On 12/15/2014 ARSENIO D MADERO JR filed a Property - Other Property Fraud lawsuit against MERCEDES DEVONEY BROUGHTON ET. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is ELIZABETH ALLEN WHITE. The case status is Pending - Other Pending.
Pending - Other Pending
Los Angeles County Superior Courts
Stanley Mosk Courthouse
Los Angeles, California
ELIZABETH ALLEN WHITE
MADERO ARSENIO D. JR.
BROUGHTON MARK K.C.
BROUGHTON MERCEDES DEVONEY
DOES 1 THRU 50
RICHARD HARRIS LAW CORPORATION
GIRARDI | KEESE
HARRIS RICHARD C
AUMAIS CHRISTOPHER T.
MENARD JEAN PAUL ESQ.
FELDMAN KENNETH C. ESQ.
MENARD JEAN-PAUL ESQ.
12/3/2018: Notice of Joinder
6/5/2019: Minute Order
12/24/2014: NOTICE OF CASE MANAGEMENT CONFERENCE
7/10/2015: NOTICE OF CONTINUANCE OF CASE MANAGEMEN CONFERENCE
8/12/2015: NOTICE OF CONTINUANCE OF ORDER TO SHOW CAUSE AND CASE MANAGEMENT CONFERENCE
8/13/2015: CIVIL DEPOSIT
8/14/2015: NOTICE OF CONTINUANCE OF CASE MANAGEMENT CONFERENCE AND OSC RE: DISMISSAL
8/27/2015: DEFENDANT JOHN GUY, ESQ.'S NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
10/9/2015: CASE MANAGEMENT STATEMENT
10/9/2015: CASE MANAGEMENT STATEMENT
10/19/2015: CASE MANAGEMENT STATEMENT
10/26/2015: RULING: DEMURRER TO COMPLAINT
11/5/2015: PLAINTIFFS' SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT JOHN GUY, ESQ.'S DEMURRER
11/9/2015: Minute Order
3/18/2016: PLAINTIFFS? OPPOSITION TO DEFENDANT JOHN GUY, ESQ.?S DEMURRER TO FIRST AMENDED COMPLAINT
3/24/2016: DEFENDANT JOHN GUY'S MEMORANDUM OF POINTS AND AUTHORITIES IN REPLY TO OPPOSITION TO DEMURRER TO FIRST AMENDED COMPLAINT
3/25/2016: THE BROUGHTON DEFENDANTS' REPLY MEMORANDUM IN SUPPPORT OF DEMURRER TO PLAINTIFFS' FIRST AMENDED COMPLAINT
3/25/2016: CASE MANAGEMENT STATEMENT
Hearingat 09:30 AM in Department 48 at 111 North Hill Street, Los Angeles, CA 90012; Jury TrialRead MoreRead Less
Hearingat 08:30 AM in Department 48 at 111 North Hill Street, Los Angeles, CA 90012; Final Status ConferenceRead MoreRead Less
DocketProof of Service (not Summons and Complaint); Filed by Mark K.C. Broughton (Defendant); Mercedes Devoney Broughton (Defendant); Paul Broughton (Defendant)Read MoreRead Less
Docketat 08:30 AM in Department 48, Elizabeth Allen White, Presiding; Status Conference (Regarding CIVNS1200020) - HeldRead MoreRead Less
DocketNotice of Ruling; Filed by Mark K.C. Broughton (Defendant); Mercedes Devoney Broughton (Defendant); Paul Broughton (Defendant)Read MoreRead Less
DocketMinute Order ( (Status Conference Regarding CIVNS1200020)); Filed by ClerkRead MoreRead Less
DocketSubstitution of Attorney; Filed by Paul Broughton (Defendant)Read MoreRead Less
DocketSubstitution of Attorney; Filed by Mercedes Devoney Broughton (Defendant)Read MoreRead Less
DocketSubstitution of Attorney; Filed by Mark K.C. Broughton (Defendant)Read MoreRead Less
Docketat 08:31 AM in Department 48, Elizabeth Allen White, Presiding; Status Conference (Regarding CIVNS1200020) - Held - ContinuedRead MoreRead Less
DocketCASE MANAGEMENT STATEMENTRead MoreRead Less
DocketNotice of Related Case; Filed by Arsenio D. Madero, Jr. (Plaintiff); Eloisa Madero (Plaintiff)Read MoreRead Less
DocketNOTICE OF RELATED CASERead MoreRead Less
DocketSummons; Filed by Arsenio D. Madero, Jr. (Plaintiff); Eloisa Madero (Plaintiff)Read MoreRead Less
DocketSUMMONSRead MoreRead Less
DocketNotice of Case Management Conference; Filed by ClerkRead MoreRead Less
DocketNOTICE OF CASE MANAGEMENT CONFERENCERead MoreRead Less
DocketNOTICE OF CASE MANAGEMENT CONFERENCERead MoreRead Less
DocketCOMPLAINT FOR DAMAGES 1. FRAUDULENT CONVEYANCE; ETCRead MoreRead Less
DocketComplaint; Filed by Arsenio D. Madero, Jr. (Plaintiff); Eloisa Madero (Plaintiff)Read MoreRead Less
Case Number: BC566767 Hearing Date: October 09, 2020 Dept: 48
[TENTATIVE] ORDER RE MOTION TO COMPEL FURTHER RESPONSES
Plaintiffs Arsenio D. Madero, Jr. and Eloisa Madero (“Plaintiffs”) filed this fraudulent transfer case alleging Defendant Mercedes Broughton (“Defendant”) transferred her interest in real property to her son to avoid the financial loss from her wrongful conduct in a motor vehicle accident. Defendant John Guy, an attorney retained by Defendant, prepared the quit claim deed. At his deposition, Guy refused to produce certain documents and answer certain questions based on the attorney-client privilege. Plaintiffs move to compel responses to those questions and the production of documents on the ground that the crime-fraud exception applies to those communications.
