This case was last updated from Los Angeles County Superior Courts on 10/27/2020 at 06:13:14 (UTC).

ACRISURE OF CALIFORNIA LLC VS MARK WOOD

Case Summary

On 12/21/2016 ACRISURE OF CALIFORNIA LLC filed a Contract - Business lawsuit against MARK WOOD. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are ELIZABETH ALLEN WHITE and LAURA A. SEIGLE. The case status is Pending - Other Pending.

Case Details Parties Dockets

 

Case Details

  • Case Number:

    ****4516

  • Filing Date:

    12/21/2016

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Business

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

ELIZABETH ALLEN WHITE

LAURA A. SEIGLE

 

Party Details

Petitioner, Plaintiff and Cross Defendant

ACRISURE OF CALIFORNIA LLC

Respondents, Defendants, Cross Defendants and Cross Plaintiffs

WOOD MARK

DOES 1 THROUGH 50

WORLD INSURANCE ASSOCIATES LLC [DOE 2]

KAVANAUGH BRYAN

WORLD INSURANCE ASSOCIATES LLC

MB HOLDINGS INC.

ACRISURE OF CALIFORNIA LLC

MCGINNIS ANDREW

BUCKALEW DAVE

Attorney/Law Firm Details

Cross Defendant and Plaintiff Attorneys

FARROW JEFFREY D.

CONTRERAS JESSE J.

STITT TODD HARRISON ESQ.

HAGEMANN KELLY M.

Petitioner and Plaintiff Attorneys

CONTRERAS JESSE J.

STITT TODD HARRISON ESQ.

Defendant and Cross Defendant Attorneys

ERICKSON MARK D.

DENISTON MARTIN K.

SHERIDAN MARK D.

MORK MARISOL C.

FARROW JEFFREY D.

Cross Plaintiff Attorneys

KITZES DANIEL V.

D'ANDREA E. JOSEPH

Court Documents

Court documents are not available for this case.

 

Docket Entries

  • 01/19/2021
  • Hearing01/19/2021 at 10:00 AM in Department 48 at 111 North Hill Street, Los Angeles, CA 90012; Jury Trial

    Read MoreRead Less
  • 01/05/2021
  • Hearing01/05/2021 at 08:30 AM in Department 48 at 111 North Hill Street, Los Angeles, CA 90012; Final Status Conference

    Read MoreRead Less
  • 11/30/2020
  • Hearing11/30/2020 at 10:00 AM in Department 48 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Motion for Summary Judgment

    Read MoreRead Less
  • 11/30/2020
  • Hearing11/30/2020 at 10:00 AM in Department 48 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Motion to Seal Motion to Seal Exhibits Submitted in Opposition to Summary Judgment Motion

    Read MoreRead Less
  • 11/30/2020
  • Hearing11/30/2020 at 10:00 AM in Department 48 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Motion for Summary Judgment

    Read MoreRead Less
  • 11/30/2020
  • Hearing11/30/2020 at 10:00 AM in Department 48 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Motion to be Admitted Pro Hac Vice

    Read MoreRead Less
  • 10/14/2020
  • Docketat 10:00 AM in Department 48, Laura A. Seigle, Presiding; Hearing on Motion for Summary Judgment (or in the Alternative, for Summary Adjudication as to M.B. Holdings, Inc.'s Cross-Complaint - Reservation ID #347678688752) - Not Held - Rescheduled by Court

    Read MoreRead Less
  • 10/14/2020
  • Docketat 10:00 AM in Department 48, Laura A. Seigle, Presiding; Hearing on Motion for Summary Judgment (- Reservation ID #894862322833) - Not Held - Rescheduled by Court

    Read MoreRead Less
  • 10/14/2020
  • Docketat 10:00 AM in Department 48, Laura A. Seigle, Presiding; Hearing on Motion to Seal (Motion to Seal Exhibits Submitted in Opposition to Summary Judgment Motion) - Not Held - Rescheduled by Court

    Read MoreRead Less
  • 10/14/2020
  • Docketat 10:00 AM in Department 48, Laura A. Seigle, Presiding; Hearing on Motion to be Admitted Pro Hac Vice - Not Held - Rescheduled by Court

    Read MoreRead Less
516 More Docket Entries
  • 01/26/2017
  • DocketNOTICE TO STATE COURT AND ADVERSE PARTY OF FILING OF NOTICE OF REMOVAL BY DEFENDANT MARK WOOD

    Read MoreRead Less
  • 01/13/2017
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

    Read MoreRead Less
  • 01/13/2017
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

    Read MoreRead Less
  • 01/13/2017
  • DocketNotice of Case Management Conference; Filed by Clerk

    Read MoreRead Less
  • 01/04/2017
  • DocketProof-Service/Summons

    Read MoreRead Less
  • 01/04/2017
  • DocketPROOF OF SERVICE SUMMONS

    Read MoreRead Less
  • 12/21/2016
  • DocketComplaint; Filed by Acrisure of California, LLC (Plaintiff)

    Read MoreRead Less
  • 12/21/2016
  • DocketSUMMONS

    Read MoreRead Less
  • 12/21/2016
  • DocketCOMPLAINT FOR: DAMAGES AND OTHER RELIEF: 1. TORTIOUS INTERFERENCE WITH CONTRACT ;ETC

    Read MoreRead Less
  • 12/21/2016
  • DocketDEMAND FOR JURY TRIAL

    Read MoreRead Less

Tentative Rulings

b'

Case Number: BC644516 Hearing Date: August 2, 2021 Dept: 48

\r\n\r\n

[TENTATIVE] ORDER RE MOTIONS IN LIMINE

\r\n\r\n

Acrisure’s MIL No. 5

\r\n\r\n

Plaintiff\r\nand Cross-Defendant Acrisure of California, LLC moves to exclude duplicative\r\ntestimony by defense experts Cunningham and Singer. Plaintiff contends that Defendants plan to\r\nhave both experts testify about industry standards.

\r\n\r\n

Wood\r\nargues that Cunningham is Wood’s expert and Singer is World’s expert, and that\r\neach party has the right to have his or its own expert testify. World argues that it designated both\r\nCunningham and Singer.

\r\n\r\n

Wood\r\nand World have the right to have their own experts testify. They are not required to share an\r\nexpert. World states that it plans to\r\nhave Cunningham and Singer testify on different topics – Cunningham on\r\nvaluation and damages, and Singer on insurance industry standards.

\r\n\r\n

The\r\nmotion is denied. If World solicits\r\ncumulative testimony from Cunningham and Singer, Acrisure can object at that\r\ntime.

\r\n\r\n

Acrisure’s MIL No. 6

\r\n\r\n

Acrisure\r\nseeks to exclude testimony by Cunningham and Singer about statements of law and\r\nlegal conclusions. Acrisure argues these\r\nexperts plan to testify about the definition of a trade secret, when a broker\r\nif able to freely solicit clients and sell his book of business, and whether an\r\nemployee handbook is a contract and the restrictions imposed by an employee\r\nhandbook. Acrisure contends these are\r\nlegal conclusions.

\r\n\r\n

Defendants\r\nargue the experts will offer opinions on industry standards, not legal conclusions,\r\nand at their depositions it was Acrisure’s counsel who asked questions calling\r\nfor legal conclusions.

\r\n\r\n

Exhibits\r\nB and C, highlighted by Acrisure to indicate the objectionable material,\r\npresent Cunningham’s and Singer’s opinions. \r\nExhibit B presents opinions that could be framed as industry\r\nstandards. If Cunningham is asked\r\nquestions that call for legal conclusions, as opposed to industry standards,\r\nAcrisure should object at that time. The\r\nmotion is denied as to Cunningham.

\r\n\r\n

Exhibit\r\nC contains an opinion that includes a legal conclusion. Paragraph 5(a) states, “I find no evidence\r\nthat such a list was misappropriated.” \r\nWhether any trade secret was misappropriated is a decision for the jury,\r\nand the expert’s conclusion that no misappropriation occurred does not aid the\r\njury. The motion is granted in part as\r\nto Singer, and this particular opinion is excluded. Otherwise, the opinions in Exhibit C could be\r\nframed as industry standards. If Singer\r\nis asked questions that call for legal conclusions, as opposed to industry\r\nstandards, Acrisure should object at that time.

\r\n\r\n

Acrisure’s MIL No. 7

\r\n\r\n

Acrisure\r\nmoves to exclude defense expert’s speculative testimony. According to Acrisure, expert Timothy\r\nCunningham plans to testify that that defendant Wood sustained $986,271 in\r\ndamages because his book of business had a transaction value of $1,668,000 and\r\nthere were many prospective buyers who would have purchased his book of\r\nbusiness.

\r\n\r\n

Acrisure\r\nargues that the following elements of Cunningham’s opinion are speculative: (1) that anyone would have offered to buy\r\nWood’s book of business, (2) that a buyer would have actually bought the book\r\nof business , (3) the amount the buyer would have paid, and (4) that Wood would\r\nhave stayed employed at Crystal. (Motion\r\nat p. 6.)

\r\n\r\n

“\r\n‘[T]he general principle [is] that damages for the loss of prospective profits\r\nare recoverable where the evidence makes reasonably certain their occurrence\r\nand extent.’ [Citation.] Such damages must ‘be proven to be certain\r\nboth as to their occurrence and their extent, albeit not with “mathematical\r\nprecision.” ’ [Citation.]” (Sargon Enterprises, Inc. v. University of\r\nSouthern California (2012) 55 Cal.4th 747, 773-774.) “Regarding lost business profits, the cases\r\nhave generally distinguished between established and unestablished\r\nbusinesses.” (Id. at p.\r\n774.) Lost profits of an established\r\nbusiness can be ascertained based on information such as past volume of\r\nbusiness and comparable business. (Ibid.) On the other hand, damages for prospective\r\nprofits from an unestablished business may be “uncertain, contingent and\r\nspeculative.” (Ibid.) “The lost profits inquiry is always\r\nspeculative to some degree. Inevitably,\r\nthere will always be an element of uncertainty.” (Id. at p. 775.)

\r\n\r\n

No\r\nparty contends that the insurance business is anything other than established and\r\nthat Wood was an established business person in that industry. Cunningham has the experience and knowledge\r\nto testify about the value of Wood’s book of business. He testified that he has worked “on well over\r\n100 transactions” and has knowledge of the marketplace in 2017. (Cunningham Depo. at p. 20.) He testified “there would be many prospective\r\nbuyers” for Wood’s book of business. (Id.\r\nat p. 116.) He explained that he would\r\nvalue the business based on the historical profit and loss statement and then\r\nbuild a model. (Id. at pp.\r\n70-71.) Using past profits of a business\r\nto determine future value is a recognized method. (Sargon, supra, 55 Cal.4th at p.\r\n774.) While there is some element of\r\nspeculation in this analysis, there is evidence on which to conclude it is\r\nreasonably certain that a buyer would have bought the book of business and paid\r\nthe estimate amount.

\r\n\r\n

The\r\ncases cited by Acrisure do not suggest Cunningham’s analysis was overly\r\nspeculative. Acrisure cites Greenwich\r\nS.F., LLC v. Wong (2010) 190 Cal.App.4th 739. (Motion at p. 6.) The Supreme Court in Sargon also\r\ndiscussed that case, using it as an example of claimed lost profits found to be\r\n“ ‘uncertain, hypothetical and entirely speculative.’ [Citation.] \r\n(Sargon, supra, 55 Cal.4th at p. 775.) In Greenwich, the plaintiff was not an\r\nestablished business and did not have a track record. (Ibid.) Here, Wood is established in the insurance\r\nindustry and has a track record. Cunningham\r\nalso has a track record in handling transactions like the proposed sale of\r\nWood’s book of business. (Opposition at\r\np. 5; Cunningham Depo. at p. 20.) The\r\nlost profits analysis here does not involve a new or unestablished business.

