Delmy Shephard v. William Frankel, et al. CASE NO. 113CV257934
DATE: 15 May 2014 TIME: 9:00 LINE NUMBER: 12
This matter will be heard by the Honorable Judge Socrates Peter Manoukian in Department 19 in the Old Courthouse, 2nd Floor, 161 North First Street, San Jose. Any party opposing the tentative ruling must call Department 19 at 408.882.6856 and the opposing party no later than 4:00 PM Wednesday 14 May 2014. Please specify the issue to be contested when calling the Court and counsel.

On 15 May 2014, the motion of plaintiff Delmy Shephard to compel production of documents and for monetary sanctions was argued and submitted. Defendants William Frankel and Amkai, Inc. filed a formal opposition to the motion, in which they request monetary sanctions.

The motion of defendants William Frankel and Amkai, Inc. for protective order and for monetary sanctions was also argued and submitted. Plaintiff Delmy Shephard filed a formal opposition to the motion, in which she requests monetary sanctions.

All parties are reminded that all papers must comply with California Rules of Court, rule 3.1110(f).

Statement of Facts

This is an action arising from the sale of real property located at 11432 Chula Vista Court, San Jose, California (“the property”).

In July 2013, prior to the sale of the property, plaintiff Delmy Shephard (“Plaintiff”) allegedly entered into an agreement with defendant William Frankel (“Mr. Frankel”), pursuant to which she agreed to buy the property from Mr. Frankel 90 days after he purchased the property by way of short sale. Plaintiff and Mr. Frankel agreed upon a purchase price of $1,077,000.00. Plaintiff alleges that Mr. Frankel further agreed that the personal property stored at the property would be retained and provided to her upon her purchase of the property.

Plaintiff alleges that she relied upon Mr. Frankel’s representations and paid $30,000.00 into an escrow account for Mr. Frankel’s purchase of the property on or about 5 September 2013. Mr. Frankel accepted the $30,000.00 and signed a “Release of Funds” from the escrow account in the amount of $30,000.00 to complete his purchase of the property. Escrow closed on or about 30 September 2013. Plaintiff contends that Mr. Frankel signed an affidavit stating that an express condition of his purchase of the property was that he would not sell the property before 90 days.

On 17 September 2013, Mr. Frankel signed a grant deed transferring the property to defendant Amkai, Inc. (“Amkai”) without informing Plaintiff. Plaintiff alleges that Amkai is the alter ego of Mr. Frankel as there is “such a unity of interest and ownership between defendant Frankel and Amkai that separate personalities of Defendant Amkai and Frankel no longer exist. ” (See First Amended Complaint, p. 2:1-4.) The grant deed was recorded on 23 October 2013.

Amkai allegedly provided a sales contract to Plaintiff on 26 September 2013, but when Plaintiff returned the signed contract, Amkai refused to accept the originally agreed upon price of $1,077,000.00 and demanded $1,088,000.00. Plaintiff thereafter agreed to the purchase price of $1,088,000.00 and signed a “Residential Purchase Agreement” dated 26 September 2013.

Mr. Frankel and Amkai (collectively “Defendants”) then advised Plaintiff on 25 October 2013, that the purchase price had increased to $1,110,000.00 and they had another buyer for the property. On 3 November 2013, Defendants informed Plaintiff that the purchase price was now $1,140,000.00.

Plaintiff emailed Defendants and requested performance of the “Residential Purchase Agreement” on 26 November 2013. On 27 November 2013, Defendants sold the property to a third party for an undisclosed amount.

Plaintiff filed her original complaint on 18 December 2013, and filed the operative first amended complaint (“FAC”) on 17 March 2014, alleging the following causes of action: (1) breach of contract to sell real estate; (2) fraud; (3) breach of contract to deliver personal property.

Discovery Dispute

On 14 February 2014, Plaintiff served Defendants by mail with identical first sets of request for production of documents (“RPD”), each consisting of 19 document requests. (See Finley Dec., p. 1:22-25, Ex. A.) Plaintiff specified in the RPD that the date for production was 21 March 2014. (See Finley Dec., Ex. A.)

Defendants served identical unverified responses to the RPD on Plaintiff on 21 March 2014. (See Finley Dec., p. 1:26-28, Ex. B.) Defendants provided boilerplate, objection-only responses to RPD Nos. 7, 8, 18, and 19. (See Finley Dec., p. 2:1-4, Ex. B.) With regard to RPD Nos. 1-6 and 9-17, Defendants responded, subject to numerous boilerplate objections, that they would “produce true and correct copies of all non-privileged documents responsive” to the RPD that were within their custody, control, and possession. (Id.) In addition, Defendants attached an additional sheet to their responses which stated, “VERIFICATIONS AND DOCUMENTS TO FOLLOW.” (Id.)

