Stockwell, Harris, Widom, Woolverton & Muehl v. Superior Court CA2/3 ( 2014 )

Filed 1/31/14 Stockwell, Harris, Widom, Woolverton & Muehl v. Superior Court CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115.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
SECOND APPELLATE DISTRICT
DIVISION THREE
STOCKWELL, HARRIS, WIDOM, B250576
WOOLVERTON & MUEHL et al.,
(Los Angeles County
Petitioners, Super. Ct. No. BC415845)
v.
SUPERIOR COURT OF THE
STATE OF CALIFORNIA, COUNTY OF
LOS ANGELES,
Respondent;
RICHARD M. WIDOM,
Real Party in Interest.
ORIGINAL PROCEEDINGS in mandate. Maureen Duffy-Lewis, Judge.
Petition granted.
Cohon & Pollak, Jeffrey M. Cohon, Henry Nicholls; Sedgwick,
Robert F. Helfing and Heather L. McCloskey for Petitioners.
No appearance for Respondent.
Katten Muchin Rosenman, Steve Cochran, Stacey McKee Knight and
Janella T. Gholian for Real Party in Interest.
_______________________________________
Stockwell, Harris, Widom, Woolverton & Muehl, a California professional
corporation (the Stockwell firm), and three of its members, George Woolverton,
Steven Harris and Edward Muehl (collectively Defendants), challenge an order denying
their motion to reopen discovery. They contend our decision in a series of consolidated
writ proceedings involving discovery matters and a motion in limine will result in a new
trial so as to automatically reopen discovery with a new discovery cutoff date under
Code of Civil Procedure section 2024.020.1 They also contend, in the alterative, the
trial court abused its discretion in denying their motion to reopen discovery on limited
issues.
We conclude that our decision on pretrial matters involving discovery disputes
and a motion in limine did not automatically reopen discovery, but the denial
a discretionary reopening in these circumstances was an abuse of discretion. We
therefore will grant the petition.
FACTUAL AND PROCEDURAL BACKGROUND
1. Factual Background
Widom is a member of the Stockwell firm and was employed by the firm in
April 2009. Widom’s wife at the time, Lisa Kerner, was also employed by the firm.
She accused Widom of domestic violence against her in an incident that occurred in
March 2009. The Stockwell firm notified Widom in April 2009 that his employment
1
All statutory references are to the Code of Civil Procedure unless stated
otherwise.
2
was terminated based on the alleged domestic violence and other allegations of
misconduct.
2. Pretrial Proceedings
Widom filed a complaint against Defendants in June 2009 and filed a second
amended complaint in August 2010 alleging that the Stockwell firm terminated his
employment without cause to avoid paying him salary, benefits, and deferred
compensation. He alleges counts for (1) involuntary dissolution of the Stockwell firm
corporation, (2) breach of fiduciary duty, (3) breach of oral contract, (4) breach of
implied-in-fact contract, (5) breach of written contract, (6) declaratory relief,
(7) reformation of contract, (8) breach of oral contract, (9) promissory estoppel,
(10) fraud, (11) negligent misrepresentation, (12) defamation, (13) intentional
interference with prospective economic advantage, (14) negligent interference with
prospective economic advantage, and (15) unfair competition.
The Stockwell firm filed a cross-complaint against Widom and Law Offices of
Richard M. Widom, LLP, in January 2010 and filed a second amended cross-complaint
against the same cross-defendants in October 2010 alleging counts for (1) breach of
fiduciary duty, (2) interference with contract, (3) interference with prospective
economic advantage, (4) violation of Labor Code sections 2854 and 2865,
(5) accounting, and (6) unfair competition.
The trial court initially set the matter for trial to begin on July 14, 2010. The
court later continued the trial date to April 20, 2011, and extended the discovery cutoff
date to March 21, 2011.
3
Kerner reportedly was physically attacked and beaten in her home on or about
March 21, 2011. She apparently lost consciousness and was discovered in her home
two or three days later. She was hospitalized with a subarachnoid hemorrhage and
many bruises and abrasions. Defendants filed a motion to reopen discovery in July
2011, seeking discovery relating to Widom’s purported involvement in the attack and
his recent work representing Kroger Company, which they argued was relevant to his
claim for damages. The trial court (Hon. Susan Bryant-Deason) denied the motion in
September 2011.
