Judge: Anne Richardson, Case: 22STCV23465, Date: 2023-08-25 Tentative Ruling
Case Number: 22STCV23465 Hearing Date: August 25, 2023 Dept: 40
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ASHISH & SAYED, LLC, Plaintiff, v. CENTURY WOMEN MEDICAL GROUP, INC., a California corporation, and
DOES 1-10, Defendants. |
Case No.: 22STCV23465 Hearing Date: 8/25/23 Trial Date: 4/23/24 [TENTATIVE] RULING RE: Defendant Century
Women Medical Group, Inc.’s Motion to Quash Deposition Subpoena for
Production of Business Records Issued by Plaintiff to 1st Century Bank and
Request for Monetary Sanctions. |
Pleadings
Plaintiff Ashish & Sayed, LLC
(A&S) sues Defendant Century Women
Medical Group, Inc. (CWMG) and Does 1-10 pursuant to a September 6, 2022 First
Amended Complaint alleging a sole claim for Breach of Contract.
The claim arises from allegations that, pursuant to a lease first entered
in 2002 and last amended to expire on October 31, 2021, CWMG leased from A&S
a medical suite with shared bathrooms and waiting area (Premises), with CWMG to
operate an OB-GYN practice therein, and that, between January 1, 2021 and
October 31, 2021, CWMG failed to pay rents for the Premises, with CWMG holding
over on the Premises from November 1, 2021 to November 23, 2021, thus resulting
in $67,683.33 in compensatory damages to A&S—comprised of past due rent for
January to October 2021 ($35,000), holdover rent for November 2021 ($2,683.33),
and $30,000 in repair costs—as well as interest thereon and reasonable
attorney’s fees and costs.
Plaintiff CWMG filed its Answer to
the FAC on September 26, 2022, in which CWMG asserts a general denial and
twelve affirmative defenses, including Excuse, Excused Nonperformance, and
Intervening or Superseding Cause.
Motion Before Court
On May 9, 2023, Plaintiff A&S
served a deposition subpoena for the production of business records on
Plaintiff CWMG’s banking provider, 1st Century Bank. The subpoena included two
production requests:
(1) “Every monthly bank statement
for the BANK ACCOUNTS (as defined above) in the name of the BANK CUSTOMER (as
defined above) reflecting banking transactions for the two year period
beginning January 1, 2020 and ending December 31, 2021.”
(2) “With respect to each bank
statement referred to above, every DOCUMENT which reflects a credit to or debit
from each such bank statement including without limitation, all offsets,
checks, drafts, electronic transfers, ATM deposits, debit cards, check cards,
on-line transfers and withdrawals, ZELLE transfers, PayPal or similar service,
counter credits, and wire transfers.”
On May 26, 2023, CWMG moved to
quash this deposition subpoena.
On August 11, 2023, A&S opposed
the motion.
On August 18, 2023, CWMG replied to
the opposition.
CWMG’s motion is now before the
Court.
Legal
Standard
Such a motion may be made by:
(1) Any party to the action (Code Civ.
Proc., § 1987.1, subd. (b)(1));
(2) The subpoenaed witness (e.g., a
custodian of another person’s personal records) (Code Civ. Proc., § 1987.1,
subd. (b)(2); Monarch Healthcare v. Superior Court (2000) 78 Cal.App.4th
1282, 1287-1288);
(3) A person (party or nonparty) whose
consumer, governmental, or employment information or records have been
subpoenaed (see Code Civ. Proc., § 1985.3, subd. (g) [party consumer], 1985.4
[state or local-agency employee or any other natural person], 1985.6, subd.
(f)(1) [employee], 1987.1, subd. (b)(3) [consumer], 1987.1, subd. (b)(4)
[employee]; see also Code Civ. Proc., §§ 1985.3, subd. (g), ¶ 2, 1985.6, subd.
