SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES – NORTH DISTRICT

ALICE ALONZO, )
) Case Number BC 508742
Plaintiff, )
) ORDER AFTER HEARING
V )
) Date of Hearing:
STEPHEN PAUL WILSON, et al ) May 8, 2014
) Dept. A-11
Defendants ) Judge Randolph A. Rogers
)
___________________________________)

The Court bases the Order After Hearing of this date upon the following Statement of Decision:

1. On May 13, 2013, Plaintiff Alice Alonzo filed her complaint against Defendants Stephen Paul Wilson; Joyce Wilson; Brianna Wilson; Stephanie Wilson; Stephen J. Wilson; Kimberly Heath; and Does 1 through 25, inclusive, alleging a cause of action for fraudulent conveyance.

2. On October 15, 2013, Defendant Joyce Wilson (“Defendant”) filed a motion to quash or modify subpoena and notice of deposition on the grounds of mediation privilege under Evidence Code §1119. By Order dated April 17 (hereinafter “April 17 Order”), the Court denied the Defendant’s motion based on evidence that the mediation and transfers were conducted with fraudulent intent, and therefore excepted from §1119 under Evidence Code §1123(d).

3. On January 27 and 28, 2014, the Plaintiff took the depositions of Defendants Kimberly Heath and Stephen J. Wilson, respectively. Disagreement arose between the parties as to discoverability of communications made by the Defendants with Henry Friedman in relation to the mediation referred to above.

4. Plaintiff brought the present motions to compel on March 18, 2014. Defendants Heath and Wilson filed a response on April 22, 2014, stating their lack of standing and submission to judgment of the Court.

5. Defendants Joyce and Breanna Wilson filed their opposition to the motion on April 25, 2014.

6. Motion to Compel – Code of Civil Procedure §2025.480 provides that “[i]f a deponent fails to answer any question or to produce any document . . . the party seeking discovery may move the court for an order compelling that answer or production.” CCP §2025.480(a). “If the court determines that the answer or production sought is subject to discovery, it shall order that the answer be given or the production be made on the resumption of the deposition.” CCP §2025.480.

7. Defendants Joyce and Breanna Wilson argue that the current motion is precluded by Evidence Code §1119, which provides for the non-discoverability of communications and writings made for the purpose of, in the course of, or pursuant to mediation. Opposition at 3:14-15. Plaintiff contends that the representations in question were made before mediation begun. Motion at 6:17-20.

8. As the Court has already noted in its previous decisions relating to Defendant Joyce Wilson’s assertion of the mediation privilege, “there is evidence to support Plaintiff’s position that the marital dissolution and property transfers were conducted in order to commit fraud.” April 17 Order at ¶10. The jailhouse recordings that were the subject of the December 20, 2013 Order, authenticated by Defendant Stephen P. Wilson’s prior counsel, provide substantial credible evidence showing that Defendants used the mediation as a vehicle for effectuating a scheme of fraudulent transfer. Given such evidence that the purpose of the mediation was to effectuate fraud, it is unlikely that the present situation falls within the scope of the Legislature’s intent to “promote a candid and informal exchange regarding events in the past.” Simmons v. Ghaderi (2008) 44 Cal.4th 570, 578. It would be farfetched to assume that the Legislature intended to permit mediation confidentiality to act as a shield for Defendants to engage in fraudulent activity.

9. It should also be noted, however, that in addition to the confidentiality protected by Evidence Code §1119, a mediator is also subject to a separate privilege that is not waived simply because parties to a mediation waive confidentiality. See Olam v. Congress Mortg. Co. (N.D. Cal. 1999) 68 F.Supp.2d 1110, 1130 (“California law confers on mediators a privilege that is independent of the privilege conferred on parties to a mediation. By declaring that, subject to exceptions not applicable here, mediators are incompetent to testify, . . . section 703.5 of the Evidence Code has the effect of making a mediator the holder of an independent privilege”). As such, while Defendants Stephen J. Wilson and Kimberly Heath are not entitled to confidentiality under §1119, the mediator is still prohibited from testifying under §703.5.

