SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

MERIDIAN FINANCIAL SERVICES, INC., ET AL.,

Plaintiffs,

vs.

LANANH PHAN, AKA LAN ANH PHAN, ET AL,

Defendants.
Case No. 2013-1-CV-254980

TENTATIVE RULING RE: MOTIONS FOR SUMMARY JUDGMENT/ADJUDICATION; MOTION TO SEAL

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on December 14, 2018, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION

According to the allegations of the Third Amended Complaint (“TAC”), filed on July 24, 2015, this case arises out of a fraudulent investment scheme. The TAC sets forth the following causes of action: (1) Breach of Contract; (2) Fraud; (3) Fraud in the Inducement; (4) Negligent Misrepresentation; (5) Violation of Unfair Business Practices Act; (6) Escrow Negligence; (7) Negligent Supervision; (8) Breach of Fiduciary Duty; (9) Breach of Written Contract; (10) Violation of Uniform Fraudulent Transfers Act; and (11) Aiding and Abetting in the Commission of a Tort.

There are now three motions before the Court: (1) Defendant Chicago Title Company’s (“Chicago Title”) Motion for Summary Judgment or, Alternatively, Motion for Summary Adjudication of Issues; (2) Defendants Monica Bui, Jodie Nguyen, Diana Tran, and Jeannie Vuong’s (collectively, the “Individual Defendants”) Motion for Summary Judgment or, Alternatively, Summary Adjudication; and (3) Defendants Jodie Nguyen, Diana Tran, and Jeannie Vuong’s Motion to Seal.

II. OBJECTIONS TO EVIDENCE

Code of Civil Procedure section 437c, subdivision (q), states:

In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion. Objections to evidence that are not ruled on for purposes of the motion shall be preserved for appellate review.

Accordingly, the Court will not rule on objections that are not deemed material to the disposition of the motions. To the extent any objections are material, they will be addressed in the Court’s discussion where appropriate.

III. REQUESTS FOR JUDICIAL NOTICE

A. Chicago Title’s Requests

Chicago Title initially requested the Court take judicial notice of the following:

1. Statement of Decision dated April 19, 2017 (“Orange County Statement of Decision and Judgment”), entered in the case of Vincent Chi Le, et al. v. Hai Dinh, et al., case no. 2013-00681756 in Orange County (the “Orange County action”);

2. The verified Cross-Complaint filed by Dany Nguyen, Tran Nguyen, John Vo, Lethu Nguyen, Michelle Bui, and Lee Bui in the Orange County action;

3. The Third Amended Complaint in this action;

4. The Stipulation and Order to Vacate the Judgment in the Orange County action; and

5. The Complaint for Declaratory and Injunctive Relief, and for Money Damages in the Orange County action.

The Court can take judicial notice of these documents as court records. The request for judicial notice is GRANTED.

In connection with the reply papers, Chicago Title made a supplemental request for judicial notice of the Orange County Superior Court’s Register of Actions for the Orange County Action. The supplemental request for judicial notice is essentially an attempt to introduce new evidence on reply. Generally, this is improper because of considerations of due process. (See Nazir v. United Airlines, Inc. (2009) 178 Cal. App. 4th 243, 252.) Accordingly, Chicago Title’s supplemental request for judicial notice is DENIED.

B. The Individual Defendants’ Requests

The Individual Defendants request judicial notice of the following:

1. Complaint, dated October 22, 2013, in Meridian Financial Services, Inc. v. Lananh Phan, et al., in the Santa Clara County Superior Court, Case No. 1-13-CV-254980;

2. Third Amended Complaint, dated October 22, 2013, in Meridian Financial Services, Inc. v. Lananh Phan, et al., in the Santa Clara County Superior Court, Case No. 1-13-CV-254980

3. First Amended Consolidated Felony Complaint against Lananh Thi Phan, Diane Do Bui, and Hai Dinh Nguyen, filed on November 19, 2015, in Santa Clara County Superior Court, Docket No. 148396 (Main Docket) and Docket No. 1524586;

4. Minute Order, dated March 30, 2016, in the matter of People v. Diane Do Bui, in the Santa Clara County Superior Court, Case No. C1489386; and

5. Minute Order, dated August 15, 2016, in the matter of People v. Lananh Thi Phan, in the Santa Clara County Superior Court, Case No. C1489386.

