Kerner v. Superior Court of L.A. Cnty.

• Decision Date: 21 May 2012
• Docket Number: B234423,B235664,B236927.,Nos. B233918,s. B233918
• Citation: 12 Cal. Daily Op. Serv. 5518,2012 Daily Journal D.A.R. 6595,206 Cal.App.4th 84,141 Cal.Rptr.3d 504
• Court: California Court of Appeals Court of Appeals
• Parties: Lisa KERNER, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; Richard M. Widom, Real Party in Interest. Stockwell, Harris, Widom, Woolverton & Muehl et al., Petitioners, v. The Superior Court of Los Angeles County, Respondent; Richard M. Widom, Real Party in Interest.

206 Cal.App.4th 84

141 Cal.Rptr.3d 504

12 Cal. Daily Op. Serv. 5518

2012 Daily Journal D.A.R. 6595

Lisa KERNER, Petitioner,

v.The SUPERIOR COURT of Los Angeles County, Respondent;

Richard M. Widom, Real Party in Interest.

Stockwell, Harris, Widom, Woolverton & Muehl et al., Petitioners,

v.The Superior Court of Los Angeles County, Respondent;

Richard M. Widom, Real Party in Interest.

Nos. B233918, B235664, B234423, B236927.

Court of Appeal, Second District, Division 3, California.

April 26, 2012.

As Modified May 21, 2012.

Cohon & Pollak, Los Angeles, Jeffrey M. Cohon, Henry Nicholls; Sedgwick, Los Angeles, Robert F. Helfing and Heather L. McCloskey for Petitioners.

No appearance for Respondent.

Katten Muchin Rosenman, Los Angeles, Steve Cochran, Stacey McKee Knight and Melissa S. Glousman for Real Party in Interest.

CROSKEY, J.

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), are defendants in an action brought by another member of the firm, Richard M. Widom. Widom's complaint arises from the firm's termination of his employment after Lisa Kerner, an attorney employed by the firm who was married to Widom at the time, accused him of domestic violence.

Kerner challenges orders compelling Defendants to produce documents purportedly protected by her attorney-client privilege and compelling her to answer deposition questions purportedly invading her attorney-client privilege. Defendants challenge orders permitting discovery of their financial condition in connection with Widom's claims for punitive damages (Civ.Code, § 3295, subd. (c)) and, based on collateral estoppel, granting a motion in limine to exclude any evidence of purported domestic violence.

After careful consideration of the record in these four consolidated writ proceedings, we conclude that (1) the trial court must conduct further proceedings to determine whether Kerner waived her claims of attorney-client privilege with respect to the production of documents; (2) the trial court erred in finding that Kerner and Woolverton did not have an attorney-client relationship and improperly granted Widom's motion to compel Kerner to answer certain deposition questions; (3) the trial court erred by considering conduct protected by the litigation privilege (Civ.Code, § 47, subd. (b)) in support of its finding that Widom had established a substantial probability of prevailing on a claim for punitive damages; (4) the existence of an attorney-client relationship between Woolverton and Kerner does not establish a basis for privity between them for purposes of collateral estoppel; and (5) the trial court's consideration of evidence that Widom had been found “factually innocent” of criminal charges in ruling on the motion in limine was error.

We therefore will grant in part and deny in part the petition challenging the orders compelling the production of documents and grant the petitions challenging the order compelling Kerner to answer deposition questions, the order permitting discovery of Defendants' financial condition and the order granting the motion in limine.

FACTUAL AND PROCEDURAL BACKGROUND

1. Factual Background

The Stockwell firm is a law firm engaged primarily in workers' compensation defense work. Widom was a member of the Stockwell firm for many years. Kerner also worked as an attorney for the firm. Widom and Kerner married in 2005 and separated in March 2009 after a physical altercation between them. Kerner filed a petition for marital dissolution in March 2009 ( In re Marriage of Kerner and Widom (Super. Ct. L.A. County, No. BD501681)) and obtained a temporary restraining order against Widom based on allegations of domestic violence.

The Stockwell firm notified Widom on April 22, 2009, that his employment was terminated effective that day based on Kerner's claims against him and other claims of misconduct.

