Zenga v. Greenberg Glusker CA2/8

Filed 9/24/14 Zenga v. Greenberg Glusker et al. CA2/8
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
BO ZENGA, B248318
Plaintiff and Appellant, (Los Angeles County
Super. Ct. Nos. BC316459 &
v. BC316318)
GREENBERG GLUSKER FIELDS
CLAMAN & MACHTINGER et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los Angeles County,
Elihu M. Berle, Judge. Affirmed.
Dovel & Luner, Gregory S. Dovel and Julien A. Adams for Plaintiff and
Appellant.
Jones Day, Brian A. Sun, Jason C. Wright and C. Kevin Marshall, pro hac vice,
for Defendants and Respondents Greenberg Glusker Fields Claman & Machtinger and
Bert Fields.
Eagan Avenatti, and Jason M. Frank and Ahmed I. Ibrahim for Defendant and
Respondent Pacific Bell Telephone Company.
Munger, Tolles & Olson, and Stephen M. Kristovich and Hailyn J. Chen for
Defendants and Respondents Samax Enterprises, Inc., and Brad Grey.
_______________________________
This appeal arises from one of the many lawsuits involving the activities of private
investigator Anthony Pellicano. Plaintiff and appellant Bo Zenga filed claims against the
law firm of Greenberg Glusker Fields, Claman & Machtinger and attorney Bert Fields;1
the media production company Samax Enterprises, Inc., and producer Brad Grey;2 and
Pacific Bell Telephone Company.3
Zenga appeals from the grant of a joint motion for summary judgment filed by
Greenberg, Grey and PacBell based on the statute of limitations. We affirm.
FACTS
The Underlying Events
In 2000, Zenga sued Grey for wrongs related to an alleged producing partnership
agreement connected with a motion picture entitled Scary Movie. During the course of
the Scary Movie litigation, Grey and his attorneys (the Greenberg firm) hired Pellicano to
investigate Zenga. Pellicano, in turn, illegally wiretapped Zenga’s telephones. Events
surrounding the wiretapping of Zenga’s telephones are discussed in more detail below in
addressing the statute of limitations issues.
In 2002 and 2003, federal authorities investigated Pellicano for illegal wiretapping
activities. The mainstream and entertainment press widely reported on the investigation.
In 2006, authorities indicted Pellicano, and, in 2008, a federal court jury convicted him of
multiple counts, including wiretapping, racketeering and wire fraud.
Meanwhile, Zenga’s Scary Movie lawsuit against Grey continued forward. At a
deposition in September 2000, Zenga testified falsely. Grey thereafter discovered the
matter, and filed a motion for an order dismissing Zenga’s case as a sanction for the false
testimony. The trial court denied Grey’s motion to dismiss, but ordered Zenga to submit
to another deposition session. In March 2001, Zenga repeatedly invoked his rights under
the Fifth Amendment, declining to answer hundreds of questions. The trial court
1
Hereafter collectively Greenberg or the Greenberg firm.
2
Hereafter collectively Grey.
3
Hereafter PacBell.
2
thereafter ordered Zenga to answer a majority of the questions. When his deposition
resumed, Zenga again invoked his Fifth Amendment privilege, and refused to answer
almost all of the court-ordered questions. The court subsequently granted Grey’s motion
in limine to preclude Zenga from testifying at trial of his Scary Movie lawsuit. At trial,
the court granted Grey’s motion for nonsuit based on Zenga’s failure to testify. Division
Three of our court affirmed the judgment of nonsuit. (See Zenga et al. v. Brillstein-Grey
Entertainment (Nov. 4, 2003, B159566 [nonpub. opn.].)
Zenga’s Current Lawsuit
1. The Pleadings
In June 2004, Zenga filed a complaint for damages against Pellicano, the City of
Los Angeles (specifically alleging claims involving the Los Angeles Police Department
(LAPD)), Mark Arneson (a LAPD officer), and Does 1 through 100. Zenga’s complaint
alleged that the LAPD, through Arneson, disclosed confidential police records about
Zenga to Pellicano. Attorney Gregory Dovel represented Zenga at the time the Pellicano-
related lawsuit was filed.