On 26 March 2014, Plaintiff’s counsel wrote to Defendants’ counsel via email to meet and confer regarding Defendants’ responses to the RPD. (See Finley Dec., p. 2:5-11, Ex. C.) Plaintiff’s counsel requested that Defendants’ counsel inform him when he could expect to receive Defendants’ verifications and the documents responsive to the RPD. Plaintiff’s counsel also requested that the verifications and responsive documents be provided by 4 April 2014. (See Finley Dec., Ex. C.)

Additionally, Plaintiff’s counsel requested that Defendants withdraw their objections to RPD Nos. 7, 8, 18, and 19 and provide the requested documents because the documents sought by the RPD regarding Amkai’s formation and capitalization were relevant to Plaintiff’s allegations of alter ego. (See Finley Dec., p. 2:5-11, Ex. C.)

Defendants’ counsel responded to the meet and confer email on 1 April 2014. (See Finley Dec., p. 2:12-17, Ex. D.) He requested that Plaintiff dismiss her FAC or file a second amended complaint curing perceived defects. (See id.) Defendants’ counsel indicated that if Plaintiff did not dismiss or amend her FAC, Defendants would file a demurrer and request that the demurrer be sustained without leave to amend. (See id.)

Defendants’ counsel also stated that in light of the purported pleading defects in the FAC, “Defendants are reluctant to produce documents at this time due to Plaintiff’s inability to file a complaint which can survive demurrer.” (Finley Dec., Ex. D.) Defendants’ counsel requested that Plaintiff agree to “suspend Defendants’ production of documents until after [she] had filed a complaint upon which Defendants must answer.” (Id.) Defendants’ counsel indicated that absent Plaintiff’s agreement, Defendants would consider moving for a protective order or “simply force Plaintiff to pursue a motion to compel.” (Id.) Defendants’ counsel further indicated that Defendants would not withdraw their objections to RPD Nos. 7, 8, 18 and 19 because Plaintiff had not alleged “facts to support a claim for alter ego/piercing the corporate veil” and the corporate documents sought are not relevant to any of Plaintiff’s causes of action. (Id.)

On 4 April 2014, Plaintiff’s counsel responded to Defendants’ counsel’s 1 April 2014 email. (See Finley Dec., p. 2:18-21; Charles Dec., Ex. D.) Plaintiff’s counsel stated that Plaintiff believed that she had adequately stated all of her causes of action in her FAC and Defendants’ contention to the contrary did not entitle them to withhold discovery or to insist that she first file an amended complaint that they deem satisfactory. (See Charles Dec., Ex. D.) Plaintiff’s counsel advised that he would not extend the time for production as proposed by Defendants’ counsel. He further advised that Plaintiff would move to compel production of documents. (Id.)

Defendants’ counsel declares that Defendants served signed verifications for their responses to the RPD on Plaintiff on 7 April 2014. (See Charles Dec., p. 3:7-9, Ex. E.)

On 16 April 2014, Plaintiff filed the instant motion to compel Defendants to produce documents and for an award of sanctions. Defendants then filed their demurrer to Plaintiff’s FAC on 22 April 2014, and the matter is set for hearing on 22 May 2014.

Defendants’ counsel wrote to Plaintiff’s counsel via email on 22 April 2014 and 23 April 2014, proposing that Plaintiff agree to take the instant motion to compel production of documents off calendar and extend the time for production of documents responsive to the RPD until 15 days after the court’s ruling on Defendants’ demurrer. (See Charles Dec., p. 3:13-21, Ex. F.) He indicated that if Plaintiff agreed to the same, Defendants would agree to extend the time for Plaintiff to file her motion to compel until 12 June 2013. (Id.) Defendants’ counsel advised that Defendants would otherwise be filing a motion for a protective order requesting that the court extend the time to produce responsive documents until after the ruling on Defendants’ demurrer. (See Charles Dec., Ex. F.)

On 23 April 2014, Plaintiff’s counsel replied to Defendants’ counsel’s emails and rejected Defendants’ counsel’s proposals. (See Charles Dec., p. 3:22-25, Ex. G.) He advised that Plaintiff’s right to discovery was separate from the status of the pleadings and Defendants’ opinion about the sufficiency of the pleadings. (See Charles Dec., Ex. G.) Plaintiff’s counsel stated that “[i]t may well be that some of the documents requested would assist plaintiff in responding to a demurrer of amending her complaint should the demurrer be granted with leave” and, thus, Defendants’ refusal to produce the responsive documents until after the demurrer hearing was suspect. (Id.) Plaintiff’s counsel further stated that Defendants’ decision to now move for a protective order was “gamesmanship designed to achieve obstruction and delay” and Defendants had failed to promptly move for the same under Code of Civil Procedure section 2031.060. (Id.)

