Court Opinion

ID: 1035125
Source: CourtListenerOpinion
Date Created: 2013-07-24 23:34:40.888733+00
Date Added: 2024-06-11T15:15:01.248956
License: Public Domain

Filed 7/24/13 Walley v. Super. Ct. CA4/3

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE

THOMAS E. WALLEY,

     Petitioner,                                                       G048340

         v.                                                            (Super. Ct. No. 30-2011-00529475)

THE SUPERIOR COURT OF ORANGE                                           OPINION
COUNTY,

     Respondent;

MATT HOOVER et al.,

     Real Parties in Interest.

                   Original proceedings; petition for a writ of mandate/prohibition to
challenge an order of the Superior Court of Orange County, Frederick Paul Horn, Judge.
Petition granted.
                   Sedgwick, Curtis D. Parvin, Frederick B. Hayes and Douglas J. Collodel
for Petitioner.

                                                             1
               No appearance for Respondent.
               Matt Hoover, in pro. per., for Real Party in Interest.
               Sarah Martin, in pro. per., for Real Party in Interest.
               Berger Kahn and Steven H. Gentry for Real Party in Interest Berger Kahn.

THE COURT:*
               Thomas E. Walley petitions this court after the trial court denied his motion
to quash a deposition subpoena that was served on his attorneys. The subpoena sought
production of accounting documents transmitted to him and related to their representation
of him. Walley has shown the deposition subpoena sought the production of documents
protected by the attorney-client privilege; Matt Hoover has not carried his burden to show
otherwise. Therefore, we grant Walley’s petition for a peremptory writ of mandate
directing the trial court to vacate its order denying the motion to quash and to grant the
motion.

                                      BACKGROUND

                                               I.
                    PRIOR LITIGATION BETWEEN WALLEY AND HOOVER.
               Walley, an attorney with the law firm of Good, Wildman, Hegness &
Walley, represented real party in interest, Sarah Martin, and her business, Footprints ‘N
More, Inc., in a landlord/tenant dispute between Martin and her commercial landlord.
Real party in interest, Hoover, was Martin’s boyfriend at the time and became a co-client
of Walley’s law firm. At some point, Hoover and Martin’s relationship deteriorated.
Wally’s law firm continued to represent Martin, but unilaterally discontinued its
representation of Hoover.

*   Before O’Leary, P. J., Fybel, J., and Thompson, J.
                                               2
              Hoover filed an arbitration claim against Walley and his law firm, asserting
causes of action for, inter alia, breach of fiduciary duty and legal malpractice (the
arbitration action). Attorney Steven H. Gentry, of the Berger Kahn law firm (Berger
Kahn), represented Walley in the arbitration action. The arbitrator found Walley and his
law firm violated their ethical duty to Hoover and committed malpractice. The
arbitrator awarded Hoover over $200,000.
              Hoover filed a complaint against Martin asserting a claim for breach of
contract and also common counts to recover money she allegedly owed him (the Martin
action). Martin filed a cross-complaint against Hoover in the Martin action, asserting
various breach of contract and tort claims against him. Gentry and Berger Kahn
represented Martin in the Martin action. The Martin action proceeded to a bench trial;
and the trial court entered judgment in favor of Martin on the complaint and in favor of
Hoover on Martin’s cross-complaint.
              In May 2009, Hoover filed a complaint against Martin, Footprints ‘N More,
Walley, Walley’s law firm, Gentry, and Berger Kahn in which he asserted claims for
malicious prosecution (based on Martin’s cross-complaint in the Martin action), aiding
and abetting, and conspiracy to commit malicious prosecution (the malicious prosecution
action). The trial court granted the defendants’ special motions to strike filed in the
malicious prosecution action, and entered a judgment of dismissal. In an unpublished
opinion, a panel of this court affirmed the judgment. (Hoover v. Walley (Nov. 9, 2010,
G042813) [nonpub. opn.].)

                                          II.
                           HOOVER FILES THE INSTANT ACTION.
              In December 2011, Hoover filed a form complaint against Walley asserting
a claim for breach of fiduciary duty (the instant action). In the complaint, Hoover
alleged the following as the basis of his claim: “Defendant breached his fiduciary duty of

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loyalty and confidentiality to me by acting adverse to me in a matter in which he
previously represented me in. Because of his intentional malicious acts against me, I
suffered extreme damage that I would not have otherwise suffered. I believe and based
thereon herein allege that defendants were the main driving force behind a third parties
litigation against me. The third party litigation was directly related to matters that
defendants previously represented me in.”
                                   III.
 HOOVER SERVES A DEPOSITION SUBPOENA ON BERGER KAHN; WALLEY FILES MOTION
               TO QUASH WHICH IS DENIED BY THE TRIAL COURT.