In May 2006, Zenga filed a first amended complaint re-alleging the claims noted
above, and adding the Greenberg firm, Grey and PacBell. The first amended complaint
alleged that Grey retained the Greenberg firm in connection with the Scary Movie
lawsuit, and that Grey and Greenberg, acting together, hired Pellicano as a private
investigator. It alleged that Pellicano wrongly wiretapped Zenga’s telephones with the
knowledge and consent of Grey and the Greenberg firm, and that Grey and Greenberg
accepted and used the fruits of Pellicano’s wrongdoing. It further alleged that Pellicano
had been able to set up the wiretaps with the complicity of PacBell employees.
In November 2008, Zenga filed his operative third amended complaint. It
reiterated the claims against Greenberg, Grey and PacBell noted above; the amendments
were mostly directed at the statute of limitations. The third amended complaint alleged
three causes of action jointly against Greenberg, Grey and PacBell, listed respectively:
(1) invasion of privacy, (2) illegal wiretapping, and (3) negligence, gross negligence, or
deliberate wrongdoing in hiring and managing an agent who engaged in unlawful acts.
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2. The Motion for Summary Judgment
In October 2012, Greenberg, Grey and PacBell filed a joint motion for summary
judgment, or, in the alternative, summary adjudication of issues. The motion was based
on the statute of limitations; it argued that Zenga’s causes of action had accrued no later
than in the first half of 2004, meaning that his lawsuit filed against them in May 2006 had
been filed too late. The evidence in support of the motion is discussed below in more
detail, but it included undisputed evidence that Zenga began asking questions about the
possibility that he had been wiretapped as early as 2001.
In December 2012, Zenga filed an opposition, which was supported by evidence
showing his investigation of his suspicions of wiretapping, including the efforts by his
attorney, Gregory Dovel. Zenga argued that the accrual of his cause of action was
delayed until the period within one year of the time he filed suit against Greenberg, Grey
and PacBell because the investigation that he conducted from 2001 through 2006 was
reasonable, and did not result in the discovery of facts supporting a cause of action.
3. The Trial Court’s Ruling and Judgment
On December 21, 2012, the parties argued the joint motion for summary relief to
the trial court, and the court granted the motion for summary judgment. The court
explained that Zenga’s arguments in opposition to the statute of limitations failed under
both of the discovery rule’s bases for beginning the limitations period. The court ruled
Zenga subjectively suspected he was wiretapped by early 2004 at the latest because
Zenga expressly admitted as much. Further, that Zenga objectively should have
suspected such wrongdoing by no later than early 2004, given what he knew, as well as
the information that would have been uncovered by a reasonable investigation based on
obvious leads. Specifically, the court noted events concerning two other victims, Warren
and Turner, the press reports in 2003-2004, especially the Times article mentioning
Turner, and a Vanity Fair article detailing Pellicano’s methods. The court rejected, as
conflicting with Supreme Court precedent, Zenga’s argument that a plaintiff does not
discover his cause of action until he obtains knowledge of specific, hard facts needed to
establish the cause of action.
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On February 20, 2013, the trial court entered judgment in favor of Greenberg,
Grey and PacBell, and against Zenga.
Zenga filed a timely notice of appeal.
DISCUSSION
Zenga contends summary judgment in favor of Greenberg, Grey and PacBell must
be reversed because he presented evidence from which a jury could determine that he did
not suspect a factual basis for his wire-tapping claims and that he conducted a reasonable
investigation but did not find sufficient facts to support filing a lawsuit until a period
within one-year of filing suit against the moving defendants. We disagree.
Standard of Review for Summary Judgment
Summary judgment properly is granted if the “affidavits, declarations, admissions,
answers to interrogatories, depositions, and matters of which judicial notice shall or may
be taken” in support of and in opposition to the motion “show that there is no triable issue
as to any material fact and that the moving party is entitled to judgment as a matter of
law.” (Code Civ. Proc., § 437c, subds. (b)(1) & (c).) When it is the defendant who
moves for summary judgment, summary judgment is proper if the defendant either
proves an affirmative defense or disproves at least one essential element of the plaintiff's
cause of action (Chevron U.S.A,. Inc. v. Superior Court (1992) 4 Cal. App. 4th 544, 548;
Brunelle v. Signore (1989) 215 Cal. App. 3d 122, 127) or if defendant shows that an
element of the cause of action cannot be established (Code Civ. Proc., § 437c, subd.