\r\n\r\n

In Vestar\r\nDevelopment II, LLC v. General Dynamics Corp. (9th Cir. 2001) 249 F.3d 958,\r\nthe plaintiff began negotiating to purchase land, but the seller ended up\r\nselling to a third party. (Vestar,\r\nsupra, 249 F.3d at p. 959.) The plaintiff sought damages of more than $48\r\nmillion dollars as the profits it would have earned if it had but the property\r\nand then developed a shopping center on the site. The court held the damages were speculative\r\nbecause the parties had no agreement to sell the property and there was no way\r\nto know if a deal would have ever been reached. \r\n(Id. at p. 962.) The lost\r\nprofits analysis in that case needed to assume the seller would have sold to\r\nthe plaintiff, the plaintiff would have built a shopping center, and the\r\nshopping center would have been profitable. \r\nIn this case, Wood had an offer from Crystal. It was not the situation that he had just\r\nbegun negotiations with Crystal and may not have even received an offer. The chain of speculation in Vestar was\r\nlong, and that case involved a unique transaction of real property. The analysis here is simpler and does not\r\nrequire many unsupported assumptions.

\r\n\r\n

Acrisure\r\ncites Wise v. DLA Piper LLP (2013) 220 Cal.App.4th 1180. (Motion at p. 6.) That case discussed whether the defendant\r\nwould have been able to collect debt from a third party. The court held that there was not substantial\r\nevidence to support a finding that the debt would have been collectible. (Wise, supra, 220 Cal.App.4th at pp. 1192-1193.) The law precluded some of the proposed\r\nmethods for collecting the debt. (Id.\r\nat pp. 1193, 1195, 1196.) Because the\r\nexpert opinion about collectability was premised on an incorrect legal theory,\r\nit could “not provide substantial evidence to support the finding of\r\ncollectability.” (Ibid.) The expert assumed the third party owned a property\r\neven though the asset search showed he did not own the property. (Id. at p. 1194.) The expert assumed without evidence that the\r\nthird party had foreign bank accounts. (Ibid.)\r\n He assumed that because the third party\r\ntook expensive trips, he had personal assets, but the evidence showed the trips\r\nwere paid with corporate funds. (Ibid.)\r\n Finally, the expert’s opinion that the\r\nthird party’s businesses would become successful in the future was not\r\nsupported by evidence because the evidence showed the businesses were dead and\r\nnew investment funds had largely dried up. \r\n(Id. at p. 1196.) Acrisure\r\ndid not point to evidence contradicting Cunningham’s opinion that “there would\r\nbe many prospective buyers” for Wood’s book of business. (Cunningham Depo. at p. 116.)

\r\n\r\n

Kids’\r\nUniverse v. In2Labs (2002 95 Cal.App.4th 870 involved an unestablished\r\nbusiness in an unestablished market. (Id.\r\nat p. 887.) That is not the situation\r\nhere.

\r\n\r\n

In Maatuk\r\nv. Guttman (2009) 173 Cal.App.4th 1191, the plaintiff had earned nothing\r\nfrom his patented technology for the four years before the lawsuit, and the\r\nevidence showed the lack of potential profit from the technology. (Id. at p. 1199.) Acrisure did not point to evidence that Wood’s\r\nbook of business lacked value or undercutting Cunningham’s value analysis.

\r\n\r\n

Acrisure also argues\r\nthere is no reason to think Wood would have stayed employed at Crystal through\r\n2017, citing Toscano v. Greene Music (2004) 124 Cal.App.4th 685. (Motion at p. 7.) That case held that the at-will nature of\r\nemployment is not “a strict impediment to recovery of future wages.” (Id. at p. 694.) However, the plaintiff’s damages were too\r\nspeculative because the expert assumed the employee would have stayed at the\r\njob for another 15-16 years, even though the employer could have fired him at\r\nany time. (Id. at pp.\r\n696-697.) The assumption here is not so\r\nspeculative. Crystal had extended a job\r\noffer to Woods, indicating they wanted to employ him. Also, even if he no longer worked at Crystal,\r\nhe could still sell his book of business. \r\n(Hagemann Decl., Ex. C.)

\r\n\r\n

In\r\naddition, Acrisure argues that to prevail on his cause of action for\r\ninterference with prospective business relations, Wood must have an existing\r\nrelationship, not a potential relationship that may eventually arise. (Motion at p. 5.) Wood argues that his interference cause of\r\naction is based on Acrisure interfering with the offer of employment from\r\nCrystal, not with Acrisure interfering with an offer to buy the book of\r\nbusiness.

\r\n\r\n

Wood’s\r\ninterference cause of action in the Second Amended Cross-Complaint alleges he\r\nhad a reasonable expectation of economic advantage from the offer of employment\r\nhe received from Crystal, and that Acrisure interfered with that offer. (SACC, ¶¶ 44-48.) The SACC does not allege that Acrisure\r\ninterfered with the sale of his book of business. Rather, he asserts his inability to sell his\r\nbook of business as damages caused by the interference with the Crystal offer.

\r\n\r\n

The\r\nmotion is denied.

\r\n\r\n

Moving party to give\r\nnotice.

\r\n\r\n

Parties who intend to\r\nsubmit on this tentative must send an email to the Court at\r\nSMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY\r\nencouraged to appear remotely.

\r\n\r\n'

Case Number: BC644516    Hearing Date: May 10, 2021    Dept: 48

[TENTATIVE] ORDER RE TRIAL MOTIONS

Plaintiff’s Motion to Exclude Witnesses Not Disclosed in Discovery

Plaintiff Acrisure of California, LLC and various related parties move to exclude Frank Costa, Michelle Stoebling, Brian Fitzgerald, and Michael Mann from testifying at trial because they were not disclosed in response to Plaintiff’s written discovery. Plaintiff also argues Fitzgerald and Mann have no personal knowledge of the facts at issue because they were hired after the events in dispute in this case, which occurred in 2016.

Defendant World had withdrawn Stoebling.

Defendant World responds that it identified those witnesses when become aware of those witnesses, in an email on March 12, 2021. Defendant argues that Fitzgerald and Mann were not employees until after the close of discovery and Costa’s role has changed, so that they would not have been proper witnesses at the time of the discovery responses.

World argues Fitzgerald is only necessary because Plaintiff requested certain documents be produced at trial, and Fitzgerald will authenticate those documents. If the parties cannot agree to the authenticity and admissibility of those documents, then as stated below, World is to make Fitzgerald available for a remote deposition by May 21, 2021 concerning those documents.

World argues Mann has percipient knowledge about “World’s business practices, and industry practices, that are relevant to understanding the transition of a broker from one brokerage to another.” The transition at issue here took place before Mann was employed at World, and therefore Mann does not have personal knowledge of World’s business practices regarding transition during the relevant time period. World argues that Plaintiff is seeking damages “resulting from ongoing business practices,” but World showed no evidence of that and did not explain what that means. The issue of industry practices is the subject of expert testimony, and Mann is not being presented as an expert. World also argues Mann has information relevant to the claim for punitive damages. If and when we reach the punitive damages phase, World can explain Mann’s personal knowledge.

The motion is DENIED subject to the witnesses being made available for depositions. Plaintiff did not prove that Defendant failed to identify the witnesses in discovery, because at the time of the discovery responses, the individuals were not witnesses. Defendant shall make Costa and Fitzgerald available for remote depositions by May 21, 2021. The motion is GRANTED as to Mann, at least until the punitive damages phase. Stoebling is withdrawn.

Plaintiff’s Motion regarding Emails Sent Through Employer Email System

Plaintiff Acrisure argues that Defendant Mark Wood that four emails are not privileged because Wood sent to his attorney using his employer email address, citing to Holmes v. Petrovich Development Co., LLC (2011) 191 Cal.App.4th 1047. That case held, “ ‘so far as [the party sending the emails was] aware,’ within the meaning of section 952, the company computer was not a means by which to communicate in confidence any information to her attorney. the company computer use policy made this clear, and [she] had no legitimate reason to believe otherwise, regardless of whether the company actually monitored employee e-mail. Thus, when, with knowledge of her employer’s computer monitoring policy, [she] used a company computer to e-mail her attorney about an employment action against her boss [], [she] in effect knowingly disclosed this information to a third party, the company and thus [the boss], who certainly was not involved in furthering [her] interests . . . .” (Id. at p. 1071.)

Acrisure argues it sent Wood the employee manual and handbook containing the company policy on email stating that all information sent via the company’s email systems should be treated as public and have no expectation of privacy. (Hagemann Decl., Exs. A, B.) Wood’s emails from his company email address contained a signature block stating that emails to and from that address may be “monitored, reviewed and archived.”

Here Wood used his own computer or phone, not a company computer. He says that he inadvertently used his work email address because those devices contained both his personal email address and his company email address, which have the same username. (Wood Decl., ¶¶ 4, 5.) Wood also states he did not acknowledge receipt of the employee manual and code of conduct and did not know the company email address was not private. (Wood Decl., ¶ 5.)

There is evidence Wood knew that emails to and from his company email address might be monitored or reviewed by a third party, as shown in the statement at the bottom of his work emails. However, the evidence does not support the conclusion Wood knowingly disclosed the information to a third party. Under Evidence Code section 952, a confidential communication with a lawyer is “information transmitted between a client and his or her lawyer in the course of the relationship and in confidence by a means which, so far as the client is aware, discloses the information to no third persons . . . .” (Holmes, supra, 191 Cal.App.4th at p. 1064.) Wood presented evidence that he did not intentionally use his work email address. He inadvertently used it because it was similar to his work email address.

To the extent the motion is to find the emails are not privileged, the motion is denied, and the objections to Exhibits 33, 34, 39 and 64 as attorney-client privileged are sustained.

Plaintiff’s Motion regarding Documents Not Produced in Discovery

Plaintiff Acrisure of California, LLC and various related parties move to exclude documents not produced in discovery. Discovery closed on February 25, 2019 for some claims and on January 21, 2020 for other claims, but the documents in question were not produced until August 28, 2019, November 16, 2020, April 15, 2021, and April 19, 2021.

World and Wood argue that the documents produced on April 15 and 19, 2021 did not exist during discovery because they contain information through March 31, 2021, and were requested by Plaintiff to be produced at trial pursuant to a trial subpoena. Because those documents contain information that did not previously exist, the motion to exclude them is denied.

World and Wood argue that the November 16, 2020 production is permissible because it contains a spreadsheet that assists in reading some documents produced by Acrisure. Wood created the spreadsheet to summarize those Acrisure documents. Therefore, the spreadsheet does not contain new information. They also argue that Plaintiff’s expert and Wood’s expert relied on these documents. Because these documents were used by both experts, the motion is denied.

Regarding the August 28, 2019 production, World and Wood state it was an exhibit to a deposition taken in August 2019. That means discovery was still being taken when that exhibit was used. Therefore, the motion is denied.

In sum, the motion to exclude the documents is denied.

Plaintiff’s Motion Regarding Exhibit 92

Defendant Wood objects to Exhibit 92, a letter from Plaintiff’s counsel Sanford Michelman as cumulative and hearsay. Wood contends it is a lawyer letter written after the fact to create a record that is not accurate.

Plaintiff contends the letter is not cumulative because it shows that Acrisure demanded that Crystal preserve all documents, but Crystal’s document production was incomplete and no privilege log was produced. Plaintiff has not shown that Crystal’s production of documents and a privilege log is an issue for trial, especially because Crystal is not a party in this case.

Second, Plaintiff argues the letter shows that the reason Michelman communicated with Crystal was because Wood was sharing trade secrets with Crystal as part of his potential employment with Crystal. Seven of the eight paragraphs of the letter are about document preservation. The first paragraph recites that Wood’s counsel threatened litigation against Plaintiff and that Wood is alleging that Plaintiff interfered with Wood’s potential engagement with Crystal. In a footnote, the letter states Plaintiff has no issue with Crystal employing Wood but “is only concerned with the transmission and/or receipt of confidential information.” However, Wood points out that Crystal had withdrawn its offer many weeks before this letter, and Plaintiff did not show that Wood and Crystal were continuing to communicate about a possible position at the time of the letter. Therefore, the vast majority of the letter is about document preservation in anticipation of litigation, not about a concern that Wood was at the time of the letter sharing trade secrets with Crystal as part of discussions about a potential position. If Plaintiff intends to use the letter as proof that Plaintiff was only concerned about the transmission of confidential information to Crystal, the letter is being offered for the truth of the matter asserted and is hearsay.

The motion to overrule the objections to Exhibit 92 is denied.

