Judge: Elaine W. Mandel, Case: 21SMCV01125, Date: 2023-01-06 Tentative Ruling

Case Number: 21SMCV01125    Hearing Date: January 6, 2023    Dept: P

Tentative Ruling

SKU Jewelry v. International Vintage Watch, Case No. 21SMCV01125

Hearing Date January 6, 2023

Defendant International Vintage Watch’s Motion to Compel Deposition and Production of Documents

Plaintiff SKU Jewelry Company loaned $250,000 to defendant International Vintage Watch, which allegedly failed to repay the loan. International contends it never agreed to borrow money, and the $250,000 was paid back to East West Bank.

Defendant noticed the deposition of Danny Suleminian, plaintiff SKU Jewelry Company’s Person Most Knowledgeable, five times, but Suleminian has not appeared. International served a request for production of documents asking for SKU’s tax returns from 2019 through 2021 and other supporting documents, which SKU failed to produce. International moves to compel production of documents, Suleminian’s deposition and seeks monetary sanctions.

Deposition

When a party in receipt of a deposition notice fails to appear without having served a valid objection, the propounding party can move for an order compelling the deponent’s testimony. Cal. Code of Civ. Proc. §2025.450(a).

International states Suleminian is SKU’s person most knowledgeable, and his deposition is necessary. SKU does not dispute that Suleminian is the PMK or that he has not appeared. GRANTED; deposition to occur within 30 days at a mutually agreeable time and location.

Request for Production of Documents

Tax returns are generally privileged and will not be subject to discovery absent a compelling interest. Webb. v. Standard Oil Co. of Cal. (1957) 49 Cal.2d 512-513. A tax return is discoverable if the circumstances indicate an intentional waiver of the privilege, the gravamen of the lawsuit is inconsistent with the privilege, or a public policy greater than that of confidentiality of tax returns is involved. Schnabel v. Superior Court (1993) 5 Cal. 4th 704, 721.

International seeks SKU’s tax returns from 2019-2021; SKU argues the returns are privileged. An exception to the privilege applies. The gravamen SKU’s suit is inconsistent with the taxpayer privilege. SKU brought this action arguing it loaned money to International. International has the right to seek evidence to disprove the existence of the loan, and whether SKU included the loan and subsequent payments in its tax filings would be probative of the loan’s existence. The right to wide-ranging discovery of relevant information overcomes International’s right to privacy regarding its internal finances. The court will enter a protective order, however, preventing disclosure of the documents to any parties outside the lawsuit. GRANTED.

Sanctions

International provided no evidence that Suleminian’s failure to agree upon a date for a deposition so far was the result of bad faith, or that SKU’s objections to the request for tax returns were made in bad faith. DENIED.