Opinion
NOT TO BE PUBLISHED
ORIGINAL PROCEEDINGS in mandate Los Angeles County Super. Ct. Nos. BC358921 Rita Miller, Judge. Writ petition in B215029 is granted with directions. Writ petition in B214762 is denied
Allen Matkins Leck Gamble Mallory & Natsis, Marvin E. Garrett, Charles D. Jarrell, Marissa M. Prayongratana and Jennifer C. Bercovici for Petitioners and Real Parties in Interest, Buchalter Nemer et al.
Law Offices of Ronald S. Barak and Ronald S. Barak for Petitioner and Real Party in Interest Ben Eisenberg Properties – New Mart Building, Inc.
CROSKEY, J.
A party, once represented by a law firm in underlying litigation, received advice from another attorney which suggested that the law firm had committed malpractice. The party fired the firm, and hired the second attorney to represent it – both in the underlying litigation and in an action for malpractice against the firm. In the malpractice action, the defendant firm sought to obtain discovery from the second attorney (both documentary and via deposition) as well as to compel his testimony at trial. The trial court concluded that the client had largely waived the attorney-client privilege with respect to many of its communications with the second attorney. The court required the second attorney to provide several documents for in camera review, but permitted the second attorney to first redact the documents. Both parties filed writ petitions – the client argues that the privilege was not waived; the defendant law firm argues that the trial court erred by permitting the second attorney to redact the documents before submission to the court. While the facts of this matter are complex, the legal issue is not – the attorney-client privilege simply was not waived.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Underlying Facts
For many years, the Buchalter Nemer law firm, and its attorneys Bryan Mashian and Jay Ziegler (collectively Buchalter) represented the Ben B. and Joyce E. Eisenberg Foundation and Ben Eisenberg Properties-New Mart Building, Inc. (collectively Eisenberg). Specifically, Eisenberg owned a commercial building in the garment district, and Buchalter prepared the master lease which Eisenberg used with each of its tenants. Buchalter drafted a clause which was intended to allow Eisenberg to raise the rent as a condition of approval of any assignment or sublease of the units. Eisenberg would later assert that the clause was negligently drafted, and might not have allowed Eisenberg to obtain as much as it was statutorily permitted to obtain upon a transfer of the lessee’s interest.
The underlying dispute in this case involves Eisenberg’s lease of one suite in the building (Suite 1201) to Anne’s Place, which was then wholly owned by Richard Guido. By 2005, the market had improved such that the rental on Anne’s Place was considerably below fair market rental value. At this point in time, West Coast Holdings acquired all of the common stock of Anne’s Place, and therefore claimed the right to possess Suite 1201 under the lease. Eisenberg alleges that Anne’s Place’s only real asset was its right to possess Suite 1201 for a below-market rent, and that the amount West Coast Holdings paid for Anne’s Place’s stock was the difference in rent between the lease amount and the fair market value, some $200,000. In other words, Eisenberg alleges that West Coast Holdings’ acquisition of Anne’s Place was in reality nothing more than a device by which West Coast Holdings obtained the lease rights to Suite 1201 without triggering Eisenberg’s right under the lease to increase the rent on the occasion of a sublease or assignment. Eisenberg further alleges that this “loophole” was made possible as a result of Buchalter’s negligent drafting of the lease.
In any event, the West Coast Holdings/Anne’s Place deal started to unravel, with both Guido and West Coast Holdings claiming a right to possess Suite 1201 and asking Eisenberg to lock the other out. A series of four lawsuits followed, some involving Eisenberg and some not. Two of these lawsuits are significant for our purposes. In one action, Eisenberg (still represented by Buchalter) brought an unlawful detainer action against West Coast. The action was brought as a limited civil action, which limits damages to $25,000. Eisenberg would later contend this constituted malpractice on the part of Buchalter – as it should have sought (on Eisenberg’s behalf) the $200,000 premium West Coast had paid for the purchase of the lease rights. In the second action, referred to by the parties as the “Guido action, ” Guido sued Eisenberg for conversion, breach of contract, andindemnity for a judgment West Coast had obtained against Guido. Guido sought damages in an amount in excess of $500,000.