World and Wood’s Motion Regarding Exhibit 310

Defendants World and Mark Wood seek an order that Plaintiff Acrisure and Cross-Defendants Dave Buckalew and Andrew McGinnis waived any privilege in an email identified as Exhibit 310, which the Court already ruled on in granting Plaintiff’s MIL No. 3. In that ruling, the Court concluded that the holder of the privilege had not waived privilege when the exhibit was used at a deposition because Plaintiff’s and Cross-Defendants’ attorney objected and there was no evidence the client (the holder of the privilege) had consented to the disclosure. Now Defendants argue that Plaintiff and Cross-Defendants waived privilege by providing the document to their experts and having their experts rely on it.

Plaintiff and Cross-Defendants state that when counsel sent documents including deposition transcripts to their experts, counsel included the transcript at which the document had been used as an exhibit. The document was attached to the transcript as an exhibit. Counsel states she did not intend to waive the privilege and forgot the exhibit was attached to the transcript. During the deposition of at least one of the experts, Plaintiff’s and Cross-Defendants’ counsel objected to the use of the document. Plaintiff and Cross-Defendants state that neither expert relied on the document for his conclusion, although one of the experts reviewed and marked up the document.

Plaintiff’s and Cross-Defendants’ counsel should have taken more care when the document was first used in the original deposition to ensure that the document was returned or destroyed. But for the same reasons stated in ruling on MIL No. 3, there is not a showing that the holder of the privilege consented to the disclosure.

Therefore, the motion is DENIED. Because Plaintiff and Cross-Defendants assert the document is privileged, their experts may not rely on it in forming their opinions and may not testify about the document at trial.

Case Number: BC644516    Hearing Date: April 5, 2021    Dept: 48

[TENATIVE] ORDER RE MOTIONS IN LIMINE

Plaintiff’s MIL No. 1

Plaintiff Acrisure of California, LLC and Cross-Defendants Dave Buckalew and Andrew McGinnis and Cross-Complainant M.B. Holdings, Inc. seek to preclude reference to or evidence of the deposition testimony from Richard Rosen concerning Crystal & Co.’s job offer to Defendant Mark Wood. The parties dispute the content of a conversation between Acrisure’s attorney Sanford Michelman and Crystal’s attorney Rosen and what was said concerning whether Acrisure would sue Crystal. Wood alleges Crystal did not hire him because Michelman falsely told Rosen that Wood had restrictive covenants in place and Acrisure would sue if Wood solicited clients for Crystal. The testimony at issue is at pp. 63:15-64:20, 86:10-88:8, 88:13-19, 90:4-12, and 99:3-22, and an August 10, 2016 email.

First, Acrisure argues Rosen’s testimony must be excluded for lack of personal knowledge because Rosen testified he did not know why Crystal did not hire Wood. The testimony at pages 86-90 is about an email Rosen sent. He was asked whether the email refreshed his recollection about why Crystal did not hire Wood and he responded it did. (88:9-12.) He also explained why he sent the email – because he wanted concrete evidence that there were no restrictions. (99:15-22.) That Rosen did not make the decision not to hire Wood does not mean necessarily he did not have knowledge about that decision or knowledge about why he sent the email.

Second, Acrisure argues Rosen cannot testify about his understanding about why Crystal did not hire Wood (88:13-19) because he testified three times that he did not know why Crystal did not hire Wood. (Motion at p. 9.) Acrisure cites to Froomer v. Drollinger (1962) 201 Cal.App.2d 90 as holding that the understanding of a witness is not admissible. In that case, the attorney sought to question the witness about his “understanding that the lease included the right of the appellant to utilize the disputed area for parking.” (Id. at p. 98.) The court did not allow the testimony because it was an inference or conclusion. (Ibid.)

Rosen testified that he did not “know exactly why” Crystal decided not to hire Wood. (85:5-11.) Then he was shown his email, which refreshed his recollection on that point. (87-88.) He also testified about his conversations with Michelman concerning restrictions on Wood (52-55), which was the subject of the disputed email. Therefore, it is not accurate to say he did not know why Crystal decided not to hire Wood or that his understanding was an improper conclusion without a basis of personal knowledge. The extent of Rosen’s knowledge about the reasons for not hiring Wood is for the jury to decide, as is the weight to be given his testimony.

Third, Acrisure argues Rosen’s testimony about why Crystal did not hire Wood is hearsay. It is unclear which statements Acrisure seeks to exclude. The Court assumes it is the testimony at p. 88:13-19. That testimony is based on the witness’s refreshed recollection from reading the email he sent. He did not state his testimony was based on something some other person told him.

Fourth, Acrisure argues the email should be excluded because it contains opinions from non-experts not helpful to a clear understanding of his testimony. However, the email is part of the communications at issue and evidence of Crystal’s concern that hiring Wood would lead to litigation, and it is helpful to an understanding of those issues.

Fifth, Acrisure argues Rosen’s testimony and the email are legal opinions. The email is not offered as a legal opinion but as part of the negotiations at issue and evidence of Crsytal’s concern that hiring Wood would lead to litigation. Acrisure also refers specifically to Rosen’s testimony at pp. 63:15-64:20. That testimony does ask about the law of restrictive covenants generally. The motion is granted as to 63:15-64:20.

Sixth, Acrisure raises the litigation privilege as a ground to exclude statements from Michelman. “ ‘Although “[t]he classic example of an instance in which the privilege would attach to prelitigation communications is the attorney demand letter threatening to file a lawsuit if a claim is not settled,” it is not the mere threat of litigation that brings the privilege into play, but rather the actual good faith contemplation of an imminent, impending resort to the judicial system for the purpose of resolving a dispute. [Citation.] “[B]ecause the privilege does not attach prior to the actual filing of a lawsuit unless and until litigation is seriously proposed in good faith for the purpose of resolving the dispute, even a threat to commence litigation will be insufficient to trigger application of the privilege if it is actually made as a means of inducing settlement of a claim, and not in good faith contemplation of a lawsuit.” ’ ” (Strawn v. Morris, Polich & Purdy, LLP (2019) 30 Cal.App.5th 1087, 1096.)

Acrisure does not specify the statements to be excluded as privileged. Wood alleges Michelman falsely represented to Crystal that Wood had restrictive covenants in place that would prevent him from performing work and/or soliciting clients from Crystal and that Acrisure would sue if Wood solicited clients for Crystal, which caused Crystal not to hire him. (SACC, ¶¶ 28, 30, 46, 48.) The litigation privilege does not bar allegedly false statements about the existence of restrictive covenants. Acrisure has not proven that Acrisure’s threat to sue was made in good faith contemplation of a lawsuit, rather than as a means to induce Crystal not to hire Wood. At the time of the alleged threat, Crystal had not yet hired Wood and Wood had not yet started soliciting clients for Crystal. Therefore, Acrisure could not yet sue. While there was a potentiality of a lawsuit later, if in fact Wood started working at Crystal and then started soliciting clients, those conditions had not yet occurred.

The motion is GRANTED in part as to Rosen’s testimony at 63:15-64:20 which is excluded. The motion is otherwise DENIED.

Plaintiff’s MIL No. 3

Plaintiff Acrisure of California, LLC and Cross-Defendants Dave Buckalew and Andrew McGinnis and Cross-Complainant M.B. Holdings, Inc. seek to preclude reference to or evidence of an inadvertently produced July 19, 2016 email from Andrew McGinnis to Dave Buckalew as attorney-client privileged and inadmissible pursuant to Code of Civil Procedure section 2031.285. A redacted version of the letter was produced during discovery. Plaintiff argues the unredacted email contains legal advice received from an attorney at Latham & Watkins because Latham was representing Buckalew and McGinnis in connection with their leaving CRG. The email stated, “Also as I recall from our discussions with Latham when leaving crg . . .”

Defendant World Insurance Associates, LLC argues Plaintiff did not show the email contains legal advice because a reference to Latham is not enough. Plaintiff submitted more than that. Plaintiff showed the email contained information about Buckalew and McGinnis’ discussions with Latham at the time Latham was acting as their attorney. That is sufficient to establish it is privileged.

Defendant argues Plaintiff waived the privilege by not demanding the return of the email after it was used as an exhibit during a deposition. Counsel objected at the deposition that the unredacted email was privileged. The attorney-client privilege may be waived if the holder of the privilege discloses or consents to the disclosure of the communication. (Evid. Code, § 912.) Here, the attorneys inadvertently produced the unredacted email. There is not evidence that the holders of the privilege consented to the disclosure.

Defendant then argues that by producing the unredacted portion of the email in the officially-produced redacted version, Plaintiff waived privilege as to the rest of the email because it is not fair for Plaintiff to disclose only the favorable parts of a communication. Redacting document to remove privileged information is very common because often a document contains both non-privileged and privileged statements. Defendant did not show that the unredacted portions were privileged such that Plaintiff was selectively waiving the privilege when it produced the redacted version. Indeed Defendant did not quote the unredacted portions of the redacted version, so it is impossible to determine whether Plaintiff disclosed privileged information in the unredacted portion.

The motion is GRANTED. Only the redacted version of the email is to be used.

Plaintiff’s MIL No. 4

Plaintiff Acrisure of California, LLC and Cross-Defendants Dave Buckalew and Andrew McGinnis and Cross-Complainant M.B. Holdings, Inc. seek to preclude argument that five communications Wood sent to Acrisure clients were not solicitations to move their business to Defendant World Insurance Associates, LLC, and from arguing that Defendants did not solicit Acrisure clients. Plaintiff bases this motion on the assertion that Defendants destroyed documents showing their solicitation of Acrisure clients.

Plaintiff argues that the Court must determine whether the specific communications were solicitations. Plaintiff alleged causes of action for interference with prospective economic advantage, breach of the duty of loyalty, aiding and abetting breach of the duty of loyalty, and trade secret misappropriation, and seeks damages for these claims. These are legal causes of action for the jury to decide. To give one example, the trade secret misappropriation cause of action alleges Acrisure owned trade secrets including a list of potential customers and information about those customers, and Wood misappropriated those trade secrets by soliciting those customers. A jury determines if a defendant improperly used trade secrets. (CACI No. 4401.)

Plaintiff next argues Defendants destroyed evidence and should not be allowed to argue there was no solicitation having destroyed the evidence of the solicitation. Defendants argue the proper remedy for spoliation is an adverse jury instruction. There are some existing documents that Plaintiff alleges show solicitation. If Plaintiff is going to argue those documents show solicitation, Defendants have the right to dispute that. As for the documents that were apparently destroyed, a jury instruction is appropriate, and then the jury can determine the inferences to draw from those missing documents. (Evid. Code, § 413.)

The motion is DENIED.

World’s MIL No. 1

Defendant World Insurance Associates, LLC moves to exclude evidence of trade secrets not identified by Plaintiff pursuant to Code of Civil Procedure section 2019.210. World argues that all of the trade secrets Plaintiff disclosed are too general to be trade secrets and are publicly known.

World did not submit any evidence that the trade secrets are actually publicly known. Nor did World file Plaintiff’s designation made pursuant to section 2019.210. If World believed Plaintiff cannot prove the existence of any trade secrets, it should have brought a summary judgment motion on that ground.

The motion is DENIED.

World’s MIL No. 2

Defendant World Insurance Associates, LLC moves to exclude claims, documents, witnesses, or evidence not disclosed in discovery. World does not identify any specific claim, document, witness, or evidence. This motion is too vague. If another party seeks to use an exhibit or witness not properly disclosed in response to pertinent document requests, World should object at that time.

The motion is DENIED.

World’s MIL No. 3

Defendant World Insurance Associates, LLC moves to exclude Plaintiff’s experts from testifying about opinions not disclosed during depositions. World did not identify any specific testimony or opinion. This motion is too vague. If another party seeks to elicit an expert opinion that was disclosed in response to a pertinent deposition question, World should object at that time.

The motion is DENIED.

Wood’s MIL

Defendant Mark Wood seeks to exclude reference to or evidence of the legal fee provision in his employment contract with his current employer on the ground it is irrelevant and prejudicial. Wood argues he negotiated that provision because of Acrisure’s threats of litigation and that a jury might believe he knew his conduct was unlawful.

Acrisure argues the provision is relevant because it (1) is part of Wood’s compensation and necessary to valuing his damages claim, (2) shows Defendants planned to solicit Acrisure’s clients, and (3) undercuts World’s argument it had no knowledge Wood had Acrisure’s trade secrets.

The provision is relevant, especially to damages, and is not unduly prejudicial.

The motion is DENIED.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.

