Judge: Virginia Keeny, Case: 21STCV35762, Date: 2022-09-01 Tentative Ruling

Case Number: 21STCV35762    Hearing Date: September 1, 2022    Dept: W

GLORIA DURON, ET AL. V. SSC TARZANA OPERATING COMPANY, LP DBA TARZANA HEALTH AND REHABILITATION CENTER, ET AL.

RULING ON DISCOVERY MOTIONS:

(1)  MTN TO COMPEL INITIAL RESPONSES TO REQUESTS FOR PRODUCTION, SET ONE

(2)  MTN TO COMPEL FURTHER RESPONSES TO REQUESTS FOR PRODUCTION, SET ONE

(3)  MTN TO COMPEL PERSON MOST QUALIFIED DEPOSITION

(4)  MTN TO COMPEL PERSON MOST QUALIFIED DEPOSITION

Date of Hearing:         September 1, 2022                 Trial Date:       Not yet set (TSC 12/16/22)

Department:               W                                             Case No.:         21STCV35762

Complaint Filed:          September 29, 2021

Moving Party:             (1) Plaintiffs Gloria Duron, Katherine Duron-Williams, and Billy Taylor

Responding Party:       (1) Defendant SSC Equity Holdings, LLC

                                    (2) Defendant SSC Tarzana Operating Company, LP dba Tarzana Health and Rehabilitation Center

                                    (3) Defendant SSC Equity Holdings, LLC

                                    (4) Defendant SavaSeniorCare, LLC

Notice:                         Proper

BACKGROUND

This is an action based on elder abuse. Plaintiffs Gloria Duron, Katherine Duron-Williams, and Billy Taylor allege while Plaintiff Gloria Duron was a resident of the defendant skilled nursing facility, Tarzana Health and Rehabilitation Center, Plaintiff Duron contracted scabies. Before being diagnosed, Plaintiff Duron was sent home where Plaintiffs Duron-Williams and Taylor contracted the scabies.

On September 29, 2021, Plaintiffs filed a complaint against Defendants SSC Tarzana Operating Company, LP dba Tarzana Health and Rehabilitation Center (“SSC Tarzana”), SavaSeniorCare Administrative and Consulting, LLC (“SavaSeniorCare Administrative”), SSC Equity Holdings, LLC (“SSC Equity”), and SavaSeniorCare, LLC (“SavaSeniorCare”) asserting causes of action for: (1) Elder Abuse and Neglect (Pursuant to the Elder Abuse and Dependent Adult Civil Protection Act, Welf. & Inst. Code §§ 15600, et seq.); (2) Violation of Patient’s Bill of Rights (Pursuant to Health & Safety Code § 1430); and (3) Negligence/Willful Misconduct.

On February 1, 2022, SSC Equity and SavaSeniorCare filed a Motion to Quash Service of Summons based on a claimed lack of personal jurisdiction (“Quash Motion”). That motion is currently scheduled for a hearing on October 18, 2022.

Plaintiffs have four discovery motions currently before the Court, two of which involve Requests for Production, Set One (“RFP”) and two of which involve a Person Most Qualified (“PMQ”) deposition:

[TENTATIVE] RULING:

1.      Plaintiffs’ Motion to Compel initial responses to the RFP is GRANTED IN PART. SSC Equity is to provide responses to RPD Nos. 1, 6, 10-14, 16, 21, 23, 31-32, 42, 44, and 47-48 within 20 days. The Court does not order an initial response to RFP Nos. 54-55 and 70. The Court orders SSC Equity and its counsel to pay $1,170 in monetary sanctions in 20 days.

2.      Plaintiffs’ Motion to Compel further responses to the RFP is CONTINUED. The parties are to conduct an IDC and the Court will reschedule the hearing date to the extent that the IDC does not resolve the parties’ dispute.

3.      Plaintiffs’ Motion to Compel a PMQ deposition and the production of documents is GRANTED as limited to the topics as identified in the motion papers.

4.      Plaintiffs’ Motion to Compel a PMQ deposition and the production of documents is GRANTED as limited to the topics as identified in the motion papers.

DISCUSSION – INITIAL RESPONSES TO RFP

Legal Standard

If a party to whom a demand for inspection, copying, testing, or sampling is directed fails to serve a timely response, the propounding party may move for an order compelling response to the demand. (Code Civ. Proc., § 2031.300, subd. (b).) The party who must respond has within 30 days after service of a demand for inspection, copying, testing, or sampling to serve the original response to it on the party making the demand, unless the court has extended the time for response on motion of the party. (Id., § 2031.260, subd. (a).) Failure to serve a response waives all objections to the inspection demands, unless the court grants a motion relieving the responding party from that waiver, and entitles the demanding party to obtain an order compelling responses. (Id., § 2031.300, subds. (a), (b).)

