Grove Way Investments, LLC v. Centene Management Company, LLC
2:19-cv-00696
E.D. Cal.Aug 6, 2020Background
- Grove Way (successor to RF3) owns an office property leased to Centene; the lease included a Construction Rider providing tenant improvement "Allowances" payable if Centene requested disbursement by a deadline.
- Original disbursement deadline was Dec. 31, 2017; parties extended it to June 30, 2018. Grove Way alleges Centene missed the deadline, later submitted an untimely request (Feb. 2019), performed unauthorized improvements, and failed to pay rent.
- Grove Way served RFPs; Centene withheld six documents as attorney-client privileged (emails and draft lease redlines).
- Centene submitted a declaration: withheld materials involved in-house counsel, two Centene directors, and Cushman & Wakefield (Centene’s broker) who helped negotiate the lease and acted as liaison. Centene contends communications were for legal advice and disclosure to the broker was reasonably necessary.
- The court ordered the declaration, reviewed the materials and arguments, concluded the dominant purpose was legal advice and that third‑party disclosure to the broker was reasonably necessary, denied Grove Way’s motion to compel production of the six documents, and denied Centene’s motion to exclude Grove Way’s expert.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether six withheld documents are protected by the attorney‑client privilege | Grove Way: documents improperly withheld; should be produced | Centene: communications were between in‑house counsel, Centene decisionmakers, and the broker; dominant purpose was legal advice; broker’s involvement was reasonably necessary | Court: privilege applies; motion to compel denied |
| Whether to exclude Grove Way’s expert witness | Grove Way: expert admissible | Centene: move to exclude (arguments proffered at hearing) | Court: motion to exclude denied |
Key Cases Cited
- Ins. Co. of N. Am. v. Super. Ct., 108 Cal. App. 3d 758 (1980) (third‑party involvement destroys confidentiality unless disclosure to that person is reasonably necessary to further the client’s interest)
- OXY Res. Cal. LLC v. Super. Ct., 115 Cal. App. 4th 874 (2004) (privilege extends to communications with attorneys, family, business associates, or agents when disclosure is reasonably necessary to further the client’s interest)
- Costco Wholesale Corp. v. Super. Ct., 47 Cal. 4th 725 (2009) (party claiming privilege bears burden to establish preliminary facts of an attorney‑client communication)
- Clark v. Superior Court, 196 Cal. App. 4th 37 (2011) (determine privilege by the dominant purpose of the relationship among participants)
- Amtel Corp. v. St. Paul Fire & Marine Ins. Co., 409 F. Supp. 2d 1180 (N.D. Cal. 2005) (disclosure to an intermediary such as an insurance broker does not waive privilege when the intermediary serves as a conduit necessary to the client’s interests)