Department 30, Spring Street Courthouse

January 11, 2022

20STCV02388

-Motion to Compel Further Deposition Testimony and Documents from Non-Party GRS Funding and Request for Sanctions

-Motion to Compel Further Deposition Testimony and Documents from Non-Party Docs Surgical Hospital

The issue presented by both of these motions is the discoverability of information about the sale of Plaintiff’s medical lien by Docs Surgical Hospital to GRS Funding, a medical factoring business.

Relevance for purposes of discovery is a broader concept than what evidence will be admissible at trial. In the discovery context, information is relevant if it might assist a party in the evaluation of a case, the preparation for trial or the reaching of a settlement. (Haniff v. Superior Court (2017) 9 CA5th 191, 205.)

A plaintiff seeking to recover past medical expenses in a personal injury action is entitled to recover the lesser of (a) the reasonable value of the medical services provided or (b) the amount paid or incurred for the medical services. (Howell v. Hamilton Meats & Provisions. Inc. (2011) 52 Cal.4th 541, 556.) 

In Moore v. Mercer (2016) 4 Cal.App.5th 424, 447)the Court of Appeal held that a trial court abused its discretion when it denied a similar motion to compel this type of information. (Id.) The Moore court concluded that “evidence surrounding the sale of bills and liens. . . does bear some probative value in determining the reasonable value of the services. And given the breadth of a party’s right to discovery any information that might assist him in evaluating or preparing his case, the court erred.” (Id.)

With respect to the motion regarding GRS Funding, GRS does not oppose the motion nor does it provide any declarations or other evidence indicating that the information sought constitutes a trade secret. Instead, Plaintiff asserts the existence of a trade secret with respect to this information. However, only “the owner of a trade secret has a privilege to refuse to disclose the secret . . .” (Evid. Code § 1060.)

With respect to the motion regarding Docs Surgical Hospital, the non-party entity does oppose the motion contending, among other things, that a trade secret is at issue here.  The declaration of Dr. Siddique is attached in support of this contention. 

This claim of the existence of a trade secret must be analyzed in the context of the parameters discussed at the IDC on this matter. At that time, the Court made it clear that it did not think that the scope of discovery about the factoring agreement sought by Defendant was appropriate. The Court indicated that the amount paid for the accounts receivable (subject to a protective order) would be the only information ordered to be produced.

In that context, Docs Surgical Hospital does not meet its burden here.

Docs Surgical Hospital argues that this information should not  be disclosed because Docs entered into a non-disclosure agreement with GRS and GRS would be harmed by this disclosure.  This does not establish a trade secret belonging to Docs Surgical Hospital.

Docs does argue that the amount paid by a factoring company for a particular lien is a trade secret that derives independent economic value from not being generally known to the public or other person who can obtain economic value from its disclosure. Docs contends that other factoring companies and the counsel in this case could use the information to Doc’s economic detriment. 

However, given that the only information to be disclosed is the payment for the accounts receivable as a whole without any details regarding how that number was reached or the agreement details or indeed any other information, Docs does not establish how this information alone constitutes a trade secret given its own acknowledgement (Siddique Decl. at paragraph 8) that “each patient billing is unique and different.” 

The motions are denied in part and granted in part.

Deposition questions and documents establishing the following items only must be answered/produced: (1) the date the lien was sold and (2) the amount paid for the lien by GRS.

Any documents produced may be redacted to the extent that they include additional information. Furthermore, the information (both deposition testimony and documents) will be produced pursuant to a protective order. The parties should stipulate to the terms of a protective order and file it with the court.

No sanctions are awarded.

Moving party to provide notice.