Judge Walter P. Schwarm, Case 30-2018-01002061 2023-08-29 Tentative Ruling

Judge: Walter P. Schwarm, Case: 30-2018-01002061, Date: 2023-08-29 Tentative Ruling

Motion No. 1:

Moving Parties’ (Law Offices of Mark B. Plummer, PC and Mark B. Plummer) Motion to Quash Subpoena (Motion), filed on 3-2-23 under ROA No. 1191, is GRANTED.

Code of Civil Procedure section 1987.1 states, in part, “(a) If a subpoena requires the attendance of a witness or the production of books, documents, electronically stored information, 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. [¶] (b) The following persons may make a motion pursuant to subdivision (a): [¶] (1) A party. [¶] (2) A witness. . . .”

The Motion seeks to quash a Deposition Subpoena directed to Mark W. Norred, CPA. (Plummer Decl., ¶ 2 and Exhibit A.) The Deposition Subpoena seeks records “. . . pertaining to all federal and state income tax returns, interim tax returns, filing extensions, and amended tax returns . . .” as to Moving Party—Mark B. Plummer and Moving Party—Law Offices of Mark B. Plummer. (Plummer Decl., ¶ 2 and Exhibit A.)

The Motion states, “Ever since the seminal case of Webb v. Standard Oil Co. (1957) 49 Cal.App.2d 509 Federal and State Tax Returns, and related documents, have not been discoverable . . . Therefore, this wholesale intrusion into the personal and financial affairs of Plaintiffs’ is clearly a tactic designed solely to harass and annoy without any pretext of legitimacy.” (Motion; 4:1-5.)

Responding Party’s (Nili Alai) Opposition to Plaintiff’s Motion to Quash (Opposition), filed on 7-24-23 under ROA No. 1362, states, “Moreover, while the Webb v. Standard Oil case recognizes a constitutional right to privacy over one's financial affairs, it also notes that this right is not absolute and may yield to compelling state interests, such as the need to facilitate the ascertainment of truth in legal proceedings.” (Opposition; 10:7-9.) The Opposition further states, “Plummer, in his argument, contends that he does not claim lost earnings. . . . However, his pursuit of a quantum meruit claim, which seeks to circumvent the terms of his written fee agreement, is based on the assertion that he lost business “opportunity” and could not take on other clients.” (Opposition; 9:1-4.) Moving Parties’ Reply to Opposition to Motion to Quash Subpoena (Reply), filed on 8-22-23 under ROA No. 1412, asserts Responding Party “. . . has not advanced a single reason by income or Tax Returns could possibly lead to the discovery of admissible evidence because there is no lost earnings claim in this case. . . . Common Counts is based on the hours spent at the Defendants’ request and the reasonable value of those services. (Reply; 1:28-21 (Emphasis in Reply.).)

Webb v. Standard Oil Company of California (1957) 49 Cal.2d 509, 513 (Webb), states, “The purpose of the amended statutory provisions prohibiting disclosure is to facilitate tax enforcement by encouraging a taxpayer to make full and truthful declarations in his return, without fear that his statements will be revealed or used against him for other purposes. If the information can be secured by forcing the taxpayer to produce a copy of his return, the primary legislative purpose of the secrecy provisions will be defeated. The effect of the statutory prohibition is to render the returns privileged, and the privilege should not be nullified by permitting third parties to obtain the information by adopting the indirect procedure of demanding copies of the tax returns.”

