Judge James C. Chalfant, Case Number: 21STCP03001, Date: 2025-04-15 Tentative Ruling

Sarah Key v. Hidden Hills Community Association, 21STCP03001

Tentative decision for order to show cause re: sanctions: granted against Key

The court ordered both parties to summarize the proceedings relating to the debtor examination and outlining their costs, and to show cause why the court should not impose sanctions.

The court has read and considered the briefs[1] and renders the following tentative decision.

Petitioner Sarah Key (“Key”) commenced this proceeding on September 13, 2021. The operative pleading is the First Amended Petition (“FAP”), filed on April 18, 2022, against Hidden Hills Community Association (“HHCA”) and Land Mark Electric, Inc. (“Land Mark”) alleging claims for writ of mandate, declaratory and injunctive relief. The FAP alleges in pertinent part as follows.

Key is the owner of the real property located at 24835 Eldorado Meadow Road, Hidden Hills, California 91302 (“Key Property”) and a member of the HHCA per Civil Code section 4160. FAP ¶5. The HHCA is a common interest development subject to the Davis Stirling Common Interest Development Act (“Davis-Stirling” or the “Act”) under Civil Code section 4800 et seq. FAP ¶6. As such, the HHCA is obligated to maintain and manage common areas and separate interests that arise out of or related to the common interest development. FAP ¶6.

In July 2021, Land Mark submitted development plans to the HHCA proposing to cut and fill 1,880 cubic yards of dirt to remove a hill on property it owns at 5949 Spring Valley Road, Hidden Hills, California 91302 (“Land Mark Property”) and to construct a driveway across the strip of land owned by Key (“Flag Strip”) without her consent. FAP ¶13. In January 2022, the HHCA’s Architectural Committee provided input that it did not like Land Mark’s plans. FAP ¶13. Land Mark has represented in its pleadings and declarations filed with the court that it plans to build driveways on the Key Property to obtain access to Eldorado Meadow Road. FAP ¶14. Land Mark has represented to the court that it does not accept that Key owns the Flag Strip between the Land Mark Property and Eldorado Meadow Road. FAP ¶14. Land Mark has never conceded that there is no easement that would permit it to build structures and/or driveways on Key’s land to get to Eldorado Meadow Road. FAP ¶14.

The HHCA violated Davis-Stirling and engaged in unlawful conduct in violation of Civil Code Section 4205 by failing to inform Land Mark, the owner of the Land Mark Property, that building any driveways or other structures over the Flag Strip owned by Key to access Eldorado Meadow Road is trespass in violation of the law and will not be permitted. FAP ¶11.

On or around July 27, 2021, and August 6, 2021, Key made demands for record inspection from the HHCA pursuant to Civil Code Sections 5200-5240 relating to the development project on the Land Mark Property. FAP ¶20. The HHCA failed and refused to provide the records requested. FAP ¶20.

On or around August 13, 2021, the HHCA’s General Manager Cary Brackett sent an email stating that the records requested were in the google link provided. FAP ¶20. None of the documents in the google link related to the development project proposed for the Land Mark Property. FAP ¶20.

The HHCA violated Davis-Stirling and engaged in unlawful conduct in violation of Civil Code Sections 4925(b) and 5000(b), and the Governing Documents Bylaws Section 7.8 by failing and refusing to permit Key and other members of the HHCA to speak at architectural meetings. FAP ¶¶ 21-22.

The HHCA violated Davis-Stirling and engaged in unlawful conduct in violation of Civil Code Section 4360 when it approved Amendments to the Architectural Standards on October 27, 2021 (the “Amendments”) without disclosing in writing the “purpose and effect” of the proposed grading amendment in Section 10(f). FAP ¶23.

The Southern California Gas Company (“SoCalGas”) has two high pressure gas transmission pipelines running directly through the Key Property and Land Mark Property. FAP ¶24. At a meeting on February 16, 2021, many members of the HHCA reported to the Board of Directors their safety concerns regarding the SoCalGas pipelines. FAP ¶52. The HHCA’s Board members voted to obtain experts to do a study independent of SoCalGas regarding the public safety issues surrounding the two high pressure gas transmission. FAP ¶53.