2. Complaint and Cross–Complaint

Widom filed a complaint against the Stockwell firm, Woolverton, Harris and Muehl in June 2009. He filed a verified second amended complaint against the same defendants in August 2010 alleging that the Stockwell firm had terminated his employment without cause “to avoid paying him the salary, benefits and bonuses he would have earned through his retirement, and the four million dollars in deferred compensation to which he is entitled.” He alleges that Defendants initially expressed their support for Widom in his opposition to Kerner's application for a temporary restraining order. He alleges, however, that Defendants later terminated his employment without notice and defamed him.

In his complaint, Widom pleads 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. He seeks compensatory and punitive damages, restitution and disgorgement, injunctive and declaratory relief, and the dissolution of the Stockwell firm and appointment of a receiver.

The Stockwell firm filed a cross-complaint against Widom and Law Offices of Richard M. Widom, LLP, in January 2010. It filed a second amended cross-complaint against those same cross-defendants in October 2010 alleging that Widom had diverted the firm's money for his own purposes, induced the firm's attorneys to work for his competing law firm and solicited clients away while he was still a shareholder and director of the Stockwell firm, and had exposed the Stockwell firm to liability “by assaulting and battering Lisa Kerner” and by mistreating another employee. The Stockwell firm alleges 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. ¹

3. Other Proceedings

Widom filed a petition for writ of mandate against the Stockwell firm, Woolverton, Harris and Muehl on August 20, 2009 ( Widom v. Stockwell, Harris, Widom, Woolverton & Muehl et al. (Super Ct. L.A. County, No. BS122265)), seeking to compel the firm to allow him to inspect its books and records. The trial court entered a judgment on October 8, 2009, granting the petition. The court found that Widom was not properly removed as a director and shareholder and that he remained a director and shareholder of the firm.²

Kerner filed a complaint against Widom on September 14, 2009 ( Kerner v. Widom (Super. Ct. L.A. County, No. BC421690)), and filed a first amended complaint on September 30, 2009, alleging counts for assault and battery and intentionalinfliction of emotional distress and seeking money damages. Kerner alleged that Widom had threatened and attacked her during their marriage, culminating in a physical attack on March 1, 2009. ³

The Los Angeles City Attorney filed a criminal complaint against Widom in November 2009. On February 3, 2010, a jury found him not guilty of spousal abuse, spousal battery, simple assault and simple battery. On Widom's motion, the trial court determined that he was factually innocent of the charges and entered an order declaring him factually innocent on March 18, 2010.

The trial court in the family law proceeding conducted a hearing over several days on Kerner's application for a permanent restraining order against Widom. The court stated in its oral ruling on January 26, 2010, that Kerner need only prove by a preponderance of the evidence that a single act of domestic violence had occurred. The court stated that Kerner's testimony about the events of March 1, 2009, lacked credibility and that her actions on that date and thereafter were inconsistent with her claim that she feared for her safety. The court also stated that Kerner's description of the events had changed over time and seemed exaggerated. The court found that Kerner had suffered injuries in the course of her altercation with Widom on March 1, 2009, but noted that she had admitted slapping him and previously had described the altercation as a pushing match.

The trial court in the family law proceeding concluded:

“My own finding is that Ms. Kerner is not a credible witness and that her testimony as to these events is not believed by the court. I choose to believe Mr. Widom's version of the facts, which is not to say that there is foolproof evidence that the events occurred in the fashion that he says, but on balance, I find his testimony to be more credible.

“In fact, some of Ms. Kerner's testimony is among the most incredible testimony I have heard in a very brief period on the bench, but in 40–plus years as a trial lawyer, including most specifically her testimony about why she returned to the home because of concern over her cats and stayed there for four days in the face of what she thought was her imminent demise at the hands of Mr. Widom. So I'm going to deny the request for restraining order on that basis.”

The trial court in Kerner's civil action for damages against Widom later concluded that the finding by the court in the family law proceeding that Widom did not commit domestic violence on March 1, 2009, was collateral estoppel in the civil action. Therefore, on February 17, 2011, the court in the civil action for damages granted Widom's motion in limine to exclude any evidence in support of Kerner's tort claims. She dismissed her civil action for damages with prejudice on March 1, 2011.

4. Widom's Motion for Net Worth Discovery

Widom filed a motion in December 2010 for an order permitting discovery of Defendants'...