Judge: Ronald F. Frank, Case: 22IWUD00103, Date: 2022-10-26 Tentative Ruling

Case Number: 22IWUD00103    Hearing Date: October 26, 2022    Dept: 8

TENTATIVE RULING: Deny motion to quash, order parties to draft and lodge with the Court by 11/4/22 a proposed Protective Order re personal financial records of Mr. Policicchio that CB&T may produce pursuant to SDT. Deny monetary sanctions to either side

OPPOSITION: Yes, filed October 13, 2022

REPLY: Yes, filed October 19, 2022

BACKGROUND¿

Plaintiff Splitting Hairs Hermosa, LLC, (“Plaintiff”) filed this action on February 10, 2022, against Defendants Daniel Joseph Policicchio, Sr., Deborah L. Policicchio, Coastal Construction Inc., Dangia Group, Inc., and Does 1 through 20. Plaintiff’s verified Complaint alleges damages for: (1) For all money paid to allegedly unlicensed general contractor; (2) breach of written contract; and (3) fraudulent concealment. This action has been deemed related by Judge Tanaka in Torrance to several other also actions on calendar on October 26, 2022 for status conferences. This and the related actions pertain to claims arising from the construction of improvements to a jobsite in the Plaza Hermosa shopping center on Pacific Coast Highway, and include allegations that because some of the defendants were not licensed contractors they should be required to disgorge nearly $1M in compensation paid to them under one or more written contracts. When this and the related cases were assigned to Judge Tanaka in Torrance, there was considerable law and motion activity including proceedings concerning pre-judgment right to attach orders. Judge Tanaka also set the hearing on this Motion to Quash after vigorous briefing and hearings over the scheduling of hearings on this and other motions.

Because October 26, 2022 will be the first time a judge in Inglewood will be seeing this case, the Court advises all parties that it has reviewed the files to gain a fuller context of this motion in the overall related litigation.

The Subject Motion: On June 10, 2022, Plaintiff caused to be issued a subpoena to the custodian of records of California Bank & Trust (“CB&T”), a third-party witness for a production date of June 28, 2022, for bank records of Mr. Policicchio (“Dan”) and Dangia. Plaintiff contends that it had wired its construction contract payment moneys to a Dangia account at CB&T and that the bank’s records in the various categories of the SDT are discoverable,

among other reasons, to show that Dangia is Dan’s alter ego. Dan is Dangia’s President and per the Motion to Quash when he established the Dangia account at CB&T he was required to provide the bank with numerous personal financial records that he contends should be kept private.

On June 12, 2022, Plaintiff assert it served the SDT on CB&T and gave notice of same to all Defendant Party Consumers by service on defense counsel, which plaintiff contends is exactly what CCP § 1985.3(b)(1) and (e) required it to do. The SDT called for production by the bank on June 28. Between June 12 and June 28, counsel exchanged barbed correspondence that preceded the motion to quash. Counsel for each side accuse each other of misdeeds and misconduct during that time. But the consequence of the inability of the disputing parties to resolve their disagreement over the nature and scope of the categories of records sought by the SDT has been a substantial delay in the ultimate production of records by the third-party witness bank. Plaintiff contends that was the defense objective.

On June 28, 2022, Defendants filed this motion to quash deposition of subpoena to CB&T. On October 13, 2022, Plaintiff filed an opposition to this motion to quash and evidentiary objections. On October 19, Defendants filed a reply to Plaintiff’s opposition to the motion to quash.

LEGAL STANDARDS

CCP §¿1987.1(a)¿states: “[i]f a subpoena requires the attendance of a witness or the production of books, documents, or other things before a court, or at the trial of an issue therein, or at the taking of a deposition, the court, upon motion reasonably made by any person described in subdivision (b), or upon the court’s own motion after giving counsel notice and an opportunity to be heard, may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare, including protective orders.¿ In addition, the court may make any other order as may be appropriate to protect the person from unreasonable or oppressive demands, including unreasonable violations of the right of privacy of the person.”¿

