Tentative Ruling

Judge Thomas Anderle
Department 3 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

FAMILY LAW
Susan Ann McMillan and Thomas Joseph Kenny
Case No: 19FL01311
Hearing Date: Tue Mar 10, 2020 10:30

Nature of Proceedings: Req. for Order: Compel (2)

Petitioner’s Req. for Order: Compel (2)

Attorneys:

Jacqueline Misho and Gary Fishbein for Petitioner [“mother”]

Paul A. Capritto for Respondent [“father”]

Ruling: For the reasons set out below Father is ordered to provide a Code-compliant 2031 statement and supplement his production and answer to interrogatories on or before March 26, 2020. The request for sanctions is denied. The trial date of May 26, 2020, is confirmed.

Background:

This case was filed by mother on 6/19/19; seeks Dissolution of marriage; two minor children; date of marriage in 10/2001; date of separation TBD; asks the Court to confirm separate property and reports: All such assets and obligations are unknown to Petitioner who will amend this Petition when same are ascertained or will prove same at time of trial; seeks attorney fees; spousal support; child custody and child support orders.

Father filed his Response request for Dissolution to the Petition on 7/2 and reported the date of marriage was 10/01 and the date of separation was 6/2019; there are two children; seeks custody orders; seeks to terminate the court’s ability to award spousal support to mother; asks the Court to confirm separate property but reports that the nature and extent of the separate property of the parties is uncertain and shall be according to proof at trial.

In 9/2029 mother filed a RFO seeking spousal and child support orders; after reading the thorough documents submitted the Court set substantial child and spousal support on 10/8/10 and said among other things that because of the unusual posture of this case the Court expressly reserves jurisdiction to reallocate or reimburse one side or the other for the overpayment or underpayment paid for spousal and child support by father at the time the case is tried. Trial date was set for May 26, 2020.

On 2/7 mother filed a RFO seeking to compel father to further respond to:

1. Request for Production and Inspection of Documents, Set One and Sanctions [filed a separate statement]; and

2. Special Interrogatories, Set One and Sanctions.

The hearing was set for 3/10.

On 2/26 father filed his Response to all of the discovery issues raised in the RFO.

On 3/3 mother filed her Reply.

The Court has read it all but will only summarize here [the Court’s summary is longer than it should be; if the Court had more time, it would have been shorter.] The Court notes that the parents have stipulated to pendente lite custody and visitation and have elected to have the MSC conducted by a private judge.

The issue of further responses for Production and Inspection

CCP § 2031.320(a), states, in part, if a party filing a response to a demand for inspection, copying, testing or sampling thereafter fails to permit the inspection, copying, testing, or sampling in accordance with that party’s statement of compliance, the demanding party may move for an order compelling compliance.

CCP §2023.010(i) states, in part, although other types of discovery misuse may warrant sanctions, sanctions are mandated when a party refuses to meet-and-confer: Notwithstanding the outcome of the particular discovery motion, the court shall impose a monetary sanction ordering that any party or attorney who fails to confer as required pay the reasonable expenses, including attorney’s fees, incurred by anyone as a result of that conduct. (CCP §2023.020)

Mother reports in her 118-page motion that father was served with the Request for Production and Inspection of Documents, Set One on November 12, 2019; he served responses on December 24, 2019; although it is not clear at the outset of the motion, the Court has concluded that mother’s counsel sent father’s counsel a meet-and-confer letter on January 9, 2020, regarding the claimed deficiencies in father’s responses and requested that father supplement his production and amend his 2031 statement on or before January 21, 2020; alleges that counsel for father failed and refused to meet-and-confer; father failed and refused to serve amended responses or supplement his production.

Asks for an order that father should be ordered to provide a Code-compliant 2031 statement and supplement his production within five business days of the date of the hearing of this motion; seeks sanctions of $3,337.50 as discovery sanctions.

Mother’s REQUEST #1: All documents that support each of your claims to reimbursement under Family Code §2640.