Case Number: BC644516    Hearing Date: March 24, 2021    Dept: 48

[TENTATIVE] ORDER RE: MOTION TO SEVER AND ADVANCE TRIAL OF SPECIAL DEFENSE

On February 25, 2019, Mark Wood filed his second amended cross-complaint (“SACC”) against Acrisure of California, LLC (“Acrisure”), M.B. Holdings, Inc. (“MB”), Dave Buckalew, and Andrew McGinni (collectively, “Cross-Defendants”), alleging, in part, intentional interference with prospective economic advantage based on statements by Cross-Defendants’ attorney to Crystal that Wood had restrictive covenants in place with Acrisure that would prevent him from soliciting clients and that Acrisure would pursue litigation if Wood solicited clients for Crystal. In their answer, Cross-Defendants raised the affirmative defense that the litigation privilege bars the SACC in whole or in part.

Cross-Defendants moved for summary adjudication of the cause of action for intentional interference on the grounds that the litigation privilege applied to statements made by their counsel. On December 2, 2020, the Court denied the motion, finding that Cross-Defendants did not show that the statements at issue were a communication related to a potential judicial action contemplated for legitimate purposes.

On February 26, 2021, Cross-Defendants filed this motion to sever the trial of the special defense that the alleged communications are not actionable. Cross-Defendants request “a separate bench trial on this issue in advance of a jury trial on all other issues.” (Motion at p. 2.) Cross-Complainant argues he posted jury fees and is entitled to a jury trial on the issue. (Opposition at p. 3.)

Cross-Defendants’ request for judicial notice is granted.

Cross-Defendants make their motion under Code of Civil Procedure sections 597 and 598. When a defendant’s answer pleads a defense not involving the merits of a cause of action, but rather constituting a bar to the cause of action, the court may proceed to the trial of the special defense before the trial of any other issue of the case. (Code Civ. Proc., § 597.) Under section 598, a court may order the trial of an issue to precede the trial on another issue.

Section 597 does not state whether such a trial of a special defense is a bench trial or jury trial. (Windsor Square Homeowners Assn. v. Citation Homes (1997) 54 Cal.App.4th 547, 551 [“While the statute clearly authorizes a bifurcated trial on the issue of certain special defenses, including res judicata, the statute is completely silent on whether that particular special defense should be tried to a jury or to the court”].) Where the special defense is based on a disputed issue of fact, the plaintiff has a right to a jury trial on the factual issue. (Jefferson v. County of Kern (2002) 98 Cal.App.4th 606, 619.)

Cross-Defendants do not contend the facts on which the litigation privilege defense is premised are undisputed. To the contrary, Cross-Defendants state the Court already determined “that a triable issue of fact existed as to whether the privilege applied to the facts of this case” when it denied Cross-Defendants’ motion for summary judgment. (Motion at p. 4.) Because Cross-Defendants have not shown the facts are undisputed, they have not shown that Cross-Complainant has no right to a jury trial on the litigation privilege defense.

The motion is DENIED.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.

Case Number: BC644516    Hearing Date: March 12, 2021    Dept: 48

[TENTATIVE] ORDER RE: MOTION TO FILE UNDER SEAL

On February 25, 2019, Mark Wood (“Wood”) filed his second amended cross-complaint (“SACC”) against Acrisure of California, LLC (“Acrisure”), M.B. Holdings, Inc. (“MB”), Dave Buckalew, and Andrew McGinni (collectively, “Cross-Defendants”).

On April 2, 2020, Cross-Defendants filed a motion for summary judgment, or in the alternative, summary adjudication of the SACC. On November 25, 2020, Cross-Defendants filed a motion to file under seal certain documents that Wood submitted with his opposition to the motion for summary judgment.

Cross-Defendants seek to file under seal certain documents that are subject to the August 16, 2017 protective order. The Court may order that a record be filed under seal only if it finds that (1) there is an overriding interest that overcomes the right of public access to the record, (2) the overriding interest supports sealing the record, (3) a substantial probability exists that the overriding interest will be prejudiced absent sealing, (4) the proposed sealing is narrowly tailored, and (5) no less restrictive means exists to achieve the overriding interest. (Cal. Rules of Court, rule 2.550(d).) A motion seeking an order sealing records must be accompanied by a declaration containing facts sufficient to justify the sealing. (Cal. Rules of Court, rule 2.551(b)(1).)

Cross-Defendants seek to seal the entirety of the opposition’s Exhibits G and Z to the declaration of Mark D. Sheridan. Exhibit G are “scorecards” that reveal confidential financial information about Acrisure and its clients, including information about who its clients are, what those clients pay for services, and compensation that is paid to Acrisure. (Hagemann Decl. ¶ 4.) Exhibit Z is an asset purchase agreement that contains client accounts, earnings, sale price, personal financial information, confidential employee information, and banking information. (Id. at ¶ 6.)

Cross-Defendants also seek to seal portions of the opposition’s Exhibits M and N to the declaration of Mark D. Sheridan. These documents are emails that reveal Acrisure’s and its clients’ confidential financial information, including information about commissions paid, compensation received, and services performed by Cross-Defendants. (Hagemann Decl. ¶ 5.)

Cross-Defendants contend that all of these exhibits contain MB’s and Acrisure’s clients’ confidential financial information, including information clients’ identities, clients’ insurance coverage, amounts clients pay for services and products, and commissions, bonuses, and other compensation paid to MB and Acrisure. (Hagemann Decl. ¶ 7.) Cross-Defendants state disclosure is likely to harm Acrisure’s competitive advantage because the documents contain trade secrets and financial information that competitors could use to take existing clients or gain a competitive edge over Acrisure when pursuing new clients. (Ibid.)

Because of the identifying information of third parties and confidential financial information, the Court finds there is an overriding interest that overcomes the right of public access to the record and substantial probability exists that the overriding interest will be prejudiced absent sealing. Additionally, “a court shall preserve the secrecy of an alleged trade secret by reasonable means, which may include . . . sealing the records of the action.” (Civ. Code, § 3426.5.) Exhibits M and Z were also previously sealed in connection with other motions, and Exhibit N contains the same email chain that is in Exhibit M. (Hagemann Decl. ¶¶ 5, 8.)

Accordingly, the motion to file under seal is GRANTED.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.

Case Number: BC644516    Hearing Date: December 02, 2020    Dept: 48

[TENTATIVE] ORDER RE: APPLICATION FOR ADMISSION PRO HAC VICE

E. Joseph D’Andrea of Squire Patton Boggs seeks to be admitted pro hac vice to represent Defendant Mark Wood in this action.

An attorney in good standing in another jurisdiction who is not be a resident of California, regularly employed in California, or regularly engaged in substantial business, professional, or other activities in California may apply to appear as counsel pro hac vice in California. (Cal. Rules of Court, rule 9.40(a).) The attorney must a verified application together with proof of service by mail of a copy of the application and notice of hearing on all parties who have appeared in the case and on the State Bar of California at its San Francisco office. (Cal. Rules of Court, rule 9.40(c).) The applicant must also pay a $50.00 fee to the State Bar of California. (Cal. Rules of Court, rule 9.40(e).)

The application must state (1) the applicant’s residence and office addresses; (2) the courts to which the applicant has been admitted to practice and the dates of admission; (3) that the applicant is a member in good standing in those courts; (4) that the applicant is not currently suspended or disbarred in any court; (5) the title of each court and cause in which the applicant has filed an application to appear as counsel pro hac vice in this state in the preceding two years, the date of each application, and whether or not it was granted; and (6) the name, address, and telephone number of the active member of the State Bar of California who is attorney of record in the local action. (Cal. Rules of Court, rule 9.40(d).)

E. Joseph D’Andrea’s application complies with the requirements. Accordingly, the application for admission pro hac vice is GRANTED. An Order to Show Cause Re: Annual Pro Hac Vice Renewal Fees by E. Joseph D’Andrea is scheduled for December 1, 2021 at 8:30 a.m.

Moving party to give notice.

[TENTATIVE] ORDER RE: CROSS-DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION

On February 25, 2019, Mark Wood (“Wood”) filed his second amended cross-complaint (“SACC”) against Acrisure of California, LLC (“Acrisure”), M.B. Holdings, Inc. (“MB”), Dave Buckalew, and Andrew McGinni (collectively, “Cross-Defendants”), alleging (1) intentional interference with prospective economic advantage; (2) failure to pay earned wages under both New Jersey and California law; (3) failure to pay earned wages – quantum meruit under both New Jersey and California law; (4) wrongful discharge in violation of clear mandate of public policy; (5) violation of the New Jersey Conscientious Employee Protection Act; (6) and wrongful termination in violation of the California Labor Code.

On April 2, 2020, Cross-Defendants filed this motion for summary judgment, or in the alternative, summary adjudication on the SACC, as well as summary adjudication on the duty of loyalty raised in Acrisure’s Third Amended Complaint and MB’s Cross-Complaint.

REQUEST FOR JUDICIAL NOTICE

Cross-Defendants’ and Wood’s requests for judicial notice are granted.

EVIDENTIARY OBJECTIONS

Wood’s objections to the declaration of Dave Buckalew are overruled.

Cross-Defendants’ Objection Nos. 5, 11-12, 14, 16 are sustained as to authentication of exhibits. Cross-Defendants’ Objection Nos. 22-24, 33 are sustained. Cross-Defendants’ remaining objections are overruled.

FACTUAL BACKGROUND

Wood worked for National Account Services, Inc. (“NASI”), an insurance brokerage. (Undisputed Material Facts “UMF” 1.) Buckalew and McGinnis created and managed NASI. (UMF 11.) Acrisure, a Michigan limited liability company, acquired the assets of NASI effective July 31, 2016. (UMF 2, 7.) In August 2016, NASI allegedly changed its name to MB Holdings, Inc. (SACC at ¶ 5.)

Wood never signed a written employment agreement with NASI or Acrisure, and he had no written commission agreement. (UMF 31-32.) Between approximately July 21, 2016 and September 23, 2016, Wood negotiated the terms under which he would sign an employment agreement with Acrisure by communicating directly and through his counsel. (UMF 8.) Wood worked for one or more Cross-Defendant(s) until September 23, 2016. (UMF 36.)

During this time he was also exploring other options, including with Crystal. Wood alleges that Sanford Michelman called Richard Rosen of Crystal in late July or early August 2016 and “falsely informed Mr. Rosen that Mr. Wood had restrictive covenants in place with Acrisure that would prevent him from performing work and/or soliciting clients for Crystal” and that “Acrisure would initiate litigation upon those knowingly false grounds.” (UMF 19.)

Wood left his employment on September 23, 2018, and became employed with World.

On December 21, 2016, Acrisure filed the initial complaint in this action, alleging (as amended) that Wood wrongfully solicited Acrisure’s clients, misappropriated trade secrets, violated company policies pertaining to the disclosure of client information, engaged in unfair competition, and breached his fiduciary duty and duty of loyalty. (UMF 23.)

DISCUSSION

For each claim in the complaint, the defendant moving for adjudication must satisfy the initial burden of proof by showing that one or more elements of a cause of action cannot be established or that there is a complete defense to a cause of action. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520 (Scalf).) Then the burden shifts to the plaintiff to show that a triable issue of material fact exists as to that cause of action or a defense. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf, supra, 128 Cal.App.4th at p. 1520.) To establish a triable issue of material fact, the party opposing the motion must produce “substantial responsive evidence.” (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 162-163.)

First Cause of Action – Intentional Interference with Prospective Economic Advantage

“In order to prove a claim for intentional interference with prospective economic advantage, a plaintiff has the burden of proving five elements: (1) an economic relationship between the plaintiff and a third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) an intentional act by the defendant, designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the defendant’s wrongful act, including an intentional act by the defendant that is designed to disrupt the relationship between the plaintiff and a third party. [Citation.] The plaintiff must also prove that the interference was wrongful, independent of its interfering character. [Citation] ‘[A]n act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.’ [Citation.]” (Edwards v. Arthur Andersen LLP (2008) 44 Cal. 4th 937, 944.)

