Judge: Walter P. Schwarm, Case: 30-2022-01260098, Date: 2022-10-04 Tentative Ruling

Defendant’s (Victor Orellana) Motion to Compel Further Responses to Demand for Production of Documents, Production, and Compliance (Motion), filed on 7-18-22 under ROA No. 70, is CONTINUED as to Request for Production (RFP) Nos. 2-7 and 13 to a date to be determined at the hearing on 10-4-22, and DENIED, without prejudice, as to RFP Nos. 11, 14-20 and 25.

Code of Civil Procedure section 2031.310 provides: “(a) On receipt of a response to a demand for inspection, copying, testing, or sampling, the demanding party may move for an order compelling further response to the demand if the demanding party deems that any of the following apply: [¶] (1) A statement of compliance with the demand is incomplete. [¶] (2) A representation of inability to comply is inadequate, incomplete, or evasive. [¶] (3) An objection in the response is without merit or too general. [¶] (b) A motion under subdivision (a) shall comply with each of the following: [¶] (1) the motion shall set forth specific facts showing good cause justifying the discovery sought by the demand. [¶] (2) The motion 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 verified response, or on or before any specific later date to which the demanding party and the responding party have agreed in writing, the demanding party waives any right to compel a further response to the demand.”

The Motion seeks further responses to RFP Nos. 2-7, 11, 13, 14-20, and 22-25.  (Notice of Motion (Notice) filed on 7-18-22 under ROA No. 78; 1:22-28)

On 1-24-22, Defendant served Plaintiff (Juan Carlos Orellana) with “Defendant’s Demand for Production of Documents and Other Things (Set One).” (Shields Decl., ¶ 15 and Exhibit E.)  On 4-12-22, Plaintiff served Defendant with objections to this discovery request. (Shields Decl., ¶ 18 and Exhibit G.)  The parties met and conferred with respect to the objections served on 4-12-22. (Shields Decl., ¶¶ 19, 20, and Exhibits H, I, and J.)  On 4-26-22, Plaintiff served Defendant with Supplemental Objections and Responses to this discovery request. (Shields Decl., ¶ 21 and Exhibit K.)   The parties met and conferred again as to the responses served on 4-26-22. (Shields Decl., ¶¶ 22, 23, 24, and Exhibits L, M, and N.)  On 6-16-22, Plaintiff served Defendant with Second Supplemental Objections and Responses. (Shields Decl., ¶ 25 and Exhibit O.)  The declaration in support of the Motion states, “. . . As to the 19 document requests addressed in this motion, there are no substantial differences from the prior supplemental responses or the original responses. The second supplemental responses to the 19 Document Demands addressed in this motion are still the same objections, entirely objections, and no documents have been identified or produced in relation to the 19 Document Demands.” (Shields Decl., ¶ 25.)

First, the court finds that the parties sufficiently met and conferred because the responses served on 6-16-22 are substantially similar to the responses served on 4-26-22 to the discovery requests at issue in this Motion.

Second, the court finds that Plaintiff has waived Plaintiff’s objections to the discovery requests at issue.  Defendant served Plaintiff with the discovery request at issue on 1-24-22.  Plaintiff did not provide responses until 4-12-22. Under Code of Civil Procedure section 2031.300 states in part, “If a party to whom a demand for inspection copying testing or sampling is directed fails to serve a timely response to it, the following rules shall apply: [¶] (a) The party to whom the demand for inspection copying testing or sampling is directed waives any objection to the demand, including one based on privilege or on the protection for work product under Chapter 4 (commencing with Section 2018.010). The court, on motion, may relieve that party from this waiver on its determination that both of the following conditions are satisfied: [¶] (1) The party has subsequently served a response that is in substantial compliance with Sections 031.210, 2031.220, 2031.230, 2031.240, and 2031.280. [¶] (2) The party's failure to serve a timely response was the result of mistake, inadvertence, or excusable neglect.”

