Nazareth v. Malcolm & Cisneros CA1/3, A143229

Background

Nazareth, a real estate broker, was jointly represented by Malcolm & Cisneros (M&C) and Freddie Mac in a wrongful-eviction suit after tenants sued over a Harvey Avenue property that Nazareth had rekeyed and "trashed-out."
M&C represented both Freddie Mac and Nazareth from late January to early April 2012; M&C later withdrew due to a disclosed potential conflict.
M&C attorney Sgroi sent Freddie Mac a March 8, 2012 memorandum raising concerns about whether Nazareth had properly established abandonment and noting possible liability and a third-party complaint; the memo did not state Nazareth failed to post a Personal Property Notice (PPN) as a fact.
A September 10, 2012 mediation (after M&C no longer represented Nazareth) included Nazareth and Freddie Mac personnel; a settlement was reached but Freddie Mac later disciplined and terminated Nazareth’s broker relationship, citing conduct at the mediation and failure to follow PPN requirements.
Nazareth sued M&C for breach of contract, breach of the covenant of good faith and fair dealing, and breach of fiduciary duty, alleging M&C disclosed confidential information to Freddie Mac that caused her termination.
The trial court granted M&C summary judgment, finding Nazareth failed to raise a triable issue on causation (or other required elements); Nazareth appealed and the appellate court affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did M&C’s communications cause Freddie Mac to terminate Nazareth?	Nazareth: M&C’s March 8 memo and joint representation caused Freddie Mac to become adverse and ultimately terminate her for failing to post a PPN.	M&C: Nazareth has no admissible evidence that M&C told Freddie Mac she failed to post a PPN; Freddie Mac relied on Nazareth’s mediation conduct and would have discovered the PPN issue independently.	Held: No triable issue of causation; summary judgment proper.
Did M&C disclose mediation-confidential statements or otherwise breach confidentiality/duty?	Nazareth: M&C disclosed confidential information obtained during joint representation and/or mediation.	M&C: Either did not make the alleged disclosures, and/or was not bound with respect to statements made at mediation after representation ended; mediation communications are largely protected.	Held: Nazareth failed to produce admissible evidence that M&C disclosed the asserted confidential statements; objections under mediation confidentiality did not produce prejudicial error.
Could Nazareth defeat summary judgment by contradicting her deposition with a later affidavit?	Nazareth: New declaration asserts she told M&C she did not post a PPN and followed Freddie Mac guidance.	M&C: Later declaration contradicts deposition and is conclusory; cannot defeat summary judgment without explanation.	Held: Court accepted deposition over unexplained contradictory affidavit; Nazareth’s declaration insufficient to create triable issue.
Were any evidentiary rulings on mediation confidentiality reversible and prejudicial?	Nazareth: Trial court erred in admitting evidence that violated Evidence Code §§1119/1126.	M&C: Admitted evidence either was not mediation-protected or any error was harmless because Nazareth produced no evidence of causation.	Held: No abuse of discretion; any error was not prejudicial to Nazareth.

Key Cases Cited

Ochoa v. Pacific Gas & Electric Co., 61 Cal.App.4th 1480 (establishes defendant’s summary judgment burdens and standards)
D’Amico v. Board of Medical Examiners, 11 Cal.3d 1 (courts may disregard unexplained contradictory affidavit opposing summary judgment)
Padilla v. Rodas, 160 Cal.App.4th 742 (causation cannot rest on speculation; summary judgment appropriate when plaintiff lacks evidence)
Wiz Technology, Inc. v. Coopers & Lybrand, 106 Cal.App.4th 1 (speculation/conjecture insufficient to defeat summary judgment on causation)
Cassel v. Superior Court, 51 Cal.4th 113 (explains mediation confidentiality under Evidence Code §§1119/1126)