3. Prior Writ Petitions and Opinion
Defendants filed a series of four writ petitions from June to October 2011
challenging pretrial orders on three discovery motions and a motion in limine. The
orders (1) compelled the production of documents despite the assertion of Kerner’s
attorney-client privilege, (2) permitted discovery of Defendants’ financial condition,
(3) compelled Kerner to answer deposition questions despite her privilege assertion, and
(4) excluded any evidence or argument that Widom committed domestic violence
against Kerner on March 1, 2009. We consolidated the four proceedings, stayed all trial
court proceedings in September 2011 pending our decision, and ordered the substitution
of Kerner as the sole petitioner in the first and third petitions in the place of Defendants.
We concluded, in a published opinion filed in April 2012, and modified in May
2012, that (1) the trial court must conduct further proceedings to determine whether
Kerner waived her attorney-client privilege as to the production of documents; (2) the
granting of the motion to compel Kerner to answer deposition questions was error;
4
(3) the granting of the motion for net worth discovery was error; and (4) the granting of
the motion in limine was error. (Kerner v. Superior Court (2012) 206 Cal. App. 4th 84,
116, 119, 122, 129.) We therefore ordered the issuance of a writ of mandate directing
the trial court to (1) vacate the orders compelling the production of documents and make
explicit findings to determine whether Kerner waived her attorney-client privilege;
(2) vacate the orders granting the motion to compel the production of documents and
motion for net worth discovery, and reconsider those two motions; and (3) vacate the
order granting the motion in limine and enter a new order denying the motion in limine.
(Id. at pp. 116, 129.)
4. Further Pretrial Proceedings
Defendants challenged the trial judge under section 170.6, subdivision (a)(2) in
August 2012. The trial court granted the motion, and the case was assigned to another
judge (Hon. Gregory Alarcon). We summarily denied Widom’s writ petition
challenging the order granting the motion.
Defendants served subpoenas for documents on Widom’s most recent employer
in November 2012. Widom challenged the subpoenas arguing that they were invalid
because they were served after the discovery cutoff. Defendants argued that discovery
was automatically reopened as a result of our decision. The trial court stated at
a hearing on another motion in February 2013 that it was inclined to rule that discovery
was not automatically reopened, but that it would consider a discretionary reopening of
discovery on particular issues.
5
Defendants filed a motion to reopen discovery on particular issues in February
2013. They argued that discovery was automatically reopened because this court had
remanded the matter for a new trial. They also argued, pursuant to section 2024.050,
that there was good cause to permit discovery concerning events that had occurred since
the March 2011 discovery cutoff, including (1) the appointment of Widom’s firm to
Kroger Company’s panel of workers compensation counsel; (2) the purported merger of
his firm with another firm and Widom’s income from that firm; and (3) the termination
of Widom’s employment with another law firm purportedly because of abusive
behavior toward other employees. Defendants argued that those events were relevant to
Widom’s claims. Widom opposed the motion. While the motion was pending, the case
was assigned to another trial judge (Hon. Malcolm Mackey). Widom challenged the
judge under section 170.6, subdivision (a)(2) in March 2013, and the case was assigned
to another judge (Hon. Maureen Duffy-Lewis). The court set a trial date of May 5,
2014.
The trial court denied the motion to reopen discovery on July 11, 2013. The
court stated that without authority on point it was not persuaded that discovery was
automatically reopened in these circumstances. The court did not comment on the
discretionary grounds asserted for the motion.
5. Present Writ Petition
Defendants petitioned this court for a writ of mandate in August 2013. We
issued an order to show cause and stayed the trial pending our decision.
6
CONTENTIONS
Defendants contend (1) the effect of our prior opinion was an order for a new
trial resulting in the automatic reopening of discovery with a new discovery cutoff date;
and (2) alternatively, the trial court abused its discretion in denying their motion to
reopen discovery on limited issues.
DISCUSSION
1. Discovery Was Not Reopened Automatically
Section 2024.020, subdivision (a) states that any party is entitled “to complete
discovery proceedings on or before the 30th day, and to have motions concerning
discovery heard on or before the 15th day, before the date initially set for the trial of the
action,” with exceptions that are inapplicable here. Subdivision (b) states that
“a continuance or postponement of the trial date does not operate to reopen discovery
proceedings,” except as provided in section 2024.050. Section 2024.050 states that the
court on motion of any party may grant leave to complete discovery proceedings, or to
have a motion concerning discovery heard, on a later date. (Id., subd. (a).)
The California Supreme Court in Fairmont Ins. Co. v. Superior Court (2000)
22 Cal. 4th 245 (Fairmont) construed the language “before the date initially set for trial
of the action” in former section 2024, subdivision (a) (now § 2024.020, subd. (a)).