Here, Plaintiff’s Opposition to Defendant Victor Manuel Orellana’s Motion to Compel Further Responses to Demand for Production of Documents, Production Compliance (Opposition), filed on 8-30-22 under ROA No. 98, does not address whether Plaintiff’s failure to serve a timely response was the result of mistake, inadvertence, or excusable neglect.  The declaration in support of the Opposition states, “Defendant Orellana claimed to have mailed his Requests for Production of Documents, but they were never received by Plaintiff’s counsel. Defendant Orellana’s counsel then served the Requests for Production of Documents by e-mail on March 11, 2022. Attached hereto as Exhibit ‘B’ is a true and correct copy of the e-mail serving the Requests for Production of Documents on March 11, 2022.” (Kernan Decl., ¶ 11.)  The “Defendant’s Demand for Production of Documents and Other Things (Set One)” attaches a Proof of Service showing service at the address of 9663 Santa Monica Blvd., Suite 450 Beverly Hills, CA 90210.” (Shields Decl., ¶ 15 and Exhibit E.)  This address corresponds to the address listed on Plaintiff’s Opposition.  The declaration in support of the Opposition does not describe the efforts made by the declarant’s office to determine as to whether the office received the discovery request at issue.  Further, the 4-20-22 email from Plaintiff’s counsel does not address the waiver issue raised in Defendant’s 3-11-22 correspondence. (Shields Decl., ¶¶ 18, 20, and Exhibits F and I.)  Since the Opposition does not address the waiver issue, the court finds that Plaintiff has waived any objection to the discovery requests at issue.

The Opposition cites Code of Civil Procedure section 1010.6, subdivision (e)(2), and contends, “Thus, under the CCP, Defendant’s counsel was required to electronically serve the discovery requests.  Instead, it was allegedly served by mail, which Plaintiff’s counsel never actually received, so this alleged service by mail was likely fabricated.” (Opposition; 8:1-3.)  The Opposition does not provide authority that an agreement pursuant to Code of Civil Procedure section 1010.6, subdivision (e)(2), invalidates service by other methods.

As to whether Defendant has shown good cause for RFP Nos. 2-7, these RFP seek the following documents relating to: (1) “. . . any bank or bank account where any funds or income of PARAMOUNT were held, deposited or paid from at any time during the RELEVANT PERIOD . . . .” (Defendant’s Separate Statement (DSS) filed on 7-18-22 under ROA No. 72; RFP No. 2.); (2) “. . . any bank statement for any account where any funds or income of PARAMOUNT were held, deposited or paid from at any time during the RELEVANT PERIOD.” (DSS; RFP No. 3.); (3) “All federal and state tax returns prepared or filed by or on behalf of PARAMOUNT at any time during the RELEVANT PERIOD.” (DSS, RFP No. 4.); (4) “. . . any financial statements, (including income statements, profit and loss statements, balance sheets, general ledgers, shareholder equity statements, etc.) prepared by or on behalf of PARAMOUNT at any time during the RELEVANT PERIOD. (DSS, RFP No. 5.); (5) “All ESI . . .  which comprise or contain any data or file files used or created by PARAMOUNT in or by its accounting software or systems to maintain and manage the company’s financial records, financial statements, accounts or accounting, along with any necessary passwords or access codes.” (DSS; RFP No. 6.); (6) “. . . any payments, distributions, or reimbursements by PARAMOUNT to or for the benefit of YOU at any time during the RELEVANT PERIOD. (DSS; RFP No. 7.) (Uppercase and emphasis in DSS.)

The Motion states, “Furthermore, the finances of Paramount are entirely discoverable because the first cause of action seeks specific performance of the agreement for redemption of shares. Under Civil Code § 3391, specific performance cannot be enforced against a party to a contract unless that party has received adequate consideration. Inadequacy of consideration is in itself sufficient to deny the granting of specific performance.” (Motion; 8:5-9.)  The Opposition states, “Defendant must limit his discovery responses to only those relevant to the only pending action here, which concerns the buy/sale agreement between Plaintiff and Defendant.” (Opposition; 1:12-14.)  The Motion characterizes the agreement at issue as a redemption agreement and the Opposition characterizes the agreement as a buy/sale agreement.  The Complaint, filed on 5-17-22 under ROA No. 2, attaches a handwritten agreement labeled “Redemption of Shares” as Exhibit A.  It is unclear whether this agreement was a redemption agreement or a purchase of stock between two individuals.

