Judge Ronald F. Frank, Case Number: 22TRCP00389, Date: 2023-05-25 Tentative Ruling

Judge: Ronald F. Frank, Case: 22TRCP00389, Date: 2023-05-25 Tentative Ruling

Case Number: 22TRCP00389 Hearing Date: October 3, 2023 Dept: 8

Tentative Ruling

HEARING DATE: October 3, 2023¿

CASE NUMBER: 22TRCP00389

CASE NAME: Alan Elias v. West Coast Laboratories, Inc.

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MOVING PARTY: Respondent, West Coast Laboratories, Inc.

RESPONDING PARTY: Petitioner, Alan Elias

MOTION:¿ (1) Motion to Compel Further Responses, Without Objections, to Requests for Production, Set One

(2) Motion to Compel Further Responses, Without Objection, to Requests for Admission, Set One

(3) Motion to Compel Further Responses, Without Objections, to Form Interrogatories, Set One

(4) Request for Sanctions

Tentative Rulings: (1) Motion to Compel RFP is DENIED as to 1, 2, and 4

(2) Motion to Compel RFAs ; the Court will entertain oral argument as to relevancy

(3) Motion to Compel FROGS is to be argued as to 17.1, since the interrogatory responses are dependent on whether the Court orders responses to the corresponding RFAs, but GRANTED as to 2.5.

(4) Request for Sanctions as to RFPs, RFAs, and FROG 17.1 is denied. Each side had substantial justification for its position regardless of which way the Court rules

I. BACKGROUND¿

A. Factual¿

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On October 21, 2022, Petitioner, Alan Elias (“Petitioner”), filed a Writ of Mandate against Respondent, West Coast Laboratories, Inc. (“Respondent” or “WCL”.) On February 14, 2023, Petitioner filed an Amended Writ of Mandate. (“AWOM”.) Petitioner requested in his writ of mandate to allow his accountant, Ashraf Attalah, to inspect the “accounting books, records, and minutes of proceedings of the shareholder and the board” as allowed under California Corporations Code section 1601.

On April 13, 2023, Respondent notes that it propounded on Defendant a set of Requests for Production, Requests for Admission, and Form Interrogatories, Set One. Respondent notes that on May 26, 2023, Petitioner sent their responses to Respondent. However, Respondent argues that for Requests for Production Nos 1-4, Requests for Admission Nos. 1-7 and 26-29, and Form Interrogatories Nos. 2.5, and 17.1 contain boilerplate objections. As such, Respondent has brought these Motions to Compel Further Responses.

B. Procedural

On July 12, 2023, Respondent brought its Motions to Compel Further. On August 9, 2023, Plaintiff filed an opposition. To date, no reply brief has been filed. On August 17, 2023, the Court granted an ex parte application to continue the discovery motions and the trial date.

¿II. ANALYSIS ¿

A. Legal Standard

“Unless otherwise limited by order of the court in accordance with this title, any 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 of Civ. Proc. § 2017.010.) For discovery purposes, information is regarded as relevant “if it might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement thereof.” (City of Los Angeles v. Superior Court (2017) 9 Cal.App.5th 272, 288.)

A motion to compel further responses to a demand for inspection or production of documents (“RFP”) may be brought based on: (1) incomplete statements of compliance; (2) inadequate, evasive, or incomplete claims of inability to comply; or (3) unmerited or overly generalized objections. (Code Civ. Proc., § 2031.310(c).) A motion to compel further production must set forth specific facts showing good cause justifying the discovery sought by the inspection demand. (See Code Civ. Proc., § 2031.310(b)(1).) In Digital Music News LLC v Superior Court (2014) 226 Cal.App.4th 216 at 224, the Court defined “good cause” as a showing that there “a disputed fact that is of consequence in the action and the discovery sought will tend in reason to prove or disprove that fact or lead to other evidence that will tend to prove or disprove the fact.” If the moving party has shown good cause for the requests for production, the burden is on the objecting party to justify the objections. (Kirkland v. Sup.Ct (2002) 95 Cal. App.4th 92, 98.)