The Court can take judicial notice of these documents as court records. (Evid. Code, § 452, subd. (d).) Accordingly, the request for judicial notice is GRANTED.

IV. FACTS

Plaintiff Mark Yazdani (“Yazdani”) is a licensed real estate broker with a Ph.D. in economics from Stanford University and is the 100% owner of plaintiff Meridian Financial Services, Inc. (Defendant Chicago Title Company’s Separate Statement of Undisputed Material Facts Filed in Support of Motion for Summary Judgment or, Alternatively, Motion for Summary Adjudication of Issues (“Chicago UMF”), No. 1.) Defendant Diane Do was an escrow officer who was employed by Chicago Title from 2009 until February 7, 2013, when her employment was terminated. (Chicago UMF, No. 3.) Chicago Title is an escrow company. (Chicago UMF, No. 4.) Defendant Lananh Phan is a loan broker and friend of Do’s. (Chicago UMF, No. 9.)

Sometime between 2008 and 2010, Phan solicited Do to participate in an investment. (Chicago UMF, No. 10.) In March 2012, Do invited Yazdani to invest with Phan. (Chicago UMF, No. 12.) When Yazdani inquired about the nature of the investment, he was told it consisted of purchasing gold in one country and selling it at a higher price in another country. (Chicago UMF, No. 14.) Phan stated she made a return of 12%-15% per month and could pay her investors 5%-6% per month. (Chicago UMF, No. 14.) Phan told Yazdani the mechanics of the investment had to be kept secret because no one else knew how to conduct the transaction and if she told Yazdani the details, he could do the transaction himself and compete against her. (Chicago UMF, No. 15.)

Prior to making any investments, on March 24, 2012, Yazdani instructed Do to delete all of his emails from her Chicago Title email account and advised her to use a private email address for all of their future communications. (Chicago UMF, No. 17.) Yazdani ultimately agreed to invest $500,000. (Chicago UMF, No. 18.) As security for the investment, Phan offered a $500,000 promissory note secured by a deed of trust on her personal residence. (Chicago UMF, No. 19.) Prior to investing, Yazdani did not conduct any due diligence to determine the legality or legitimacy of the investment. (Chicago UMF, No. 20.)

Between April 2012 and December 12, 2012, Plaintiffs made approximately fifteen additional investments with Phan totaling approximately $3 million. (Chicago UMF, No. 25.) As security, Phan and Do gave Yazdani unsecured promissory notes. (Chicago UMF, No. 25.) Between April 2012 and early December 2012, Yazdani received approximately $300,000 in investment returns from Phan. (Chicago UMF, No. 27.)

On December 12, 2012, Phan and/or Do requested that Yazdani invest an additional $900,000 with Phan, which was comprised of a $650,000 investment and a second $250,000 investment. (Chicago UMF, No. 28.) Yazdani requested additional security and Phan offered to secure the investment with five deeds of trust covering multiple parcels of real property that were owned by her various friends and family members. (Chicago UMF, No. 30.) The security was structured as cross-collateralized loans. (Chicago UMF, No. 30.) Yazdani employed non-party PLM Loan Management Services (“PLM”) to document the loans. (Chicago UMF, No. 31.) In providing information about the transactions regarding these deeds of trust, Yazdani represented to PLM that the mailing address for all of the borrowers was Phan’s residential address. (Chicago UMF, No. 32.) Yazdani also represented to PLM that the email address for all of the borrowers was yazdani@aol.com, which is his email address. (Chicago UMF, No. 33.)

In connection with these loans: (1) none of the purported borrowers submitted any loan applications; (2) Yazdani never communicated with any of the purported borrowers; (3) Yazdani never sent any of the required truth-in-lending documents to any of the purported borrowers; and (4) none of the purported borrowers received any of the allegedly loaned funds. (Chicago UMF, No. 34.) Yazdani executed Lender’s Escrow Instructions whereby he falsely represented to Chicago Title he was loaning money to the owners of the real property when, in fact, he was investing money with Phan. (Chicago UMF, No. 36.)