Schnabel v. Superior Court (1993) 5 Cal.4th 704, 720 (Schnabel), states, “This privilege against forced disclosure of tax returns has been reaffirmed in a variety of situations by both this court and the courts of appeal. (Sav–On Drugs v. Superior Court, supra, 15 Cal.3d at pp. 3, 6–7, 123 Cal.Rptr. 283, 538 P.2d 739 [information related to sales tax returns is privileged]; Crest Catering Co. v. Superior Court, supra, 62 Cal.2d 274, 42 Cal.Rptr. 110, 398 P.2d 150 [employment tax returns are privileged, but the privilege was waived]; King v. Mobile Home Rent Review Bd. (1989) 216 Cal.App.3d 1532, 265 Cal.Rptr. 624 [privilege applies to administrative proceedings]; Rifkind v. Superior Court, supra, 123 Cal.App.3d at pp. 1048–1049, 177 Cal.Rptr. 82 [income tax returns of a law corporation and three partnerships of which husband was a member are privileged in a marriage dissolution proceeding]; Sammut v. Sammut (1980) 103 Cal.App.3d 557, 562, 163 Cal.Rptr. 193 [privilege applies to ‘discovery of income tax returns in litigation between former spouses in spousal support modification proceedings’]; In re Marriage of Brown (1979) 99 Cal.App.3d 702, 707–709, 160 Cal.Rptr. 524 [privilege applies to income tax records of new spouse in litigation between former spouses involving child support payments]; Brown v. Superior Court (1977) 71 Cal.App.3d 141, 139 Cal.Rptr. 327 [privilege applies to W–2 forms].)” (Footnote 4 omitted.) “As explained in Sammut v. Sammut, supra, 103 Cal.App.3d at page 560, the privilege is waived or does not apply in three situations: ‘(1) there is an intentional relinquishment (Crest Catering Co. v. Superior Court (1965) 62 Cal.2d 274, 278), (2) the “gravamen of [the] lawsuit is so inconsistent with the continued assertion of the taxpayer's privilege as to compel the conclusion that the privilege has in fact been waived” (Wilson v. Superior Court, supra, 63 Cal.App.3d at p. 830), or (3) a public policy greater than that of confidentiality of tax returns is involved (Miller v. Superior Court, supra, 71 Cal.App.3d at p. 149).’ ” (Id., at p. 721.)

Weingarten v. Superior Court (2002) 102 Cal.App.4th 268, 276 (Weingarten), explains, “Although the public policy favoring the confidentiality of tax returns does not give way merely because the information is relevant to prove punitive damages, the balance changes when the defendant, without a valid basis, refuses to comply with legitimate discovery requests that seek nonprivileged financial information. Weingarten's conduct not only interfered with plaintiffs' ability to prove their case, but it also undermined the discovery process and the judicial system's ability to ensure an ordered process designed to uncover the truth. These policies, when considered together with the importance of obtaining financial condition evidence to establish a proper punitive damages amount, outweighed Weingarten's right to claim the tax return privilege as a basis to refuse to produce highly relevant evidence of her financial condition.” “In reaching our conclusion the trial court did not abuse its discretion, we caution against compelled disclosure of personal tax returns except in those rare instances where the public policy underlying the tax privilege is outweighed by other compelling public policies or where waiver principles apply. The fact that financial records are difficult to obtain or that a tax return would be helpful, enlightening or the most efficient way to establish financial worth is not enough. Likewise, standing alone, a finding of liability for punitive damages is insufficient. But disclosure may be ordered where a defendant has been found liable for punitive damages and the party requesting disclosure establishes (1) the defendant has refused to produce relevant nonprivileged financial records or has produced only meaningless and unreliable financial information in response to punitive damage discovery; (2) the defendant has engaged in a pattern of improperly obstructing efforts to obtain financial records through means that do not implicate the privilege and it is reasonable to assume this pattern of conduct will continue; and (3) less intrusive methods to obtain the financial records have been unsuccessful. Although the trial court did not specifically articulate these factors, upon reviewing the entire record before us, we are satisfied the trial court found each of these factors existed before ordering production of the tax returns.” (Id, at pp. 276-277.)

Since Moving Parties concede they are not seeking to recover damages for lost earnings based on a lost opportunity theory, Defendant has not shown that the relevance of the tax return documents outweighs the public policy favoring the confidentiality of tax returns. Further, the declaration in support of the Opposition does not describe the attempts to obtain information regarding Plaintiffs’ financial information by less intrusive methods. (Juarez Decl., ¶¶ 7-13.)