2. The Proposed Settlement
In “January to early February 2006, ” while Buchalter was still representing Eisenberg, a settlement was negotiated between Eisenberg and West Coast, but not Guido. The settlement also included a third party, Paul Guez, who apparently leased the suite next to 1201, but wished to expand into Suite 1201. The settlement would have resolved all pending litigation, with the exception of the Guido action, and established a lease of Suite 1201 to Guez. Under the originally proposed settlement, Guez would have agreed to indemnify Eisenberg for any damages it owed Guido. However, it is alleged that once the Guido action was actually filed, Guez withdrew the offer of indemnity. For a time, it appeared that Eisenberg was nonetheless willing to proceed with the settlement. In late January/early February 2006, counsel for Eisenberg (Buchalter) and West Coast agreed to the final form of the settlement. However, the agreement was never executed.
3. Attorney Barak’s Involvement
While the settlement was nearing execution, Eisenberg sent the documents to be reviewed by Attorney Barak. On February 2, 2006, Attorney Barak sent Eisenberg a four page single-spaced email entitled “Preliminary Comments on Review of Messengered Documents.” The following week, Attorney Barak told West Coast that he was substituting in as counsel for Eisenberg, and that the “currently pending settlement is off the table.”
The parties have somewhat differing views of the reasons for the failure of the settlement. Buchalter, not surprisingly, suggests that Attorney Barak undermined an otherwise acceptable settlement which would have resolved nearly all of the pending litigation and immediately placed a paying tenant in Suite 1201. Eisenberg and Attorney Barak take a somewhat different view – they assert that once Guez withdrew his offer to indemnify Eisenberg against Guido’s claims, the settlement was no longer reasonable from Eisenberg’s point of view.
Eisenberg concedes that it initially considered proceeding with the settlement even without indemnity for the Guido action – a course of action it claims it considered “on the patently substandard advice” of Buchalter.
4. The Resolution of the Underlying Actions
The unlawful detainer action brought by Eisenberg against West Coast was successfully pursued to completion. However, Attorney Barak never refiled the action as an unlimited civil action; thus, Eisenberg obtained a judgment of possession of Suite 1201, and an award of $25,000. West Coast vacated Suite 1201 in July 2006; Eisenberg apparently re-let Suite 1201 in August 2006.
Eisenberg also obtained an award of $5,000 for attorney fees.
As to the Guido action, Attorney Barak, on behalf of Eisenberg, filed a cross complaint, in March 2006, against Guido and West Coast, seeking, among other things, the $200,000 premium to which it thought it was entitled under the lease. Guido eventually dismissed his complaint against Eisenberg (for no consideration). Eisenberg, ultimately obtained a judgment on the cross-complaint for $200,000 against Guido. Eisenberg asserts that it could have obtaineda greater amount had the lease not been improperly drafted. Eisenberg also asserts that the amount of legal fees it incurred in this action (i.e., to Attorney Barak) were in excess of its recovery. It appears that all of the underlying actions are now resolved.
5. The Malpractice Action
On February 9, 2007, Eisenberg, represented by Attorney Barak, brought suit against Buchalter for malpractice, for, among other things: (1) negligently drafting the lease provision; (2) failing to properly investigate the terms of the transfer from Anne’s Place to West Coast; (3) improperly advising it regarding the dispute between West Coast and Guido over Suite 1201; and (4) improperly bringing the unlawful detainer as a limited civil action and not seeking the $200,000 in that action. Eisenberg sought, among other things, reimbursement for its legal fees (to Attorney Barak) in the underlying actions, and lost rent on the premises. In its answer, Buchalter asserted numerous affirmative defenses – including comparative negligence (of Eisenberg or third parties) and failure to mitigate damages.
As the malpractice action had been filed prior to the ultimate resolution of the underlying actions, Eisenberg also sought, as damages, compensation for any judgment against it, and the $200,000 to which it was entitled as a result of the West Coast/Anne’s Place transfer of interest.
