On 14 March 2014, the motion of Defendant to Compel Plaintiff’s Further Responses to Demand for Inspection, Set One (Nos. 1-8, 11, 13-18, and 19-21) was argued and submitted. Plaintiffs filed formal opposition to the motion.

All parties are reminded that all papers must comply with Rule of Court 3.1110(f).

I. Background

This is an action for breach of a settlement agreement (including breach of contract, unfair competition and unjust enrichment) and for common law slander. AIMZ Investment Advisors, LLC (AIMZ); Riley; and Friedman (Plaintiffs) allege that Norman Lehrer, (Defendant) breached the settlement agreement’s non-disparagement provision of a between AIMZ and Defendant’s company, Lehrer Management Company (LMC), and committed slander by making disparaging statements to customers regarding AIMZ.

Defendant cross-claimed for breach of the non-solicitation provision of the settlement agreement, alleging that Plaintiffs solicited Defendant’s clients after the settlement, and for disparagement and slander.

Plaintiffs Riley and Friedman worked as portfolio managers for LMC from approximately mid-2007 to mid-2011. On 26 May 2011, Riley and Friedman left LMC to start their own company, AIMZ. Defendant subsequently sued Plaintiffs in a separate case and the parties reached a settlement agreement on 08 July 2011 that included, among other provisions, a mutual non-disparagement agreement and the Plaintiffs’ agreement to not solicit LMC’s clients.

Plaintiffs’ First Amended Complaint alleges that in 2011, Defendant told his clients that Plaintiffs had stolen his business, solicited his clients, were unethical and unqualified, risked their client’s funds, and that Plaintiffs had behaved illegally and irresponsibly. Further, Plaintiff’s alleged that Defendant engaged in anti-competitive behavior by embellishing his involvement in the day-to-day activities of LMC, and misrepresenting the experience of the portfolio managers Defendant hired to replace Riley and Friedman.

Defendant’s Cross-Complaint alleges that beginning in November 2010, Plaintiffs began establishing AIMZ to compete with LMC, misappropriated LMC’s trade secrets and solicited LMC’s clients. Defendant alleges that Plaintiffs continued to solicit LMC’s clients after the settlement agreement and disparaged and slandered Defendant by telling customers that Defendant’s age and health issues interfered with his ability to manage his client’s funds. Defendant’s cross-complaint originally asserted causes of action for breach of settlement agreement, breach of pre-settlement employment agreement, slander, and misappropriation of trade secrets. The Plaintiff’s demurrers to the breach of employment and trade secrets claims were sustained without leave to amend. The Plaintiff’s demurrers to the breach of settlement agreement and slander claims were also sustained, with leave to amend, on the grounds that they were insufficiently plead. Defendant subsequently filed an Amended Cross-Complaint alleging breach of the settlement agreement (solicitation of LMC’s clients, disparagement of Defendant, using LMC’s confidential and trade secret information), slander, and misappropriation of trade secrets.

II. Discovery Dispute

On 27 September 2013, Defendant served Plaintiff with Demand for Inspection, Set One.

On 01 November 2013, Plaintiffs served responses to the Defendant’s Demand for Inspection.

On 06 December 2013, Defendant’s counsel sent a meet and confer letter to Plaintiffs’ counsel alleging that Plaintiffs’ responses to most of the demands were deficient.

On 16 December 16 2013, the parties’ counsel conferred by phone regarding the discovery dispute and agreed to schedule another meet and confer session.

On 07 January 2014, Plaintiffs’ counsel sent a letter in response to Defendant’s 06 December 2013 letter.

On 16 January 2014, the parties’ counsel met and conferred by phone but failed to resolve the dispute.

On 07 March 2014, Defendant filed this motion to compel Plaintiff’s further responses to Defendant’s Demand for Inspection, Set One (Nos. 1-8, 11, 13-18, and 19-21).

III. Discussion

A party may seek a motion to compel further responses to discovery if it deems that the responses received meet any of the following standards: 1) A statement of compliance is incomplete; 2) A representation of inability to comply is inadequate, incomplete, or evasive; or 3) An objection in the response is too general or without merit. (Code of Civ. Proc. § 2031.310(a); see Korea Data Systems Co. Ltd. v. Superior Court (4th Dist. 1997) 51 Cal.App.4th 1513, 1516.)

A motion to compel further production is code-compliant only if: 1) The motion sets forth specific facts showing good cause justifying the discovery sought by the demand; and 2) The motion is accompanied by a meet and confer declaration. (Code of Civ. Proc. § 2031.310(b).) Once good cause is demonstrated, the burden falls on the party resisting production to justify the objection. (See Kirkland v. Superior Court (2d Dist. 2002) 95 Cal.App.4th 92, 98.) A meet and confer declaration must show a reasonable and good faith attempt at an informal resolution as to each issue addressed in the motion. (Code of Civ. Proc. § 2016.040.) “The level of effort at informal resolution that satisfies the ‘reasonable and good faith attempt’ standard depends upon the circumstances.” (See Stewart v. Colonial Western Agency, Inc. (2d Dist. 2001) 87 Cal.App.4th 1006, 1016.) In a simple case, a modest effort may suffice. (See Obregon v. Superior Court (2d Dist. 1998) 67 Cal.App.4th 424, 431.) An adequate attempt at informal resolution may be completed through written communications, such as a single letter followed by a response which refuses concessions. (Id. at 432.)