              Hoover served a deposition subpoena (the subpoena) on the custodian of
records for Berger Kahn in the instant action, seeking two categories of business records:
(1) “All accounting records, including account receivable and billing system records,
which are related to [the Martin action]”; and (2) “All accounting records, including
account receivable and billing system records, which are related to [the arbitration
action].”
              Walley filed a motion to quash the subpoena, pursuant to Code of Civil
Procedure section 1987.1, subdivision (a), as to the second category of subpoenaed
records on grounds including that the records sought were (1) protected from disclosure
by the attorney-client privilege and the attorney work-product doctrine, (2) protected
from disclosure by Walley’s right to privacy, and (3) irrelevant to the subject matter of
the instant action. Walley filed a declaration in support of the motion to quash in which
he stated, “[t]he referenced ‘accounting records’ including ‘billing statements’ identified
in Hoover’s deposition subpoena include attorney-client privileged communications
                                                                   1
between [him] and [his] attorneys at the Berger Kahn law firm.”        Following a hearing

       1
         Our record contains Gentry’s declaration filed in opposition to a motion to
compel filed by Hoover in which he sought an order compelling production of the first
category of accounting records listed in the subpoena—those pertaining to the Martin
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during which the trial court discussed Berger Kahn redacting privileged information on
the subpoenaed documents, the court denied the motion to quash and ordered responsive
documents to be produced within 30 days.
                                             IV.
           WALLEY FILES THE PETITION FOR WRIT OF MANDATE/PROHIBITION.
              Walley filed the petition for writ of mandate/prohibition (the petition) in
which he sought various forms of relief, including the issuance of a peremptory writ
directing the trial court to vacate its order denying Walley’s motion to quash. The
petition also requested a stay of the court’s order denying the motion to quash pending
this court’s decision on the merits of the petition. We invited real parties in interest,
Hoover, Berger Kahn, and Martin, to file an informal response to the petition, and the

action and not the arbitration action. At the hearing on the motion to compel, after
Walley’s attorney cited Gentry’s declaration during a general discussion of the subpoena,
the court stated it had not yet seen that declaration (the hearing on the motion to compel
was not held until 14 days after the hearing on the motion to quash). Walley’s counsel
offered a copy of the declaration to the court during the hearing; the record is unclear
whether the trial court accepted a copy of it during the hearing and whether the court
relied upon it in deciding the motion to compel.
         In his declaration, Gentry referred to both categories of documents sought by the
subpoena, stating in part: “In connection with [the Martin action and the arbitration
action], Berger Kahn sent periodic invoices to the respective clients. Those invoices
contained detailed information regarding various tasks performed in the representation
and the time associated with each task. I have always considered the contents of those
invoices to be confidential information protected by the attorney-client privilege.”
Gentry further stated he “became aware that the clients in both of these representations
had taken appropriate legal steps to contest the production of records by Berger Kahn
based, among other things, on the existence of the privilege. Berger Kahn did not
previously file written opposition to the [subpoena] because of its belief that the privilege
belongs to the clients, not the attorney, and because of its understanding that both former
clients were aware of the [subpoena] and were contesting it. Berger Kahn’s silence at
that time was never intended to suggest that it believed [Hoover] was entitled to the
records in question.”
                                              5
                 2
parties complied. We stayed the trial court proceedings pending the resolution of the
petition.

                                      DISCUSSION
              Walley argues, inter alia, the trial court erred by denying his motion to
quash because the subpoena required the production of documents protected by the
attorney-client privilege. For the reasons we will explain, we agree the subpoena sought
privileged documents, and thus the trial court should have quashed the subpoena.
                                             I.
                                 STANDARD OF REVIEW.
              Although writ review of discovery orders is not favored, it is appropriate to
review the production of documents which may be subject to a claim of privilege. (Crab
Addison, Inc. v. Superior Court (2008) 169 Cal.App.4th 958, 965.) “Extraordinary
review of a discovery order will be granted when a ruling threatens immediate harm, such
as loss of a privilege against disclosure, for which there is no other adequate remedy.”
(Zurich American Ins. Co. v. Superior Court (2007) 155 Cal.App.4th 1485, 1493.)
              We review the trial court’s discovery order for abuse of discretion.
(Krinsky v. Doe 6 (2008) 159 Cal.App.4th 1154, 1162 [reviewing order denying motion
to quash subpoenas].) The trial court’s determination that various documents were not
protected by the attorney-client privilege or the work product doctrine is also reviewed
for an abuse of discretion. (National Football League Properties, Inc. v. Superior Court
(1998) 65 Cal.App.4th 100, 108; In re Jeanette H. (1990) 225 Cal.App.3d 25, 31.) “[A]n