6. The Discovery Dispute
On October 11, 2007, Buchalter served a deposition subpoena on Attorney Barak. Its notice of deposition stated, “By claiming damages arising from the failed settlement agreement and the failed lease with Paul Guez with respect to Suite 1201 in or around January to February 2006, and by seeking attorneys fees which were incurred as a result of such failed settlement and lease executions, Plaintiff [Eisenberg] has put communications regarding such topics in issue. [Citations.] Placing such communications in issue has resulted in Plaintiff’s waiver of the attorney-client privilege with respect to all communications relating to the above subject matters.”
Eisenberg responded with a motion to quash. Eisenberg argued that it did not put the failed settlement at issue, Buchalter did – in its affirmative defense of failure to mitigate damages. Thus, Eisenberg argued, it had not waived the privilege by putting the communications in issue. In addition, Eisenberg also argued that the motion should be granted on the basis that Buchalter had not established the right to depose its opponent’s trial counsel.
A party cannot depose its opponent’s trial counsel unless: (1) there is no other means to obtain the information; (2) the information is relevant and non-privileged; and (3) the information is crucial to the preparation of the case. (Spectra-Physics, Inc. v. Superior Court (1988) 198 Cal.App.3d 1487, 1494-1495.)
The motion to quash was briefed to the discovery referee, retired Justice Charles Vogel. There were six areas in which Buchalter sought to depose Attorney Barak: (1) the failure to execute the settlement; (2) the failure to execute the Guez lease; (3) the decision not to re-let Suite 1201 until August 2006; (4) Attorney Barak’s decision not to transfer the unlawful detainer to a court of unlimited jurisdiction; (5) the judgments, decrees, legal fees and costs incurred by Eisenberg in the underlying actions which it claims as damages; and (6) Eisenberg’s continued use of the allegedly poorly drafted lease provision after Attorney Barak became its counsel.
As the execution of the Guez lease was contemplated as part of the settlement, we treat them both as the same area of proposed testimony.
Justice Vogel concluded that the only issues put in issue by Eisenberg were (4) the decision not to refile the unlawful detainer in a court of unlimited jurisdiction and (5) the judgments and attorney fees sought as damages. Justice Vogel concluded that Attorney Barak could be deposed on those two matters. Although the decisions that those two matters were the only ones put in issue by Eisenberg includes the implicit conclusion that the failure to enter into the settlement was not put in issue by Eisenberg, Justice Vogel did not expressly so conclude. Instead, with respect to the matters pertaining to the failed settlement, Justice Vogel relied on the other issue raised by Eisenberg in its motion to quash – that Buchalter had not met its burden of establishing a right to depose its opponent’s trial counsel (because it had not established that Attorney Barak was the only source of such information).
Eisenberg chose not to object “to the scope of the deposition... recommended by the discovery referee.” Thus, Justice Vogel’s recommendation regarding permitting Attorney Barak to be deposed on issues (4) and (5) is not at issue. Likewise, Buchalter no longer sought discovery from Attorney Barak on issue (6). Thus, the dispute in this case has been narrowed to the issues surrounding the settlement and, to a lesser extent, the decision not to re-let Suite 1201 until August 2006.
Attorney Barak turned over copies of his bills to Buchalter in discovery. At oral argument, Attorney Barak argued that issue (5) was still at issue, to the extent Buchalter sought to question him with respect to the work performed justifying the time claimed in his bills. Justice Vogel’s recommendation specifically stated that Attorney “Barak has provided his time records, but that alone is not sufficient, ” and Eisenberg expressly declined to challenge Justice Vogel’s recommendation on this issue. We therefore consider the issue waived. In any event, we have reviewed the specific questions the trial court directed Attorney Barak to answer, and it is clear that the trial court did not order any questions answered on the basis that Attorney Barak had waived the attorney client and work product privileges with respect to explaining the work he had performed. Indeed, the trial court specifically denied Buchalter’s motion to compel Attorney Barak to answer several questions regarding the reasonableness of his fees.