A. Showing of Good Cause

Here, Defendant asserts that the requested documents regarding communications with Defendant’s current and former clients is a key part of Defendant’s cross-claim for breach of the settlement agreement’s non-solicitation provision. Defendant also asserts that Plaintiffs’ refusal to produce documents prior to 08 July 2011 is countered by his right to develop a truth defense in response to Plaintiffs’ slander and disparagement claims, which extend back to November 2010.

Generally, Defendant asserts that instead of agreeing to produce “relevant” documents, Plaintiffs must specifically object on relevancy grounds if they believe the requests seek irrelevant information. Defendant also asserts that agreeing to produce “portions” implies that Plaintiffs may limit the disclosed information. Finally, Defendant argues that Plaintiffs’ agreement to produce documents that “mention or concern” the subject matter, instead of using the request’s language of “refer or relate to,” is unclear.

Defendant argues that Plaintiffs’ responses to Request Nos. 1-4 and 8 are evasive and incomplete, as it is reasonably foreseeable that production of documents in response to Defendant’s request for all documents relating to Norman Lehrer, Lenore Lehrer, Tony Alarcon, John Kosecoff, and LMC, will lead to admissible evidence. Defendant asserts that documents relating to him are relevant to Plaintiffs’ claims regarding his conduct. Also, documents relating to Lenore Lehrer are claimed relevant because the pleadings note that she is a percipient witness to many of the alleged events. Further, documents relating to Alarcon and Kosecoff are claimed relevant due to being named as parties who allegedly told Plaintiffs that Defendant had disparaged them and that Defendant misrepresented Alarcon and Kosecoff’s experience and cohesion. Finally, LMC is claimed to be central to both parties’ pleadings due to its role as employer of Riley and Friedman and Defendant’s ownership.

Defendant also argues that Plaintiffs cannot limit the documents to the period beginning on 08 July 2011 because the relevant claims and defenses relate to activities extending back to January 2010, such as whether Riley and Friedman set up AIMZ before November 2010, misappropriated Defendant’s trade secrets and solicited Defendant’s clients and to establish the Defendant’s defense to Plaintiffs’ slander and disparagement claims that such statements were justified. Defendant also argues that communications taking place before the settlement will give context to post-settlement communications and aid in determining whether they are affirmative attempts to solicit LMC’s customers.

Defendant argues that Request Nos. 5-7, demanding all documents relating to Riley and Friedman’s resignation from LMC and the formation of AIMZ are relevant to his truth defense regarding the Plaintiff’s disparagement, slander, and unfair competition claims.

Defendant argues that Request No. 10, seeking all documents relating to Riley and Friedman’s proposal to buy LMC, is reasonably foreseeable to lead to the discovery of admissible evidence regarding the proposal itself and the surrounding facts and circumstances. Defendant claims those details would be relevant to proving the proposal’s existence and relevant to Defendant’s truth defense to the Plaintiff’s slander and disparagement claims.

Defendant argues that Plaintiffs’ response to Request No. 11, requesting documents relating to disparaging remarks made by Plaintiffs regarding Defendant, is incomplete as it agreed only to produce responsive documents after 08 July 2011. Defendant argues that pre-settlement evidence could lead to identification of other witnesses and evidence of post-settlement disparagement and equitable unclean hands defenses to the Plaintiffs’ slander claim.

Defendant argues that Plaintiffs’ response to Request No. 13, requesting documents referring or relating to catalogs, lists, spreadsheets, or organizational charts of LMC’s clients, is relevant to determining whether Plaintiffs’ solicited Defendant’s clients and proving Defendant’s truth defense to Plaintiffs’ slander and disparagement claims. Plaintiffs’ response agreed only to provide documents that “constitute” the requested documents rather than including those relating to the requested documents.

Defendant argues that Plaintiffs’ response to Request Nos. 14-15, requesting documents referring or relating to catalogs, lists, spreadsheets, or organizational charts of AIMZ or FRAM’s clients, could support Defendant’s claim that Plaintiffs and is relevant to Plaintiffs’ defense that many of LMC’s customers went elsewhere (rather than to AIMZ/FRAM) and determining Defendants’ damages. Defendant argues that any privacy concerns would be addressed by designating them highly confidential in accordance with the protective order.