On 24 April 2014, Defendants filed the instant motion for protective order and an award of monetary sanctions. Plaintiff filed opposition papers to Defendants’ motion for protective order on 1 May 2014, in which she requests sanctions. Defendants filed opposition papers to Plaintiff’s motion to compel production of documents on 5 May 2014, in which they request sanctions.

On 8 May 2014, Plaintiff filed reply papers in support of her motion to compel production of documents. On the same date, Defendants filed reply papers in support of their motion for protective order.

Discussion

I. Plaintiff’s Motion to Compel Production of Documents

A. Request for Judicial Notice

As an initial matter, Plaintiff requests that the Court take judicial notice of her FAC filed on 17 March 2014. A court may take judicial notice of court records that are relevant to a pending issue. (See Evid. Code, § 452, subd. (d); People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [only relevant matters subject to judicial notice].) Plaintiff’s FAC is a court record and is indisputably relevant to the issues involved in this motion because the allegations in the FAC must be examined to determine the relevancy of the discovery sought. Accordingly, Plaintiff’s request for judicial notice is GRANTED.

B. Nature of the Motion

As a threshold matter, the Court notes that Plaintiff’s motion, captioned as a “MOTION TO COMPEL PRODUCTION OF DOCUMENTS,” is made pursuant to Code of Civil Procedure sections 2031.320 and 2031.310, which address motions to compel compliance and further responses to request for production of documents.

With regard to RPD Nos. 1-6 and 9-17, Plaintiff does not move to compel a further written response and seeks only to compel the production of responsive documents in accordance with Defendants’ statements of compliance served on 21 March 2014. Plaintiff’s motion is not accompanied by a separate statement for RPD Nos. 1-6 and 9-17 as would be required to assess the sufficiency of the written responses. (See Cal. Rules of Court, rule 3.1345; see also Mills v. U.S. Bank (2008) 166 Cal.App.4th 871, 893.)

With regard to RPD Nos. 7, 8, 18, and 19, Plaintiff contends that Defendants’ objections are without merit and they should be ordered to respond to the RPD without the same. Plaintiff’s motion as to these requests is accompanied by a separate statement as required for a motion to compel further responses to request for production of documents. (See Cal. Rules of Court, rule 3.1345; see also Mills v. U.S. Bank, supra, 166 Cal.App.4th at p. 893.)

Thus, it appears that Plaintiff’s motion is one to compel compliance with Defendants’ responses to RPD Nos. 1-6 and 9-17 under Code of Civil Procedure section 2031.320, and further responses to RPD Nos. 7, 8, 18, and 19 under Code of Civil Procedure section 2031.310. The Court will construe the motion accordingly.

C. RPD Nos. 1-6 and 9-17

Plaintiff moves for an order compelling Defendants to produce all documents responsive to RPD Nos. 1-6 and 9-17 in accordance with their statements of compliance. Defendants oppose the motion and argue that Plaintiff is not entitled to the production of responsive documents prior to the court’s ruling on its demurer.

1. Legal Standard

Pursuant to Code of Civil Procedure section 2031.320, “[i]f 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.” (Code Civ. Proc., § 2031.320.)

2. Analysis

Plaintiff argues that Defendants should be compelled to produce documents responsive to RPD Nos. 1-6 and 9-17 because they have failed to produce the same even though they stated in their responses that they would “produce true and correct copies of all non-privileged documents responsive” to the RPD that were within their custody, control, and possession. (See Finley Dec., p. 2:1-4, Ex. B.)

Defendants do not deny that they have failed to produce documents responsive to RPD Nos. 1-6 and 9-17 in accordance with their statements of compliance. Instead, Defendants argue that their refusal to produce the documents prior to the court’s ruling on their demurrer is justifiable.

First, Defendants argue that Plaintiff did not engage in adequate meet and confer efforts because Plaintiff’s counsel would not agree to extend their time to produce documents responsive to the RPD. However, Code of Civil Procedure section 2031.320 does not require a party to engage in meet and confer efforts prior to bringing a motion to compel compliance. (See Code Civ. Proc.,§ 2031.320.)

