Judge: Daniel S. Murphy, Case: 23STCV17632, Date: 2023-10-16 Tentative Ruling

Case Number: 23STCV17632    Hearing Date: January 12, 2024    Dept: 32

BACKGROUND

            On July 27, 2023, Plaintiffs Wendy Wai Fong Ho and Raymond Ho filed this action against Defendants Hoi Ying Eugenie Lai and Global West Real Estate Corporation. The complaint asserts causes of action for (1) breach of fiduciary duty, (2) intentional fraud, (3) negligent misrepresentation, (4) elder abuse, (5) financial elder abuse, (6) intentional infliction of emotional distress, (7) negligence, and (8) unfair competition.

            On December 13, 2023, Defendant Lai filed the instant motion for protective order to preclude discovery into her romantic and sexual life, as well as her financial and business dealings with third parties. Plaintiffs filed their opposition on December 21, 2023. Defendant filed her reply on January 2, 2024.

LEGAL STANDARD

“The court shall limit the scope of discovery if it determines that the burden, expense, or intrusiveness of that discovery clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence. The court may make this determination pursuant to a motion for protective order by a party or other affected person.” (Code Civ. Proc., § 2017.020(a).) “The issuance and formulation of protective orders are to a large extent discretionary.” (Nativi v. Deutsche Bank National Trust Co. (2014) 223 Cal.App.4th 261, 316.) “[T]he burden is on the party seeking the protective order to show good cause for whatever order is sought.” (Id. at p. 318.)

DISCUSSION

I. Personal Relationships

            Defendant identifies two discovery requests as inappropriately intruding upon her privacy. Special Interrogatory (SROG) No. 4 requests “all facts, with specificity, that RELATE TO your romantic relationship and extramarital affair with RAYMOND HO, with specific details on when the extramarital affair started, when the extramarital affair ended, and how it led to the quitclaim of his interest in the Property in favor of you on January 21, 2022.” (Buckman Decl., Ex. 11.) Request for Production (RFP) No. 4 seeks all communications between Defendant and Raymond Ho from January 1, 2018 to present. (Id., Ex. 13.)

            The complaint alleges that Defendant engaged in a romantic relationship with Plaintiff Raymond Ho and manipulated him to sign a quit claim deed transferring the subject property to her. (Compl. ¶ 18.) Therefore, evidence pertaining to the relationship and the communications between Defendant and Raymond Ho are directly relevant.

II. Financial Privacy

            Defendant identifies the following discovery requests that she contends improperly seek the financial information of herself, her tenants, and her clients. (See Buckman Decl., Ex. 11, 13.)

SROG No. 11 asks Defendant to identify the source of funds for the down payment used to purchase the Property. SROG No. 12 asks for “all facts, with specificity, that RELATE TO the mortgage of the Property, with details on who are the debtors and obligors of such mortgage, who pays for the monthly mortgage, and the source of funds of the monthly mortgage payments.” SROG No. 13 seeks “all facts, with specificity, that RELATE TO the management of the Property, with details on the maintenance, marketing, collection of rent and payment of expenses of the Property.” SROG No. 14 seeks the identities of “all tenants, sub-tenants, and people occupying the Property from purchase of Property to present.” SROG Nos. 16-20 ask Defendant to identify all bank accounts used by Defendant to handle money for the Property, facts related to Defendant’s co-ownership of the Property with her real estate clients, and facts related to Defendant’s financial arrangements with her clients to purchase real property.

RFP Nos. 3, 5, and 8-11 seek all trust fund accounting that relates to the Property, communications with Plaintiff Wendy Ho, documents relating to the rental of the Property (including rental applications, credit reports, and lease agreements), documents relating to all bank accounts that Defendant uses to handle money for the Property, documents relating to the rental income for the Property (including ledgers and receipts), and documents relating to the expenses of the Property (including mortgage statements, tax statements, and bills).

This information is relevant because Plaintiffs allege that Defendant defrauded them out of the Property and have failed to provide an accounting for the profits generated from the Property. (See Compl. ¶¶ 15-23.) Defendant argues that there is no dispute she rightfully owns the Property, citing the quitclaim deed. However, the merits of the action are not properly litigated on a discovery motion. That Defendant has evidence supporting her position does not preclude Plaintiffs from obtaining evidence to prove the opposite.

While Defendant has a privacy interest in her personal and financial information, that interest must be balanced against Plaintiffs’ right to obtain information in litigation. (See Williams v. Superior Court (2017) 3 Cal.5th 531, 552.) For the particular discovery requests at issue here, Plaintiffs’ need for the information outweighs Defendant’s privacy interests. Additionally, a protective order addresses the concerns over privacy and potential misuse of the information. (See Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 38.) The evidence sought is discoverable even if it is not admissible. (See Code Civ. Proc., § 2017.010.) Lastly, the conduct of Plaintiffs’ counsel in a separate case, and the merits of that case, do not determine the discoverable information in this case.   

CONCLUSION

            Defendant Lai’s motion for protective order is GRANTED in part. The information at issue is relevant and discoverable, but production shall be subject to a protective order.