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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1 2 3 4 5 6 7 IN THE UNITED STATES DISTRICT COURT 8 FOR THE NORTHERN DISTRICT OF CALIFORNIA 9 SAN FRANCISCO DIVISION 11 For the Northern District of California United States District Court 10 12 13 14 IGUAÇU, INC., Plaintiff, v. 15 16 ORDER OVERRULING OBJECTION TO DISCOVERY ORDER ANTONIO CABRERA MANO FILHO, 17 No. C 09-0380 RS Defendant. ____________________________________/ 18 19 In this breach of contract action, plaintiff Iguaçu, Inc contends it is owed commissions under 20 a written “Finder’s Agreement” whereby it allegedly was obligated to, and did, assist defendant 21 Antonio Cabrera Mano Filho (“Cabrera”) in locating investors for certain ethanol production 22 projects. One issue is whether there is a drafting error in certain portions of the written agreement. 23 Specifically, Iguaçu argues that the terms used to refer to the respective parties, “You” and “Buyer,” 24 were inadvertently transposed in some provisions. Iguaçu contends the error arose from the fact that 25 the document was prepared from an earlier “boilerplate” agreement intended for use in differently- 26 structured transactions, and that when that prior “buyer boilerplate” form was “flipped over” to a 27 “seller boilerplate” form, the need to reverse those references was apparently overlooked. 28 Iguaçu claims that the parties had a mutual understanding of the meaning of the agreement 1 2 as executed, notwithstanding the alleged drafting error. Nevertheless, Iguaçu previously sought and 3 was granted leave to amend its complaint to include an alternative claim for reformation, should it 4 prove necessary. In light of this issue and Iguaçu’s assertion of the reformation claim, Cabrera sought 5 connection with the negotiations leading to the formation of the agreement. The magistrate judge to 8 whom discovery disputes have been referred ruled that communications between Iguaçu and those 9 attorneys have “not been placed in issue and that no waiver of attorney-client privilege or attorney 10 work product has occurred.” The magistrate judge conditioned the denial of further discovery into 11 For the Northern District of California document production and deposition testimony from the attorneys who represented Iguaçu in 7 United States District Court 6 the matter, however, on Iguaçu complying with its representation that “it will not ask the attorneys 12 to testify at trial, will not seek to introduce any previously unproduced documents withheld as 13 privileged (or attorney work product) and will not offer any testimony by Iguaçu witnesses referring 14 to alleged drafting errors by the attorneys.” Cabrera now seeks review of this non-dispositive 15 ruling. 16 A district court may modify a magistrate judge’s ruling on a non-dispositive matter only if 17 the order is “clearly erroneous” or “contrary to law.” 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a); 18 Bahn v. NME Hospitals, Inc., 929 F.2d 1404, 1414 (9th Cir. 1991). Here, Cabrera contends the 19 discovery it seeks is not protected by the work-product doctrine, that attorney-client privilege has 20 been waived, and that the magistrate judge erred in concluding otherwise. The proper construction 21 of the agreement, of course, does not turn on any undisclosed intent that may have been held by 22 Iguaçu and known to its attorneys. Iguaçu’s argument that the terms “Seller” and “You” have been 23 transposed flows from the face of the agreement itself and from non-attorney testimony as to the 24 circumstances under which the document was prepared. The magistrate judge’s order effectively 25 precludes Iguaçu from blaming its attorneys at trial or referring to any role they may have had in 26 preparation of the document. Whether Iguaçu will be able to meet its burden to establish grounds 27 for reformation absent evidence from its attorneys involved in the preparation of the document is a 28 separate question. Under these circumstances, though, Iguaçu is not impermissibly using its claim 2 1 of privilege both as a “sword” and a “shield.” As such, Cabrera has not shown the magistrate 2 judge’s ruling to be clearly erroneous or contrary to law, and the objection is overruled. 3 4 5 IT IS SO ORDERED. 6 7 8 9 Dated: 12/10/12 RICHARD SEEBORG UNITED STATES DISTRICT JUDGE 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3

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