(o)(2)). Although the trial court may grant summary judgment on one basis, this court
may affirm the judgment under another that was presented by the motion. On appeal, this
court examines the facts and independently determines their effect as a matter of law.
(AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal. App. 3d 1061, 1064-
1065.)
The Discovery Rule
A statute of limitations prescribes the period of time past which a plaintiff may not
commence a cause of action. (Code Civ. Proc., § 312; Fox v. Ethicon Endo-Surgery, Inc.
(2005) 35 Cal. 4th 797, 806 (Fox).) The starting point for the running of a limitations
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period is the date of the “accrual of the cause of action.” (Fox, supra, 35 Cal.4th at p.
806.) As a general rule, the accrual date of a cause of action is “‘when the cause of
action is complete with all of its elements.’” (Ibid.)
To avoid the unfairness that would result from the forfeiture of a cause of action
by the expiration of a statute of limitations period before a plaintiff knows it may exist,
there is an exception to the general rule of accrual noted above. This exception is known
as the “discovery rule.” Under the discovery rule, the date for the accrual of a cause of
action is delayed “until the plaintiff discovers, or has reason to discover, the cause of
action.” (Fox, supra, 35 Cal.4th at p. 807.) A plaintiff is said to “discover” a cause of
action when he or she “suspects a factual basis, as opposed to a legal theory, for its
elements, even if he [or she] lacks knowledge thereof . . . .” (Norgart v. Upjohn Co.
(1999) 21 Cal. 4th 383, 397-398 (Norgart), italics added, citing Jolly v. Eli Lilly & Co.
(1988) 44 Cal. 3d 1103, 1110 (Jolly).) A plaintiff is said to have “reason to discover” a
cause of action when he or she “has reason . . . to suspect a factual basis for its
elements.” (Norgart, at p. 398, italics added.) Thus, the discovery rule establishes two,
alternate tests for the date of accrual of a cause of action: (1) a subjective test based on
when a plaintiff actually suspected that an injury was caused by wrongdoing; or (2) an
objective test based on when a reasonable person would have suspected that an injury
was caused by wrongdoing. (See Kitzig v. Nordquist (2000) 81 Cal. App. 4th 1384, 1391.)
Under either test, it is the suspicion of the existence of the elements of a cause of
action that generally will be enough to trigger the accrual date. (Norgart, supra, 21
Cal.4th at p. 398, fn. 3; Jolly, supra, 44 Cal.3d at p. 1112.) In applying the concept of
suspicion, the discovery rule looks to “the ‘generic’ elements of wrongdoing, causation,
and harm.” (Fox, supra, 35 Cal.4th at p. 807, quoting Norgart, supra, 21 Cal.4th at
p. 397.) This means that courts “do not take a hypertechnical approach to the application
of the discovery rule. Rather than examining whether the plaintiffs suspect facts
supporting each specific legal element of a particular cause of action, we look to whether
the plaintiffs have reason to at least suspect that a type of wrongdoing has injured them.”
(Fox, supra, 35 Cal.4th at p. 807.)
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Subjective or objective suspicion of one or more elements of a cause of action
against a particular potential defendant, and thus, the accrual date of the cause of action
against that defendant, cannot be avoided by “dilatory tactics.” (Fox, supra, 35 Cal.4th at
p. 807.) To employ the discovery rule to delay the accrual date of a cause of action, a
potential plaintiff who suspects that an injury may have been caused by wrongdoing
“must conduct a reasonable investigation of all potential causes of [action].” (Id. at
p. 808.)
In Fox, the Supreme Court clarified the issue of how this requirement of a
reasonable investigation affects the date of accrual of a cause of action, and articulated
this rule: “If such an investigation would have disclosed a factual basis for a cause of
action, the statute of limitations begins to run on that cause of action when the
investigation would have brought such information to light.” (Fox, supra, 35 Cal.4th at
pp. 808-809.) Given Fox’s repeated discussions of the Norgart and Jolly cases with
approval, we believe that Fox’s rule must be read as follows: “If such an investigation
would have disclosed a suspected factual basis for a cause of action, the statute of
limitations begins to run on that cause of action when the investigation would have
brought such information to light.” The unstated, but necessarily implied corollary rule is
that, if a reasonable investigation would not have disclosed a suspected factual basis for a
cause of action, the statute of limitations does not begin to run. But once a plaintiff
suspects or has reason to suspect a factual basis for a cause of action, he or she may not
wait to sue until he or she corrals the facts that are “necessary to establish the claim; that
is a process contemplated by pretrial discovery.” (Jolly, supra, 44 Cal.3d at p. 1111.)