(f)(2) [nonparty consumer can make written objections instead of motion to
quash]);
(4) A person whose “personally identifying
information” within the meaning of Civ. Code § 1798.79.8, subd, (b), subpoenaed
in connection with an action involving that person’s exercise of free-speech
rights; and
(5) The Court, on its own motion, after
giving the parties notice and the opportunity to be heard (Code Civ. Proc., §
1987.1, subd. (a).)
A motion to quash may be based on various
grounds, including that:
The subpoena seeks information that is not
relevant to the issues in the case (see, e.g., Catholic Mut. Relief Soc’y v.
Superior Court, supra, 42 Cal.4th at p. 365 [motion to quash
deposition subpoena because documents were outside the scope of discovery]; Slagle
v. Superior Court (1989) 211 Cal.App.3d 1309, 1314-1315 [motion to quash
trial subpoena because medical records were not relevant was properly
overruled]; cf. Cadiz Land Co. v. Rail Cycle, L.P. (2000) 83 Cal.App.4th
74, 122-123 [motion to quash deposition notice because deposition would not
lead to admissible evidence]);
The subpoena makes unreasonable or
oppressive demands for information (see Code Civ. Proc., § 1987.1, subd. (a);
see, e.g., McClatchy Newspapers v. Superior Court, supra, 26
Cal.2d at p. 391 [motion to quash deposition subpoenas because they were
unreasonable and oppressive]);
The disclosure of the records sought will
violate the consumer’s constitutional right to privacy (see Cal. Const., art.
I, § 1; see, e.g., Fett v. Medical Bd. (2016) 245 Cal.App.4th 211, 213
[petitions to quash to nonparties’ doctor because of privacy rights]; Manela
v. Superior Court (2009) 117 Cal.App.4th 1139, 1150-1151 [motion to quash a
subpoena to party’s doctor because of privacy rights]).
Order
Quashing Subpoena: GRANTED.
Defendant
CWMG moves to quash the May 9, 2023 subpoena on various grounds, including that
the discovery the subpoena seeks to produce is premature before entry of
judgment, violative of Civil Code section 3295 (relating to punitive damages),
violative of the right to privacy in financial and patient information,
irrelevant to this action in light of CWMG’s payment of past due and holdover rent,
not specifically described or designated in reasonably particularized
categories, and overbroad. (Mot., pp. 2, 7-12.)
Plaintiff
A&S opposes the motion on grounds that: the subpoena properly seeks
discovery related to CWMG’s twelve affirmative defenses, which CWMG has
clarified to center on CWMG’s operations being negatively impacted by the
COVID-19 pandemic and force majeure (i.e., an inability to pay rent), for which
reason bank records from January 2020 to December 2021 are relevant; Civil Code
section 3295 is applicable only where punitive damages are at issue, and none
are at issue in this action; a corporation has no right to privacy, and even if
it did, courts must consider whether the relevance of the information outweighs
the right, where the discovery sought there is narrowly tailored to address an
alleged financial downturn in CWMG’s business; any private information of
patients can be redacted; the subpoena is specific and imposes a minimal burden
on the bank; and any payment of the past due rents by CWMG fails to undercut
the issues that remain as to CWMG’s affirmative defenses and the responses to
interrogatories indicating an inability to pay. (Opp’n, pp. 7-17.)
In
reply, CWMG reiterates its arguments in the motion and responds to the
opposition. (Reply, pp. 3-7.)
The
Court finds in favor of Defendant CWMG.
First,
as the party whose bank records are issue, CWMG has standing to bring this
motion. (Code Civ. Proc., §§ 1985.3, subd. (g), 1987.1, subd. (b)(3).)
