit. First, he argues that the privilege was waived when OGSI attached other communications between Gareeb and itself to their Complaint. (Kaladjian Opposition at p. 4.) “[A] plaintiff who exposes any significant part of a communication in making his own case waives the privilege with respect to the communication’s contents bearing on discovery, as well.” (Samuels v. Mix (1999) 22 Cal.4th 1, 20 fn. 5.) However, the communication cited by Kaladjian in OGSI’s complaint is an unrelated communication from Flores to Gareeb, which Gareeb then forwarded to Kaladjian. (Kaladjian Decl. Exh. B.) There is no indication that Gareeb’s decision to relay this communication to Kaladjian was intended to waive the privilege as to all other communications.

Kaladjian also argues that OGSI and Gareeb have implicitly waived the privilege by making otherwise privileged communications an issue in the present dispute. (Kaladjian Opposition at p. 7.) However, the doctrine of implicit waiver generally applies to a plaintiff “where the plaintiff has placed an issue a communication which goes to the heart of the claim in controversy.” (Chicago Title Ins. Co. v. Superior Court (1985) 174 Cal.App.3d 1142, 1149.) Thus a party may implicitly waive their own privilege by asserting a claim necessarily dependent upon proof from a privileged source. (See id. at p. 1149–50 [discussing cases where element of claim asserted by plaintiff effectively required plaintiff to waive privilege].) But Kaladjian does not articulate why it is necessary for OGSI to waive the privilege to assert its own claims, or how Gareeb submitting a declaration in response to a motion for summary judgment on another issue implicates the communication here. Kaladjian rather appears to argue that it is his own claims and defenses, rather than OGSI’s that ought to impliedly waive the privilege of the other party. But a party generally rely on their own necessity to force waiver of another’s privilege. (See Solin v. O’Melveny & Myers, LLP (2001) 89 Cal.App.4th 451, 457 [“The privilege is absolute and disclosure may not be ordered, without regard to relevance, necessity or any particular circumstances peculiar to the case.”], internal alterations omitted.)

Kaladjian also argues that a plaintiff cannot pursue a claim against a former attorney if he will not waive the privilege to allow that attorney to mount a defense. (Opposition at p. 7, citing Solin v. O’Melveny & Myers, LLP (2001) 89 Cal.App.4th 451, 467.) But this rule applies when the privilege asserted is that between the plaintiff-client and the attorney being sued, not that of the plaintiff and other counsel, as here. (Solin, supra, 89 Cal.App.4th at p. 463 [“It strikes us as fundamentally unfair for a client to sue a law firm for the advice obtained and then to seek to forbid the attorney who gave that advice from reciting verbatim, as nearly as memory permits, the words spoken by his accuser during the consultation.”].)

Kaladjian finally argues, briefly, that the privilege ought to be waived by the crime-fraud exception. (Kaladjian Opposition at p. 8.) This exception is codified in Evidence Code § 956, which states that “[t]here is no privilege under this article if the services of the lawyer were sought or obtained to enable or aid anyone to commit or plan to commit a crime or a fraud.”

“To invoke the Evidence Code section 956 exception to the attorney-client privilege, the proponent must make a prima facie showing that the services of the lawyer ‘were sought or obtained’ to enable or to aid anyone to commit or plan to commit a crime or fraud.” (State Farm Fire & Casualty Co. v. Superior Court (1997) 54 Cal.App.4th 625, 644.) This means the presentation of evidence for every element of fraud from which a reasonable inference may be drawn, as in an anti-SLAPP motion. (See BP Alaska Exploration, Inc. v. Superior Court (1988) 199 Cal.App.3d 1240, 1262.) Kaladjian here has not attempted to support the application of the crime-fraud exception with the necessary evidence, but has merely asserted its application. (Opposition at p. 8.) The court therefore has no basis to find it applicable.

The court therefore finds that the document is privileged, that OGSI has not waived the privilege, and that no exception to the privilege applies. The Motion to Destroy a Privileged Email and Prohibit Its Use is therefore GRANTED.