Fox was a physical injury case alleging harm from a medical device, and arose in
the context of a demurrer. In Fox, the Supreme Court accepted as true a plaintiff’s
allegations that she conducted a reasonable investigation after filing a medical
malpractice action, but had not found facts to suggest a cause of action existed against the
medical device maker until later, when she deposed her doctor. (Fox, supra, 35 Cal.4th
at p. 811.)
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The Supreme Court noted that, in a number of opinions in physical injury cases,
it had addressed delayed accrual and the discovery rule in the context of summary
judgment motions where it was presented with a record of undisputed material facts
“for determining when and how the plaintiff discovered an injury, whether the plaintiff
conducted a reasonable investigation, when such an investigation would have brought to
light the factual basis for a cause of action . . . and whether the plaintiff could have
discovered the factual basis for cause of action earlier by exercising reasonable
diligence.” (Fox, supra, 35 Cal.4th at p. 810.)
The court went on to explain “[i]n our previous [physical injury] cases addressing
the discovery rule, we affirmed that ignorance of the identity of the defendant does not
delay accrual of a cause of action, but that ignorance of a generic element of the cause of
action does. (Norgart, supra, 21 Cal.4th at p. 399.) Such a distinction certainly exists in
the context of a products liability action. Although the identity of the manufacturer-
wrongdoer is not an essential element of a products liability cause of action, and therefore
ignorance of its identity will not delay the running of the statute of limitations . . . , a
plaintiff’s ignorance of wrongdoing involving a product’s defect will usually delay
accrual because such wrongdoing is essential to that cause of action. . . .
“It is therefore consistent with our prior applications of the discovery rule to delay
accrual of a products liability cause of action even when a related medical malpractice
claim has already accrued, unless the plaintiff has reason to suspect that his or her injury
resulted from a defective product. More broadly stated, if a plaintiff’s reasonable and
diligent investigation discloses only one kind of wrongdoing when the injury was actually
caused by tortious conduct of a wholly different sort, the discovery rule postpones accrual
of the statute of limitations on the newly discovered claim.
“In both Jolly and Norgart, the plaintiffs suspected or had reason to suspect that a
product had caused their injury. . . . [¶] . . . [¶] . . . Jolly and Norgart presuppose a
situation in which the factual basis for a claim was reasonably discoverable through
diligent investigation. In both Jolly and Norgart, the court emphasized that the plaintiffs
had ample reason to suspect the basis of their claims. [Citations.] . . .
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“[¶] . . . [¶]
“As the allegations in this case illustrate, a diligent plaintiff’s investigation may
only disclose an action for one type of tort (e.g., medical malpractice) and facts
supporting an entirely different type of tort action (e.g., products liability) may, through
no fault of the plaintiff, only come to light at a later date. Although both claims seek to
redress the same physical injury to the plaintiff, they are based on two distinct types of
wrongdoing and should be treated separately in that regard. Accordingly, the . . . rule
[articulated in Bristol-Myers Squibb Co. v. Superior Court (1995) 32 Cal. App. 4th 959]
that all claims arising from an injury accrue simultaneously, even if based upon distinct
types of wrongdoing, is inconsistent with the generic elements approach prescribed by
Norgart. . . .
“[¶] . . . [¶]
“It would be contrary to public policy to require plaintiffs to file a lawsuit ‘at a
time when the evidence available to them failed to indicate a cause of action.’ . . .”
(Fox, supra, 35 Cal.4th at pp. 813-815.)
Analysis
Zenga alleges a single type of harm -- an invasion of his privacy, by a single type
of wrongful instrumentality -- wiretapping. In other words, unlike Fox, we do not have
one defendant who allegedly committed one type of wrongdoing and a second defendant
who allegedly committed a distinct type of wrongdoing. In Zenga’s case, the three
defendants are alleged to have been actors in the single type of wrongdoing, as noted,
wiretapping. With this foundational perspective in mind, we turn to Zenga’s appeal.
