Judge Randy Rhodes, Case 21CHCV00961 2022-12-07 Tentative Ruling

MOVING PARTY: Defendant/Cross-Complainant 4650 Von Karman, LLC, a California limited liability company (“Defendant”)

RESPONDING PARTY: Plaintiff/Cross-Defendant Curtin Security Co., Inc., a California corporation (“Plaintiff”)

RELIEF REQUESTED: An order compelling Plaintiff to provide verified supplemental responses and all responsive documents to Defendant’s Request for Production of Documents (“RFPs”), Set One, specifically request Nos. 14–16 and 18–46, and a privilege log to the extent Plaintiff is withholding any responsive documents on the basis of a purported privilege or other ground. Defendant also requests monetary sanctions against Defendants in the amount of $6,013.00. Defendant also requests the court take judicial notice of a deed grant, recorded on 11/22/19.

TENTATIVE RULING: Defendant’s motion is granted, and defendant’s request for judicial notice is granted. Plaintiff is ordered to produce further responses to Defendant’s first set of RFPs as set forth below, including the production of a privilege log to the extent that Plaintiff intends to withhold any responsive documents on the basis of privilege. The Court imposes sanctions against Plaintiff in the amount of $650.00

This action arises out of the parties’ co-ownership of certain commercial real property located at 12843 Foothill Blvd., Los Angeles California 91342 (the “Property”). (Compl. ¶ 1.) Plaintiff purchased the building on 10/7/08 with non-party Zuggy, Inc., with Plaintiff holding 90% interest in the Property and Zuggy, Inc. holding the remaining 10% interest. (Exhibit 1 to Compl., p. 9.) On 12/29/08, Zuggy, Inc. sold its interest in the Property to 7675 San Fernando Road Bldg. 9E Associates, LLC. (Decl. of Marianna Fratianne, ¶ 11; Pl.’s Opp. 2:19–20.) Thereafter, on 7/23/19, 7675 San Fernando Road Bldg. 9E Associates, LLC conveyed its interest in the Property to Defendant. (Exhibit 1 to Compl., p. 10; Exhibit 6 to Fratianne Decl.)

On 12/16/21, Plaintiff filed its complaint for partition of the Property by sale.

On 3/15/22, Defendant filed its answer and its cross-complaint against Plaintiff for the following causes of action: (1) Intentional Breach of Fiduciary Duty; (2) Negligent Breach of Fiduciary Duty; (3) Accounting; and (4) Unjust Enrichment.

On 8/10/22, Defendant served its first set of RFPs on Plaintiff, generally seeking communications and financial documents relating to the Property. On 9/12/22, Plaintiff served its responses. On 10/7/22, Plaintiff served a responsive document production.

On 10/28/22, Defendant filed the instant motion to compel Plaintiff’s further responses to Defendant’s first set of RFPs, and a request for the Court to take judicial notice of the 11/22/19 grant deed conveying 7675 San Fernando Road Bldg. 9E Associates, LLC’s 10% interest in the Property to Defendant.

On 11/22/22, Plaintiff filed its opposition. On 11/30/22, Defendant filed its reply.

A propounding party may move for an order compelling further response to a discovery request if it decides that: “(1) A statement of compliance with the demand is incomplete”; “(2) A representation of inability to comply is inadequate, incomplete, or evasive”; or “(3) An objection in the response is without merit or too general.” (Code Civ. Proc. § 2031.310, subd. (a).)

Here, Defendant seeks to compel additional responses to its first set of RFPs, specifically to request Nos. 14–16 and 18–46, which relate to communications and financial information about the Property. (Def.’s Mot., 3:1–2.) Defendant argues that the motion is warranted because Plaintiff unjustifiably failed to respond to the requests as written, made meritless objections, and failed to produce a privilege log.

A motion to compel further discovery responses must be accompanied by a meet and confer declaration stating “facts showing a reasonable and good faith attempt at an informal resolution of each issue presented by the motion.” (Code Civ. Proc. §§ 2031.310, subd. (b)(2); 2016.040.)

Here, on 10/4/22, Defendant’s counsel sent Plaintiff’s counsel a meet and confer letter raising the issues in the instant motion. (Fratianne Decl., ¶ 4.) Plaintiff’s counsel responded on 10/10/22. (Id., ¶ 5.) The parties further discussed these issues on 10/17/22, 10/25/22, and 10/28/22, but were unable to come to an informal resolution. (Id., ¶¶ 6–9.) Accordingly, Defendant has satisfied the preliminary meet and confer requirement under Code of Civil Procedure section 2031.310, subdivision (b)(2).

