Judge: Theresa M. Traber, Case: 21STCV28708, Date: 2024-01-09 Tentative Ruling

Case Number: 21STCV28708    Hearing Date: January 9, 2024    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     January 9, 2024                     TRIAL DATE: June 4, 2024

CASE:                         Ledle Arreola Garcia v. PACE Fundigng Group, LLC, et al.

CASE NO.:                 21STCV28708           

MOTION TO COMPEL FURTHER RESPONSES TO REQUESTS FOR PRODUCTION (SET ONE)

MOVING PARTY:               Plaintiff Ledle Arreola Garcia

RESPONDING PARTY(S): Defendant PACE Funding Group d/b/a Home Run Financing

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is a fraud action filed on August 4, 2021. Plaintiff alleges that Defendants are engaged in a scheme to defraud homeowners, including Plaintiff, by inducing them to agree to predatory loans funded by California’s PACE program and falsely promising that the loans could be used for home renovations and additions.

Plaintiff moves to compel further responses to requests for production propounded to Defendant PACE Funding Group, and for sanctions.

TENTATIVE RULING:

Plaintiff’s Motion to Compel Further Responses is GRANTED IN PART to the extent described herein.

            Defendant is ordered to produce verified, code-compliant responses without objections to all requests for production of documents, except for Requests 8-10, 28 and 29.  The supplemental responses are due within 30 days of this order, with the exception of responses to Requests Nos. 24 and 26, which shall be due within 75 days of the date of this order.

//

DISCUSSION:

Plaintiff moves to compel further responses to requests for production Nos. 4-10, 15, 24-26, 28-29, 31-33, and 35-39 propounded to Defendant PACE Funding Group, and for sanctions.

Legal Standard

Under Code of Civil Procedure section 2031.310, subdivision (a), a court may order a party to serve a further response to a demand for inspection when the court finds 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.”

The burden is on the moving party to “set forth specific facts showing good cause justifying the discovery sought by the demand.” (Code Civ. Proc., § 2031.310, subd. (b)(1).) These facts must also be set forth in a separate statement filed by the moving party. (Cal. Rules of Court Rule 3.1345(c).) This burden “is met simply by a fact-specific showing of relevance.” (TBG Ins. Servs. Corp. v. Superior Court (2002) 96 Cal.App.4th 443, 448.)

Timeliness

A motion to compel further responses to requests for production must be served “within 45 days of the service of the verified response, or any supplemental verified response, or on or before any specific later date to which the propounding party and the responding party have agreed in writing.” (Code Civ. Proc. § 2031.310(c).) The 45-day requirement is mandatory and jurisdictional. (Sexton v. Superior Court¿(1997) 58 Cal.App.4th 1403, 1410.)

Plaintiff served Requests for Production (Set One) on Defendant on February 15, 2022. (Declaration of Nicholas J. Hoffman ISO Mot. ¶ 3; Exh. A.) Defendant served initial responses on April 14, 2022. (Id. ¶ 4, Exh. B.) Partial supplemental responses were provided on June 17, 2022. (Id.¶ 6 Exh. D.) The parties attended an Informal Discovery Conference on December 2, 2022, where the Court ordered, pursuant to an agreement by the parties, that Defendant would produce supplemental responses and additional responsive documents within two weeks of entry of a protective order. (Id. Exh. F.) The Court also ordered an extension of Plaintiff’s deadline to file this motion until three weeks after supplemental responses were received. (Hoffman Decl.  Exh. F.) The protective order was entered on April 27, 2023. (Id. Exh. G.) Defendant served a second set of supplemental responses on July 28, 2023, then a third on October 20, 2023. (Hoffman Decl. Exhs. I, J, L.) This motion was filed on November 3, 2023, well within the 45-day limit for the most recent set of responses. The motion is therefore timely.

//

Meet and Confer

A party making a motion to compel further responses must also include a declaration stating facts showing a “reasonable and good faith attempt” to resolve informally the issues presented by the motion before filing the motion. (Code Civ. Proc., §§ 2016.040, 2031.310, subd. (b)(2).)

The Declaration of Nicholas Hoffman in support of the motion sets forth the extensive history of Plaintiff’s attempts to informally resolve this dispute, including several meet-and-confer letters, phone calls, and an informal discovery conference. (See Hoffman Decl. ¶¶ 5, 7-10, 13, 15; Exhs. C, E, K.) Plaintiff has satisfied her statutory meet-and-confer obligations.

