Judge: Anne Richardson, Case: 21STCV35458, Date: 2023-09-01 Tentative Ruling

DEPARTMENT 40 - JUDGE ANNE RICHARDSON - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions.The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) email Dept 40 by 8:30 a.m. on the day of the hearing (smcdept40@lacourt.org) with a copy to the other party(ies) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no email is necessary and all parties should appear at the hearing in person or by Court Call. 

Case Number: 21STCV35458    Hearing Date: October 12, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

Pleadings

Plaintiff Guadalupe Maxey sues Defendants KND Real Estate 40, LLC (Kindred Paramount), KND SNF Real Estate Holdings, LLC (since dismissed), KND Real Estate Holdings, LLC (since dismissed), Kindred Healthcare Operating, LLC (KHO), Agva, LLC, Aspen Skilled Healthcare, Inc., and Does 1 through 50 pursuant to a September 24, 2021 Complaint alleging claims of (1) Dependent Adult Abuse & Neglect, (2) Negligence, and (3) Violation of Residents Rights.

The claims arise from allegations that Plaintiff Maxey failed to receive proper treatment while under Defendants’ care, resulting in, among other things, a long-standing contracture condition of her left arm, which, to this day, has left her with no function in that arm.

The relationship between Defendants, as alleged in the Complaint, is that KHO is the parent company of KND Real Estate Holdings, LLC, which is, in turn, the parent company of KND SNF Real Estate Holdings, LLC, which is, in turn, the parent company of Kindred Paramount. KHO is thus the ultimate parent company of Kindred Paramount.

Motion Before the Court

On September 15, 2023, Plaintiff Maxey moved to compel further responses and production from KHO related to Plaintiff’s Requests for Production (RPDs), Set Two, Nos.115-119, 121-126, 129-132, and 137-153.

On September 27, 2023, KHO opposed Plaintiff’s motion.

On October 5, 2023, Plaintiff Maxey replied to the opposition.

Plaintiff Maxey’s motion is now before the Court.

Motion to Compel Further Production

Legal Standard

A motion to compel a further response is used when a party gives unsatisfactory answers or makes untenable objections to interrogatories, demands to produce, or requests for admission. (See Code Civ. Proc., § 2031.310, subd. (a); Sinaiko Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007) 148 Cal.App.4th 390, 403.)

To request further production, a movant must establish: (1) good cause for the production (Code Civ. Proc., § 2031.310, subd. (b)(1); Sinaiko, supra, at p. 403); and (2) that a further response is needed because (a) the responding party’s statement of compliance with the demand to produce is incomplete Code Civ. Proc., § 2031.310, subd. (a)(1)), (b) the responding party’s representation that it is unable to comply is inadequate, complete, or evasive (Code Civ. Proc., § 2031.310, subd. (a)(2)), (c) the responding party’s objection in the response is without merit or is too general (Code Civ. Proc., § 2031.310, subd. (a)(3); Catalina Island Yacht Club v. Superior Court (2015) 242 Cal.App.4th 1116, 1127), or (d) if the responding party objected to the production of ESI on the ground that it is not reasonably accessible the movant can show that the (i) ESI is reasonably accessible or (ii) there is good cause for production of the ESI regardless of its accessibility (Code Civ. Proc., § 2031.310, subd. (e)).

Order Compelling Further Production: GRANTED, in Part.

Plaintiff Maxey moves to compel further responses and production from KHO related to Plaintiff’s RPDs, Set Two, Nos.115-119, 121-126, 129-132, and 137-153. (See Mot., Notice., p. 2.) Plaintiff argues that good cause exists for this production (alter ego liability against KHO based on any liability against Kindred Paramount) and that KHO’s objections to these RPDs lack merit. (Mot., pp. 6-14.) Plaintiff attaches a separate statement providing grounds for further responses and production to these RPDs. (Mot., Separate Statement.)

I. RPDs, Set Two, Nos. 115-118, 126, 137-138, and 145-146

In opposition to further responses and production to RPDs, Set Two, Nos. 115-118, 126, 137-138, and 145-146, KHO argues that the requests are overbroad and properly subject to the stated objections. (Opp’n, pp. 2-7.)

