Tentative Ruling

Judge Pauline Maxwell
Department 6 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION
Sheila Gianelli vs Mark Schwartz
Case No: 18CV02660
Hearing Date: Wed Oct 23, 2019 9:30

Nature of Proceedings: Conduct Financial Discovery; Protective Order

Tentative Ruling: 1. The court orders that defendant Eric Woosley, as an individual, is authorized to file an answer to the complaint and he shall do so forthwith. In all other respects, the court denies plaintiff’s motion for discovery of financial information and other relief.

2. The court grants defendant Law Office of Eric A. Woosley’s motion for a protective order and for establishment of deposition procedures and the court orders as follows: At all depositions in this case, only the deponent, the parties, the parties’ counsel of record, and the court reporter and/or videographer shall be present. In no event may Eric Alan Cover be present at any deposition other than his own. For any deposition taken by telephone or other remote electronic means, all parties and their counsel of record shall be present at the same neutral location, such as a court reporter’s office, and only the deponent may appear by telephone or other remote electronic means. If the deponent is represented by counsel, that counsel must state his or her appearance and may appear by telephone or other remote electronic means with the deponent. No other person may appear with the deponent without a specific court order.

Background: On May 5, 2017, plaintiff filed an action in the Superior Court, Contra Costa County, against defendants Mark Schwartz, Eric Woosley, and Don Dennis, Jr., for legal malpractice, breach of fiduciary duty, and fraud. The action arises out of defendants’ representation of plaintiff in her action against The Home Depot in the United States District Court for the Eastern District of California (the “Home Depot case”).

In an order dated January 8, 2018, the Contra Costa Superior Court transferred the action to this county. Defendants Law Office of Eric A. Woosley, a Professional Corporation (erroneously sued as Eric Woosley), Mark Schwartz, and Don Dennis, Jr., answered the complaint. On February 11, 2019, plaintiff dismissed Dennis with prejudice.

On July 5, 2019, the court continued the trial date to December 18, 2019, with all discovery dates to be based on the new trial date. On August 9, 2019, there was a settlement conference. The minute order reflects that there was no agreement, the parties shall continue their efforts to reach a settlement with Deborah A. David at a later date, and the December 18 Trial Confirmation Conference was confirmed. Plaintiff’s motion for summary judgment is scheduled for hearing on November 6.

Motion: Plaintiff seeks orders: 1) authorizing financial discovery of each defendant, 2) directing the clerk’s office to accept the answer of Eric Woosley for filing and adding the Law Offices of Eric Woosley as a defendant, 3) authorizing documents related to plaintiff’s employment with Gallo Winery produced by THD to be filed confidential in this case, 4) to change the nature of the December 18, 2019 hearing form a trial date to a trial confirmation hearing, and 5) terminating mandatory settlement conference proceedings and referral to a private mediator. Defendants jointly oppose the motion.

The motion improperly seeks multiple unrelated orders in a single motion. Plaintiff has not established cause for the primary relief she seeks and the other requests for relief have no merit, except for the matter of one defendant’s answer, which could have been resolved by stipulation.

1. Woosley’s Answer: There is an answer on file for Law Office of Eric A. Woosley but not Eric Woosley, as an individual. Woosley has no objection to the request that his answer be filed. But is it unclear to the court what this means. Plaintiff attaches as Exhibit D to her declaration an answer by Woosley dated November 6, 2018, which was served on her. It is not clear if that was submitted to the court. The court orders that defendant Eric Woosley, as an individual, is authorized to file an answer to the complaint and he shall do so forthwith.

2. “Confidential Documents”: It appears that plaintiff wants unspecified documents attached to her addendum to her declaration in support of her motion for summary judgment/adjudication to be filed under seal.

CRC 2.550(d) reads: “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.”

In her memorandum, plaintiff simply says she had an agreement with her former employer that restricts public disclosure of her employment records and the circumstances of her separation agreement. She does not provide evidence of this agreement and does not mention it in her declaration. Also, plaintiff says there was a stipulated protective order in the U.S. District Court. To her declaration, she only attaches an order granting a “concurrently-filed” stipulation for a protective order. She does not provide a copy of the protective order.

Plaintiff has not identified what documents she wants sealed and has not provided redacted copies of those documents that would replace what she wants sealed. Plaintiff has not presented evidence supporting the factual findings required by CRC 2.550(d). The court denies the request to file documents under seal.