Defendant argues that Plaintiff improperly rewrote the RFPs “by stating that the production will only be allowed in part,” in violation of Code of Civil Procedure sections 2031.210 through 2031.240. (Def.’s Mot., 8:25–26.) The statute requires a responding party to respond to each request with either a statement of compliance, a representation that the party lacks the ability to comply, or an objection to the demand. (Code Civ. Proc. § 2031.210, subd. (a).)

If the responding party responds with a statement of compliance, it must also state that the document production “will be allowed either in whole or in part, and that all documents or things in the demanded category that are in the possession, custody, or control of that party and to which no objection is being made will be included in the production.” (Code Civ. Proc. § 2031.220.)

If the responding party lacks the ability to comply with the request, it must “affirm that a diligent search and a reasonable inquiry has been made in an effort to comply with that demand. This statement shall also specify whether the inability to comply is because the particular item or category has never existed, has been destroyed, has been lost, misplaced, or stolen, or has never been, or is no longer, in the possession, custody, or control of the responding party. The statement shall set forth the name and address of any natural person or organization known or believed by that party to have possession, custody, or control of that item or category of item.” (Code Civ. Proc. § 2031.230.)

If the response includes an objection to the demand in part, it must also include a statement of compliance or noncompliance as set forth above. (Code Civ. Proc. § 2031.240, subd. (a).) Additionally, the response must (1) identify the particular document that falls within the category of the request to which the objection is being made, and (2) expressly set forth the extent of, and specific ground for, the objection. (Id., subd. (b).)

Defendant brings this motion arguing, in part, that Plaintiff’s objections to its first set of RFPs are without merit. (Def.’s Mot., 9:8–9; Code Civ. Proc. § 2031.310, subd. (a).) Plaintiff objected to each request propounded in Nos. 14–16 and 18–46 as follows:

“Responding Party objects to this demand to the extent it seeks documents prior to Propounding Party’s acquisition of its interest in the subject real property. No such prior documents will be produced. Responding Party further objects to this demand on the grounds that it is unduly burdensome and oppressive to the extent that any responsive documents have been provided to Propounding Party previously. Responding Party further objects to this demand on the grounds that it seeks information irrelevant to the issued [sic] in this lawsuit. Responding Party further objects to this demand to the extent that it seeks documents privileged from production on settlement discussion, attorney/client, attorney work product or privacy grounds. Such privileged documents will not be produced.”

Defendant argues that Plaintiff’s objections to the production of documents prior to Defendant’s acquisition of its interest in the Property are without merit because Defendant and its predecessor in interest are owned by the same principals. (Def.’s Mot., 10:5–13.) Defendant’s RFPs seek the production of documents dating back to January 1, 2014. (Exhibit 1 to Fratianne Decl.) Plaintiff argues that Defendant “received its interest in the subject property in November 2019. … As such, production of documents prior to Von Karman’s ownership has no bearing or relevance to this action.” (Pl.’s Separate Stmt.)

The Court takes judicial notice of the 7/23/19 grant deed, recorded on 11/22/19, documenting the conveyance of 7675 San Fernando Road Bldg. 9E Associates, LLC’s 10% interest in the Property to Defendant. (Exhibit 6 to Fratianne Decl.) The grant deed explicitly notes that “the grantor and grantees in this conveyance are comprised of the same parties who continue to hold the same proportionate interest in the property.” (Id., p. 2.)

Accordingly, the Court finds that Defendant and its predecessor, who acquired its interest in the Property in 2008, are owned by the same principals, thus rendering Plaintiff’s objections on this ground meritless.

Defendant further argues that Plaintiff’s objections to Defendant’s RFPs on the basis that they are unduly burdensome and oppressive are meritless because Plaintiff has made no showing of any such undue burden or oppression. (Def.’s Mot., 10:14–16.) The party objecting to a discovery request on this basis bears the burden of supplying evidence of “the quantum of work required.” (Williams v. Superior Court (2017) 3 Cal.5th 531, 549.)