Second, Defendants argue that “there is no substantial justification for Plaintiff’s motion because Plaintiff fails to ‘set forth specific facts’ justifying the discovery sought prior to the hearing on the demurrer.” Defendant maintains that Plaintiff must establish that there is a compelling need which warrants the production of documents prior to the hearing on the demurrer such as the documents are needed in order to properly amend her complaint or to prevent the loss or destruction of evidence. However, Code of Civil Procedure section 2031.320 does not require a showing of substantial justification, good cause, or compelling need for the discovery sought in order for a party to prevail on a motion to compel compliance. (See Code Civ. Proc., § 2031.320.)

Third, Defendants assert that the status of the pleadings in the present case, i.e. the fact that they have file a demurrer that is set for hearing on 22 May 2014, warrants their decision to delay the production of responsive documents. Defendants contend that it is very likely that their demurrer will be sustained without leave to amend, and present lengthy arguments in their opposition papers attempting to establish that they will prevail on demurrer. Defendants also argue that the cases of Budget Finance Plan v. Super. Ct. (1973) 34 Cal.App.3d 794 and Mattco Forge, Inc. v. Arthur Young & Co. (1990) 223 Cal.App.3d 1429, which support the general proposition that the right to discovery does not depend upon the status of the pleadings, are distinguishable from the present case. Defendants contend that in both Budget Finance Plan v. Super. Ct. and Mattco Forge, Inc. v. Arthur Young & Co. the plaintiffs needed the discovery in order to amend their complaints, while here Plaintiff has made no such assertion.

Defendants’ position on this point is misguided and unsupported. As stated by Plaintiff, the right to discovery does not depend on the status of the pleadings absent jurisdictional challenges. (See Budget Finance Plan v. Super. Ct. (1973) 34 Cal.App.3d 794, 797 [i.e. deficiencies in the pleadings do not affect either party’s right to conduct discovery and a valid complaint need not be on file]; Mattco Forge, Inc. v. Arthur Young & Co. (1990) 223 Cal.App.3d 1429, 1436.) Here, Defendant has not asserted that there are jurisdictional matters at issue. Furthermore, the Code of Civil Procedure also supports the general rule that the status of a pleading is not determinative because a plaintiff may propound requests for production of documents on a party without leave of court at any time that is 10 days after the service of the summons. (Code Civ. Proc., § 2031.020, subd. (b).)

Defendants’ attempt to distinguish Budget Finance Plan v. Super. Ct. and Mattco Forge, Inc. v. Arthur Young & Co. from the instant case is unpersuasive because Plaintiff’s counsel stated in his 23 April 2014 email that Plaintiff may very well need the discovery sought in order to draft an amended complaint. Moreover, the courts in Budget Finance Plan v. Super. Ct. and Mattco Forge, Inc. v. Arthur Young & Co. did not hold that a plaintiff must contend that the discovery is necessary to amend his or her complaint in order to obtain the discovery sought, but indicated that it was merely a factor to be considered.

Furthermore, Defendants are essentially asking the Court to preemptively rule on their demurrer, which is outside the scope of this discovery motion. Without passing on the merits of the parties’ respective arguments, the Court notes that it is not a foregone conclusion that the court will rule in favor of Defendants on the demurrer. In the meantime, discovery may assist the parties in evaluating the case and/or facilitating a settlement thereof. (See Gonzalez v. Super. Ct. (1995) 33 Cal.App.4th 1539, 1546.)

For all of those reasons, Defendants refusal to produce responsive documents in accordance with their statements of compliance is without merit. Accordingly, Plaintiff’s motion to compel Defendants to produce responsive documents in compliance with their responses to RPD Nos. 1-6 and 9-17 is GRANTED.

D. RPD Nos. 7, 8, 18, and 19

Plaintiff moves for an order compelling Defendants to provide further responses to RPD Nos. 7, 8, 18 and 19 without objections. Defendants oppose the motion and argue that the documents sought by the RPD are irrelevant and disclosure of responsive documents would invade Defendants’ right to privacy in their financial information.

1. Legal Standard

A party propounding a request for production may move for an order compelling a further response if it deems that an objection in the response is without merit or too general. (Code Civ. Proc., § 2031.310, subds. (a)(1) and (3).) The motion must set forth “specific facts showing good cause justifying the discovery sought by the demand.” (Code Civ. Proc., § 2031.310, subd. (b)(1); Kirkland v. Super. Ct. (2002) 95 Cal.App.4th 92, 98.) Good cause is established simply by a fact-specific showing of relevance. (Kirkland v. Super. Ct., supra, 95 Cal.App.4th at p. 98.) If good cause is shown, the burden shifts to the responding party to justify any objections. (Id.)

2. Meet and Confer

Defendants argue that Plaintiff’s motion should be denied because Plaintiff failed to adequately meet and confer.