Based on the above, the court GRANTS Moving Parties’ (Law Offices of Mark B. Plummer, PC and Mark B. Plummer) Motion to Quash Subpoena (Motion), filed on 3-2-23 under ROA No. 1191. The court awards a monetary sanction in the amount of $1374.20 against Responding Party and in favor of Moving Parties because Responding Party was not substantially justified in opposing this Motion in light of the taxpayer privilege. (Plummer Decl., ¶ 4; Code Civ. Proc., § 1987.2, subd. (a).)

Moving Parties are to give notice.

Motion No. 2:

Moving Parties’ (Law Offices of Mark B. Plummer, PC and Mark B. Plummer) Motion to Quash Subpoena (Motion), filed on 3-2-23 under ROA No. 1192, is GRANTED.

The Motion seeks to quash a Deposition Subpoena directed to One Legal. (Plummer Decl., ¶ 2 and Exhibit A.) The Deposition Subpoena requests “. . . records and documents including, but not limited to, list of all complaints filed, list of filing records, and billing ledgers submitted andor filed by or on behalf of MARK B. PLUMMER . . . .” (Plummer Decl., ¶ 2 and Exhibit A.)

The Motion states, “. . . there can be not dispute that GLORIA M. JUAREZ is improperly seeking private information about Clients . . . something that is both highly privileged and clearly irrelevant.” (Motion; 5:11-15; Uppercase in Motion.).)

Responding Party’s (Nili Alai) Opposition to Plaintiff’s Motion to Quash (Opposition), filed on 7-24-23 under ROA No. 1360, states, “Plummer is seeking relief on two counts, one that he remitted costs on Alai’s behalf in two legal matters, which he has refused to participate in written discovery to date. Juarez Dec. ¶5. Those amounts must be computed from independent sources, including those costs and ledgers in Onelegal. Second, Plummer seeks punitive claims for alleged ‘fraud’ and recovery of more than ten times (10x) what he billed Alai under an alleged quantum meruit claim (despite a written contract-attachment Exh. G) hence Alai is entitled to show her obligations and amounts anticipated for the disputed fees.” (Opposition; 6:16-22.)

Moving Parties’ Reply to Opposition to Motion to Quash Subpoena (Reply), filed on 8-22-23 under ROA No. 1410, asserts Responding Party “. . . has not advanced a single reason by income or Tax Returns could possibly lead to the discovery of admissible evidence because there is no lost earnings claim in this case. . . . Common Counts is based on the hours spent at the Defendants’ request and the reasonable value of those services. (Reply; 1:28-21 (Emphasis in Reply.).)

The Deposition Subpoena is not limited to records related to other matters in which Moving Parties represented Responding Party. To the extent the subpoena seeks information regarding Plaintiffs’ “lost opportunity” theory of damages, Plaintiffs have conceded they are not making such a claim. (Reply, 1:27-2:1.) Responding Party has not shown that the Deposition Subpoena is reasonably calculated to lead to the discovery of admissible evidence. (Code Civ. Proc., § 2017.010.)

Based on the above, the court GRANTS Moving Parties’ (Law Offices of Mark B. Plummer, PC and Mark B. Plummer) Motion to Quash Subpoena filed on 3-2-23 under ROA No. 1192. The court awards a monetary sanction in the amount of $1374.20 against Responding Party and in favor of Moving Parties because Responding Party was not substantially justified in opposing this Motion. (Plummer Decl., ¶ 4; Code Civ. Proc., § 1987.2, subd. (a).)

Motion No. 3:

Moving Party’s (Nili Alai) Motion to Compel Plaintiff Plummer to Provide Responses to Request for Admissions, Set One and Form Interrogatories (Motion), filed on 1-4-23 under ROA No. 1134, is GRANTED.

