Judge Craig Griffin, Case Fortune Management Systems v. Brusch 2022-08-29 Tentative Ruling

Judge: Craig Griffin, Case: Fortune Management Systems v. Brusch, Date: 2022-08-29 Tentative Ruling

MOTION #1: COMPEL FURTHER RESPONSE TO FIRST SET OF SPECIAL INTERROGATORIES AND FOR A MONETARY SANCTION OF $3250

Plaintiff Fortune Management Systems moves for an order compelling defendant Chase Whitaker to serve a further response to the first set of special interrogatories that contains supplemental answers to interrogatories 7, 10, 11, 13, 14, 16, 17, and 18. Plaintiff also moves for an order imposing a monetary sanction of $3250 against defendant.

This is the first of six motions to compel filed by plaintiff against the two defendants, and both defendants filed a single opposition to all six, which prompted plaintiff to file a single reply.

Defendants contend that the vast majority of discovery requests at issue are moot because they served a supplemental response to the discovery, i.e., a “second amended and supplemented omnibus objections and responses of defendants Dyllon and Chase Whitaker to form interrogatories, requests for admissions, special interrogatories, and requests for production of documents.” A copy of this document is submitted with the opposition as Exhibit 4, and it is verified by both defendants and was served by email on 8-12-22.

The reply contends that the requests are not moot because the supplemental answers are still evasive, and objections are asserted.

A review of the second amended and supplemented omnibus objections and responses shows that defendant Chase Whitaker gave supplemental answers to special interrogatories 7, 10, 13, 14, 17, and 18. The supplemental answers to special interrogatories 7 and 10 appear to be substantive and responsive, but the others are not. Also, the responding defendant did not provide a supplemental answer to special interrogatory 11.

The motion of plaintiff Fortune Management Systems for an order compelling defendant Chase Whitaker to serve a further response to the first set of special interrogatories is GRANTED om part.

The motion is granted with respect to special interrogatories 11, 13, 14, 16, 17, and 18 only. Supplemental answers should be served within 21 days.

A reduced monetary sanction of $ 1,700 is imposed against defendant Chase Whitaker, payable to plaintiff Fortune Management Systems and its attorneys in 30 days.

MOTION #2: COMPEL FURTHER RESPONSE TO FIRST SET OF SPECIAL INTERROGATORIES AND FOR A MONETARY SANCTION OF $3250

Plaintiff moves for an order compelling defendant Dyllon Whitaker to serve a further response to the first set of special interrogatories that contains supplemental answers to interrogatories 7, 10, 11, 13, 14, 16, 17, and 18. Plaintiff also moves for an order imposing a monetary sanction of $3250 against defendant.

A review of the second amended and supplemented omnibus objections and responses shows that defendant Dyllon Whitaker gave supplemental answers to special interrogatories 7, 10, 13, 14, 17, and 18. The supplemental answers to special interrogatories 7 and 10 appear to be substantive and responsive, but the others are not. Also, the responding defendant did not provide a supplemental answer to special interrogatory 11.

The motion of plaintiff Fortune Management Systems for an order compelling defendant Dyllon Whitaker to serve a further response to the first set of special interrogatories is GRANTED om part.

The motion is granted with respect to special interrogatories 11, 13, 14, 16, 17, and 18 only. Supplemental answers should be served within 21 days.

A monetary sanction of $1,700 is imposed against defendant Dyllon Whitaker, payable to plaintiff Fortune Management Systems and its attorneys in 30 days.

MOTION #3: COMPEL FURTHER RESPONSE TO FIRST SET OF REQUESTS FOR ADMISSIONS AND FOR A MONETARY SANCTION OF $5459.50

Plaintiff Fortune Management Systems moves for an order compelling defendant Chase Whitaker to serve a further response to the first set of requests for admissions that contains supplemental answers to requests 4-11. Plaintiff also moves for an order imposing a monetary sanction of $5459.50 against defendant.

A review of the second amended and supplemented omnibus objections and responses shows that defendant Chase Whitaker gave supplemental answers to requests 4-11 – and that he expressly admitted the matters in requests 4-9. He objected to requests 10 and 11 on the basis of privileges for privacy and tax concerns and on the basis that these requests, as phrased, were vague, ambiguous, and unintelligible.

