Judge: Gary I. Micon, Case: 22CHCV00728, Date: 2024-05-08 Tentative Ruling

Case Number: 22CHCV00728    Hearing Date: May 8, 2024    Dept: F43

Dept. F43

Date: 5-8-24

Case #22CHCV00728, Albert Gonzales vs. Daniel Torres, et al.

Trial Date: 7-15-24

MOTION TO QUASH SUBPOENA FOR PRODUCTION OF BUSINESS RECORDS SERVED ON CAPITAL ONE

MOVING PARTY: Defendant Daniel Torres

RESPONDING PARTY: Plaintiffs Abel Gonzalez, Albert Gonzalez, Jr., and Albert Gonzalez

RELIEF REQUESTED

Defendant requests that the Court quash and/or limit the subpoena for production of business records from third-party Capital One

RULING: Motion is denied.

SUMMARY OF ACTION

Plaintiffs Abel Gonzalez, Albert Gonzalez, Jr., and Albert Gonzalez (Plaintiffs) were shareholders of Pueblo Restaurant, Inc., with Defendant Daniel Torres (Defendant). Plaintiffs have alleged that Defendant took control of the business and paid out funds to himself and failed to pay the other shareholders. Plaintiffs discovered that Defendant submitted, approved, and authorized credit card payments that were subsequently paid by Pueblo. Plaintiffs are seeking information on those credit card payments, which included 50 payments totaling $270,710.21 to American Express and 25 payments totaling $54,384 to Capital One.

The business records subpoenas issued to American Express and Capital One by Plaintiffs were to discover more information about these payments, including whether they were payments made for Pueblo or payments made for Defendant personally. The business records subpoena was served on Capital One and Defendant on September 28, 2023, with the records requested to be provided by October 20, 2023.

The requests at issue are the following:

Request No. 1:

Credit Card Number Unknown; Statements for all Capital One credit card accounts for Daniel Torres, Pueblo Restaurant, Inc., Casa Torres Wholesale, Palacio Torres, Casa Torres Banquets, and Casa Torres from January 1, 2018, to September 28, 2023.

Request No. 2:

Credit Card Number Unknown; Copies of all checks, money orders, electronic records and other documents showing the source and manner of each credit card payment for all credit card accounts of Daniel Torres, Pueblo Restaurant, Inc., Casa Torres Wholesale, Palacio Torres, Casa Torres Banquets, and Casa Torres from January 1, 2018, to September 28, 2023.

Defendant argues in his motion to quash filed on October 12, 2023, that the requests are overly broad and not limited in scope; there are privacy concerns involved in the production; and the documents are not relevant because some seek personal financial information of Defendant.

Plaintiffs argue in their opposition that Plaintiffs are entitled to learn where their money is. They also argue that the documents sought are already as limited as can be given the information available to Plaintiffs. Next, they argue that Defendant cannot have a privacy interest in the records if he had Pueblo pay the credit card bills. They also request sanctions against Defendant and his counsel of record in the amount of $2,000.00.

Defendant reiterates in his reply that the requests are overly broad and should be limited in scope. Defendant also argues that the information sought is not relevant to Plaintiffs’ claims. Defendant argues that sanctions are not appropriate.

ANALYSIS

CCP § 1987.1 provides that any witness may make a motion to quash a subpoena and request a protective order upon reasonable notice. (See Lee v. Swansboro County Property Owners Assn. (2007) 151 Cal.App.4th 575, 583.) The Court has broad authority to quash or modify a subpoena or issue a protective order. (Id.) In the context of non-party discovery subpoenas, the courts have determined that requests that are not likely to lead to relevant or admissible evidence, not specified with reasonable particularity, and require overly burdensome searches by non-parties are not reasonable. (CCP § 2020; see Calcor Space Facility, Inc. v. Superior Court (Thiem Industries, Inc.) (1997) 53 Cal.App.4th 216, 221.)

For Defendant’s relevance argument, it is clearly relevant to Plaintiffs’ claim for breach of fiduciary duty if he was making credit card payments for his personal credit cards from Pueblo’s accounts.

As for whether the requests were overly broad, the requests are only for a specific time period: 2018 to the present. While Plaintiffs’ do not have the credit card number related to the Capital One payments, they are only seeking information for Defendant and Pueblo and related entities. Seeking this information would not burden Defendant; only Capital One would be burdened.