Merits

Plaintiffs seek to compel SSC Equity to produce initial responses to the RPD.

Plaintiffs allege that SSC Equity is an equity owner of SSC Tarzana and they share common officers, directors, and/or managing agents. (Complaint ¶ 7.) Additionally, Plaintiffs allege that SSC Equity is a subsidiary of SavaSeniorCare, which is also a parent company of SSC Tarzana. (Id. ¶ 8.)

On November 1, 2021, Plaintiffs served the first set of discovery on SSC Equity, including the RFP at issue here. (Siegel Decl. Ex. A.)

SSC Equity did not produce responses to the RFP as of the filing of the motion initially on June 10, 2022 and as amended on August 2, 2022.

As a preliminary matter, SSC Equity requests that the Court continue the hearing on this motion until the Court rules on the Motion to Quash. However, SSC Equity provides no supporting authority why this procedural posture compels the Court to decide the Quash Motion first. The Court does not otherwise find that doing so is in the interests of justice because the discovery sought here, as indicated by the amended motion, is jurisdictional discovery only that is needed to oppose the Motion to Quash.

SSC Equity cannot alternatively request a protective order in an opposition to a noticed motion. That request is procedurally improper and requires its own noticed motion pursuant to Code of Civil Procedure section 2031.060, subdivision (a). Even if the court were to consider the request, the court would deny it for the following reasons.

The significant delay to seek relief is fatal. The subject RFP was served in November 2021,[2] demonstrating a lack of promptness on SSC Equity’s part, as required. (Code Civ. Proc., § 2031.060, subd. (a) [“When an inspection . . . has been demanded, the party to whom the demand has been directed, and any other party or affected person, may promptly move for a protective order.”].)

The lack of a meet and confer declaration as required is also fatal. SSC Equity did file a declaration, but that declaration does not satisfactorily address any meet and confer efforts, instead relying on a conclusory statement of an offer to meet and confer and to wait until after the Court decides the Motion to Quash. (Khonsari Decl. filed August 8, 2022[3] ¶ 2 [“Specially Appearing Defendant SS Equity Holdings, LLC has acted in good faith at all times by offering to meet and confer to clarify the scope of the inquiry and to wait until the Court makes a ruling on its Motion to Quash Service of Summons to Stay Civil court Proceedings which was continued by the Court from June 8, 2022 to August 15, 2022 and now October 18, 2022. SS Equity Holdings, LLC therefore has acted with substantial justification at all times to avoid disclosure of improper material and to avoid jurisdictional waiver by engaging in discovery.”].) The declaration does not explain the efforts made to resolve this discovery dispute before seeking a protective order. Instead, there is evidence in the record of a refusal to submit to discovery.

Finally, even if the Court overlooks these procedural defects, the Court would deny the request for a protective order on the merits. SSC Equity filed a Quash Motion on the basis of a lack of personal jurisdiction. Plaintiffs are entitled to test the claim of a lack of personal jurisdiction through basic, limited discovery on that issue. It would be inherently unfair to allow SSC Equity to use its Quash Motion both as a sword against Plaintiffs’ action and, at the same time, a shield against Plaintiffs’ discovery rights.

Accordingly, the Court addresses the merits.

Here, as limited by the amended motion, Plaintiffs seek initial responses to the RFP as they relate to personal jurisdiction issues. This scope includes RRP Nos.:

·         1 (insurance agreements/policies);

·         6 (documents describing SSC Equity’s ownership interest in SSC Tarzana);

·         10-12 (contracts/agreements with SSC Tarzana);

·         13 (mission statement);

·         14 (operating agreement);

·         16 (documents showing SSC Equity’s role in managing SSC Tarzana);

·         21 (form submitted to California Department of Public Health);

·         23 (form submitted to California Department of Public Health);

·         31 (business associate agreement);

·         32 (marketing materials);

·         42 (documents showing set benchmarks for SSC Tarzana);

·         44 and 47 (documents showing business relationship between SSC Equity and SSC Tarzana);

·         48 (services provided);

·         54 (calculation of bonuses);

·         55 (calculation of profit sharing); and

·         70 (net worth).

Regarding the merits of the individual discovery requests, SSC Equity makes a series of arguments that the court finds unpersuasive:

1.      SSC Equity argues that Plaintiffs can more appropriately seek these facts from SSC Tarzana and SavaSeniorCare Administrative. Plaintiffs might be able to get some of the information through other sources, but Plaintiffs can seek it from the direct source of the information and the entity that filed the Motion to Quash.