Code of Civil Procedure section 2033.290 states, in part, “(a) On receipt of a response 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. [¶] (b)(1) A motion under subdivision (a) shall be accompanied by a meet and confer declaration under Section 2016.040. . . . [¶] (c) Unless notice of this motion is given within 45 days of the service of the verified response, or any supplemental response, or any specific later date to which the requesting party and the responding party have agreed in writing, the requesting party waives any right to compel further response to the requests for admission. . . .”

Code of Civil Procedure section 2033.210 states in part, “(a) The party to whom requests for admission have been directed shall respond in writing under oath separately to each request. [¶] (b) Each response shall answer the substance of the requested admission, or set forth an objection to the particular request. . . .”

Code of Civil Procedure section 2033.220 provides, “(a) Each answer in a response to requests for admission shall be as complete and straightforward as the information reasonably available to the responding party permits. [¶] (b) Each answer shall: [¶] (1) Admit so much of the matter involved in the request as is true, either as expressed in the request itself or as reasonably and clearly qualified by the responding party. [¶] (2) Deny so much of the matter involved in the request as is untrue. [¶] (3) Specify so much of the matter involved in the request as to the truth of which the responding party lacks sufficient information or knowledge. [¶] (c) If a responding party gives lack of information or knowledge as a reason for a failure to admit all or part of a request for admission, that party shall state in the answer that a reasonable inquiry concerning the matter in the particular request has been made, and that the information known or readily obtainable is insufficient to enable that party to admit the matter.”

Fairmont Insurance Company v. Superior Court (2000) 22 Cal.4th 245, 255 (Fairmont), explains, “Or a party may object to a particular discovery request, placing the burden on the party seeking discovery to enforce discovery through a motion to compel. [Citations.]” Williams v. Superior Court (2017) 3 Cal.5th 531, 541 (Williams), states, “While the party propounding interrogatories may have the burden of filing a motion to compel if it finds the answer it receives unsatisfactory, the burden to justify any objection and failure to respond remains at all times with the party resisting an interrogatory. [Citation.]”

Moving Party’s Separate Statement (SS), filed on 1-4-23 under ROA No. 1124, seeks to compel further responses to Request for Admission (RFA) Nos. 3, 19, 21, and 29, and Form Interrogatory No. 17.1 as applied to RFA Nos. 3, 19, 21, and 29.

First, the court finds that the Motion is timely because it was filed within 45 days of Responding Party’s (Law Offices of Mark B. Plummer) “Response to Request for Admissions—Set One.” (Juarez Decl., ¶ 9 and Exhibit D.) Responding Party served the responses on 11-28-22 which is within 45 days of 1-4-23, the date of the filing of this Motion.

Second, as to RFA Nos. 3, 19, 21, and 29, the SS reflects that Responding Party only provided objections to these RFAs. Responding Party’s Supplemental Opposition to Motion to Compel Responses to Request for Admissions and Form Interrogatories (Opposition), filed on 8-16-23 under ROA No. 1401, states, “. . . the requests are improperly compound and Plaintiff would be required to adopt a false statement regardless of whether Plaintiff admits or denies these requests.” (Opposition; 4:12-16.) The Opposition does not explain why a denial constitutes an adoption of a false statement. Therefore, the court finds that Responding Party has not justified its objections to RFA Nos. 3, 19, 21, and 29.

Based on the above, the court GRANTS Moving Party’s (Nili Alai) Motion to Compel Plaintiff Plummer to Provide Responses to Request for Admissions, Set One and Form Interrogatories filed on 1-4-23 under ROA No. 1134. The court ORDERS Responding Party to provide Code of Civil Procedure compliant responses to RFA Nos. 3, 19, 21, and 29 (as well as Form Interrogatory 17.1 which applies to these RFAs) within 14 days of the date of service of the notice of the court’s ruling. The court awards a monetary sanction in the amount of $1,765.25 in favor of Moving Party and against Responding Party. (Code Civ. Proc., § 2033.290, subd. (d); Juarez Decl., ¶¶ 14 and 15.) Responding Party did not meaningfully meet and confer with Moving Party. (Juarez Decl., ¶13.)

Moving Party is to give notice.