KHO’s objections were based on undue burden and harassment, overbreadth, vagueness, and ambiguity, scope of discovery (relevance; reasonably calculated to lead to discovery of admissible evidence), peer-review protections (Evid. Code, § 1157), a right to privacy and/or confidentiality, third-party HIPPA and CMIA protections, the attorney-client privilege and/or the work product doctrine, and/or Civil Code section 3295 protections. Some of KHO’s responses provide that, subject to its objections, “KHO produces all documents responsive to this demand within its possession, custody or control, to which no objection has been made, via Hightail link.” (See Mot., Separate Statement, Nos. 115-117; cf. id. at Nos. 126, 137-138, 145-146 [objection only responses]; Mot., Cassidy Decl., Exs. K-L [copy of RPDs, Set Two, and responses].)

In reply, Plaintiff Maxey reiterates good cause for production. (Reply, pp. 5-7.)

The Court finds that further responses and production to RPDs Set, Two, Nos. 115-118, 126, 137-138, and 145-146.

The Court first notes that the production sought is relevant to alter ego liability as based on factors provided in Associated Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal.App.2d 825, 838-840 (Associated Vendors). Questions of alter ego liability could arise from documents showing the services that KHO provided to Kindred Paramount as a hospital and corporate entity, documents describing KHO and Kindred Paramount’s business relationship, documents evidencing overlap between meetings and conferences, etc., documents provided to Kindred Paramount’s governing body, documents showing communications between Kindred Paramount and KHO, minutes discussing the Kindred Paramount hospital, and documents showing KHO’s members and employee roster for the relevant time period. For example, domination and control could be shown through those documents.

However, as on September 7, 2023, the Court limits the production period to 18 months before the relevant time period—starting on April 27, 2020—through July 27, 2020.

The Court also notes that while documents showing any and all communications between the parties may be burdensome to collect by KHO, the lack of such communications can support a finding that no alter ego liability exists by supporting a position that KHO does not dominate or control Kindred Paramount.

The Court next finds that this modification will adequately resolve any objections as to undue burden, harassment, overbreadth, vagueness, and ambiguity.

The Court finds that KHO presents insufficient grounds for the Court to find that a peer review privilege exists in the production at issue.

The Court finds that to the extent KHO has a right to privacy in the requested production, there is a compelling need for production: alter ego liability evidence. For this reason, even if there was a fundamental right to privacy at issue, the production would be merited. (Williams v. Superior Court (2017) 3 Cal.5th 531, 552 (Williams) [If the case involves an obvious invasion of a privacy interest that is fundamental to the holder’s personal autonomy, a compelling interest or need must be present to overcome the privacy interest]; see also Ameri-Med Corp. v. Worker’s Comp. Appeals Bd. (1996) 42 Cal.App.4th 1260, 1287-1288 (Ameri-Med Corp.) [corporation’s do not have constitutional right to privacy but have some right to privacy, the existence of which is dependent on the circumstances of the case].)

The Court next recognizes that Plaintiff has agreed to redaction of third-party information, mooting right to privacy issues relating to third parties. (Response Nos. 115, 117.)

Where the attorney-client or work product privilege is invoked in further responses, the Court imposes the obligation to provide a privilege log pursuant to Hernandez v. Superior Court (2003) 112 Cal.App.4th 285, 291, fn. 6. (See Code Civ. Proc., § 2031.240, subd. (b)(2).)

Last, the Court determines that KHO’s Civil Code section 3295 objections are irrelevant insofar as the use of this evidence is for the purposes of establishing alter ego liability, not punitive damages. Moreover, it is not clear to the Court that seeking production related to services, communications, and resources shared by KHO and Kindred Paramount is evidence relating to the profits or financial condition of KHO.

The Court thus GRANTS Plaintiff’s motion as to RPDs, Set Two, Nos. 115-118, 126, 137-138, and 145-146.

II. RPDs, Set Two, Nos. 121-124

In opposition to further responses and production to RPDs, Set Two, Nos. 121-124, KHO argues that the production requests are too burdensome and harassing based on excessive and unnecessary burden of seeking “reports” exchanged between Kindred Paramount and KHO, that that the requests are generally overbroad, vague, and ambiguous, and that the requests do not relate to alter ego grounds. (Opp’n, pp. 7-8.)

