On 28 March 2014, the motion of Kelleen Hails (“Plaintiff”) to compel further responses to demand for inspection of documents and for monetary sanctions was argued and submitted. Defendants David Solnick (“David”) and Melissa Solnick (“Melissa”) filed a formal opposition to the motion in which they also seek monetary sanctions.

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

Statement of Facts

This action arises from an attempt to collect on a judgment and allegations that the judgment debtor fraudulently transferred assets to her spouse to avoid paying the judgment.

According to the allegations of the complaint, Plaintiff’s husband, nonparty Karl Meyer (“Meyer”), engaged in an extramarital affair with Melissa beginning in 2001 through 2006. During the course of the affair, Melissa introduced Meyer to David as a business associate in the real estate business. Plaintiff alleges that her husband loaned Melissa and David (collectively “Defendants”) over $500,000 to develop real estate in Palo Alto. The loans consisted of marital community property assets belonging jointly to Meyer and Plaintiff and were made without Plaintiff’s knowledge or consent.

In 2007, Meyer learned that Defendants had sold one of the Palo Alto properties without informing him and without making any repayment of the loan. During the same time period, Meyer also discovered that Melissa and David were not just business associates and had been married since 2004. Following these discoveries, Meyer disclosed to Plaintiff the existence of the affair and that he had loaned Melissa more than $1.5 million over the course of the affair, none of which had been repaid.

Based on these facts, on 8 December 2008, Meyer and Plaintiff filed an action (Santa Clara County Case No. 1-08-CV-130237) (the “Prior Action”) to recover the monies loaned to Defendants. During the course of the litigation, Meyer assigned all of his rights against David and Melissa to Plaintiff. In October 2012, the parties entered into a partial settlement agreement under which David agreed to pay $390,000 to Meyer and Plaintiff in return for a full release from further liability. The settlement agreement provides that the release “does not include a release of any claims . . . for transfers of money or property which violate the Uniform Fraudulent Transfer Act, codified by California Code of Civil Procedure § 3439 et seq.” (Decl. of D. Solnick, Ex. A.) Similarly, Melissa agreed to the entry of a consent judgment and, on 10 October 2012, a judgment was entered against Melissa in the amount of $500,000.

On 7 June 2013, Plaintiff instituted the present action against David and Melissa, claiming that they fraudulently transferred Melissa’s assets to David for David to keep as separate property, thus leaving Melissa insolvent and thwarting Plaintiff’s ability to satisfy her judgment against Melissa. The complaint, as originally filed, sought damages and a judgment lien against The Solnick Family Trust (created in September 2005) and a residential property located at 227 Webster Street, Palo Alto (the “Webster Street Property”).

Plaintiff filed a First Amended Complaint (“FAC”) on 15 January 2014. The FAC expands the allegations of wrongdoing by Defendants and includes several additional real properties subject to Plaintiff’s fraudulent transfer and creditor’s claims. More Specifically, Plaintiff alleges that, after their marriage in 2004, Defendants jointly owned several real properties in Palo Alto and real property in Park City, Utah, and that Melissa fraudulently transferred her community property interest in those properties to avoid payment of the judgment from the Prior Action.

Discovery Dispute

On 14 October 2013, Plaintiff served requests for production of documents (“RPD”) on each of the Defendants. The RPD seek documents concerning (1) The Solnick Family Trust, (2) Defendants’ marital agreement, (3) Melissa’s assets (including bank records), (4) Defendants’ ownership interests in real property, and (5) certain limited liability companies bearing the Solnick name allegedly involved with the fraudulent transfers at issue in this action.

On 12 November 2013, Defendants served Plaintiff with responses to the RPD. The initial responses contained objections to the requests on various grounds, including attorney-client privilege, privacy, and that the requests seek documents outside the scope of the allegations of Plaintiff’s 7 June 2013 complaint. Some of the initial responses indicated that some documents responsive to the requests had already been produced. All of the initial responses indicated that no further documents would be produced.

Plaintiff’s counsel wrote to defense counsel on 16 December 2013, indicating that good cause existed for the production of documents to all of the requests, that Defendants had asserted objections based upon privileges but no privilege log had been provided, and that Plaintiff was willing to execute a protective order to alleviate Defendants’ privacy concerns. (Decl. of Elliot in Sup. of Mot. to Compel, Ex. E.) Defense counsel responded on 20 December 2013, asserting that the documents requested are not “directly relevant” for the purposes of the privacy analysis under Article I of the California Constitution, and that, because Plaintiff’s complaint only deals with the Webster Street Property, documents related to the other properties listed in the document demands are irrelevant.

Notwithstanding the disagreements between the parties’ attorneys outlined above, based upon counsels’ informal negotiations, Defendants agreed to provide amended responses.

