This case was last updated from Los Angeles County Superior Courts on 03/19/2016 at 10:06:47 (UTC).

LESLIE GOULD, ET AL VS. JOEL D. KETTLER, ET AL

Case Summary

On 07/22/2014 LESLIE GOULD filed a Property - Other Property Fraud lawsuit against JOEL D KETTLER. This case was filed in Los Angeles County Superior Courts, Van Nuys Courthouse East located in Los Angeles, California. The Judges overseeing this case are FRANK J. JOHNSON and KEVIN C. BRAZILE. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****1909

  • Filing Date:

    07/22/2014

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Property - Other Property Fraud

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Van Nuys Courthouse East

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

FRANK J. JOHNSON

KEVIN C. BRAZILE

 

Party Details

Plaintiffs and Cross Defendants

GOULD LESLIE AS AN INDIVIDUAL

GOULD LESLIE AS PERSONAL REPRESENTATIVE

ROES 1 TO 10 INCLUSIVE

Defendants and Others

AXA ADVISORS LLC

AXA EQUITABLE FINANCIAL SERVICES LLC

AXA NETWORK INSURANCE AGENCY OF CA LLC

AXA NETWORK LLC

DOES 1-100

KETTLER JOEL D.

THE STERLING GROUP

Defendants and Cross Plaintiffs

KETTLER JOEL D.

GOULD SUSAN AN INDIVIDUAL

Attorney/Law Firm Details

Plaintiff and Cross Defendant Attorney

RING BART IVAN

Defendant and Cross Plaintiff Attorneys

ARSHT SAMUEL J

GALLO VALERIE N.

REIF BRANDON S.

BLOOM RENATA ORTIZ

 

Court Documents

Minute Order

8/13/2015: Minute Order

Minute Order

8/13/2015: Minute Order

PLAINTIFF'S REQUEST FOR JUDICIAL NOTICE FILED IN SUPPORT OF MOTION TO REQUEST VACATING OF PRIOR ORDER FOR REASSIGNMENT OF LOS ANGELES SUPERIOR COURT CASE NO. LC101909 TO PROBATE LAW DEPARTMENT; DECLAR

9/4/2015: PLAINTIFF'S REQUEST FOR JUDICIAL NOTICE FILED IN SUPPORT OF MOTION TO REQUEST VACATING OF PRIOR ORDER FOR REASSIGNMENT OF LOS ANGELES SUPERIOR COURT CASE NO. LC101909 TO PROBATE LAW DEPARTMENT; DECLAR

NOTICE OF MOTION AND MOTION TO REQUEST VACATING OF PRIOR ORDER FOR REASSIGNMENT OF LOS ANGELES SUPERIOR COURT CASE NO. LC101909 TO PROBATE LAW DEPARTMENT AND FOR ORDER REASSIGNING CASE NO LC 101 909 T

9/4/2015: NOTICE OF MOTION AND MOTION TO REQUEST VACATING OF PRIOR ORDER FOR REASSIGNMENT OF LOS ANGELES SUPERIOR COURT CASE NO. LC101909 TO PROBATE LAW DEPARTMENT AND FOR ORDER REASSIGNING CASE NO LC 101 909 T

DEFENDAT JOEL D. KETTLER'S JOINDER IN PLAINTIFF'S NOTICE OF MOTION, ETC

9/18/2015: DEFENDAT JOEL D. KETTLER'S JOINDER IN PLAINTIFF'S NOTICE OF MOTION, ETC

DEFENDANT AND CROSS-COMPLAINANT JOEL D. KETTLER'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF AND CROSS-DEFENDANTS' MOTION TO REQUEST VACATING OF PRIOR ORDER FOR REASSIGNMENT OF LOS A

9/18/2015: DEFENDANT AND CROSS-COMPLAINANT JOEL D. KETTLER'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF AND CROSS-DEFENDANTS' MOTION TO REQUEST VACATING OF PRIOR ORDER FOR REASSIGNMENT OF LOS A

REMITTITUR

1/23/2017: REMITTITUR

 

Docket Entries

  • 03/02/2016
  • Request-Dismissal-Partial (WITH PREJUDICE COMPLAINT ) Filed by Attorney-Plaintiff

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  • 01/28/2016
  • Statement-Case Management Filed by Attorney for Cross-Complainant

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  • 01/21/2016
  • Proof of Service Filed by Attorney-Defendant

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  • 01/21/2016
  • Statement-Case Management Filed by Attorney-Defendant

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  • 12/01/2015
  • Statement-Case Management Filed by Attorney-Defendant

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  • 11/25/2015
  • Statement-Case Management Filed by Attorney-Cross Defendant

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  • 11/24/2015
  • Proof of Service Filed by Attorney-Defendant

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  • 11/24/2015
  • Statement-Case Management Filed by Attorney-Defendant

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  • 11/19/2015
  • Statement-Case Management Filed by Atty for Deft and Cross-Complnt

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  • 10/15/2015
  • Notice (OF SETTING OF CASE MANAGEMENT CONFERENCE ) Filed by Attorney-Defendant

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101 More Docket Entries
  • 09/19/2014
  • Notice (OF APPLICATION OF LARRY H. KRANTZ TO APPEAR AS PRO HAC VICE COUNSEL FOR THE AXA DEFENDANTS ) Filed by Attorney-Defendant

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  • 09/19/2014
  • Notice (OF APPLICATION OF WENDY GERSTMANN POWELL TO APPEAR AS PRO HAC VICE COUNSEL FOR THE AXA DEFENDANTS ) Filed by Attorney-Defendant

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  • 09/19/2014
  • Memorandum-Points & Authorities (IN SUPPORT OF APPLICATION OF LARRY H. KRANTZ ) Filed by Attorney-Defendant

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  • 09/19/2014
  • Amended Proof of Service (SERVED MARC EHRLICH, ESQ. ) Filed by Attorney-Defendant

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  • 09/19/2014
  • Application-Pro Hac Vice (FOR WNEDY GERSTMANN POWELL ) Filed by Attorney-Defendant

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  • 09/19/2014
  • Application-Pro Hac Vice (FOR LARRY H. KRANTZ ) Filed by Attorney-Defendant

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  • 09/19/2014
  • Memorandum-Points & Authorities (IN SUPPORT OF APPLICATION OF WENDY GERSTMANN POWELL ) Filed by Attorney-Defendant

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  • 07/22/2014
  • Summons Issued Filed by Attorney-Plaintiff

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  • 07/22/2014
  • Notice-Case Management Conference Filed by Clerk

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  • 07/22/2014
  • Complaint Filed by Attorney-Plaintiff

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Tentative Rulings

Case Number: LC101909    Hearing Date: November 18, 2020    Dept: U

Tentative for this afternoon’s hearing:

The parties disagree about whether the Court should instruct the jury with CACI instructions nos. 405 and 406, or some modified versions thereof, entitled “Comparative Fault of Plaintiff” and “Apportionment of Responsibility,” respectively.  For the reasons explained below, the Court finds that giving such instructions in this case would be error and, thus, denies the request of Cross-Defendants Leslie Gould and Susan Gould that such instructions be given, whether in the form previously drafted by the Court or otherwise. 

The California Supreme Court ruled in B.B. v. County of Los Angeles (2020) 10 Cal. 5th 1, that “California principles of comparative fault have never required or authorized the reduction of an intentional tortfeasor’s liability based on the acts of others” and made clear that these principles apply to any acts of the plaintiff or of other defendants.  (Id., at pp. 18-21, 24.) 

All claims asserted by Cross-Complainant Joel D. Kettler require proof of intentional conduct or acts tantamount to intentional conduct.  None of Kettler’s claims seek relief based solely on a finding that the Goulds’ conduct was negligent. 

Kettler’s First through Third Causes of Action assert claims for libel per se, slander per se, and defamation.  While the initial showing on these claims requires proof that the Goulds failed to use reasonable care to determine the truth or falsity of their statements (CACI 1704), the parties appear to agree that the common interest privilege of Civil Code section 47(c) applies, so Kettler will actually be required to prove malice to succeed on his defamation claims, consistent with CACI 1723. 