3. Trial Date and Settlement Conference: “Trial confirmation” and “trial date” are one and the same. The December 18, 2019, date is the confirmed date for trial and the court has expressly stated that discovery cutoff and expert witness discovery will be measured from that date. Plaintiff presents no reason to change the status of the December 18 date or to continue it.

On August 9, the court ordered that the parties shall continue their settlement efforts with Deborah A. David at a later date. Plaintiff wants the court to terminate settlement proceedings because “negotiations are not constructive.” Settlement discussions are always useful. The court will not terminate the settlement proceedings. The court orders that the parties shall attend a mandatory settlement conference on November 22, 2019, in Dept. 5, with Deborah A. David or at such other time to be determined at the hearing.

4. Financial Discovery: Plaintiff moves, pursuant to Civil Code § 3295(c), for an order permitting discovery of defendants’ financial information. CCP § 3295 provides, in relevant part:

(a) The court may, for good cause, grant any defendant a protective order requiring the plaintiff to produce evidence of a prima facie case of liability for damages pursuant to Section 3294, prior to the introduction of evidence of:

(1) The profits the defendant has gained by virtue of the wrongful course of conduct of the nature and type shown by the evidence.

(2) The financial condition of the defendant.

* * *

(c) No pretrial discovery by the plaintiff shall be permitted with respect to the evidence referred to in paragraphs (1) and (2) of subdivision (a) unless the court enters an order permitting such discovery pursuant to this subdivision. … Upon motion by the plaintiff supported by appropriate affidavits and after a hearing, if the court deems a hearing to be necessary, the court may at any time enter an order permitting the discovery otherwise prohibited by this subdivision if the court finds, on the basis of the supporting and opposing affidavits presented, that the plaintiff has established that there is a substantial probability that the plaintiff will prevail on the claim pursuant to Section 3294. Such order shall not be considered to be a determination on the merits of the claim or any defense thereto and shall not be given in evidence or referred to at the trial.

“The purpose of this requirement is to protect defendants’ financial privacy and prevent defendants from being pressured into settling nonmeritorious cases in order to avoid disclosure of their financial information.” Kerner v. Superior Court, 206 Cal.App.4th 84, 120 (2012).

Against this backdrop of legislative intent, in which protecting the financial privacy of defendants is paramount, we interpret the language of section 3295(c), requiring the trial court to find based on supporting and opposing affidavits that the plaintiff has established there is a substantial probability he will prevail on his claim for punitive damages, to mean that before a court may enter an order permitting discovery of a defendant’s financial condition, it must (1) weigh the evidence submitted in favor of and in opposition to motion for discovery, and (2) make a finding that it is very likely the plaintiff will prevail on his claim for punitive damages. In this context, we interpret the words “substantial probability” to mean “very likely” or “a strong likelihood” just as their plain meaning suggests.

Jabro v. Superior Court, 95 Cal.App.4th 754, 758 (2002).

Civil Code § 3294(a) provides that a plaintiff may recover punitive damages if he proves by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice. “‘Malice’ means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” Civil Code § 3294(c)(1). “‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” Civil Code § 3294(c)(2). ‘Fraud’ means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” Civil Code § 3294(c)(3).

“Despicable conduct” refers to circumstances that are “base,” “vile,” or “contemptible.” College Hospital v. Superior Court, 8 Cal.4th 704, 725 (1994). Conduct must be “so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people.” American Airlines v. Sheppard, Mullin, Richter & Hampton, 96 Cal.App.4th 1017, 1050 (2002). “The wrongdoer must act with the intent to vex, injure, or annoy, or with a conscious disregard of the plaintiff’s rights. Punitive damages are appropriate if the defendant’s acts are reprehensible, fraudulent or in blatant violation of law or policy. The mere carelessness or ignorance of the defendant does not justify the imposition of punitive damages…. Punitive damages are proper only when the tortious conduct rises to levels of extreme indifference to the plaintiff’s rights, a level which decent citizens should not have to tolerate.” Lackner v. North, 135 Cal.App.4th 1188, 1210 (2006) [internal quotations and citations omitted].

Plaintiff asks the court to consider all the evidence in support of her motion for summary judgment. She specifically cites only four exhibits but does not attach them to her declaration. Plaintiff purports to cure this with her reply, asking the court to take judicial notice of several documents not attached to the request and some that are. “The general rule of motion practice, which applies here, is that new evidence is not permitted with reply papers.” Jay v. Mahaffey, 218 Cal.App.4th 1522, 1537 (2013) (anti-SLAPP motion). Declarations submitted with a reply should not address the substantive issues in the first instance but should only fill gaps in the evidence created by the opposition. Id. at 1538. The inclusion of additional evidentiary matter with the reply “should only be allowed in the exceptional case.” Plenger v. Alza Corp., 11 Cal.App.4th 349, 362 n8 (1992). This is not an exceptional case.