2640 provides:

(a) “Contributions to the acquisition of property,” as used in this section, include down payments, payments for improvements, and payments that reduce the principal of a loan used to finance the purchase or improvement of the property but do not include payments of interest on the loan or payments made for maintenance, insurance, or taxation of the property.

(b) In the division of the community estate under this division, unless a party has made a written waiver of the right to reimbursement or has signed a writing that has the effect of a waiver, the party shall be reimbursed for the party’s contributions to the acquisition of property of the community property estate to the extent the party traces the contributions to a separate property source. The amount reimbursed shall be without interest or adjustment for change in monetary values and may not exceed the net value of the property at the time of the division.

(c) A party shall be reimbursed for the party’s separate property contributions to the acquisition of property of the other spouse’s separate property estate during the marriage, unless there has been transmutation in writing pursuant to Chapter 5 . . . or a waiver of the right to reimbursement. The amount reimbursed shall be without interest or adjustment for change in monetary values and may not exceed the net value of the property at the time of the division.

Father’s RESPONSE to #1:

“Pursuant to the specific requirements set forth in the California Code of Civil Procedure § 2031.230, I have made a good faith effort to conduct an investigation aimed at locating all documents in my possession and in my control. I have complied with the best of my ability to produce documentation responsive to the above demand. I have made a diligent search for any and all documents in my possession described in the above demand and have made reasonable inquiries with respect to the documents demanded in an effort to comply with the demand. Having done so, all documents responsive to the above demand, in my possession and control at the time this document was executed will be produced. My investigation and search for records and documents is continuing, however, there are no other such documents within my possession or control at this time. I reserve the right to supplement my response to this Request for Production of Documents upon the discovery of information and/or documents relevant thereto.”

Mother’s REQUEST #2

“All documents that refer to or reflect the payment of your compensation by TIAACREF, including, but not limited to stock option agreements, vesting agreements, deferred compensation agreements, correspondence between you and any individual at TIAA-CREF or any representative of TIAA-CREF concerning payment of your compensation.”

Father’s RESPONSE to # 2:

“Pursuant to the specific requirements set forth in the California Code of Civil Procedure § 2031.230, I have made a good faith effort to conduct an investigation aimed at locating all documents in my possession and in my control. I have complied with the best of my ability to produce documentation responsive to the above demand. I have made a diligent search for any and all documents in my possession described in the above demand and have made reasonable inquiries with respect to the documents demanded in an effort to comply with the demand.

Having done so, all documents responsive to the above demand, in my possession and control at the time this document was executed will be produced. My investigation and search for records and documents is continuing, however, there are no other such documents within my possession or control at this time. I reserve the right to supplement my response to this Request for Production of Documents upon the discovery of information and/or documents relevant thereto.”

Mother’s REQUEST #3:

“All DOCUMENTS that refer to or reflect the payment of your compensation by AFLAC, including, but not limited to stock option agreements, vesting agreements, deferred compensation agreements, correspondence between you and any individual at AFLAC or any representative of AFFLAC concerning payment of your compensation.”

Father’s RESPONSE to #3:

“Pursuant to the specific requirements set forth in the California Code of Civil Procedure § 2031.230, I have made a good faith effort to conduct an investigation aimed at locating all documents in my possession and in my control. I have complied with the best of my ability to produce documentation responsive to the above demand. I have made a diligent search for any and all documents in my possession described in the above demand and have made reasonable inquiries with respect to the documents demanded in an effort to comply with the demand. Having done so, all documents responsive to the above demand, in my possession and control at the time this document was executed, and have been provided in response to Request2 of this Request for Production, Set One. My investigation and search for records and documents is continuing, however, there are no other such documents within my possession or control at this time. I reserve the right to supplement my response to this Request for Production of Documents upon the discovery of information and/or documents relevant thereto.”

Father’s Written Declaration in Response to the Motion to Produce

Father testifies that he provided responses to Petitioner’s Request for Production Set 1 on 12/24/19, as well as documents in response to the document demand.