1. Subjective Suspicion
It is undisputed –– because it was admitted–– that Zenga subjectively suspected,
long before mid-2005, that his privacy had been was invaded, and that the instrumentality
of the invasion was wiretapping. In responding to defendants’ separate statement of facts
in support of their motion for summary judgment, Zenga admitted that the following facts
were undisputed: Zenga knew, during the time of the Scary Movie litigation, that
Greenberg and Grey had retained Pellicano. Zenga’s attorney “wondered if wiretapping
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was going on” during the Scary Movie litigation, and “took steps to determine whether
there was a possibility that some unlawful wiretapping was going on” at that time. Zenga
had multiple conversations with different people during 2001 about their suspicions that
Pellicano had wiretapped their telephones.
In 2003 and 2004, Zenga had even more conversations with others about being
wiretapped. In 2003, Zenga went to the FBI to ask the agency to look into whether he
had been wiretapped. Zenga told the FBI that a neighbor had reported to Zenga that
someone representing to be from PacBell asked to enter the neighbor’s yard to set up
phone service to Zenga’s home. After hearing the report from his neighbor, Zenga began
to hear “weird noises” on his telephone. Zenga read and heard multiple news reports
during the 2001-2004 time frame about Pellicano’s wiretapping activities. In 2003,
Zenga testified before a grand jury that was, as Zenga understood, investigating whether
Pellicano had wiretapped telephones, including Zenga’s telephone. A Los Angeles
Times reporter interviewed Zenga in the fall of 2003 for a story regarding Zenga’s
suspicion that Pellicano had wiretapped his telephones. The Times article was published
in November 2003.
We could go on, but see no need to do so. Zenga’s argument on appeal that he
offered evidence from which a jury could conclude that he “did not suspect” a factual
basis for his wiretapping claims earlier than one year period before he filed his lawsuit
simply denies the existence of the undisputed facts in the record. It is undisputed that
Zenga did suspect a factual basis that he had been the victim of an invasion of privacy by
wiretapping well before mid-2005. Indeed, it is undisputed that Zenga actually acted on
his suspicions by undertaking efforts to investigate possible wrongdoing.
2. Objective Suspicion
It is equally undisputed that Zenga objectively should have suspected, long before
mid-2005, that his privacy had been invaded, and that the instrumentality of the invasion
was wiretapping. Our discussion above applies with equal force here. Any reasonable
person faced with the circumstances described above should have suspected he had been
the victim of an invasion of privacy by means of wiretapping. We presume that Zenga is
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a reasonable person, and he actually suspected the harm of an invasion of privacy by
wiretapping. Thus, it is undisputed that a reasonable person should have suspected the
harm of an invasion of privacy by wiretapping.
3. The Effect of Investigation
This leaves the only true issue on appeal which is Zenga’s argument that he
presented evidence from which a jury could conclude that he conducted a reasonable
investigation upon suspecting wiretapping, but did not find sufficient facts to support
filing a lawsuit until a period within one-year of filing his current suit against Greenberg,
Grey and PacBell. Zenga’s evidence on this point largely relied on the deposition of his
attorney, Gregory Dovel. Zenga’s legal argument was that the accrual date of his cause
of action was delayed until he obtained “actual knowledge” that he had been wiretapped.
In accord with the standards for reviewing summary judgment motions, the
following facts must be accepted as being true: In April 2005, Zenga’s counsel received
a letter from the United States Attorney’s Office (USAO) requesting that Zenga waive his
attorney-client privilege regarding documents in possession of the USAO. Later, Zenga’s
counsel reviewed the documents to determine whether they contained privileged matter.
In May 2005, Zenga’s counsel reviewed copies of records summaries prepared by Tarita
Virtue, a Pellicano employee, showing telephone calls of Zenga that were intercepted by
Pellicano. Zenga first learned that he “was actually wiretapped” by Pellicano when the
government unsealed the criminal indictment of Pellicano in early 2006. Prior to that
time, Zenga’s counsel had contacted phone company representatives, a security expert,
the FBI and federal prosecutors in attempts to learn facts showing that Zenga actually
was wiretapped, but Zenga’s counsel did not “discover a factual basis” for a wiretapping
claim.