KHO’s objections were based on undue burden and harassment, overbreadth, vagueness, and ambiguity, scope of discovery (relevance; reasonably calculated to lead to discovery of admissible evidence), a right to privacy, the attorney-client privilege and/or the work product doctrine, and/or Civil Code section 3295 protections. (See Mot., Separate Statement, Nos. 121-124; Mot., Cassidy Decl., Exs. K-L [copy of RPDs, Set Two, and responses].)

The reply does not appear to address these production requests.

The Court finds that production is merited as to these production requests.

The evidence is relevant to an alter ego determination. If KHO received many reports of any kind from Kindred Paramount on a regular basis, such evidence could help establish one of many factors for alter ego liability listed in Plaintiff’s motion and drawn from Associated Vendors, supra, 210 Cal.App.2d at pp. 838-840, e.g., failure to maintain records and domination and control, to the extent they exist.

However, as on September 7, 2023, the Court limits the production period to 18 months before the relevant time period—starting on April 27, 2020—through July 27, 2020.

As to the contention that the use of the word “reports” in the production requests is somewhat broad, vague, or ambiguous, the Court notes that the extent to which KHO and Kindred Paramount send reports to one another itself is relevant to a determination of, for example, failure to maintain records or domination and control.

The Court otherwise finds the undue burden and harassment objections without merit.

The Court finds that to the extent KHO has a right to privacy in the requested production, there is a compelling need for production: alter ego liability evidence. For this reason, even if there was a fundamental right to privacy at issue, the production would be merited. (Williams, supra, 3 Cal.5th at p. 552; see also Ameri-Med Corp., supra, 42 Cal.App.4th at pp. 1287-1288.)

The Court next recognizes that Plaintiff has agreed to redaction of third-party information, mooting right to privacy issues relating to third parties. (Response Nos. 121.)

Where the attorney-client or work product privilege is invoked in further responses, the Court imposes the obligation to provide a privilege log pursuant to Hernandez v. Superior Court (2003) 112 Cal.App.4th 285, 291, fn. 6. (See Code Civ. Proc., § 2031.240, subd. (b)(2).)

Last, the Court determines that KHO’s Civil Code section 3295 objections are irrelevant insofar as the use of this evidence is for the purposes of establishing alter ego liability, not punitive damages. Moreover, it is not clear to the Court that seeking production related to reports shared by KHO and Kindred Paramount is evidence relating to the profits or financial condition of KHO.

The Court thus GRANTS Plaintiff’s motion as to RPDs, Set Two, Nos. 121-124.

III. RPDs, Set Two, Nos. 130-131, 141-144, and 147-152

In opposition to further responses and production to RPDs, Set Two, Nos. 130-131, 141-144, and 147-152, KHO argues this production is protected by Civil Code section 3295. (Opp’n, pp. 8-12.)

KHO’s objections were based on undue burden and harassment, overbreadth, vagueness, and ambiguity, scope of discovery (relevance; reasonably calculated to lead to discovery of admissible evidence), peer-review protections (Evid. Code, § 1157), a right to privacy and/or confidentiality, the attorney-client privilege and/or the work product doctrine, and/or Civil Code section 3295 protections. The response to Request No. 131 also provides that “KHO produces all documents responsive to this demand within its possession, custody or control, to which no objection has been made, via Hightail link.” (See Mot., Separate Statement, Nos. 130-131, 141-144, 147-152; Mot., Cassidy Decl., Exs. K-L [copy of RPDs, Set Two, and responses].)

The Court finds that documents relating to budget approval by KHO in favor of Kindred Paramount, support fees by KHO to Kindred Paramount, financial assistance to Kindred Paramount and debts to KHO, overlap in accounts receivable and payable, billing statements, financial transactions, and overlapping withdrawals are reasonably calculated to lead to admissible alter ego evidence. (RPDs, Nos. 130-131, 141-144, 147-149). These issues touch upon comingling of assets, failure to segregate funds, treatment by one entity of the other’s assets as its own, use of the other entity as a mere shell, and lack of legal formalities. (Associated Vendors, supra, 210 Cal.App.2d at pp. 838-840.)