Defendants served Plaintiff with amended responses to the RPD on 14 February 2014. In the amended responses, Defendants maintained their objections but indicated that they would produce documents responsive to some of the requests, and that redactions would be made on the basis of Defendants’ privacy objections. Defendants also continued to refuse to produce various documents on the basis of their initial objections.

After receiving Defendants’ amended responses, counsel for Plaintiff again wrote to defense counsel on 20 February 2014, indicating that the objections asserted in the amended responses lack merit and that, if Defendants were unwilling to produce further documents on the basis of privacy, then Plaintiff would proceed with a motion to compel.

On 6 March 2014, after Defendants refused to supplement their document production, Plaintiff filed the motion to compel further responses presently before the Court. Defendants filed an opposition to the motion on 17 March 2014, and Plaintiff filed her reply on 21 March 2014.

Discussion

I. Request for Judicial Notice

Defendants request that the Court take judicial notice of the following documents: (1) the Court’s order granting Defendants’ motion to expunge lis pendens entered by Judge Stoelker in this matter on 25 November 2013; (2) Plaintiff’s complaint filed 7 June 2013; (3) Plaintiff’s FAC filed 15 January 2014; (4) the declaration of Kelleen Halis in opposition to the plaintiffs’ motion for summary judgment filed in the Prior Action; and (5) Defendants’ memorandum of points and authorities filed in support of their motion to quash service of summons on Plaintiff’s FAC.

The above listed documents constitute records of the superior court subject to judicial notice under Evidence Code section 452, subdivision (d). (See Stepan v. Garcia (1974) 43 Cal.App.3d 497, 500 [the court may take judicial notice of its own file].) They are also relevant to the matter presently before the Court. (Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301 [information subject to judicial notice must be relevant to the issue at hand].) Defendants’ request for judicial notice of the above listed documents on file with the Court is therefore GRANTED.

II. Plaintiff’s Motion to Compel Further Responses to RPD

Plaintiff seeks further responses to RPD Nos. 1, 2, and 4 served on Melissa and RPD Nos. 1-3, 5-10, and 12 served on David. Plaintiff argues that Defendants’ production of documents is incomplete and that their objections lack merit.

Defendants argue (1) that the documents sought are protected by Defendants’ right to privacy, (2) that the requests—which were served prior to Plaintiff filing her FAC—seek documents outside the scope of the allegations of Plaintiff’s original complaint, and (3) that the motion to compel further responses is premature because Defendants have filed a motion to quash service of the summons as to the FAC, which is set to be heard by Judge Overton on 10 April 2014.

A. Legal Standard

Upon receipt of a response to a demand for inspection, including requests for the production of documents, the demanding party may move for an order compelling further response to the demand if the demanding party deems that any of the following apply:

(7) A statement of compliance with the demand is incomplete.
(8)
(9) A representation of inability to comply is inadequate, incomplete, or evasive.
(10)
(11) An objection in the response is without merit or too general.
(12)
(Code Civ. Proc. [“CCP”], § 2031.310, subd. (a)(1) – (3).) The motion for order compelling further responses “shall set forth specific facts showing good cause justifying the discovery sought by the inspection demand.” (CCP, § 2031.310, subd. (b)(1); Kirkland v. Sup. Ct. (2002) 95 Cal.App.4th 92, 98.) To establish “good cause,” the burden is on the moving party to show both relevance to the subject matter (e.g., how the information in the documents would tend to prove or disprove some issue in the case) and specific facts justifying discovery (e.g., why such information is necessary for trial preparation or to prevent surprise at trial). (Glenfed Develop. Corp. v. Sup. Ct. (1997) 53 Cal.4th 1113, 1117.) Where the moving party establishes “good cause,” the burden shifts to the responding party to justify its objections. (Kirkland, supra, 95 Cal.App.4th at p. 98.)

B. Preliminary Matter

Defendants argue that Plaintiff’s motion is premature because Defendants have filed a motion to quash service of the summons as to the FAC, which is set to be heard by Judge Overton on 10 April 2014. For the reasons set forth below, this argument is not well-taken.

In July 2010, during the pendency of the Prior Action, Defendants moved to New York—a non-community property state. At the time Plaintiff instituted the present action, Defendants were no longer residents of California. Based upon the fact that they are not residents of California, on 4 March 2014, Defendants filed a motion to quash service of the summons as to Plaintiff’s FAC for lack of personal jurisdiction or, in the alternative, to dismiss the proceeding on the ground of forum non conveniens. The hearing on Defendants’ motion is set to be heard by Judge Overton on 10 April 2014. Defendants assert that the Court’s ruling on their motion to quash may affect the scope of permissible discovery in this case and that Plaintiff’s discovery motion is premature and should be continued until after the Court’s ruling on the motion to quash. The Court disagrees.