CCP¿§¿1985.3(b)¿states that, prior to the date called for in the subpoena duces tecum for the production of personal records, the subpoenaing party shall serve or cause to be served on the consumer whose records are being sought a copy of the subpoena duces tecum, of the affidavit supporting the issuance of the subpoena, if any, and of the notice described in subdivision (e) (notice to consumer), and proof of service as indicated in paragraph (1) of subdivision (c).¿

“[U]pon¿motion reasonably made by the party, judges may rule upon motions for quashing, modifying or compelling compliance with subpoenas.”¿¿Lee v. Swansboro Country Property Owners¿Ass'n¿(2007) 151 Cal. App. 4th 575, 582-83.¿ Either the nonparty witness who has been subpoenaed or any party to the action may challenge the deposition subpoena.¿¿¿Weil & Brown,¿Civ. Proc. Before Trial,¿¶¿8:597.¿¿¿

A deposition subpoena may be quashed for:¿(1) defects in form or content of the subpoena (e.g., inadequate description of requested records); (2) defects in service of the subpoena (e.g., failure to satisfy the requirements of providing notice to consumer; (3)

requesting¿production of records not within the permissible scope of discovery; and (4) being unjustly burdensome or oppressive.¿ Weil & Brown,¿Civ. Proc. Before Trial, ¶¿8:598.¿

CCP § 2017.020(a) states “the court shall limit the scope of discovery if it determines that the burden, expense, or intrusiveness of that discovery clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence. The court may make this determination pursuant to a motion for protective order by a party or other affected person. This motion shall be accompanied by a meet and confer declaration under Section 2016.040.”

DISCUSSION¿

Untimely Filing

As a preliminary matter, Plaintiff’s opposition to Defendants’ motion to quash argues that Defendants’ motion was untimely under Code of Civil Procedure § 1985.3(g), a consumer whose personal records are sought may file a motion to quash the subpoena, and “[n]otice of the bringing of that motion shall be given to the witness and deposition officer at least five days prior to production. The failure to provide notice to the deposition officer shall not invalidate the motion to quash or modify the subpoena duces tecum but may be raised by the deposition officer as an affirmative defense in any action for liability for improper release of records.” (Code Civ. Proc. § 1985.3(g) (emphasis added)).

Here, Plaintiff argues that the same is true for the written objections. The date set for the bank’s production of the subpoenaed records was June 28, 2022. On June 21, 2022, Defendants served their written objections. Defendants argued in their reply that because the parties did not reach an agreement in the meet and confer on or after June 21, 2022, it would have been premature to file the motion much before the date set for production. Plaintiff asserts that the last day to file the motion was five days prior to June 28, 2022, not on June 28, 2022. The Court concurs that the MTQ should have been filed not less than 5 days before June 28, but given the Court’s view of the merits as discussed below it need not deny the Motion to Quash for that procedural defect.

Consumer Records

Defendant asserts that Plaintiff’s deposition subpoena should be quashed because it seeks production of consumer records. The SDT requests consumer records related for a banking account held by Dangia Group, Inc., but Defendant argues that the requests are not limited to those of Dangia because of the definitions used in the SDT. Defendant asserts that all twenty-four document categories requested in the SDT seek documents related to account number 5798821822 held in the name of Dangia Group, Inc. The Subpoena defines “DANGIA GROUP, INC.” in the to include “its directors, officers, agents… employees… members, owners, or any person, agent, agency or entity acting on its behalf.” (Subpoena, Attachment 3, Definitions.) Dan is the corporate president and owner of Dangia. (Declaration of Daniel Joseph Policicchio (“Policicchio Decl.”), ¶ 2.) As such, Dan’s consumer records are being sought by the Subpoena. Accordingly, Defendant argue that both Dangia and Dan have standing, as parties and as consumer (Dan), to seek an order quashing or modifying the Subpoena.

Defendants further assert that the subpoena is procedurally defective because Plaintiff failed to serve a separate, stand-alone, statutory Notice to Consumer direct to Dan. Defendants claim that while the subpoena was directed to Dangia, Dan’s personal consumer banking records were sought because of the definition of “DANGIA GROUP, INC.” as discussed above.