Next are Defendant’s privacy arguments. “California accords privacy the constitutional status of an inalienable right, on par with defending life and possessing property. Courts must balance the rights of civil litigants to discover relevant facts against privacy interests of persons subject to discovery.” (California Constitution, Article I, §1; Vinson v. Superior Court (1987) 43 Cal.3d 833, 239.) “A showing of relevancy may be enough to cause the court to balance the compelling public need for discovery against the fundamental right of privacy.” (Mendez v. Superior Court (1988) 206 Cal.App.3d 557, 567.) However, the balance will favor for confidential information in third party personnel files unless the litigant can show a compelling need for the particular documents and that the information cannot reasonably be obtained through depositions or from nonconfidential sources….” (Life Technologies Corp v. Superior Court (2011) 197 Cal.App.4th 640, 652-653.)

Plaintiffs have demonstrated that the information sought is relevant to their breach of fiduciary duty cause of action. The information sought regarding the credit card payments from Pueblo’s account can only be obtained through Defendant or Capital One. Plaintiffs have a compelling need for this information because it could establish Defendant’s liability for the breach of fiduciary duty cause of action and demonstrate that Defendant was using Pueblo’s credit cards for his own personal use.

The Court denies Defendant’s motion to quash the business record subpoenas. Plaintiffs have demonstrated that the information sought is relevant and not overly broad, and Plaintiffs’ compelling need for the information outweighs Defendant’s privacy concerns.

CCP § 2025.410 allows for the imposition of sanctions when a party unsuccessfully makes or opposes a motion to quash without substantial justification. Plaintiffs have requested $2,000.00 in sanctions against Defendant and Defendant’s counsel of record for Defendant’s unsuccessful motion to quash. The Court finds that Defendant did not act with substantial justification in filing the motion to quash. However, because this motion is substantially similar to Defendant’s other motion to quash, the Court will only grant sanctions in the amount of $800.00.

Defendant’s motion to quash the subpoena of business of records from Capital One is denied. Defendant and Defendant’s counsel of record are ordered to pay sanctions in the amount of $800.00 to Plaintiff’s counsel within 30 days.

Moving party to give notice.

Dept. F43

Date: 5-8-24

Case #22CHCV00728, Albert Gonzales vs. Daniel Torres, et al.

Trial Date: 7-15-24

MOTION TO QUASH SUBPOENA FOR PRODUCTION OF BUSINESS RECORDS SERVED ON AMERICAN EXPRESS

MOVING PARTY: Defendant Daniel Torres

RESPONDING PARTY: Plaintiffs Abel Gonzalez, Albert Gonzalez, Jr., and Albert Gonzalez

RELIEF REQUESTED

Defendant requests that the Court quash and/or limit the subpoena for production of business records from third-party American Express

RULING: Motion is denied.

SUMMARY OF ACTION

Plaintiffs Abel Gonzalez, Albert Gonzalez, Jr., and Albert Gonzalez (Plaintiffs) were shareholders of Pueblo Restaurant, Inc., with Defendant Daniel Torres (Defendant). Plaintiffs have alleged that Defendant took control of the business and paid out funds to himself and failed to pay the other shareholders. Plaintiffs discovered that Defendant submitted, approved, and authorized credit card payments that were subsequently paid by Pueblo. Plaintiffs are seeking information on those credit card payments, which included 50 payments totaling $270,710.21 to American Express and 25 payments totaling $54,384 to Capital One.

The business records subpoenas issued to American Express and Capital One by Plaintiffs were to discover more information about these payments, including whether they were payments made for Pueblo or payments made for Defendant personally. The business records subpoena was served on American Express and Defendant on September 28, 2023, with the records requested to be provided by October 20, 2023.

The requests at issue are the following:

Request No. 1:

Credit Card Number ending in 8-74008; Statements for all American Express credit card accounts for Daniel Torres, Pueblo Restaurant, Inc., Casa Torres Wholesale, Palacio Torres, Casa Torres Banquets, and Casa Torres from January 1, 2018, to September 28, 2023.

