Judge Peter A. Hernandez, Case Number: 23STCP01071, Date: 2023-10-04 Tentative Ruling

1. Cross-Complainant Maryam Rouillard’s Motion to Quash Deposition Subpoena to Wells Fargo for Production of Business Records is GRANTED in part [i.e., as to Categories Nos. 19-24] and otherwise DENIED. Rouillard’s alternate request to limit the deposition subpoena is GRANTED in part [i.e., as to Categories Nos. 6-16], DENIED in part [i.e., as to Categories Nos. 17 and 18] and is otherwise DENIED as MOOT [see below]. Sanctions are denied.

2. Cross-Complainant Maryam Rouillard’s Motion to Quash and/or Limit Deposition Subpoena to JP Morgan Chase Bank for Production of Business Records is GRANTED in part [i.e., as to Categories Nos. 19-24] and otherwise DENIED. Rouillard’s alternate request to limit the deposition subpoena is GRANTED in part [i.e., as to Categories Nos. 6-16], DENIED in part [i.e., as to Categories Nos. 17 and 18] and is otherwise DENIED as MOOT [see below]. Sanctions are denied.

Plaintiff Annex Walnut Automotive Colors & Supply, Inc. (“Annex”) alleges as follows:

Annex is a distributor of automotive and industrial coatings and paint. Rachel M. Darvish ("Darvish"), Keyvan Rahbar (“Rahbar”) and Maryam Rouillard (“Rouillard”) each own 33% of the outstanding shares and voting power of Annex. Rouillard has been responsible for the day-to-day management and operations of Annex. Annex seeks to wind up and dissolve. Rouillard has never distributed any income to Darvish and Rahbar but has reported to the IRS distributions to both. In December 2022, Rouillard informed Darvish and Rahbar of her plans to retire, that she had arranged to sell sale of Annex to one its competitors, Wesco Group, LLC. (hereinafter "Wesco Group") and that she and Wesco Group had agreed on a total estimated purchase price of $1,308,385.00. On January 30, 2023, Rouillard changed Annex’s Statement of Information on file with the California Secretary of State to name herself as agent for service of process and its only director and Chief Executive Officer. On March 6, 2023, Darvish, Rahbar and Rouillard met to discuss how the sale and distribution of the proceeds would be handled; during that meeting, Rouillard became angry and physically assaulted Darvish. Rouillard interfered with the sale due in part to the March 6^th incident, causing Wesco Group to withdraw from the transaction. On or about May 1, 2023, Darvish and Rahbar contacted Wesco Group and were able to revive Wesco Group's initial offer to purchase Annex. On May 17, 2023, in order to effectuate the sale, Wesco Group submitted a list of documents to be produced by Annex. Rouillard is one of two individuals affiliated with Annex who has access to this information, the other person being Rouillard's nephew, Amir Karimpour (“Karimpour”). Rouillard has failed to cooperate and has directed Annex’s employees, including Karimpour, not to cooperate and supply the requested information. Rouillard has contacted representatives of Wesco Group, as well as other third parties and potential buyers, and informed them that she will prevent the sale of Annex to Wesco Group or to those third-party buyers.

On June 8, 2023, Annex filed a “Verified First Amended Petition,” asserting causes of action against Rouillard, John Kobes, Calvin Kobes and Does 1-20 for:

1. Request for Court Supervision Over Voluntary Dissolution—California Corporations Code Section 1904

On August 17, 2023, the court related Case No. 23PSCV01022 to the instant case and designated the instant case as the lead case.

On November 21, 2023, an “Order Authorizing Receiver Kevin Singer to Draw Upon Annex Walnut Automotive Colors & Supply, Inc., Wells Fargo Line of Credit Account” was entered.

On December 22, 2023, an “Order to Show Cause Re: Contempt Against Defendant” was entered.

A Trial Setting Conference and an Order to Show Cause Re: Why the Defendant Should Not be Held in Contempt of Court are set for January 24, 2024.

M&K is a general partnership between Lilly Darvish and Rahbar. On October 4, 2019, Rouillard caused legal title to the property located at 17999 East Valley Boulevard, City of Industry, CA 91744 (“property”) to be transferred to MMK Partners, LLC (“MMK Partners”). The transfer was unauthorized and made without consideration.

On May 30, 2023, M&K filed a First Amended Complaint, asserting causes of action against MMK Partners, Kamran Ghoreyshi (“Ghoreyshi”), Rouillard, all persons unknown claiming any legal or equitable right, title, estate, lien, or interest in the property described in the complaint adverse to Plaintiff’s title, or any cloud on Plaintiff’s title thereto and Does 1-20 for:

On August 17, 2023, the court related Case No. 23STCP01071 to the instant case and designated Case No. 23STCP01071 as the lead case.

On December 6, 2023, M&K dismissed MMK Partners, Ghoreyshi and Does 1-20, without prejudice.

If a subpoena requires the attendance of a witness or the production of documents, the court may, upon motion reasonably made, make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms of conditions as the court shall declare, including protective orders. (Code Civ. Proc., § 1987.1, subd. (a).)

In making an order pursuant to CCP § 1987.1, “the court may in its discretion award the amount of the reasonable expenses incurred in making or opposing the motion, including reasonable attorney’s fees, if the court finds the motion was made or opposed in bad faith or without substantial justification or that one or more of the requirements of the subpoena was oppressive.” (Code Civ. Proc., § 1987.2, subd. (a).)

“Any motion involving the content of a discovery request or the responses to such a request must be accompanied by a separate statement. The motions that require a separate statement include a motion: . . . (5) To compel or to quash the production of documents or tangible things at a deposition.” (California Rules of Court [“CRC”] Rule 3.1345(a)(5).)