Fairmont held that in the event of a mistrial, order granting a new trial, or remand for
a new trial after reversal of a judgment on appeal, the quoted language refers to the first
date set for trial in the action following a mistrial, order granting a new trial, or remand
for a new trial after reversal on appeal. (Fairmont, supra, at p. 250.) In those
7
circumstances, the discovery clock is reset and the last day for completing discovery is
measured from the new date initially set for trial. (Id. at pp. 250-251.) Fairmont
concluded that Beverly Hospital v. Superior Court (1993) 19 Cal. App. 4th 1289
(Beverly Hospital) was correct in so holding.2 (Fairmont, supra, at p. 247.) Fairmont
rejected the argument that the discovery cutoff date should be measured from the date
initially set for the original trial in those circumstances. (Id. at p. 250.)
Fairmont, supra, 22 Cal. 4th 245, contrasted the situation where a case is set for
trial after a mistrial, an order granting a new trial, or the reversal of a judgment on
appeal from the situation where there has been no trial or dispositive judgment in the
action:
“In the context of an action that has not yet proceeded to trial or otherwise
resulted in a dispositive judgment, the phrase ‘date initially set for the trial of the action’
([former] Code of Civ. Proc., § 2024, subd. (a)) is unambiguous. In such instance, it
plainly refers to the first date set for trial of the action. Thus, the statute expressly states
that continuance or postponement of that date will not operate to reopen discovery.
(Ibid.) [¶] In the context of an action that has been set for a new trial after a mistrial, an
order granting a new trial, or remand for a new trial after appellate reversal of
a judgment, the meaning of the phrase ‘before the date initially set for trial of the action’
is less clear.” (Fairmont, supra, 22 Cal.4th at p. 250.)
2
Beverly Hospital, supra, 19 Cal.App.4th at page 1291, stated, “we hold
a mistrial, new trial or reversal of the judgment on appeal automatically restarts the time
limitations on discovery.”
8
Fairmont explained that the statute was intended to address the problem of
“intentional manipulation of the trial date by way of continuances and postponements in
order to extend the time for discovery.” (Fairmont, supra, 22 Cal.4th at p. 252.) “The
same problem does not arise, however, in the relatively unusual situation when a new
trial is ordered—i.e., following an order granting a new trial, a mistrial, or remand for
a new trial after reversal of a judgment on appeal—for the simple reason that parties are
unlikely to manipulate the discovery procedure by creating grounds for a new trial,
mistrial, or appellate reversal merely in order to extend the time for discovery.
Moreover, unlike a continuance or postponement that only delays the onset of a trial,
a new trial begins trial proceedings anew, ‘ “as though no trial had ever been
had . . . . ” ’ [Citation.] Accordingly, there is thus no compelling basis, consistent with
the legislative intent, not to allow the parties to engage in additional discovery within
the statutory time limits as measured by the date set for retrial.” (Id. at p. 252.)
Fairmont stated that resetting the discovery cutoff date to allow additional
discovery in the event of a new trial was consistent with another statute,
section 583.320. Section 583.320, subdivision (a) provides that if a new trial is granted
after a mistrial, an order granting a new trial, or the reversal of a judgment on appeal,
the action must be brought to trial within three years after that event. Such a lengthy
period of time appears to contemplate additional discovery in the event of a new trial.
(Fairmont, supra, 22 Cal.4th at p. 252.) Fairmont also stated that allowing additional
discovery as of right in those circumstances would expedite efficient trial preparation at
a time when it is likely that further discovery is needed to clarify facts and address
9
issues the importance of which has become more apparent following the mistrial, order
granting a new trial, or reversal of a judgment on appeal.3 (Id. at pp. 252-253.)
The rule from Fairmont, supra, 22 Cal. 4th 245, and Beverly Hospital, supra,
19 Cal. App. 4th 1289, applies in the event of a mistrial, order granting a new trial, or
remand for a new trial after reversal of a judgment on appeal. Here, in contrast, there
has been no mistrial, order granting a new trial, or remand for a new trial after reversal
of a judgment on appeal. There has been no trial and no dispositive judgment. We
conclude that our decision in the interlocutory writ proceedings involving discovery
disputes and a motion in limine did not result in an order granting a new trial for
purposes of section 2024.020 and the rule from Fairmont and Beverly Hospital.
Our conclusion is the same regardless of whether the trial court properly
determined that the proceedings following our prior opinion will involve a “new trial”
for purposes of section 170.6, subdivision (a)(2). That provision allows a party to
challenge a judge for cause after a reversal on appeal “if the trial judge in the prior
proceeding is assigned to conduct a new trial on the matter” (ibid.). Defendants argue
that a “new trial” within the meaning of section 170.6, subdivision (a)(2) occurs after an
appellate decision whenever the trial court “is required to conduct [a] retrial or a first
trial on a factual or legal issue.” They argue that such a new trial results in the
automatic reopening of discovery under the rule from Fairmont, supra, 22 Cal. 4th 245,
and Beverly Hospital, supra, 19 Cal. App. 4th 1289. We reject the latter argument.
