Case Number: BC570854??? Hearing Date: September 01, 2016??? Dept: 58
JUDGE JOHN P. DOYLE
DEPARTMENT 58
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Hearing Date: Thursday, September 1, 2016
Calendar No: 7
Case Name: Tract No. 7260 Association, Inc. v. Fix the City Inc.
Case No.: BC570854 (r/t SC125328)
Motion: Motion to Compel Compliance or for Protective Order
Moving Party: Defendants Fix the City Inc. and Michael Eveloff
Responding Party: Plaintiff Tract No. 7260 Association, Inc.
Tentative Ruling: Motion is denied.
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I. BACKGROUND
On 1/29/15, Tract No. 7260 Association, Inc. filed this action (BC570854) against Fix the City Inc. asserting a common count for money had and received based on coercion and undue influence. After the Court granted a motion for judgment on the pleadings with leave to amend, Tract 7260 filed the operative First Amended Complaint on 4/15/16 which asserts causes of action for (1) assumpsit, (2) rescission, and (3) injunctive relief.
Tract 7260 alleges that Michael Eveloff, as a board member and the president of Tract 7260, negotiated a contract in 2012 which concerned Tract 7260 giving up rights in a contract with a third party. In the 2012 contract, the third party proposed to pay $3.1 million to fund neighborhood improvements but Eveloff proposed that the funds be paid ?to a non-profit corporation selected by Tract 7260? which was agreed to by the third party. The 2012 contract was signed by the third party and Eveloff as president of Tract 7260 in June 2012. In July 2012, Eveloff retained Beverly Palmer of Strumwassert & Woocher (?S&W?), which was then Tract 7260?s counsel, to incorporate Fix the City as a nonprofit corporation with Eveloff as its president. Eveloff through Palmer directed the third party to pay $200,000 under the 2012 contract to Fix the City. Tract 7260?s board did not approve of or know about the incorporation of and the $200,000 payment to Fix the City. In November 2012, a board member of Tract 7260 learned about the $200,000 payment and objected that Tract 7260 had not approved Fix the City. Eveloff agreed to hold a special meeting on 1/30/13. Palmer and S&W, despite having a conflict of interest that was not fully disclosed, prepared a written opinion on the 2012 contract that did not fully disclose the third party?s proposal to pay funds for neighborhood improvements or facts about Fix the City. At the special meeting on 1/30/13, Tract 7260?s board approved Fix the City by a vote of 6-5 but imposed a number of conditions. Shortly thereafter, Eveloff circulated a proposed motion that he claimed had been approved requesting comments by 5 p.m. the next day which was contrary to Tract 7260?s practice of approving minutes of action at the next board meeting. In February 2013, Eveloff and Palmer instructed the third party to pay $2.9 million to Fix the City despite knowing that Tract 7260 had not approved or agreed upon the terms of the resolution approving Tract 7260.
On 1/28/16, Tract 7260 filed an action (SC125328) against Eveloff for breach of fiduciary duty arising out of the 2012 contract and the payment of funds to Fix the City.
On 4/8/16, the Honorable Barbara A. Meiers found the two actions related. On 4/26/16, Judge Meiers accepted a peremptory challenge filed by Eveloff in SC125328. On 6/2/16, the related actions were assigned to this Court.
Fix the City and Eveloff (collectively ?Defendants?) have filed demurrers and anti-SLAPP motions in the related actions. These motions and the CMC are set for hearing on 9/15/16.
II. MOTION TO COMPEL COMPLIANCE OR FOR PROTECTIVE ORDER
Defendants have filed a motion to compel Tract 7260 to file confidential materials under seal, seeking to enforce Judge Meiers? 4/8/16 order or the entry of a protective order. The motion is denied based on the same reasons as stated in the Court?s 8/9/16 ruling denying Defendants? motion to seal.
When Judge Meiers accepted Eveloff?s peremptory challenge, Judge Meiers stated that ?due to collateral estoppel, the work and time put in by the court and counsel on case number BC570854 will not be wasted and an undue duplicative effort in two courts (at least as to issues already decided) will not occur due to this court?s decision not to retain case #BC570854? (M.O. dated 4/26/16). On 4/8/16, Judge Meiers only ruled as to the parties? use and disclosure of the 2012 contract ?to the extent necessary to the preparation and presentation of [the related actions]? with only limitations as to third parties signing confidentiality statements, concluding that Tract 7260?s claims about the loss of ?quasi public? funds overrode any perceived need for confidentiality. See M.O. dated 4/8/16.
Defendants argue that Judge Meiers? 4/8/16 ruling is inconsistent with the public filing of confidential materials and that Tract 7260 has violated the subject ruling by publicly filing such materials in this action. But at most, Judge Meiers? 4/8/16 ruling only governed the parties? use and disclosure of confidential materials. Indeed, on 4/11/16, Judge Meiers clarified that the 4/8/16 ruling ?does not relate to the ?world at large? that has access to court filings.? M.O. dated 4/11/16. Therefore, Tract 7260 has not violated Judge Meiers? 4/8/16 ruling by merely filing the confidential materials.
Additionally, it is worth noting that the asserted confidential materials appear to consist of materials related to the 2012 contract and materials subject to asserted attorney-client privilege and/or attorney work product protections. But as explained in the Court?s 8/9/16 ruling, neither Defendants nor non-party Century City Mall, LLC has established an overriding interest that supports the sealing of the requested materials. The Court believes that the same analysis on the motion to seal applies to a protective order such that a protective order is not required at this time under the circumstances. See, e.g., Mercury Interactive Corp. v. Klein (2007) 158 Cal.App.4th 60, 106-7 (requiring good cause); Raymond Handling Concepts Corp. v. Superior Court (1995) 39 Cal.App.4th 584, 588 (stating that the issuance and formulation of the protective order is a matter of discretion).
In sum, the 2012 contract and related materials are asserted to be confidential because of a confidentiality provision in the 2012 contract, and Defendants request that these materials be sealed. But Judge Meiers? 4/8/16 ruling did not address the filing or sealing of such materials, and as set forth in the Court?s 8/9/16 ruling, good cause has not been established to support sealing materials related to the 2012 contract. Therefore, the motion is denied.