Therefore, the court CONTINUES the hearing on RFP Nos. 2 through 7, and requests supplemental briefing on whether the agreement at issue is a “Redemption of Shares” agreement by Paramount, or a voluntary purchase of shares of stock from Defendant by Plaintiff. Plaintiff may file a supplemental opposition, not to exceed three pages, no later than 9 court days before the next hearing. Defendant may file a supplemental reply, not to exceed three pages, no later than 5 court days before the next hearing.

RFP No. 13 requests, “For each and every account from which any check, payment or disbursement was made or tendered by YOU or on YOUR behalf to Victor Orellana at any time (whether or not they were ever deposited or negotiated) for any stock, securities or interests in PARAMOUNT, each and every WRITING which comprises, constitutes, or contains any bank statement for each such account at any time during the RELEVANT PERIOD.” (DSS; RFP No. 13.)  The DSS states, “Plaintiff has alleged that he tendered various cashier’s checks to Victor Orellana pursuant to the alleged agreement for redemption of shares. These documents will show the exact dates such funds were withdrawn from the accounts in question, whose accounts the funds were withdrawn from, and whether and when those funds were returned or re-deposited. Thus, the relevance objection is baseless.” (DSS; 16:18-22.)  RFP No. 13 appears to seek to explore whether the funds were withdrawn from Plaintiff’s or Paramount’s accounts. Accordingly, the Court CONTINUES the hearing on RFP No. 13 to be heard for the same reasons as stated for RFP Nos. 2-7.

RFP No. 11 seeks, “Each and every WRITING which shows, reflects, reveals, mentions, or identifies any officers or directors insurance issued, maintained, or in force for the benefit of PARAMOUNT or any of its officers or directors at any time during the RELEVANT PERIOD.” (Emphasis in RFP No. 11.)  Defendant contends, “

Defendant contends that good cause exists for compel a further response because “A party is entitled to discover the existence and contents of any agreement under which an insurance carrier may be liable to satisfy any part of a claim or to indemnify a party. (C.C.P. § 2017.210.)” (DSS; 15:11-13.)

Defendant has not filed a cross-complaint against Plaintiff and at this stage has no claims against Plaintiff.  Defendant also has not filed an answer.  Without a complaint or an answer that places indemnification at issue, Defendant has not shown that good cause exists for compelling a further response to Request No. 11. Therefore, the court DENIES the Motion as to RFP No. 11, and Defendant can re-serve RFP No. 11 if indemnification becomes an issue.

RFP Nos. 14-20 and 22-25 seek documents relating to relating to Seacool, Inc. (DSS; RFP Nos. 14-20 and 22-25.)  The Motion states, “Along with that demand for corporate action, Victor presented his proposed shareholder derivative complaint against Juan Carlos for the benefit of Paramount. In order to determine whether the claims alleged in the proposed shareholder derivative action are well founded, documents and records concerning Seacool, Inc. are properly discoverable.” (Motion; 4:8-12.)

Although RFP Nos. 14-20 and 22-25 may be relevant to Defendant’s proposed shareholder derivative action, Defendant has not shown how these documents are relevant to the subject matter involved in this action or may lead to the discovery of admissible evidence. Defendant has also not submitted any case law in support of his contention that he may conduct discovery relating to a proposed shareholder derivative action in this action. Therefore, Defendant has not sufficiently shown good cause to compel a further response to these Requests.

Based on the above, the court CONTINUES Defendant’s (Victor Orellana) Motion to Compel Further Responses to Demand for Production of Documents, Production, and Compliance, filed on 7-18-22 under ROA No. 70, as to Request for Production (RFP) Nos. 2-7 and 13 to a date to be determined at the hearing on 10-4-22, and DENIES the Motion, without prejudice, as to RFP Nos. 11, 14-20 and 25.

Defendant is to give notice.