Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

BACKGROUND 

 This action relates to a dispute over a non-compete provision.  Defendant Focus Financial Partners LLC (“Focus”) is an acquirer of, and investor in, financial wealth management firms and other financial services firms.  (Compl. ¶6.)  Focus—through its wholly owned subsidiary NKSFB, LLC (“NKSFB”)—acquired substantially all assets of Nigro Karlin Segal Feldstein & Bolno, LLC (“Nigro Karlin”), a business management firm.  (Id. ¶¶ 6, 16.)  At the same time, the principals of Nigro Karlin formed a management company—Plaintiff KSFB Management LLC (“KSFB”) – through which those principals would pursuant to a Management Agreement, manage and oversee the NKSFB business.  (Id. ¶ 17.) 

As part of the initial acquisition, KFSB and its principals agreed to a Transaction Management Agreement (“TMA”).  (Id. ¶ 18.)  The TMA contains a non-competition covenant which applied for two years following the termination of (a) the TMA or (b) a principal’s employment or affiliation with KSFB.  (Id.)  The parties also signed a separate Non-Competition and Non-Solicitation Agreement, which contained a five year non-compete expiring on April 1, 2023, which KSFB concedes is valid and enforceable.  (Id. ¶ 19.) 

On July 1, 2022, the parties entered into an Amended and Restated Management Agreement (“ARMA”) which is an amended and restated version of the TMA.  (Id. ¶ 20.) The ARMA contains a materially similar non-competition covenant to the one to which the parties agreed in the TMA.  The ARMA’s non-compete also applied for two years following the termination of (a) the ARMA or (b) a principal’s employment or affiliation with KSFB.  (Id. ¶¶ 21, 25.)  

On June 7, 2023, KSFB sued Focus, seeking a declaratory judgment that the ARMA’s non-compete is not enforceable under California law.  The operative complaint alleges two claims for (1) declaratory relief and (2) injunctive relief.   

On June 14, 2023, Focus served its First Set of Requests for Production of Documents (“1st RFPs”) which included the following Requests:  

Request No. 1: All Documents and Communications relating to any covenant of non-competition or non-solicitation in any contract or agreement to which You, NKSFB, or Focus are a party.  

Request No. 2: All Documents or Communications relating to Focus’s alleged assertion “that it will seek to enforce Sections 2.12(a) and (b)” of the ARMA if the KSFB Principals “terminate their relationship with” Focus, NKSFB, or KSFB, as referenced in Paragraph 29 of KSFB’s Complaint.  

Request No. 3: All Documents and Communications relating to any action taken by any of the KSFB Principals, or any Person acting on their behalf, to terminate any relationship with Focus, NKSFB, or KSFB, as referenced in Paragraph 29 of KSFB’s Complaint.  

(Glass Decl. ¶ 2; id., Ex. 1, at 4–5.)   

KSFB responded to the 1st RFPs on August 11, 2023, and agreed to produce documents responsive to each of the three Requests.  (See id. ¶ 2; id., Ex. 1, at 4–5.)  As of July 25, 2024, however, KSFB has produced only two documents, responsive to Request No. 1, and no documents responsive to Request Nos. 2 and 3.  (Id. ¶ 3.)   

On February 23, 2024, Focus served its Second Set of RFPs (“2nd RFPs”).  (Id. ¶ 11.)  On March 26, 2024, KSFB responded to the 2nd RFPs with objections to every single request and blanket refusals to search for or produce any documents.  (See id.; id., Ex. 5, at 5–11.)  Focus met and conferred with KSFB regarding its responses to the 2nd RFPs on April 11, 2024.  (Id. ¶ 12.)  During the meet and confer, Focus agreed to consider narrowing several of the 2nd RFPs. (Id.) On May 22, 2024, Focus agreed temporarily to withdraw Request Nos. 10 and 11, and conditionally offered to withdraw Request No. 8.  (Id. ¶ 13.)  Focus also offered to narrow or amend Request Nos. 4, 6, and 7 in response to KSFB’s stated concerns.  (Id.) Focus did not elect to make changes to Request Nos. 5, 9, and 12.  (Id.)  

The 2nd RFPs now include the following Requests:  

Request No. 4: All Documents and Communications relating to the negotiation of the non-compete in the Original Management Agreement.  

Request No. 5: All Documents and Communications relating to the negotiation of the ARMA, including but not limited to the non-compete (Section 2.12), non-solicit (Section 2.13), full-time-duties (Section 2.5), and confidentiality provisions (Section 2.10).  

Request No. 6: All Documents and Communications relating to the negotiation and execution of the purchase of RBS.  

Request No. 7: Documents sufficient to show where each KSFB Principal resides and from where each KSFB principal primarily works.  

Request No. 9: All Documents and Communications between KSFB or any KSFB Principal and any other Person—including but not limited to clients, other Focus partner firms, or potential acquirers of NKSFB or KSFB—relating to the ARMA’s non-compete (Section 2.12), terminating any relationship with Focus, NKSFB, or KSFB, or leaving Focus to start a new firm of any kind.  

Request No. 12: Documents sufficient to show Your document retention policies, including but not limited to, policies implemented to retain documents relating to this Litigation.  

(Id. ¶ 13; id., Ex. 5, at 4–10.)  

This hearing is on Focus’ motion to compel responses to its 1st and 2nd RFPs.  Focus argues that as to the 1st RFPs, KSFB failed, and must be compelled, to conduct a reasonable search for responsive documents.  As to the 2nd RFPs, Focus argues they seek relevant discovery, and KSFB’s objections are boilerplate and meritless.   

