Judge: Deborah C. Servino, Case: 30-2019-01075202, Date: 2022-10-28 Tentative Ruling

Plaintiffs Main Street Asset Solutions, Inc.; Nathan T. Hayes, LLC dba Main Street Funding; and Main Street Capital Funding, Inc.’s motion to compel further responses from Defendant Trinity Financial Services, LLC (“Trinity”), to Plaintiffs’ requests for production of documents, set two, and for sanctions, is granted in part and denied in part.  The motion is granted with respect to request no. 54, and denied as to nos. 55 through 59.

Code of Civil Procedure section 2031.010 provides, in relevant part, that “any party may obtain discovery” by “inspecting, copying, testing, or sampling documents, tangible things, land or other property, and electronically stored information in the possession, custody, or control of any other party to the action.” (Code Civ. Proc., § 2031.010, subd. (a).) Section 2031.210 requires a party responding to an inspection demand to respond with (1) a statement that it will comply, (2) a representation that it does not have the ability to comply, or (3) an objection. (Code Civ. Proc., § 2031.210.) On receipt of the response, the demanding party may move to compel a further response if any of the following apply: (1) a statement of compliance is incomplete; (2) a representation of inability to comply is inadequate, incomplete or evasive; (3) an objection is without merit or too general. (Code Civ. Proc., § 2031.310, subd. (a).) The motion must set forth specific facts showing good cause justifying the discovery, and it must be accompanied by a separate statement. (Code Civ. Proc., § 2031.310, subd. (b); Cal. Rules of Court, rule 3.1345.)

No. 54

Trinity states it has since supplemented its response to form interrogatory no. 3.7 response, and that it is willing to produce the “Secretary of State documents relating to the two registrations identified in response to Form Interrogatory no. 3.7.” (Opp. Sep. Stmt., at p. 3 [ROA 335].) Thus, the motion is granted as to this request. Trinity is ordered to serve a verified, Code-compliant further response to no. 54 and production within 20 days of the notice of ruling.

No. 55

Plaintiffs claim that the loan identified in this request, no. 1400002035, is directly at issue in this case, because Defendants sold it to Plaintiffs, then foreclosed on it and refused to acknowledge that they had foreclosed on it. However, Trinity claims that this loan was “pulled back from transfer . . . after issues were discovered,” and that Main Street was advised of the same on or about October 29, 2015. (Opp. Sep. Stmt., at pp. 4-6; Vo Decl. at ¶¶ 2-3, Exh. A [ROA 339].)  Plaintiffs have not denied the accuracy of these representations. Accordingly, Defendant has sufficiently justified its objections.  Thus, the motion as to this request is denied.

Nos. 56-59

Trinity opposes the motion on the grounds that Trinity’s licensing is not at issue because Plaintiffs’ claims “do not involve or relate to Trinity’s licensing status or prior servicing,” as the only representation and warranty of licensing was made by the buyers, not the seller, i.e., Trinity. Trinity further argues that its servicing of the loans “is not relevant to determining the value of the notice” and “a lapse in licensing does not render the paper of less value.” (Opp., at pp. 2, 5.)

The court has previously stated in its ruling on a different discovery motion:

Whether Trinity has, was denied, or lost a license does not bear directly on Plaintiffs’ claims that Trinity breached its contracts for sale of certain mortgages or made misrepresentations that Plaintiffs relied on. But Plaintiffs’ allegations are of an ongoing scheme by Defendants, operating at the edge of the regulations governing the mortgage servicing industry. From this perspective, discovery requests designed to determine what licenses Trinity is supposed to have, has, was denied, or lost are reasonably calculated to lead to the discovery of admissible evidence.

(7/29/2022 Minute Order at p. 2 [ROA 327].)

With respect to inspection demands, Plaintiffs bear the initial burden of setting forth specific facts showing good cause justifying the discovery. Notably, the requests at issue go beyond what the court deemed to be relevant in the prior motion, i.e., “what licenses Trinity is supposed to have, has, was denied, or lost.” Plaintiffs are asking Trinity to produce, not only the “documentation relating to each license” identified Trinity’s form interrogatory response, but also all documents “relating to any regulatory investigations,” “relating to any consent decrees,” “relating to any regulatory enforcement actions,” and “relating to any consumer complaint lodged.” These requests have not been limited to investigations, consent decrees, complaints or regulatory enforcement actions regarding Trinity’s licensing. Unlike the Nevada federal court action that Plaintiffs refer to in their separate statement, this action is not a consumer complaint for improper licensing. There is not any evidence that the loans sold to Plaintiffs were implicated in that action or the consent decrees in Washington. Thus, the motion is denied with respect to these requests, without prejudice to Plaintiffs propounding more narrowly-tailored requests.

The court declines to award any monetary sanctions.

Plaintiffs shall give notice of the ruling.