Documents Produced in Response to Request #1: he testifies that the only documents he has succeeded in securing in support of his request for separate property reimbursement pursuant to Family Code Section 2640 are the documents produced to mother’s lawyer’s office concurrently with his written response; has had no success locating additional documents; continues with his efforts to locate additional documents that will allow him to trace his separate property reimbursement claims, and will voluntarily update his responses and supplement the documents he has produced; he has identified the only documents in his current possession and control that are responsive to Request 1.

Request #2, Documents Regarding Payment of Compensation by AFLAC: he testifies that he produced copies of documents responsive to Request #2 concurrently with the service of his written responses and have subsequently secured additional documents which have been served on mother’s counsel.

Request #3, Stock Agreements, Vesting Agreements, Deferred Compensation Agreements Regarding Payment and Compensation by TIAA-CREF; he testifies that he has produced copies of documents responsive to Request #2 (sic) concurrently with the service of his written responses and have subsequently secured additional documents which have been served on mother’s counsel.

Mother’s Reply to Father’s Response

Mother submits her Reply and her declaration and the declaration of Linda Thaure; mother’s counsel testifies that father’s opposition to this motion was transmitted to her office after business hours on February 26, 2020; she conferred with Linda Thaure, the document manager for Misho Law Group, regarding father’s assertion that he produced documents responsive to Category #2 “with the service of my written responses.” Counsel personally inspected the document production which accompanied father’s written responses and verified that he produced no documents of any kind responsive to Category #2; that documents were delivered to her office on February 27, 2020, by the office of counsel for father; they were not accompanied by a list or index of any kind and have not yet been reviewed, inventoried, nor has she had an opportunity to determine whether they comply in full with any of the categories of mother’s Request to Produce, Set One.

Mother contends that as to each of the three categories of documents to which the motion to Produce is directed, father does not dispute the assertion that his response is not Code-compliant; does not explain whether the documents never existed, or were in his possession but subsequently lost or destroyed, nor does he identify potential locations of the documents, all of which are required pursuant to Code of Civil Procedure §2031.230. Because he does not assert otherwise, father must be ordered to provide an amended, Code-compliant response to each of the three categories.

The issue of further responses to Interrogatories

Mother requests: 1) An order compelling father to provide further responses to Special Interrogatories, Set One served November 12, 2019.

2) An order requiring father to pay sanctions of $3,165, or such other amount as the Court deems appropriate.

Mother relies on the law that provides a motion to compel lies where the party to whom the interrogatories were directed gives responses deemed improper by the propounding party, e.g., improper objections, evasive or incomplete answers. (Code of Civil Procedure §2030.300) A motion to compel is also appropriate when “an objection is without merit. . .” (Code of Civil Procedure §2030.300(a)(3).)

Mother also contends that father’s counsel ignored the meet-and-confer letter of January 7, 2020; it is a separate ground for sanctions; points out that sanctions for failing to meet-and-confer are not discretionary – they are mandatory (Code of Civil Procedure §2023.020); that father and/or his attorney failed to meet-and-confer; he/they must be sanctioned.

Code of Civil Procedure §2030.300(d) provides: The court shall impose a monetary sanctions against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel a further response to interrogatories, 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.

Mother’s counsel testifies that on November 12, 2019, she served mother’s Special Interrogatories, Set One.

On December 24, 2019, father served responses to the Special Interrogatories, Set One.

On January 7, 2020, counsel transmitted a meet-and-confer letter to father’s attorney regarding the deficiencies in his responses; requested that he provide amended responses on or before January 21, 2020.

Father’s counsel failed to respond to her meet-and-confer letter of January 7, 2020, in any manner; did not request an extension of time to respond, nor has his client provided amended responses as of February 7, 2020; requests a total of $3,165 as discovery sanctions.

