Judge Gregory Keosian, Case Number: 18STCV10002, Date: 2023-08-14 Tentative Ruling

Judge: Gregory Keosian, Case: 18STCV10002, Date: 2023-08-14 Tentative Ruling

Case Number: 18STCV10002 Hearing Date: August 22, 2023 Dept: 61

Plaintiffs’ Motion to Compel Defendants’ Attendance at Trial and Production of Documents Pursuant to Plaintiffs’ Notices to Attend Trial and Bring Documents is adjudicated as follows:

· The motion is GRANTED as to Requests No. 1–27, with the proviso that in Requests No. 1–5 and 18, the phrase “all documents concerning” is limited to “all documents describing.” Documents responsive to Requests No. 1–27 need only be produced upon the return of a verdict for plaintiff awarding actual damages and finding that a defendant is guilty of malice, oppression, or fraud, as stated in Civil Code § 3295, subd. (d);

· The motion is DENIED as to Requests No. 28–33.

· The motion is GRANTED as to Requests No. 34 and 35. Responsive computer devices and systems need only be made available at trial for the purpose of facilitating Plaintiffs’ questioning of Defendant Haim, with Plaintiffs’ access to the devices and systems limited to the Rent Manager system.

· The motion is GRANTED as to Requests No. 36 and 37, with responsive documents limited to those created on or after January 1, 2016.

Plaintiffs’ Motion to Compel Defendants’ Attendance at Trial and Production of Documents pursuant to Plaintiffs’ Second Notices to Attend Trial and Bring Documents is GRANTED.

I. MOTION TO COMPEL COMPLIANCE WITH SUBPOENA

“If a subpoena requires the attendance of a witness or the production of books, documents, electronically stored information, or other things before a court, or at the trial of an issue therein, or at the taking of a deposition, the court, upon motion reasonably made by any person described in subdivision (b), or upon the court's own motion after giving counsel notice and an opportunity to be heard, may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare, including protective orders. In addition, the court may make any other order as may be appropriate to protect the person from unreasonable or oppressive demands, including unreasonable violations of the right of privacy of the person.” (Code Civ. Proc. § 1987.1, subd. (a).) A party may bring a motion under this section. (Code Civ. Proc. § 1987.1, subd. (b)(1).)

Plaintiffs Alberto Gamero, Jose Carrillo, Javier Juarez, Pasual Velasquez, and SAJE (Plaintiff) move to compel the attendance at trial of Defendants Robin Haim, Fairfax Investments, LLC, and Laurel Investments LLC (Defendants), and their production of documents with respect to two notices to so attend and produce, served respectively on June 30 and July 21, 2023. Trial is currently set to begin on the date of hearing on these motions.

The first motion and first notice concern, in Plaintiffs’ characterization, four broad categories of documents: (1) documents related to Defendants’ financial condition; (2) documents related to Plaintiff’s claim for alter ego liability; (3) computer devices and systems Defendants use to access their Rent Manager system; and (4) documents related to the identities of Defendant Laurel’s officers and employees. (Motion at p. 6.)

Defendant objected to these requests on grounds of overbreadth and relevance, and further argued that they sought financial condition discovery “prior to a determination of Defendant’s liability for punitive damages.” (Separate Statement at p. 5.) In response to each request, Defendants stated that they would not be producing the requested documents or devices. (Separate Statement.)

Plaintiffs contend that the requests concerning Defendants’ financial condition are sought pursuant to Civil Code § 3295, subd. (c), which states:

[T]he plaintiff may subpoena documents or witnesses to be available at the trial for the purpose of establishing the profits or financial condition referred to in subdivision (a), and the defendant may be required to identify documents in the defendant's possession which are relevant and admissible for that purpose and the witnesses employed by or related to the defendant who would be most competent to testify to those facts.