Kettler’s trade libel claim asserted as his Fourth Cause of Cction requires proof that the Goulds made false statements that they knew to be true or with reckless disregard for their truth or falsity – elements that are equivalent to intentional conduct.  (CACI 1731.) 

In his Fifth and Sixth Causes of Action for intentional interference with prospective economic advantage and with contract, Kettler must show that the Goulds intended to disrupt his economic prospects or his employment contract or knew that such a disruption was certain or substantially certain to occur.  (CACI 2201 and 2202.) 

Finally, under Kettler’s Seventh Cause of Action for intentional infliction of emotional distress, he must prove that the Goulds’ conduct was intentional, outrageous, and intended to cause emotional distress.  (CACI 1600.) 

Because all of Kettler’s claims require proof of intentional misconduct or acts that are tantamount to intentional behavior, and none of them rest on allegations of negligence alone, the Court will not instruct on contributory fault or apportionment of fault as to do so would be error in a case like this one.    

Case Number: LC101909    Hearing Date: September 30, 2020    Dept: U

TENATIVE RULING ON EVIDENTIARY USE OF PROBATE ACTION DOCUMENTS

Before the Court are the requests of Cross-Complainant Joel Kettler (“Kettler”) and Cross-Defendants Leslie Gould and Susan Gould (jointly “the Goulds”) to use certain documents from the probate proceeding in which the parties were involved, entitled In the Matter of The Gould Living Trust dated September 6, 2006, No. BP133880 (“the Probate Action”). Kettler seeks to establish certain facts as proven in this action by asking that the Court find that the Goulds are collaterally estopped from contesting specific rulings in the Probate Action in this case. The Gould seek to use certain verified documents submitted in the Probate Action as evidence in the trial of this action. The Court’s rulings on these issues are provided below.

I. BACKGROUND

A. Relevant Proceedings in the Probate Action

On April 2, 2012, Sherey Gould, who is the sister Cross-Defendant Leslie Gould (“Leslie”), commenced the Probate Action by filing a Petition for an Order to Instruct Trustee to Sell Residence, seeking an order directing the Trustee, Kettler, to sell the residence of her deceased parents, Donna and Daniel Gould (“the elder Goulds”) and distribute the sales proceeds and other property to herself and her brother, Leslie. On July 6, 2012, the probate court ordered Kettler to provide an accounting of the trust assets for the period from June 4, 2011 through July 31, 2012 (“the First Account”), which he filed on October 19, 2012. Sherey filed objections to the First Account on November 6, 2012.

On November 8, 2012, Sherey Gould, Leslie and Kettler entered into a settlement, inter alia, distributing certain trust assets to Sherey Gould and Leslie, requiring the siblings to make certain payments and transfers to effectuate the distribution, and mandating Sherey’s dismissal of the action and mutual releases of all known and unknown claims between the parties pursuant to Civil Code section 1542. (Exhibit 1 to Kettler’s Motion to Enforce Settlement, which is attached as Exhibit B to the Goulds’ Opposition to Kettler’s Brief re Use of Probate Proceeding Documents, etc. [“Goulds’ Opposition”].) The settlement agreement also provided that Kettler’s accounting through July 31, 2012 would be “deemed approved by the parties, provided that Les and the Trustee comply with the provisions of this Agreement.” (Id. at p. 2.) As the Trustee, Kettler was obligated under the settlement agreement to “undertake his best efforts to fully distribute all trust assets by March 1, 2013, except for the retention of a reasonable reserve to cover any expected taxes and trust expenses.” (Id. at p. 3.)

As Respondents named in Sherey Gould’s Petition, Leslie and Kettler were jointly represented by a single lawyer, Steven D. Kramer, in the probate proceeding and in negotiating the settlement. This joint representation ended on July 16, 2013 when Mr. Kramer sent a letter terminating his representation and citing serious disputes between Leslie and Kettler that made joint representation untenable. (Leslie’s Opposition to Motion to Enforce Settlement, pp. 6-7, and Exhibit A to attached Gould Declaration, all of which is attached as Exhibit C to the Goulds’ Opposition.)

According to Kettler, the First Account he filed was taken off calendar so Kettler refiled it on August 16, 2013. In response, Leslie filed objections to the First Account on October 21, 2013. Sherey Gould also filed objections but they were later withdrawn. Kettler submitted a response to Leslie’s objections on December 10, 2013. (Kettler’s Motion to Enforce Settlement, at pp. 7-8 [Exhibit B to Goulds’ Opposition].)

On December 20, 2013, Leslie filed his Petition for Redress for Breach of Trust in his capacity as a beneficiary of the trust, requesting that Kettler be removed as Trustee and seeking an order for monetary surcharge and punitive or exemplary damages. (Gould Exhibit 536.) According to Leslie, his petition was never calendared for any hearing on the merits. (Goulds’ Opposition, at p. 6.)

Kettler filed a motion on January 2, 2014 seeking to enforce the November 8, 2012 settlement agreement under Code of Civil Procedure section 664.6 and arguing that any objections to the First Account had been resolved by that agreement and its comprehensive mutual releases. (Kettler’s Motion to Enforce Settlement [Exhibit B to Goulds’ Opposition].)

In his opposition, Leslie challenged the section 664.6 motion as procedurally improper and argued that the issues raised by the motion should be resolved by allowing the probate court to address Leslie’s pending objections and his petition to remove the Trustee and for further relief. (Leslie’s Opposition to Motion to Enforce [Exhibit C to Goulds’ Opposition].) Leslie also argued that the First Account could not be approved via the settlement, because the settlement agreement conditioned such approval on Kettler’s compliance with his obligation to undertake his best efforts to fully distribute all trust assets by March 1, 2013, except for a small reserve, and Kettler had failed to satisfy his duty to do so. In support of this contention, Leslie argued that Kettler had delayed the refiling of the First Account until August 16, 2013 and that, as of November 30, 2013, there was $264,729.44 in trust property that had not been distributed. Leslie also argued that the First Account should not be approved because it did not even mention a key bank account, identified as a Bank of America account assigned number xxx666 (“the 666 account”).

In addition, Leslie urged the probate court to invalidate the settlement agreement because of Kettler’s “ongoing fraud.” (Id., at pp. 8-9.) Specifically, Leslie argued that Kettler had concealed the 666 account by not listing it in the First Account and that there was evidence that Kettler had engaged in various questionable financial transactions with respect to the 666 account, including by paying Sherey Gould’s rent out of this account and separately reimbursing himself for making these same rent payments out of a separate account. (Id.)

In reply, Kettler disputed Leslie’s contentions that the motion was procedurally improper and that the settlement agreement was unenforceable. As to the argument that Kettler had failed to make good faith efforts to distribute the trust assets, Kettler pointed to the description in his moving papers of the process he undertook and noted that Leslie’s objections, new petition and opposition to the settlement had blocked his ability to complete the distribution. Kettler denied any fraudulent activities that would vitiate the settlement agreement arguing that the 666 Account was not a trust asset that needed to be included in the First Account and asserting that Kettler’s challenged financial activities were not fraudulent. (Kettler’s Reply at pp. 7-8 [Exhibit D to Goulds’ Opposition].) Further, Kettler argued that, because of the Civil Code section 1542 release executed by the settling parties, Leslie had to prove that he was fraudulently induced to enter into the settlement in order to void the agreement and that the evidence he submitted did not show such fraud. (Id.)

The probate court issued an order granting the motion to enforce the settlement agreement. In the order, the probate court held that the agreement was enforceable under Code of Civil Procedure section 664.6 and overruled Leslie’s objections to the enforcement motion and the enforceability of underlying settlement between the parties. (Kettler Exh. 190.5.) Turning to Leslie’s argument that the First Account should not be deemed approved, the probate court found that Leslie “has not established factual support to demonstrate that Mr. Kettler has not used his ‘best efforts’ to distribute all trust assets prior to March 1, 2013.” (Id.) The probate court also found that Leslie “has not established that the Daniel Gould checking account was a Trust asset” and that “the assertions about rent paid by Sherey are not substantiated by competent evidence.” (Id.) Further, the court ruled that Leslie had not shown that the settlement agreement was “the product of extrinsic fraud.” (Id.) Finally, the probate court made clear that any disputes over royalty payments were not relevant to the First Account nor resolved by the parties’ settlement agreement. (Id.) Based on these rulings, the probate court granted the motion to enter judgment pursuant to the parties’ settlement agreement. No party appealed this ruling, so it became final in 2014.