A motion to compel further responses shall be accompanied by a meet and confer declaration “showing a reasonable and good faith attempt at an informal resolution of each issue presented by the motion.” (Code Civ. Proc., §§ 2016.040, 2031.310, subd. (b)(2).) A reasonable and good faith attempt at informal resolution entails something more than argument with opposing counsel. It requires that the parties present the merits of their respective positions with candor, specificity, and support. (See Townsend v. Super. Ct. (1998) 61 Cal.App.4th 1431, 1435, 1439.) The level of effort at informal resolution that satisfies the “reasonable and good faith attempt” standard depends upon the circumstances of the case. (Obregon v. Super. Ct. (1998) 67 Cal.App.4th 424, 431.)

Defendants’ argument with regard to the adequacy of Plaintiff’s meet and confer efforts focuses on Plaintiff’s counsel’s refusal to agree to an extension of time for Defendants to produce responsive documents in accordance with their statements of compliance until after the 22 May 2014 hearing on Defendants’ demurrer. As previously noted, a party is not required to meet and confer prior to bringing a motion to compel compliance under Code of Civil Procedure section 2031.320.

Defendants do not specifically address Plaintiff’s meet and confer efforts with regard to RPD Nos. 7, 8, 18, and 19. In the instant case, Plaintiff’s counsel requested in his 26 March 2014 email to Defendants’ counsel that Defendants withdraw their objections to RPD Nos. 7, 8, 18, and 19 because the RPD ask for documents about Amkai’s formation and capitalization that are relevant to Plaintiff’s allegations regarding alter ego. (See Finley Dec., p. 2:5-11, Ex. C.) In response, Defendants’ counsel stated that Defendants would not withdraw their objections to RPD Nos. 7, 8, 18 and 19 because Plaintiff had not alleged “facts to support a claim for alter ego/piercing the corporate veil” and the documents sought are not relevant to any of Plaintiff’s causes of action. (See Finley Dec., Ex. D.) Thus, it was reasonable for Plaintiff to conclude that further meet and confer efforts regarding RPD Nos. 7, 8, 18, and 19 would not be fruitful.

Accordingly, the Court finds that Plaintiff’s meet and confer efforts pertaining to RPD Nos. 7, 8, 18, and 19 were adequate.

3. Good Cause

Discovery is allowed for any matters that are not privileged, relevant to the subject matter involved in the action, and reasonably calculated to lead to the discovery of admissible evidence. (Code Civ. Proc., § 2017.010.) The “relevance to the subject matter” and “reasonably calculated to lead to discovery of admissible evidence” standards are applied liberally with any doubt generally resolved in favor of discovery. (Colonial Life & Acc. Ins. Co. v. Super. Ct. (1982) 31 Cal.3d 785, 790.) Moreover, for discovery purposes, information is “relevant to the subject matter” if it might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement. (Gonzalez v. Super. Ct. (1995) 33 Cal.App.4th 1539, 1546.)

Here, the RPD at issue, Nos. 7, 8, 18, and 19, seek documents relating to: the formation of Amkai; the incorporation of Amkai; the minutes of Amkai’s shareholders and directors meetings; financial statements, including balance sheet, income, and expense statements for Amkai for 2013; and the identity of Amkai’s shareholders. (See Finley Dec., Ex. A.)

Plaintiff contends that there is good cause for the discovery sought because documents regarding the formation and capitalization are relevant to her allegations of alter ego in her FAC.

Conversely, Defendants assert that there is no good cause for the discovery sought because the formation and capitalization of Amaki “has nothing to do with Plaintiff’s ability to plead and prove breach of contract or fraud.” (Opp’n., p. 12:3-6.) Defendants further assert that “the issue of ‘alter ego’ status is premature” because they have not filed an answer asserting affirmative defenses. (Opp’n p. 12:6-8, 12-13.)

Defendants’ argument is without merit. Here, Plaintiff alleges in her FAC that Amkai is an alter ego of Mr. Frankel and seeks to impute liability to Mr. Frankel. In essence Plaintiff’s complaint alleges in part that Amkai has been used by Mr. Frankel to accomplish an unjust and inequitable purpose, and that the corporate entity should be disregarded. Since Plaintiff’s complaint raises allegations of alter ego, the discovery sought is not premature even though Defendants have not filed an answer or asserted affirmative defenses.

To establish that the acts and obligations of Amkai are legally those of Mr. Frankel, Plaintiff must demonstrate “that the corporation is not only influenced and governed by that person, but that there is such a unity of interest and ownership that the individuality, or separateness, of the said person and corporation has ceased.” (Flora Crane Serv., Inc. v. Super. Ct. (1965) 234 Cal. App. 2d 767, 778-79 [citation and quotation marks omitted];.) In determining whether the person and corporation have “such a unit of interest,” the court may consider a number of factors, including the “failure to adequately capitalize a corporation [. . .] and under-capitalization.” (Id. at p. 779 [citation omitted]; Leek v. Cooper (2011) 194 Cal.App.4th 399, 417-418 [alter ego factors considered by the court].)

