Judge Lee W. Tsao, Case Number: 23NWCP00359, Date: 2024-05-30 Tentative Ruling

Judge: Lee W. Tsao, Case: 23NWCP00359, Date: 2024-05-30 Tentative Ruling

Case Number: 23NWCP00359 Hearing Date: May 30, 2024 Dept: C

LUI v. FIRST EVANGELICAL COMMUNITY CHURCH

CASE NO.: 23NWCP00359

HEARING: 05/30/24

Defendant FIRST EVANGELICAL COMMUNITY CHURCH’s Motion for a Protective Order is DENIED.

Opposing Party to give notice.

This is an action by a former “member” of a religious corporation being brought against the religious corporation. The action is thus similar to a derivative action.

This action for inspection of church books and records was filed by Plaintiff WILLIAM LUI (“Plaintiff”) on September 7, 2023. Plaintiff alleges that he was a longstanding member of the FIRST EVANGELICAL COMMUNITY CHURCH (“Defendant” or “FECC”). In response to the FECC”s decision to withdraw from the First Evangelical Church Association, Plaintiff sent a written demand, via electronic mail, for inspection of Defendant FIRST EVALGELICAL COMMUNITY CHURCH (“Defendant” or “FECC”) books and records on March 30, 2023. (Complaint ¶21.) On May 6, 2023, Plaintiff provided the FECC with another written demand for inspection of the FECC annual report and financial report. (Id. ¶23.) As of the date this action was filed, Plaintiff has not been provided with accounting books and financial records of FECC. (Id. ¶25.)

Plaintiff’s Complaint asserts a sole cause of action for Enforcement of Inspection Rights Pursuant to California Corporations Code §9514.

On October 3, 2023, Plaintiff served a Request for Production of Documents (set one) onto Defendant.

Defendant now moves for entry of a protective order “because at issue in this matter is whether plaintiff has standing to bring a lawsuit against FECC under the California Corporations Code. Without the matter [of] plaintiff’s legal standing resolved, requiring the defendant to respond to discovery requests would subject FECC to an oppressive and burdensome abuse of process.” (Motion 3:7-11.) Defendant argues that Plaintiff lacks standing to sue the FECC under Corp. Code §9514 because Plaintiff has not been a member of the FECC since November 3, 2023.

In Opposition, Plaintiff argues that Plaintiff was a member at the time the demands for inspection for made, and at the time this action was filed. In bad faith, Defendant unilaterally terminated his membership with the FECC to avoid their obligation to comply with Plaintiff’s demands for inspection.

“When an inspection, copying, testing, or sampling of documents, tangible things, places, or electronically stored information has been demanded, the party to whom the demand has been directed, and any other party or affected person, may promptly move for a protective order…. [¶] The court, for good cause shown, may make any order that justice requires to protect any party or other person from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.” (CCP §2031.060(a)(b).)

Under Cal. Corp. Code §9512, “the accounting books and records and minutes of proceedings of the members and the board and committees of the board shall be open to inspection upon the written demand on the corporation of any member at any reasonable time, for a purpose reasonably related to such person’s interests as a member.” Plaintiff alleges that he was a member of the church when the first and second written demands for inspection of books and records were made, in compliance with Corp. Code §9512. Plaintiff has established standing to enforce his right to the books and records when the church failed to produce them upon request (on March 30, 2023 and May 6, 2023). (Cal. Corp. Code §9514.)

Moreover, as argued in Reply, it is not necessary for Plaintiff to establish “standing” to sue in opposition to this Motion. This dispositive issue is more appropriately resolved via demurrer or summary judgment. Here, Defendant moves for entry of a blanket protective order, without specifying why production of particular documents would be unduly burdensome or oppressive. Importantly, no explanation of which specific Requests Defendant seeks protection from have been provided to this Court. Defendant maintains that Plaintiff is barred from seeking any discovery at all throughout the pendency of this case. However, Defendant has not justified the imposition of any such blanket order.

The Motion is DENIED.