Wood alleges Cross-Defendants authorized Michelman to represent to Crystal that Wood had restrictive covenants in place with Acrisure that would prevent him from soliciting clients, and Acrisure would pursue litigation against Crystal if Mr. Wood solicited clients for Crystal. (SACC at ¶¶ 28-30.) He alleges that “Cross-Defendants intentionally and unjustifiably interfered with Mr. Wood’s reasonable expectation of employment with Crystal when Mr. Michelman (who was acting on their behalves) made the knowingly false representation to Mr. Rosen at Crystal that Mr. Wood was bound by restrictive covenants.” (Id. at ¶ 46.) Wood alleges that as a result, Crystal rescinded the offer of employment that it had made to him. (Id. at ¶ 48.)

Cross-Defendants contend they have a defense to the cause of action because Michelman’s statements are protected by the litigation privilege. (Motion at pp. 8-9.) The litigation privilege applies to any communication “‘(1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that [has] some connection or logical relation to the action.’” (Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1241.) “If all the elements of the privilege are satisfied, the privilege is absolute, a complete defense regardless of malice.” (Laffer v. Levinson, Miller, Jacobs & Phillips (1995) 34 Cal.App.4th 117, 122 (Laffer).) “The breadth of the litigation privilege cannot be understated. It immunizes defendants from virtually any tort liability (including claims for fraud), with the sole exception of causes of action for malicious prosecution.” (Olsen v. Harbison (2010) 191 Cal.App.4th 325, 333.)

Wood’s claim is entirely based on Michelman’s representation that Wood had restrictive covenants in place with Acrisure that would prevent him from soliciting clients, and Acrisure would pursue litigation if Wood solicited clients for Crystal. Prelitigation statements made in serious and good faith consideration of litigation are absolutely privileged. (Aronson v. Kinsella (1997) 58 Cal.App.4th 254, 268.) Cross-Defendants have therefore met their initial burden, and the burden shifts to Wood to show the existence of a disputed fact.

Wood relies on Herzog v. A Co., Inc. (1982) 138 Cal.App.3d 656 (Herzog) to argue that the litigation privilege does not apply here. (Opposition at pp. 14-15.) In Herzog, the court held that the plaintiff’s damage claim was not barred. In that case, the plaintiff alleged his employer had sent a letter to the potential new employer specifically to prevent the plaintiff from obtaining employment, even though accepting new employment would not have violated an agreement with his employer. (138 Cal.App.3d at p. 661.) The plaintiff’s employment agreement did not restrict the plaintiff’s right to employment, only his right to disclose certain confidential matters related to his employer’s operations. (Id. at p. 662.) The court held that the “absolute privilege to communications made in pursuit of litigation applies only to litigation contemplated in good faith” (id. at pp. 660-661), and “a communication not related to a potential judicial action contemplated for legitimate purposes is not protected by the privilege.” (Id. at p. 662.) The letter “facially exceed[ed] any legitimate purpose” because it threatened the future employer “with suit based merely upon the fact of employment.” (Ibid.) In reversing judgment on the pleadings, the court stated that the company could still raise the privilege as an affirmative defense at trial if it could show that the letter was not designed to prevent the plaintiff from obtaining employment and “was otherwise a good faith communication about prospective litigation contemplated for legitimate purposes.” (Id. at p. 662, fn. 5.)

Wood contends that similarly here, the litigation privilege does not bar his claim because he was not subject to a restrictive covenant while employed by Cross-Defendants. (Opposition at p. 15.) Wood cites Rosen’s deposition testimony about what Michelman told him. (Ibid.; Sheridan Decl., Ex. C at pp. 51-54.) Rosen testified that he asked Michelman for any restrictive covenants that he believed Wood was subject to and asked him to show him, but Michelman never showed them to Rosen. (Sheridan Decl., Ex. C at p. 54.) Wood also notes that in 2016, Rosen did not believe that the threats of litigation were in good faith, as he wrote in an email to Wood’s counsel, “As I see it, at this point, Mark is at-will employee and his current employer is blocking him from lawfully pursuing another business opportunity.” (Sheridan Decl., Ex. H [unlabeled as Ex. H; PDF p. 49].)

Cross-Defendants argue in reply that “litigation was instituted on the exact same subject matter and only three months after Wood went to work for World.” (Reply at p. 4.) However, when Acrisure sued Wood on December 21, 2016, it did not allege Wood had violated any restrictive covenants in accepting work with and soliciting clients for a competitor. The allegations and causes of action primarily concerned Wood’s conduct while still employed at Acrisure. (See Complaint, first, third and fourth causes of action.) The second cause of action for interference with prospective economic advantage alleged that after he left Acrisure, Wood “attempted to use Acrisure’s own connections to woo Acrisure’s existing clients . . . by concealing the fact that he was no longer affiliated with Acrisure.” (Complaint, ¶ 40.) And the fourth cause of action for unfair competition alleged he “made false statements to the third parties about his employment with Acrisure.” (Complaint, ¶ 61.) Nowhere does the complaint mention restrictive covenants. Therefore, it is not accurate to say the complaint initiating this action was on the exact same subject matter as Michelman’s representation that Wood had restrictive covenants in place preventing him from soliciting clients.

The Court cannot conclude the litigation privilege applies to Michelman’s statement about restrictive covenants because Cross-Defendants did not show it was a communication related to a potential judicial action contemplated for legitimate purposes. (Herzog, supra, 138 Cal.App.3d at p. 662.) Therefore, the Court cannot conclude that Michelman made a truthful statement about commencing litigation for violation of restrictive covenants if a potential employer hired Wood.

Cross-Defendants argue Wood was not damaged by the alleged interference because he ended up making more money at World that he would have at Crystal. (Motion at p. 7.) Wood submitted an expert declaration calculating the alleged damages. Wood’s evidence is sufficient to raise triable issues about the extent of damages, if any.

Cross-Defendants argue Wood cannot establish causation because he testified that he did not intend to accept the offer from Crystal. (Motion at p. 8.) Cross-Defendants quote Wood as testifying that before he was terminated in September 2016, he did not plan to work for any other company. Specifically regarding Crystal, Wood stated that before September 2016, “I was exploring all of my option, but I had no intent of leaving NASI.” (Motion at p. 8.) Wood responds that he also testified at his deposition, “I wanted to make sure that I had options available to me should I need to exercise them,” he was “continuing to negotiate on all sides,” and he was “keeping everybody excited about the possibilities.” (Wood Depo. at pp. 110, 261.) His testimony does not establish that he did not intend to accept the Crystal offer.

Cross-Defendants argues that Wood cannot establish Buckalew and McGinnis are liable for Michelman’s statement because they were not Wood’s employer and they did not retain counsel for themselves to negotiate with Wood. (Motion at p. 10.) But the cited UMFs (UMFs 5, 6, 8, 9, 10, 11, 13, 14, 15, 16) do not refer to Michelman, who retained him, and who he was representing when he made the statement. Therefore, Cross-Defendants have not submitted evidence showing that Wood cannot establish Michelman was an agent for Buckalew and McGinnis when he made the statement.

For these reasons, summary adjudication on the first cause of action is denied.

Second Cause of Action – Failure to Pay Earned Wages (under New Jersey law)

Wood alleges that in February 2016, Cross-Defendants told him that NASI was changing its method of payment, and then Cross-Defendants retroactively deducted amounts Wood had earned in 2015 and January-February 2016, adding up to about $17,400. (SACC at ¶ 20.) Wood alleges that in violation of the New Jersey Wage Payment Law, Cross-Defendants failed to provide advance notice of the commission structure and wrongfully deducted and withheld earned commissions when they retroactively changed the structure. (Id. at ¶¶ 55-56.) Wood also alleges Cross-Defendants have not paid him for his earned commissions on monies received from clients after August 31, 2016, an amount exceeding $72,000, despite the historical practice of paying commissions to brokers after the termination of their employment for amounts they had earned during their employment. (Id. at ¶¶ 40, 59.)

Cross-Defendants contend that Wood “was always a commissioned employee of NASI who received draw payments against his commissions” and any alleged change in the commission structure does not give rise to liability because Wood continued working for Cross-Defendants for nine additional months. (Motion at p. 11.) These arguments do not address Wood’s allegation that Cross-Defendants improperly retroactively deducted about $17,400 from the amounts he had earned before the pay method changed.

Cross-Defendants also argue Wood was not underpaid and in fact was paid more in 2016 than in 2015, citing UMF 37-39. (Motion at pp. 11-12.) Even if Wood’s take-home pay did not substantially change or he was paid more in 2016, that does not establish that he was paid the full amount he was owed. And the argument does not address the allegation that the $17,400 in retroactive deductions from 2015 and early 2016 pay were improper. Cross-Defendants did not satisfy their burden on this point.

Regarding the payment of commissions on monies received after Wood left in September 2016, Cross-Defendants argue commissions are a matter of contract, and Wood never signed an employment agreement or commission agreement. (Motion at pp. 12-13, citing UMF 32.) But the absence of a written agreement does not establish the absence of any agreement. Indeed, Wood submitted evidence that there was a practice of paying commissions even without a written agreement. (Buckalew Depo. at p. 94.) Also, Cross-Defendants do not address the practice of paying commissions post-employment, as alleged in the SACC. On this point, too, Cross-Defendants did not satisfy their burden.

Finally, Cross-Defendants contend that McGinnis and Buckalew are not employers under New Jersey law and therefore not liable for unpaid wages. (Motion at p. 14.) An employer is “any individual, partnership, association, joint stock company, trust, corporation, the administrator or executor of the estate of a deceased individual, or the receiver, trustee, or successor of any of the same, employing any person in this State.” (N.J. Stat. Ann. § 34:11-4.1, subd. (a).) Under this statute, “the officers of a corporation and any agents having the management of such corporation shall be deemed to be the employers of the employees of the corporation.” (Ibid.) According to Cross-Defendants, because Acrisure is a limited liability company and not a corporation, the exception for officers and managing agents of a corporation does not apply, and in any event McGinnis and Buckalew were not managers or members of Acrisure, only employees. (Motion at p. 14.)

Wood appears to concede that McGinnis and Buckalew are not liable based on their status as employees of Acrisure. Instead, Wood argues that if MB was Wood’s employer, then McGinnis and Buckalew are also employers because they are officers of MB. (Opposition at p. 16.) The SACC alleges unpaid wages “[d]uring the course of his employment with NASI and/or Acrisure.” (SACC at ¶ 54.) In their motion, Cross-Defendants do not address McGinnis’ or Buckalew’s status as employers via their position as officers of NASI (later MB). In their reply, Cross-Defendants argue there is no evidence that Wood was employed by NASI after August 1, 2016. Assuming that is true, that fact does not resolve the allegation of wrongfully-deducted pay from 2015 and 2016, when Wood was employed by NASI.

Cross-Defendants did not meet their burden. Accordingly, summary adjudication is not warranted on the second cause of action under New Jersey law.

Second Cause of Action – Failure to Pay Earned Wages (under California law)

In the alternative, Wood alleges that Cross-Defendants intentionally and willfully failed to timely pay his wages, commissions, and benefits due upon termination, in violation of the California Labor Code. (SACC at ¶¶ 62-63.) Cross-Defendants seek summary adjudication on the grounds that Wood did not perform any work in California. (Motion at p. 13.)

Courts “ordinarily presume the Legislature drafts laws with domestic conditions in mind [citation], and thus requires some degree of connection between the subject matter of the statutory claim and the State of California.” (Oman v. Delta Air Lines, Inc. (2020) 9 Cal.5th 762, 773.) Thus, the Labor Code “does not apply to work performed in California during pay periods in which the employee, based outside California, works primarily outside California.” (Id. at p. 776.) It is undisputed that after August 1, 2016, Wood performed his responsibilities from his home office in New Jersey. (UMF 17.) Wood provides a declaration from Buckalew that identifies only four instances of Wood traveling to California for work prior to August 2016: a meeting on March 18, 2015; a sales dinner and meeting on May 18-19, 2015, an undated meeting in the Century City office; and an undated meeting in San Francisco. (Response to UMF 17; Opposition RJN, Ex. 3 at ¶¶ 19-21.)

As there is no dispute that Wood was based outside California and worked primarily outside California, summary adjudication is granted on the second cause of action under California law.

Third Cause of Action – Failure to Pay Earned Wages – Quantum Meruit

The third cause of action alleges that if Wood is deemed not to have been an Acruisure employee after July 31, 2016, then he continued working for NASI, Buckalew, and McGinnis to the benefit of Acrisure. (SACC at ¶ 66.) He performed services for Acrisure but did not receive the commissions representing the value of the services he provided. (SACC at ¶¶ 68-70.)