Moving
to the merits, the Court notes that there are various groups of damages at
issue in this action:
(1)
$35,000 in past due rent for January to October 2021 (FAC, ¶ 42), which CWMG
paid off on May 22 or 23, 2023 (Mot., Cunningham Decl., ¶ 7, Ex. E; Opp’n,
Ludwig Decl., ¶¶ 13-14, Ex. 6);
(2)
$2,683.33 in holdover rent for November 2021 (FAC, ¶ 42), which CWMG paid off
on May 22 or 23, 2023 (Mot., Cunningham Decl., ¶ 7, Ex. E; Opp’n, Ludwig Decl.,
¶¶ 13-14, Ex. 6);
(3)
$30,000 in repair costs (FAC, ¶ 42), which appear to remain outstanding;
(4)
Interest on damages at a rate of 10% per annum (FAC, Prayer, ¶ 2), which appear
to remain outstanding;
(5)
Costs, expenses and fees, including, but not limited to, reasonable attorney’s
fees and costs (FAC, ¶ 42; FAC, Prayer, ¶ 3), which appear to remain
outstanding; and
(6)
Other relief as the Court deems proper (FAC, Prayer, ¶ 4).
Defendant
CWMG has also represented to Plaintiff A&S that CWMG “will not be asserting
any defense related to its inability to pay rent.” (Mot., Cunningham Decl., Ex.
F, May 23, 2023 Email, 6:01 PM.)
Based
on payment of the past due and holdover rents, as well as CWMG’s
representations that it waives any defense related to its inability to pay
rent, the Court finds that, at this time, the production of bank records is
premature and irrelevant, therefore placing the records outside the scope of
discovery. CWMG has paid the owed rents, leaving only issues of repair costs,
interest, fees and costs, and other relief at issue for trial. None of these
remaining damages are premised on an inability to pay rent during the pandemic.
Repair costs involve evidence relating to the extent of damages in the Premises
as well as the costs to A&S through the date of CWMG’s vacating the
Premises, not on CWMG’s financial resources during 2021. The issues of interest
and attorney’s fees and costs similarly lie outside the scope of the state of
CWMG’s financial resources during 2021 because a determination on such damages
arises from questions of harm to A&S independent of CWMG’s past financial
condition.
The
Court understands A&S’s skepticism of the scope of CWMG’s waiver of
defenses relating to its inability to pay rents, as well as A&S’s desire
that CWMG amend its Answer and discovery responses to clarify the defenses to
the damages in this action.
Without
reaching the appropriateness of or need for such changes from CWMG, there are
other means for addressing this concern. Any attempts by CWMG at trial to walk
back on its waiver and assert any kind of defense based on either an inability
to pay due to the COVID-19 pandemic, force majeure, or like defenses would be subject
to judicial estoppel. CWMG cannot benefit from asserting waiver of such
defenses in relation to this motion only to later benefit from use of those
defenses at trial or another dispositive proceeding. Moreover, the Court reads
such waiver as including waiver and concession as to A&S’s entitlement to
the past due and holdover rents from January 1, 2021 to November 23, 2021,
which CWMG has since paid.
Defendant
CWMG’s motion is therefore GRANTED, with these caveats.
Sanctions:
DENIED.
Both
parties request sanctions against the other based on misuse of the discovery
process. (Mot., p. 12 & Cunningham Decl., ¶ 11; Opp’n, p. 18 & Ludwig
Decl., ¶¶ 21-24.) CWMG also moves for sanctions pursuant to Code of Civil
Procedure section 1987.2 based on oppressiveness of a subpoena. (Mot., p. 12.)
The Court finds that sanctions are not merited either way. The parties both raised arguments upon which reasonable minds could differ, undercutting the sanctions requests. For this reason, the sanctions are DENIED.
Defendant Century Women Medical
Group, Inc.’s Motion to Quash Deposition Subpoena for Production of Business
Records Issued by Plaintiff to 1st Century Bank is GRANTED.
The May 9, 2023 subpoena served on
1st Century Bank is QUASHED.
Defendant’s Request for Monetary
Sanctions is DENIED.
Plaintiff Ashish & Sayed, LLC’s sanctions request is likewise DENIED.