Similarly, the RehabCare production requests (Nos. 151-152) are relevant because (1) RehabCare Group of California, Inc. was first raised in KHO’s summary judgment or adjudication motion as an entity that contracts with Kindred Paramount to provide rehabilitation care services and (2) production could show that RehabCare is simply a passthrough entity or alter ego through which KHO provides services to Kindred Paramount, thus aiding an alter ego determination.

However, as on September 7, 2023, the Court limits the production period to 18 months before the relevant time period—starting on April 27, 2020—through July 27, 2020.

The Court next finds that with this modification, the undue burden, harassment, overbreadth, vagueness, and ambiguity objections are undercut.

The Court finds that KHO presents insufficient grounds for the Court to find that a peer review privilege exists in the production at issue.

The Court finds that to the extent KHO has a right to privacy in the requested production, there is a compelling need for production: alter ego liability evidence. For this reason, even if there was a fundamental right to privacy at issue, the production would be merited. (Williams, supra, 3 Cal.5th at p. 552 [If the case involves an obvious invasion of a privacy interest that is fundamental to the holder’s personal autonomy, a compelling interest or need must be present to overcome the privacy interest]; see also Ameri-Med Corp., supra, 42 Cal.App.4th at pp. 1287-1288 [corporation’s do not have constitutional right to privacy but have some right to privacy, the existence of which is dependent on the circumstances of the case].)

Where the attorney-client or work product privilege is invoked in further responses, the Court imposes the obligation to provide a privilege log pursuant to Hernandez v. Superior Court (2003) 112 Cal.App.4th 285, 291, fn. 6. (See Code Civ. Proc., § 2031.240, subd. (b)(2).)

Last, the Court determines that KHO’s Civil Code section 3295 objections are irrelevant insofar as the use of this evidence is for the purposes of establishing alter ego liability, not punitive damages. Moreover, it is not clear to the Court that seeking production related to financial overlap between KHO and Kindred Paramount is evidence relating to the profits or financial condition of KHO.

The Court thus GRANTS Plaintiff’s motion as to RPDs, Set Two, Nos. 130-131, 141-144, and 147-152.

IV. RPDs, Set Two, Nos. 119, 125, 129, 132, 139, and 140 and/or 153.

KHO agrees in its opposition to provide further responses and production in relation to RPDs, Set Two, Nos. 119, 125, 129, 130, and alternately, 140 and 153. (Opp’n, p. 12.) The Court interprets this as agreement to responses and production in relation to all the named production requests, which is reinforced by the notice naming Request No. 153 and no other opposition section touching upon Request No. 140. (See Opp’n, pp. 2-12.)

The Court thus GRANTS Plaintiff’s motion as to RPDs, Set Two, Nos. 119, 125, 129, 132, 139, 140, and 153.

Sanctions: DENIED.

Except in certain circumstances involving electronic stored information, the court must impose a monetary sanction under Chapter 7 (commencing with Section 2023.010) against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel further response to a demand, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust. (Code Civ. Proc., § 2031.310, subd. (h).)

The court may award sanctions under the Discovery Act in favor of a party who files a motion to compel discovery, even though no opposition to the motion was filed, or opposition to the motion was withdrawn, or the requested discovery was provided to the moving party after the motion was filed. (Cal. Rules of Court, rule 3.1348, subd. (a).)

Based on the Court’s modifications to the time period for the discovery requests, there was some overbreadth in scope of time, showing justification in KHO opposing this motion. KHO also raised valid arguments as to various privacy rights and privileges (for which a log is needed), as well as the vague nature of some words in the production requests, e.g., “reports.”

Sanctions are thus DENIED.

Conclusion

Plaintiff Guadalupe Maxey’s Motion to Compel Further Responses by Defendant Kindred Healthcare Operating, LLC to Plaintiff’s Requests for Production, Set Two, is GRANTED, in Part, as to Requests for Production, Set Two, Nos.115-119, 121-126, 129-132, and 137-153, as modified above.

The Request for Sanctions is DENIED.

Defendant Kindred Healthcare Operating, LLC is ORDERED to produce all relevant documents and other papers within 10 days of this ruling.