Father’s Response

Father testifies that with respect to Special Interrogatory #2, he was asked to identify each property or asset in which he claims a right to reimbursement under Fam. Code Section 2640. “Identify” was defined as requiring him to specifically describe the property or asset and to give the amount of his reimbursement claim in each property or asset in dollars; his response includes a description of each property or asset to which he claims a reimbursement, which is recited immediately after the words, “Description of Property,” written in bold; been diligently working to secure copies of records of transactions regarding the five reimbursement claims he has identified, including requests for copies of financial account statements, documents regarding each of the real estate transactions, including settlement statements, escrow documents, wire transfers, deposits, and other documentary evidence in order to identify the exact amount of each such reimbursement; has not yet been successful; continues his efforts and is fully aware that the burden to prove Family Code Section 2640 reimbursements claim is on the party making such claims; understands that the Court will deny any and all Family Code Section 2640 reimbursement claims that are not supported by sufficient documentary evidence that traces each such reimbursement claim to his separate property; but does not currently possess documents that sufficiently trace the reimbursements he has identified to his separate property; continues his efforts to secure such evidence; if unable to secure evidence to support reimbursement claims, will not seek reimbursement; will voluntarily provide updated information and produce all documents and evidence to support his reimbursement claims as he locates and secures such information.

Special Interrogatory 3 required him to describe each transaction he contends effected a transfer of his separate property to property in which he now claims a right of reimbursement; his response to Special Interrogatory 3 makes it clear that he hasnot been successful in securing documents that trace his separate property reimbursement claims; continue his efforts to locate financial records that will allow him to trace his separate property contributions, but has had no success to date.

Special Interrogatory 5: The only documents he has succeeded in locating are the documents he has identified and produced; will continue efforts to locate and secure documents that will allow him to trace separate property reimbursement claims, and will voluntarily update responses and supplement the documents produced; has identified the documents in his current possession and control that are responsive to Special Interrogatory 5.

Special Interrogatory 6 required him to describe all margin transactions he has initiated since date of separation and provide the date of the transaction, the purpose of the transaction and the disposition of the proceeds of the transaction; heidentified the date of all such transactions, the purpose of each such transaction, and the disposition of the proceeds; identified the specific financial account and account number for each such margin transaction, all of which were confined to the Fidelity Joint Account ending in 5578; Fidelity Joint Account identified is an account to which both mother and he have complete access, and for which 100% of all transactions, including the specific margin transactions, are recorded and accounted for. In addition to access to the Fidelity Joint Account from which the capital calls were paid, mother has immediate, unfettered access to detailed records, receipts, confirmations, capital call notices, requests and communications with respect to the Fidelity Family Offices Services, through which all such margin transactions are processed; responded to the information requested in the order and manner requested.

Mother’s Reply

Mother points out that father’s Response to Special Interrogatories, Set One, he unnecessarily duplicates effort and the reader’s burden by submitting the very same pleading as Exhibit “A” to his Responsive Declaration. As to two of his reimbursement claims, father fails to identify the property currently in existence which his claimed separate property funds were used to acquire; as to the remaining claims, he fails to provide the amount of the claim. His response to Special Interrogatory #2 is insufficient, and must be amended to meet the call of the question; father concedes that his responses to #3 and #5 are insufficient; his offer to “update” his responses is not helpful, as it leaves mother in the position of receiving the required information too late to verify or dispute it; as to #6, mother attaches her declaration allegedly directly disputing the assertions made by father that mother has “immediate access to detailed records, receipts, confirmations, capital call notices; she has access to the account from which the margin calls are paid, but that does not provide information within father’s sole possession and control regarding the entity that made the “capital call,” the purpose of the “capital call” and the disposition of the proceeds of the capital call.

Analysis

Father’s does not appreciate that the trial date is only 60 days away; mother cannot prepare until she has all the documents and answers she needs. The claim “I am looking for documents” will not be permitted. The Court reserves for father the opportunity to ask for an amendment to his documentary production or answers to interrogatories if he should “find” new information and the Court will hold a hearing to determine if the “new” evidence should be permitted. If the Court were to do that, father will likely be required to pay sanctions for mother’s trial preparation based upon the evidence available to her 60 days before trial and a trial continuance.