Here, Plaintiff argues that Defendant requested “documents which have been provided to it on multiple occasions.” (Pl.’s Separate Stmt.; Decl. of Cyrus Godfrey ¶ 3.) Plaintiff argues that Defendant was given quarterly accountant-prepared financial reports relating to the Property, and the burden of requiring it to reproduce all responsive documents would be great, as it would require significant time and money paid to its accountants. (Id., 6:14–16.) “For [Defendant] to now assert that they have not previously been provided copies of financial records and reports continuously through the years simply is false and should not be condoned by the court. “ (Pl.’s Opp., 5:1–3.)

Defendant argues in reply that the previous documents provided by Plaintiff, namely various QuickBooks documents and balance sheets, are insufficient to provide the full accounting which Defendant seeks by way of its RFPs. (Def.’s Reply, 6:16–19.) “The prior production … is not a substitute for a full and complete production of all responsive documents in this litigation.” (Def.’s Mot., 10:20–22.)

The Court agrees with Defendant that the scope of its requests exceed that of the financial documents Plaintiff previously provided to Defendant. Defendant’s requests seek such documents as communications between Plaintiff and certain individuals, Property agreements (e.g., lease agreements), grant and loan applications, insurance claims, appraisals, and letters of intent. (Exhibit 1 to Fratianne Decl.) Accordingly, Plaintiff’s objections to the requests to the extent that they are unduly burdensome, oppressive, or duplicative of the documents previously provided to Defendant, are meritless.

Defendant further argues that Plaintiff’s objections to Defendant’s RFPs on the basis that they seek irrelevant matter are meritless because the documents are directly related to the claims in the Complaint and Cross-Complaint. (Def.’s Mot., 10:14–16.) Discovery is relevant if it is admissible as evidence, or “appears reasonable calculated to lead to the discovery of admissible evidence.” (Code Civ. Proc. § 2017.010.) “Discovery may relate to the claim or defense of the party seeking discovery or of any other party to the action.” (Ibid.)

Here, “the documents sought are relevant to Curtin’s and Von Karman’s claims as they are directly tied to the allegations of the Complaint (and inherent to a Partition action) and the Cross-Complaint’s claims of breach of fiduciary duty, etc. They include requests for financial documentation which are expressly allowed in a partition action.” (Def.’s Mot., 11:9–13.) The Court finds that financial and accounting documents sought by Defendant, as detailed above, are relevant to the parties’ claims for partition, accounting, and unjust enrichment. Plaintiff’s argument that the request “could relate to documents irrelevant to the issues in this litigation” is insufficient to overcome this finding. Accordingly, Plaintiff’s objections to the requests on the basis of relevance are meritless.

Plaintiff’s final objections to Defendant’s requests assert that the requests seek privileged documents “on attorney/client, attorney work product or privacy grounds.” (Exhibit 2 to Fratianne Decl.) “If an objection is based on a claim of privilege or a claim that the information sought is protected work product, the response shall provide sufficient factual information for other parties to evaluate the merits of that claim, including, if necessary, a privilege log.” (Code Civ. Proc. § 2031.240, subd. (c)(1).)

Here, as Defendant observes, Plaintiff’s responses do not mention any factual information supporting its claims of privilege, nor has Plaintiff produced a privilege log. (Def.’s Mot., 11:25.) In its separate statement, Plaintiff claims a privacy privilege because Defendant “is not and has never been since its acquisition of an interest in the subject property a partner or anyone entitled to private financial information related to [Plaintiff].” (Pl.’s Separate Stmt.) Plaintiff further contends that it does not owe Defendant any fiduciary duties as the parties are co-tenants who acquired their ownership interests at different times with separate instruments. (Pl.’s Opp., 5:9–15.)

“While corporations do have a right to privacy, it is not a constitutional right.” (SCC Acquisitions, Inc. v. Superior Court (2015) 243 Cal.App.4th 741, 756.) Therefore, a balancing test must be used, where “the discovery's relevance to the subject matter of the pending dispute and whether the discovery ‘appears reasonably calculated to lead to the discovery of admissible evidence’ is balanced against the corporate right of privacy.” (Ibid.)

Here, as Defendant observes, the financial documents are germane to both the Complaint and the Cross-Complaint, which contain causes of action for partition, breach of fiduciary duty, accounting, and unjust enrichment. (Def.’s Reply, 5:18–19.) Defendant argues that it is entitled to “the historical documentation as to how the Property is and has been managed, to address the failure to pay out to Von Karman and its assignor the 10% profits, to address Curtin’s self-dealing, etc.,” particularly when financial discovery is allowed in partition actions. (Id., 5:20–6:11.) As set forth above, the requests are directly relevant to the parties’ claims, and therefore prevail against Plaintiff’s corporate right of privacy.