(Motion at pp. 7–8.) Plaintiff contends that document requests seeking information concerning the diversion and commingling of Defendants’ assets are sought pursuant to Plaintiffs’ theories of alter ego liability. (Motion at pp. 8–9, citing Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486, 512 [identifying alter ego factors, including “commingling of funds”].) As to the request for the production of Defendants’ computer systems they use to access “the Rent Manager system,” Plaintiffs contend that during Defendant Haim’s deposition, he consistently declined to authenticate various documents, asserting that he would need to access the Rent Manager system to attest to their authenticity. (Motion at p. 9.) And as to Requests No. 36 and 37, seeking documents related to the identities of employees and officers of Defendant Laurel, Plaintiffs argue that these documents are relevant to assess Defendants’ defense, asserted in their prior motion for summary adjudication, that they are employees of the entity on whose behalf they collect debt. (Motion at pp. 9–10.)

Defendants in opposition contend that Plaintiffs have subpoenaed documents related to their financial condition to be produced on the first day of trial, when in fact Civil Code § 3295 only allows such documents to be subpoenaed “to be available at trial” for the purpose of establishing profits from wrongful conduct and a defendant’s financial condition. (Opposition at pp. 3–4.) Thus Defendants argue the subpoenas, in seeking that such documents be produced on the first day of trial, are unlawful. (Ibid.) Defendants further argue that the requested categories of documents — seeking “all documents concerning” Defendants’ assets, liabilities, income, diversion of assets and liabilities from one entity to another, and Laurel’s officers and employees — are overbroad. (Opposition at pp. 4–6.) And Defendants further object to the requests that their computers systems be produced, as the computers contain the private financial information of third parties and Defendant Haim’s communications with his counsel. (Opposition at pp. 5–6.)

There is some merit to Defendants’ arguments with respect to the overbreadth of the requests. Those requests that Plaintiffs identify as seeking information related to Defendants’ financial condition under Civil Code § 3295, Requests No. 1–27 seek all documents “concerning” — defined as “relating to, referring to, describing, evidencing, or constituting” — Defendants’ financial condition, assets, liabilities, credit, income, expenses, and a variety of associated documents, items, and reports, such as loan applications, income statements, and documents related to boats and aircraft owned by Defendants.

It is true that requests seeking all documents “relating to” Defendants’ financial condition, assets, liabilities, and income, expenses, and credit, are reasonably interpreted to seek all documents that Defendants’ possess concerning their business. In this respect, they are overbroad. However, the overbreadth of these requests — effectively Requests No. 1–5 and 18 —may be reduced by limiting the definition of “concerning” in the subpoena to documents “describing” the relevant phenomena. The definition of “concerning” is so limited with respect to Requests No. 1–5 and 18.

These same overbreadth objections do not apply to the remaining requests related to Defendants’ financial condition (Requests No. 6–17 and 19–27), which do not seek all documents related to broad phenomena, but rather target specific types of documents, applications, reports, and assets.

However, Defendants are correct that the subpoena, which seeks the production of these documents to Plaintiffs at the outset of trial, exceeds the obligations which may be imposed upon Defendants pursuant to Civil Code § 3295, subd. (c). Per that statute, the above discovery may be sought by subpoena only to “be available at the trial for the purpose of establishing the profits or financial condition” of Defendants for the purposes of establishing the amount of punitive damages. (Civ. Code § 3295, subd. (c).) The purpose of this section is to “afford[] the plaintiff some assurance that the defendant's financial information will be at the ready if and when it becomes necessary.” (Soto v. BorgWarner Morse TEC Inc. (2015) 239 Cal.App.4th 165, 193.) Plaintiff is thus not entitled to immediate production of the documents sought once trial begins. The subpoena rather requires that such discovery be “available” at the trial once it becomes relevant. Thus the subpoena may require production of the documents sought pursuant to Requests No. 1–27 only upon the return of a verdict for plaintiff awarding actual damages and finding that a defendant is guilty of malice, oppression, or fraud, as stated in Civil Code § 3295, subd. (d).

Plaintiffs’ requests No. 28–33, which seek all documents related to Defendants’ alleged comingling and diversion of assets to one another, are likewise overbroad and argumentative. Diversion and comingling of assets are a factor in assessing whether a unity of interest exists between parties for the purposes of establishing alter ego liability against them. (See Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486, 512 [identifying as alter ego factors “[c]ommingling of funds and other assets, failure to segregate funds of the separate entities, and the unauthorized diversion of corporate funds or assets to other than corporate uses”].) However, propounding requests for “all documents concerning any diversion” or “comingling” of funds, assets, or liabilities among the defendants is to frame the question both in an argumentative fashion — akin to asking a defendant to provide all documents supporting the propounding party’s contention — as well as to seek a broad category of information without reasonably particularity. The motion is therefore properly DENIED as to Requests No. 28–33.