Plaintiff filed her original complaint on 7 June 2013. Defendants filed their answer to the complaint on 26 September 2013. In other words, Defendants have already appeared and proceeded to defend this action—including serving responses to Plaintiff’s discovery requests. Under Code of Civil Procedure section 2031.020, subdivision (b), “[a] plaintiff may make a demand for inspection . . . at any time that is 10 days after the service of the summons on, or appearance by, the party to whom the demand is directed.”

“[I]t is well established that relevancy of the subject matter does not depend upon a legally sufficient pleading, nor is it restricted to the issues formally raised in the pleadings. Relevancy of the subject matter is determined by the potential as well as actual issues in the case [citation omitted]; discovery is proper if it would be material to any possible issue raised by new allegations in an amended complaint.” Union Mut. Life Ins. Co. v. Superior Court (1978) 80 Cal. App. 3d 1, 10.

Defendants cite no authority supporting the position that discovery should be stayed until after the hearing on the motion to quash. Once Defendants made a general appearance in this action, which they did when they filed their answer, Plaintiff had the right to serve her document demands and Defendants are required to respond.

Based upon the above discussion, the Court rejects Defendants’ argument that Plaintiff’s motion to compel further responses is premature.

C. Good Cause and Direct Relevance

In evaluating a motion to compel further responses to document requests, the first question the court must address is whether the moving party has established good cause justifying the discovery sought. (CCP, § 2031.310, subd. (b)(1); Kirkland, supra, 95 Cal.App.4th at p. 98.) As indicated above, to establish good cause, the burden is on Plaintiff to show both relevance to the subject matter (e.g., how the information in the documents would tend to prove or disprove some issue in the case) and specific facts justifying discovery (e.g., why such information is necessary for trial preparation or to prevent surprise at trial). (Glenfed Develop. Corp., supra, 53 Cal.4th at p. 1117.)

Defendants have produced some redacted documents and outright refused to produce other documents on the basis of privacy. Where privacy interests are implicated, the proponent of discovery must demonstrate that the information sought is “directly relevant” to a claim or defense, and “essential to the fair resolution of the lawsuit.” (Britt v. Sup. Ct. (1978) 20 Cal.3d 844, 859-862.) “Direct relevance” is a higher standard than the “relevancy to the subject matter” standard generally applicable to discovery requests, (id., at p. 859), and requires a showing that the information sought is essential to determining the truth of the matters in dispute. (See Davis v. Sup. Ct. (1992) 7 Cal.App.4th 1008, 1017.)

Because the good cause analysis and the determination of whether a party is entitled to obtain private information require a determination of the relevance of the information sought (albeit to different degrees), the Court will address the good cause and direct relevance standards at the same time. Defendants’ objections to the requests will be addressed following the good cause analysis.

The requests at issue can be grouped into four categories: (1) documents related to the Solnick Family Trust and Defendants’ marital agreement (RPD Nos. 1 and 2 served on both Defendants); (2) documents regarding Melissa’s assets, including bank account records (RPD No. 4 served on Melissa); (3) documents concerning specific real properties in which David currently or formally possessed an ownership interest as well as documents relating to the transfer of those properties (RPD Nos. 3, 10, and 12 served on David); and (4) documents concerning certain limited liability companies bearing the Solnick name that were allegedly involved with the fraudulent transfers at issue in this case (RPD Nos. 5-9 served on David).

Plaintiff argues that good cause exists justifying further responses to each of her requests and that the documents are directly relevant to her fraudulent transfer claim for the purposes of the privacy analysis. The Court agrees.

Plaintiff brings her claims under Civil Code section 3439, known as the Uniform Fraudulent Transfer Act (“UFTA”). The UFTA applies to property transactions associated with marital dissolutions and property settlement agreements. (See Filip v. Bucurenciu (2005) 129 Cal.App.4th 825, 829.) A fraudulent conveyance under the UFTA involves “’a transfer by the debtor of property to a third person undertaken with the intent to prevent a creditor from reaching that interest to satisfy its claim.’” (Id., quoting Kirkeby v. Sup. Ct. (2004) 33 Cal.4th 642, 648.) Under the UFTA, “[a] transfer made . . . by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made, if the debtor made the transfer as follows: (1) With actual intent to hinder, delay, or defraud any creditor of the debtor.” (Civil Code, § 3439.04, subd. (a).) The UFTA sets forth creditors’ remedies, which include avoidance of a transfer, attachment, and the equitable remedies of injunction and receivership as well as “[a]ny other relief the circumstances may require.” (Civil Code, § 3439.07, subd. (a)(3)(C).)