2.      SSC Equity argues that Plaintiffs possess the Declaration of Wynn Sims, the Vice-President and Secretary of SSC Equity, and presumably know that there are no documents responsive to most of the requests for production of documents. Although that declaration may help to demonstrate a lack of jurisdiction in the case, Plaintiffs do no need to rely on it and can inquire into the facts supporting jurisdiction including by propounding targeted discovery.

3.      SSC Equity fails to persuasively explain how any specific individual request is overbroad and burdensome that it is not confined to the task at hand, i.e., jurisdictional discovery, which the court further notes SSC Equity improperly seeks to narrow the jurisdictional discovery to only specific jurisdiction when evidence may reveal general jurisdiction. Even if there may be an issue pursuant to Civil Code section 3295 regarding certain financial discovery including RPD No. 70’s inquiry into net worth (but see Reply 3:13-22 [arguing otherwise], that inquiry is expressly limited by RFP No. 70 itself until after conclusion of a jury trial in Plaintiffs’ favor on punitive damages. (Siegel Decl. Ex. A 15:20-22.) Plaintiffs also included similar limiting language regarding RFP Nos. 54-55. (Id. 12:9-11, 17-18.)

4.      SSC Equity cannot limit the sought discovery to when Duron was a resident of the facility from November 4, 2019 to February 1, 2020. Plaintiffs seek discovery on whether SSC Equity may be subject to general jurisdiction, and an expanded timeframe for general jurisdiction is not covered by SSC Equity’s cited caselaw as limited with specific jurisdiction. (Opposition 9:7-15.)

Accordingly, the Court grants the motion and orders SSC Equity to provide responses to RFP Nos. 1, 6, 10-14, 16, 21, 23, 31-32, 42, 44, and 47-48 within 30 days. The Court does not order an initial response to RPD Nos. 54-55 and 70.

Plaintiffs seek $1,170 in monetary sanctions against SSC Equity and its counsel.[4]

Under Code of Civil Procedure section 2023.030, subdivision (a), “[t]he court may impose a monetary sanction ordering that one engaging in the misuse of the discovery process, or any attorney advising that conduct, or both pay the reasonable expenses, including attorney’s fees, incurred by anyone as a result of that conduct. . . . If a monetary sanction is authorized by any provision of this title, the court shall impose that sanction 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.” Failing to respond or to submit to an authorized method of discovery is a misuse of the discovery process. (Code Civ. Proc. § 2023.010.)

In the July 6, 2022 minute order, the Court ruled that it will rule on monetary sanctions after deciding the Motion to Quash. The Court does not adopt the same position here because the Court acknowledges that the need for this jurisdictional discovery is necessary for Plaintiffs to successfully oppose the Motion to Quash. Plaintiffs seek $1,170, which includes $1,170 in attorney fees for 2.6 hours of work at a $450 hourly rate. (Siegel Decl. ¶ 12.) The amount is reasonable given counsel’s 20 years of experience and the preparation of two sets of motion papers, i.e., an initial motion and an amended motion. (Ibid.) The Court does not award a filing fee because Plaintiffs did not request one.

Accordingly, the Court orders SSC Equity and its counsel to pay $1,170 in monetary sanctions within 30 days days.

DISCUSSION – FURTHER RESPONSES TO RFP

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).)

Merits

Plaintiffs seek further responses from SSC Tarzana to RFP Nos. 9-10, 14-15, 27-32, 44, 46-47, 66, and 76.

On November 1, 2021, Plaintiffs served the first set of discovery on SSC Tarzana, including the RFP at issue here. (Siegel Decl. Ex. A.)

On February 22, 2022, SSC Tarzana served its initial responses, but with no accompanying documents. (Id. Ex. B.)

On May 18, 2022, SSC Tarzana served supplemental responses. (Id. Ex. B.)

The parties did not conduct an Informal Discovery Conference (“IDC”). Although an IDC is not required pursuant to the Code of Civil Procedure for motions to compel further discovery, this Court strongly recommends the parties to conduct one and has previously advised the parties pursuant to its Courtroom Rules that “[i]f a discovery motion is filed without scheduling an IDC, it is likely that the Court will order one before hearing the motion.” (Courtroom Rules at p. 4, accessible at https://www.lacourt.org/courtroominformation/ui/result.aspx.) The Court finds an IDC appropriate here.

Accordingly, Court continues the hearing so that an IDC can occur.

DISCUSSION – MTN TO COMPEL PMQ DEPOSITION

Legal Standard

Any party may obtain discovery, subject to restrictions, by taking the oral deposition of any person, including any party to the action. (Code Civ. Proc., § 2025.010.) A properly served deposition notice is effective to require a party or party-affiliated deponent to attend and to testify, as well as to produce documents for inspection and copying. (Id., § 2025.280, subd. (a).)