7. The Trial Court’s December 20, 2007 Order and the Initial Writ Petition
On December 20, 2007, the trial court held a hearing on the recommendations of Justice Vogel and concluded that Buchalter could depose Attorney Barak on each of the five then disputed issues. As to the issues pertaining to the settlement, the trial court stated, “Plaintiff has placed cause of damages in issue in this case and has therefore waived attorney-client privilege. The court finds that there is no less intrusive means to get the information.” The trial court’s analysis with respect to waiver was that when a party sues for damages, it puts into issue the causation of those damages, and each disputed issue pertained to whether Buchalter caused Eisenberg’s damages. Therefore, the court concluded there was a “limited waiver” of the attorney-client privilege as to those topics.
The trial court stated, “You have the burden of proving that Buchalter caused you to lose the revenue from those spaces. Buchalter contends no, we didn’t cause you to lose the revenue from those spaces. You caused it yourself because we gave you a settlement agreement that would have obviated all of this revenue and you blew it off, so it is part of your burden as plaintiff to prove causation of damages. That is my focus here, and that’s put in issue by the plaintiff, not by the defendant, so that’s where I’m coming from.”
Eisenberg sought writ relief from the December 20, 2007 order. On January 29, 2008, we denied the petition, stating, “The petition is denied without prejudice to determination by the discovery referee and/or the trial court regarding the existence of an unwaived privilege as to specific questions asked during the deposition.”
8. Continued Litigation to Determine Specific Questions
The trial court treated our denial of the writ petition as an indication that we would not rule on the matter unless and until specific questions were identified.
In a May 5, 2008 tentative ruling, the court stated, “[Buchalter’s] argument that the Superior Court’s ruling that there had been a waiver of the attorney client privilege was ‘upheld by the Court of Appeal’ bears no resemblance whatsoever to what the Court of Appeal did. The Court of Appeal indicated a willingness to review the propriety of any Superior Court order that might be issued ordering answers to specific questions.” In other words, the trial court took the position that Attorney Barak had to attend his deposition to “allow the referee, and the Superior Court and Court of Appeal if need be, to have specific questions on which to rule.”
On June 2, 2008, the court ruled on a motion to compel further answers at Barak’s deposition. At some point, although the trial court entered this order compelling further answers at deposition, Attorney Barak refused to attend a scheduled session of his deposition, and Buchalter did not move to compel him to attend. Discovery then closed. Thus, this trial court order was not then challenged by a writ petition.
9. The Trial Court’s Order Regarding Trial Testimony
Subsequently, on August 8, 2008, the trial court ordered Buchalter’s counsel to “make a list of questions they intend to ask [Attorney Barak] at trial which allegedly invade the privilege spoken of on many prior occasions and what documents they are seeking.” Buchalter came up with a list of 67 questions and 29 document categories. The court scheduled a hearing under Evidence Code section 405, where Attorney Barak would likely refuse to answer many of the questions, with the result being a list of questions (and documents) that each party could challenge in the Court of Appeal, if it so desired.
Substantial briefing followed, and the hearing was held. At the hearing, Buchalter’s counsel was permitted to ask Attorney Barak each question it wished to ask him at trial, and identify each document it wished Attorney Barak to produce at trial, which implicated assertedly privileged information. Attorney Barak answered one of the questions and Buchalter’s counsel withdrew some of its originally-proposed questions. Ultimately, the court directed Attorney Barak to answer a number of questions, and produce, for in camera review, several documents, which Attorney Barak refused to do, subject to appeal.
10. The Writ Petitions
The current writ petitions were filed virtually simultaneously. Buchalter filed first (B214762) on March 28, 2009, raising two arguments. Buchalter argues that (1) the trial court erred in permitting Eisenberg to redact documents before presenting them for in camera review and (2) the court erred in limiting its upcoming trial examination of Attorney Barak to the list of questions it had submitted for the 405 hearing. Buchalter contends that it should not be limited in advance, but should be permitted to examine Attorney Barak at trial on any relevant, non-privileged matter.