B. Relevant Prior Rulings in this Case

The issues being litigated in this matter include the truthfulness of various statements the Goulds made to Kettler’s former employer, AXA Advisors, LLC (“AXA”), and/or to Certified Financial Planner Board of Standards, Inc. (the CFP Board). These statements constitute unprivileged communications on which Kettler’s defamation claim and other causes of action are properly grounded. (Kettler v. Gould (2018) 22 Cal.App.5th 593.)

In his papers, Kettler identifies Exhibit 60 as one of the underlying documents reflecting the Goulds’ statements to AXA. But Exhibit 60 appears to be a copy of Leslie Goulds’ privileged complaint made to the Financial Industry Regulatory Authority (“FINRA”), albeit in a slightly different format from the one previously submitted to the Court. (Compare Kettler’s Exhibit 60 to the Goulds’ Exhibit D, submitted in connection with their second Anti-SLAPP motion, filed on February 3, 2017.) Judge Johnson found that Leslie Gould’s complaint to FINRA is subject to the litigation privilege under Civil Code section 47 and, thus, may not form the basis for a civil claim against the Goulds. (Minute order, entered March 24, 2017 [Judge Frank Johnson].)

This Court reaffirmed Judge Johnson’s ruling in its resolution of the Goulds’ Motion in Limine #15. In this ruling, the Court granted the Goulds’ request to exclude evidence of the Goulds’ complaints to FINRA as privileged under Civil Code section 47, except to the extent that their complaints were republished in any unprivileged contexts.

The Court also granted the Goulds’ Motion in Limine #9, which sought to prohibit Kettler from relying on Leslie’s Petition for Redress filed in the Probate Action as a basis for his claims against the Goulds and to “[p]reclude any claims, testimony or evidence relating to and/or pertaining to [Leslie’s] Petition for Redress . . . or as a basis for Kettler’s termination by AXA Advisors.” (Goulds’ Motion in Limine Number Nine, at p. 2.)

Apparently recognizing that they had obtained greater relief than they desired, the Goulds asked the Court to rule on specific documents from the Probate Action that they wanted to use during the trial of this action. Kettler too requested that he be given a chance to carve out certain documents from the Probate Action that could be used in this case. Accordingly, the Court ordered each side to submit a list of documents from the Probate Action they wished to use at the trial in this case and provide arguments justifying their use and admissibility. This order addresses the arguments of the parties regarding their proposed use of documents and/or rulings from the Probate Action.

C. Statements by the Goulds that Kettler Contends are Defamatory and False

Ignoring Exhibit 60 (which is discussed below), the scope of actionable statements made by the Goulds to AXA include those set forth in Exhibit 66 and those described in detail in the Court of Appeal’s decision authorizing Kettler’s claims against the Goulds based on their statements to AXA. (Kettler v. Gould, supra, at pp. 608-609.)

The statements made to AXA in August 26, 2013 include charges that Kettler: (1) “embezzled approximately 6 figures of funds from [the Goulds’] now deceased parents and committed numerous instances of financial elder abuse”; (2) took “deliberate, intentional” actions that “show an ongoing and malicious pattern of his breach of fiduciary responsibility”; (3) had the elder Goulds “sign a codicil to their will making him the successor trust over their son, Les Gould, . . . and told them that he had been executor” of their will; (4) had control over the elder Gould’s bank accounts that received their monthly annuity payments and withdrew money from these accounts by writing checks to “unidentifiable sources” and making electronic transfers to Kettler’s credit cards; (5) “submitted false receipts for reimbursement for funeral expenses, double dipped legitimate reimbursements, filed estate tax returns with inaccurate information (to his advantage and the financial detriment of the estate and heirs) and failed to account for this ‘mystery account ‘ in the Goulds’ estate accounting.” (Kettler’s Exh. 66.3.) The Goulds also complained on August 26, 2013, that “the estate has still not closed and has over $89,000 in it, which Kettler has refused to disburse, citing reasons that make no fiscal sense,” and that may be “partially from out of spite, because [the Goulds] removed [Kettler] as [their] own financial broker immediately upon discovery of his illicit activities.” (Id.) The Goulds state their intent to remove Kettler as successor trustee and describe Kettler’s August 2013 account in the probate matter as “completely bogus and incomplete and further, it does not contain any reference to the ‘mystery account.’” (Id.) The Goulds state that Kettler engaged in “deliberate financial manipulations of our elderly parents’ assets,” that the “offenses are widespread and span several years,” and that all examples described are supported by back-up documents. (Id.) The Goulds also tell AXA that they have “contacted FINRA, the DA and the FBI.” (Id.)

In a follow-up email from Susan Gould, she expressed the Goulds’ concern that Kettler was amassing a “defense fund” with the AXA annuity payments which he “won’t disburse.” (Exh. 66.1) They also accused Kettler of having “no legitimate reason . . . to have taken money from the secretive 6666 BofA account,” as his “actual expenses were reimbursed to him” from an “estate account” and another accounts used to rehabilitate the elder Goulds’ home. (Id.) The email also charges Kettler with “making up the documentation himself” to justify his misdeeds. (Id.) The Goulds urge AXA to secure a letter of resignation from Kettler so they can pursue the closure of the estate, which Kettler is said to have delayed because he “wanted to continue to have access to the Gould’s money for as long as possible.” (Id.)

In February 2014, the Goulds emailed AXA again, urging that the company remove Kettler as their “financial professional,” asking whom to contact at AXA about “employee dishonesty,” recounting Kettler’s “fraudulent activities” and “nefarious actions,” including that “he may have taken out a life insurance policy (again with Gould money) on either Donna or Danny Gould, for which he had no insurable interest, and urging an investigation be conducted. (Kettler v. Gould, supra, at pp. 608-609.) The Goulds also charged that Kettler was using AXA annuity money belonging to the Goulds to defend their lawsuit against Kettler “while he crafts back-dated ‘faux’ letters trying to extricate himself from the lies he has been caught in.” (Id.) A later email offers help to AXA in its investigation of Kettler, assuring the company that they “have copious documentation demonstrating his fraud, elder abuse, and embezzlement.” (Id.)

II. LEGAL STANDARDS AND DISCUSSION

A. Kettler’s Effort to Rely on Exhibit 60

In its ruling on the Goulds’ Motion in Limine #15, the Court granted the request to exclude evidence of Goulds’ complaint to FINRA, as privileged under Civil Code section 47, except to the extent that this complaint was republished in the Goulds’ non-privileged complaints. Hoping to capitalize on the exception stated in the Court’s ruling, Kettler asserts that he will offer evidence showing that the Goulds shared their FINRA complaint with AXA and argues that this disclosure waives its privileged character.

“Codified in Civil Code section 47, subdivision (b), California's litigation privilege protects litigants from being subjected to tort liability for communications made in judicial or quasi-judicial proceedings, at least where the communications bear some ‘logical relation’ to the litigation. (Silberg v. Anderson (1990) 50 Cal.3d 205, 212, 266 Cal.Rptr. 638, 786 P.2d 365.) The privilege does not extend, however, to statements regarding the litigation made “to non-participants in the action ... [which] are thus actionable unless privileged on some other basis.’ (Id. at p. 219 . . . )” (TSMC N. Am. v. Semiconductor Mfg. Internat. Corp. (2008) 161 Cal. App. 4th 581, 599.) Whether the privilege extends to statements made outside the judicial or quasi-judicial proceeding is determined by considering whether the statement: (1) had some connection or logical relation to the proceeding; (2) was made to achieve the objectives of the litigation; and (3) involved litigants or other participants authorized by law. (Costa v. Superior Court (1984) 157 Cal.App.3d 673, 677.) The last requirement is satisfied where the statements are made to non-parties who have a “substantial interest in the outcome” of the pending proceeding. (Id., at 677-678.)