A cause of action for quantum meruit in New Jersey requires “‘(1) the performance of services in good faith, (2) the acceptance of the services by the person to whom they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of the services.’” (Pollack v. Quick Quality Restaurants, Inc. (N.J. Super. Ct. App. Div. 2017) 452 N.J.Super. 174, 194.) In California, a plaintiff must establish that he was acting pursuant to either an express or implied request for such services from the defendant and that the services rendered were intended to and did benefit the defendant. (Advanced Choices, Inc. v. State Dept. of Health Services (2010) 182 Cal.App.4th 1661, 1673.)

Cross-Defendants contend that Wood did not perform services in good faith or convey a benefit on Acrisure. (Motion at p. 16.) Cross-Defendants contend that Wood “was asked for written client updates and refused to provide them until a deal was reached,” citing only Wood’s August 17, 2016 email that said, “As for bringing you up to date on all my accounts and future prospects. I am more than happy to accommodate but feel it is in everyone’s best interest if we wait until an agreement is reached.” (Ibid.; UMF 41.) This does not necessarily demonstrate a refusal to provide client updates. Cross-Defendants also contend that Wood actively solicited offers, planned to solicit clients whose accounts Acrisure purchased, and refused to sign the employment agreement, but they cite no evidence for these assertions. (Motion at p. 16.) Cross-Defendants have failed to meet their burned of showing a lack of good faith or benefit.

Cross-Defendants also argue Wood cannot establish the reasonable value of his services, citing his November 20, 2019 discovery response that discovery is ongoing and his damages are the subject of expert testimony which will be provided at an appropriate time and place.” (UMF 42.) Summary judgment law “continues to require a defendant moving for summary judgment to present evidence, and not simply point out that the plaintiff does not possess, and cannot reasonably obtain, needed evidence.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854 (Aguilar), footnote omitted.) Cross-Defendants must therefore “present evidence that the plaintiff does not possess, and cannot reasonably obtain, needed evidence—as through admissions by the plaintiff following extensive discovery to the effect that he has discovered nothing.” (Id. at p. 855.) A November 2019 response that discovery was ongoing and expert testimony would later be provided does not meet this standard.

Accordingly, summary adjudication is not warranted on the third cause of action.

Fourth and Fifth -- Wrongful Termination

Wood alleges wrongful discharge in violation of clear mandate of public policy under New Jersey’s Wage Payment Law (fourth cause of action) and violation of the New Jersey Conscientious Employee Protection Act (fifth cause of action).

Cross-Defendants seek summary adjudication of these causes of action on the ground that they did not terminate Wood. Instead, negotiations regarding Wood’s employment ceased when Wood issued an ultimatum personally and through his counsel. (Motion at p. 17.) Cross-Defendants cite cases in which employers did not renew existing employment contracts or the employee resigned. However, Cross-Defendants do not provide evidence of that being the case here. Cross-Defendants cite UMF 45-46 to support the assertion that Wood resigned. But those facts do not support that assertion. The facts quote an email from Wood’s counsel stating he could not agree to the terms outlined and that if his counter terms were unacceptable, he did not see the need for further negotiations, and a text from Wood stating, “I would love to stay but I also understand Dave will be unreasonable going forward.” (UMF 45, 46.) These are not statements of resignation as much as they indicate the parties were negotiating.

Assuming Cross-Defendants satisfied their burden, Wood presented evidence that he did not resign. (Buckalew Depo at p. 171; McGinnis Depo. at p. 109.) This is sufficient to create a disputed issue of material fact regarding the circumstances of his employment ending.

Cross-Defendants also contend that Wood did not suffer any damages because he immediately began working for World, and he was paid all that he was owed. (Motion at p. 18.) As previously discussed, Cross-Defendants did not establish Wood was paid all amounts owed.

Finally, Cross-Defendants contend that McGinnis and Buckalew are not personally liable for wrongful termination because they were not Wood’s employer. (UMF 13, 14.) Under New Jersey law, as discussed above, the officers of a corporation shall be deemed to be the employers of the employees of the corporation. (N.J. Stat. Ann. § 34:11-4.1, subd. (a).) Wood submitted evidence that as of September 2016, he was employed by NASI. (See, e.g., Buckalew Depo Ex. 105.) And he submitted evidence that Buckalew was an officer of MB. (Buckalew Depo at p. 25.) Cross-Defendants appear to concede that McGinnis and Buckalew were officers of MB. (Reply at pp. 9-10.) If Wood was employed by NASI at the time of his termination, McGinnis and Buckalew could be liable as officers of NASI or MB.

Therefore summary adjudication is denied.

Sixth Causes of Action – Wrongful Termination

The sixth cause of action is for wrongful termination under the California Labor Code. As discussed above, the California Labor Code does not apply here because Wood was employed and worked in New Jersey.

Therefore, summary adjudication is granted on this cause of action.

Duty of Loyalty

Cross-Defendants seek summary adjudication of the issue of Wood’s duty of loyalty to his employer. (Motion at p. 19.) Both Acrisure’s third amended complaint and MB’s cross-complaint allege that Wood breached his duty of loyalty. However, Acrisure and MB do not cite to any UMF stating they were each Wood’s employer during the applicable time when the alleged breach of the duty of loyalty occurred and do not cite to evidence establishing those facts. Therefore summary adjudication is denied.

CONCLUSION

The motion for summary adjudication is GRANTED to the second cause of action under California law and the sixth cause of action. The motion is otherwise DENIED.

Moving party to give notice.

[TENTATIVE] ORDER RE: WORLD’S MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION AND MOTION TO FILE UNDER SEAL

On May 17, 2019, M.B. Holdings (“MB”) filed a cross-complaint against World Insurance Associates (“World”) and Mark Wood (“Wood”), alleging (1) tortious interference with contract; (2) intentional interference with prospective economic advantage; (3) breach of duty of loyalty; (4) aiding and abetting breach of duty of loyalty; and (5) unfair competition. The first, second, and fourth causes of action are against World.

On November 15, 2019, World filed this motion for summary judgment, or in the alternative, summary adjudication. On March 2, 2020, MB filed a motion to file documents under seal.

MOTION TO SEAL

MB seeks to file under seal certain documents that are subject to the August 17, 2017 protective order. The Court may order that a record be filed under seal only if it finds that (1) there is an overriding interest that overcomes the right of public access to the record, (2) the overriding interest supports sealing the record, (3) a substantial probability exists that the overriding interest will be prejudiced absent sealing, (4) the proposed sealing is narrowly tailored, and (5) no less restrictive means exists to achieve the overriding interest. (Cal. Rules of Court, rule 2.550(d).) A motion seeking an order sealing records must be accompanied by a declaration containing facts sufficient to justify the sealing. (Cal. Rules of Court, rule 2.551(b)(1).)

MB seeks to seal the entirety of the opposition’s Exhibit 5 to the declaration of C. David Buckalew, which is a Confidentiality and Non-Disclosure Agreement between NASI and a third party. (Motion to Seal at p. 10.) The Agreement became Acrisure’s proprietary information and obligations when it purchased MB. (Buckalew Sealing Decl. ¶ 3.) The Agreement prohibits a party’s disclosure, without the other party’s written consent, of the fact of discussions or the terms of any possible agreements that might come of discussions. (Id. at ¶¶ 3-4.) It also reveals the identity of a business partner and terms of the business relationship, including private financial information and trade secrets. (Id. at ¶ 4.) MB therefore contends that disclosure of any part of the Agreement would reveal private business information and could place Acrisure at a competitive disadvantage. (Motion to Seal at p. 11.) “[A] contractual obligation not to disclose can constitute an overriding interest within the meaning of” the sealing rules. (Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1283.) Exhibit 5 contains information about a third party that NASI is obligated to keep confidential. Additionally, “a court shall preserve the secrecy of an alleged trade secret by reasonable means, which may include . . . sealing the records of the action.” (Civ. Code, § 3426.5) The Court therefore finds that there is an that overcomes the right of public access to the record, that overriding interest supports sealing this record, and substantial probability exists that the overriding interest will be prejudiced absent sealing. The proposed sealing is narrowly tailored and the least restrictive means because NASI/M.B./Acrisure have a contractual agreement to not disclose any of the terms, so the entire document must be sealed. Accordingly, the motion is granted as to these exhibits.

MB also seeks to seal portions of the opposition’s Exhibits 10 and 11 to the declaration of C. David Buckalew and Exhibits 21, 23, 27, 28, 35, 36, 38, and 44 to the declaration of Kelly M. Hagemann. (Motion to Seal at p. 11.) These exhibits are emails that reveal Acrisure’s confidential financial information, including information identifying its clients, the costs of services and products to those clients, clients’ insurance coverage, and the commissions, bonuses, and other compensation paid to M.B. and Acrisure. (Id. at p. 11; Buckalew Sealing Decl. ¶ 5; Hageman Sealing Decl. ¶ 9.) Because of the identifying information of third parties and confidential financial information, the Court finds that there is an that overcomes the right of public access to the record, that overriding interest supports sealing this record, and substantial probability exists that the overriding interest will be prejudiced absent sealing. Exhibits 10 and 11 redact only the sensitive material within the emails. Exhibits 21, 23, 27, 28, 35, 36, 38, and 44 are fully withheld in the redacted versions of exhibits. However, due to the nature of the emails and their contents, the Court finds that these requests are still narrowly tailored and no less restrictive means exist. Additionally, all of the documents were previously sealed in connection with other motions. (See Hageman Sealing Decl. ¶ ¶ 10-12.) Accordingly, the motion is granted as to these exhibits.

The motion also seeks to seal Exhibits 3 and 4 to the declaration of C. David Buckalew. (Sealing Motion at pp. 1, 5, 11.) This request also includes the entirety of Exhibits A and C to World’s declaration of Michelle L. Young, which are identical to or excerpted from Exhibits 3 and 4. (Id. at p. 2.) MB states that these were designated by the producing party as confidential pursuant to the Protective Order. (Id. at p. 11.) One declaration states that Exhibits 3 and 4 are emails in which confidential information are revealed. (Buckalew Sealing Decl. ¶ 5.) However, Exhibits A and C to World’s declaration of Michelle L. Young are the Asset Purchase Agreement and Letter Agreement dated July 26, 2016 that supplemented the Asset Purchase Agreement. (Young Decl. ¶¶ 7, 9.) Another declaration states only that Exhibits A and C were produced by Acrisure in discovery, and “all of the above described documents and exhibits contain MBH’s and Acrisure’s clients’ confidential financial information . . . .” (Hageman Sealing Decl. ¶¶ 3-4, 9.) The Court therefore finds that there are insufficient facts to justify sealing Exhibits 3 and 4 to the declaration of C. David Buckalew and Exhibits A and C to World’s declaration of Michelle L. Young. Accordingly, the motion is denied as to these exhibits.

REQUEST FOR JUDICIAL NOTICE

World’s and MB’s requests for judicial notice are granted.

EVIDENTIARY OBJECTIONS

Acrisure’s objections to World’s evidence are overruled, as it is not a party to this motion.

MB’s objections to World’s reply evidence are sustained, as the Court generally will not consider new evidence submitted with a reply.¿¿(See¿Jay v. Mahaffey¿(2013) 218 Cal.App.4th 1522, 1537-1538.)¿¿

FACTUAL BACKGROUND

Wood worked with insurance brokers Dave Buckalew and Andrew McGinnis (“McGinnis”) from 2010 to September 26, 2016 at a series of companies. (Additional Material Facts “AMF” 1.) On July 8, 2016, Acrisure of California, LLC (“Acrisure”) and National Account Services, Inc. (“NASI”) executed an Asset Purchase Agreement (“APA”), effective July 31, 2016, through which Acrisure purchased substantially all of NASI’s operations and assets as a wholly-owned subsidiary. (Undisputed Material Facts “UMF” 1, 111, 166; AMF 6.) Wood informed Buckalew and McGinnis that he was seeking other employment. (UMF 2, 112, 167.) On July 25, 2016, Wood requested a $1 million payout and a share of NASI’s future earnings under the APA in exchange for his agreement to stay with the company. (AMF 15-16.) Wood was told that his $1 million payment was dependent upon him acquiring broker-of-record renewals for the accounts he worked on. (AMF 17.)

