Judge: Elaine Lu, Case: 18STCV06544, Date: 2022-12-07 Tentative Ruling

Case Number: 18STCV06544    Hearing Date: December 7, 2022    Dept: 26

Superior Court of California

County of Los Angeles

Department 26

Background

            On November 29, 2018, Plaintiffs Miranda Chen aka Jien Chen (“Chen”) and Rolling Roles, LLC (jointly “Plaintiffs”) filed the instant fraud action against Defendants Christine Gilmore, Red Velvet Entertainment, Inc., Blood Pageant, LLC, and Anthony J. Sands.  On September 16, 2022, Plaintiff filed the operative second amended complaint (“SAC”) against Christina Gilmore aka Chris Gilmore aka Christina Ferra Gilmore dba Red Velvet Entertainment, Red Velvet Entertainment, Inc., a California Corporation, Red Velvet Entertainment, Inc. a Wyoming Corporation, Blood Pageant, LLC, Robert Burton (“Burton”), Anthony Sands, and Mark Askey.  The SAC asserts three causes of action for (1) fraud and deceit, (2) negligent misrepresentation, and (3) constructive trust. 

            On September 15, 2022, the Court granted Defendants’ unopposed motion for mistrial.  (Minute Order 9/15/22.)  On September 16, 2022, the Court dismissed the jury and noted that:

Defendants have marked 10 new exhibits (including attachments) relating to Miranda Chen's mortgage loan and Miranda Chen's request for Robert Burton to generate an employment verification in connection with a mortgage loan, which was the subject of Miranda Chen's testimony yesterday. The parties dispute the authenticity of Defendants' 10 new exhibits. Within 3 court days, Defendants are to file an appendix marking the 10 new exhibits.

(Minute Order 9/16/22.)

            On September 20, 2022, Defendant Burton filed the declaration of Jesse Gessin containing the ten exhibits.  On October 4, 2022, Defendant Burton filed a substitution of attorney substituting out Jesse Gessin and Gessin LTD to be self-represented.  On October 6, 2022, Plaintiffs filed the instant motion to seal portions of the declaration of Jesse Gessin filed on behalf of Defendant Burton on September 20, 2022 and for sanctions.  On October 17, 2022, Defendant Burton filed a substitution of attorney noting Burton’s representation by Attorney Michael Long.

            On November 18, 2022, Defendant Burton’s former Counsel, Jesse Gessin and Gessin LTD (jointly “The Gessin Firm”) filed an opposition.  On November 22, 2022, Defendant Burton filed an opposition.  On November 30, 2022, Plaintiffs filed a reply to each of the two oppositions.

Lack of Service on Defendant Burton

            As a preliminary matter, the Gessin Firm contends that the Court should deny the instant motion because Plaintiffs did not serve Defendant Burton with the instant motion.  The Gessin Firm is correct that the proof of service fails to indicate proper service of the instant motion on Defendant Burton.  However, Defendant Burton filed an opposition on the merits on November 22, 2022, and thus, Defendant Burton has waived the defect in notice.  (See Reedy v. Bussell (2007) 148 Cal.App.4th 1272, 1288 [“ ‘the appearance of a party at the hearing of a motion and his or her opposition to the motion on its merits is a waiver of any defects or irregularities in the notice of the motion. [Citations.] This rule applies even when no notice was given at all.’ [Citations.]”].)

Request for Judicial Notice

            Plaintiffs request judicial notice of the following:

1.     The Declaration of Jesse Gessin and exhibits filed by Defendant Burton on September 20, 2022

            Defendant Burton requests judicial notice of the following:

1.     Court’s September 16, 2022 order

2.     Declaration of Jesse Gessin, filed September 20, 2022

3.     Substitution of Attorney filed October 4, 2022

            As the Court may take judicial notice of court records and actions of the State, (See Evid. Code, § 452(c),(d)), the parties’ unopposed request for judicial notice are granted.  However, the Court does not take judicial notice of the truth of hearsay assertions within the judicially noticed records. (See Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.) 