In light of the above, Plaintiff persuasively argues that the discovery regarding the capitalization and formation of Amkai is relevant. Documents concerning Amkai’s governance and management are relevant to Plaintiff’s alter ego allegation as such records may indicate whether Amkai’s corporate formalities were observed. Amkai’s financial documents reflecting its income and management are relevant to Plaintiff’s alter ego theory of liability because such documents may demonstrate whether Defendants respected corporate formalities and maintained Amkai as distinct and separate entity. Similarly, “balance sheet information is relevant to the alter ego issue.” (Flora Crane Serv., Inc. v. Super. Ct. (1965) 234 Cal. App. 2d 767, 779.)

Accordingly, there is good cause for the discovery sought.

4. Objections

i. Undefended Objections

Defendants raised numerous boilerplate objections in response to RPD Nos. 7, 8, 18, and 19. Except as expressly noted below, Defendants do not attempt to defend their objections, and therefore, the Court finds that the undefended objections are without merit. (See Coy v. Super. Ct., (1962) 58 Cal.2d 210, 220-221.)

ii. Relevance

In their responses, Defendants objected to RPD Nos. 7, 8, 18, and 19 on the ground that the documents sought are irrelevant to the instant case. Defendants attempt to justify this objection in their opposition papers. As stated above, these documents are relevant to Plaintiff’s alter ego allegations in the FAC. Thus, this objection is overruled.

iii. Privacy

In their responses, Defendants objected to RPD No. 18 on the ground that the documents sought seek their private financial information.

Courts apply a three-factor test to determine whether a privacy objection has merit. (See Alch v. Super. Ct. (2008) 165 Cal.App.4th 1414, 1423-1424.) The first inquiry is whether the discovery sought actually implicates a privacy interest. (Id.) If so, then the court must decide whether the discovery would result in a serious invasion of a reasonable expectation of privacy. (Id.) If a serious invasion would result, then the court must determine whether the discovery is directly relevant and essential to a fair resolution of the lawsuit. (Id.)

It is well-established that the right to privacy extends to a person’s financial affairs. (See Cobb v. Super. Ct. (1979) 99 Cal.App.3d 543, 550.) While it is clear that persons, such as Mr. Frankel, have a right to privacy in their financial information, the question of whether business entities, such as Amkai, may invoke the right to privacy in the first instance is unsettled. (See Nativi v. Deutsche Bank National Trust Co. (2014) 223 Cal.App.4th 261, 314 n. 16; compare Roberts v. Gulf Oil Corp. (1983) 147 Cal.App.3d 770, 793 [privacy limited to “people” and business entities are not “people”] with H & M Associates v. City of El Centro (1980) 109 Cal.App.3d 399, 409 [corporate right to privacy invaded by city’s improper disclosure of information].)

In their opposition papers, Defendants mention the fact that they objected to RPD No. 18 on the ground that the RPD seeks their private financial information and cite applicable case law regarding privacy rights in general. (See Opp’n p. 12, 16-22.) However, Defendants fail establish that the discovery sought constitutes a serious invasion of their purported privacy rights. (See id.) Defendants state only that Plaintiff fails to establish that the documents sought are directly relevant to her causes of action. Thus, Defendants have not met their burden of justifying their privacy objection. (See San Diego Professional Ass’n v. Super. Ct. (1962) 58 Cal.2d 194, 199 [the burden is on the objecting party to justify its objection based on privacy rights].) Accordingly, this objection is overruled.

5. Conclusion

Accordingly, all of Defendant’s objections are overruled and further responses to RPD Nos. 7, 8, 18 and 19 are warranted. Thus, Plaintiff’s motion to compel further responses to RPD Nos. 7, 8, 18, and 19 is GRANTED.

II. Defendants’ Motion for Protective Order

Defendants moves for a protective order under Code of Civil Procedure section 2031.060 extending the time for them to produce documents responsive to RPD Nos. 1-6 and 9-17 until after the court’s ruling on the demurrer and stating that they do not have to provide further responses or produce documents to RPD Nos. 7, 8, 18 and 19.

A. Request for Judicial Notice

As an preliminary matter, Defendants request that the Court take judicial notice of Plaintiff’s FAC filed on 17 March 2014. A court may take judicial notice of court records that are relevant to a pending issue. (See Evid. Code, § 452, subd. (d); People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [only relevant matters subject to judicial notice].) Plaintiff’s FAC is a court record and is indisputably relevant to the issues involved in this motion because the allegations in the FAC must be examined to determine the relevancy of the discovery sought. Accordingly, Defendants’ request for judicial notice is GRANTED.