It is not entirely clear that the trial court made such an order. At the Evidence Code section 405 hearing, the trial court explained that it was concerned only with testimony which invaded the attorney-client privilege, and that Buchalter could question Attorney Barak at trial on non-privileged matters. The court also indicated that Buchalter could seek another Evidence Code section 405 hearing if the circumstances required it, and that the court would rule upon that request if and when it was made.
Eisenberg’s petition (B215029) was filed on April 1, 2009. As the trial court had now issued an order compelling Attorney Barak to answer specific questions and disclose specific documents, Eisenberg challenges the trial court’s rulings on the waiver of the privilege. Eisenberg objects to: (1) the trial court’s initial December 20, 2007 order, which held that the privilege was impliedly waived with respect to the settlement; (2) the June 2, 2008 order compelling Attorney Barak to answer certain questions at his deposition; and (3) the February 3, 2009 ruling compelling him to answer certain questions and produce certain documents. We consolidated both writ petitions for review, and issued an order to show cause.
After the petitions were filed, briefing was stayed pending the Supreme Court’s resolution of Costco Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725 (Costco), a case which addressed the issue of compelling an attorney to produce redacted versions of privileged communications for in camera review.
DISCUSSION
Our analysis begins and ends with the trial court’s December 20, 2007 order, which erroneously found that Eisenberg impliedly waived the attorney-client privilege with respect to the settlement and the decision not to re-let the property until August 2006.
1. Review Is Not Foreclosed
Buchalter contends that we may not review the December 20, 2007 order. Buchalter argues that Eisenberg brought a timely challenge to the December 20, 2007 order in the initial writ proceeding, and that we rejected that challenge by denying the writ petition. Indeed, Buchalter states that our previous denial constitutes law of the case, preventing further review.
We disagree. Our initial denial stated: “The petition is denied without prejudice to determination by the discovery referee and/or the trial court regarding the existence of an unwaived privilege as to specific questions asked during the deposition.” We clearly did not resolve the issue of implied waiver of the privilege and, as the trial court understood, left the issue open for further resolution upon the identification of specific questions.
2. The “Implied Waiver” Doctrine
The attorney-client privilege is a creation of statute, protecting from disclosure confidential communications between client and attorney. (Evid. Code § 954.) “ ‘The privilege authorizes a client to refuse to disclose, and to prevent others from disclosing, confidential communications between attorney and client. [Citation.] Clearly, the fundamental purpose behind the privilege is to safeguard the confidential relationship between clients and their attorneys so as to promote full and open discussion of the facts and tactics surrounding individual legal matters. [Citation.] In other words, the public policy fostered by the privilege seeks to insure “the right of every person to freely and fully confer and confide in one having knowledge of the law, and skilled in its practice, in order that the former may have adequate advice and a proper defense.” [Citation.] [¶] Although exercise of the privilege may occasionally result in the suppression of relevant evidence, the Legislature of this state has determined that these concerns are outweighed by the importance of preserving confidentiality in the attorney-client relationship.’ [Citation.]” (Chicago Title Ins. Co. v. Superior Court (1985) 174 Cal.App.3d 1142, 1149.) “Application of the privilege will occasionally shield relevant information which may very well create obstacles for the party seeking the privileged information; however, the Legislature and the courts of this state have determined that the party’s concern is ‘outweighed by the importance of preserving confidentiality in the attorney-client relationship.’ ” (Southern Cal. Gas Co. v. Public Utilities Com. (1990) 50 Cal.3d 31, 37.)