       2
          In his response to the petition, Hoover argues this court lacks jurisdiction to
adjudicate the petition because he was never served with any documents relating to the
petition by mail or by personal service. The proof of service attached to the petition,
however, shows Hoover was personally served on April 23, 2013, at the same address
listed on his response to the petition.
                                             6
error of law is an abuse of discretion.” (Knapp v. AT&T Wireless Services, Inc. (2011)
195 Cal.App.4th 932, 939.)
                                              II.
      THE ATTORNEY-CLIENT PRIVILEGE AND ALLOCATION OF BURDENS OF PROOF.
              As our Supreme Court has explained: “The attorney-client privilege, set
forth at Evidence Code section 954, confers a privilege on the client ‘to refuse to
disclose, and to prevent another from disclosing, a confidential communication between
client and lawyer . . . .’ The privilege ‘has been a hallmark of Anglo-American
jurisprudence for almost 400 years.’ [Citation.] Its fundamental purpose ‘is to safeguard
the confidential relationship between clients and their attorneys so as to promote full and
open discussion of the facts and tactics surrounding individual legal matters. [Citation.]
. . . [¶] Although exercise of the privilege may occasionally result in the suppression of
relevant evidence, the Legislature of this state has determined that these concerns are
outweighed by the importance of preserving confidentiality in the attorney-client
relationship. . . . “The privilege is given on grounds of public policy in the belief that the
benefits derived therefrom justify the risk that unjust decisions may sometimes result
from the suppression of relevant evidence.” [Citations.]’ [Citation.] ‘[T]he privilege is
absolute and disclosure may not be ordered, without regard to relevance, necessity or any
particular circumstances peculiar to the case.’” (Costco Wholesale Corp. v. Superior
Court (2009) 47 Cal.4th 725, 733, italics added (Costco).) The application of the
attorney-client privilege is liberally construed. (Benge v. Superior Court (1982) 131
Cal.App.3d 336, 344.)
              The term “confidential communication,” for purposes of the attorney-client
privilege, is broadly defined in Evidence Code section 952 as follows: “‘[C]onfidential
communication between client and lawyer’ means information transmitted between a
client and his or her lawyer in the course of that relationship and in confidence by a

                                              7
means which, so far as the client is aware, discloses the information to no third persons
other than those who are present to further the interest of the client . . . or those to whom
disclosure is reasonably necessary for the transmission of the information or the
accomplishment of the purpose for which the lawyer is consulted, and includes a legal
opinion formed and the advice given by the lawyer in the course of that relationship.”
Additionally, “[t]he attorney-client privilege attaches to a confidential communication
between the attorney and the client and bars discovery of the communication irrespective
of whether it includes unprivileged material.” (Costco, supra, 47 Cal.4th at p. 734.)
              In the context of a discovery dispute, the California Supreme Court in
Costco, supra, 47 Cal.4th at page 733 explained: “The party claiming the privilege has
the burden of establishing the preliminary facts necessary to support its exercise, i.e., a
communication made in the course of an attorney-client relationship. [Citations.] Once
that party establishes facts necessary to support a prima facie claim of privilege, the
communication is presumed to have been made in confidence and the opponent of the
claim of privilege has the burden of proof to establish the communication was not
confidential or that the privilege does not for other reasons apply. [Citations.]” (Costco,
                             3
supra, 47 Cal.4th at p. 733.)

                                             III.
             THE TRIAL COURT ERRED BY DENYING THE MOTION TO QUASH
              In the motion to quash, Walley argued the subpoena required the
production of confidential communications within the meaning of Evidence Code section
952 because it required the production of “Berger Kahn’s ‘accounting records’ including

       3
         Hoover does not contend any exceptions to the attorney-client privilege, such as
the crime-fraud exception, apply here. Nor does Hoover contend the privilege was
waived.
                                              8
‘billing system records’ for its representation of Walley in the arbitration matter.” He
contended these documents constituted “attorney-client communications between Walley
and his counsel Berger Kahn.” On its face, the subpoena seeks written communications
between the attorney and its client in the course of their attorney-client relationship.
Except for the purpose of furthering the client’s interest, such as in the case of a third
person paying for the client’s attorney fees, such documentation and information would
not be disclosed to third persons. Considering the broad language of section 952, coupled
with the liberal application of the attorney-client privilege and the general description of
the subpoenaed documents, those documents fall within the statute’s expansive definition
of confidential communications. (See Benge v. Superior Court, supra, 131 Cal.App.3d at
p. 344.)
              Hoover did not produce any evidence rebutting Walley’s showing that the
records sought by the subpoena are protected by the attorney-client privilege under
Evidence Code 952. That point is dispositive here, resulting in the granting of the
petition.
              The parties have not cited any California case, and we have found none,
which specifically analyzes whether attorney accounting records transmitted to the client
constitute attorney-client confidential communications within the meaning of Evidence
Code section 952. While a few cases assume attorney billing statements are confidential
communications in other contexts, no California case has examined the application of the
privilege to such documentation and communications in the context of discovery.
Instead, such assumptions have been made in the context of disputes over the
reasonableness of attorney fees. (See, e.g., Banning v. Newdow (2004) 119 Cal.App.4th
438 [holding bills redacted to protect attorney-client privilege enabled the defendant to
challenge the reasonableness of attorney fees]; Smith v. Laguna Sur Villas Community
Assn. (2000) 79 Cal.App.4th 639, 645-646 [the attorney-client privilege barred disclosure

