Case Number: BC533149 Hearing Date: April 16, 2014 Dept: 58

JUDGE ROLF M. TREU
DEPARTMENT 58
________________________________________
Hearing Date: Wednesday, April 16, 2014
Calendar No.: 7
Case Name: Attar v. Attar, et al.
Case No.: BC533149
Motion: (1) Motion to Quash Deposition Subpoenas
(2) Motion to Quash Service of Summons and Complaint
Moving Party: (1) Defendant Elie Attar and Joanna Attar
(2) Defendant Walid Tohme
Responding Party: (1)-(2) Plaintiff Georges Attar
Notice: OK

Tentative Ruling: (1) Motion to quash deposition subpoenas is granted. Sanctions are awarded in favor of Defendants Elie Attar and Joanna Attar against Plaintiff and Plaintiff’s counsel of record, jointly and severally, in the total reduced amount of $2,160 to be paid within 30 days.

(2) Motion to quash service of summons and complaint is granted.

Background –
On 1/15/14, Plaintiff Georges Attar, individually and as shareholder of Courtesy Electric Wholesale Corporation (“CEW”), filed this action against Defendants Elie Attar, Joanna Attar, Walid Tohme, and CEW arising out of the alleged conversion of CEW’s assets. On 4/8/14, in response but prior to the hearing on a demurrer filed by Elie and Joanna, Plaintiff filed a First Amended Complaint asserting causes of action for (1) conversion, (2) fraud, (3) constructive fraud, (4) breach of fiduciary duties, (5) breach of contract, (6) breach of implied covenant of good faith and fair dealing, (7) unjust enrichment, (8) removal of director for cause, (9) appointment of provisional director, and (10) accounting.

Motion to Quash Deposition Subpoenas –
Elie and Joanna move to quash 12 deposition subpoenas issued on several banks. See Chammas Decl. ¶ 1, Ex. A. These subpoenas were directed at Bank of America, NA; Chase Bank; CitiBank; Pacific Western Bank; Chase Bank USA; and JP Morgan Securities LLC and sought records from 1/1/08 to the present. Elie and Joanna move to quash these subpoenas pursuant to CCP § 1987.1.

1. Privacy
These subpoenas broadly seek all financial records of Elie and Joanna, which implicates their own financial privacy rights and those of third-parties involved in transactions with them. See Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652, 656 (“[T]he right to privacy extends to one’s confidential financial affairs as well as to the details of one’s personal life.”); Int’l Federation of Prof. & Tech. Eng., Local 21 v. Superior Court (2007) 42 Cal.4th 319, 330.

“The person seeking discovery of material protected by the constitutional right to privacy ‘has the burden of making a threshold showing that the evidence sought is ‘directly relevant’ to the claim or defense.’ A showing of direct relevancy may trigger a balancing by the court of the need for the discovery against the fundamental right of privacy, but ‘the balance will favor privacy for confidential information in third party files unless the litigant can show a compelling need for the particular documents and that the information cannot reasonably be obtained through depositions or from nonconfidential sources.’” Ombudsman Services of Northern California v. Superior Court (2007) 154 Cal.App.4th 1233, 1251 (citations omitted).

Plaintiff’s action is based on the alleged unauthorized cash withdrawals from and/or transfers from CEW bank accounts, unauthorized CEW credits or payments to various bank and credit card accounts, false CEW purchase tickets, and unauthorized transfers of CEW assets. See FAC ¶¶ 16-18. Plaintiff alleges that these unauthorized transfers were used to benefit a different business (see FAC ¶ 21) and real properties (id. ¶ 23).

The Court finds that Plaintiff has failed to establish direct relevancy of the comprehensive financial records of Elie and Joanna. The Court notes that Plaintiff submitted a declaration concerning the discovery of a spreadsheet identifying numerous bank accounts of Elie and Joanna (Georges Decl. ¶¶ 3-4, Ex. A), to which Elie and Joanna submitted objections. However, Plaintiff’s factual allegations all hinge on unauthorized transfers of CEW’s assets, which is consistent with Plaintiff’s declaration. Plaintiff has failed to make any showing that comprehensive discovery into Elie and Joanna’s financial records is directly relevant to the claims in this action.

Additionally, even if direct relevancy were shown, Plaintiff has failed to make any showing that information could not reasonably be obtained from CEW’s bank accounts and financial records through appropriate discovery methods. But see FAC ¶¶ 32-33 (alleging that Defendants have refused to produce or consent to production of CEW’s records). Therefore, the motion to quash deposition subpoenas is granted.

2. Sanctions
Elie and Joanna request sanctions pursuant to CCP § 1987.2(a) in the amount of $8,400 (Chammas Decl. ¶ 11 (requesting 24 hours at the hourly rate of $350)) plus the $60 filing fee.

However, the Court notes that Elie and Joanna’s motion and reply papers addressed issues beyond their privacy rights. They argued that Plaintiff’s discovery is premature (Mot’n p. 8:21-9:7) and challenged the sufficiency of Plaintiff’s pleadings (Reply p. 4:14-5:28): this is improper because pleading deficiencies do not generally affect the right to conduct discovery (see Mattco Forge, Inc. v. Arthur Young & Co. (1990) 223 Cal.App.3d 1429, 1436). They asserted that the bank accounts in the subpoenas doe not all belong to them (Mot’n p. 9:18), however, no evidence was submitted to support this argument and the subpoenas are directed only at the accounts of Elie and Joanna. Lastly, they asserted the unclean hands doctrine (Mot’n p. 9:24-11:2) which is an affirmative defense (Kendall-Jackson Winery, Ltd. v. Superior Court (1999) 76 Cal.App.4th 970, 978-79).

Under these circumstances, the Court finds that the amount of Elie and Joanna’s request for attorney fees is excessive. Therefore, the Court will award $2,100 in attorney fees plus $60 in filing fees.

Motion to Quash Service of Summons and Complaint –
Tohme moves to quash service of the summons and complaint against him. In connection with the motion, Tohme requests judicial notice of the Complaint and the proof of service filed as to Tohme on 1/27/14: the RJN is granted.

“In the absence of a voluntary submission to the authority of the court, compliance with the statutes governing service of process is essential to establish that court’s personal jurisdiction over a defendant. When a defendant challenges that jurisdiction by bringing a motion to quash, the burden is on the plaintiff to prove the existence of jurisdiction by proving, inter alia, the facts requisite to an effective service.” Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1439-40. “It has been held that the filing of a proof of service creates a rebuttable presumption that the service was proper. However, that presumption arises only if the proof of service complies with the statutory requirements regarding such proofs.” Id. at 1441-42 (citations omitted).

Tohme submits that he was purportedly served by substituted service at a Pasadena address (RJN Ex. B ), which Tohme submits is not his residence, business, or mailing address. Tohme Decl. ¶¶ 3-5. Tohme submits that he resides in Lebanon. Id. ¶ 6. Plaintiff fails to establish that the Pasadena address was proper for serving Tohme as an office, usual mailing address, dwelling, usual place of abode, or usual place of business (see CCP § 415.20): indeed, Plaintiff’s “response” appears to concede that the service was insufficient as to Tohme (Response filed 4/3/14 (indicating that investigation into Tohme’s local address continues and Tohme will be served pursuant to the Hague Convention or the laws of Lebanon if unsuccessful)). Therefore, the motion to quash service of summons and complaint is granted.