Legal Standard

            “The public has a First Amendment right of access to civil litigation documents filed in court and used at trial or submitted as a basis for adjudication. [Citation.] Substantive courtroom proceedings in ordinary civil cases, and the transcripts and records pertaining to these proceedings, are ‘ “presumptively open.” ’ [Citation.]” (Savaglio, supra, 149 Cal.App.4th at pp.596–597.)  As the Supreme Court has explained, “the public has an interest, in all civil cases, in observing and assessing the performance of its public judicial system, and that interest strongly supports a general right of access in ordinary civil cases.” (NBC Subsidiary, Inc. v. Superior Court (1999) 20 Cal.4th 1178,1210.)  “Openness is a presumption; it is not an absolute. The ‘presumption of openness can be overcome upon a proper showing’ compatible with the constitutional standards. [Citation.]”  (McNair v. National Collegiate Athletic Assn. (2015) 234 Cal.App.4th 25, 31.) 

California law authorizes the sealing of court records containing confidential information.  (NBC Subsidiary, Inc., supra, 20 Cal.4th at p.1222, Fn.46.)  California Rules of Court, Rule 2.551(a) provides that a record may not be filed under seal without a court order, and the court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.  (Cal. Rules of Court, Rule 2.551(a).)  The party requesting a record be filed under seal must file a motion or an application for an order sealing the record that is accompanied by a memorandum or declaration containing facts to justify the sealing.  (Cal. Rules of Court, Rule 2.551(b)(1).)  “The court may order that a record be filed under seal” if it finds that there is an overriding interest in favor of maintaining the confidentiality of the information.  (Cal. Rules of Court, Rule 2.550(d).)

The court may order a record sealed if it finds that (1) an overriding interest exists that overcomes the right of public access to the record; (2) the overriding interest supports sealing the record; (3) a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) the request is narrowly tailored; and (5) no less restrictive means exist to achieve the overriding interest. (Cal. Rules of Court, Rule 2.550(d); See also Savaglio, supra, 149 Cal.App.4th at p.597 [ “Therefore, before a trial court orders a record sealed, it must hold a hearing and make findings that (1) there is an overriding interest supporting sealing of the records; (2) there is a substantial probability that absent sealing, such interest will be prejudiced; (3) the sealing order is narrowly tailored to serve the overriding interest; and (4) a less restrictive means of meeting that interest is not available.”].)

“As the party seeking an order sealing [] court records, [the moving party] has the burden to ‘justify the sealing.’”  (McNair, supra, 234 Cal.App.4th at p.32.)

Discussion

            Plaintiffs seek to seal the declaration of Jesse Gessin that Defendant Burton filed on September 20, 2022.  Plaintiffs also seek monetary sanctions against Defendant Burton and Burton’s former counsel the Gessin Firm. 

Overriding Interest

Plaintiffs request sealing of the September 20, 2022 Jesse Gessin declaration and accompanying exhibits on the basis that they contain Plaintiff Chen’s full unredacted social security number.

The right of privacy in the California Constitution (art. I, § 1), “protects the individual's reasonable expectation of privacy against a serious invasion.”  (Puerto v. Superior Court (2008) 158 Cal.App.4th 1242, 1250 [italics in original]; See Williams v. Superior Court (2017) 3 Cal.5th 531, 552 [“In Hill, we 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.”].)

            As the Supreme Court has “previously observed, the right of privacy extends to sexual relations (Vinson v. Superior Court, supra, 43 Cal.3d at p. 841, 239) and medical records (Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 41.).”  (John B. v. Superior Court (2006) 38 Cal.4th 1177, 1198.)  Similarly, the constitutional right to freedom of association requires protection of a person’s membership in associations, whether they pertain to religious, political, economic, or even purely social matters.  (Britt v. Superior Court (1978) 20 Cal.3d 844, 852; see also Pacific-Union Club v. Superior Court (1991) 232 Cal.App.3d 60, 71.)  Moreover, in California there is a clear longstanding right to privacy of financial documents.  (See Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652, 655; see also Burrows v. Superior Court (1974) 13 Cal.3d 238, 243, [“A bank customer's reasonable expectation is that, absent compulsion by legal process, the matters he reveals to the bank will be utilized by the bank only for internal banking purposes.”]; see e.g. Gov. Code, § 7460, [California Right to Financial Privacy Act].) 