Following an audit of Do’s escrow files, Chicago Title discovered Do had violated Chicago Title’s policies. (Chicago UMF, Nos. 49-50.) On February 7, 2012, Do was forced to resign and Chicago Title referred the matter to the Santa Clara District Attorney, the Internal Revenue Service, and the California Secretary of State for further investigation. (Chicago UMF, No. 51.) Do told Yazdani her employment had been terminated, the signatures on the loan documents were forged by Phan, and Do had notarized signatures without the borrowers being present, but Yazdani continued to make investments with Phan. (Chicago UMF, No. 52.) Subsequently, Phan’s investment collapsed and she has failed to return Plaintiffs’ investment principal or the promised returns. (Chicago UMF, No. 53.) Phan and Do were charged with, and pleaded guilty to, various crimes.

In September 2013, despite being told the borrowers’ signatures on the loans were forged, Yazdani began foreclosure proceedings against the properties securing those loans. (Chicago UMF, No. 54.) Two of the purported borrowers filed suit against Yazdani and Meridian Financial Services in an action entitled Vincent Chi Le, et al. v. Hai Dinh Nguyen, et al., Orange County Superior Court case no. 30-2013-00681756. (Chicago UMF, No. 55.)

On April 4, 2017, the Orange County action went to trial and on April 19, 2017, Judge David T. McEachen issued a Statement of Decision that found Yazdani and Meridian acted with unclean hands. (Chicago UMF, No. 56.) After judgment was entered in the Orange County action, Yazdani reached a settlement with the plaintiffs in that case and, as part of the settlement, the parties stipulated to have portions of the Statement of Decision and Judgment vacated. (Chicago UMF, No. 57.)

V. CHICAGO TITLE’S MOTION

Chicago Title moves for summary judgment and, in the alternative, for summary adjudication, of all causes of action alleged against it (the second, third, fourth, and fifth causes of action), in addition to the request for punitive damages. Chicago Title argues plaintiffs Meridian Financial Services, Inc. and Mark Yazdani (“Plaintiffs”) are subject to an unclean hands defense, which is an absolute defense to all causes of action. Chicago Title also argues the wrongful conduct of Diane Do, an employee of Chicago Title, occurred outside the course and scope of her employment. Lastly, Chicago Title contends it cannot be held liable for punitive damages.

A. Collateral Estoppel

Chicago Title argues that the finding in the Orange County Statement of Decision and Judgment in the Orange County action that Plaintiffs acted with unclean hands has collateral estoppel effect in this action.

Collateral estoppel is a well-known defense under California law. As one case has stated:

Collateral estoppel is a distinct aspect of res judicata. The doctrine of res judicata gives conclusive effect to a former judgment in subsequent litigation between the same parties involving the same cause of action. A prior judgment for the plaintiff results in a merger and supersedes the new action by a right of action on the judgment. A prior judgment for the defendant on the same cause of action is a complete bar to the new action. Collateral estoppel involves a second action between the same parties on a different cause of action. The first action is not a complete merger or bar, but operates as an estoppel or conclusive adjudication as to such issues in the second action which were actually litigated and determined in the first action.

(Murray v. Alaska Airlines, Inc. (2010) 50 Cal.4th 860, 866-867, internal quotation marks, ellipses, and citations omitted.) The elements for collateral estopped are:

First, the issue sought to be precluded from relitigation must be identical to that decided in a former proceeding. Second, this issue must have been actually litigated in the former proceeding. Third, it must have been necessarily decided in the former proceeding. Fourth, the decision in the former proceeding must be final and on the merits. Finally, the party against whom preclusion is sought must be the same as, or in privity with, the party to the former proceeding.