Key provided the HHCA Board with a list of three independent high-pressure gas transmission pipeline experts with their resumes. FAP ¶53. On March 15, 2021, Key also provided the HHCA Board with more than ten pages of safety and safety related issues pertaining to the SoCalGas pipelines. FAP ¶53. On March 16, 2021, the HHCA Board announced at a meeting, without notice to the members and without an agenda item, that it would not address any of the safety issues that it had begun investigating relating to the SoCalGas pipelines. FAP ¶54.

In 2021, SoCalGas sent Key a safety notice stating that it needed clear access to the high-pressure lines to inspect, maintain, repair, and/or replace the pipelines. FAP ¶59. Land Mark obtained a letter from SoCalGas regarding the safety protocols that must be followed with respect to what development may be permitted in the vicinity of the SoCalGas pipelines. FAP ¶62. The HHCA’s Architectural Committee moved forward with the plans to develop the Land Mark Property. FAP ¶62.

Petitioner Key seeks a writ of mandamus and declaratory relief commanding the HHCA, its Board of Directors, and its Architectural Committee to (1) mandate that Architectural Standards require a permit applicant to obtain a variance to excavate the hills and basements at Hidden Hills; (2) refrain from declaring that a variance is not necessary for the proposed development at the Land Mark Property to excavate, compact, and grade; (3) observe the safety requirements set forth in the SoCalGas’ safety notice regarding high pressure gas transmission pipelines and to comply with the safety protocols of SoCalGas for any development at the Land Mark Property; (4) comply with Civil Code Sections 4925(b) and 5000(b) and the Governing Documents Bylaws Section 7.8 permitting Key and other members of the HHCA to speak for a reasonable time at any meeting of the Architectural Committee; (5) comply with the HHCA’s February 16, 2021 meeting minutes; (6) determine that the Amendments are illegal; (7) and declare that Key owns the Flag Strip that borders the Land Mark Property. FAP at 24-25.

Petitioner Key also seeks declaratory and injunctive relief against Land Mark that (1) declares Key owns the Flag Strip, (2) there is no easement of any kind permitting Land Mark to build driveways or any other structures across the Flag Strip owned by Key, (3) declares the non-exclusive road easement is to the Hidden Hills Corporation, not the HHCA, (4) Land Mark cannot traverse or build on the Flag Strip owned by Key without her prior written permission, (5) Land Mark does not have permission to traverse or build on the Flag Strip, and (6) Land Mark be ordered to remove its fencing from the Key Property. FAP at 25-26.

On September 21, 2021, Petitioner filed a Petition for writ of mandate, declaratory and injunctive relief.

On April 14, 2022, the court granted a motion to compel arbitration brought by Respondent.

On December 14, 2023, an arbitrator awarded Respondent $254,815.53 in attorneys’ fees and costs.

On September 24, 2024, the court denied Petitioner’s motion to stay enforcement of the judgment pending her appeal.

On October 10, November 19, and December 12, 2024, and again on January 16 and February 20, 2025, the parties made debtor examination-related court appearances.

On February 20, 2025, the court continued its Order for Appearance and Examination and issued an Order to Show Cause Re: Sanctions (“OSC”), warning the parties that the losing party on the examination issue would have to pay the other party’s attorney fees for the debtor proceedings.

Judgment debtor examinations serve an important function I the judicial system of compelling the judgment debtor to give information concerning his property. Li v. Yan, (2016) 247 Cal.App.4^th 56, 66 ((tax returns required to be produced). Inspection of documents for a creditor’s examination is enforceable, to the extent practicable, in the same manner as inspection demands in a civil action. CCP §708.030(c).

The court shall impose a monetary sanction against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel a further response to an inspection demand, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust. CCP §2030.310(h).

Apart from this action, the HHCA brought a petition in probate court to collect on its judgment from Key’s interest in a family trust. Hanley Decl., ¶2. Pre-trial statements in the probate court were due on April 7, 2025. Hanley Decl., ¶2. William Hanley, Esq. (“Hanley”), counsel for Key, did not file a timely OSC response in this case because he believed the parties would stipulate to stay the judgment in this case pending the outcome of the probate litigation. Hanley Decl., ¶2.

