Judge: Mark H. Epstein, Case: 23SMCV02268, Date: 2023-11-16 Tentative Ruling

Case Number: 23SMCV02268    Hearing Date: March 8, 2024    Dept: I

This is a motion to compel further responses.  Plaintiff filed a fraudulent conveyance action against defendants.  Plaintiff is a judgment creditor who holds a judgment against Jeff.  (The court uses first names because relevant actors include a father and son, Jake, and thus surnames would be confusing.)  The allegation is that Bull Canyon (BCI) and its principal Alfano are really shills for Jeff.  Plaintiff served requests for production but claims that the responses are inadequate and the objections are made in bad faith.  Plaintiff tried to engage in an IDC and a meet and confer but the problem has not been solved.

Preliminarily, a party seeking to compel further responses to document demands must, as a threshold matter, “set forth specific facts showing good cause justifying the discovery sought by the inspection demand.”  (Code Civ. Proc., § 2031.310, subd. (b)(1); see also Kirkland v. Superior Court (2002) 95 Cal.App.4th 92, 98.)  This burden may be satisfied “simply by a fact-specific showing of relevance.”  (TBG Ins. Services Corp. v. Superior Court (2002) 96 Cal.App.4th 443, 448.)  The relevance standard for purposes of discovery is broad.  Discovery is generally allowed for any non-privileged matters that are relevant to the subject matter involved in the action “if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.” (Code Civ. Proc., § 2017.010.)  Information is relevant to the subject matter of an action if it might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement.  (Gonzalez v. Superior Court (1995) 33 Cal.App.4th 1539, 1546.)  The court has reviewed the RFPs and has concluded that there is cause for them.  The RFPs all concern the purported fraudulent transfers in question and evidence used to establish the common scheme between the defendants.

Plaintiff moves to compel a further response to RFP Nos. 7, 32, 34, 39, 43, 44, 48, 49 and 50, and to produce responsive documents. Plaintiff further asks that a detailed privilege log be provided where documents are withheld on that basis.  According to plaintiff, it served discovery on September 5, 2023 and received defendant’s responses on October 5.  However, these responses were full of objections and no documents were produced, though defendant later produced 8 pages.  The parties met and conferred extensively and had an IDC with the court.  Plaintiff states that the parties eventually agreed that supplemental responses would be due on January 12, 2024 and a rolling production would be completed by January 31.  (Benjy Decl., Exh. 14.)  Plaintiff’s extended deadline to file the instant motion was extended to January 31 as well.  (Id. at Exh. 11.)

Defendant only produced 8 pages and no supplemental responses by the time this motion was filed.  In opposition, defendant argues that the motion is premature.  The defense asserts the motion was filed 2 weeks prior to the parties’ agreed upon deadline for production and supplemental responses.  The court is not so sure.  While defendant’s counsel states he never agreed to the January 12 deadline for supplemental responses, that is not how the email in the moving papers reads.  (Benjy Decl., Exh. 14 [“The following is a summary of what we discussed and agreed to on our call today: [¶]  For all named defendants, by January 12, 2024, they will have reviewed all of their RFP1 responses, both original and further responses, and serve further Code compliant responses for any and all prior responses wherein they said that they would produce after entry of a protective order.  All production should be completed by the hard deadline we all agreed to for rolling production cutoff during our IDC: January 31, 2024.  (Alternatively, if no documents are in possession, custody or control of responding defendants, then they must furnish a code compliant response about the fate of such documents and who may have possession, etc.)”], emphasis omitted.)  Defendant cannot complain he did not agree where he failed to clarify plaintiff’s emailed summary.  In any event, defendant argues the motion is moot because he served supplemental responses on January 26 as to RFP Nos. 7, 32, 39, 44, 48, 49, and 50.  He further produced 655 pages, he contends.  Defendant states no further response will be provided to RFP No. 34 and a supplemental response to RFP No. 43 is forthcoming, based on the new limitations proposed in plaintiff’s moving papers.  There is no evidence that plaintiff reached out to defendant after January 12, 2024, and before the motion was filed to see where the further responses were or why they were not served.  Had he done so, it is likely that any confusion over dates would have been resolved.  The court notes, though, that plaintiff’s interpretation makes sense.  If the further responses were due on January 31, 2024, but not served, it is unclear whether plaintiff would have been able to file any motion.  The deadline had been extended to January 31, 2024, so the failure to serve any responses that day might have meant that a motion filed February 1, 2024, would be untimely.  (Maybe not, though.  The motion would be to enforce the promise of further responses, not a motion based on the prior responses.)