Defendant argues that Plaintiffs’ response to Request Nos. 16-18 and 20, requesting documents evidencing communications between Plaintiffs and LMC’s current or former clients, are directly relevant to its claims that Plaintiffs solicited Defendant’s clients after the settlement agreement and that prior conduct would be relevant to its defense to Plaintiffs’ claims.

Defendant argues that Plaintiffs’ response to Request No. 19, requesting appointment books and visitor lists reflecting meeting with clients or prospective clients is relevant to determining potential witnesses and recipients of Plaintiff’s solicitation offers and disparagement of Defendant in addition to Defendant’s defenses to Plaintiffs’ claims. Defendant claims that these materials could form the basis for further investigation of pre-settlement disparagement or slander.

Finally, Defendant argues that Plaintiffs’ response to Request No. 21, requesting production of customer information and other LMC trade secrets or proprietary information taken by Riley or Friedman during their employment at LMC are relevant to Defendant’s defense to Plaintiffs’ claims.

Plaintiffs contend that Defendant has failed to demonstrate specific facts showing good cause for his motion to compel further responses. Plaintiffs further argue that Defendant’s requests are overbroad and unduly burdensome. Plaintiffs also claim that the discovery period should be limited to the period between 09 July 2011 to 01 October 2012 because the doctrine of res judicata precludes the Defendant from requesting documents prior to the settlement agreement and Defendant’s cross-complaint alleges wrongdoing only up to the date of 01 October 2012 and that he therefore could not have sustained damages beyond that point.

Defendant has shown good cause for the requested categories of information. Defendant’s memorandum of points and authorities specifies how each of the requested documents could produce evidence relevant to its claims or defenses. This is sufficient to establish good cause for the documents sought.

Plaintiff’s argument that discovery should be limited to information generated prior to 09 July 2011 fails because the Defendant has sufficiently supported its argument that documents generated after 01 January 2010 could be relevant to its case. Defendant argues that documents generated after the settlement would give context to subsequent communications, showing whether Plaintiffs’ communications with former LMC clients were unrelated to solicitation or resulted from Plaintiff’s earlier solicitation efforts. Plaintiff is correct that the settlement agreement bars Defendant from raising the same claims as the earlier action, but this does not bar the Defendant from reviewing evidence pertinent to the case at hand.

Plaintiff’s argument that documents generated after 01 October 2012 are not relevant to this case is merited, however, because the Defendant has not alleged Plaintiffs’ wrongdoing after that date.

There is no substantial argument that the Plaintiff’s agreement to produce documents that “mention or concern” conflicts with Defendant’s demand for documents that “refer or relate to” its requests. Plaintiffs confirmed that they would produce all documents within the scope of proper discovery.

B. Meet and Confer Requirement

Defendant has satisfied the meet and confer requirement by sending a meet and confer to Plaintiffs’ counsel and conferring two additional times by phone.

IV. Requests for Judicial Notice

A court may take judicial notice of court records that are relevant to a pending issue. (Evidence Code, § 452, subdivision (d); People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [only relevant matters are subject to judicial notice].) To be relevant, the matter must help prove or disprove an important disputed fact. (Evidence Code, § 210; see People v. Broderick Boys (2007) 149 Cal.App.4th 1506, 1524).

A. Plaintiff’s Request for Judicial Notice

Plaintiffs’ request for judicial notice, filed on 21 February 2014, requests that this Court take notice of three documents from the prior action (Exhibits A-C: LMC’s complaint and request for dismissal, and the entry of dismissal and proof of service) and two documents from the current action (Exhibits D-E: Defendant’s First Amended Cross-Complaint and the order on the Plaintiff’s Demurrer).

Plaintiffs’ request for judicial notice of these documents is GRANTED. Such documents are noticed as to their existence and filing dates only.

B. Defendant’s Request for Judicial Notice

Defendant’s request for judicial notice, filed on 07 February 2014, requests that this Court take notice of Plaintiff’s First Amended Complaint in this action (Exhibit A) and Defendant’s Cross-Complaint in this action (Exhibit B).

Defendant’s request for judicial notice of these documents is GRANTED. Such documents are noticed as to their existence and filing dates only.

V. Conclusion

Defendant’s Motion to Compel Plaintiff’s Further Responses to Demand for Inspection, Set One (Nos. 1-8, 11, 13-18, and 19-21) is GRANTED IN PART, subject to the demands being limited to the time period between 01 January 2010 and 01 October 2012.

Plaintiffs shall respond to the discovery without objection (except for attorney-client privilege and work product doctrine) and within 20 days of the date of the filing of this Order. To the extent any documents are withheld based on attorney-client privilege or work product doctrine, Defendant shall provide a privilege log identifying all documents withheld and providing a factual basis for the claimed privilege.

Plaintiffs’ request for judicial notice is GRANTED. Such documents are noticed as to their existence and filing dates only.

Defendant’s request for judicial notice is GRANTED. Such documents are noticed as to their existence and filing dates only.