Further, “Any party may obtain discovery . . . by propounding to any other party to the action written interrogatories to be answered under oath.”¿ (Code Civ. Proc., § 2030.010, subd. (a).)¿¿ “The party to whom interrogatories have been propounded shall respond in writing under oath separately to each interrogatory by any of the following: (1) An answer containing the information sought to be discovered[;] (2) An exercise of the party's option to produce writings[;] (3) An objection to the particular interrogatory.”¿ (Code Civ. Proc., § 2030.210, subd. (a).)¿“On receipt of a response to interrogatories, the propounding party may move for an order compelling a further response if the propounding party deems that any of the following apply: (1) An answer to a particular interrogatory is evasive or incomplete[;] (2) An exercise of the option to produce documents under Section 2030.230 is unwarranted or the required specification of those documents is inadequate[;] (3) An objection to an interrogatory is without merit or too general.”¿ (Code Civ. Proc., § 2030.300, subd. (a).)¿

Additionally, Code of Civil Procedure section 2033.290, subdivision (a), provides that “[o]n receipt of a particular response to requests for admissions, the party requesting admissions may move for an order compelling a further response if that party deems that either or both of the following apply: (1) An answer to a particular request is evasive or incomplete[;] (2) An objection to a particular request is without merit or too general.” Notice of the motion must be given within 45 days of service of the verified response, otherwise the propounding party waives the right to compel a further response. (Code Civ. Proc., § 2033.290, subd. (c).) The motions must also be accompanied by a meet and confer declaration. (Code Civ. Proc., § 2033.290, subd. (b).)

"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." (Cal. Code of Civ. Proc. § 2017.020(a).) Generally, objections on the ground of burden require the objecting party to produce evidence of (a) the propounding party's subjective intent to create burden or (b) the amount of time and effort it would take to respond. (See West Pico Furniture Co. of Los Angeles v. Superior Court In and For Los Angeles County (1961) 56 Cal.2d 407, 417.) However, no such evidence is necessary where discovery is obviously overbroad on its face. (See Obregon v. Superior Court (1998) 67 Cal.App.4th 424, 431.)

B. Discussion

RFP Nos. 1-4

Here, Respondent argues that RFP Nos. 1 through 4 are relevant to Petitioner’s claim, and to Respondent’s ability to effectively defend itself. Respondent asserts that Petitioner answered in “boilerplate” language, stating that such requests were vague, ambiguous, and overbroad as to content, scope, and time, that to comply with the request would pose an undue burden on the Responding Party and the request is intended to annoy or harass thereof, and tat it is irrelevant and beyond the scope of permissible discovery. Further, Respondent noted that Petitioner also objected on the basis of premature disclosure of expert witnesses, the equal availability of the sought information to the propounding party, and work product privilege. However, Respondent contends that the requests for production are simply none of what Petitioner claims in the objections. Instead, Respondent argues they are clear, with narrow timeframe, and within scope of this litigation. Respondent next notes that Petitioner also objected asserting the information sought is equally available to the propounding party, but Respondent contends Petitioner has full and direct access to the requested information, whereas Respondent would need to traverse multiple communication channels to obtain the same information.

In opposition, Petitioner argues that this action is a petition for a writ of mandate under Corporations Code § 1601, and analyzes whether Petitioner is a shareholder of WCL, and if so, whether he can ask for the records, whether he is entitled to them, and whether he can copy them. However, Petitioner argues that Respondent’s discovery does not seek to determine whether or not Petitioner is a shareholder, and instead, is a “fishing expedition” involving a past and ongoing history of litigation between the Shad family, of whom Alan Elias is a member, and seeks discovery from other cases involving the parties. With respect to the RFPs, Petitioner argues that they are not reasonably calculated or particularized, noting they ask for Elias’ communications with his accountant, and Elias’ contracts and communications with WCL. However, Petitioner argues this case is not about HIS books or records but is about WCLs. Petitioner contends he is not obligated to open his books to the corporation, nor are his contracts with WCL relevant to his inspection rights.