On April 1, 2025 at 8:29 p.m., the HHCA filed its status report. Hanley Decl., ¶3. Hanley believes the April 15 OSC hearing is moot because a settlement in principle has been reached, but he is filing Key’s status brief out of an abundance of caution. Hanley Decl., ¶3.

Hanley attaches (1) a copy of correspondence between counsel defining the scope of documents requested; (2) a copy of the document production request; (3) the court’s minute orders dated October 22, 2024, December 12, 2024, January 16, 2025, and February 20, 2025; and (4) the recorded deed of trust dated May 17, 2024 and recorded June 5, 2025. Hanley Decl., ¶¶ 4-6, Exs. 1-6.

Hanley bills at $550 per hour for a total client expense of $5,500 incurred from the judgment debtor exams. Hanley Decl., ¶8.

On October 2, 2024, HHCA filed a petition in the probate case entitled “Petition Pursuant to CCP § 709.010 and Probate Code §§ 15301 and 15306.5 for an Order Applying Trust Distributions Towards Satisfaction of Judgment” (“Probate Case”), in which Jonathan A. Wershow, Esq. (“Wershow”) is counsel for Key. Wershow Decl., ¶4.

On or about December 6, 2024, Wershow assisted Hanley in this case in responding for a request for production by the HHCA. Wershow Decl., ¶5, Ex. A. On December 9, 2024, Wershow reviewed and analyzed the requests and gathered and packaged 19 documents totaling 837 pages which were responsive. Wershow Decl., ¶6. Wershow forwarded these documents to Hanley. Wershow Decl., ¶6, Ex. A. Haney in turn produced these documents to HHCA. Wershow Decl., ¶7.

On or about December 16, 2024, Wershow further assisted with follow-up production and related ORAP proceedings. Wershow Decl., ¶8. Key has produced and fully complied with all HHCA’s document requests relating to the Probate Case and the Plott Family Trust. Wershow Decl., ¶9.

In total, Wershow performed 3.5 hours of legal services in response to the document request. Wershow Decl., ¶10, Ex. B. At Wershow’s hourly rate of $625 per hour, Key incurred $2,187 in legal fees from Wershow in connection with this ORAP and related production. Wershow Decl., ¶10.

On July 18, 2024, Key’s counsel agreed to accept service of the order for her appearance and subpoena. White Decl., ¶2, Ex. 1. The next day, Key’s counsel received a copy of each. White Decl., ¶3, Ex. 2.

On October 21, 2024, the parties agreed to continue the debtor’s examination to November 5, 2024. White Decl., ¶6. The examination was actually continued to November 19, 2024 due to schedule conflicts. White Decl., ¶6.

On November 12, 2024, Key requested another extension. White Decl., ¶9. HHCA refused to consider another extension without first receiving document production. White Decl., ¶8. The same day, Key objected to all requests and threatened to apply ex parte for an extension, but ultimately did not do so. White Decl., ¶9, Ex. 5-6.

On November 20, 2024, Key filed a petition for writ of supersedeas, which the court of appeal denied the same day. White Decl., ¶4, Ex. 3.

Key missed a court-imposed deadline to file a motion to quash. White Decl., ¶13.

On December 9, 2024, Key’s probate counsel produced several pleadings from the trust proceeding. White Decl., ¶14.

On December 12, 2024, the court ordered Key’s documents produced by December 23, 2024, but she produced no further documents. White Decl., ¶16.

On January 15, 2025, Key sought another extension for the hearing the next day, and HHCA once again said it would agree if Key turned over bank statements. White Decl., ¶17. Nothing was produced by the next day, so HHCA counsel Johnny White, Esq. (“White”) travelled to court. White Decl., ¶17. Key emailed three months of bank statements while White was at the courthouse. White Decl., ¶17, Ex. 12. These bank statements for a Bank of America account showed minimal amounts and did not reflect Key’s $20,000 per month family trust distributions. White Decl., ¶17.00

On January 16, 2025, the court once again continued the hearing to February 20, 2025. White Decl., ¶18. At that January hearing, Key raised several new issues in objections to the subpoena, and also misrepresented that there had been no previous court-established deadline. White Decl., ¶18.

Key produced no further documents between January 16 and February 20, 2025. White Decl., ¶21.