The Court finds that, even if Kettler can prove that the Goulds conveyed their FINRA complaint to AXA, this disclosure would not vitiate the protections of the litigation privilege. Because FINRA regulates financial advisors employed by AXA, including Kettler, there is no question that AXA had a substantial interest in the outcome of the Goulds’ complaint. Further, the Goulds’ complaint targeted conduct by Kettler undertaken, at least in part, as part of his employment responsibilities with AXA. As a result, the disclosure of the Goulds’ FINRA complaint to AXA was logically connected to FINRA’s investigation of the complaint and arguably advanced the objectives of the Goulds’ FINRA complaint by bringing it to the attention of AXA which was subject to FINRA’s regulatory activities.

The Court finds, therefore, that even if the Goulds provided their FINRA complaint to AXA, that complaint retains its privileged status under Civil Code section 47.

B. Kettler’s Collateral Estoppel Argument

Kettler requests that the Court admit the Notice of Entry of Judgment, filed June 9, 2014 in the Probate Action, along with the attached Ruling on Submitted Matter, dated May 29, 2014 (Kettler Exh. 190), on the grounds that the probate court’s rulings in the attached order are collateral estoppel in this case. The Goulds oppose on several grounds arguing that Kettler is entitled neither to issue preclusion on any probate court rulings nor to admission of the minute order as evidence at trial.

“Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them. Collateral estoppel, or issue preclusion, ‘precludes relitigation of issues argued and decided in prior proceedings.’ [Citation.]” (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896.) “Collateral estoppel is an awkward phrase, but it stands for an extremely important principle in our adversary system of justice. It means simply that when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit.” (Hawkins v. SunTrust Bank (2016) 246 Cal. App. 4th 1387, 1393 [Citations and internal quotations omitted].) In this case, the question is whether certain issues decided in the Probate Action should be barred from being relitigated in this action.

Collateral estoppel or issue preclusion may be applied to an issue of fact or an issue of law. ( George Arakelian Farms, Inc. v. Agricultural Labor Relations Bd. (1989) 49 Cal.3d 1279, 1289–90; Lumpkin v. Jordan (1996) 49 Cal.App.4th 1223, 1229.) The doctrine “precludes the relitigation of an issue only if (1) the issue is identical to an issue decided in a prior proceeding; (2) the issue was actually litigated; (3) the issue was necessarily decided; (4) the decision in the prior proceeding is final and on the merits; and (5) the party against whom collateral estoppel is asserted was a party to the prior proceeding or in privity with a party to the prior proceeding.” (Zevnik v. Superior Court (2008) 159 Cal. App. 4th 76, 82 [Citations omitted].)

1. Overlapping Issues

The first question is whether any of the issues raised in the settlement enforcement motion in the Probate Action is identical to an issue to be litigated in this action.

Before turning to the individual issues adjudicated in the Probate Action, the Court disposes of the Goulds’ argument that there can be no issue preclusion here because the minute order in the Probate Action ruled only on the enforcement of a settlement agreement and not on any substantive issues raised in either proceeding. “The ‘identical issue requirement’ concerns whether ‘identical factual allegations’ are at stake in the two proceedings.” (Murphy v. Murphy (2008) 164 Cal.App.4th 376, 400, quoting Lucido v. Superior Court (1990) 51 Cal.3d 335, 342.) The fact that the relevant prior determination arose as a result of a settlement does not preclude application of the doctrine of collateral estoppel so long as the issues actually litigated in both proceedings are the same. (Murphy v. Murphy, supra, at p. 400 [rejecting argument that issue preclusion was inapplicable where substituted judgment order in prior case was the result of a stipulation].)

Turning to the individual issues in play, the Court finds that the probate court’s determination that Kettler’s motion to enforce the parties’ settlement agreement under Code of Civil Procedure section 664.6 was proper is a procedural decision that has no counterpart in this case. Issue preclusion would also be denied with respect to this ruling on the grounds that it is a decision on procedural grounds, rather than on the merits.

The next ruling at issue is the probate court’s holding that the First Account should be deemed approved by way of settlement, rejecting Leslie’s argument that Kettler had not used his best efforts to distribute all trust assets prior to March 1, 2013 and, thus, failed to satisfy the contractual condition for approval of the First Account. Contrary to this ruling is the Goulds’ August 26, 2013 complaint that “the estate has still not closed and has over $89,000 in it, which Kettler has refused to disburse, citing reasons that make no fiscal sense,” and that may be “partially from out of spite.” (Kettler’s Exh. 66.3.) In a follow-up email, Kettler is accused of having delayed the distribution because he “wanted to continue to have access to the Gould’s money for as long as possible.” (Id.) At issue in this case is whether these statements are true, either as a defense to Kettler’s defamation action or in support of his contention that the Goulds engaged in intentional acts designed to interfere with Kettler’s employment relationship with AXA.

The Court finds that there are identical issues at the intersection of the ruling in the Probate Action and the unresolved question of whether the quoted statements are true. The identical issues are whether Kettler used his best efforts to distribute all trust assets by March 1, 2013 and whether the First Account was properly approved. The probate court made rulings on these issues, which are also subsumed within the question in this case regarding the truth of the Goulds’ assertion that, as of August 26, 2013, Kettler had failed to distribute trust assets for reasons that made no fiscal sense, out of spite, and to have access to the elder Goulds’ money for as long as possible.

The probate court also found that that Leslie “has not established that the Daniel Gould checking account was a Trust asset” that needed to be included in the First Account. In the August 26, 2013 complaint to AXA, the Goulds state the reverse, that the First Account was “completely bogus and incomplete,” including that it does not contain any reference to the ‘mystery account.” (Kettler’s Exh. 66.3.) The Court concludes from a review of the file and Exhibit 66.3 that the Goulds are referring to the same accounting that was approved in the Probate Action’s ruling – the First Account -- and that both the ruling and the August 26, 2013 complaint addressed the issue of whether the same Daniel Gould checking account, the 666 account, should have been included in the First Account as part of the trust assets. Based on this comparison, the Court finds that the probate court’s rulings resolved these same issues to be litigated in this case.

The ruling in the Probate Action also includes a finding that Leslie’s “assertions about rent paid by Sherey are not substantiated by competence evidence.” Leslie’s allegations were that Kettler facilitated the elder Goulds’ payment of Sherey Gould’s rent by having them pay a $1,000 check to him out of a household bank account, ostensibly so he could pay the rent, but that Kettler kept that money for himself and wrote a separate check for Sherey’s rent out of the 666 account, with the result being that Kettler pocketed $1,000 each month for himself as part of the double rent payments from the elder Goulds.

Kettler asserts that this accusation is embedded in the Goulds’ charges that he “double dipped legitimate reimbursements,” “submitted false receipts for reimbursement,” charged the estate “ridiculous expenses,” and/or made improper payments out of the elder Goulds’ accounts, as the August 25, 2013 email alleges. To the extent that the Goulds intend to demonstrate the rent scheme that Leslie raised with the probate court as an example of any of these broad accusations, the Court finds that the probate finding is a determination on an identical subissue raised in this case.

The final rulings of the probate court there that Leslie had failed to show that the settlement agreement was “the product of extrinsic fraud” and that any disputes over royalty payments were not relevant to the First Account nor resolved by the parties’ settlement agreement. The Court finds that these issues are not relevant to the issues in this case, much less identical to any issues to be litigated here.

2. Issues That Were Actually Litigated

An issue is “actually litigated” when “it is properly raised, by the pleadings or otherwise, and is submitted for determination and is determined.” (People v. Sims (1982) 32 Cal.3d 468, 484.) An “issue” includes “any legal theory or factual matter which could have been asserted in support of or in opposition to the issue which was litigated.” (Border Business Park, Inc. v. City of San Diego, 142 Cal.App.4th 1538, 1566, 49 Cal.Rptr.3d 259 (2006).