            There is undoubtedly a strong right of privacy in an individual’s full social security number.  The California Rules of Court specify and require that parties and their attorney’s must redact Social Security Numbers.  (Cal. Rules of Court, Rule 1.201(a)(1), [“To protect personal privacy and other legitimate interests, parties and their attorneys must not include, or must redact where inclusion is necessary, the following identifiers from all pleadings and other papers filed in the court's public file, whether filed in paper or electronic form, unless otherwise provided by law or ordered by the court: [¶] (1) Social security numbers [¶] If an individual's social security number is required in a pleading or other paper filed in the public file, only the last four digits of that number may be used.”].)  Thus, the inclusion of Plaintiff Chen’s full unredacted Social Security Number is clearly improper and in violation of mandatory filing rules.  Further, Plaintiff Chen’s privacy interest in highly confidential and identifying information such as her social security number clearly overrides the public’s interest in unredacted versions of the documents.  Given the sensitive nature of Plaintiff’s social security number, publicly filing such information clearly prejudices Plaintiff Chen’s privacy.  Accordingly, there is a clear overriding interest in sealing the files.

Narrow Tailoring

            Despite the clear overriding interest, Plaintiff has failed to provide a narrowly tailored order or proposed public filings as required.  (Cal. Rules of Court, Rule 2.551(b)(5), [“If necessary to prevent disclosure, any motion or application, any opposition, and any supporting documents must be filed in a public redacted version and lodged in a complete, unredacted version conditionally under seal.”], [bold added].)  A sealing order must be as narrowly tailored as to serve the overriding interest.  (Savaglio, supra, 149 Cal.App.4th at p.597.)  

            Here, the sole overriding interest identified is Plaintiff Chen’s social security number.  The social security numbers make up only a small portion of the exhibits attached to the declaration of Jesse Gessin filed on September 20, 2022.  A complete redaction of the declaration would not be narrowly tailored.  The California Rules of Court clearly specify the material that must be redacted to protect a party’s privacy interest – i.e., the first five digits of any social security number.  (See Cal. Rules of Court, Rule 1.201(a)(1).)  Therefore, the Court finds that the only redactions that are proper are of the first five digits of Plaintiff Chen’s social security number and leaving only the last four digits in the various exhibits attached to the declaration of Jesse Gessin.  Redaction of only the first five digits of Plaintiff Chen’s social security number would be narrowly tailored.  The Court further finds that no less restrictive means exist to address the overriding interest in protecting Plaintiff Chen’s privacy interest in her Social Security Number.

Sanctions under Code of Civil Procedure § 128.5

            Plaintiffs seek sanctions against Defendant Burton and the Gessin Firm for filing the declaration of Jesse Gessin with Plaintiff Chen’s unredacted Social Security Number.

            “A trial court may order a party, the party's attorney, or both, to pay the reasonable expenses, including attorney's fees, incurred by another party as a result of actions or tactics, made in bad faith, that are frivolous or solely intended to cause unnecessary delay.”  (CCP §128.5(a).)  “[Code of Civil Procedure] section 128.5 empowers a trial court to manage the proceedings conducted before it and to grant sanctions in the appropriate situations where proceedings are instituted in bad faith, are frivolous or brought for purposes of delay.”  (Ellis v. Roshei Corp. (1983) 143 Cal.App.3d 642, 648.) 

            “[A] party seeking sanctions under section[] 128.5 … must follow a two-step procedure.”  (Transcon Financial, Inc. v. Reid & Hellyer, APC (2022) 81 Cal.App.5th 547, 550.)  “‘[T]he moving party must serve on the offending party a motion for sanctions. Service of the motion on the offending party begins a [21]-day safe harbor period during which the sanctions motion may not be filed with the court. During the safe harbor period, the offending party may withdraw the improper pleading and thereby avoid sanctions. If the pleading is withdrawn, the motion for sanctions may not be filed with the court. If the pleading is not withdrawn during the safe harbor period, the motion for sanctions may then be filed.’ [Citation.]”  (Martorana v. Marlin & Saltzman (2009) 175 Cal.App.4th 685, 698.)  “The ‘21 days is not a notice period.... It defines when the target of a sanctions motion can act without penalty and withdraw’ an objectionable document.”  (Transcon Financial, Inc., supra, 81 Cal.App.5th at pp.550–551.)  “[T]he ‘sanctions motion cannot be filed until the 22nd day after service of the motion, i.e., after the 21-day safe harbor period expires.’ [Citation.]”  (Id. at p.551.)  “Failure to comply with the safe harbor provisions ‘precludes an award of sanctions.’ [Citation.]”  (Ibid.) 