(Hernandez v. City of Pomona (2009) 46 Cal.4th 501, 511.) The focus of a court’s inquiry regarding the doctrine of collateral estoppel and its corollary principle of judicial exhaustion should be on whether a party against whom issue preclusion is being sought had an adequate opportunity to litigate the factual finding or issue in the prior administrative proceeding. (Murray v. Alaska Airlines, Inc., supra, 50 Cal.4th at p. 869.)

i. Identical Issue

“The ‘identical issue’ requirement addresses whether ‘identical factual allegations’ are at stake in the two proceedings, not whether the ultimate issues or dispositions are the same.” (Hernandez v. City of Pomona, supra, 46 Cal.4th at pp. 511-512.) Chicago Title presents evidence the Orange County action concerned loans made as part of the overall scheme perpetrated by Phan and Do. (Chicago UMF, Nos. 54-56.) Yazdani began foreclosure proceedings against the properties securing those loans and two of the purported borrowers filed suit against Yazdani and Meridian Financial Services to clear title to their property because of forged deeds. (Chicago UMF, Nos. 54-55; Orange County Statement of Decision and Judgment, p. 14:4.) The facts giving rise to the Orange County action are the same facts underlying this case. (Compare Orange County Statement of Decision and Judgment with Third Amended Complaint.) This is essentially undisputed by Plaintiffs. Therefore, the identical issue requirement is met.

ii. Issue Actually Litigated

Generally, the focus of a collateral estoppel inquiry is “on whether the party against whom issue preclusion is being sought had ‘an adequate opportunity to litigate’ the factual finding or issue in the prior [] proceeding.” (Murray v. Alaska Airlines, Inc. (2010) 50 Cal.4th 860, 869.) In other words, it is “the opportunity to litigate that is important in these cases, not whether the litigant availed himself or herself of the opportunity.” (Ibid., italics in original, quoting Rymer v. Hagler (1989) 211 Cal.App.3d 1171, 1179.)

The issue of unclean hands was addressed in the Orange County Statement of Decision and Judgment. (Orange County Statement of Decision and Judgment, pp. 12:3-13:4.) Plaintiffs were parties to the Orange County action and had the opportunity to litigate the issues before the court. Plaintiffs do not dispute this. Plaintiffs argue, however, that the question of unclean hands was not properly before the Orange County court because unclean hands is an affirmative defense and therefore can only be used against a plaintiff. Plaintiffs in this case were defendants in the Orange County action.

Plaintiffs are correct that generally the doctrine of unclean hands has no application against a defendant. (See Omnibus Inv. Corp. v. Maag (1961) 188 Cal.App.2d 29, 32.) However, Judge McEachen directly addressed this point in the Orange County Statement of Decision and Judgment. He stated:

Meridian/Yazdani’s unclean hands also mandate this remedy. Though unclean hands is an affirmative defense, in this case the suit is seeking to bar the affirmative claim of Meridian seeking to foreclose on the Tara property. Thus, though Plaintiffs initiated this suit and there is no cross-complaint, the suit was precipitated by a notice of default seeking to foreclose on the Tara property. Thus plaintiffs are in fact in the defensive posture. They can assert unclean hands to bar the foreclosure initiated by Meridian.

(Orange County Statement of Decision and Judgment, p. 12:3-9.)

The Orange County court specifically found unclean hands could be asserted notwithstanding Meridian and Yazdani’s status as defendants. “It is the general rule that a final judgment or order is res judicata even though contrary to statute where the court has jurisdiction in the fundamental sense, i.e., of the subject matter and the parties.” (Pacific Mut. Life Ins. Co. of Cal. v. McConnell (1955) 44 Cal.2d 715, 725.) Under most circumstances, a final judgment or order “should be challenged directly, for example by motion to vacate the judgment, or on appeal, and [is] generally not subject to collateral attack once the judgment is final. . . .” (People v. American Contractors Indemnity Co. (2004) 33 Cal.4th 653, 661.)

If Plaintiffs believed the Orange County court’s finding was an error and there was some deficiency in the Orange County Statement of Decision and Judgment, Plaintiffs could have waited for a ruling on the motion to set aside the Judgment. Instead, Plaintiffs sought to eliminate harmful portions of the Judgment through a settlement. Consequently, there has never been a finding of any defect in Judge McEachen’s original Statement of Decision and Judgment and it is therefore binding for purposes of collateral estoppel.

iii. Issue Necessarily Decided

Plaintiffs contend the issue of unclean hands was not “necessarily decided” in the Orange County action because a finding of unclean hands was not necessary to determine that the deeds of trust were not enforceable. Plaintiffs state the Orange County court found the deeds of trust were not enforceable because they were not signed by the Orange County plaintiffs.