                                              9
of privileged attorney billing documents because the attorney’s client was the defendant
condominium association, and not the plaintiff residents who sought the documents].)
              In 1986, the Legislature protected some financial information related to the
attorney-client relationship by enacting Business and Professions Code section 6149,
which provides, “[a] written fee contract shall be deemed to be a confidential
                                                                           [4]
communication within the meaning of subdivision (e) of Section 6068 and of Section
952 of the Evidence Code.” An attorney fee contract is similar in subject matter to the
attorney’s accounting records at issue in this proceeding. Specifically, both documents
are connected to an attorney’s representation of a client; both contain information
regarding the attorney’s billing rates and payment arrangements with that client; and both
may describe the services rendered or to be rendered. Although we do not equate a
written fee contract with all billing records, Business and Professions Code section 6149
illustrates the legislature’s intent to protect the kind of information at issue in this
proceeding.
              In opposition to Walley’s motion to quash, Hoover relied on federal cases
for the proposition that attorney billing statements are discoverable. Unlike California
law, which as discussed ante, deems attorney fee contracts to be protected by the
attorney-client privilege pursuant to Business and Professions Code section 6149, federal
common law provides, ‘“the nature of [an attorney’s] fee arrangements with his clients
[is] not [a] confidential communication[] protected by the attorney-client privilege.”’ (In
re Osterhoudt (1983) 722 F.2d 591, 592.) California law, not federal law, applies in this

       4
          Business and Professions Code section 6068, subdivision (e) states, in pertinent
part, an attorney has a duty “[t]o maintain inviolate the confidence, and at every peril to
himself or herself to preserve the secrets, of his or her client.” (Bus. & Prof. Code, §
6068, subd. (e)(1).)
                                               10
                                                   5
case; therefore, Hoover’s legal authority is inapt. In any event, there is an exception to
the general federal rule where “in the circumstances of the case disclosure . . . [is] in
substance a disclosure of the confidential communication in the professional relationship
between the client and the attorney.” (Id. at p. 593.) That exception may well apply here,
but we do not need to reach the issue because we decide the case based on California law.
              At the hearing on the motion to quash, the trial court suggested documents
responsive to the subpoena might contain privileged information that could be redacted.
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The trial court’s order, however, denied the motion in its entirety.
              Walley carried his burden of establishing that the subpoena sought
documents protected by the attorney-client privilege, and Hoover failed to carry his
burden to establish the privilege did not apply. Accordingly, we conclude the trial court’s
order denying the motion to quash constituted error.
              Because we conclude the trial court erred by denying the motion to quash
on the ground the subpoena sought documents protected by the attorney-client privilege,
we do not consider Walley’s other grounds for challenging the trial court’s order.

       5
          We acknowledge the handful of California cases that rely on federal cases
applying federal law regarding the attorney-client privilege. All of those cases predate
the enactment of Business and Professions Code section 6149 and are otherwise
inapplicable. (See, e.g., Willis v. Superior Court (1980) 112 Cal.App.3d 277, 291-295.)
        6
          Code of Civil Procedure section 1987.1, subdivision (a) provides in relevant
part: “If a subpoena requires the attendance of a witness or the production of books,
documents, electronically stored information, or other things before a court, or at the trial
of an issue therein, or at the taking of a deposition, the court, upon motion reasonably
made by any person described in subdivision (b), . . . may make an order quashing the
subpoena entirely, modifying it, or directing compliance with it upon those terms or
conditions as the court shall declare, including protective orders.”
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                                      DISPOSITION
              There is no factual dispute regarding the trial court’s order denying the
motion to quash. The petition, responsive briefing, and the moving and opposing papers
on file from the proceedings below more than adequately address the issues raised by the
petition. Hence, neither further briefing nor oral argument is required for the disposition
of the petition. Petitioner is entitled to a peremptory writ of mandate.
              Let a peremptory writ of mandate issue directing the superior court to
vacate its April 10, 2013, order denying petitioner’s motion to quash the deposition
subpoena and to enter a new order granting the motion to quash the deposition subpoena.
The stay previously issued by this court is dissolved. In the interests of justice, each
party shall bear its own costs.

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