On July 26, 2016, Acrisure and NASI executed a Letter Agreement to supplement the APA. (UMF 4, 114, 169.) The Letter Agreement involved renewals of accounts with Allergan, Inc., Duke Realty, Putnam Investments, Santander Consumer, and Yusen Logistics (collectively, “Unpurchased Wood Accounts”). (UMF 7, 117, 172; Young Decl., Ex. C.) Under the Letter Agreement, Acrisure withheld an amount from the purchase price for a one-year period following closing (“Renewal Period”). (UMF 4, 114, 169.) If the Unpurchased Wood Accounts were no long Acrisure accounts as of July 31, 2017, the purchase price would be reduced, and Acrisure could retain the amount of any downward adjustment. (Response to UMF 4, 114, 169; Young Decl., Ex. C.)

On August 8, 2016, NASI changed its name to MB. (UMF 11, 121, 176.)

On August 10, 2016, Buckalew emailed Wood to see if he had communicated with Santander, and Wood indicated that he had communicated with Santander and Putnam. (UMF 258.) Wood said he was happy to discuss with Buckalew at any time, and Buckalew responded that he would prefer to get a written update for each client, including Yusen and Allergan. (UMF 258.)

On September 8, 2016, Santander’s new human resources director, Lisa Vanroekel, reached out to Wood regarding commissions and bonuses MB or Acrisure had been receiving because she believed MB was being paid too much. (UMF 79, 260.) Wood forwarded the email to Buckalew. (UMF 79, 260.) Wood did not further discuss this with Santander. (UMF 80, 261.) Buckalew followed up, which caused Vanroekel to email Wood again. (UMF 81, 262.) Wood forwarded that email to Buckalew, and Buckalew instructed Wood to speak to Santander’s new CEO. (UMF 82, 263.)

On September 19, 2016, World sent an internal email indicting that Wood would be joining them and requesting a form broker-of-record letter they could show him for his use. (AMF 26.) Wood’s employment agreement with World is dated September 28, 2016. (UMF 17, 127, 182.)

On October 12, 2016, Santander ceased doing business with Acrisure. (UMF 22, 86, 132, 187, 223.) Buckalew did not speak with anyone at Santander about why it decided to stop doing business with Acrisure. (UMF 23, 133, 188, 224.) After withdrawing its two accounts, Santander did not change the broker of record to World. (UMF 25-26, 135-136, 190-191, 222, 226-227; see UMF 24, 134, 189, 225.)

On December 28, 2016, Putnam ceased doing business with Acrisure, and it changed its broker of record designation to World on August 10, 2017. (UMF 27, 87, 137, 192, 228.) Buckalew sent an e-mail to Putnam to ask why it was leaving, but received no response. (UMF 28, 138, 193, 229.)

On January 1, 2017, Allergan ceased doing business with Acrisure and changed its broker of record designation to World. (UMF 30, 88, 140, 195, 231.) Allergan had made changes to its maternity leave program in 2016 and wanted them implemented by December 23, 2016. (UMF 32, 142, 197, 233.) Acrisure’s former Executive Director of Global Benefits of Allergan, Bryan Kavanaugh, testified that Allergan decided to terminate its relationship with Acrisure in December 2016 because Acrisure “failed to implement the maternity leave program benefit on time and as scheduled and as promised.” (UMF 31, 141, 196, 232; see UMF 33, 143, 198, 234.) Kavanaugh also testified that after Wood stopped managing Allergan’s account, Acrisure did not provide the same level of communication that Wood had. (UMF 34, 144, 199, 235.) He testified that Wood “had always delivered for [him]” and “has always been able to find the right resource to bring to the challenges that [he] have as a client.” (UMF 42, 152, 207, 243.) Kavanaugh recommended to Allergan’s Vice President of Compensation and Benefits, Eric Stern, that Allergan terminate Acrisure as its broker of record, and Stern made the final decision to do so. (UMF 39, 149, 204, 240.) Kavanaugh testified that other than the issues with the implementation of the maternity leave program and the lack of communication, there were no other reasons that he recommended terminating Acrisure. (UMF 40, 150, 205, 241.) Kavanaugh informed Buckalew of the broker-of-record change on December 29, 2016. (UMF 44, 154, 209, 245.)

On March 7, 2017, Yusen ceased doing business with Acrisure. (UMF 46, 89, 156, 211, 247.) It did not change its broker of record to World. (UMF 47, 49, 157, 159, 212, 214, 248, 250.) Buckalew spoke with a benefits manager, and according to Buckalew, Yusen’s benefits manager told him that Yusen decided to select another broker who could do life insurance, disability, and medical insurance. (UMF 48, 158, 213, 249.)

On December 21, 2016, Acrisure filed the initial complaint in this action alleging that Wood used its information to solicit its clients. (UMF 50, 90.) Acrisure later added World and Kavanaugh as defendants and made further amendments to its complaint. (UMF 53-55, 93-95.)

On June 26, 2017, World filed a cross-complaint against Acrisure, McGinnis, and Buckalew. (UMF 56, 96.) World later amended his cross-complaint and added MB as a cross-defendant on March 26, 2019. (UMF 57-58, 97-98.)

On May 17, 2019, MB filed this cross-complaint against Wood and World. (UMF 69, 109.)

DISCUSSION

For each claim in the complaint, the defendant moving for adjudication must satisfy the initial burden of proof by showing that one or more elements of a cause of action cannot be established or that there is a complete defense to a cause of action. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520 (Scalf).) Then the burden shifts to the plaintiff to show that a triable issue of material fact exists as to that cause of action or a defense. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf, supra, 128 Cal.App.4th at p. 1520.) To establish a triable issue of material fact, the party opposing the motion must produce “substantial responsive evidence.” (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 162-163.)

Statute of Limitations

World contends that the first (tortious interference with contract), second (intentional interference with prospective economic advantage), and fourth (aiding and abetting breach of duty of loyalty) causes of action are barred by the statutes of limitations.

An action based on a contract, obligation, or liability not founded on an instrument of writing is subject to a two-year statute of limitations. (Code Civ. Proc., § 339.) Additionally, “[i]t is now well established that a cause of action for interference with prospective economic advantage, an action involving a property right, is governed by the two-year limitations period of [Code of Civil Procedure] section 339, subdivision 1.” (Augusta v. United Service Automobile Assn. (1993) 13 Cal.App.4th 4, 10, citing Edwards v. Fresno Community Hosp. (1974) 38 Cal.App.3d 702, 706.)

MB filed this cross-complaint on May 17, 2019. World contends that because Wood’s employment with NASI/MB ended on September 23, 2016, any breach of loyalty had to occur before then. (Motion at p. 18.) World also notes that the latest change of a client’s broker of record occurred on January 1, 2017, extinguishing MB’s future payments on the accounts and causing damages. (Id. at pp. 18-19.)

Damages are an element of tortious interference with contract and intentional interference with prospective economic advantage. (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126, fn. 2 (Pacific Gas & Electric Co.); Edwards v. Arthur Andersen LLP (2008) 44 Cal. 4th 937, 944 (Edwards).) “When damages are an element of a cause of action, the cause of action does not accrue until the damages have been sustained. [Citation.] ‘Mere threat of future harm, not yet realized, is not enough.’ [Citation.]” (City of Vista v. Robert Thomas Sec. (2000) 84 Cal.App.4th 882, 886-887.)

MB alleges that it was damaged by Wood soliciting two of its clients and moving their business to World, and by unsuccessfully soliciting two other clients who stopped doing business with Acrisure as a result. (See Cross-Complaint at ¶¶ 42, 46, 48, 50, 52, 59, 67-69.) As a result, MB did not receive the full value of the accounts at closing and the accounts were stolen before their renewal dates when the holdback payment would have been made to MB. (Id. at ¶¶ 42, 52, 58.) These damages were not realized until July 31, 2017, the expiration of the Renewal Period under the Letter Agreement. (See UMF 4; Response to UMF 4.) Accordingly, the May 17, 2019 cross-complaint was timely filed within two years of M.B. incurring damages, and summary adjudication of the first and second causes of action is not warranted on this ground.

For the fourth cause of action, “[t]he statute of limitations for a cause of action for aiding and abetting a tort generally is the same as the underlying tort.” (American Master Lease LLC v. Idanta Partners, Ltd. (2014) 225 Cal.App.4th 1451, 1479.) The statute of limitations for breach of fiduciary duty is three years if the gravamen of the tort is fraudulent, and four years if not. (Ibid.) Accordingly, allegations that Wood breached his duty of loyalty after May 17, 2016 – three years prior to MB filing this cross-complaint – would not be time-barred. The allegations seem to be focused on Wood’s conduct after August 1, 2016. Summary adjudication of the fourth cause of action is therefore not warranted on this ground.

First/Second Causes of Action –Interference with Contract/Prospective Economic Advantage

In the first cause of action, the Cross-Complaint alleges Wood had knowledge of the contract for the sale of MB’s assets including its accounts to Acrisure and shared that information with World, World targeted those accounts to get them to move their business by sending false statements, and MB was damaged. (Cross-Complaint, ¶¶ 45, 51, 54.) In the second cause of action, the Cross-Complaint alleges MB was in an economic relationship with its clients and with Acrisure, Wood had knowledge of the accounts with MB’s clients and told World, World made false statements to Acrisure’s clients, and MB was damages. (Cross-Complaint, ¶¶ 57, 59, 62, 68, 69.)

“The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Pacific Gas & Electric Co., supra, 50 Cal. 3d at p. 1126, fn. 2.)

“In order to prove a claim for intentional interference with prospective economic advantage, a plaintiff has the burden of proving five elements: (1) an economic relationship between the plaintiff and a third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) an intentional act by the defendant, designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the defendant's wrongful act, including an intentional act by the defendant that is designed to disrupt the relationship between the plaintiff and a third party. [Citation.] The plaintiff must also prove that the interference was wrongful, independent of its interfering character. [Citation] ‘[A]n act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.’ [Citation.]” (Edwards, supra, 44 Cal. 4th at p. 944.)

World contends that it did not know and had no reason to know of the Letter Agreement or its terms. (Motion at pp. 20-21.) World also contends that it could not have intended to disrupt the Letter Agreement because it had no knowledge of it. (Id. at p. 21.) World submitted the Declaration of Rich Eknoian stating World did not know about the Letter Agreement or its terms. (Eknoian Decl., ¶¶ 8, 9.) This is sufficient to shift the burden.

In opposition, MB argues Wood’s knowledge of the Letter Agreement and its terms are imputed to World. “As a general rule, an agent has a duty to disclose material matters to his or her principal, and the actual knowledge of the agent is imputed to the principal.” (In re Marriage of Cloney (2001) 91 Cal.App.4th 429, 439.) “‘The principal is charged with knowledge which his agent acquires before the commencement of the relationship when that knowledge can reasonably be said to be present in the mind of the agent while acting for the principal.’ [Citations.]” (O’Riordan v. Federal Kemper Life Assurance Co. (2005) 36 Cal.4th 281, 288.) MB submitted evidence that Wood had knowledge of “NASI’s right to future payments depending on account status and earnings.” (Buckalew Decl., ¶ 24.) Therefore, there is a triable issue of material fact as to whether Wood knew of the terms of the Letter Agreement such that Wood’s knowledge was imputed to World.

World also argues Allergan and Yusen did not move their business to World because of any wrongful conduct by Wood or World but due to other reasons. (Motion at p. 21.) Santander and Putnam did select other firms, but there is no evidence to connect the move to World’s conduct. (Motion at p. 22.) In opposition, MB submitted evidence from which it could be inferred that World’s or Wood’s contacts with Allergan were an impetus to Allergan’s changing firms. (AMF 45, 46.) This is sufficient to create a disputed fact.

Accordingly, summary adjudication is not warranted on the first or second causes of action.

Fourth Cause of Action – Aiding and Abetting Breach of Duty of Loyalty

The fourth cause of action alleges World aided and abetted Wood’s breach of his duty of loyalty to MB, World knew Wood was making false statements to MB clients, and World gave Wood incentives if the clients moved their accounts to World. (Cross-Complaint, ¶¶ 77-78.)