The “implied waiver” doctrine was initially recognized in Merritt v. Superior Court (1970) 9 Cal.App.3d 721 (Merritt). In that case, a plaintiff who successfully obtained a judgment in a personal injury action obtained from the defendant an assignment of the defendant’s claim against its insurer for bad faith refusal to settle within policy limits. When the plaintiff then sued the defendant’s insurer for bad faith, the plaintiff proceeded on the theory that it had been impossible for the plaintiff’s attorneys to settle the underlying action within policy limits because the insurer had furnished “conflicting and irreconcilable statements” regarding the policy limits. (Id. at pp. 723 724.) In other words, the plaintiff’s theory of bad faith was based on the state of mind of his own attorneys in failing to propose a settlement. (Id. at p. 730.) Under these circumstances, the court concluded that the plaintiff could not shield from discovery communications between its attorneys and others regarding the reasons for not settling. The appellate court stated that the trial court had not held that bringing a bad faith action waives the privilege with respect to the prior negligence action. Instead, the trial court “simply found that plaintiff had initiated a lawsuit in which he has placed in issue the decisions, conclusions and mental state of his then attorneys, particularly as to their confusion and disability allegedly caused by defendant’s conduct which precluded them from making a settlement offer. It is obvious both from the issues framed and the contents of the depositions of plaintiff’s prior counsel that plaintiff would rely heavily upon evidence to be given by his said counsel and that he would be using his prior counsel to prove matter which they could only have learned in the course of their employment. Thus it was not merely the initiation of the lawsuit but rather the manner of its prosecution which constituted the waiver.” (Id. at p. 730.)
The “implied waiver” doctrine is not a statutory exception to the attorney-client privilege, but is court-created. (Chicago Title Ins. Co. v. Superior Court, supra, 174 Cal.App.3d at p. 1149, fn. 8.) In Costco, supra, 47 Cal.4th 725, our Supreme Court indicated that “the attorney-client privilege is a legislative creation, which courts have no power to limit by recognizing implied exceptions.” (Id. at p. 739.) The “implied waiver” doctrine is mandated by “fundamental fairness, ” (Mitchell v. Superior Court (1984) 37 Cal.3d 591, 604) and may, therefore, have constitutional dimension. In any event, as we conclude the “implied waiver” doctrine clearly does not apply in this case, we need not discuss to what extent, if any, the doctrine is an impermissible court created exception to the statutory privilege or any potential conflict between Mitchell and Costco.
The court also found the privilege had been waived by the voluntary disclosure of privileged information at plaintiff’s counsel’s deposition. (Merritt, supra, 9 Cal.App.3d at pp. 728-729.)
Our Supreme Court subsequently explained the result of Merritt by stating, “Since plaintiff was necessarily forced to prove his case by reference to the mental state of his counsel, the defendant was entitled to inquire into communications relating to that state.” (Mitchell v. Superior Court, supra, 37 Cal.3d at p. 605.) Indeed, “[C]ase law has distinguished Merritt ‘as being limited in its application to the one situation in which a client has placed in issue the decisions, conclusions, and mental state of the attorney who will be called as a witness to prove such matters. [Citations.]” (Chicago Title Ins. Co. v. Superior Court, supra, 174 Cal.App.3d at p. 1150.)
The authority is absolutely clear that the privilege is not impliedly waived simply because the attorney-client communication would be relevant to an issue at issue in the litigation. (Southern Cal. Gas Co. v. Public Utilities Com., supra, 50 Cal.3d at p. 45.) The “implied waiver” doctrine applies only when “client has put the otherwise privileged communication directly at issue and that disclosure is essential for a fair adjudication of the action.” (Id. at pp. 40.)