“The courts have previously required only that the issue not have been “entirely unnecessary” to the judgment in the initial proceeding.” (Lucido v. Superior Court (1990) 51 Cal.3d 335, 342.) Moreover, “‘[a]n alternative ground upon which a decision is based should be regarded as ‘necessary’ for purposes of determining whether the plaintiff is precluded by the principles of res judicata or collateral estoppel from relitigating in a subsequent lawsuit any of those alternative grounds.’” (Wall v. Donovan (1980) 113 Cal.App.3d 122, 126, quoting Winters v. Lavine (2d Cir. 1978) 574 F.2d 46, 67.)

The Orange County court specifically held unclean hands was a basis for the decision and that it mandated the remedy of cancellation of the deeds of trust. (Orange County Statement of Decision and Judgment, p. 12:3.) Therefore, it must be considered “necessary” to the decision.

iv. Final Decision on the Merits

Whether the Orange County Statement of Decision and Judgment was a final decision on the merits is the element of collateral estoppel most hotly contested by Plaintiffs. Following the issuance of the Orange County Statement of Decision and Judgment, Plaintiffs filed a motion to vacate judgment that was set for June 23, 2017. (See Defendant Chicago Title Company’s Request for Judicial Notice filed in Support of its Motion for Summary Judgment or, Alternatively, Motion for Summary Adjudication of Issues, Ex. L (“Stipulation for Order Vacating Portions of Statement of Decision and Judgment”).) Before the motion was heard, the parties reached a settlement and, as part of the settlement, the parties stipulated to have portions of the Orange County Statement of Decision and Judgment vacated. (Chicago UMF, No. 57; Stipulation for Order Vacating Portions of Statement of Decision and Judgment.)

Plaintiffs argue the Orange County Statement of Decision and Judgment was not a final decision on the merits, but rather a tentative decision. Plaintiffs state California procedure requires a judge to issue a tentative decision before issuing a statement of decision. In making this argument, Plaintiffs rely on In re Marriage of Hafferkamp (1998) 61 Cal.App.4th 789. In that case, the court found an unsigned minute order to which an unsigned three-page “decision” was attached did not constitute a judgment because, “[a]mong other things, it was not entitled ‘judgment’ and it was not signed by the court.” (Id. at pp. 791-793.) The court found the document was therefore a tentative decision. (Id. at pp. 793-794.)

In contrast, the Orange County Statement of Decision and Judgment was titled “Statement of Decision and Judgment” and it was signed by the judge. (Orange County Statement of Decision and Judgment.) Further, the stipulation of the parties in the Orange County action stated that, aside from the portion of the Orange County Statement of Decision and Judgment that would be vacated, “[t]he remainder of the Statement of Decision and Judgment shall remain in full force and effect.” (Stipulation for Order Vacating Portions of Statement of Decision and Judgment, p. 2:21-22.) This was an acknowledgment that the Orange County Statement of Decision and Judgment was, in fact, a final judgment.

As discussed previously, if Plaintiffs believed there was some deficiency in the Orange County Statement of Decision and Judgment entered in the Orange County action, procedural or otherwise, Plaintiffs could have waited for a ruling on the motion to vacate the Judgment. Instead, Plaintiffs sought to eliminate harmful portions of the Judgment through a settlement. There has never been a finding of any defect in Judge McEachen’s original Statement of Decision and Judgment and Plaintiffs cannot now collaterally attack the Orange County Statement of Decision and Judgment.
It is true that the stipulation of the parties in the Orange County action vacated portions of the original Orange County Statement of Decision and Judgment. However, stipulating to remove language from an adverse judgment does not allow a party to escape the collateral estoppel effect of the adverse ruling. (See Stonewall Ins. Co. v. City of Palos Verdes Estates (1996) 46 Cal.App.4th 1810, 1840 [After a judgment is entered against a party, and pending appeal the case is settled with a stipulation that the judgment be vacated and the appeal is thereupon abandoned, collateral estoppel precludes the party’s denial that it was liable under the judgment.].) Therefore, Plaintiffs are bound by the original Orange County Statement of Decision and Judgment for collateral estoppel purposes.