The court will not consider the voluminous documents offered in support of the motion for summary judgment. That would require hours of sifting through the pleadings in support of a motion set for November 9. The court would also need to consider evidentiary objections to all that evidence, which are not even due yet under the rules. The court will not hear the summary judgment motion twice.

The motion fails for lack of evidence. Even considering plaintiff’s arguments, she alleges negligence and breaches of fiduciary duty related to her fee agreements and a fee sharing agreement. What she describes does not indicate a substantial probability plaintiff will prove despicable conduct necessary to prevail on a claim for punitive damages. The court denies plaintiff’s motion for discovery of financial information.

Motion for Protective Order and Order for Procedures for Telephonic Depositions: Defendant Law Office of Eric A. Woosley, APC (Woosley), moves for a protective order prohibiting non-party witnesses from attending depositions of other witnesses and for an order establishing procedures for plaintiff’s intended telephonic depositions, specifically to ensure that other witnesses do not attend those depositions. Plaintiff opposes the motion.

Plaintiff’s procedural objections to the manner in which the hearing was scheduled on shortened notice have been dealt with at the ex parte hearing. The court overrules the procedural objections.

The motion arises out of Eric Alan Cover’s participation in plaintiff’s deposition on September 23 and 24. Cover is a former attorney, who was disbarred in 2006. Plaintiff testified that she married Cover on September 21, two days before the deposition commenced. He ostensibly attended her deposition to represent himself and assert the marital privilege. Plaintiff and Cover have cohabited since October 2013. People v. Cover, 2017 WL 2952899, at *2 (Cal. Ct. App. July 11, 2017). Woosley’s counsel says that Cover was disruptive at plaintiff’s deposition, asserted an “asked and answered” objection, and appeared to be coaching plaintiff. Objections were asserted under Evid. Code §§ 970, 971, and 980. Plaintiff says she testified for 13 hours without assistance.

Woosley insists that Cover will be a witness and the marriage is an effort to avoid his testimony in the case as it was known Woosley’s counsel had been trying to serve Cover with a deposition subpoena prior to the marriage. The court is in no position to rule on the merits of the marital privilege at this time. Woosley concedes he is not asking for such a ruling at this time. (He indicates that will be the subject of a separate motion.)

A party may move for a protective order before, during, or after a deposition. CCP § 2025.420(a). “The court, for good cause shown, may make any order that justice requires to protect any party, deponent, or other natural person or organization from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.” CCP § 2025.420(b). A protective order may provide that the deposition “be taken only on certain specified terms and conditions” and may provide that “designated persons, other than the parties to the action and their officers and counsel, be excluded from attending the deposition.” CCP § 2025.420(b)(5), (12).

CCP § 2025.310 provides, in relevant part:

(a) A person may take, and any person other than the deponent may attend, a deposition by telephone or other remote electronic means.

(b) The court may expressly provide that a nonparty deponent may appear at the deposition by telephone if it finds there is good cause and no prejudice to any party. …

(c) The procedures to implement this section shall be established by court order in the specific action or proceeding or by the California Rules of Court.

The parties have not informed the court what depositions remain to be taken, other than the deposition of defendant Schwartz. It appears that plaintiff’s deposition has concluded, so there is no reason for Cover to attend any deposition to assert a marital privilege. Cover is not an attorney authorized to practice in California and cannot represent plaintiff. If Cover is to be deposed, he obviously will attend and plaintiff will be there so anyone entitled to assert a marital privilege will be present. There is no reason for anyone other than the parties and counsel of record to be present at any depositions. Given the limited time remaining for discovery, the court will make orders that will ensure efficient conclusion of depositions.

Therefore, the court orders as follows:

1. At all depositions in this case, only the deponent, the parties, the parties’ counsel of record, and the court reporter and/or videographer shall be present. In no event may Eric Alan Cover be present at any deposition other than his own.

2. For any deposition taken by telephone or other remote electronic means, all parties and their counsel of record shall be present at the same neutral location, such as a court reporter’s office, and the deponent may appear by telephone or other remote electronic means. If the deponent is represented by counsel, that counsel must state his or her appearance and may appear by telephone or other remote electronic means with the deponent. No other person may appear with the deponent without a specific court order.