Request 10 is: “Admit that You did not pay any taxes for your alleged ownership interest in FMS for 2019.”

Request 11 is: “Admit that you did not pay any taxes for your alleged ownership interest in FMS for 2020.”

Neither of these requests asks for the disclosure of tax information per se. As a result, the motion of plaintiff Fortune Management Systems for an order compelling defendant Chase Whitaker to serve a further response to the first set of requests for admissions is GRANTED in part.

The motion is granted with respect to requests 10 and 11 only, and supplemental answers should be served within 21 days. A monetary sanction of $1,700 is imposed against defendant Dyllon Whitaker, payable to plaintiff Fortune Management Systems and its attorneys in 30 days.

MOTION #4: COMPEL FURTHER RESPONSE TO FIRST SET OF REQUESTS FOR ADMISSIONS AND FOR A MONETARY SANCTION OF $5459.50

Plaintiff Fortune Management Systems moves for an order compelling defendant Dyllon Whitaker to serve a further response to the first set of requests for admissions that contains supplemental answers to requests 4-11. Plaintiff also moves for an order imposing a monetary sanction of $5459.50 against defendant.

A review of the second amended and supplemented omnibus objections and responses shows that defendant Dyllon Whitaker gave supplemental answers to requests 4-11. These answers were identical to the ones given by the co-defendant, i.e., he expressly admitted the matters in requests 4-9 and objected to requests 10 and 11 on the basis of privileges for privacy and tax concerns and on the basis that these requests, as phrased, were vague, ambiguous, and unintelligible.

Neither request 10 nor 11 asks for the disclosure of tax information per se. As a result, the motion of plaintiff Fortune Management Systems for an order compelling defendant Dyllon Whitaker to serve a further response to the first set of requests for admissions is GRANTED in part.

MOTION #5: COMPEL FURTHER RESPONSE TO FIRST SET OF REQUESTS FOR PRODUCTION AND FOR A MONETARY SANCTION OF $2736.25

Plaintiff Fortune Management Systems moves for an order compelling defendant Chase Whitaker to serve a further response to the first set of requests for production that contains supplemental answers to requests 4, 5, and 45 and produce responsive documents. Plaintiff also moves for an order imposing a monetary sanction of $2736.25 against defendant.

Subdivision (b) of Code Civ. Proc. § 2031.310 provides that a motion to compel a further response to a request for production must: (1) set forth specific facts showing good cause justifying the discovery sought by the demand; and (2) be accompanied by a meet and confer declaration.

Request 4

Request 4 is: “Produce your state and federal personal income tax returns for the year 2019.”

The answer by defendant Chase Whitaker to this request in the second amended and supplemented omnibus objections and responses is:

“Responding Party reiterates the prior objection to the production of his personal income tax return for 2019 and supplements his objections with the additional objection on behalf of his spouse, that since the return in question was filed as a joint return with his spouse, absent notice to his spouse, production by not be compelled. (See Weingarten v. Sup. Ct. 102 Cal.App.4th 268, 2002).”

Moving plaintiff contends that the tax returns “are relevant to the gravamen of Defendants’ Answer, as well as the causes of action of Plaintiff’s Complaint.” (Moving papers (ROA 174) at 8:9-10.) It argues that the gravamen of the defendants’ answer and affirmative defenses is that the defendants each one one-third interest in the plaintiff and that the estate administrator failed to investigate the facts regarding their ownership interests. (Moving papers (ROA 174) at 8:23-25.) Plaintiff contends that defendants’ answer and cross-complaint put their income and profits from the business, as well as documents evidencing their ownership interest directly in issue. (Moving papers (ROA 174) at 8:25-9:2.)

Plaintiff contends that the documents sought by requests 4, 5, and 45 would produce the most direct and probative information regarding the defendant’s purported ownership interest. It also argues that this information cannot be obtained from any other source, and would provide fundamental proof of defendants’ business ownership claims.