This comports with the “public policies underlying collateral estoppel – preservation of the integrity of the judicial system, promotion of judicial economy, and protection of litigants from harassment by vexatious litigation.” (Lucido v. Superior Court, supra, 51 Cal.3d at p. 343.) The issue of unclean hands was already litigated in the Orange County action and, following a trial on the merits, a Statement of Decision was issued and a Judgment was entered. Allowing the same issue to be relitigated in this action neither preserves the integrity of the judicial system nor promotes judicial economy.

In sum, the Court finds there was a final decision on the merits in the Orange County action for collateral estoppel purposes.

v. Party to the Former Proceeding

There is no dispute that Plaintiffs were parties to the Orange County action.

vi. Conclusion

All of the elements of collateral estoppel have been met with regard to the application of the unclean hands doctrine.

B. Application of Unclean Hands Doctrine

The unclean hands doctrine “demands that a plaintiff act fairly in the matter for which he seeks a remedy. He must come into court with clean hands, and keep them clean, or he will be denied relief, regardless of the merits of his claim.” (Kendall-Jackson Winery, Ltd. v. Superior Court (1999) 76 Cal.App.4th 970, 978.) “Unclean hands applies when it would be inequitable to provide the plaintiff any relief, and provides a complete defense to both legal and equitable causes of action.” (Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 56.)

Plaintiffs argue the finding of unclean hands in the Orange County action was not directly related to this case, so it should not be applied. Plaintiffs cite to Kendall-Jackson, supra, where the court stated: “The doctrine of unclean hands does not deny relief to a plaintiff guilty of any past misconduct; only misconduct directly related to the matter in which he seeks relief triggers the defense.” (76 Cal.App.4th at p. 974.) For the unclean hands doctrine to apply, however, it only needs to relate directly to the transaction concerning which the complaint is made, i.e., to the “subject matter involved.” (Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133 Cal.App.4th 658, 681, citations omitted.)

Plaintiffs assert the purported unclean hands in the Orange County action related to Meridian’s procuring the trust deed and other loan documents. While the specific issue resolved between the parties in the Orange County action involved the trust deeds, the conduct underlying the Orange County court’s unclean hands finding relied on essentially the same evidence presented in this case. The court there stated:

Meridian took affirmative steps to prevent Plaintiffs from having notice of the purported loans/trust deeds. Rather than having the loan documents sent to the borrowers, Meridian had the documents sent to Yazdani. Yazdani had the mailing address and principal resident of the Plaintiffs and the other purported borrowers listed as Phan’s home even though he knew the house did not hold eight couples and with knowledge from Phan that the purported borrowers lived in Southern California.

(Orange County Statement of Decision and Judgment, p. 12:15-23.)

The evidence in this action also involves representations regarding the mailing addresses and email addresses for the borrowers. (Chicago UMF, Nos. 32-33.) Moreover, both the Orange County action and this action directly relate to the fraudulent scheme perpetrated by Phan and Do. The two cases relate directly to the same transaction. This is sufficient for the unclean hands doctrine to apply.

C. Conclusion

As discussed, all of the elements of collateral estoppel have been met with regard to the application of the unclean hands doctrine. Therefore, it must be applied here to preclude any recovery by Plaintiffs. Accordingly, Chicago Title’s motion for summary judgment is GRANTED.

VI. THE INDIVIDUAL DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT/ADJUDICATION

The Individual Defendants move for summary judgment. Only the tenth cause of action is alleged against them. The Individual Defendants argue Plaintiffs’ action under the Uniform Fraudulent Transfers Act (“UFTA”), which seeks to disgorge any remaining assets in the Ponzi scheme to recoup their own alleged losses, is contrary to the established purpose of the UFTA and securities laws in Ponzi scheme cases, which is to provide equal distribution of any remaining assets among all the defrauded investors. The Individual Defendants also argue Plaintiffs’ unclean hands, established by the judgment in the Orange County action, and also by the facts here, bars Plaintiffs’ UFTA claim.