Requests No. 34 and 35 sought “[a]ll computing systems” and “all computing devices that you use to access the Rent Manager system.” The basis for these requests is Plaintiffs’ contention that during Defendant Haim’s deposition, he “repeatedly testified that he could not answer questions or provide requested information because he would have to check his Rent Management system in order to do so.” (Motion at p. 9; Grynberg Decl. Exh. A.) Defendants in opposition do not contest this characterization of the deposition, but argue that the computing systems and devices contain private and privileged information, and that any documents that would be authenticated through the Rent Manager system may be authenticated by the stipulation of the parties. (Opposition at pp. 5–6.)

Defendants’ computer systems and devices need not be produced for Plaintiffs’ unlimited perusal. The asserted basis for their production is not Plaintiff’s lack of responsive documents from the Rent Manager system, but rather Haim’s repeated reference to the system during his deposition and his indications that he could not testify fully to various topics without the benefit of the system. Accordingly, the computer devices and systems need only be made available at trial for the purpose of facilitating Plaintiffs’ questioning of Defendant Haim, with Plaintiffs’ access to the devices and systems limited to the Rent Manager system.

This leaves Requests No. 36 and 37, seeking documents showing the identifies of any individuals or entities serving as employees or officers of Laurel. Plaintiffs contend these documents are necessary to address Defendants’ contention that they are employees of a debt-collecting entity (Laurel) and therefore immune from liability under the Fair Debt Collection Practices Act (FDCPA). (Motion at pp. 9–10.) Plaintiffs assert that these documents would include “statements of information filed by Laurel with the California Secretary of State disclosing the identities of members and corporate officers,” as well as “records showing the identities of employees, such as employment contracts, paystubs and income-tax documents reflecting wages paid.” (Motion at p. 10.) Defendants object that the requests are not limited in time or subject matter. (Opposition at p. 6.)

The documents sought are relevant to Defendants’ defenses under the FDCPA, but are properly limited in time. Plaintiffs’ document requests with respect to Defendant’s financial condition are largely limited to the period from 2016 through 2023, as are the document requests addressed below with respect to Plaintiffs’ other requests for documents. Accordingly, with respect to Requests No. 36 and 37, the documents are limited to those created on or after January 1, 2016.

In summary the motion is adjudicated as follows:

· The motion is DENIED as to Requests No. 28–33.

· The motion is GRANTED as to Requests No. 36 and 37, with responsive documents limited to those created on or after January 1, 2016.

As to the second motion, Plaintiffs seek to compel production of documents pursuant to a second notice of attend trial and produce documents, particularly as to Requests No. 38–58 (Numbered 36–51 to Defendant Fairfax). These requests seek four broad categories of documents: (1) those relating to rent payments made by individual Plaintiffs; (2) unlawful detainer complaints filed in specific cases or against specific tenants; (3) all UD complaints filed against their tenants since 2016; and (4) voluntary vacate agreements prepared by Defendants for their tenants. (Motion at pp. 6–7; Separate Statement.) Defendants’ response to each request consisted of objections and a refusal to produce documents.

Plaintiffs argue that the requests are necessary, because although Defendants produced these documents in discovery, Defendants have refused to stipulate to their authenticity at trial. (Motion at pp. 8–9.) Thus Plaintiffs seek to have Defendants produce the documents at trial, to preclude Defendant Haim from disclaiming their authenticity, since he would be the party to have produced them at trial. (Motion at pp. 8–9.) Plaintiffs argue that the unlawful detainer complaints sought in these requests are also relevant to show Defendants’ policy of exploiting minor shortfalls to evict poor tenants, and also to verify an asserted change in policy that Defendants claim to have implemented in 2019. (Motion at pp. 9–10.)

Plaintiffs have shown good cause for the documents sought, and Defendants have filed no opposition justifying their objections.

The motion is therefore GRANTED as to the second notices to attend trial and produce documents.