Crime Fraud Exception
Evidence Code section 956 states, “There is no privilege under this article if the services of the lawyer were sought or obtained to enable or aid anyone to commit or plan to commit a crime or a fraud.” “To invoke the Evidence Code section 956 exception to the attorney-client privilege, the proponent must make a prima facie showing that the services of the lawyer ‘were sought or obtained’ to enable or to aid anyone to commit or plan to commit a crime or fraud.” (BP Alaska Exploration, Inc. v. Superior Court (1988) 199 Cal.App.3d 1240, 1262.) “[M]ere assertion of fraud is insufficient; there must be a showing the fraud has some foundation in fact.” (Ibid.) A prima facie case is “one which will suffice for proof of a particular fact unless contradicted and overcome by other evidence. In other words, evidence from which reasonable inferences can be drawn to establish the fact asserted, i.e., the fraud.” (Ibid.) The prima facie case must show that the services of the lawyer were retained and used to enable the client to commit a crime or a fraud and that there exists a reasonable relationship between the crime or fraud and the attorney-client communication. (State Farm Fire & Cas. Co. v. Superior Court (1997) 54 Cal.App.4th 625, 645.) “[I]t is the intent of the client upon which attention must be focused and not that of the lawyers.” (Ibid.)
Plaintiffs argue that letters from Defendant’s attorney, David Nakahara, are evidence of the prima facie case. In a letter to Plaintiff’s counsel, Nakahara stated Defendant “took an early retirement option as she suffers from chronic asthma and chronic pulmonary obstructive disease . . . she suffers from hypertension,” and that “[i]n light of her medical condition and near death in the wreck, Mrs. Boughton sought the advice of the competent estate planning counsel.” The letters establish the property was her only asset. Thereafter, the only estate planning she did was to transfer the property interest. Plaintiffs argue the letters show Defendant only sought the estate planning advice after the accident, and therefore, “it is clear that the accident (and more specifically the death of DJ Madero) and not her health was the reason for the seeking of advice.” (Motion at p. 7.) Plaintiffs argue the letters show Defendant “was solely attempting to shield her assets to defraud Plaintiffs and that was the sole reason she talked met [sic] with attorney John Guy. (Motion at p. 7.) Similarly, Plaintiffs argue, “The clear and only reasonable inferences that can be drawn from the statement made [in the letters] are that she was seeking to commit a fraud.” (Reply at p. 2.)
Defendant first argues Nakahara’s letters are inadmissible. The Court rejects that argument. Next Defendant argues that Plaintiffs’ argument is based solely on inferences from the Nakahara letters, and that to make a prima facie showing, Plaintiffs need to show that the desired inference is more likely than not to be true. (Opposition at pp. 5-6.)
In Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, the California Supreme Court discussed the role of inferences in making a prima facie showing (in that case, a plaintiff making a prima facie showing of a triable issue of material fact of the existence of an unlawful conspiracy in the summary judgment context). In that situation, the plaintiff “must often rely on inference rather than evidence since, usually, unlawful conspiracy is conceived in secrecy and lives its life in the shadows.” (Id. at p. 857.) The inference “need only be reasonable,” but “the inference is reasonable if, and only if, it implies unlawful conspiracy more likely than permissible competition.” (Ibid.) Thus, if the plaintiff’s evidence and the inferences drawn from the evidence “show and imply unlawful conspiracy only as likely as permissible competition or even less likely,” the plaintiff has not made a prima facie showing. (Ibid.) “[I]f the court determines that any evidence or inference presented or drawn by the plaintiff indeed shows or implies unlawful conspiracy more likely than permissible competition,” than the plaintiff has made a prima facie showing “because a reasonable trier of fact could find for the plaintiff.” (Id. at pp. 856-857.)
Here, too, the allegedly unlawful fraud would have taken place in secret, and so Plaintiffs need to rely on inference. The Nakahara letters allow the inference that Defendant was seeking to shield her assets to defraud Plaintiffs. But they also allow the inference that because Defendant had been through a tragic accident, had been seriously injured, and generally was not in good health, she wanted to do some legitimate estate planning. One of the letters refers to the transfer being “made under the Bush Tax cuts which will probably expire this year in 2012, and will allow the mortgage to remain intact without estate tax consequences, and also allow proposition 13 tax benefits to continue,” which supports an inference that the transfer was for non-fraudulent estate planning purposes. Both inferences are equally likely. The Court cannot conclude, as Plaintiffs argue, that the only reasonably inference is that Defendant was intending to commit a fraud.
Documents Provided by Defendant
In addition, Plaintiffs seek production of documents Defendant transmitted to John Guy, arguing that documents provided by a client to a lawyer do not become privileged merely by being turned over to counsel. While Plaintiffs are correct that non-privileged documents do not become privileged by transmission to an attorney, it does not follow that Plaintiffs can therefore demand their production from the attorney. (Wellpoint Health Networks, Inc. v. Superior Court (1997) 59 Cal.App.4th 110, 119.) Plaintiffs can seek their production from Defendant.
In Camera Review
Plaintiffs ask the Court to conduct an in camera review. A court may not review documents in camera review to determine if they are privileged or if the crime-fraud exception applies. “[T]he Legislature does not contemplate disclosure of privileged material in ruling on the crime/fraud exception.” (State Farm, supra, 54 Cal.App.4th at p. 645.) Therefore, the Court denies this request.
For the reasons stated above, 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.
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