Judge: Matthew C. Braner, Case: 37-2018-00064842-CU-BT-CTL, Date: 2024-04-02 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

DEPT.:

EVENT DATE:

EVENT TIME:

HALL OF JUSTICE

TENTATIVE RULINGS - March 07, 2024

03/08/2024  09:00:00 AM  C-60 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Matthew C. Braner

CASE NO.:

CASE CATEGORY:

EVENT TYPE:

CASE TITLE: CASE TYPE:

Civil - Unlimited  Business Tort Discovery Hearing 37-2018-00064842-CU-BT-CTL LANCAIR CORP VS R CONSULTING & SALES INC [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Defendants R Consulting & Sales, Inc., Lance Ricotta, Centerline Holdings, and Raquel Michel's motions to quash the business records subpoenas served on Wells Fargo Bank, N.A., American Express Company, Bank of America, and Citibank, are GRANTED.

The court will hear from the parties regarding the subpoena served on Scott W. Smith CPAs, Inc. on December 13, 2023. Although Defendants served an amended notice of motion in connection with this subpoena (ROA #259), they did not discuss it in their supporting memorandum or reply, and Plaintiff Lancair Corporation did not discuss it in their opposition.

As to the four financial institution subpoenas, they each contain the following identical document request: For the time periods of January 1, 2010 to December 31, 2014 and January 1, 2017 to December 31, 2018, please produce all monthly statements for any account(s) held in the name of R Consulting & Sales, Inc. either individually, or jointly with any third person or entity.

Defendants seek to preclude Plaintiff from accessing the private financial records of Defendant R Consulting based on the limited corporate right to financial privacy. (SCC Acquisitions, Inc. v. Superior Court (2015) 243 Cal.App.4th 741, 754 [the right of privacy extends to confidential financial affairs and personal financial information].) Because a corporation's right to privacy is not constitutionally protected, it is 'a lesser right than that held by human beings and is not considered a fundamental right,' and whether infringement of that right will be allowed is resolved by balancing the relevance of the sought records against the privacy right. (Id. at p. 756.) In connection with the subpoenaed financial documents, the balance favors the privacy right.

Plaintiff's reliance on Rawnsley v. Superior Court for the proposition that 'Lancair is entitled to discover financial information about R Consulting to prove alter ego factors,' is misplaced. (ROA #277, Plaintiff's Opposition, p. 5:16-19.) In that case, the court rejected the defendants' reliance on Civil Code section 3295 (related to claims for punitive damages) because the requested financial documents were 'fundamental to his case.' (Rawnley v. Superior Court (1986) 183 Cal.App.3d 86, 91 [plaintiff alleged that assets were diverted from entities in which he had an interest to the defendants or their alter ego business entities, and Plaintiff could only prove his case by obtaining the requested financial documents].) Here, the conclusory alter ego allegations alleged by Plaintiff are not 'fundamental' to its case, which Calendar No.: Event ID:  TENTATIVE RULINGS

3062548  15 CASE NUMBER: CASE TITLE:  LANCAIR CORP VS R CONSULTING & SALES INC [IMAGED]  37-2018-00064842-CU-BT-CTL centers almost entirely on the allegedly fraudulent conduct of Defendant Lance Ricotta. Rather, the alter ego allegations are a tangential effort to impose liability directly on Defendant R Consulting (and its principal, Defendant Raquel Michel) for the conduct of Defendant Ricotta, by claiming that Defendant Ricotta is the alter ego of R Consulting. This is quite unlike the usual case necessitating proof of alter ego liability, where a plaintiff can prove his or her case or obtain a remedy after proving the case only by piercing the corporation's corporate veil (i.e., the corporate defendant is found liable but has no assets to pay the judgment). But there is no indication that Defendant Ricotta is insolvent, nor that he is otherwise attempting to hide behind Defendant R Consulting's veil of corporate limited liability. Thus, the typical issues that might elevate the alter ego theory and its corresponding proof to 'fundamental' status are absent from this case.

Accordingly, Defendants' motions to quash the business records subpoenas to Wells Fargo Bank, N.A., American Express Company, Bank of America, and Citibank are granted.

Notwithstanding the court's decision to quash the four subpoenas, if the dynamic of the case shifts such that Defendant Ricotta is insolvent or otherwise incapable of paying a judgment, or if facts come to light indicating the use of Defendant R Consulting to shield otherwise relevant and discoverable information or documents, the court may be inclined to allow access to Defendant R Consulting's financial records.

The minute order is the order of the court.

Calendar No.: Event ID:  TENTATIVE RULINGS

3062548  15