Judge: Layne H. Melzer, Case: 01CC01440, Date: 2022-08-25 Tentative Ruling
Pltfs.The Surface Pros, Mark Ferry
1. Motion to Quash Discovery Subpoena
Plaintiffs The Surface Pros and Mark Alan Ferry seeks an order quashing the civil subpoena (duces tecum) for personal appearance and production of documents, electronically stored information, and things at trial or hearing issued to Midway Law Firm APC and the civil subpoena (duces tecum) for personal appearance and production of documents, electronically stored information, and things at trial or hearing issued to Marc Applbaum (collectively, “Subpoenas”) by Judgment Creditor Judgment Recovery Assistance, LLC (“Judgment Creditor”).
The subpoenaed parties are the legal representatives of Judgment Debtor Mark Ferry (“Ferry”). (Compton Decl., ¶ 8.) The Subpoenas seek financial information relating to Ferry and Flordeliza Labesores, aka Flordeliza Bantilan Labesores (“Labesores”), who appears to be Ferry’s spouse. (Id.)
On 7/28/2022, the hearing on this motion was continued to allow the parties to address the status of Ferry’s bankruptcy petition, the automatic bankruptcy stay and its effect on the Subpoenas, and whether the parties met their burdens under Spectra-Physics, Inc. v. Superior Court (1988) 198 Cal.App.3d 1487. (7/28/2022 Minute Order.) The parties were strongly encouraged to meet and confer before the continued hearing. (Id.)
Status of Bankruptcy Proceeding
Judgment Creditor showed Ferry’s bankruptcy petition was dismissed on 3/8/2022. (Compton 8/12/2022 Decl., ¶¶ 14-15, Exhibit C.) Accordingly, no stay was in place at the time the subpoenas were issued. (Id., ¶ 16.)
General legal authority
Code of Civil Procedure section 1987.1, subdivision (a) provides that: “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.”
In making an order pursuant to a motion made under Code of Civil Procedure Section 1987.1, the Court “may in its discretion award the amount of the reasonable expenses incurred in making or opposing the motion, including reasonable attorney’s fees, if the court finds the motion was made or opposed in bad faith or without substantial justification or that one or more of the requirements of the subpoena was oppressive.” (Code Civ. Proc., § 1987.2, subd. (a).)
“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.” (Williams v. Superior Court (2017) 3 Cal.5th 531, 552.)
The information sought must be directly relevant to a claim or defense. (Harris v. Superior Court (1992) 3 Cal.App.4th 661, 665 (disapproved on other grounds).) A compelling interest is required to justify an obvious invasion of an interest fundamental to personal autonomy. (Williams v. Superior Court, 3 Cal.5th at 556.) However, when “lesser interests are at stake…the strength of the countervailing interest sufficient to warrant disclosure of private information varying according to the strength of the privacy interest itself, the seriousness of the invasion, and the availability of alternatives and protective measures. (Id.) Discovery will not be ordered as to matters protected by privacy rights if the information sought is available from other sources or less intrusive means. (Allen v. Superior Court (1984) 151 Cal.App.3d 447, 453.)
Financial records are also protected by an individual’s right to privacy. (Fortunato v. Superior Court (2003) 114 Cal.App.4th 475, 480-481.) A person has a right to privacy to his or her confidential financial affairs. (Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652, 656.) Tax records, both state and federal, are privileged. (Webb v. Standard Oil Co. (1957) 49 Cal. 2d 509, 513-514.)
Depositions of opposing counsel are severely restricted and extremely good cause is required. (Spectra-Physics, Inc. v. Superior Court (1988) 198 Cal.App.3d 1487, 1494; see, Carehouse Convalescent Hospital v. Superior Court (2006) 143 Cal.App.4th 1558, 1562 [“Depositions of opposing counsel are presumptively improper, severely restricted, and require ‘extremely’ good cause—a high standard.”].)
“California applies a three-prong test in considering the propriety of attorney depositions. First, does the proponent have other practicable means to obtain the information? Second, is the information crucial to the preparation of the case? Third, is the information subject to a privilege?” (Carehouse Convalescent Hospital v. Superior Court (2006) 143 Cal.App.4th 1558, 1563.) The party seeking to depose opposing counsel has the burden of proof to establish the first two prongs. The party asserting work-product or attorney-client privilege has the burden of establishing the third prong. “Each of these prongs poses an independent hurdle to deposing an adversary’s counsel; any one of them may be sufficient to defeat the attempted attorney deposition.” (Ibid.)
