Judge: Michelle Williams Court, Case: 21STCV32018, Date: 2022-10-17 Tentative Ruling

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Case Number: 21STCV32018    Hearing Date: October 17, 2022    Dept: 74

21STCV32018           ANGELA SHALOME STREAT WILSON vs SHLOMO RECHNITZ, et al.

Plaintiff’s Motion to Compel Further Responses and the Actual Production of Documents from Defendant Rechnitz Lakewood GP to Request for Identification and Production of Documents, Set One; Request for Monetary Sanctions against Defendant Rechnitz Lakewood GP and its Attorneys of Record Cowdrey Jenkins LLP

TENTATIVE RULING: The Motion to Compel Further Responses and the Actual Production of Documents from Defendant Rechnitz Lakewood GP to Request for Identification and Production of Documents, Set One; Request for Monetary Sanctions against Defendant Rechnitz Lakewood GP and its Attorneys of Record Cowdrey Jenkins LLP is GRANTED.

Defendant Rechnitz Lakewood GP is ordered to provide a further verified, code-compliant response to Plaintiff’s Request for Production of Documents, Set One No. 7, removing all objections except the privilege objection within 20 days. Simultaneously therewith, Defendant must provide a supplemental privilege log that contains all facts required to justify its claim of attorney-client privilege.

Defendant is ordered to produce unredacted versions of all documents withheld or redacted pursuant to any other objection within 30 days.

Background

On August 30, 2021, Plaintiff Angela Shalome Streat Wilson, by and through her Guardian ad Litem, Megan Frilot filed this action against Defendants Shlomo Rechnitz, The Healthcare Center of Downey LLC, Rechnitz Lakewood GP, Rockport Administrative Services, and Steven Stroll. The complaint alleged two causes of action: (1) dependent adult abuse and (2) negligent hiring and supervision. The complaint alleges that the Defendants, through various entities, aided and abetted wrongful acts and omissions at the direction of Shlomo Rechnitz, resulting in Plaintiff, a dependent adult, eloping from the facility and being allowed to roam the streets for two months. Defendants allegedly failed to staff enough individuals, hired unqualified employees, and provided sub-standard care to the patients, including Plaintiff.  

Motion

On September 19, 2022, Plaintiff filed the instant motion seeking to compel Defendant Rechnitz Lakewood GP to provide a further response to Plaintiff’s Request for Production of Documents, Set One No. 7.

Opposition

In opposition, Defendant contends the financial information withheld is protected by a right to privacy and is not discoverable in this case.

Reply

In reply, Plaintiff contends Defendant has still failed to provide an adequate privilege log and Civil Code section 3295 does not apply.

Motion to Compel Further Responses

Standard

The propounding party may bring a motion to compel further responses to requests for production if it believes the statement of compliance is incomplete, the representation of an inability to comply is inadequate, incomplete, or evasive, or if an objection is without merit or too general. (Code Civ. Proc. § 2031.310.) The motion must be accompanied by a meet and confer declaration, (Code Civ. Proc. §§ 2016.040; 2031.310(b)(2)), and a separate statement. (Cal. R. Ct., rule 3.1345.)

As an additional requirement only as to requests for production, the motion must set forth specific facts showing good cause justifying the discovery sought. (Code Civ. Proc. § 2031.310(b)(1).) “[T]hat burden is met simply by a fact-specific showing of relevance.” (TBG Ins. Services Corp. v. Superior Court, 96 Cal. App. 4th 443, 447 (2002).) The opposing party bears the burden of justifying any objections. (Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245, 255; Kirkland v. Superior Court (2002) 95 Cal.App.4th 92, 97-98.)

Discovery at Issue and Meet and Confer Efforts

Plaintiff’s motion is accompanied by the required separate statement and meet and confer declaration.

Plaintiff served Request for Production of Documents, Set One upon Defendant Rechnitz Lakewood GP on May 23, 2022. (Garcia Decl. ¶ 6.) Defendant served responses on July 8, 2022. (Id. ¶ 7, Ex. 2.) Plaintiff sent a meet and confer letter on July 12, 2022 addressing the issues raised herein. (Id. ¶ 8 Ex. 3.) The parties participated in an Informal Discovery Conference on September 9, 2022. (Id. ¶ 9.) Plaintiff indicates Defendant “was to provide a privilege log or unredacted documents by September 16, 2022, however, the Defendant failed to provide a privilege log or documents.” (Ibid.) Plaintiff filed the instant motion on September 19, 2022. Defendant provided a privilege log on September 20, 2022. (Nilssen Decl. ¶ 3, Ex. A.)