In opposition, Plaintiff argues that Dan’s consumer rights have not been violated because Plaintiff gave notice by service on Dan’s attorney of record, in compliance with Code of Civil Procedure §§ 1985.3 and 1984.4. Plaintiff notes that, all of the claimed “Defendant Party Consumers,” i.e., Dangia, Dan and Deborah, were given notice by the providing of notice to their attorney of record, Mr. Bubion. Plaintiff argues that the claimed improper notice was a fallacy invented by Mr. Bubion to convince CB&T to not comply with a simple Subpoena for production of bank records. Plaintiff even cites to Bubion’s declaration, noting that he admitted to notice of the subpoena being served on him. (See Decl. Bubion ¶ 2, 3).

The Court finds Plaintiff has the better of the argument on the notice issue. The letter and the spirit of the notice requirements in the SDT sections of the Code are to ensure that a person whose consumer records are being sought has procedural Due Process rights to be able to challenge efforts to obtain her or his records from a third party. Those requirements were substantially satisfied by the notice Plaintiff gave to Dan through his counsel as contemplated by several different provisions of the Code.

Plaintiff further alleges that Dan’s personal records maintained by CB&T are not subject to any protection from production by CB&T. Section 1985.3(a)(1) defines personal records as “the original of any copy of books, documents, other writings or electronically stored information pertaining to a consumer and which are maintained by any ‘witness’” (emphasis added), citing Sasson v. Katash (1983) 146 Cal.App.3d 119, 123-25 (subpoenaed bank records not limited to those prepared or maintained in the course of the bank customer relationship, e.g., checking account records, but include documents or things prepared by third parties, in other relationships, and entrusted to the witness: in this case, a lease between the consumer and another person). CB&T qualifies as a “witness” under Section 1985.3 (a) (1).

Constitutional Privacy Rights

Defendants assert that the subpoena should be quashed or modified because Plaintiff requests information and documents that invade Defendants’ constitutional privacy rights. Here, Plaintiff’s subpoena seeks records from January 2021 to present. Defendants allege that this time period is overbroad and invades Dangia’s general privacy rights because it is not narrowly tailored to the relevant time period for the alter ego claim. Defendant claims that the relevant period of time includes the time period of the construction project – March 2021 to August 2021.

In response, Plaintiff does not address the narrowing of time period, but instead argues that Dangia is not a consumer under section 1985.3. Plaintiff also argues that a corporation is not included in the definition of consumer in section 1985.3; even though Dangia was given notice, it was not entitled to notice as a consumer, only as a party. The person who may be entitled to notice pursuant to Section 1985.3 (a)(2) defines consumer as: “any individual, partnership of five or fewer persons, association, or trust which has transacted business with, or has used the services of, the witness or for whom the witness has acted as agent….” A corporation is not included in the definition.

The Court will entertain oral argument at the hearing on Defendants’ request to narrow the scope of the time period to only include the relevant period of time during the construction project - March 2021 to August 2021. There may be good reasons to refrain from narrowing the scope, but if Plaintiff is willing to concede or acquiesce on a point it failed to address in its Opposition, the Court will so order.

Finally, the Court will also entertain argument at the hearing as to whether a protective order should be in place to restrict the use of Dan’s personal financial information to only those purposes required by this litigation and to prevent the filing of any exhibits containing such information without procedural safeguards to protect his right of privacy.

On the cross-requests for monetary sanctions, the Court recognizes that each side has a good faith belief that the other is engaged in improper conduct or misuse of the civil discovery process. But on the record presented, the Court is not inclined to award sanction to either party.

CONCLUSION¿

Based on the foregoing, the Court DENIES Defendants’ Motion to Quash the subpoenas directed to CB&T. Depending on Plaintiff’s position at oral argument, the Court is inclined to GRANT Defendants’ request to modify the subpoenas to only seek responsive documents created, dated and/or received during the period of time between March 2021 to August 2021. Further, the Court is inclined to order the parties to draft and lodge with the Court by 11/4/22 a proposed Protective Order re personal financial records of Mr. Policicchio that CB&T may produce pursuant to the SDT. The Court denies monetary sanctions to either side.

Unless notice is waived, Plaintiff is ordered to give notice of this ruling.¿