Indeed, case law has identified a distinction between instances where the client’s mental state is placed at issue and those in which the attorney’s mental state is placed at issue; only in the latter circumstance is the privilege impliedly waived. In Southern Cal. Gas Co. v. Public Utilities Com., supra, 50 Cal.3d 31, Southern California Gas (SoCalGas) sought Public Utilities Commission approval of a decision it made to buy out an unfavorable gas contract. SoCalGas had believed, based in part on attorney advice, that there was no legal way to unilaterally terminate the contract, so chose a negotiated buyout. It then sought commission approval of the decision as “prudent and reasonable, ” although it explicitly stated that it “would not rely on advice of counsel as a justification for its decision to buy out the... contract.” (Id. at pp. 35 36.) The Public Utilities Commission determined that SoCalGas “had impliedly waived the attorney-client privilege by putting advice of counsel at issue. It reasoned that before SoCalGas could recover the cost of its expenditures, it had the burden of proving by clear and convincing evidence that its expenditures were reasonable. The test it normally applies to determine the prudence of a utility’s expenses is: ‘In light of all the information that the utility’s decision makers knew or should have known at the time, was the decision a reasonable one?’ [Citation.] The commission determined that SoCalGas’s... application placed in issue the reasonableness of its decision to buy out the contract, and that SoCalGas could not have made this decision prudently without considering legal advice because legal concerns are an essential consideration when determining a reasonable means of terminating a contract.” (Id. at pp. 39 40.) The Supreme Court reversed. The court agreed that the prudence of SoCalGas’s decision depended upon a legal analysis of the contract’s validity. However, the court stated, “Although some legal analysis of the contract’s enforceability will be necessary in order for the commission to assess the reasonableness of the buyout, the actual legal analysis provided by SoCalGas’s attorneys is not essential for this determination. The issue is an objective one which does not depend on a particular attorney’s analysis, but upon the terms of the contract itself and surrounding factual circumstances.” (Id. at p. 43.) As SoCalGas never indicated an intention to rely on its attorneys’ advice or state of mind, the attorneys’ advice or state of mind was not at issue and the privilege was not impliedly waived. (Id. at p. 42.)
Other cases draw the same distinction. In Mitchell v. Superior Court, supra, 37 Cal.3d 591, a plaintiff claimed intentional infliction of emotional distress from the defendants’ chemical contamination of the air and groundwater. Defendants sought to discover any communications made to the plaintiff by her attorney regarding the risks of defendants’ chemicals on an “implied waiver” theory. The Supreme Court disagreed; plaintiff’s mental state was relevant to her claim of intentional infliction, the mental state of her attorney was not. (Id. at pp. 605, 607.) As to resolving whether plaintiff’s claim of emotional distress was reasonable, the court could perform the “relatively objective test” of whether plaintiff’s fears squared with scientific knowledge. (Id. at p. 608.) Communications of counsel were simply not at issue. (Id. at p. 607.)
In Schlumberger Limited v. Superior Court (1981) 115 Cal.App.3d 386, a case virtually indistinguishable from the instant case, the plaintiff sued its former attorneys for malpractice, alleging losses sustained in an underlying litigation. The defendant asserted that the losses were the fault of the plaintiff and its subsequent counsel, who allegedly failed to mitigate damages. The defendant sought production of written communications between plaintiff and its subsequent counsel regarding the losses sustained in the underlying action. (Id. at pp. 389-390.) The Court of Appeal concluded such discovery was not permissible on an “implied waiver” theory. “Communications between a client and an attorney representing the client in a malpractice action against a former attorney are privileged and not subject to discovery, and the privilege is not waived by tendering an issue on which the requested information may be relevant.” (Id. at pp. 394.) The court further stated, “Privileged communications do not become discoverable because they are related to issues raised in the litigation.... If tendering the issue of damages in a malpractice action waived the privilege, there would be no privilege, and Evidence Code section 954 would be meaningless.” (Id. at p. 393.)
Buchalter suggests that the results in the above cases were justified because the attorneys’ testimony was sought in their capacity as counsel in the instant case, while Buchalter seeks the testimony of Attorney Barak in his capacity as successor counsel in the underlying litigation. The distinction is irrelevant, and not supported by the authority. Indeed, in Southern Cal. Gas Co. v. Public Utilities Com., supra, 50 Cal.3d 31, the Public Utilities Commission had sought the testimony of SoCalGas’s attorneys not in their capacity as counsel in the then-pending approval proceeding, but in their capacity as counsel who recommended the underlying buyout. The Supreme Court’s conclusion that the “implied waiver” doctrine did not apply was based solely on the fact that SoCalGas had not placed its attorneys’ mental state at issue.