Here, Plaintiffs have failed to comply with the 21-day safe harbor provision.  The instant motion was served on October 5, 2022 on the Gessin Firm.  There was no service on Defendant Burton.  Because Plaintiffs failed to comply with the safe harbor provision, the Court cannot impose an award of sanctions.

            In addition, Plaintiffs fail to identify how the September 20, 2022 declaration of Jesse Gessin was filed in bad faith, frivolous or brought for purposes of delay.  The Court ordered Defendant Burton to file an appendix marking the exhibits included in the Jesse Gessin declaration.  (Minute Order 9/16/22.)  Defendant Burton’s failure to comply with the Rules of Court in redacting the first five digits of Plaintiff Chen’s social security number appears to be inadvertent and may demonstrate carelessness.  However, Plaintiffs have made no showing of bad faith.  In fact, Plaintiffs themselves have refiled Chen’s unredacted Social Security Number.  (See Request for Judicial Notice Filed 10/6/22.)  Accordingly, sanctions are unwarranted.

            Defendant Burton and the Gessin Firm’s requests for sanctions in opposition are similarly unwarranted.  As noted above, Defendant Burton and the Gessin Firm violated mandatory filing rules, necessitating the instant motion to seal.  (Cal. Rules of Court Rule 1.201(a)(1).)  Moreover, no evidence is presented that Plaintiffs brought the instant motion for an improper purpose.

            Therefore, the parties’ requests for sanctions are denied.

OSCs re Sanction for Failure to Serve the Second Amended Complaint and the Second Amended Cross-Complaint

Plaintiffs' Counsel has failed to file proof of service of the Amended Summons and operative Second Amended Complaint as to all named defendants, including Red Velvet, Inc., a California corporation, Red Velvet, Inc., a Wyoming corporation, Blood Pageant LLC, and Robert Burton.

12/12/22 at 8:30 am - OSC re sanctions for failure to file proof of service.  Plaintiffs' Counsel is ordered to appear on 12/12/22 at 8:30 am and explain why sanctions (including monetary sanctions of at least $500 and/or dismissal) should not be imposed for failure to serve all named defendants, in compliance with California Rules of Court, Rule 3.720.  IN ORDER TO IMPLEMENT PHYSICAL DISTANCING AND UNTIL FURTHER NOTICE, THE COURT STRONGLY ENCOURAGES ALL COUNSEL AND ALL PARTIES TO APPEAR REMOTELY FOR NON-TRIAL AND NON-EVIDENTIARY MATTERS, INCLUDING THE 12/12/22 OSC HEARING.  

If proof of service has not been filed at that time, then no later than two days before the OSC hearing, Plaintiff’s Counsel is also to file a declaration explaining the failure to file proofs of service of the summons and complaint as to all unserved defendants and explaining any and all efforts undertaken to attempt service of the summons and complaint on all named defendants. 

Failure of Plaintiff to appear at the next hearing will be deemed by the court to be Plaintiff’s consent to dismiss the entire case.

Cross-Complainants Red Velvet Entertainment Inc., Blood Pageant, and Christine Ferra Gilmore's Counsel have failed to file proof of service of the Summons and Cross-Complaint as to all named Cross-Defendants, including Otis Cooper.

12/12/22 at 8:30 am - OSC re sanctions for failure to file proof of service.  Cross-Complainant’s Counsel is ordered to appear on 12/12/22 at 8:30 am and explain why sanctions (including monetary sanctions of at least $500 and/or dismissal) should not be imposed for failure to serve all named Cross-Defendants, in compliance with California Rules of Court, Rule 3.720.

If proof of service has not been filed at that time, then no later than five days before the OSC hearing, Cross-Complainant’s Counsel is also to file a declaration explaining the failure to file proofs of service of the summons and Cross-Complaint as to all unserved Cross-Defendants and explaining any and all efforts undertaken to attempt service of the summons and complaint on all named Cross-Defendants. 