Request for Production No. 7

Request for Production, No. 7 seeks “[a]ll DOCUMENTS which were provided to YOU by the FACILITY relating to the finances of the FACILITY during the time period of December 1, 2020 through June 17, 2021. (The names of all residents other than the PLAINTIFF should be redacted from the production.).” (Garcia Decl. Ex. 2.) Defendant responded with the following:

Objections: Overbroad in scope. Vague and ambiguous. Not reasonably particularized. Seeks financial information protected from disclosure by section 3295 of the Civil Code. Seeks documents that are protected from discovery under the attorney-client privilege. Without waiving the foregoing objections, responding party responds as follows: Responding party will comply with the request in part, and all documents in the requested category that are in the possession, custody, or control of responding party and to which no objection is being made will be included in the production.

(Ibid.)

Civil Code section 3295(a) provides: “[t]he court may, for good cause, grant any defendant a protective order requiring the plaintiff to produce evidence of a prima facie case of liability for damages pursuant to Section 3294, prior to the introduction of evidence of: (1) The profits the defendant has gained by virtue of the wrongful course of conduct of the nature and type shown by the evidence. (2) The financial condition of the defendant.” Subsection (c) further states:

No pretrial discovery by the plaintiff shall be permitted with respect to the evidence referred to in paragraphs (1) and (2) of subdivision (a) unless the court enters an order permitting such discovery pursuant to this subdivision. However, the plaintiff may subpoena documents or witnesses to be available at the trial for the purpose of establishing the profits or financial condition referred to in subdivision (a), and the defendant may be required to identify documents in the defendant's possession which are relevant and admissible for that purpose and the witnesses employed by or related to the defendant who would be most competent to testify to those facts. Upon motion by the plaintiff supported by appropriate affidavits and after a hearing, if the court deems a hearing to be necessary, the court may at any time enter an order permitting the discovery otherwise prohibited by this subdivision if the court finds, on the basis of the supporting and opposing affidavits presented, that the plaintiff has established that there is a substantial probability that the plaintiff will prevail on the claim pursuant to Section 3294.

(Civ. Code § 3295(c).)

In the separate statement, Plaintiff explains the documents are sought to support Plaintiff’s alter ego claims, ratification allegations, and Plaintiff’s claim that Defendants knowingly underfunded the facility, resulting in understaffing and a failure to lawfully operate. (Sep. Stmt. at 3:14-9:12 citing Compl. ¶¶12, 19, 73, 74.) Plaintiff has provided a fact specific showing of relevance for the documents sought. Plaintiff’s theory of liability based upon underfunding and cost-cutting also finds support in California law. (See e.g. Fenimore v. Regents of University of California (2016) 245 Cal.App.4th 1339, 1350 (“A jury may see knowingly flouting staffing regulations as part of a pattern and practice to cut costs, thereby endangering the facility's elderly and dependent patients, as qualitatively different than simple negligence.”).)

The Court agrees with Plaintiff that Civil Code section 3295 does not bar the discovery at issue because it is not a premature attempt to obtain punitive damages evidence, but rather seeking evidence directly related to Plaintiff’s substantive claims. While Defendant attempts to distinguish Plaintiff’s authority, Defendant does not demonstrate Civil Code section 3295 applies here. “Unlike the situation in which a plaintiff seeks to discover defendant's financial status solely for the purpose of assessing a punitive damages claim, the documents sought by petitioner here are fundamental to his case.” (Rawnsley v. Superior Court (1986) 183 Cal.App.3d 86, 91.)