Mother’s Request to Produce #1. This category required father to produce all documents in support of his reimbursement claims under Family Code §2640. The law on the subject is clear but the proof can be complex and time consuming at trial unless the documentation is made available in discovery. It may be that counsel has elected to not retain a forensic to do the tracing and thus the discovery process is more important. In any event, in response, father produced only deeds regarding 118 Rubicon Peak Lane, 305 Bonita Avenue and 1195 Sequoia Avenue; no closing statement, bank statement or investment account statement was provided; no documents of any kind were produced that demonstrate a right to reimbursement or that allow mother to trace his separate property into an existing piece of community property; father is able to identify and produced the documents that support his claims; additionally his verified response is deficient because it fails to conform to the requirements of Code of Civil Procedure §2031.230. He must “specify whether the inability to comply is because the particular item or category has never existed, has been destroyed, has been lost, misplaced, or stolen, or has never been, or is no longer, in the possession, custody, or control of the responding party.” He did not provide that information. He does not state whether the documents that support his claims were ever in his custody and control and subsequently were lost, misplaced, stolen, or destroyed. He does not state that such documents were never in his custody or control. It is not enough for him to allege that there are “no other documents within my possession or control at this time.” He is ordered to produce all documents responsive to this category; including all documents possessed by his agents, which includes escrow companies, banks, and any financial institution that maintains any account in which he has an interest; since the burden is on him to prove his reimbursement claims, this request asks no more of him than what he is required to provide at trial.

2. Mother’s Request to Produce #2.

This request required father to produce all documents reflecting his compensation by TIAA-CREF. In response, he produced:

A. AFLAC Confirmations or Release from May 2017 to May 2019

B. AFLAC Inc. Options and Awards Summary 07/31/19

C. AFLAC Inc. x2066 Total Holder July 2019 statement

D. Stock Plan AFLAC x0334 History 2015 to 2019

[Mother and the Court assumed that father’s production was mislabeled, and that the foregoing documents were produced in response to Request No. 3, which required father to produce: “All documents that refer to or reflect the payment of your compensation by AFLAC, including, but not limited to stock option agreements, vesting agreements, deferred compensation agreements, correspondence between you and any individual at AFLAC or any representative of AFFLAC concerning payment of your compensation.”

Father failed to produce all documents in his possession and control. The option agreements he entered into were not produced. No deferred compensation agreements were produced. No correspondence between father and AFLAC was produced; his 2031 response suffers the same defect that his response to #1 does, because he fails to state whether his inability to comply fully is because the document(s) “never existed, has been destroyed, has been lost, misplaced, or stolen, or has never been, or is no longer, in the possession, custody, or control of the responding party.” If the documents have “never been, or is no longer, in the possession, custody, or control of the responding party” he fails to provide the name and address of the individual or entity he knows or believes has possession, custody or control of the responsive documents. Father is ordered to produce all responsive documents to this category and amend his response to comply with CCP §2031.210 et seq.

3. Mother’s request to Produce #3

As noted above, it appears that father produced the documents in response to this category but mislabeled them as responsive to Request # 2. In response to Request #2, father produced nothing. Request No. 2 as noted above required father to produce all documents reflecting his compensation by TIAA-CREF including, but not limited to stock option agreements, vesting agreements, deferred compensation agreements, and correspondence between father and any individual at TIAA-CREF. Clearly he has in his possession and control, documents reflecting his stock option agreements, deferred compensation agreements and compensation received from TIAA-CREF. He is ordered to produce all documents responsive to this category. Moreover his 2031 response suffers the same defect that his response to #1 does, because he fails to state whether his inability to comply fully is because the document(s) “never existed, has been destroyed, has been lost, misplaced, or stolen, or has never been, or is no longer, in the possession, custody, or control of the responding party.” If the documents have “never been, or is no longer, in the possession, custody, or control of the responding party” he fails to provide the name and address of the individual or entity he knows or believes has possession, custody or control of the responsive documents. Father is ordered to amend his response to comply with the Code of Civil Procedure.