Focusing on the Probate Action rulings that correspond to unresolved issues in this case, the Court finds that all four were actually litigated in the prior action. Leslie’s opposition to Kettler’s enforcement motion objected to the enforcement of the settlement agreement by arguing that Kettler had not made best efforts to disburse the trust assets by March 31, 2013, contending that the First Account should not be approved, charging him with intentionally hiding the 666 account by excluding it from the First Account, and accusing Kettler of engaging in fraud through his concealment of the 666 account and his scheme to have the elder Goulds pay Sherey’s rent directly out of the 666 account and to Kettler out of another account. There is no question that these issues were raised by Leslie’s opposition and submitted to the probate court for determination. Further, the minute order in the Probate Action reveals that the probate court issued rulings on all four arguments, rejecting Leslie’s contentions.

The Goulds argue that the probate court’s determination that Leslie “has not established factual support to demonstrate that Mr. Kettler has not used his ‘best efforts’ to distribute all trust assets prior to March 1, 2013” (Kettler Exh. 190.5) is a “far cry from Kettler’s characterization that a finding was made that he had exercised his best efforts.” (Goulds’ Opposition at pp. 4-5.) But the issue raised by Leslie and decided by the probate court was whether Kettler had used his best efforts to distribute the trust assets such that the First Account should be approved. The probate court found that Kettler had used his best efforts because Leslie failed to prove otherwise.

The Goulds argue that such a ruling is insufficient to support collateral estoppel. For issue preclusion to apply, however, the prior “determination may be based on a failure of pleading or of proof as well as on the sustaining of the burden of proof. . . . A party urging collateral estoppel must prove that the issue was actually litigated and that the evidence was not restricted, but need not establish that oral testimony, or any particular type of evidence was presented.” (Murphy v. Murphy, supra, at p. 401 [Citations and internal quotations omitted].)

There is no question that a probate court has the authority to enforce the terms of a settlement reached by the parties under its ongoing oversight of the probate proceedings and under Code of Civil Procedure section 664.6. (In re Estate of Beard (1999) 71 Cal. App. 4th 753, 773.) Further, a court ruling on a section 664.6 enforcement motion considers the parties’ declarations and other evidence and makes factual findings that are reviewed under the substantial evidence standard. (Hines v. Lukes (2008) 167 Cal.App.4th 1174, 1182.)

In this case, both parties submitted evidence which the probate court considered in ruling on the “best efforts” issue. Under these circumstances, there is no question that the probate court actually decided the question raised by Leslie of whether Kettler used his best efforts to disperse the trust assets, finding that he did. The same is true of the probate court’s rulings that the First Account was complete and that the 666 account was not a trust account that had to be included in the First Account. As with the ruling on the “best efforts” issue, Leslie raised these issues by attacking Kettler’s failure to include the 666 account in the First Account, both parties submitted evidence on the issue, and the probate court issued a ruling.

Plainly, the probate court issued a ruling on Leslie’s accusation about the alleged rent scheme. Like the “best efforts” finding, the ruling on this issue was that “the assertions about rent paid by Sherey are not substantiated by competent evidence.” (Kettler Exh. 190.5.) Under the law, such a ruling reflects the actual litigation of the issue. (Murphy v. Murphy, supra, at p. 401.) The parties had the opportunity to submit evidence in support of their contentions and, in fact, did submit evidence to the probate court. Having reviewed the evidence presented and after considering the written and oral arguments of counsel, the probate court rejected Leslie’s argument that Kettler engaged in fraud in dealing with Sherey’s rent. Although it finds that the rent scheme issue was actually litigated in the Probate Action, the Court addresses below whether Leslie had an adequate opportunity to litigate his fraud allegations such that it would be equitable to bar his relitigation of this issue in this action.

3. Necessarily Decided Issues

The next factor is whether the issues raised in the Probate Action were “necessarily decided” in that proceeding. This requirement “means only that the resolution of the issue was not entirely unnecessary to the judgment in the initial proceeding.” (Zevnik v. Superior Court, supra, at p. 83 [Citation and internal quotations omitted].)

The Court finds that all four relevant issues from the Probate Action meet this standard. The determination that Kettler used his best efforts to disburse the trust assets was a necessary predicate to the probate court’s determination that the First Account was approved. (Kettler Exh. 109.4.) Leslie argued that the First Account should not be approved because Kettler had not satisfied the condition precedent by using his best efforts, but the probate court rejected that argument and approved the First Account. (Id., at p. 109.5.)

The probate court also addressed the propriety and scope of the First Account, rejecting Leslie’s argument that it was incomplete because it did not include the 666 account. The probate court affirmed the agreed-upon approval of the First Account, finding that the 666 account was not a trust asset that needed to be included in the First Account. Consistent with that ruling, although not relevant here, was the probate court’s determination that Daniel Gould’s royalty payments were not addressed in the First Account, nor marshaled either before or during the time period covered by the account. These rulings were not unnecessary to the probate court’s charge to determine the scope of the settlement and order its enforcement.

Similarly, the probate court’s other findings were necessarily decided because they addressed Leslie’s accusations of fraud in connection with his effort to set aside the settlement. In response to the claim that Kettler had concealed the 666 account by excluding it from the First Account, the probate court rejected the fraud accusation in part by finding that the 666 account was not a trust asset that needed to be included in the First Account. The probate court also addressed Leslie’s other charge of fraud, finding that there was no evidence to substantiate the claim that Kettler had perpetrated the rent scheme that Leslie’s opposition described. Because these factual findings address Leslie’s contention that the settlement should have been set aside because of Kettler’s fraud, the Court concludes that they cannot be deemed “entirely unnecessary” to the probate court’s enforcement order and, thus, were necessarily decided by that court.

4. Final Rulings on the Merits

The next factor involves an assessment of whether “the decision in the prior proceeding is final and on the merits.” (Zevnik v. Superior Court, supra, at p. 82.) Issue preclusion is proper so long as the prior adjudication of an issue in another action is “sufficiently firm to be accorded conclusive effect.” (Border Business Park, Inc. v. City of San Diego (2006) 142 Cal.App.4th 1538, 1564 [Citations omitted].) “A prior adjudication of an issue in another action may be deemed ‘sufficiently firm’ to be accorded preclusive effect based on the following factors: (1) whether the decision was not avowedly tentative; (2) whether the parties were fully heard; (3) whether the court supported its decision with a reasoned opinion; and (4) whether the decision was subject to an appeal.” (Id., at p. 1565.)

In this case, the probate court’s rulings are sufficiently firm for issue preclusion to apply. The rulings were not tentative, but rather were conclusive determinations issued after all parties were fully heard and based on a detailed explanation issued orally during the hearing and in a written minute order. While no party appealed, there is no question that such an appeal was available to them. (See, e.g., In re Estate of Beard, supra, 71 Cal. App. 4th 753.)

Further, the Court finds that the four probate rulings at issue are determinations on the merits. In its discussion above, the Court has already weeded out the probate court’s procedural rulings as inappropriate for collateral estoppel effect.

5. Against Same Party in Prior Proceeding or One in Privity with Such a Party

The last factor to be considered in applying issue preclusion is whether “the party against whom collateral estoppel is asserted was a party to the prior proceeding or in privity with a party to the prior proceeding.” (Zevnik v. Superior Court, supra, at p. 82.) Leslie was the opposing party in the probate proceeding at issue and he is a cross-defendant here. The only question is whether Susan Gould, Leslie’s wife and a cross-defendant here, should be deemed to be in privity with Leslie, such that she should be held to the determination he received in the probate proceeding.

“The concept of privity for the purposes of ... collateral estoppel refers to a mutual or successive relationship to the same rights of property, or to such an identification in interest of one person with another as to represent the same legal rights . . . and, more recently, to a relationship between the party to be estopped and the unsuccessful party in the prior litigation which is ‘sufficiently close’ so as to justify application of the doctrine of collateral estoppel. This requirement of identity of parties or privity is a requirement of due process of law.” (Nein v. HostPro, Inc. (2009) 174 Cal.App.4th 833, 845 [Citations and internal quotations omitted].) Due process mandates that the nonparty in the prior proceeding have an identity or community of interest with and adequate representation by the party in the first action. (Roberson v. City of Rialto (2014) 226 Cal. App. 4th 1499, 1511.) Representation will be deemed adequate where the parties’ interests are so similar that the non-party should be considered to have been virtually represented in the prior action. (Id.)