The “strong policy considerations against deposing an opposing counsel” include, “the state’s public policy to ‘[p]revent attorneys from taking undue advantage of their adversary’s industry and efforts” as ‘[d]iscovery was hardly intended to enable a learned profession to perform its functions ... on wits borrowed from the adversary.’” Furthermore, “ [a]ttorney depositions are disruptive, and add to the length and expense of litigation”; “[t]he parties get sidetracked into endless collateral disputes about which attorney statements are protected and which are not, and it increases the possibility that the lawyer may be called as a witness at trial.” (Id. at pp. 1562-1563.) When the dominant purpose of outside counsel’s factual investigation was to provide legal services to the employer in anticipation of litigation, the attorney-client privilege applies. Outside counsel was not required to give legal advice as to what course of action to pursue, in order for the attorney-client privilege to apply. (City of Petaluma v. Superior Court (2016) 248 Cal.App.4th 1023, 1028.) Fact-finding which pertains to legal advice counts as professional legal services. (Id. at p. 1034.)
The Court in City of Petaluma v. Superior Court (2016) 248 Cal.App.4th 1023 summarized the attorney-client privilege and attorney work product as follows:
The attorney-client privilege, which is set forth in Evidence Code section 954, confers a privilege on the client “to refuse to disclose, and to prevent another from disclosing, a confidential communication between client and lawyer....” The fundamental purpose of the privilege “ ‘is to safeguard the confidential relationship between clients and their attorneys so as to promote full and open discussion of the facts and tactics surrounding legal matters.’ ” (Costco, supra, 47 Cal.4th at p. 732, 101 Cal.Rptr.3d 758, 219 P.3d 736.) The privilege is absolute and precludes disclosure of confidential communications even though they may be highly relevant to a dispute. (Ibid.)
A party that seeks to protect communications from disclosure based upon the attorney-client privilege must establish the preliminary facts necessary to support its exercise—i.e., a communication made in the course of an attorney-client relationship. (Costco, supra, 47 Cal.4th at p. 733, 101 Cal.Rptr.3d 758, 219 P.3d 736.) “Once that party establishes facts necessary to support a prima facie claim of privilege, the communication is presumed to have been made in confidence and the opponent of the privilege has the burden of proof to establish the communication was not confidential or that the privilege does not for other reasons apply.” (Ibid.)
An attorney-client relationship exists when the parties satisfy the definitions of “lawyer” and “client” as specified in Evidence Code sections 950 and 951, respectively. For purposes of the attorney-client privilege, “client” is defined in relevant part as “a person who, directly or through an authorized representative, consults a lawyer for the purpose of retaining the lawyer or securing legal service or advice from him in his professional capacity....” (Evid.Code, § 951, italics added.) A “confidential communication” means “information transmitted between a client and his or her lawyer in the course of that relationship and in confidence” by confidential means. (Evid.Code, § 952.) A confidential communication may include “a legal opinion formed and the advice given by the lawyer in the course of that relationship.” (Ibid.)
In assessing whether a communication is privileged, the initial focus of the inquiry is on the “dominant purpose of the relationship” between attorney and client and not on the purpose served by the individual communication. (Costco, supra, 47 Cal.4th at pp. 739–740, 101 Cal.Rptr.3d 758, 219 P.3d 736.) “If a court determines that communications were made during the course of an attorney-client relationship, the communications, including any reports of factual material, would be privileged, even though the factual material might be discoverable by other means.” (Id. at p. 740, 101 Cal.Rptr.3d 758, 219 P.3d 736.)
The attorney work product doctrine is codified in section 2018.010 et seq. of the Code of Civil Procedure. The meaning of “client” for purposes of the work product doctrine is the same as that used for the attorney-client privilege. (Code Civ. Proc., § 2018.010.) The attorney work product doctrine serves the policy goals of “preserv[ing] the rights of attorneys to ... investigate not only the favorable but [also] the unfavorable aspects” of cases and to “[p]revent attorneys from taking undue advantage of their adversary's industry and efforts.” (Code Civ. Proc., § 2018.020, subds. (a) & (b).)