3
Beverly Hospital, supra, 19 Cal.App.4th at pages 1295-1296, reached the same
conclusion for some of the same reasons.
10
Neither the language of section 2024.020 nor its purposes as discussed in Fairmont and
Beverly Hospital suggest that the rule resetting the discovery clock in the event of
a mistrial, order granting a new trial, or remand for a new trial after reversal of
a judgment on appeal should extend to this case where there has been no trial and no
dispositive judgment.
To the contrary, we conclude that the statutory language “date initially set for the
trial of the action” (§ 2024.020, subd. (a)) is unambiguous in these circumstances where
there has been no trial or dispositive judgment in the action. This language “plainly
refers to the first date set for trial of the action. Thus, the statute expressly states that
continuance or postponement of that date will not operate to reopen discovery.”
(Fairmont, supra, 22 Cal.4th at p. 250.) Accordingly, we conclude that the trial
postponement necessitated by the stay of trial court proceedings imposed by this court
did not automatically reopen discovery.
2. Defendants Are Entitled to a Discretionary Reopening of
Discovery on Limited Issues
Section 2024.050, subdivision (b) states that “[i]n exercising its discretion to
grant or deny [a motion to reopen discovery], the court shall take into consideration any
matter relevant to the leave requested,” including (1) the necessity and reasons for the
discovery; (2) the diligence or lack of diligence of the party seeking relief; (3) the
likelihood that permitting the discovery will delay the trial, otherwise interfere with the
trial calendar, or prejudice any party; and (4) the length of time that has elapsed between
any date previously set for trial and the date presently set for trial. The statute expressly
11
states that the court exercises discretion in ruling on the motion. Accordingly, we
review the ruling for abuse of discretion.
“An abuse of discretion occurs if, in light of the applicable law and considering
all of the relevant circumstances, the court’s decision exceeds the bounds of reason and
results in a miscarriage of justice. [Citations.] This standard of review affords
considerable deference to the trial court provided that the court acted in accordance with
the governing rules of law. We presume that the court properly applied the law and
acted within its discretion unless the appellant affirmatively shows otherwise.
[Citations.]” (Mejia v. City of Los Angeles (2007) 156 Cal. App. 4th 151, 158.)
Defendants contend the statutory factors weigh heavily in favor of reopening
discovery. They argue that because Widom seeks lost income for a period of 10 years
after the termination of his employment, his income after the discovery cutoff date in
March 2011 is highly relevant to both liability and damages. They argue that the events
surrounding the termination of his employment with another firm may be probative of
his misconduct alleged in this action and therefore are highly relevant to both his and
Defendants’ liability. They also argue that as of the date of the trial court’s ruling and
the date of their petition there was sufficient time to complete the requested discovery
prior to the May 5, 2014, trial date.
We agree that the specified discovery is highly relevant to issues of liability and
damages. Defendants could not have completed such discovery before the discovery
cutoff date because the events postdated the discovery cutoff. Defendants were diligent
in pursuing the discovery after the events occurred and promptly sought relief in the
12
trial court when the discovery was challenged. With more than three months remaining
before the scheduled trial date, we believe that the likelihood of completing the limited
discovery without delaying the trial is high. Finally, the substantial period of time that
has elapsed since the previously scheduled trial date of April 20, 2011, on which the
discovery cutoff date was based, makes the limited reopening of discovery on events
occurring after that date just and appropriate.
Our consideration of the factors set forth in section 2025.050, subdivision (b) in
the circumstances of this case compels the conclusion that the interests of justice require
a reopening of discovery limited to the three issues specified by Defendants and that the
denial of such a reopening was an abuse of discretion. The trial court must reopen
discovery on those three limited issues, and may reopen discovery on any other issue as
the court in its discretion deems appropriate, and must set a new discovery cutoff date.
13
DISPOSITION
The petition is granted. Let a peremptory writ of mandate issue directing the trial
court to reopen discovery on limited issues as discussed in this opinion and set a new
discovery cutoff date. Our prior stay of trial is vacated as of the date of our remittitur.
Defendants are entitled to recover their costs in this appellate proceeding.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
CROSKEY, J.
WE CONCUR:
KLEIN, P. J.
KITCHING, J.
14