Here, the direct financial interests at issue in the probate action were Leslie’s. It was his parents who were allegedly defrauded by Kettler and his inheritance that was purportedly squandered. That said, it cannot be denied that there is an identity or community of interest between the Goulds in challenging Kettler’s actions through judicial and extra-judicial means.

Because Leslie had standing as the elder Goulds’ son or as the beneficiary of their trusts or estate, it was Leslie’s name on probate petition or on the complaint in this action. But Susan took an active role in advancing Leslie’s interests, inter alia, by sending emails to AXA raising accusations against Kettler and insisting that Kettler be removed as the successor trustee on the Gould Living Trust account. (Kettler Exh. 66.1-66.2.) She also conducted investigations into Kettler’s alleged improprieties and, with her husband, contacted FINRA, the District Attorney, and the Federal Bureau of Investigation to report Kettler’s financial activities and seek action to remedy and/or punish Kettler for those activities. (Id., at pp. 66.2, 66.4.) Over and over, Susan’s actions demonstrate the identity or community of interest she shares with Leslie. Further, as Leslie’s wife, Susan’s financial interests are aligned with those of Leslie, and there is no reason to believe that she has not benefited from the payments made to Leslie out of the elder Goulds’ accounts before they died or from the distribution to Leslie of the elder Goulds’ assets out of the estate. Given the marriage between the Goulds and their evident partnership in seeking redress for Kettler’s alleged wrongs, it is just to find that their interests are so similar that the advocacy of Leslie’s attorney in the Probate Action should be considered an effective representation of Susan’s interests as well. Indeed, he mentioned Susan’s involvement in Leslie’s financial affairs at the probate hearing on May 9, 2014 and noted that she was present at the hearing on Kettler’s motion to enforce the probate settlement. (5/9/14 Transcript, p. 16.)

Accordingly, for all these reasons, the Court finds that Susan is in privity with Leslie for the purpose of applying collateral estoppel to the rulings in the Probate Action.

6. Whether Issue Preclusion Is Just Under the Circumstances

In addition to the five factors considered for application of collateral estoppel, “the courts consider whether the party against whom the earlier decision is asserted had a full and fair opportunity to litigate the issue. . . . Collateral estoppel will not be applied if injustice would result or if the public interest requires that relitigation not be foreclosed.” (Nein v. HostPro, Inc., supra, 174 Cal.App.4th at p. 845 [Citations and internal quotations omitted].)

The touchstone for determining whether the party opposing issue preclusion had a full and fair opportunity to litigate is the context in which the prior issue was resolved. “An issue may be submitted and determined on a motion to dismiss for failure to state a claim, a motion for judgment on the pleadings, a motion for summary judgment . . . [,] a motion for directed verdict, or their equivalents, as well as on a judgment entered on a verdict. A determination may be based on a failure of pleading or of proof as well as on the sustaining of the burden of proof.” (Barker v. Hull (1987) 191 Cal.App.3d 221, 226 [citations omitted].) For a matter that is typically resolved based on briefing and supportive declarations and exhibits, courts have considered it fair to preclude relitigation so long as the losing party’s ability to submit evidence was not improperly restricted. (Id. [“while the party urging the estoppel must prove that the issue was actually litigated and that evidence was not restricted, he need not establish that any particular type of evidence, such as oral testimony, was presented”]; Jackson v. Yarbray (2009) 179 Cal.App.4th 75, 95 (because “the question of the reasonable amount of attorney fees incurred by a prevailing party in litigation is typically determined based on declarations submitted by the parties and their counsel, . . . [a]bsent exceptional circumstances indicating there was no opportunity for a full presentation of the issue in the context of the motion for fees, such a determination meets the “actually litigated” requirement for application of collateral estoppel”].)

California courts have recognized an exception to the rule that precludes relitigation even where a factual issue is decided based solely on competing declarations and exhibits. A long line of cases has established that collateral estoppel will generally be inapplicable to a ruling on a motion to set aside a default or default judgment. (Groves v. Peterson (2002) 100 Cal. App. 4th 659, 667.) The justification for this exception is that the moving party is usually “limited to presenting ex parte affidavits of voluntary witnesses, unless the trial court in its discretion permits a greater latitude. The party does not have the right to produce oral testimony or to compel witnesses to attend for deposition or cross-examination.” (Id. at p. 668.)

This concern is especially great where the motion is based on an allegation that the default or default judgment was procured through extrinsic fraud. A party attempting to prove fraud based solely on voluntary declarations faces an uphill battle. As the Supreme Court explained in Estudillo v. Security Loan etc. Co. (1906) 149 Cal. 556, 564:

The burden of proof rests upon no one more heavily than upon a plaintiff seeking relief upon the ground of fraud, and he ought not to be unduly hampered as to the means of making proof. In support of a motion he is limited to ex parte affidavits of voluntary witnesses unless the court in its discretion permits a wider latitude. In a separate suit he may bring unwilling witnesses into court by subpoena, and he may take their depositions. The [latter] remedy is ampler and more efficacious, and the case is one which demands the amplest and most efficacious remedy.

(Ibid.) Based on this guidance consistently applied over the last century, it became “well settled in California that a judgment procured by extrinsic fraud or mistake may be attacked either by a motion in the same action or by an independent action in a court having equity jurisdiction, and that each remedy is distinct and cumulative.” (Rohrbasser v. Lederer (1986) 179 Cal.App.3d 290, 297.) This is still true except in those cases where the party seeking to show fraud in fact enjoyed a full opportunity to prove it. (Groves v. Peterson, supra, at p. 668.)

The resolution of whether there was a full and fair opportunity to litigate an issue in a prior proceeding depends, therefore, on the nature of the issue. (Jackson v. Yarbray, supra, at pp. 94-95.) A party’s opportunity to litigate is considered to be unduly restricted only where it is deprived of “an opportunity for a full presentation of the issue within the procedural framework of he particular motion.” (Garcia ex rel. Marin v. Clovis Unified School District (E.D. Cal. Dec. 18, 2009) 2009 WL 5111789 at *5, discussing Jackson v. Yarbray.)

In this case, the motion to enforce the parties’ settlement agreement involved two kinds of factual issues. The first set of issues focused on whether the settlement agreement was enforceable as written and, if so, the scope of its reach. There is no reason on this record to revisit the probate court’s rulings that Kettler used his best efforts to distribute the trust assets, that the First Account was complete and should be approved, or that the 666 account was not a trust asset to be included in the First Account. These issues were properly raised and fully resolved through Kettler’s motion to enforce under Code of Civil Procedure section 664.6. There has been no showing that Leslie was deprived of any opportunity for a full presentation of these issues “within the procedural framework” of the enforcement motion under section 664.6. Thus, there is no equitable bar to applying collateral estoppel principles to block the relitigation of these issues.

The second set of issues presented by Kettler’s motion arose from Leslie’s effort to invalidate the settlement agreement by arguing that it was entered into because of Kettler’s extrinsic fraud. The Court finds that these issues are akin to those raised in a motion to set aside a default or default judgment because of fraud. In light of the firmly established rule that collateral estoppel should not bar the later litigation of such a fraud contention, and given Leslie’s inability to fully explore or present his fraud accusation in the context of the motion to enforce the probate settlement, the Court finds that it would be unfair to apply issue preclusion rules to prohibit the litigation in this action of whether Kettler engaged in a fraudulent scheme in using the elder Goulds’ funds to pay Sherey Gould’s rent.

7. Conclusion re Application of Collateral Estoppel

For the reasons explained above, the Court will instruct the jury as follows:

“It has already been determined, in the probate proceeding dealing with the estate of Daniel and Donna Gould, that Joel Kettler used his best efforts to distribute all trust assets prior to March 1, 2013, as he was obligated to do as the Trustee for the Daniel Gould Trust.

“It was also determined, in the probate proceeding, that the Daniel Gould checking account ending with the number 666 was not a trust asset and, thus, it did not need to be listed in the accounting Joel Kettler filed with the probate court in 2013. It was also determined that this 2013 accounting was complete and properly approved.

