Iguacu, Inc. v. Filho

Filing 253

ORDER OVERRULING OBJECTION TO DISCOVERY ORDER. Signed by Judge Richard Seeborg on 12/10/12. (cl, COURT STAFF) (Filed on 12/10/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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For the Northern District of California

United States District Court

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IGUAÇU, INC.,
Plaintiff,
v.

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ORDER OVERRULING OBJECTION
TO DISCOVERY ORDER

ANTONIO CABRERA MANO FILHO,

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No. C 09-0380 RS

Defendant.
____________________________________/

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In this breach of contract action, plaintiff Iguaçu, Inc contends it is owed commissions under

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a written “Finder’s Agreement” whereby it allegedly was obligated to, and did, assist defendant

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Antonio Cabrera Mano Filho (“Cabrera”) in locating investors for certain ethanol production

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projects. One issue is whether there is a drafting error in certain portions of the written agreement.

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Specifically, Iguaçu argues that the terms used to refer to the respective parties, “You” and “Buyer,”

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were inadvertently transposed in some provisions. Iguaçu contends the error arose from the fact that

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the document was prepared from an earlier “boilerplate” agreement intended for use in differently-

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structured transactions, and that when that prior “buyer boilerplate” form was “flipped over” to a

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“seller boilerplate” form, the need to reverse those references was apparently overlooked.

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Iguaçu claims that the parties had a mutual understanding of the meaning of the agreement

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as executed, notwithstanding the alleged drafting error. Nevertheless, Iguaçu previously sought and

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was granted leave to amend its complaint to include an alternative claim for reformation, should it

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prove necessary.
In light of this issue and Iguaçu’s assertion of the reformation claim, Cabrera sought

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connection with the negotiations leading to the formation of the agreement. The magistrate judge to

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whom discovery disputes have been referred ruled that communications between Iguaçu and those

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attorneys have “not been placed in issue and that no waiver of attorney-client privilege or attorney

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work product has occurred.” The magistrate judge conditioned the denial of further discovery into

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For the Northern District of California

document production and deposition testimony from the attorneys who represented Iguaçu in

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United States District Court

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the matter, however, on Iguaçu complying with its representation that “it will not ask the attorneys

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to testify at trial, will not seek to introduce any previously unproduced documents withheld as

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privileged (or attorney work product) and will not offer any testimony by Iguaçu witnesses referring

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to alleged drafting errors by the attorneys.” Cabrera now seeks review of this non-dispositive

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ruling.

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A district court may modify a magistrate judge’s ruling on a non-dispositive matter only if

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the order is “clearly erroneous” or “contrary to law.” 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a);

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Bahn v. NME Hospitals, Inc., 929 F.2d 1404, 1414 (9th Cir. 1991). Here, Cabrera contends the

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discovery it seeks is not protected by the work-product doctrine, that attorney-client privilege has

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been waived, and that the magistrate judge erred in concluding otherwise. The proper construction

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of the agreement, of course, does not turn on any undisclosed intent that may have been held by

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Iguaçu and known to its attorneys. Iguaçu’s argument that the terms “Seller” and “You” have been

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transposed flows from the face of the agreement itself and from non-attorney testimony as to the

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circumstances under which the document was prepared. The magistrate judge’s order effectively

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precludes Iguaçu from blaming its attorneys at trial or referring to any role they may have had in

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preparation of the document. Whether Iguaçu will be able to meet its burden to establish grounds

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for reformation absent evidence from its attorneys involved in the preparation of the document is a

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separate question. Under these circumstances, though, Iguaçu is not impermissibly using its claim

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of privilege both as a “sword” and a “shield.” As such, Cabrera has not shown the magistrate

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judge’s ruling to be clearly erroneous or contrary to law, and the objection is overruled.

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IT IS SO ORDERED.

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Dated: 12/10/12
RICHARD SEEBORG
UNITED STATES DISTRICT JUDGE

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For the Northern District of California

United States District Court

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