“If, after service of a deposition notice, a party to the action or an officer, director, managing agent, or employee of a party, or a person designated by an organization that is a party under Section 2025.230, without having served a valid objection under Section 2025.410, fails to appear for examination, or to proceed with it, or to produce for inspection any document … described in the deposition notice, the party giving the notice may move for an order compelling the deponent’s attendance and testimony, and the production for inspection of any document … described in the deposition notice.” (Id., § 2025.450, subd. (a).) The motion shall set forth specific facts showing good cause justifying the production for inspection of any document described in the deposition notice. (Id., subd. (b)(1).) The motion shall also be accompanied by a meet and confer declaration. (Id., subd. (b)(2).)

Merits

Plaintiffs move to compel a PMQ deposition of SSC Equity and SavaSeniorCare and the production of documents related to personal jurisdiction issues that were requested as part of Plaintiffs’ deposition notice. The two motions are nearly identical. The oppositions and replies are nearly identical as well.

On November 8, 2021, Plaintiffs served the Notice of Deposition of the PMQ for SSC Equity and SavaSeniorCare. (Siegel Decl. Ex. A.) The notices identify 57 topics to be discussed at the depositions. (Ibid.)

SSC Equity and SavaSeniorCare separately objected to the notice, refusing to designate a witness and to produce the requested documents. (Id. Ex. B.)

Plaintiffs now move to compel the PMQ depositions, but do so only on certain designated topics related to personal jurisdiction, specifically Topic Nos.:

·         1-5 (establishment of policies and procedures);

·         6-7 (services or functions provided);

·         8-9 and 11 (setting the price for care and development of the budget and overall business direction);

·         13-19 (involvement in business operations);

·         20-21 and 23 (how revenues generated were transferred and how assets were leveraged);

·         22 (identity of officers, directors, and members);

·         24-25 (involvement of officers, directors, and members in overseeing the operations and managements);

·         33 (control of the payor mix);

·         35 (control over vendors);

·         36 (the authority or ability to use trademark or logo);

·         37-38 and 40 (control of revenues and financial dependency);

·         45-46 (oversight of patient care and financial management);

·         49 (interaction between governing boards); and

·         50-52 (covenants, restrictions, and/or obligations imposed by any credit or loan agreements).

In Opposition, SSC Equity and SavaSeniorCare generally argue that they are merely holding companies with no information or documents related to Plaintiffs’ claims. (Khonsari Decl. Ex. A.) Therefore, they should not be part of this litigation. Nevertheless, SSC Equity and SavaSeniorCare have indicated a willingness to submit to a deposition regarding issues affecting personal jurisdiction only, though the topics and categories contained in the notices are overbroad and irrelevant. The arguments on this point are generally duplicative of the Opposition to the Motion to Compel Initial Responses to the RFP, including a: request for a protective order; limitations on what discovery can be completed including on issues of specific jurisdiction only (i.e., not general jurisdiction), no financial discovery, no discovery that violates privacy rights, and temporal limitations.

The Court incorporates its earlier discussion as it relates to these issues, i.e., the request for a protective order is procedurally improper, a limitation to discovery only to specific jurisdiction issues and not general jurisdiction is not persuasively supported by legal authority, and the temporal limitation overlooks the basis of general jurisdiction that does not implicate the proposed limited scope of discovery.

The Court does not otherwise find the arguments by SSC Equity and SavaSeniorCare persuasive. First, Civil Code section 3295 does not prohibit all financial discovery. It prohibits certain financial discovery, including evidence of the financial condition of a defendant. Simply because a topic involves financial issues does not mean that it categorically immune from discovery. Second, Plaintiffs do not seek a PMQ deposition on all of the topics, but have limited to the deposition to ones only relating to personal jurisdiction as persuasively explained in the motion, including regarding the control and involvement by SSC Equity and SavaSeniorCare over the facility and the operation of a California business. (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 541 [“[I]f a parent corporation exercises such a degree of control over its subsidiary corporation that the subsidiary can legitimately be described as only a means through which the parent acts, or nothing more than an incorporated department of the parent, the subsidiary will be deemed to be the agent of the parent in the forum state and jurisdiction will extend to the parent.”].) Finally, SSC Equity and SavaSeniorCare do not otherwise meet their burden to justify their objections based on a number of privileges, including attorney-client and/or work product, confidential trade secrets, privacy, and quality assurance. Notably, the only declaration submitted in opposition is an attorney declaration. The Sims Declaration annexed as an exhibit to the Khonsari Declaration does not otherwise address the specifically sought documents and topics to justify these objections.

Plaintiffs do not seek monetary sanctions. Therefore, the Court awards none.