The Court agrees that the records sought in RFP Nos. 1, 2, and 4 are irrelevant to the present action. While those records may be pertinent to Petitioner’s true motives, which Respondent suspects, the Court does not believe his actual motives matter if he has a statutory right to inspect the subject records. As to RFP No. 3, the scope of this discovery request may be seeking contracts between Petitioner and Respondent as a way of determining Petitioner’s role as a shareholder, which appears to be legitimate discovery. The Court’s tentative is thus to grant a motion to compel as to RFP No. 3 only, and to permit oral argument as to the scope of production.

Request for Admission Nos. 1-7; 26-29

On the RFA motion, Respondent argues that Petitioner’s objections to RFAs Nos. 1 through 7 are improper. These RFAs seek receipt of Petitioner’s financial documents (Tax Returns from 2019 to 2021, Bank Statements from 2019 through July 2021, Balance Sheets for the period of 2019-2021, Profit and Loss Statements for the period 2019-2021, and Trial Balances for the period 2019-2021.) Respondent notes that Petitioner’s objections to these requests includes premature disclosure of expert opinion, but the Court disagrees. Further, Respondent argues that Petitioner also objects based on equally available information, work product privilege, and that he is not an accountant, and he forwards the records directly to his accountant. However, Respondent notes that the requests only seek Petitioner’s acknowledgement that he received such documents.

In opposition, Petitioner argues that the RFAs relating to documents are ambiguous and argumentative as Petitioner cannot admit whether he received “the Balance Sheet” or “the Profit and Loss statements” from WCL. Instead, Petitioner contends that that is the entire point of this action, as Petitioner does not know what he has or does not have. Petitioner further argues that the RFAs reference extrinsic documents and are not self-contained, and as such, cannot be admitted or denied. Petitioner posits that if WCL had attached documents and asked for admissions regarding their receipt or genuineness, then there might be a proper request. Instead, Petitioner contends that what was made, and what was objected to, is simply argumentative and a transparent attempt to obviate WCL’s obligations to make its books and records available to a shareholder. Lastly, Petitioner argues that if WCL’s premise is that it has previously provided some of the books and records, or even all of them, that does not mean that Petitioner has lost his right to request them again, in their most current and updated form.

The Court is not persuaded by the briefing that such admissions are relevant to the present action, but the Court has an open mind and will therefore invite oral argument as to relevancy. In Respondent’s moving papers, it appears that Respondent has requested these admissions to prove that Petitioner had current knowledge of WCL’s financial situation from having access to WCL’s annual financial documents and discussing such with his accountant. While that may or may not be true, the Court is unclear as to why an admission of the same is material to Petitioner’s shareholder rights to inspect the records again or to have his account re-examine the records. The Court will allow oral argument as to relevancy with respect to Corporations Code § 1601

Further, Respondent argues that Petitioner’s objections to RFAs 26-29 ae improper. Respondent contends that Petitioner’s relevance objection to admission that he did not pay $5,000 to his accountant for the review of WCL’s books and records between 2019-2022 is groundless and improper as Respondent contends that such discovery is relevant. Again, the Court will allow oral argument as to the relevance of such requests with respect to this case.

Form Interrogatories 2.5 and 17.1

Lastly, Respondent argues Petitioner’s objections to Form Interrogatories 2.5 and 17.1 are improper. As to FROG 2.5, Respondent argues that Petitioner’s current and previous address are relevant and speaks to his character and ability to effectively be informed about the current state of business. As a general note, the Court contends that responses to FROGS are almost always going to be found to be relevant as they are Judicial Council-approved requests. Here, the Court orders Petitioner to respond to FROG 2.5.

As for FROG 17.1, the Court will determine whether Petitioner need respond further after oral argument as to the corresponding RFAs.

C. Sanctions

Sanctions are mandatory in connection with motions to compel responses to interrogatories and requests for production of documents against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel.¿¿(CCP. §§ 2030.290(c),¿2030.300(d),¿2031.300(c),¿and 2031.310(h).) However, sanctions are not mandatory if the court “finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.”¿¿(Id.)

Here, it appears that each side has presented a bona fide basis for its position that the discovery is objectionable or discoverable. Accordingly, sanctions are denied.