Judge: Monica Bachner, Case: 22STCV25657, Date: 2023-04-13 Tentative Ruling

Case Number: 22STCV25657    Hearing Date: April 13, 2023    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

TEODULO CASTELLANOS and MARIA CASTELLANOS,

         vs.

PINNACLE ESTATE PROPERTIES, INC., et al.

 Case No.:  22STCV25657

 Hearing Date:  April 13, 2023

Plaintiffs Teodulo Castellanos’ and Maria Castellanos’ motion for protective order is granted as to the Settlement Agreement.

          Plaintiffs Teodulo Castellanos’ (“Teodulo”) and Maria Castellanos (“Maria”) (collectively, “Plaintiffs”) move for a protective order at to any production of the settlement agreement between Plaintiffs and non-party Steve Swaner (“Swaner”) in the case Castellanos v. Swaner, LASC Case No. 22STCV01063 (“Settlement Agreement”).  (Notice of Motion, pg. 2.)

          Request for Judicial Notice

          Defendants Pinnacle Estate Properties, Inc.’s and Jeremy Rodriguez’s 3/31/23 request for judicial notice of the first amended complaint filed on 1/18/22, in LASC Case No. 22STCV01063 (D-RJN, Exh. A); grant deed recorded on 8/16/22, in Los Angeles County Office of the Recorder under Doc. No. 20220818892 (D-RJN, Exh. B); and deed of trust recorded on 8/16/22, in Los Angeles County Office of the Recorder under Doc. No. 20220818893 (D-RJN, Exh. C) is granted.

Meet and Confer

A motion for a protective order must be accompanied by a declaration stating facts showing a “reasonable and good faith attempt” to resolve the matter outside of court.  (C.C.P. § 2025.420(a).)

Parties met and conferred regarding the subpoena and were able to resolve most objectionable issues, except for Defendant Pinnacle’s request for the Settlement Agreement.  (Decl. of Lozoya ¶¶10-11, Exh. 7.)  Plaintiffs have demonstrated a reasonable and good faith attempt to resolve the instant matter outside of court.  (C.C.P. § 2025.420(a).)

Background

          Plaintiffs served their operative Complaint on Defendants Pinnacle Estate Properties, Inc. (“Pinnacle”) and Jeremy Rodriguez (“Rodriguez”) (collectively, “Pinnacle Defendants”) and Defendants Efrain Flores-Yanez (“Yanez”), Valentin Ramirez Solano (“Solano”), and J. Oronoz (“Oronoz”) August 9, 2022.  On October 21, 2022, Defendant Pinnacle served on non-party Swaner a Notice of Deposition and request for produce documents for a deposition scheduled for November 15, 2022.  (Decl. of Lozoya ¶1, Exh. 1.)  On November 4, 2022, Plaintiffs objected to Defendant Pinnacle’s subpoena as overbroad and requesting protected material.  (Decl. of Lozoya ¶2, Exh. 2.)  Plaintiffs filed the instant motion on December 2, 2022.  On April 3, 2023, Pinnacle Defendants filed their opposition.  On April 3, 2023, Plaintiffs filed their reply.

          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.”  (C.C.P. § 2031.060(a).)  Such a motion will include a meet and confer declaration pursuant to C.C.P. § 2016.040. (Id.)  Protective orders may be also granted on motion of the deponent or any party, or any third person who could be affected by the disclosure (e.g., a nonparty whose privacy would be impaired).  (C.C.P. § 2025.420(a).)  The motion must be accompanied by a declaration stating facts showing a “reasonable and good faith attempt” to resolve the matter outside of court.  (Id.)  Plaintiffs’ argument that Defendant’s failure to respond to Plaintiff’s separate statement is fatal to their opposition is incorrect as a matter of law—a motion for a protective order does not require a separate statement in either the moving papers or in opposition.  (See C.C.P. §2031.060.)

The decision upon whether to enter a protective order lies within the sound discretion of the court.  (Raymond Handling Concepts Corp. v. Superior Court (1995) 39 Cal.App.4th 584, 588, 591; Meritplan Insurance Co. v. Superior Court (1981) 124 Cal.App.3d 237, 242.)  Moving parties have the burden to show good cause for protective order.  (Emerson Electric Co. v. Superior Court (1997) 16 Cal.4th 1101, 1110.)   

Plaintiffs move for a protective order on the ground that Evidence Code §1152 protects settlement agreements from being disclosed to a party other than the settling parties in another and difference case.  However, §1152 is inapplicable because it renders an offer to is inadmissible to prove his or her liability for the loss or damage or any part of it, which is not at issue here.  Rather, Evidence Code §1119 protects as confidential, pursuant to a mediation or mediation consultation, any writing prepared for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation, and all communications, negotiations, or settlement discussions by and between participants.  (Evid. Code §1119(b)-(c).)  Plaintiffs failed to argue or demonstrate that the Settlement Agreement applicable under §1119 because it was prepared for the purpose of, in the course of, or pursuant to, a mediation.  (See Motion.)

Plaintiffs move for a protective order on the ground that the Settlement Agreement is protected by California Constitution art. I, §1, and California statutory and common law on the basis that non-parties have a right to their personal financial records being protected by the right to privacy.  (See Hinshaw, Winkler, Draa, Marsh & Still v. Superior Court (1996) 51 Cal.App.4th 233, 241, disapproved of by Williams v. Superior Court (2017) 3 Cal.5th 531; Fortunato v. Superior Court (2003) 114 Cal.App.4th 475, 480; Cobb v. Superior Court (1979) 99 Cal.App.3d 543, 550; Webb v. Standard Oil Co. (1957) 49 Cal.2d 509; Brown v. Superior Court (1977) 71 Cal.App.3d 141; Sav-On Drugs, Inc. v. Superior Court (1975) 15 Cal.3d 1, 6; Deary v. Superior Court (2001) 87 Cal.App.4th 1072, 1078.) 

The Hinshaw Court found a private settlement agreement is entitled to at least as much privacy protection as a bank account or tax information, and held that the moving party failed to make a sufficient showing of compelling need for the information in the settlement agreements to be entitled to invade that protection on the basis of public policy favoring settlements, the parties’ expressed desire for confidentiality, and the speculative nature of measuring damages by the amounts awarded in settlements.  (Hinshaw, 51 Cal.App.4th at pgs. 241-242.)  Here, like in Hinshaw, the financial records of a third-party, Swaner, would be compromised by the disclosure of the Settlement Agreement in a subpoena.  While Pinnacle Defendants seek information related to any agreements or arrangements related to the Subject Property directly at issue in this case, a protective order would properly balance Swaner’s financial privacy interest against Pinnacle Defendants’ rights under the Discovery Act to obtain relevant discovery.

Pinnacle Defendants’ argument in opposition on the basis of Volkswagen of America, Inc. v. Superior Court is inapposite, as Williams also recognizes the importance of preserving the privacy interests of third parties, like Swaner.  (Volkswagen of America, Inc. v. Superior Court (2006) 139 Cal.App.4th 1481, 1492.)

Based on the foregoing, Plaintiffs’ motion for protective order is granted as to the Settlement Agreement.

Dated: Aprill 11, 2023

                                                                             Hon. Daniel P. Ramirez
                                                                            Judge of the Superior Court