Failure of Cross-Complainant to appear at the next hearing will be deemed by the court to be Cross-Complainant’s consent to dismiss the Cross-Complaint.

The Parties’ Request for a Continuance of the Trial                                                                                                                     

The stipulation for continuance of the jury trial submitted on November 18, 2022 is denied.  The stipulation fails to articulate good cause to justify a continuance of the FSC or trial dates.

The Court has already previously granted multiple continuances of the trial date.  

In the stipulation, the parties state that discovery is not complete, and the parties propose extending discovery cut-off.  However, the instant case has been pending more than four years, and the parties fail to explain in the stipulation why four years has not provided them with sufficient time to complete discovery. The parties have also failed to articulate precisely what discovery the parties must still pursue before announcing ready for trial (including naming witnesses to be deposed and written discovery to be propounded and responded to).  On September 16, 2022, the parties stipulated, and based thereon, the Court ordered that discovery be reopened as to a couple of discrete issues. (9/16/22 Minute Order.)  The parties have failed to explain why they have had insufficient time since September 16, 2022 to complete discovery.  In short, the parties have failed to demonstrate diligence in pursuing discovery. 

            Defendant Robert Burton’s decision to substitute counsel into the case recently does not constitute good cause to continue the trial.  The trial date of January 3, 2023 had already been set when Michael Long accepted the representation knowing that the trial had been set for January 3, 2023.  Having accepted the representation, Mr. Long must be prepared to try the case on the January 3, 2022 trial date.

            Nor does Daniel A. Friedlander’s alleged conflicts constitute good cause.  As the September 16, 2022 minute order reflects, all parties, including Daniel A. Friedlander, stipulated to the January 3, 2023 trial date.  Having done so, Mr. Friedlander should not have scheduled other trials that conflict with the instant one.  In any event, the Court is highly skeptical that any of the other conflicting trials involves a case as old as the instant one, and thus, the instant case must take priority.

The final status conference remains set for December 12, 2022 at 9:00 AM.

All parties are ordered to download from the court’s website (www.lacourt.org) the standing FSC and trial preparation order for this department (Department 26). All parties must comply with the requirements in Department 26's FSC/trial preparation order.

The trial remains set for January 3, 2023  at 9:30 AM.

Conclusion and ORDER

Based on the foregoing, the parties’ stipulation to continue the trial is denied.  The trial remains set for January 3, 2023  at 9:30 AM.

Plaintiffs' Counsel is ordered to appear on 12/12/22 at 8:30 am and explain why sanctions (including monetary sanctions of at least $500 and/or dismissal) should not be imposed for failure to serve all named defendants with the Second Amended Complaint, in compliance with California Rules of Court, Rule 3.720.  

Cross-Complainant’s Counsel is ordered to appear on 12/12/22 at 8:30 am and explain why sanctions (including monetary sanctions of at least $500 and/or dismissal) should not be imposed for failure to serve all named Cross-Defendants with the Second Amended Cross-Complaint, in compliance with California Rules of Court, Rule 3.720.

Plaintiffs Miranda Chen aka Jien Chen and Rolling Roles, LLC’s motion to seal is GRANTED.

            The Court orders that the following documents be sealed:

            Within 10 days, Defendant Robert Burton is to file a redacted “DECLARATION OF JESSE GESSIN” that redacts the first five digits of Plaintiff Miranda Chen’s Social Security Number in the attached exhibits.  Failure to comply may result in sanctions.

            Within 10 days, Plaintiffs are to file a redacted “REQUEST FOR JUDICIAL NOTICE PURSUANT TO EVIDENCE CODE §§ 451, 452 AND 453 IN SUPPORT OF PLAINTIFF’S MOTION TO SEAL RECORD AND FOR SANCTIONS AGAINST COUNSEL OF RECORD FOR DEFENDANT ROBERT BURTON” redacting the first five digits of Plaintiff Miranda Chen’s Social Security Number.  Failure to comply may result in sanctions.

Moving Parties are to provide notice and file proof of service of such.

DATED: December 7, 2022                                                   ___________________________

                                                                                    Elaine Lu

                                                                                    Judge of the Superior Court