Case Name: Castlepoint National Insurance Company v. TLC of the Bay Area Inc., et al.

Case No.: 16CV297716

Motion of Plaintiff Castlepoint National Insurance Company for Order Compelling Defendant TLC of the Bay Area Inc. and dba Valley House Rehabilitation Center to Serve Further Written Responses to Demand for Inspection of Documents, Tangible Things, Land or Other Property, Set No. Three and Four and Production, Inspection and Compliance Therewith; Request for Monetary Sanctions Against Defendant TLC of the Bay Area Inc. and dba Valley House Rehabilitation Center and Alan L. Martini, Esq., Jointly and Severally, in the Sum of $4,460.00

Discovery Dispute

On December 9, 2017, plaintiff Castlepoint National Insurance Company (“CNIC”) served defendant TLC of the Bay Area Inc. (“TLC”) with a Demand for Inspection of Documents, Tangible Things, Land or Other Property (“RPD”), set three and four. RPD, set three, seeks to inspect documents related to the floor plans of the business operations located at 991 Clyde Avenue in Santa Clara. RPD, set four, seeks to inspect the business operations located at 991 Clyde Avenue in Santa Clara.

On January 16, 2018, defendant TLC served plaintiff CNIC with its response to RPD, set three and four, consisting entirely of objections.

Between January 12, 2018 and January 24, 2018, plaintiff CNIC’s counsel and defendant TLC’s counsel met and conferred with regard to RPD, set three and four, by exchanging e-mails and letters. Plaintiff CNIC offered to limit the scope of the RPD.

Defendant TLC did not seek a protective order restricting the nature and extent of the inspection.

Defendant TLC continues to refuse to allow the inspection or to produce the documents requested.

On March 6, 2018, plaintiff CNIC filed the motion now before the court, a motion to compel further response to RPD, set three and four, and production, inspection, and compliance therewith.

VI. Timeliness.

As a preliminary matter, defendant TLC contends the motion to compel is untimely. Defendant TLC’s counsel declares he made objections to the request to inspect the property on December 18, January 11, 12, and 16. Although informal objections were voiced, defendant TLC did not serve its formal response to the RPD until January 16, 2018.

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.

(Code Civ. Proc., §2031.310, subd. (c).)

Based on defendant TLC’s mail service of its formal response to the RPD on January 16, 2018, plaintiff CNIC had until March 7, 2018 to file and serve a motion to compel. Plaintiff CNIC timely filed this motion to compel on March 6, 2018.

VII. Plaintiff CNIC’s motion to compel defendant TLC’s further response to RPD, set three and four, is GRANTED.

Upon receipt of a response to a demand for inspection, including requests for the production of documents, 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.

(Code Civ. Proc., §2031.310, subd. (a)(1) – (3).)

The motion for order compelling further responses “shall set forth specific facts showing good cause justifying the discovery sought by the inspection demand.” (Code Civ. Proc., §2031.310, subd. (b)(1); Kirkland v. Sup. Ct. (2002) 95 Cal.App.4th 92, 98 (Kirkland).) To establish “good cause,” the burden is on the moving party to show both relevance to the subject matter (e.g., how the information in the documents would tend to prove or disprove some issue in the case) and specific facts justifying discovery (e.g., why such information is necessary for trial preparation or to prevent surprise at trial). (Glenfed Develop. Corp. v. Sup. Ct. (1997) 53 Cal.4th 1113, 1117.) Where the moving party establishes “good cause,” the burden shifts to the responding party to justify its objections. (Kirkland, supra, 95 Cal.App.4th at p. 98.)

Plaintiff CNIC explains that, by its complaint, CNIC seeks to recover premium due in the principal sum of $92,712 under a workers compensation insurance policy issued to defendant TLC. CNIC agreed to pay claims in connection with injuries suffered by TLC workers arising out of the business operations located at 991 Clyde Avenue in Santa Clara. The policy is a variable basis policy that requires premium adjustment after policy expiration based on the actual worker remuneration (payroll) and the actual worker classification (type of work performed by workers and where work is performed). Defendant TLC contends certain of its workers are “8810 clerical workers” for whom there is a lower premium than the general industry specific class code application to defendant TLC’s operations. By regulation, “Classification 8810 Clerical Office Employees” is applicable to workers who are engaged 100% in clerical activities with no additional duties and work in a physically separated workspace. Classification 8810 is not applicable to production managers, supervisors, and similar employees who spend most but not all of their workday in a clerical environment. By regulation, “physical separation” or “physically separated” means operations conducted in separate buildings at a location, or on separate floors of a building, or, if departments are on the same floor, to achieve physical separation they must be separated by permanent wall not less than eight (8) feet in height, and constructed from standard building materials.

Plaintiff CNIC issued the RPD to confirm that the classifications assigned in the policy are correct and any operations involving the Class Code 881 standard exception meet the requirements. Proper classification must be determined in order to accurately calculate actual premium.

Based on the evidence presented by plaintiff CNIC, the court finds good cause for production and inspection as sought. “If ‘good cause’ is shown by the moving party, the burden is then on the responding party to justify any objections.” (Weil & Brown et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2017) ¶8:1496, p. 8H-42 citing Kirkland v. Superior Court (2002) 95 Cal.App.4th 92, 98.)

In opposition, defendant TLC explains that it operates a 201 bed licensed skilled nursing facility (“SNF”). Defendant TLC further explains that, as a SNF, it is heavily regulated by the state and federal government and is required to protect the privacy of its residents. In opposition, defendant TLC objects to RPD, set four, which seeks inspection of the property where TLC operates on the basis that it is overbroad and burdensome in view of the privacy rights of its residents. In this court’s opinion, defendant TLC’s objection does not apply to RPD, set three, which seeks production of documents only. Accordingly, plaintiff CNIC’s motion to compel defendant TLC’s further response to RPD, set three, is GRANTED. Defendant TLC shall provide a further response, without objection and in compliance with the Code of Civil Procedure, to plaintiff CNIC’s RPD, set three, and produce documents responsive thereto within 20 calendar days from entry of this order.

As to RPD, set four, defendant TLC’s objection has some merit. However, defendant TLC’s concern over the scope of the inspection is not particularly persuasive in view of plaintiff CNIC’s offer, during the meet and confer, to limit its inspection to the areas where clerical work was performed and offer to use photography instead of videography. Plaintiff CNIC’s offer to limit the scope of the inspection was reasonable and aimed at allaying defendant TLC’s privacy concerns. The court will, however, impose some further limitations. Plaintiff CNIC may use photography but shall not take photographs of any patients/residents or the records, personal or medical, of any patient/resident.

Accordingly, plaintiff CNIC’s motion to compel defendant TLC’s further response to RPD, set four, is GRANTED. Defendant TLC shall provide a further response, without objection and in compliance with the Code of Civil Procedure, to plaintiff CNIC’s RPD, set four, within 20 calendar days from entry of this order. Defendant TLC shall allow plaintiff CNIC to inspect the property located at 991 Clyde Avenue in Santa Clara subject to the limitations described above. The parties shall meet and confer on a mutually convenient date for the inspection to occur no later than 30 calendar days from entry of this order.

Code of Civil Procedure section 2031.310, subdivision (h) mandates an award of monetary sanctions “against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel further response to a demand, 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.”

In this circumstance, although defendant TLC unsuccessfully opposed the motion to compel, the court finds the imposition of sanctions would be unjust. Accordingly, plaintiff CNIC’s request for monetary sanctions is DENIED.