“ ‘The work product rule in California creates for the attorney a qualified privilege against discovery of general work product and an absolute privilege against disclosure of writings containing the attorney's impressions, conclusions, opinions or legal theories.’ ” (Wellpoint Health Networks, Inc. v. Superior Court (1997) 59 Cal.App.4th 110, 120, 68 Cal.Rptr.2d 844 (Wellpoint ); Code Civ. Proc., § 2018.030.) An attorney's work product that is subject to a qualified privilege is not discoverable unless a court determines that denial of discovery would unfairly prejudice the party seeking discovery or result in an injustice. (Code Civ. Proc., § 2018.030, subd. (b).)
(City of Petaluma v. Superior Court (2016) 248 Cal.App.4th 1023, 1032–1033.)
After the party claiming privilege makes a prima facie claim of privilege, the burden passed to the party seeking discovery to make a prima facie showing the claimed privilege does not apply or that an exception exists or that there has been an expressed or implied waiver. (Wellpoint Health Networks, Inc. v. Superior Court (1997) 59 Cal.App.4th 110, 123.)
Analysis
Judgment Creditor did not meet its burden under Spectra-Physics to show extremely good cause for the records sought in the Subpoenas. The documents subpoenaed are overly broad in scope. Although Judgment Creditor contends the Subpoenas only seek documents to show the amount of any retainer held by Ferry’s attorneys, the subpoenaed records are not so limited. (Motion, Exhibit A.) The Subpoenas seek financial records regarding payments from 1/1/2021 from Ferry and/or his spouse to Ferry’s attorney and law firm and “all records, reports, invoices, bills, statements, accounts, memoranda, correspondence and other written material…relating to indebtedness paid or payable by” Ferry and/or his spouse. (Id.) Contrary to Judgment Creditor’s contention, the documents are not limited in scope to those related to the levy served on Ferry’s attorney and law firm. (Compton 8/12/2022 Decl., ¶¶ 9 and 17, Exhibit D.)
Judgment Creditor did not show there are no other means to obtain the information subpoenaed (ie. the unearned retainer fees belonging to Judgment Debtor existed at the time of the levy). Although Judgment Creditor contends Judgment Debtor and his spouse are avoiding judgment enforcement efforts, Judgment Creditor has not shown it cannot obtain information regarding the retainer balance from Judgment Debtor and/or his spouse by other means. In addition, the Subpoenas do not seek only the retainer balance at the time of the levy.
At least some of the subpoenaed documents are protected by attorney-client privilege and/or work product. (See, Motion, 5:12 and 6:8-12, Exhibit A.)
Furthermore, Judgment Creditor has not shown why Judgment Creditor is entitled to obtain privileged records for Ferry’s spouse. Judgment Creditor did not show its interest in the records relating to Judgment Debtor’s spouse outweighs her privacy interest.
There is no showing that Ferry or his wife waived their attorney-client privilege.
Accordingly, the motion is granted.
Judgment Creditor Judgement Recovery Assistance, LLC
2. Motion - Other (To Attach Spousal Wages)
Judgment Creditor Recovery Assistance, LLC’s motion for order garnishing wages of judgment debtor Mark Ferry’s spouse, Flordeliza Bantilan Labsores, is denied without prejudice .
There is no notice of continuance and proof of the notice in the file and no response or opposition has been filed.
Pursuant to CCP §706.109, “an earnings withholding order may not be issued against the earnings of the spouse of the judgment debtor except by court order upon noticed motion.”
Code Civ. Proc. § 706.109, which is the basis for Defendant’s motion, is part of the Wage Garnishment Law. Code Civ. Proc. §§706.010 et seq. Other provisions within the Wage Garnishment Law provide the forms and information required for an earnings withholding order. Defendant has not provided the required information for the court to issue an order that complies with section 706.125.
While Judgment Creditor’s motion identifies the spouse by name, it does not provide her address, her or the debtor’ social security number, the address of her employer.
Nor does the motion provide a description of the withholding period or the name and address of the person to whom the withheld money is to be paid by the levying officer.
Creditor to give notice.