Requests Without Supplemental Responses

            On December 2, 2022, the Court entered an order, pursuant to an agreement by the parties at an Informal Discovery Conference, that Defendant would provide supplemental responses to the outstanding requests for production at issue in that conference, including all the requests at issue on this motion, conditioned on the entry of a protective order. (December 5, 2022 Notice of Ruling; see also September 16, 2022 Informal Discovery Conference Form.) The protective order was entered on April 27, 2023. (April 27, 2023 Stipulation and Order.) To date, no supplemental responses have been provided for Requests Nos. 4, 5, 6, 25, 31, 32, 33, and 35-39. (See Separate Statement Nos. 4-6, 25, 31-33, 35-39.) Although Defendant offers arguments in support of its objections to these requests, those contentions are irrelevant. Defendant was ordered to provide supplemental responses to these requests and failed to do so. Plaintiff is therefore entitled to an order compelling further responses to these requests.

Good Cause for Remaining Requests

            Plaintiff contends that good cause exists to compel further responses to the remaining discovery requests.

1. Pattern, Policy, and Practice (Nos. 7, 15)

            Request No. 7 seeks copies of Defendant’s policies and procedures for its authorized contractor dealers in California in use between January 2015 and the present. (Separate Statement Request No. 7.) These materials are facially relevant to the allegations that Defendant’s contractors were allowed to solicit low-income homeowners to sign homeowners up for PACE loans. (See Complaint ¶¶ 45-54.) Request No. 15 seeks all documents relating to written or verbal complaints that Defendant received from January 2015 to the present regarding Elite Energy Home Improvement or Lawrence Smith. (Separate Statement Request No. 15.) This request is facially relevant to the same allegations. (See Complaint ¶¶ 45-54.) Plaintiff has therefore shown good cause for these requests.

2. Training, Background, Vetting, and Communication with Contractors (Nos. 8-10)

Requests Nos. 8 and 9 seek a copy of Defendant’s entire vetting file on Elite Energy Home Improvement and Lawrence Smith, respectively, including background checks, interviews, references, or application documents. (Separate Statement Request Nos. 8, 9.) Request No. 10 seeks all orientation, training, or competency materials related to Elite Energy and Lawrence Smith from January 2015 to the present. (Id. No. 10.) These requests are directly relevant to Plaintiff’s allegations that Defendant did not adequately vet, train, or control its contractors. (See Complaint ¶¶ 45-54.) Plaintiff has shown good cause for these requests.

3. Contractor Misconduct (Nos. 24, 26)

Requests Nos. 24 and 26 seek any documents relating to written or verbal complaints to Defendant from January 2015 to the present wherein a California homeowner alleged that they did not sign a document that had been submitted to Defendant through a contractor, or that the contractor failed to complete the promised work. (Separate Statement Requests Nos. 24, 26.)

Defendant contends that Plaintiff has not shown good cause for these requests because she stated on a phone call to Defendant that all installations had been completed and that she was satisfied. This contention is directly addressed by paragraph 72 of the Complaint, which alleges that Plaintiff was misled by Lawrence Smith into making those statements so that Defendant would release funds for the second-story addition that was never completed. (Complaint ¶¶ 72-74.) The Complaint also directly alleges that Defendants’ agents either forged Plaintiff’s signature or tricked her into signing financial paperwork unknowingly. (Complaint ¶ 92.) These requests are therefore directly relevant to this case, and Plaintiff has shown good cause for these requests.

4. Permissible Improvements (Nos. 28, 29)

            Requests Nos. 28 and 29 seek documents relating to permissible improvements, renovations, or upgrades allowed under the PACE Funding program in California as of May 2018 (Separate Statement Request No. 28) and the costs of those renovations (Request No. 29.) These requests go to the allegations that Defendant’s contracts promised renovations which were not covered as part of the alleged scheme. (Complaint ¶¶ 46-47.) Plaintiff has shown good cause for these requests.

Defendant’s Responses

1. Pattern, Policy, and Practice (Nos. 7, 15)

            Defendant’s most recent response to Request No. 7 produced a series of responsive documents without objection but limited the production to only those documents “which were in place at the time of the subject assessment contract.” (Separate Statement Second Further Response No. 7.) Defendant asserts that documentation pertaining to other contractors or that predate or post-date Plaintiff’s assessment contract are not relevant to this action. The Court disagrees.  As explained above, the request as framed is relevant to the allegations as pled in the Complaint. Moreover, Defendant cites absolutely no authority entitling it to unilaterally limit the scope of its response to a request based on what it believes not to be relevant when relevance objections have not been raised or have been dropped. Plaintiff is entitled to an order compelling a further response.