3. There Is No “Implied Waiver” In This Case
The parties dispute whether Eisenberg put in issue the circumstances surrounding its rejection of the settlement by seeking as damages its subsequent attorney’s fees, or if, to the contrary, Buchalter put those circumstances in issue by asserting Eisenberg’s failure to mitigate. The distinction is not relevant. Even if Eisenberg put “in issue” the circumstances surrounding its rejection of the settlement, it did not put in issue Attorney Barak’s state of mind or his communications to it regarding the settlement. What matters is Eisenberg’s rejection of the settlement and whether it was objectively reasonable. While Attorney Barak’s communications might be relevant on this point, they are not at issue in the case, and they are therefore privileged.
Our conclusion might be different if Eisenberg expressly indicated an intention to rely on Attorney Barak’s advice as proof that its rejection of the settlement was reasonable. Without such an intention, however, the privilege is not impliedly waived.
We set forth a sample of the questions the trial court ordered Attorney Barak to answer: (1) “Did you ever author any documents containing your evaluation of the settlement agreement that was under discussion in January of 2006?” (2) “Did you have any conversations with [Eisenberg] regarding the advisability of going forward on a settlement agreement without indemnity from Paul Guez?” (3) “Did you ever provide any advice to [Eisenberg] in January or February 2006 with respect to the advisability of executing a settlement agreement to resolve the disputes relating to Suite 1201?” Each of these questions clearly seeks privileged attorney-client communications. The trial court concluded the attorney-client privilege was impliedly waived on the basis that “[Eisenberg] has placed cause of damages in issue in this case.” This is simply contrary to the law. As Eisenberg has placed the causation of damages at issue, Eisenberg has placed its actions and the reasonableness of those actions at issue. It has not, however, placed its attorney’s state of mind or its attorney’s confidential communications at issue. The privilege is not impliedly waived, and none of the questions Buchalter sought to ask Attorney Barak as relevant to the issue of the causation may be asked in this case.
The trial court was apparently concerned with the hypothetical possibility that Attorney Barak had counseled Eisenberg to reject the settlement on the basis that if Eisenberg was not successful at trial against Guido and West Coast, Eisenberg could recover from Buchalter in the malpractice action. Again, the issue is not the reason Attorney Barak may have provided his client for rejecting the settlement, but simply whether rejection of the settlement was objectively reasonable.
4. No Issues Remain
We conclude that the trial court erred in holding that the attorney-client privilege was impliedly waived by Eisenberg. Thus, each of the trial court’s orders directing disclosure of privileged information must be reversed. To the extent Buchalter contends the trial court erred in limiting its trial questioning of Attorney Barak to specific questions pertaining to the disputed issues, the contention is moot, as Buchalter may not question Attorney Barak at trial as to any of the disputed issues. Similarly, all of the documents which the trial court ordered to be disclosed in camera, subject to redaction, relate to the settlement, and therefore need not be disclosed at all.
We have reviewed the transcripts from the Evidence Code section 405 hearing. Most of the documents ordered produced specifically related to the settlement. (For example, the trial court compelled production, for in camera review, of “Any February 9th 2006, e-mails with the Eisenberg contacts that discuss the draft settlement agreement or Guez lease.... ”) Of those which were not specifically described as referring to the settlement, they occurred during the time period of the settlement and were sought on the basis that they may have related to it. The sole exception was a February 21, 2006 email between Attorney Barak and Eisenberg which discusses a possible settlement with West Coast, which Attorney Barak represented to relate to a completely different, subsequent proposed settlement. The trial court ultimately ordered its production for in camera review, on the basis that it might relate to the settlement at issue, and that, if it did not, the court would not order it produced to Buchalter.
DISPOSITION
Eisenberg’s writ petition (B215029) is granted. The trial court is directed to vacate its orders of December 20, 2007, June 2, 2008, and February 3, 2009 and enter new and different orders denying the requested discovery on the grounds of attorney client privilege. Buchalter’s writ petition (B214762) is denied. Eisenberg shall recover its costs in this consolidated writ proceeding.
We Concur: KLEIN, P. J., ALDRICH, J.