“In ruling on the matters before you, you must consider these facts to be true.”

No instruction will be given to the jury regarding Leslie’s accusation that Kettler engaged in fraud in connection with the payment of Sherey Gould’s rent.

The Court finds that this instruction will effectuate its collateral estoppel ruling and denies Kettler’s request to submit the underlying probate documents as evidence at trial. Admission of these documents is not justified and will only confuse the jury.

C. Probate Pleadings Identified by the Goulds as Evidence for Trial

The Goulds list 15 verified pleadings from the Probate Action and urge the Court to permit their use at trial. The parties have reached agreement that many of these documents should be admitted as evidence at trial. The Court will honor the parties’ stipulation and admit these documents as evidence.

Some documents identified by the Goulds are described as objections, accountings, or other statements verified by Kettler and submitted by him to the Probate Court. (Exhs. 646, 648, 650, and 668.) The Court notes that statements by a party opponent are admissible over a hearsay objection under Evidence Code section 1220. They cannot be admitted as evidence, however, unless they are relevant to the issues being tried and do not run afoul of Evidence Code section 352. (E.g., Estate of Anderson (1997) 60 Cal. App. 4th 436, 441; People v. Karis (1988) 46 Cal. 3d 612, 637.) The Court will consider these and any other objections raised by Kettler at trial to determine whether any of these documents should be admitted as exhibits or, in the alternative, whether the Goulds should be permitted to read certain relevant portions to the jury as evidence in support of their defenses.

The Goulds also seek admission of verified statements by Sherey Gould, whom Kettler intends to call as a witness at trial. Ms. Gould is not a party, so a hearsay objection will prevent these documents from being admitted at trial. They may be used, however, to impeach Ms. Gould’s trial testimony to the extent that she testifies in a manner that contradicts her earlier verified statements.

Dated: September 29, 2020

_____________________________________

Hon. Theresa M. Traber

Superior Court Judge

Further Tentative Ruling on Cross-defendants Goulds’ Motions in Limine #3 and #1:

Through their Motion in Limine # 3, Cross-defendants Goulds seek to exclude certain testimony from Lucille Goldin.  The Court denied the motion in limine as to admissible testimony about the elder Goulds’ actions and statements regarding support for Cross-Defendants Goulds’ lifestyle and Cross-Defendants’ antagonism towards Kettler and Mr. Gould’s sister.  The Court noted that specific testimony would be addressed at the time that it is offered.

The Court granted the motion in limine with respect to prior lawsuits involving the homeowners association, the small claims actions against the Temple, and the various disputes between the Goulds and the Temple.  The Court also granted Motion in Limine #11 seeking the exclusion of any evidence about these lawsuits and disputes from any source, including but not limited to Lucille Goldin.

The Goulds have stated their intention to offer testimony “establishing that the previous friendly relationship between [Goldin] and cross defendants ended at some point in time and to establish when the end of the friendly relationship occurred.”  Kettler does not object to the Goulds’ interest in offering this limited evidence but states, that if the Goulds violate the Court’s order by offering evidence from Lucille Goldin or otherwise about the referenced lawsuits and disputes or seek to demonstrate any reasons for the falling-out between the Goulds and Goldin, Kettler should be permitted to offer evidence regarding the excluded events and issues to counter the Goulds’ evidence. 

The Court agrees with Kettler that he should be permitted to rebut any showing about the alleged reasons for Goldin’s views of the Goulds, but will rule on the extent of any such evidence at the time it is offered and in relation to any actual breach by the Goulds of the Court’s order granting their motions in limine in relevant part.

Kettler contends that the FINRA Arbitration Award is admissible as an exception to the hearsay rule under Evidence Code section 1280, which provides:

Evidence of a writing made as a record of an act, condition, or event is not made inadmissible by the hearsay rule when offered in any civil or criminal proceeding to prove the act, condition, or event if all of the following applies:

(a) The writing was made by and within the scope of duty of a public employee.

(b) The writing was made at or near the time of the act, condition, or event.

(c) The sources of information and method and time of preparation were such as to indicate its trustworthiness.

(Evidence Code § 1280.)  Evidence Code section 195 defines a public employee as “an officer, agent or employee of a public entity.”  (Evidence Code § 195.)  Section 200 of the Evidence Code defines “public entity” as “a nation, state, county, city and county, city, district, public authority, public agency or any other political subdivision or public corporation, whether foreign or domestic.”  (Evidence Code § 200.)  The Court agrees that the FINRA Arbitration Award is admissible as a public record under section 1280 to prove the decision made by the FINRA arbitrator in connection with Cross-Complainant Kettler’s challenge to AXA’s termination of his employment.

There is no question that FINRA is a “public entity” and that its arbitrators act as its “agents” within the meaning of the Evidence Code.  As the Court of Appeal explained in Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1128-1129:

FINRA is a “‘self-regulatory organization’” as defined in the Securities Exchange Act of 1934 that oversees the conduct of securities brokers and brokerage firms. (15 U.S.C. §§ 78c(a)(26), 78s(b); Sacks v. S.E.C. [(9th Cir.2011) 648 F.3d 945, 948].) “It is ‘responsible for regulatory oversight of all securities firms that do business with the public; professional training, testing and licensing of registered persons; [and] arbitration and mediation....’ [Citation.]”  (Ibid.)

One of FINRA’s duties under the Securities Exchange Act of 1934 is to “establish and maintain a system for collecting and retaining registration information,” including “information reported in connection with the registration or licensing of brokers and dealers and their associated persons, including disciplinary actions, regulatory, judicial and arbitration proceedings....” (15 U.S.C. § 78o–3(i)(1)(A) &  (i)(5).)  FINRA maintains these records in the electronic CRD database it developed in concert with the state security commissions. (See Meyers v. NASD, Inc. (E.D.Mich. Mar. 29, 1996) No. 95–CV–75077, 1996 WL 1742619, *1.) All broker/dealers registered with the Securities and Exchange Commission (SEC) must file their registration forms through the CRD system, along with the registration forms for their associated persons. (NASD Notice to Members 01-65—Request for Comment (Oct.2001), p. 564.) These forms require reporting of administrative information on registered members as well as disclosure information, including information relating to customer complaints, arbitration claims and awards, and court filings by customers. (Ibid.)

FINRA has established “BrokerCheck,” an online application through which the public may obtain information on the background, business practices and conduct of FINRA member firms and their representatives. Through BrokerCheck, FINRA releases to the public certain information maintained on the CRD, thereby enabling investors to make informed decisions about individuals and firms with which they may wish to conduct business. This data includes historic customer complaints and information about investment-related, consumer-initiated litigation or arbitration.  (FINRA Reg. Notice 10-34, July 2010; Securities and Exchange Com., Release No. 34-62476, July 8, 2010.)

Given the federal authority granted to FINRA and its specific responsibilities to conduct arbitrations, issue arbitration awards and post these awards and other relevant information on the public database, the Court finds that the FINRA Arbitration Award is admissible as a public record under Evidence Code §1280.  Specifically, the Court finds, based on the evidence proffered by Cross-Complainant Kettler, that the FINRA Arbitration Award is a writing that was created by a public employee, the FINRA arbitrator, within the scope of his duties, under subsection (a) of Section 1280. 

The Court also finds that, consistent with subsection (b) of Section 1280, the FINRA Arbitration Award was made at or near the time of the decision in the FINRA arbitration, which is the “act, . . . or event” that it is offered to prove.  Finally, based on the evidence in the record, there appears to be no dispute that the FINRA Arbitration Award at issue satisfies the standards of subsection (c) of Section 1280 in that it is in fact a true and correct copy of the award that was issued at the conclusion of Cross-Complainant Kettler’s FINRA arbitration.  Moreover, authentication of an official record like the FINRA Arbitration Award may be demonstrated in a number of ways, as long as there is sufficient evidence offered that it is what it purports to be.  (Jazayeri v. Mao (2009) 174 Cal. App. 4th 301, 320-321.) 