The court does not believe the motion is fully moot. RFP No. 34 has no supplemental response and the objections are unjustified.  RFP No. 34 asks defendant to produce “all writings reflecting how proceeds of the loan were utilized,” with the “loan” being defined as “any loan or extension of credit made by BCI to the Katofsky Family Trust and purporting to be secured by the Valley Residence.”  Defendant provided an objection-only response, claiming the RFP was overbroad, burdensome, and harassing.  It is his burden to justify the objections.  (See Kirkland v. Superior Court (2002) 95 Cal.App.4th 92, 98.)  Defendant contends that “it is impossible to specify documents showing how the proceeds advanced by BCI were utilized.  The wire transfers at issue from Alfano and/or BCI were deposited into the Katofsky Family Trust general account.  The advanced wired funds were used in the general course of business and for personal use.  As such, there are no specific, identifiable documents that would show how these particular proceeds were utilized as Plaintiff suspects.”  (Opp. Sep. Stms., p. 8:14-20.)  Defendant’s general point is that money is fungible and there are no “marked” dollars showing how the exact money he received was spent.  The court agrees to a point.  The issue is that defendant himself identifies at least one document that would show how the fungible funds were moved after deposit: the bank statements of the Katofsky Family Trust general account.  It might not; it depends on amounts and timing.  But it might and it, and those bank statements ought to be produced.  Defendant will produce the bank statements within 15 court days of today along with a verified statement confirming that all such statements have been produced.  The statements may be designated as confidential.  Further, to the extent that defendant’s statement in the opposition is true, it needed to be set forth under oath in the response as the reason that no documents could be produced.

As for RFP No. 43, defendant agrees with plaintiff’s self-imposed limitations in opposition, but has not yet provided a further response.  The motion is therefore GRANTED, subject to plaintiff’s asserted limitations and the production will be completed (and verified as such) within 5 court days of today.

The remainder of the motion is GRANTED as well.  Defendant may have supplemented his responses and produced documents in compliance, but plaintiff claims the production is incomplete and there seems to be some reason to so believe.  Defendant is ordered to review his supplemental responses, production of documents, and plaintiff’s complaints about missing responsive documents, especially in relation to RFP Nos. 48 and 49.  Defendant can stand on his responses if he believes they are complete and Code-compliant, but he must nonetheless serve a verified statement so attesting.  If they are not and plaintiff discovers as much, then a subsequent motion would be in relation to the violation of the instant order and could include a request for evidentiary, issue, or terminating sanctions as well as monetary sanctions.  (The court is not saying that sanctions would be issued; only that a request for them could be made.)  With that said, the court warns plaintiff that it cannot order defendant to produce documents over which he has no custody, possession, or control.

That leaves the privilege log.  After the motion was filed, defendant produced a privilege log identifying three communications between himself and his son as privileged per ACP.  Plaintiff asks the court to order the production of those emails as an exception to the crime-fraud exception.  The court cannot do so based on an argument presented in reply, especially where plaintiff has not met and conferred with defendant and defendant has no opportunity to brief this issue.  That said, if plaintiff believes that the documents ought to be produced and if meeting and conferring does not resolve the matter, plaintiff may file a further motion to compel if needed. The belated request for the production of documents set forth in the privilege log is therefore DENIED without prejudice.

Plaintiff’s request for sanctions in the amount of $7,608 is GRANTED in full as against defendant only and not counsel; the hourly rate and hours claimed are proper given this complicated case and subject matter.  Defendant’s request in opposition is DENIED and sanctions against him are justified because defendant’s position lacks substantial justification.  While defendant supplemented his responses, he did so only after the motion was filed.  Further, the original responses were boilerplate and bad faith objections; they necessitated this motion.