B. Legal Standard

For good cause shown, a court may make any order that justice requires to protect any party or other natural person from unwanted annoyance, embarrassment, or oppression, or undue burden and expense. (Code Civ. Proc., § 2031.060, subd. (b).)

For example, the court may order that all or some of the items or categories of items in the demand need not be produced, or the time specified to respond to a set of demands for production of documents be extended. (Code Civ. Proc., § 2031.060, subd. (b)(1), (2).) If the motion for a protective order is denied in whole or in part, the court may order that the party provide or permit the discovery against which protection was sought on terms and conditions that are just. (Code Civ. Proc., § 2031.060, subd. (g).)

C. Timeliness of the Motion

Plaintiff contends that Defendants failed to promptly move for a protective order as they did not file this motion until after the due date for production of documents.

Code of Civil Procedure section 2031.060 provides that a motion for protective order must be filed “promptly,” but provides no specific deadline by which such a motion must be filed. (Code Civ. Proc., § 2031.060, subd. (b).) The determination of whether a motion for a protective order has been promptly filed is a fact specific inquiry entrusted to the discretion of the Court. (See Nativi v. Deutsche Bank National Trust Co. (2014) 223 Cal.App.4th 261, 316 [filing ex parte application for order for shortening time for notice of motion of protective order within one week of learning opposing party unwilling to stipulate to protective order considered prompt].)

Here, the information submitted to the Court indicates that Defendants did not promptly file their motion. The date for production of documents responsive to RPD Nos. 1-6 and 9-17 was 21 March 2014. (See Finley Dec., Ex. A.) As early as 26 March 2014, Defendants’ counsel was aware that Plaintiff was demanding production of the responsive documents and would file a motion to compel production if the same were not received by 4 April 2014. Plaintiff’s counsel later advised Defendant’s counsel on 4 April 2014, that he was unwilling to agree to an extension of time for Defendants to produce the responsive documents and would proceed with filing a motion to compel. (See Charles Dec., Ex. D.) Only after Plaintiff filed her motion on 16 April 2014, did Defendants file this motion for a protective order. Therefore, taking into account the entirety of Defendants’ conduct, the Court finds that Defendants failed to promptly move for a protective order. This lack of timeliness, on its own, is sufficient to support the denial of the motion.

D. Good Cause

Defendants offer the same reasons in support of their position that good cause exists for a protective order that they offered in their opposition to Plaintiff’s motion to compel.

Defendants assert that a protective order extending the time for them to produce responsive documents to RPD Nos. 1-6 and 9-17 until after the court’s ruling on the demurrer is necessary to prevent unwarranted annoyance, expense and oppression because they have filed a demurrer to Plaintiff’s FAC, which is set to be heard on May 22, 2014. (Mem. Ps & As., p. 7:6-10.) Defendants contend that they are likely to prevail on the demurrer and there is a real possibility that leave to amend will be denied (See id. at p. 1:26-28) and they want to “avoid incurring unnecessary expenses and fees until a Court rules that Plaintiff has a viable complaint.” (See id. at p. 7:9-10.) Similarly, Defendants state that the RPD ask for private financial information and a demand for production of the same “unless and until the case is at issue” constitutes an unwarranted annoyance and undue expense. (See id. at p. 7:3-6.)

Defendant also assert that a protective order stating that they do not have to provide further responses or produce documents to RPD Nos. 7, 8, 18 and 19 is necessary because the RPD seek irrelevant information since “the issue of ‘alter ego’ status is premature.” (See Mem. Ps & As., p. 9:20-22.)

As previously discussed, with regard to Plaintiff’s motion to compel compliance with RPD Nos. 1-6 and 9-17, and further responses to RPD Nos. 7, 8, 18 and 19, Plaintiff’s right to discovery is not dependent upon the status of the pleadings and Defendants’ position that discovery should be postponed until after the ruling on the demurrer is not supported by any law. In addition, Defendants’ relevancy objection with regard to RPD Nos. 7, 8, 18 and 19 is overruled, as is their privacy objection with regard to RPD No. 18.

Accordingly, there is no good cause for the protective order sought and Defendants’ motion is DENIED.

III. Requests for Monetary Sanctions

Both Plaintiff and Defendants seek monetary sanctions in connection with their respective motions.

