Judge: Edward B. Moreton, Jr., Case: 21SMCV01355, Date: 2023-01-31 Tentative Ruling

Case Number: 21SMCV01355    Hearing Date: January 31, 2023    Dept: 205

Superior Court of California

County of Los Angeles – West District

Beverly Hills Courthouse / Department 205

MOVING PARTY:                Defendant Andre Adhami

RESPONDING PARTY:       Plaintiff Cyrus Adhami

BACKGROUND

This case arises from a dispute between two brothers over the proceeds of their father’s life insurance policies.  Plaintiff Cyrus Adhami and Defendant Andre Adhami are brothers.  Their father had three life insurance policies, with policy numbers 1077167, 1098741 and 97601946.  Plaintiff alleges the brothers entered into an agreement whereby Plaintiff would relinquish his interest in two policies – 1098741 and 97601945 – in exchange for two conditions: (1) Defendant would be solely responsible for the premiums on all three policies, and (2) Plaintiff was to receive $167,690.86 in death benefits from policy 1077167.  Defendant disputes the terms of the agreement, alleging Plaintiff agreed to receive 30% of the death benefits, not $167,690.86.  In any event, Plaintiff alleges Defendant took loans against policy 1077167, drastically reducing its value and as a result, Plaintiff only received $32,727.07 after their father’s death.  Plaintiff claims Defendant purposefully diminished the value of the policies in an attempt to evade paying Plaintiff $167,690.86 in death benefits.  Defendant disputes he was the one who took out the loans, claiming it was their father who did so, not Defendant.          

This hearing is on Defendant’s motion to quash a subpoena to J.P. Morgan Chase, N.A. and for attorneys’ fees and costs in the amount of $1,545.  The subpoena seeks “[b]etween 3/2016 to 3/2017, [a]ll documents and records stored in any format or method including, but not limited to, documents for all accounts bearing the signatory authority of Andre Adhami, including all documents pertaining to all open or closed checking, savings, NOW, Time, or other deposit or checking accounts in the name of or under signature authority of any of the named parties or entities, including signature cards, bank statements, canceled checks and deposit tickets.”  (Ex. 1 to Motion.)  Defendant argues the subpoena seeks information irrelevant to the issues before the Court and is intended solely to harass him.             

LEGAL STANDARD

A party may move to quash a deposition subpoena to strike, modify, or impose conditions on a subpoena that is procedurally or substantively defective, including that the subpoena violates the right to privacy. (Code Civ. Proc. § 1987.1.)  Courts must balance the right of civil litigants to discover relevant facts against the privacy interests of persons subject to discovery.  (Puerto v. Superior Court (2008) 158 Cal.App.4^th 1242, 1250.)  “Even highly relevant, nonprivileged information may be shielded from discovery if its disclosure would impair a person’s ‘inalienable right of privacy’ provided by” Article 1, section 1 of the California Constitution.  (See Britt v. Superior Court (San Diego Unified Port Dist.) (1978) 20 Cal.3d 844, 855-856.)  The right to privacy set forth in the California Constitution (at Art. I, § 1) extends to one’s financial records.  (Valley Bank of Nevada v. Superior Court of San Joaquin County (1975) 15 Cal.3d 652, 656; see also Harris v. Superior Court (1992) 3 Cal.App.4^th 661, 664 (“Personal financial information comes within the zone of privacy protected by article 1, section 1 of the California Constitution.”).)

The California Supreme Court in Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 35, “established a framework for evaluating potential invasions of privacy. The party asserting a privacy right must establish a legally protected privacy interest, an objectively reasonable expectation of privacy in the given circumstances, and a threatened intrusion that is serious.  The party seeking information may raise in response whatever legitimate and important countervailing interests disclosure serves, while the party seeking protection may identify feasible alternatives that serve the same interests or protective measures that would diminish the loss of privacy.  A court must then balance these competing considerations.” (Williams v. Superior Court¿(2017) 3 Cal.5th 531, 552.)  If any of the threshold Hill requirements are absent, the court need not move on to a balancing of interests. (Id. at p. 555.) 

“The burden is on the party seeking the constitutionally protected information to establish direct relevance.” (Davis v. Superior Court (1992) 7 Cal.App.4th 1008, 1017.) “Mere speculation as to the possibility that some portion of the records might be relevant to some substantive issue does not suffice.” (Id.) 