Accordingly, Plaintiff’s objections to the requests to the extent that they are privileged as private financial information are meritless. To the extent that Plaintiff intends to further object to the requests on the basis of any other privilege, it should produce a privilege log pursuant to Code of Civil Procedure section 2031.240, subdivision (c)(1).

In addition to its aforementioned objections, Plaintiff’s responses to Defendant’s requests provide as follows:

· Nos. 14–16: “Responding Party is unaware of any documents responsive to this demand during the relevant time periods.”

· No. 18: “Responding Party will produce any documents transmitted to its agents which bear on the issues of this action and which were intended for dissemination to Propounding Party as a tenant in common in the subject property.”

· Nos. 19–27, 42, 44–46: “Responding Party will produce such non-privileged, responsive documents for the period after Propounding Party’s acquisition of the subject real property.”

· Nos. 28–41: “Responding Party will produce such non-privileged, responsive documents for the period after Propounding Party’s acquisition of the subject real property to the extent that they bear on the joint ownership of the property.”

· No. 43: “Responding Party will not produce any documents responsive to this demand.”

Defendant argues that the language used in Plaintiff’s responses, limiting Plaintiff’s compliance with Defendant’s requests, amounts to a complete rewriting of the original requests. (Def.’s Mot., 8:26–27.) Defendant further argues that Plaintiff’s responses do not comply with the requirements of either Code of Civil Procedure sections 2031.220 or 2031.230.

Plaintiff’s responses to request Nos. 18–42 and 44–46, which purport to limit the scope of Plaintiff’s responsive document production, are most aptly analyzed under Code of Civil Procedure section 2031.220 as statements of compliance with the requests. The statute requires the complying party to state in its response that (1) the production will be allowed either in whole or in part, and (2) all non-objectionable responsive documents that are in its possession, custody, or control will be included in the production. (Code Civ. Proc. § 2031.220.) Here, the language used by Plaintiff in its responses show its intention to allow the production in part, pursuant to the statute. While the initial responses do not include a statement that Plaintiff would produce all non-objectionable responsive documents in its possession, Plaintiff makes this representation in its separate statement. Nevertheless, Plaintiff’s responses are insufficient given the above determinations that its objections are meritless.

Plaintiff’s responses to request Nos. 14–16 and 43 are seemingly “representations of inability to comply” with the requests, and are thus analyzed under Code of Civil Procedure section 2031.230. The initial responses were not accompanied by statements explaining the reasoning for Plaintiff’s inability to comply, nor any names or addresses of parties who would be in possession of the responsive documents. (Code Civ. Proc. § 2031.230.)[1]

Accordingly, Plaintiff’s responses to Defendant’s first set of RFPs are not complaint with Code of Civil Procedure sections 2031.210, 2031.220, 2031.230, and 2031.240, and Defendant’s motion to compel Plaintiff’s further responses to request Nos. 14–16 and 18–46 is therefore granted.

“The court shall impose a monetary sanction … 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.” (Code Civ. Proc. § 2031.310, subd. (h).)

Here, Defendant requests sanctions in the total amount of $6,013.00 to be imposed on Plaintiff and its counsel. This amount includes 12 hours of Plaintiff’s attorney’s time working on this motion, at her hourly billing rate of $495.00 per hour, plus a $60 filing fee for the motion and $13 in electronic filing charges. (Fratianne Decl., ¶ 16.) Counsel’s time was spent as follows: 3 hours drafting meet-and-confer communications; 5 hours preparing the instant motion and supporting documents; an anticipated 2 hours reviewing the opposition and drafting a reply; and an anticipated 2 hours preparing for and attending the hearing on the instant motion.

In granting the instant motion, the Court finds it reasonable to award Defendant sanctions against Plaintiff and its counsel in the amount of $650.00.

Defendant’s motion is granted, and defendant’s request for judicial notice is granted. Plaintiff is ordered to produce further responses to Defendant’s first set of RFPs as set forth above, including the production of a privilege log to the extent that Plaintiff intends to withhold any responsive documents on the basis of privilege. The Court imposes sanctions against Plaintiff in the amount of $650.00.

[1] Curiously, Plaintiff’s separate statement asserts that it “has produced documents in its possession for the relevant period” in response to request Nos. 14–16 and 43, despite its initial assertions that it was unaware of any such documents and that it would not produce them. (Pl.’s Separate Stmt.)