Judge: Michael Shultz, Case: 22CMCV00314, Date: 2023-04-25 Tentative Ruling
Case Number: 22CMCV00314 Hearing Date: April 25, 2023 Dept: A
22CMCV00314
Dwayne Hamilton v. Tanya Hamilton
[TENTATIVE] ORDER
DENYING PLAINTIFF’S THREE MOTIONS TO QUASH DEPOSITION SUBPOENAS FOR BUSINESS
RECORDS SERVED ON LENDING 3, INC.; STEWART TITLE OF CALIFORNIA INC.; AND FIRST
AMERICAN TITLE CO. AND ALTERNATIVELY, MODIFYING THE SCOPE OF THE SUBPOENAS.
I.
BACKGROUND
The complaint alleges that Defendant
assigned her interests in real property to Plaintiff in a probate matter settling
the Estate of Margie Lee Hamilton (“Estate”). Prior to this order, the parties,
who are siblings, entered into an informal verbal agreement wherein Defendant,
Tanya Hamilton, would collect the rental proceeds from tenants for deposit into
the Estate’s account. Plaintiff alleges he discovered that Defendant misappropriated
rental income and acted as de facto landlord/owner of the properties without Plaintiff’s
knowledge. Plaintiff alleges claims for conversion and private nuisance.
On October 31, 2022, Defendant filed
a cross-complaint against Plaintiff alleging claims for fraud, intentional and
negligent interference with prospective economic advantage, breach of contract,
and for breach of implied-in-fact contract.
On February 1, 2023, Defendant
issued three subpoenas on First American Title Co.; Stewart Title of California,
Inc.; and Lending 3, Inc. requiring the production of documents including
correspondence relating to any refinance of the Butler properties between each
entity and Plaintiff and Margie Hamilton (mother). As all three motions address
the same categories of documents identified in each subpoena and raise the same
issues of law, the Court’s ruling addresses all three motions in one tentative order.
II.
ARGUMENTS
Plaintiff argues
that the documents are not discoverable on grounds his financial information is
protected from disclosure by the right of privacy, and that the subpoenas are
overbroad, burdensome, and seek irrelevant documents. Plaintiff requests an
order imposing sanctions against Defendant and her counsel.
Defendant argues
that Plaintiff failed to meet and confer. The information is necessary to the
conduct of the litigation, which concerns the real property and the funds
Plaintiff fraudulently obtained by financing the property and converting the
funds to his own use. Defendant is not requesting Plaintiff’s financial
information.
In reply,
Plaintiff argues that he is not required to meet and confer to move to quash a
subpoena. Defendant has no ownership interest in the real properties as she
unequivocally transferred her rights to Plaintiff.
III.
LEGAL STANDARDS
The court can
quash a subpoena to protect the Plaintiff from unreasonable or oppressive
demands including unreasonable violations of the right of privacy by motion
“reasonably made.” The court has discretion to quash the subpoena upon such
terms or conditions as the court shall declare, including issuing protective
orders. (Code Civ. Proc., § 1987.1.)
The statute does not require the moving party to meet and confer prior to
making the motion.
IV.
DISCUSSION
The party claiming a privacy interest bears
the burden of proof on the issue. As the California Supreme Court held, “[t]he
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.” (Williams v. Superior Court (2017)
3 Cal.5th 531, 531.)
Even
if such a privacy interest is proven, discovery may still be ordered if a
sufficient need for the information is shown. Moreover, an implicit waiver of a
party’s constitutional rights encompasses “only discovery directly
relevant to the plaintiff's claim and essential to the fair resolution
of the lawsuit.” (Davis v. Superior Court (1992)
7 Cal.App.4th 1008, 1014.) The scope of permitted disclosure “must be narrowly circumscribed,
drawn with narrow specificity, and must proceed by the least intrusive manner. (Davis v. Superior Court (1992)
7 Cal.App.4th 1008, 1014.)
A right of privacy
exists as to a party's confidential financial affairs, even when the
information sought is admittedly relevant to the litigation. (Cobb v. Superior Court (1979) 99 Cal.App.3d 543,
550.) In considering whether disclosure
should be permitted, “the courts must balance the right of civil litigants to
discover relevant facts against the privacy interests of persons subject to
discovery." (SCC Acquisitions, Inc. v. Superior Court (2015) 243 Cal.App.4th 741, 754–755). The court must consider the purpose of the information sought,
the effect that disclosure will have on the affected persons and parties,
the nature of the objections urged by the party resisting disclosure, and
whether there are less intrusive means for obtaining the requested information.
(SCC Acquisitions at 753).
Defendant filed
a cross-complaint alleging that around 2013, Plaintiff proposed to refinance
the properties to allow Defendant to continue to maintain the properties
without using her personal funds. (Cross-complaint, ¶ 18.) Defendant alleges
that in 2014, Plaintiff pressured her to sign an irrevocable assignment of her property
interests to “speed up” their mother’s probate proceedings and facilitate
refinancing. (Cross-complaint, ¶ 22-23.) Defendant assigned her real property interests
to Plaintiff on June 5, 2016, based on that representation, at which time
Plaintiff acknowledged the agreement to return Defendant’s interest in the real
property once the probate matter and refinancing were complete. (Cross-complaint,
¶ 26.) Thereafter, Plaintiff allegedly stopped taking Defendant’s calls.
As Plaintiff
observes, his financial records are necessarily part of the application to refinance
the subject properties; however, Defendant requests only those records that are
tethered to the refinancing agreement(s) as the Defendant’s transfer of her
interests were purportedly necessary to obtain
and/or facilitate refinancing. Defendant relied on those purported representations
in assigning her interests to Plaintiff.
Therefore,
while the scope of the subpoenas is limited in subject matter, it is overbroad
as to time. Defendant alleges that she signed the irrevocable assignment on
June 5, 2016. (Cross-complaint, ¶ 25). Plaintiff then proceeded to refinance
the properties. (Cross-complaint, ¶ 27.) However, the subpoena on Stewart Title
requests documents from January 1, 2005; the First American subpoena requests
documents from January 1, 2010; and the Lending 3 subpoena requests documents
from January 1, 2015. All of these dates precede the date Defendant assigned
her interests and before Plaintiff allegedly applied for refinancing. Defendant
did not allege any wrongdoing by Plaintiff prior to the date she assigned her
interests. Defendant alleged that after her mother died, she maintained the
rentals and paid the mortgages. (Cross-complaint ¶ 12.) It was not until 2013
that Plaintiff allegedly proposed refinancing the property. (Cross-complaint, ¶
18.)
V.
CONCLUSION
Based on the
foregoing, Plaintiff’s Motion to Quash is DENIED. However, the Court MODIFIES the
scope of discoverable documents from June 5, 2016, to the date of production. The
Court DENIES both parties’ request for imposition of sanctions as both parties
raised some substantial ground for supporting and opposing the motion.