            Defendant’s most recent response to Request No. 15 states that all responsive documents in its possession, custody, and control have been produced, but identifies only four pages of materials. (Separate Statement Second Further Response No. 15.) The Separate Statement states that the pages identified are the handwritten copies of the Home Improvement Contract signed by the contractor and two separate homeowners, and nothing else. (Id. fn. 1.) The response does not, as an example, even identify Plaintiff’s own complaints. In opposition, Defendant states that it received only one complaint other than Plaintiff’s from a homeowner that used Elite Energy. (Declaration of Ryan Griffin ISO Opp  ¶ 8.) Defendant also states that it administered only three assessment contracts from inception through funding involving Elite and Smith, and of these, there were two complaints: one from Plaintiff, and one by a third-party homeowner. (Id.) The Court is not persuaded that this constitutes a full and complete response to the request as framed. Plaintiff did not seek complaints limited to contracts that were administered “from inception through funding,” but rather any complaints regarding the contractors from January 2015 to the present. The Court finds this response to be improperly evasive, and a further response is required.

2. Training, Background, Vetting, and Communication with Contractors (Nos. 8-10)

            On December 21, 2023, Defendant provided a third set of supplemental responses to these interrogatories, which purport to identify all responsive documents without objections or limitations. (Declaration of Larissa Nefulda ISO Opp. Exh. 1.) The Court observes that the documents identified in the latest set of supplemental responses are identical to those set forth in the previous responses, except that they are now identified without objections. Plaintiff contends in her reply brief that these responses remain deficient, but neglects to describe the documents or provide any justification for the contention. The Court is therefore not persuaded that further responses to these requests are required.

3. Contractor Misconduct (Nos. 24, 26)

            Defendant produced identical supplemental responses to these requests, objecting that the request is vague and ambiguous as to “complaints,” overly broad, unduly burdensome, and harassing, is irrelevant, and invades the privacy of third parties, before unilaterally limiting the response to Elite Energy and producing two pages of documents. (See Separate Statement Second Further Response Nos. 24, 26.)

            With respect to Defendant’s objections for vagueness and third-party privacy, Defendant fails to address these contentions in its opposition and has therefore failed to justify its objections. As to the relevance objections, the Court rejects Defendant’s arguments for the reasons stated above. However, Defendant offers evidence that it administered 29,621 assessment contracts between January 2016 and the present in California, with 4,761 in Los Angeles County. (Griffin Decl. ¶ 4.) Contracts created in 2015 were recorded in an older system, and Defendant states that they would need to be counted manually. (Id.) Defendant further states that complying with the request from 2015 to 2018 would require a manual search of each file, which would require a team of five employees working full-time to conduct a manual search for three to four months. (Id. ¶ 5.) Defendant contends that it is a small company which would be heavily impacted by such an undertaking. (Id.) Plaintiff offers little counterargument in reply, except to contend that Defendant has stalled discovery for two years and should therefore not be permitted to raise undue burden as an objection. Plaintiff does not, for example, offer any proposed approach that might mitigate the hardship to Defendant, such as random sampling, or limitation of the scope of production to a shorter time span.

            As Defendant has offered evidence of undue hardship in the request as framed, and Plaintiff has not rebutted that evidence, the Court finds that some limitation on a further response is appropriate, but that a further response should be compelled to these requests in consideration of the policy favoring production. The Court therefore will limit the response to complaints dated from July of 2016 to the present.

4. Permissible Improvements (Nos. 28, 29)

Defendant provided a third set of supplemental responses to these interrogatories on December 21, 2023 which purport to identify all responsive documents without objections or limitations. (Declaration of Larissa Nefulda ISO Opp. Exh. 1.) The Court observes that the documents identified in the latest set of supplemental responses are identical to those set forth in the previous responses, except that they are now identified without objections. Plaintiff contends in her reply brief that these responses remain deficient, but neglects to describe the documents or provide any justification for the contention. The Court is therefore not persuaded that further responses to these requests are required.

CONCLUSION:

            Accordingly, Plaintiff’s Motion to Compel Further Responses is GRANTED IN PART to the extent described herein.

            Defendant is ordered to produce verified, code-compliant responses without objections to all requests for production of documents, except for Requests 8-10, 28 and 29.  The supplemental responses are due within 30 days of this order, with the exception of responses to Requests Nos. 24 and 26, which shall be due within 75 days of the date of this order.

            Moving Party to give notice.

IT IS SO ORDERED.

Dated:  January 9, 2024                                  ___________________________________

                                                                                    Theresa M. Traber

                                                                                    Judge of the Superior Court

            Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.