While a different cause of action is at issue in the Individual Defendants’ motion, the arguments and the evidence related to the collateral estoppel effect of the unclean hands ruling in the Orange County case are basically the same. The Individual Defendants provide evidence regarding the existence of the Orange County case and the court’s ruling in that case as it pertains to unclean hands. (Separate Statement of Undisputed Material Facts in Support of Joint Motion for Summary Judgment, or Alternatively, Summary Adjudication of Defendants Monica Bui, Jodie Nguyen, Diana Tran and Jeannie Vuong, Nos. 61-64.)

For the reasons set forth above, the Court finds all of the elements of collateral estoppel have been met with regard to the application of the unclean hands doctrine to the claims alleged against Chicago Title. There is no basis to reach a different conclusion regarding the collateral estoppel effect of the Orange County Statement of Decision and Judgment as it relates to the Individual Defendants. Accordingly, the unclean hands doctrine must be applied here to preclude any recovery by Plaintiffs. The Individual Defendants’ motion for summary judgment is GRANTED.

VII. MOTION TO SEAL

The Individual Defendants move to seal Exhibits 9, 10, and 11 to the Consolidated Declaration of Kenneth R. Van Vleck in Support of Plaintiffs’ Opposition to (1) Defendant Chicago Title Company’s Motion for Summary Judgment or, Alternatively Motion for Summary Adjudication of Issues, and (2) Defendants’ Monica Bui, Jodi Nguyen, Dian Tran and Jeannie Vuong’s Motion for Summary Judgment or in the Alternative Summary Adjudication.

A. Legal Standard

“Unless confidentiality is required by law, court records are presumed to be open.” (Cal. Rules of Court, rule 2.550(c).) “A record must not be filed under seal without a court order. The court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.” (Cal. Rules of Court, rule 2.551(a).) The court may order that a record be filed under seal only if it expressly finds facts that establish:

1. There exists an overriding interest that overcomes the right of public access to the record;

2. The overriding interest supports sealing the record;

3. A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed;

4. The proposed sealing is narrowly tailored; and

5. No less restrictive means exist to achieve the overriding interest.

(Cal. Rules of Court, rule 2.550(d).)

A party moving to seal a record must file a memorandum and a declaration containing facts sufficient to justify the sealing. (Cal. Rules of Court, rule 2.551(b)(1).) A declaration supporting a motion to seal should be specific, not conclusory, as to the facts supporting the overriding interest. If the court finds that the supporting declarations are conclusory or otherwise unpersuasive, it may conclude that the moving party has failed to demonstrate an overriding interest that overcomes the right of public access. (See In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 305.)

Further, where some material within a document warrants sealing but other material does not, the document should be edited or redacted if possible, to accommodate the moving party’s overriding interest and the strong presumption in favor of public access. (See Cal. Rules of Court, rule 2.550(e)(1)(B); see also In re Providian Credit Card Cases, supra, 96 Cal.App.4th at p. 309.) In such a case, the moving party should take a line-by-line approach to the information in the document, rather than framing the issue to the court on an all-or-nothing basis. (In re Providian Credit Card Cases, supra, 96 Cal.App.4th at p. 309.)

B. Discussion

The Individual Defendants state Exhibits 9, 10, and 11 contain private financial information pertaining to Jodie Nguyen, Diana Tran, and Jeannie Vuong. (Declaration of Brandon Rose in Support of Motion to Seal, ¶ 6.) “[T]he right of privacy extends to one’s confidential financial affairs as well as to the details of one’s personal life.” (Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652, 656.) Plaintiff has sufficiently supported the motion to seal. Although the documents have already been placed in the public record by Plaintiffs, Plaintiffs did so without first lodging the documents conditionally under seal as required by the Stipulated Confidentiality Order in this case. The Court finds the documents should be removed from the public record. The motion to seal is GRANTED.

The Court will prepare the final order if this tentative ruling is not contested.

NOTICE: The Court does not provide court reporters for proceedings in the complex civil litigation departments. Parties may arrange for a private court reporter to provide services, but those arrangements must be consistent with the local rules and policies posted on the Court’s website.