LEGAL STANDARD 

A¿motion to compel further responses¿to a¿document request¿is proper where the moving party believes the statement of compliance is incomplete, or a representation of inability to comply is inadequate, evasive and/or an objection is without merit or too general. (Code Civ. Proc., § 2031.310 (a).)  The motion must show good cause to justify the discovery and must be supported by a meet and confer declaration. (Id. at subd. (b).) 

The scope of discovery is liberally construed in favor of disclosure “as a matter of right unless statutory or public policy considerations clearly prohibit it.”  (Greyhound Corp. v. Superior Court of Merced County (1961) 56 Cal. 2d 355, 377-378.)  The broad scope of permissible discovery includes “any matter, not privileged, that is relevant to the subject matter involved in the pending action or to the determination of any motion made in that action, if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence”.  (Code Civ. Proc., § 2017.010.) 

MEET AND CONFER 

Focus submits the Declaration of Scott Glass in support of its meet and confer requirements.  The declaration attests the parties met and conferred on the 1st RFPs and 2nd RFPs and attended an informal discovery conference (“IDC”).  (Glass Decl. ¶¶ 3, 12-16.)  The Court concludes Focus has met its obligations to meet and confer.     

DISCUSSION 

1st RFPs 

In response to each request in the 1st RFPs, KSFB agreed to “undertake a diligent search for responsive documents” and to “produce responsive nonprivileged documents.”  (Ex. 1 at 4-5.)  KSFB has only produced two documents in response to the 1st RFPs, and Focus maintains there are other responsive documents known to Focus that have not been produced.  (Focus Mot. at 6-8.)  Focus also notes KSFB has not produced a single internal document.  (Id. at 8.)  Accordingly, Focus asks the Court to compel KSFB to conduct a reasonable search for other responsive documents. 

In opposition, KSFB argues that it did not agree to produce all responsive documents.  But instead, its response was to produce documents subject to objections.  (KSFB Opp. at 6.)  It never explains how any of the objections it raised justified the failure to produce documents specifically identified by Focus as responsive and not produced.  It also never explains how it could be that it does not have a single internal non-privileged document responsive to the 1st RFPs.               

Given the foregoing, the Court orders KSFB to file a declaration explaining how it searched for responsive documents, including the custodians, the search terms, the time period and the categories of documents it searched.  The Court will defer ruling on the motion to compel the 1st RFPs after reviewing KSFB’s declaration.     

2nd RFPs 

Focus argues that the 2nd RFPs seek relevant documents, and accordingly, it has established good cause for compelling their production.  (Focus Mot. at 10-14.)  KSFB does not dispute that the requests seek relevant documents.  Instead, KSFB contends that Focus’ motion is procedurally defective because it cannot move to compel production when KSFB has not stated it would produce the documents.  Instead, Focus should have filed a motion to compel further responses to challenge KSFB’s objections.  (KSFB Opp. at 8.)  In addition, KSFB argues Focus has not filed a separate statement in compliance with California Rules of Court rule 3.1345(c). 

A¿motion to¿“compel¿or to quash the production of documents or tangible things at a deposition” requires a separate statement.¿ (Cal. Rules of Court rule 3.1345(a)(5).)  Failure to comply with the CRC’s separate statement requirements is grounds alone to deny the motion. (Mills v. U.S. Bank¿(2008) 166 Cal.App.4th 871, 893.)  Notwithstanding, the Court will consider Focus’ motion on the merits since it filed a joint statement.   

As to KSFB’s other procedural challenge, it is without merit.  KSFB argues that Focus should have brought a motion to compel further responses pursuant to § 2031.310, rather than a motion to compel production pursuant to § 2031.320.  But Focus’ notice of motion states that it is moving for an order pursuant to both §§ 2031.310 and 2031.320.  Accordingly, KSFB’s argument, even if correct, is of no moment.        

The Court now turns to the merits of the motion.  A motion to compel production of documents must be accompanied by a showing of ‘good cause — i.e., declarations containing¿specific facts¿justifying inspection of the documents described in the document requests. (Weil & Brown, Rutter Group,¿Civil Procedure Before Trial, Chapter 8E-15, Section 8:801.2, citing¿Code Civ. Proc. §2025.450(b)(1).)   

A showing of good cause must be supported by admissible evidence, such as declarations.¿(Calcor Space Facility, Inc. v. Superior Court¿(1997) 53 Cal.App.4th 216, 223-224.)  Declarations in support of the good cause requirement must contain “specific facts rather than mere conclusions”.¿(Rutter Group,¿Civil Procedure Before Trial, Chapter 8H-8, Section 8:1495.7, citing¿Fireman's Fund Ins. Co. v. Superior Court¿(1991) 233 Cal.App.3d 1138, 1141.)  Once a showing of good cause is met, it is then the responding party’s burden to justify the objections asserted.  (Kirkland v. Superior Court¿(2002) 95 Cal.App.4th 92, 98.) 

Here, Focus’ declaration does not address the relevance of any of its requests in the 2nd RFPs.  Accordingly, the Court concludes it has not met its burden to show good cause.    

Request for Sanctions  

KSFB requests sanctions because it claims Focus misused the discovery process by (1) using a discovery method in a manner that does not comply with its specified procedures and (2) making a motion to compel without substantial justification.  The Court declines to award sanctions as it concludes Focus’ motion was not frivolous.   

CONCLUSION 

Based on the foregoing, the Court GRANTS IN PART and DENIES IN PART Defendant Focus Financial Partners, LLC’s motion to compel. 

IT IS SO ORDERED. 

DATED: September 20, 2024 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court