ANALYSIS

            Defendant has established a legally protected privacy interest in his bank records, an objectively reasonable expectation of privacy, and a threatened intrusion that is serious.  There is a recognized right of privacy to a party’s confidential financial affairs, including bank records, and there can be no serious dispute that the subpoena here threatens a serious intrusion on that right of privacy.  (See, e.g., Rosenberg v. Lorenz, 2022 Cal. Super. LEXIS 17729 at *10 (defendant had privacy interest and objectively reasonable expectation of privacy in his bank records); AC v. Holmstrom, 2022 Cal. Super. LEXIS 40933 at *9-*10 (subpoena of bank records intruded on defendant’s right to privacy).   

            Once Defendant has established a privacy interest, Plaintiff must raise any countervailing interests that disclosure would serve.  Plaintiff has failed to do so.  Plaintiff claims he is seeking bank records that would show Defendant was actively taking out loans against the policies, which Plaintiff believes took place during the period from March 2016 to March 2017.  But the subpoena essentially seeks all of Defendant’s bank records at JP Morgan Chase from March 2016 to March 2017.  The subpoena is not tied to loans or death benefits made by the insurer which Defendant may have deposited at his bank.  Plaintiff has not established how all bank records, including signature cards, bank statements, canceled checks and deposit tickets, from any and every bank account Defendant has at JP Morgan Chase could conceivably relate to Plaintiff’s claim that he was not paid what he was owed.  Such an overbroad subpoena cannot overcome Defendant’s privacy interest in his bank records.  (Rosenberg, 2022 Cal. Super. LEXIS 17729 at *10-*12 (quashing subpoena of bank records where bank records were not relevant, subpoena was overbroad, and defendant had privacy interest in the bank records); AC v. Holmstrom, 2022 Cal. Super. LEXIS 40933 at *9-*10 (quashing subpoena on bank records where plaintiff “failed to establish how the information contained in the bank records … would be sufficiently relevant to proving its causes of action against [d]efendants so as to warrant the intrusion on [d]efendants’ privacy rights”).  The Court, however, believes some of the bank records would be relevant and, therefore, Plaintiff may re-issue a narrowed subpoena that seeks only Defendant’s records at JP Morgan Chase relating to loans and payments by the insurer (Phoenix Life Insurance).

            Defendant seeks monetary sanctions in the amount of $1,545.  The Court may award reasonable expenses incurred in making the motion if it was opposed in bad faith or without substantial justification, or that one or more of the requirements of the subpoena was oppressive.  Code Civ. Proc. § 1987.2.  An award for sanctions based on bad faith generally requires a subjective element of bad faith.  Evilsizor v. Sweeney, 230 Cal.App.4^th 1304, 1312 (2014).  Further, substantial justification means the request is “clearly reasonable because it is well grounded in both law and fact.”  (Id.)  The Court may also impose monetary sanctions for the misuse of the discovery process.  Code Civ. Proc. § 2023.030.  Misuse of the discovery process includes employing discovery in a manner that causes unwarranted annoyance, embarrassment or oppression or undue burden and expense and failing to confer in a reasonable attempt to resolve informally any discovery dispute.  Code Civ. Proc. § 2023.010.  There has been no showing of subjective bad faith or that Plaintiff failed to confer in a reasonable attempt to resolve the discovery dispute.  Further, while the Court is granting Defendant’s motion in part, it finds that at least some of the bank records are relevant and the subpoena as to those records is proper.  Accordingly, the Court does not find an award of fees is appropriate under these facts.

            Plaintiff also seeks sanctions in the amount of $2,762.50.  Plaintiff claims Defendant brought his motion without substantial justification and in bad faith.  Plaintiff claims Defendant is attempting to obstruct Plaintiff’s ability to obtain discoverable documents and information which he claims are necessary to prepare for trial in this matter.  For reasons set forth above, the Court does not find the bulk of records sought by the subpoena is relevant, and the scope of the subpoena is not, as Plaintiff claims, narrowly tailored.  Accordingly, the Court denies Plaintiff’s request for sanctions.    

CONCLUSION

Based on the foregoing, the Court GRANTS IN PART AND DENIES IN PART Defendant’s motion to quash the subpoena and DENIES Defendants’ motion for attorneys’ fees and costs in the amount of $1,545.  The Court also DENIES Plaintiff’s request for sanctions in the amount of $2,762.50.

DATED: January 31, 2023                                                   ___________________________

Edward B. Moreton, Jr.

Judge of the Superior Court