5. Special Interrogatory #2. Father’s response is insufficient, and must be amended to meet the call of the question.

6. Special Interrogatory #3. Father failed to identify any transaction after the sale of the that property; he must identify the property in which his alleged separate property contribution now “resides,” and must describe each transaction tracing the proceeds of sale of Sequoia Avenue into the existing property in which he claims a right of reimbursement; same holds true with respect to the Bonita Street property; father fails to identify any property to which the proceeds of sale of Bonita Street were transferred; with respect to the properties at 400 East 51st Street in New York; Incline Village; Llano Avenue, Santa Barbara and Nectarine Avenue in Carpinteria, father failed to identify each of the transactions that lead to an existing property which his claimed separate property was used to acquire; he is required to provide a full and complete response and not just a portion thereof; he must identify each transaction that leads to the existing property in which his alleged separate property was used to acquire; failed to do that; he is ordered to provide an amended response.

7. Special Interrogatory #5. Father is required to identify all documents in support of each of his separate property reimbursement claims under Family Code §2640. In response he only identified the documents related to the acquisition of the Sequoia Avenue property and the Bonita Street property. He failed to identify any documents in support of his claims with respect to the property on 51st Street in New York, Rubicon Peak in Nevada, Llano Avenue in California or Nectarine Avenue in California; he is ordered to provide a full and complete response, which includes identifying all of the documents that would allow mother to trace his separate property reimbursement claims into the properties he identifies.

7. Special Interrogatory #6. This Interrogatory required father to give the date of each of the margin transactions he initiated, the purpose of the transaction and the disposition of the proceeds of the transaction. Father provides the dates of several transactions but only provides the phrase, “capital call” with respect to the purpose of the transaction and the disposition of the proceeds of the transaction; if the purpose of the transaction was a “capital call,” father must state which entity issued the “capital call;” must state the purpose of the “capital call;” he is required to explain the reasons for the “capital call” and provide all information available, not the minimum amount of information; as to the disposition of the proceeds of the “capital call,” he must identify what debts were paid, what property was acquired, what accounts were used; he is ordered to provide all of the information he has with respect to each of the transaction described in his response to this Interrogatory.

8. As for the request for $3,165 or $3,337.50, as discovery sanctions, the Court will not award any sanctions; the Court finds that one meet and confer letter is an insufficient effort to meet the statute in this particular case on these issues. The Court does not find that father gave responses deemed improper, evasive or incomplete answers. He made a good faith effort to answer but his answers need to have more specificity; this is not always easy, but if he is going to trace separate property claims, specificity is required; the stakes are too high; this is serious litigation and mother is entitled to all the information father has. Section 271 provides that notwithstanding any other provision of this code, the court may award sanction-based attorney’s fees and costs on the extent to which the conduct of each party or attorney furthers or frustrates the policy of the law to promote settlement of litigation and, where possible, to reduce the cost of litigation by encouraging cooperation between the parties and attorneys. An award of attorney’s fees and costs pursuant to this section is in the nature of a sanction. In making an award pursuant to this section, the court shall take into consideration all evidence concerning the parties’ incomes, assets, and liabilities. The court shall not impose a sanction pursuant to this section that imposes an unreasonable financial burden on the party against whom the sanction is imposed. In order to obtain an award under this section, the party requesting an award of attorney’s fees and costs is not required to demonstrate any financial need for the award. The section is discretionary; the Court does not find that father or his attorney frustrated the policy of the law to promote settlement of the litigation or failed to cooperate; also the Court must consider all evidence concerning the parties’ incomes, assets, and liabilities; the Court has no current evidence on that requirement.