A. Plaintiff’s Motion to Compel Production of Documents

1. Defendants’ Request for Sanctions

Defendants request monetary sanctions against Plaintiff and/or her counsel in the amount of $2,715.00 under Code of Civil Procedure section 2031.320, subdivision (b) in connection with Plaintiff’s motion to compel compliance.

Code of Civil Procedure section 2031.320 states that the court shall impose a monetary sanction against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel compliance with 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.

Defendants were unsuccessful in their opposition to Plaintiff’s motion and, therefore, are not entitled to sanctions. Accordingly, Defendants’ request for monetary sanctions is DENIED.

2. Plaintiff’s Request for Sanctions

Plaintiff requests monetary sanctions against Defendants in the amount of $2,610.00 under Code of Civil Procedure sections 2031.320 and 2031.310 in connection with her motion to compel compliance and further responses to the RPD.

Code of Civil Procedure sections 2031.320 and 2031.310 state that the court shall impose a monetary sanction against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel compliance with a demand or further responses to request for production of documents, 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.

Here, Plaintiff was successful on her motion. Defendant did not act with substantial justification and there are no other circumstances making the imposition of sanctions unjust. Plaintiff is therefore entitled to an award of sanctions.

Plaintiff’s counsel declares that he spent 7 hours preparing the motion at an hourly rate of $250.00. He anticipates spending 3 hours to prepare a reply and attend the hearing. The Court does not award sanctions for expenses not yet incurred. (See Cal. Code Civ. Proc. § 2023.030, subd. (a); Tucker v. Pacific Bell Mobile Services (2010) 186 Cal.App.4th 1548, 1551.) Consequently, the anticipated attorney fees are not compensable. While counsel’s hourly rate is reasonable, the time spent is excessive and will be limited to 4 hours at $250.00 given the repetitive nature of the arguments asserted in the motion papers. Plaintiff’s counsel also seeks to recoup the $60.00 filing fee. This cost constitutes a reasonable expense.

Accordingly, Plaintiff’s request for monetary sanctions against Defendants is GRANTED IN PART in the amount of $1,060.00.

B. Defendants’ Motion for Protective Order

1. Defendants’ Request for Sanctions

Defendants request monetary sanctions against Plaintiff and/or her counsel in the amount of $2,715.00 under Code of Civil Procedure section 2031.060, subdivision (h) in connection with their motion for protective order.

Code of Civil Procedure section 2031.060, subdivision (h) states that the court shall impose a monetary sanction against any party, person, or attorney who unsuccessfully makes or opposes a motion for a protective order, 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.

Defendants were unsuccessful in their motion for protective order and, therefore, are not entitled to sanctions. Accordingly, Defendants’ request for monetary sanctions is DENIED.

2. Plaintiff’s Request for Sanctions

Plaintiff requests monetary sanctions against Defendants in the amount of $1,200.00 under Code of Civil Procedure sections 2031.060, subdivision (h) in connection with Defendants’ motion for protective order.

Code of Civil Procedure section 2031.060, subdivision (h) states that the court shall impose a monetary sanction against any party, person, or attorney who unsuccessfully makes or opposes a motion for a protective order, 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.

Here, Plaintiff successfully opposed Defendants’ motion, Defendants did not act with substantial justification, and there are no other circumstances making the imposition of sanctions unjust. Plaintiff is therefore entitled to an award of sanctions.

Plaintiff’s counsel declares that he spent 4.8 hours reviewing Defendants’ motion and preparing the opposition at an hourly rate of $250.00. The hourly rate and time spent are reasonable.

Accordingly, Plaintiff’s request for monetary sanctions against Defendants is GRANTED in the amount of $1,200.00.

Conclusion and Order

Plaintiff’s motion to compel Defendants’ compliance with their responses to RPD Nos. 1-6 and 9-17, and for further responses to RPD No. 7, 8, 18, and 19, is GRANTED. Accordingly, within 20 calendar days of the filing of this Order, Defendants shall produce all documents responsive to RPD Nos. 1-6 and 9-17 in accordance with their statements of compliance, as well as verified code-compliant further responses to RPD Nos. 7, 8, 18 and 19, without objections.

Defendants’ motion for protective order is DENIED.

Defendants’ requests for monetary sanctions are DENIED.

Plaintiff’s request for monetary sanctions against Defendants in connection with her motion is GRANTED IN PART in the amount of $1,060.00. Accordingly, Defendants shall pay $1,060.00 to Plaintiff’s counsel within 20 days of the date of the filing of this Order.

Plaintiff’s request for monetary sanctions against Defendants in connection with Defendants’ motion is GRANTED in the amount of $1,200.00. Accordingly, Defendants shall pay $1,200.00 to Plaintiff’s counsel within 20 days of the date of the filing of this Order.