Rouillard moves the court for an order quashing or modifying production, or granting a protective order against disclosure to third parties, as to Annex’s subpoena issued on December 5, 2023 directed to the Custodian of Records for Wells Fargo Bank, National Association (“WF”). Rouillard also seeks sanctions against Plaintiff in the amount of $4,785.00.

Shortly after December 12, 2023, Abrams’ office received a copy of a Deposition Subpoena for Production of Business Zivari”). Between January 2, 2024 and January 4, 2024, Abrams and Plaintiff’s counsel, Pedram Zivari (“Zivari”), exchanged emails wherein Abrams raised various objections. (Id., ¶ 11).

From any and all times to the present, any and all records, notes, electronic communications, including any electronic data transaction file reflecting,

At the outset, the court notes that Plaintiff has agreed to remove Categories Nos. 19-24 from its subpoena (Opp., 7:2-4); as such, the motion to quash is summarily granted in part in this regard.

With respect to Categories Nos. 1-5, Rouillard has advised that “if a time limit of four years is set, Defendant has no objection to the production of such information.” (Sep. State., 2:21-22; 3:7-8; 3:21-22; 4:7-8 and 4:21-22). Plaintiff, in turn, acknowledges that the relevant time period should be “scaled back” but proposes a time limit of seven years, which it represents is the bank’s retention period. (Opp., 2:17-19; 5:18-20).[1]

Rouillard asserts that Categories Nos. 6-18 seek irrelevant information. This assertion is not well-taken. “[A]ny party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action or to the determination of any motion made in that 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). “For discovery purposes, information is relevant 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 [internal quotations and citation omitted].)s

Plaintiff has alleged, inter alia, that Rouillard converted Plaintiff’s earnings, inventory and property (Verified First Amended Petition [“Petition”], ¶¶ 44-46), that Rouillard concealed the fact that she authorized corporate expenses which were, in fact, her own personal expenses (Id., ¶ 50) and that it relied on Rouillard’s representations that expenses were reasonable and necessary business expenses when they actually constituted unauthorized dividends for her own personal benefit. (Id., ¶ 53). Further, Rouillard has alleged in her FACC that she managed and operated Plaintiff for approximately 30 years, contributed her own personal funds and received minimal compensation and lent money to Plaintiff without seeking immediate repayment because Plaintiff and its shareholders had promised her that she would be “justly compensated” for her contributions and work at the time Plaintiff was dissolved and sold. (FACC, ¶¶ 11-13).

The court, in fact, in its March 5, 2024 order entered on the “OSC Re: Contempt of Court Concerning Defendant Maryam Rouillard” has found beyond a reasonable doubt that Rouillard has violated the July 7, 2023 Appointment Order by diverting $115,721.90 from Plaintiff’s checking account into her personal checking account.

The bank records sought, then, are relevant to the facts and causes of action asserted in both the Petition and FACC and are necessary to prove, or disprove, same.

Rouillard asserts financial privacy. The 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. (Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 35-37.) The party seeking information may raise in response whatever legitimate and important countervailing interests disclosure serves, while the party seeking protection may identify feasible alternatives that serve the same interests or protective measures that would diminish the loss of privacy. (Id. at 37–40.) Courts must carefully balance a right of privacy against the interest in having just litigation. (Pioneer Electronics (USA), Inc. v. Superior Court (2007) 40 Cal.4th 360, 371.) If there is a serious invasion of a constitutional right to privacy, the party seeking the evidence must establish that the information sought is not only essential and directly relevant, but also that this information could not be discovered through less intrusive means. (See Williams v. Superior Court (2017) 3 Cal.5th 531, 552; Allen v. Superior Court (1984) 151 Cal.App.3d 447, 449.) Rouillard cannot establish an objectively reasonable expectation of privacy, nor has she identified a serious threatened intrusion under the circumstances here or less intrusive alternatives.

Rouillard also asserts third-party privacy. Third-party privacy rights, however, can be adequately safeguarded by the parties’ entry into a stipulated protective order. Plaintiff has represented that it “has no objection to the bank records being produced subject to a condition that [it will not disclose the records to a person not involved in this litigation.” (Opp., 4:13-15).

Again, the court grants the motion to quash the subpoena with respect to Categories Nos. 19-24. The court will modify Categories Nos. 6-16 of the subpoena to the extent that they will be limited in time to the last seven years. The motion to quash or modify Categories Nos. 17 and 18 of the subpoena is denied. The motion to modify Categories Nos. 19-24 is denied as moot.

Rouillard moves the court for an order quashing or modifying production, or granting a protective order against disclosure to third parties, as to Annex’s subpoena issued on December 5, 2023 directed to the Custodian of Records for JPMorgan Chase Association. Rouillard also seeks sanctions against Plaintiff in the amount of $4,785.00.

The subpoena seeks the same information set forth in Motion #1, except that it pertains to

“Account Number 872279237 held in the name of Maryam Rouillard aka Maryam Mansouri aka Maryam Mansouri Rouillard: DOB: 02/08/1949, SSN: XXX-XX-8437, individually or jointly with any person or entity.”

The court grants the motion to quash the subpoena with respect to Categories Nos. 19-24. The court will modify Categories Nos. 6-16 of the subpoena to the extent that they will be limited in time to the last seven years. The motion to quash or modify Categories Nos. 17 and 18 of the subpoena is denied. The motion to modify Categories Nos. 19-24 is denied as moot.

[1] With respect to Categories Nos. 6-16, Plaintiff is likewise agreeable to limiting the time period to seven years. (Id., 6:2-3).