“The elements of a cause of action for breach of a duty of loyalty, by analogy to a claim for breach of fiduciary duty, are as follows: (1) the existence of a relationship giving rise to a duty of loyalty; (2) one or more breaches of that duty; and (3) damage proximately caused by that breach.” (Huong Que, Inc. v. Luu (2007) 150 Cal.App.4th 400, 410.)

World argues MB has no evidence that Wood ignored or concealed client inquiries and dissatisfaction or refused M.B.’s request to include supervisors on client correspondence. (Motion at p. 23.) World points to UMF 75-78 to show that Wood complied with Buckalew’s requests with respect to Acrisure’s clients. (Id. at pp. 23-24.) World also notes that Wood forwarded an email from Vanroekel to Buckalew, and Buckalew specifically instructed Wood to speak to Santander’s new CEO. (Id. at p. 24; UMF 81-82.) World also asserts that MB has not identified any specific client “about whom Wood allegedly falsely stated that the client was not interest in purchasing additional products.” (Motion at p. 25.) World cites to UMF 266, but that UMF contains merely the same assertion with no evidentiary support. Similarly, World asserts that MB has no evidence that World or Wood may any false statements to an Acrisure client. (Motion at p. 26.) But the cited UMF does not contain evidence supporting that assertion. (UMF 73.)

Summary judgment law “continues to require a defendant moving for summary judgment to present evidence, and not simply point out that the plaintiff does not possess, and cannot reasonably obtain, needed evidence.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854, footnote omitted.) To succeed on this argument, World must “present evidence that the plaintiff does not possess, and cannot reasonably obtain, needed evidence—as through admissions by the plaintiff following extensive discovery to the effect that he has discovered nothing.” (Id. at p. 855.) While World has pointed out some evidence inconsistent with MB’s allegations, World did not submit evidence showing that MB cannot present evidence supporting its claims. 

World also contends that Wood’s allegedly false statements about MB were opinions expressed after his employment with MB ended. (Motion at p. 25; see UMF 83-84; see also Cross-Complaint ¶¶ 60-62.) However, summary adjudication “shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc., § 437c, subd. (f)(1).) World has not met its burden regarding other alleged breaches of Wood’s duty of loyalty.

World argues it gave no assistance to Wood before he joined World. (UMF 21, 72.) MB disputes these assertions. (Response to UMF 21, 72.)

For these reason, summary adjudication is still not appropriate.

CONCLUSION

The motion for summary judgment, or in the alternative summary adjudication, is DENIED.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.

Case Number: BC644516    Hearing Date: January 09, 2020    Dept: 48

MOTIONS TO QUASH DEPOSITION SUBPOENA OR, IN THE ALTERNATIVE, FOR PROTECTIVE ORDER; REQUEST FOR SANCTIONS

MOVING PARTY: Plaintiff Acrisure of California, LLC and Cross-Complainant MB Holdings, Inc.

RESPONDING PARTY(S): Defendant Mark Wood

PROOF OF SERVICE:

ANALYSIS

Motion to Quash Deposition Subpoena

Plaintiff Acrisure of California, LLC and Cross-Complainant MB Holdings, Inc. move to quash the deposition subpoenas issued to attorney Sanford L. Michelman or, in the alternative, for a protective order.

The Court finds that attorney Sanford L. Michelman—whose name appears first in the firm that represents Plaintiff Acrisure—qualifies as opposing counsel.

n.12 “Depositions of opposing counsel are presumptively improper, severely restricted, and require ‘extremely’ good cause—a high standard. [Citations.]” (Carehouse Convalescent Hospital v. Superior Court (2006) 143 Cal.App.4th 1558, 1562 [50 Cal. Rptr. 3d 129].) “California applies a three-prong test in considering the propriety of attorney depositions. First, does the proponent have other practicable means to obtain the information? Second, is the information crucial to the preparation of the case? Third, is the information subject to a privilege? [Citations.]”  (Id. at p. 1563.)

Melendrez v. Superior Court (2013) 215 Cal.App.4th 1343, 1353, fn. 12.

The adversarial system of justice presumes that the attorneys for each side oppose one another, not depose one another. We issue a peremptory writ because plaintiffs have failed to make the requisite showing of “extremely” good cause to overcome the presumption against taking the deposition of defense counsel Kippy Wroten.

Carehouse Convalescent Hospital v. Superior Court (2006) 143 Cal.App.4th 1558, 1560.

The Court addresses the document requests set forth in the separate statement.

¿ Document Request No. 1: “All DOCUMENTS reflecting any communications YOU had with Mr. Wood.”

GRANT motion to quash.

1. Re: Does the proponent have other practicable means to obtain the information?

Yes. Wood himself can produce the documents which reflect communications from attorney Michelman.

2. Re: Is the information crucial to the preparation of the case?

Because the first prong is not satisfied, the Court need not address this prong.

The court notes, in any event, that Michelman’s deposition testimony cannot change the substance of what he communicated to Wood in a document.

3. Re: Whether the information is subject to a privilege.

Because the first prong is not satisfied, the Court need not address this prong.

The Court notes that the litigation privilege is a privilege against liability, not a discovery or evidentiary privilege:

More fundamentally, " '[t]he privileges of Civil Code section 47, unlike evidentiary privileges which function by exclusion of evidence [citation], operate as limitations upon liability.' . . . Indeed, on brief reflection, it is quite clear that section 47(2) has never been thought to bar the evidentiary use of every 'statement or publication' made in the course of a judicial proceeding . . . . Accordingly, when allegations of misconduct properly put an individual's intent at issue in a civil action, statements made during the course of a judicial proceeding  [*915]  may be used for evidentiary purposes in determining whether the individual acted with the requisite intent." ( Oren Royal Oaks Venture v. Greenberg, Bernhard, Weiss & Karma, Inc. (1986) 42 Cal. 3d 1157, 1168 [232 Cal. Rptr. 567, 728 P.2d 1202].) It follows that statements made during a judicial proceeding may also be used to prove the existence of bad faith in an action against an insurer.

Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 914-15.

¿ Document Request No. 2: “All non-privileged DOCUMENTS that in any way mention or otherwise reference Mr. Wood.”

GRANT motion to quash.

1. Re: Does the proponent have other practicable means to obtain the information?

Yes. Because the documents being sought are non-privileged, the documents can be obtained by propounding document requests upon Acrisure and/or M.B. Holdings.

2. Re: Is the information crucial to the preparation of the case?

Because the first prong is not satisfied, the Court need not address this prong.

The court notes, in any event, that non-privileged documents mentioning Wood of which attorney Michelman would have posseession

3. Re: Whether the information is subject to a privilege.

Because the first prong is not satisfied, the Court need not address this prong.

The Court notes, however, that the request seeks only non-privileged documents.

¿ Document Request No. 3: “All DOCUMENTS reflecting any communication YOU had with Crystal & Company (which includes anyone employed by Crystal & Company) that mention or otherwise reference Mr. Wood, including, but not limited to, any such DOCUMENTS reflecting communications with Richard Rosen.”

GRANT motion to quash.

1. Re: Does the proponent have other practicable means to obtain the information?

Yes. Crystal & Company and/or Mr. Rosen can produce the documents which reflect communications from attorney Michelman.

2. Re: Is the information crucial to the preparation of the case?

Because the first prong is not satisfied, the Court need not address this prong.

The court notes, in any event, that Michelman’s deposition testimony cannot change the substance of what he communicated to Crystal & Company and/or Mr. Rosen in a document.

3. Re: Whether the information is subject to a privilege.

Because the first prong is not satisfied, the Court need not address this prong.

The Court notes that the litigation privilege is a privilege against liability, not a discovery or evidentiary privilege. Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 914-15.

¿ Document Request No. 4: “All DOCUMENTS reflecting any communications YOU had with World Insurance Associates, LLC (which includes anyone employed by World Insurance Associates, LLC) that mention or otherwise reference Mr. Wood.”

GRANT motion to quash.

1. Re: Does the proponent have other practicable means to obtain the information?

Yes. World Insurance Associates, LLC can produce the documents which reflect communications from attorney Michelman.

2. Re: Is the information crucial to the preparation of the case?

Because the first prong is not satisfied, the Court need not address this prong.

The court notes, in any event, that Michelman’s deposition testimony cannot change the substance of what he communicated to World Insurance Associates, LLC in a document.

3. Re: Whether the information is subject to a privilege.

Because the first prong is not satisfied, the Court need not address this prong.

The Court notes that the litigation privilege is a privilege against liability, not a discovery or evidentiary privilege. Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 914-15.

Sanctions

The Court exercises its discretion not to award any sanctions upon Defendant Mark Wood or his counsel of record, Squire Patton Boggs (US) LLP.

The request for sanctions is DENIED.

Case Number: BC644516    Hearing Date: December 11, 2019    Dept: 48

(1) – (3) MOTIONS TO QUASH DEPOSITION SUBPOENAS OR, IN THE ALTERNATIVE, FOR PROTECTIVE ORDER; REQUEST FOR SANCTIONS

MOVING PARTY: Plaintiff Acrisure of California, LLC and Cross-Complainant MB Holdings, Inc.

RESPONDING PARTY(S): Defendant World Insurance Associates, LLC; Defendant Mark Wood

PROOF OF SERVICE:

ANALYSIS

Motion To Quash Deposition Subpoena—Putnam Investments, Inc., Yusen Logistics (Americas), Inc. and NFP Corp.

Plaintiff Acrisure of California, LLC and Cross-Complainant MB Holdings, Inc. move to quash the deposition subpoenas issued to the persons most knowledgeable at Putnam Investments, Inc., Yusen Logistics (Americas), Inc. and NFP Corp. or, in the alternative, for a protective order. These entities were clients who formerly held accounts with Acrisure.

As an initial matter, the Court does not find the claimed procedural deficiencies justify quashing the deposition subpoenas or require the issuance of a protective order.

Cross-Defendants Wood and World Insurance are entitled to conduct discovery as to M.B. Holdings, Inc.’s cross-claims against them, even if such evidence is relevant to Acrisure’s claims against Defendant Wood, as to which discovery is closed.

“A complaint and a cross-complaint are, for most purposes, treated as independent actions.” (Citations omitted.) A cross-complaint is generally considered to be a separate action from that initiated by the complaint. (Citations omitted.)

Westamerica Bank v. MBG Industries, Inc. (2007) 158 Cal.App.4th 109, 134.

Here, the PMK deposition subpoenas served upon Putnam Investments, Inc. and Yusen Logistics (Americas), properly seek the reason those clients decided not to continue doing business with Acrisure, which in turn deprived M.B. of holdback payment amounts. Indeed, M.B.’s Cross-Complaint alleges at the first and second causes of action that Wood and World Insurance wrongfully intended to interfere with MB Holding’s contract and prospective economic advantage with Acrisure by meeting with clients whose accounts had been purchased by Acrisure to solicit those clients away from Acrisure. Cross-Complaint, ¶¶ 44 – 50. This conduct allegedly caused MB Holdings not to receive the contractual holdback payment from Acrisure as to those accounts which had been solicited away by Cross-Defendants. Cross-Complaint, ¶¶ 52, 53.

Accordingly, the reasons why the clients—Putnam Investments, Inc. and Yusen Logistics decided to transfer their accounts from Acrisure is relevant to whether Cross-Defendants Wood and World Insurance’s conduct was a factor in those decisions. The information sought is discoverable.

As to NFP Corp., although it was a client with an account that was not part of the holdback letter under the asset purchase agreement, as Cross-Defendant Wood points out in his opposition, M.B.’s Cross-Complaint does not on its face exclude NFP Corp. as a client that was solicited by Wood. Accordingly, Wood is entitled to conduct discovery as to NFP Corp. unless and until M.B. Holdings stipulates that it is not seeking damages related to NFP Corp’s account. Indeed, if M.B. Holdings is not seeking such damages, it should be no skin of its back to so stipulate.

According, the motions to quash/motion for protective order as to PMK deposition subpoenas issued to Putnam Investments, Inc., Yusen Logistics (Americas), Inc.; and NFP Corp. are DENIED.

related-case-search

Dig Deeper

Get Deeper Insights on Court Cases


Latest cases where World Insurance Associates LLC is a litigant

Latest cases where ACRISURE OF CALIFORNIA LLC DBA BOB GABRIEL CO. INSURANCE SERVICES LLC is a litigant

Latest cases represented by Lawyer HAGEMANN KELLY M.

Latest cases represented by Lawyer CONTRERAS JESSE J