Relying on Sosinsky v. Grant (1992) 6 Cal. App. 4th 1548, 1551, Cross-Defendants Goulds object to the admission of the FINRA Arbitration Award on the ground that the Court should not take judicial notice of the award or of any findings made in the award.  Because the Court does not take judicial notice of the FINRA Arbitration Award, but rather finds it to be admissible evidence under the public records exception to the hearsay rule, much of the Goulds’ briefing is immaterial to the issue decided by the Court. 

The Goulds also challenge the relevance of the FINRA Arbitration Award.  In this case, Kettler seeks to admit the FINRA Arbitration Award to demonstrate that the arbitrator made certain determinations that undermine AXA’s stated reasons for its termination of Kettler.  Specifically, Kettler seeks to show that the FINRA arbitrator granted him compensatory damages in connection with his termination and recommended the expungement from three U5 forms filed by AXA of language regarding Kettler’s termination.  These determinations constitute evidence calling into question AXA’s asserted reasons for Kettler’s termination and, thus, are relevant to certain factual disputes in this case.  The Goulds’ argument challenging the relevance of the FINRA Arbitration Award reflects its character as a double-edged sword in that the Award may tend to prove or disprove Kettler’s theory on his intentional interference with contract claim, but their attack does not undermine the potential probative value of the Award depending how it is used at trial. 

Accordingly, the Court finds that the FINRA Arbitration Award is admissible at trial under the public record exception set forth in Evidence Code § 1280, as evidence to prove the arbitrator’s determination regarding Kettler’s termination by AXA. To the extent that either party seeks an instruction explaining to the jury the significance of the FINRA Arbitration Award as evidence in the case, the Court will entertain arguments regarding such an instruction.

In the wake of the Court’s denial of the motion in limine of Cross-defendants Leslie Gould and Susan Gould (“the Goulds”) seeking to exclude the FINRA Arbitration Award obtained by Cross-complainant Joel Kettler, the Court solicited briefing on the admissibility of the Award in the face of the Goulds’ objections based on hearsay, relevance, and authentication.  Having reviewed the arguments of the parties, the Court rules as follows.

Kettler contends that the FINRA Arbitration Award is admissible as an exception to the hearsay rule under Evidence Code section 1280, which provides:

Evidence of a writing made as a record of an act, condition, or event is not made inadmissible by the hearsay rule when offered in any civil or criminal proceeding to prove the act, condition, or event if all of the following applies:

(a) The writing was made by and within the scope of duty of a public employee.

(b) The writing was made at or near the time of the act, condition, or event.

(c) The sources of information and method and time of preparation were such as to indicate its trustworthiness.

(Evidence Code § 1280.)  Evidence Code section 195 defines a public employee as “an officer, agent or employee of a public entity.”  (Evidence Code § 195.)  Section 200 of the Evidence Code defines “public entity” as “a nation, state, county, city and county, city, district, public authority, public agency or any other political subdivision or public corporation, whether foreign or domestic.”  (Evidence Code § 200.)  The Court agrees that the FINRA Arbitration Award is admissible as a public record under section 1280 to prove the decision made by the FINRA arbitrator in connection with Cross-Complainant Kettler’s challenge to AXA’s termination of his employment.

There is no question that FINRA is a “public entity” and that its arbitrators act as its “agents” within the meaning of the Evidence Code.  As the Court of Appeal explained in Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1128-1129:

FINRA is a “‘self-regulatory organization’” as defined in the Securities Exchange Act of 1934 that oversees the conduct of securities brokers and brokerage firms. (15 U.S.C. §§ 78c(a)(26), 78s(b); Sacks v. S.E.C. [(9th Cir.2011) 648 F.3d 945, 948].) “It is ‘responsible for regulatory oversight of all securities firms that do business with the public; professional training, testing and licensing of registered persons; [and] arbitration and mediation....’ [Citation.]”  (Ibid.)

One of FINRA’s duties under the Securities Exchange Act of 1934 is to “establish and maintain a system for collecting and retaining registration information,” including “information reported in connection with the registration or licensing of brokers and dealers and their associated persons, including disciplinary actions, regulatory, judicial and arbitration proceedings....” (15 U.S.C. § 78o–3(i)(1)(A) &  (i)(5).)  FINRA maintains these records in the electronic CRD database it developed in concert with the state security commissions. (See Meyers v. NASD, Inc. (E.D.Mich. Mar. 29, 1996) No. 95–CV–75077, 1996 WL 1742619, *1.) All broker/dealers registered with the Securities and Exchange Commission (SEC) must file their registration forms through the CRD system, along with the registration forms for their associated persons. (NASD Notice to Members 01-65—Request for Comment (Oct.2001), p. 564.) These forms require reporting of administrative information on registered members as well as disclosure information, including information relating to customer complaints, arbitration claims and awards, and court filings by customers. (Ibid.)

FINRA has established “BrokerCheck,” an online application through which the public may obtain information on the background, business practices and conduct of FINRA member firms and their representatives. Through BrokerCheck, FINRA releases to the public certain information maintained on the CRD, thereby enabling investors to make informed decisions about individuals and firms with which they may wish to conduct business. This data includes historic customer complaints and information about investment-related, consumer-initiated litigation or arbitration.  (FINRA Reg. Notice 10-34, July 2010; Securities and Exchange Com., Release No. 34-62476, July 8, 2010.)

Given the federal authority granted to FINRA and its specific responsibilities to conduct arbitrations, issue arbitration awards and post these awards and other relevant information on the public database, the Court finds that the FINRA Arbitration Award is admissible as a public record under Evidence Code §1280.  Specifically, the Court finds, based on the evidence proffered by Cross-Complainant Kettler, that the FINRA Arbitration Award is a writing that was created by a public employee, the FINRA arbitrator, within the scope of his duties, under subsection (a) of Section 1280. 

The Court also finds that, consistent with subsection (b) of Section 1280, the FINRA Arbitration Award was made at or near the time of the decision in the FINRA arbitration, which is the “act, . . . or event” that it is offered to prove.  Finally, based on the evidence in the record, there appears to be no dispute that the FINRA Arbitration Award at issue satisfies the standards of subsection (c) of Section 1280 in that it is in fact a true and correct copy of the award that was issued at the conclusion of Cross-Complainant Kettler’s FINRA arbitration.  Moreover, authentication of an official record like the FINRA Arbitration Award may be demonstrated in a number of ways, as long as there is sufficient evidence offered that it is what it purports to be.  (Jazayeri v. Mao (2009) 174 Cal. App. 4th 301, 320-321.) 

Relying on Sosinsky v. Grant (1992) 6 Cal. App. 4th 1548, 1551, Cross-Defendants Goulds object to the admission of the FINRA Arbitration Award on the ground that the Court should not take judicial notice of the award or of any findings made in the award.  Because the Court does not take judicial notice of the FINRA Arbitration Award, but rather finds it to be admissible evidence under the public records exception to the hearsay rule, much of the Goulds’ briefing is immaterial to the issue decided by the Court. 

The Goulds also challenge the relevance of the FINRA Arbitration Award.  In this case, Kettler seeks to admit the FINRA Arbitration Award to demonstrate that the arbitrator made certain determinations that undermine AXA’s stated reasons for its termination of Kettler.  Specifically, Kettler seeks to show that the FINRA arbitrator granted him compensatory damages in connection with his termination and recommended the expungement from three U5 forms filed by AXA of language regarding Kettler’s termination.  These determinations constitute evidence calling into question AXA’s asserted reasons for Kettler’s termination and, thus, are relevant to certain factual disputes in this case.  The Goulds’ argument challenging the relevance of the FINRA Arbitration Award reflects its character as a double-edged sword in that the Award may tend to prove or disprove Kettler’s theory on his intentional interference with contract claim, but their attack does not undermine the potential probative value of the Award depending how it is used at trial. 

Accordingly, the Court finds that the FINRA Arbitration Award is admissible at trial under the public record exception set forth in Evidence Code § 1280, as evidence to prove the arbitrator’s determination regarding Kettler’s termination by AXA. To the extent that either party seeks an instruction explaining to the jury the significance of the FINRA Arbitration Award as evidence in the case, the Court will entertain arguments regarding such an instruction.