10. Having already deemed Evidence Code §§1123(d) and 1124(c) to permit discovery of the mediation proceedings with regards to Defendants Joyce Wilson and Stephen P. Wilson, it would be inconsistent to now reinstate the protection with regards to Defendants Kimberly Heath and Stephen J. Wilson. As Defendants readily concede, Heath and Wilson “had no business with Henry Friedman . . . other than as a part of the mediation to provide information on behalf of Stephen, Jr.” Opposition at 3:19-22. As agents of Defendant Stephen Wilson, Kimberly Heath and Stephen J. Wilson cannot claim a protection greater than that enjoyed by the principal to the mediation.

11. As to Defendant Kimberly Heath, Plaintiff asks for an order to compel the production of “[a]ny and all documents, including but not limited to handwritten notes, invoices, and emails, evidencing, referring or relating to meetings with Henry Friedman in December 2010.” Plaintiff’s Statement of Disputed Questions and Answers from Kimberly Heath at 2:16-17. In addition, Plaintiff seeks an order for Defendant to answer the questions “what marital assets did you tell Mr. Friendman and Joyce and Stephen Jr. have (sic)?” and “[w]hat was discussed at that meeting?” Id. at 4:26-27 and 6:2.

12. As to each discovery request, Defendants argue that Evidence Code §1119 prevents disclosure. As already discussed above, the implication and applicability of §1123 permits discovery. Defendants’ concede that Kimberly Heath was acting as an agent of Defendant Stephen Paul Wilson. Therefore, production of any documents from that meeting relevant to Defendant Heath’s involvement as Defendant Stephen P. Wilson’s agent is discoverable. Similarly, questions that appear to be reasonably calculated to lead to the discovery of admissible evidence are not made inadmissible by §1119 pursuant to §§1123 and 1124. CCP§2017.010 and Cal. Evid. Code §§1123(d) and 1124(c).

13. Keeping in mind the general rule that “[t]he concept of relevance in the discovery context is, of course, broader than evidence that is admissible at trial” Mercury Interactive Corp., v. Klein (2007) 158 Cal.App.4th 60, 97, and the fact that “[a]ny doubts regarding relevance are generally resolved in favor of allowing the discovery,” Id. at 98, the questions Plaintiff seeks answers to seem related to, at a minimum, impeachment evidence. As such, Plaintiff is entitled to answers to the question and production of the documents.

14. As to Defendant Stephen J. Wilson, Plaintiff seeks the same categorical documents as for Defendant Heath. Plaintiff’s Statement of Disputed Questions and Answers from Stephen J. Wilson at 2:16-17. In addition, Plaintiff seeks to compel answers to the questions “what was said at [the December 16] meeting?” and “what was discussed at [the December 27] meeting?” Id. at 3:26 and 4:23.

15. Again, Defendants Joyce and Breanna Wilson oppose the discovery on the grounds of Evidence Code §1119. As stated above, Evidence Code §§1123(d) and 1124(c) control admissibility here. Further, as was the case in the documents and questions related to Defendant Kimberly Heath, the documents and questions sought for Defendant Stephen J. Wilson appear to be reasonably calculated to lead to admissible evidence. As such, Plaintiff is entitled to the documents and answers.

16. Accordingly, the Plaintiff’s motions to compel production of documents and answers to questions from Defendants Kimberly Heath and Stephen J. Wilson are GRANTED.

17. Sanctions – Code of Civil Procedure §2025.480(j) provides that “[t]he court shall impose a monetary sanction under Chapter 7 (commencing with Section 2023.010) against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel an answer or production, 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.”

18. Plaintiff seeks sanctions against Mr. Hoines and Defendant Kimberly Heath in the amount of $14,060.00. As a preliminary matter, CCP §2025.480(j) authorizes sanctions only against a party, person, or attorney who unsuccessfully makes or opposes a motion to compel. Defendant Heath and Mr. Hoines explicitly state they neither oppose nor agree to Plaintiff’s motion. Defendants Stephen J. Wilson and Kimberly Heath’s Response to Plaintiff’s Motion to Compel, 1:19-20. Therefore, Plaintiff is not entitled to seek sanctions against them.

19. Section 2025.480 does authorize the imposition of sanctions on any party, person, or attorney who unsuccessfully opposes a motion to compel. Defendants Joyce and Breanna Wilson opposed the present motion. Therefore, sanctions can be awarded to the Plaintiff against them.