Defendant raises the right to privacy in its opposition. (Opp. at 3:16-26.) However, Defendant only objected based upon overbreadth, vagueness, ambiguity, lack of particularity, Civil Code section 3295, and attorney-client privilege. (Garcia Decl. Ex. 2.) By failing to assert a privacy objection in its response, Defendant waived any such objection. (Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 785 (“a court will not consider belated objections or additional objections.”); Scottsdale Ins. Co. v. Superior Court (1997) 59 Cal.App.4th 263, 273 (“It is clear from the Act that the Legislature intended that any and all objections are to be made at the earliest timely response.”).) Moreover, Defendant has not met its burden on the privacy issue. (Williams v. Superior Court (2017) 3 Cal.5th 531, 557 (“Courts must instead place the burden on the party asserting a privacy interest to establish its extent and the seriousness of the prospective invasion.”).) Finally, the Court finds the asserted privacy interest in the finances of the facility at issue outweighed by Plaintiff’s rights to discovery and the need for the documents in question to support Plaintiff’s legal theories.

As to the attorney-client privilege objection, the Court agrees Defendant’s privilege log is not sufficient. “The party claiming the privilege has the burden of establishing the preliminary facts necessary to support its exercise, i.e., a communication made in the course of an attorney-client relationship.” (Costco Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725, 733. See also People v. Superior Court (Bauman & Rose) (1995) 37 Cal.App.4th 1757, 1771 (“it is the burden of the party asserting the work product privilege to prove that the material in question is work product and therefore privileged.”).) “Where the privilege applies, it may not be used to shield facts, as opposed to communications, from discovery.” (Edwards Wildman Palmer LLP v. Superior Court (2014) 231 Cal.App.4th 1214, 1226.) Similarly, “that which was not privileged in the first instance may not be made so merely by subsequent delivery to the attorney.” (D. I. Chadbourne, Inc. v. Superior Court of City and County of San Francisco (1964) 60 Cal.2d 723, 732.) Furthermore, “[i]t is settled that the attorney-client privilege is inapplicable where the attorney merely acts as a negotiator for the client, gives business advice or otherwise acts as a business agent.” (Chicago Title Ins. Co. v. Superior Court (1985) 174 Cal.App.3d 1142, 1151.)

“The purpose of a ‘privilege log’ is to provide a specific factual description of documents in aid of substantiating a claim of privilege in connection with a request for document production. The purpose of providing a specific factual description of documents is to permit a judicial evaluation of the claim of privilege.” (Hernandez v. Superior Court (2003) 112 Cal.App.4th 285, 292 (quotations omitted).)

The privilege log states “Attorney Client Privilege – Legal matter information” in connection with communications from Michael Lee to Melvin Daignault, Alan Ma, Shlomo Rechnitz, Joe Frustaci, Josh Kauffman, and David Silver regarding various months and years of “Final Financials – Region 15.” (Nilssen Decl. Ex. A.) Nothing in the privilege log demonstrates the documents identified are communications made in the course of an attorney-client relationship as required. The privilege log does not identify the attorney or the client.  The privilege log also includes a March 3, 2021 document with the subject “Fw: 01-21 Final Financials - Region 15” between “Payroll” and “Administrator.” This entry lacks specificity as it must identify, by name, the individuals involved and provide facts demonstrating the privilege applies. Additionally, this document appears to be a forward of the February 26, 2021 document with the subject “01-21 Final Financials - Region 15” for which Defendant did not assert the privilege.

“If the response and any privilege log fail to provide sufficient information to allow the trial court to rule on the merits, the court may order the responding party to provide a further response by serving a privilege log or, if one already has been served, a supplemental privilege log that adequately identifies each document the responding party claims is privileged and the factual basis for the privilege claim.” (Catalina Island Yacht Club v. Superior Court (2015) 242 Cal.App.4th 1116, 1127.) Defendant must provide a revised privilege log with all facts necessary to establish the existence of the attorney-client privilege as to the documents identified: RLR2RFP-01- #3,5,7, -0126-0127; RLR2RFP-01- #3,5,7, -0241-0242; RLR2RFP-01- #3,5,7,-0275; and RLR2RFP-01- #3,5,7,-0313.

Sanctions

Pursuant to Code of Civil Procedure section 2031.310(h), “the court shall impose a monetary sanction under Chapter 7 (commencing with Section 2023.010) against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel further response to a demand, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.”

Plaintiff sought sanctions in the amount of $6,710.00. While Defendant was not successful in its opposition, the Court finds both parties acted with substantial justification and the Court declines to impose sanctions.