The court on February 20, 2025 required the parties to resume the examination, although Key insisted they were only told to meet and confer until the court reporter read back the record. White Decl., ¶23.

On February 24, 2025, Key missed a self-imposed deadline to communicate her position on the demanded documents, asking for an additional day. White Decl., ¶ 24, Ex. 16. On March 3, 2025, Key’s counsel asked HHCA’s counsel what requests apply to credit card statements and the HELOC loan application so they could meet and confer about the question. White Decl., ¶26. The same day, White explained in email why such records would be responsive to the subpoena, but received no reply to this email nor to White’s follow-ups on March 6, March 7, and March 12. White Decl., ¶27, Ex. 17.

Since October 22, 2025, HHCA has incurred $9,350 in fees connected to the debtor’s examinations from 17 hours of its counsel’s work.

The issue for the OSC is Key’s compliance with HHCA’s subpoena and the court’s order. On November 19, 2024, HHCA’s counsel informed Key that he sought two years of bank statements from Bank of America and PNC Bank, two years of credit card statements for the same period, and a PNC Bank loan application. White Decl., Ex. 8.

The bank statements are within the scope of Requests 2 and 3. The loan application is within the scope of Request 7. The court also ordered both to be produced. Key contends that she recently produced the two years of bank statements and loan application. The court will verify this with HHCA’s counsel.

The credit card statements are different. It is not obvious that they are within the scope of the Requests. The court never ordered their production and Key claims the parties have agreed to no production of credit card statements. Hanley Decl., ¶7. HHCA states that the credit card statements are arguably within the scope of Request 24, but the request will be withdrawn if the bank statements show no payment to credit card companies of $5000 or more. HHCA Br. at 17.

In these circumstances, the court concludes that credit card statements need not be produced.

On October 22, 2024, the court denied Key’s motion to quash. After that, she was obligated to submit to the debtor’s exam and produce the requested documents. Despite this, she made written objections to all the requests on November 12, 2024.

On November 19, Key wrongly tried to shift the burden to HHCA to move to compel production when the burden lay with her for a motion to quash the subpoenaed documents. See Li v. Swansboro, (2007) 151 Cal.App.4th 575.

On December 12, 2024, the court ordered Key to produce the two years of bank statements and loan application by December 23. It did not occur on that date, or by the January 16 and February 20, 2025 dates. On February 20, the court explained that Key was past the time she could object to the subpoena. The court ordered the parties to meet and confer, and stated it would impose full sanctions on the losing party at the instant OSC hearing.

Key may have recently produced the bank statements and loan application, but she provides no justification for refusing to produce them earlier. She failed to act with substantial justification for this delayed production.

Key argues that sanctions can be imposed under CCP section 708.030(c) only if there is a noticed motion in compliance with the Discovery Act under CCP sections 2033.030 and .040 and CRC 3.1345-48. Opp. at 11.

The operative Discovery Act provision is CCP section 2023.030, which authorizes monetary and other sanctions “after notice to any affected party” and “after opportunity for hearing”. It does not require a noticed motion; it only requires notice and an opportunity to be heard. Key received exactly that through the court’s OSC. If there were any doubt, CCP section 708.030(c) states that inspection of documents for a creditor’s examination is enforceable, to the extent practicable, in the same manner as inspection demands in a civil action. The OSC meets this practicality requirement and sanctions may be imposed against Key.

Since October 22, 2025, HHCA has incurred $9,350 in fees connected to the debtor’s examinations from 17 hours of its counsel’s work. This amount is reduced to $5000 for two reasons. First, the court did not order production of the bank statements and loan application until December 12, 2024, and therefore some portion of HHCA’s fees were incurred before that date. Second, the court is not ordering production of the credit card statements.

Key is ordered to produce the requested two years of all bank statements from Bank of America and PNC Bank and the loan application within five calendar days if they have not already been produced. Sanctions are awarded against Key and her counsel, jointly and severally, in the amount of $5000 and collectible as a judgment.

[1] In violation of the Presiding Judge’s First Amended General Order Re: Electronic Filing, Key filed a 60-page brief, including exhibits and two declarations, without providing a courtesy copy. The court has exercised its discretion to read and consider the brief, declarations, and exhibits.