In Weingarten, which was also discussed in the moving papers as well as cited in the above answer to request 4, the court addressed the privacy of tax returns, and stated:

“There is no recognized federal or state constitutional right to maintain the privacy of tax returns. [Citations.] California courts, however, have interpreted state taxation statutes as creating a statutory privilege against disclosing tax returns. [Citations.] The purpose of the privilege is to encourage voluntary filing of tax returns and truthful reporting of income, and thus to facilitate tax collection. [Citation.]

“But this statutory tax return privilege is not absolute. The privilege will not be upheld when (1) the circumstances indicate an intentional waiver of the privilege; (2) the gravamen of the lawsuit is inconsistent with the privilege; or (3) a public policy greater than that of the confidentiality of tax returns is involved. [Citation.] This latter exception is narrow and applies only ”when warranted by a legislatively declared public policy.“ [Citation.] A trial court has broad discretion in determining the applicability of a statutory privilege. [Citation.]”

One of the key issues in this case would be, as plaintiff points out, who owns the company and whether the defendants entered into an oral partnership with their father before his death as they claim. Tax records would disclose this information and it appears that the privilege would need to give way.

A further answer should be compelled.

Request 5

Request 5 is: “Produce your state and federal personal income tax returns for the year 2020.”

The answer by defendant Chase Whitaker to this request in the second amended and supplemented omnibus objections and responses is:

“Responding Party reiterates the prior objection to the production of his personal income tax return for 2020 and supplements his objections with the additional objection on behalf of his spouse, that since the return in question was filed as a joint return with his spouse, absent notice to his spouse, production by not be compelled. (See Weingarten v. Sup. Ct. 102 Cal.App.4th 268, 2002).”

The analysis would be the same as it was for request 4 and a supplemental answer should be compelled.

Request 45

Request 45 is: “Produce all Documents filed with any governmental agency including, but not limited to the IRS and the California Franchise Tax Board, wherein your reported your ownership interest in FMS.”

The answer by defendant Chase Whitaker to this request in the second amended and supplemented omnibus objections and responses is:

“Responding Party admits that no such “Documents” have as yet been “filed” with any governmental agency including, but not limited to the IRS and the California Franchise Tax Board, wherein Responding party reported his ownership interest in FMS. Therefore, no such documents exist at the present time and none can therefore be “identified” nor produced at the present time.”

This answer appears to comply with Code Civ. Proc. § 2031.230, which relates to a statement of inability to comply. Therefore the Court will not order a further reply to Request 45.

The motion of plaintiff Fortune Management Systems for an order compelling defendant Chase Whitaker to serve a further response to the first set of requests for production that contains supplemental answers to requests 4 and 5, and produce responsive documents is GRANTED in part.

The motion is granted with respect to the extent that it seeks supplemental answers to requests 4 and 5, and the supplemental answers and responsive documents should be served within 21 days. A monetary sanction of $750 is imposed against defendant Chase Whitaker, payable to plaintiff Fortune Management Systems and its attorneys in 30 days.

MOTION #6: COMPEL FURTHER RESPONSE TO FIRST SET OF REQUESTS FOR PRODUCTION AND FOR A MONETARY SANCTION OF $2736.25

Plaintiff Fortune Management Systems moves for an order compelling defendant Dyllon Whitaker “to produce documents and provide further responses to Requests for Production of Documents Set One (Nos. 4, 5, and 45)” and imposing a monetary sanction of $2736.25 against defendant.

The separate statement filed by plaintiff (ROA 158) indicates that the three requests in issue are the same as those in issue in motion #5. A review of the second amended and supplemented omnibus objections and responses shows that this defendant only produced a supplemental answer to request 45 and that this answer was the same given to this request by the co-defendant.

The motion of plaintiff Fortune Management Systems

for an order compelling defendant Dyllon Whitaker to serve a further response to the first set of requests for production that contains supplemental answers to requests 4 and 5,and 45 produce responsive documents is GRANTED in part.

The motion is granted with respect to the extent that it seeks supplemental answers to requests 4, and 5, and the supplemental answers and responsive documents should be served within 21 days. A monetary sanction of $750 is imposed against defendant Dyllon Whitaker, payable to plaintiff Fortune Management Systems and its attorneys in 30 days.

Moving party to give notice of ruling on all motions.