Request No. 2:

Credit Card Number ending in 8-74008; Copies of all checks, money orders, electronic records and other documents showing the source and manner of each credit card payment for all credit card accounts of Daniel Torres, Pueblo Restaurant, Inc., Casa Torres Wholesale, Palacio Torres, Casa Torres Banquets, and Casa Torres from January 1, 2018, to September 28, 2023.

Defendant argues in his motion to quash filed on October 12, 2023, that the requests are overly broad and not limited in scope; there are privacy concerns involved in the production; and the documents are not relevant because some seek personal financial information of Defendant.

Plaintiffs argue in their opposition that Plaintiffs are entitled to learn where their money is. They also argue that the documents sought are already as limited as can be given the information available to Plaintiffs. Next, they argue that Defendant cannot have a privacy interest in the records if he had Pueblo pay the credit card bills. They also request sanctions against Defendant and his counsel of record in the amount of $800.00.

Defendant reiterates in his reply that the requests are overly broad and should be limited in scope. Defendant also argues that the information sought is not relevant to Plaintiffs’ claims. Defendant argues that sanctions are not appropriate.

ANALYSIS

CCP § 1987.1 provides that any witness may make a motion to quash a subpoena and request a protective order upon reasonable notice. (See Lee v. Swansboro County Property Owners Assn. (2007) 151 Cal.App.4th 575, 583.) The Court has broad authority to quash or modify a subpoena or issue a protective order. (Id.) In the context of non-party discovery subpoenas, the courts have determined that requests that are not likely to lead to relevant or admissible evidence, not specified with reasonable particularity, and require overly burdensome searches by non-parties are not reasonable. (CCP § 2020; see Calcor Space Facility, Inc. v. Superior Court (Thiem Industries, Inc.) (1997) 53 Cal.App.4th 216, 221.)

For Defendant’s relevance argument, it is clearly relevant to Plaintiffs’ claim for breach of fiduciary duty if he was making credit card payments for his personal credit cards from Pueblo’s accounts.

As for whether the requests were overly broad, the requests are only for a specific time period: 2018 to the present. They are also for a specific American Express card ending in 8-74008. Seeking this information would not burden Defendant; only American Express would be burdened.

Next are Defendant’s privacy arguments. “California accords privacy the constitutional status of an inalienable right, on par with defending life and possessing property. Courts must balance the rights of civil litigants to discover relevant facts against privacy interests of persons subject to discovery.” (California Constitution, Article I, §1; Vinson v. Superior Court (1987) 43 Cal.3d 833, 239.) “A showing of relevancy may be enough to cause the court to balance the compelling public need for discovery against the fundamental right of privacy.” (Mendez v. Superior Court (1988) 206 Cal.App.3d 557, 567.) However, the balance will favor for confidential information in third party personnel files unless the litigant can show a compelling need for the particular documents and that the information cannot reasonably be obtained through depositions or from nonconfidential sources….” (Life Technologies Corp v. Superior Court (2011) 197 Cal.App.4th 640, 652-653.)

Plaintiffs have demonstrated that the information sought is relevant to their breach of fiduciary duty cause of action. The information sought regarding the credit card payments from Pueblo’s account can only be obtained through Defendant or American Express. Plaintiffs have a compelling need for this information because it could establish Defendant’s liability for the breach of fiduciary duty cause of action and demonstrate that Defendant was using Pueblo’s credit cards for his own personal use.

The Court denies Defendant’s motion to quash the business record subpoenas. Plaintiffs have demonstrated that the information sought is relevant and not overly broad, and Plaintiffs’ compelling need for the information outweighs Defendant’s privacy concerns.

CCP § 2025.410 allows for the imposition of sanctions when a party unsuccessfully makes or opposes a motion to quash without substantial justification. Plaintiffs have requested $800.00 in sanctions against Defendant and Defendant’s counsel of record for Defendant’s unsuccessful motion to quash. The Court finds that Defendant did not act with substantial justification in filing the motion to quash and grants Plaintiffs’ request for sanctions in the amount of $800.00.

Defendant’s motion to quash the subpoena of business of records from American Express is denied. Defendant and Defendant’s counsel of record are ordered to pay sanctions in the amount of $800.00 to Plaintiff’s counsel within 30 days.

Moving party to give notice.