20. In demanding $14,060.00 in sanctions, Plaintiff’s counsel Mr. Rehwald declares that he spent, at a normal hourly rate of $500.00, 10 hours between the meet and confer process and bringing the motion, expects to spend a further 5 hours in court appearances and reply, expects to incur $1,500 in airfare, hotels, and meals for another trip to Florida, and asks for a further $5,000.00 for travel time to Florida.

21. Plaintiff is clearly not entitled to the sum requested. First, the $6,500.00 requested relating to the trip to Florida is, in its entirety, not recoverable. Sanctions under §2025.480 are awarded pursuant to Code of Civil Procedure §2023.030(a), which states that the court “may impose a monetary sanction ordering that one engaging in the misuse of the discovery process . . . pay the reasonable expenses . . . incurred by anyone as a result of that conduct.” The conduct here described is opposing the motion to compel, therefore, the only costs that can be recovered are those costs related to bringing the motion to compel.

22. The Court of Appeal’s decision in Tucker v. Pacific Bell Mobile Services (2010), 186 Cal.App.4th 1548, is controlling here. In the Tucker case, the Court of Appeal reviewed the facts of an earlier case, Johnson v. Superior Court (1968) 258 Cal.App.2d 829, where a plaintiff moved for a motion to compel and sanctions based on defendant’s refusal to answer questions and produce documents at his deposition. Johnson, supra 258 Cal.App.2d at 835. In that motion, the plaintiff asked for “reasonable costs and attorney’s fees, incurred because of the proceeding.” Id. at 833. The trial court granted the motion and ordered the defendant to pay the costs of taking the future deposition. Id. The appellate court in Johnson vacated the order, stating that former CCP §2034(a), the predecessor statute to current §2023.030(a), “limited sanctions to ‘the “reasonable expenses incurred [by the successful party] in obtaining the order” compelling discovery.’ The Johnson court concluded that former section 2034, subdivision (a) did not authorize the trial court to award the costs of a future deposition.” Tucker, supra, 186 Cal.App.4th at 1564. As such, the appellate court found that the trial court exceeded its powers in granting the sanctions. Johnson, supra, at 840.

23. Similarly, in Tucker, the defendants were awarded monetary sanctions against plaintiff for the “further deposing [of] Plaintiff . . . and for bringing the motion for sanctions.” Tucker, supra, at 1562. Relying on the Johnson decision, the Court of Appeals rejected the defendant’s attempts to justify the sanctions, stating that “[a] trial court does not have the authority to award the costs of a future deposition as a discovery sanction where the individual has not yet ‘incurred’ those costs.” Id. at 1564.

24. Based on the Johnson and Tucker decisions, Plaintiff is clearly not entitled to any of the $6,500.00 requested for costs associated with the future deposition.

25. Turning to the $7,500.00 requested for attorney’s fees, Mr. Rehwald lumps the hours spent on Plaintiff’s meet and confer obligation with the hours spent in preparing the motion. As already noted, sanctions under CCP §§ 2023.030 and 2025.480 are awarded only to the costs associated with bringing the motion. Plaintiff is not entitled to costs associated with fulfilling her meet and confer obligation under §2025.480(b). Moreover, the estimated five (5) hours associated with the hearing and preparing a reply seems excessive. Plaintiff is therefore credited with the $60 filing fee and 9 hours in attorney’s fees at $500 an hour, without prejudice to a showing by Plaintiff of the hours actually spent preparing the motion and reply, for a total of $4,560.00.

26. Plaintiff’s motion for sanctions is GRANTED, with Defendants Joyce and Breanna Wilson to pay $4,560.00 to Plaintiff.

27. Accordingly, the motion to compel production and testimony is GRANTED. Defendants Stephen J. Wilson and Kimberly Heath are ordered to produce documents under document request no. 4 and to answer the questions as detailed above as well as follow up questions. Plaintiff’s request for sanctions is GRANTED. Defendants Joyce and Breanna Wilson are ordered to pay sanctions to the Plaintiff in the amount of $4,560.00.

SO ORDERED AND ADJUDGED this the ______ day of May, 2014.