We agree with Greenberg, Grey and PacBell that Zenga reads too much into Fox
in relying upon the case to support the proposition that, until a reasonable investigation
obtains hard evidence of a cause of action, the cause of action does not accrue. We do
not read Fox as broadly as does Zenga. Fox did not change the Supreme Court’s prior
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discovery rule jurisprudence that the statute of limitations begins to run when a plaintiff
“suspects” the “generic” elements of a claim. (Fox, supra, 35 Cal.4th at p. 807.)
Under Zenga’s construction of Fox, a cause of action does not accrue until a
plaintiff conducts a reasonable investigation which finds evidence “to support a cause of
action,” rather than evidence which raises a suspicion of harm caused by a particular
type of wrongdoing. If this is what Fox holds, it must be read as a complete overhaul of
the Supreme Courts’ previous discovery rule jurisprudence, without any indication in Fox
that this is what the court was doing. We simply do not read Fox to have done as much.
Zenga’s construction of Fox is at odds with the Supreme Court’s decisions in Jolly
and Norgart –– neither of which he seriously addresses in his reading of Fox. The
problem is that Fox addressed an unusual situation of distinguishing the date of accrual of
a products liability claim that was tangential to a medical malpractice claim. Fox stands
for the simple proposition that the accrual date for each claim must be addressed on its
own. Fox, as far as we read it, left the principles articulated in Jolly and Norgart
undisturbed when it comes to addressing a particular claim.
In Jolly, the Supreme Court unanimously upheld summary judgment against the
plaintiff on the ground of the statute of limitations under the discovery rule, finding that
her claim accrued when she suspected a factual basis for her products liability claim. In
Jolly, the plaintiff filed her products liability suit in 1981. The limitations period was one
year. The Supreme Court found that her cause of action accrued by no later than 1978,
when she endured surgery for cancer and suspected, that her condition was a result of her
mother’s ingestion of DES during pregnancy. (Jolly, supra, 44 Cal.3d at p. 1107-1108.)
It was not telling that the summary judgment motions disclosed “no conclusive
evidence . . . that a reasonable investigation by plaintiff in 1978 would have disclosed
specific proven facts that would establish any wrongful conduct on the part of a DES
drug manufacturer.” (Id. at p. 1108, italics added.) “In sum, the limitations period begins
when the plaintiff suspects, or should suspect, that she has been wronged.” (Id. at p.
1114.) The court expressly rejected a formulation of the discovery rule that would take
into account the acquisition of evidence to prove a claim: “A plaintiff need not be aware
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of the specific ‘facts’ necessary to establish the claim; that is a process contemplated by
pretrial discovery.” (Id. at p. 1111.) Only “a suspicion of wrongdoing” was needed for
the clock to start running. (Ibid.)
Norgart follows a similar path. There, the plaintiffs sued a drugmaker in 1991 for
the death of their daughter in 1985 from a drug overdose. The limitations period was one
year. The plaintiff admitted in discovery that, in 1985, they had “thought” there had to be
some reason that caused their daughter to commit suicide, and that, by 1986, he had
“formed a belief” that somebody “‘did something wrong to [his daughter] that caused her
to take her own life.’” (Norgart, supra, 21 Cal.4th at p. 392.) The court affirmed a grant
of summary judgment, ruling that the plaintiffs’ claim accrued by at least 1986, because
they had admitted to having a suspicion, at that time, that someone had done something
wrong to cause their daughter’s death. (Id. at p. 406, citing Jolly.)
We see little difference between Jolly and Norgart on the one hand, and Zenga’s
current case on the other hand. The record on appeal here is replete with admissions by
Zenga that he suspected wiretapping long before mid-2005. That he did not obtain hard
evidence to support those suspicions until later does not mean that the statute of
limitations did not accrue long before mid-2005.
We find the trial court did not err when it granted the summary judgment motion
filed by Greenberg, Grey and PacBell.
DISPOSITION
The judgment is affirmed. Respondents are awarded costs on appeal.
BIGELOW, P.J.
We concur:
RUBIN, J. GRIMES, J.
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