1. RPD Nos. 1 and 2

Concerning the first category of documents, documents related to the Solnick Family Trust and Defendants’ marital agreement (RPD Nos. 1 and 2 served on both Defendants), Plaintiff asserts that, “[i]n this action for fraudulent transfer of assets between wife and husband, the family trust and marital property agreements which were created before they were charged with fraud are obviously relevant.” (Pl.’s Mem. Ps & As, p. 6.) According to Plaintiff, the identification of accounts and values of the properties listed in the Schedules attendant to the trust and marital property agreement (which Defendants have either refused to produce or redacted) are “particularly relevant to discovery in this case which will focus on tracing of assets and transfers of assets as between wife and husband.”

The Court agrees. As Plaintiff points out, these documents will show, or tend to show, what assets Defendants had, and will serve as a baseline of information against which later spousal transactions can be evaluated. The UFTA requires a showing that a transfer of assets was in fact made. The documents sought by RPD Nos. 1 and 2 served on Defendants are relevant in showing whether Melissa had a community property interest in the assets at issue in the first instance. The Court therefore finds that Plaintiff has established good cause justifying the discovery sought. Similarly, because the documents sought are directly relevant to Plaintiff’s claims under the UFTA, i.e., the information sought is essential to determining the truth of the matters in dispute, the Court finds that Plaintiff has satisfied the heightened standard of direct relevance for the purposes of the privacy analysis.

2. RPD No. 4

Concerning the second category of documents, documents concerning Melissa’s assets including bank records (RPD No. 4 served on Melissa), the Court previously found these documents directly relevant in ruling on Defendants’ motion for a protective order. On 14 November 2013, Defendants filed a motion for a protective order precluding Union Bank of California and JP Morgan Case Bank from complying with a subpoena served by Plaintiff on the banks to produce Melissa’s bank account records. Speaking to the relevance of the documents, the Court stated that “[t]he discovery sought would indicate whether Melissa’s separate assets or Defendants’ community assets were being used to pay expenses related to the [Webster Street Property] (e.g., mortgage payments, repair costs, utilities) after Defendants purportedly transferred title of the property to the Trust, and after the Trust transferred title to David as his separate property.” (Decl. of Elliot, Ex. G.)

Based on that finding, the Court found the documents directly relevant and overruled Defendants’ privacy objection. For the same reasons, the Court again finds that the bank documents in Melissa’s possession are directly relevant to Plaintiff’s claims under the UFTA. Plaintiff also asserts that Melissa’s copies of her bank account records may not be identical to what the banks have been required to produce. According to Plaintiff, the banks are required to keep records only for a certain amount of time and Melissa may have additional records. Additionally, Plaintiff asserts that the records in Melissa’s possession may include handwritten notations on the statements.

Based on the above discussion, the Court finds that Plaintiff has demonstrated that the documents sought by RPD No. 4 served on Melissa are directly relevant to her claims under the UFTA and that Plaintiff has set forth specific facts justifying the discovery sought. Plaintiff has therefore met her burden of establishing good cause as to RPD No. 4. The Court also finds that Plaintiff has satisfied the heightened standard of direct relevance for the purposes of the privacy analysis.

3. RPD Nos. 3, 10, and 12

Concerning the third category of documents, documents concerning specific real properties in which David currently or formally possessed an ownership interest as well as documents relating to the transfer of those properties (RPD Nos. 3, 10, and 12 served on David), Plaintiff asserts that good cause exists for the production of these documents and that the documents are directly relevant to her claims under the UFTA. The Court agrees.

RPD Nos. 3, 10, and 12 served on David seek documents regarding specific properties (in additional to the Webster Street Property) that David (and purportedly Melissa) held a property interest in since September of 2001. As Plaintiff points out, the documents related to these properties are directly relevant to the tracing of asserts that is necessary for Plaintiff to prove whether (1) Melissa held a community property interest in the properties, and (2) whether she fraudulently transferred those assets to avoid paying the judgment from the Prior Action. Each of the properties to which Plaintiff seeks documents is also listed in Plaintiff’s FAC.

Based on the above discussion, the Court finds that Plaintiff has demonstrated that the documents sought by RPD Nos. 3, 10, and 12 served on David are directly relevant to her claims under the UFTA and that Plaintiff has set forth specific facts justifying the discovery sought. Plaintiff has therefore met her burden of establishing good cause as to RPD Nos. 3, 10, and 12. The Court also finds that Plaintiff has satisfied the heightened standard of direct relevance for the purposes of the privacy analysis.

4. RPD Nos. 5-9

Concerning the fourth category of documents, documents concerning certain limited liability companies bearing the Solnick name that were allegedly involved with the fraudulent transfers at issue in this case (RPD Nos. 5-9 served on David), Plaintiff argues that the documents sought are directly relevant to her fraudulent transfer claims. The Court agrees.

In her FAC, Plaintiff added several limited liability companies as defendants (D Solnick Design & Development LLC (formerly Doe 1), D Solnick Design Five, LLC (formerly Doe 2), D Solnick Design Six, LLC (formerly Doe 3), and D Solnick Design 7, LLC (formerly Doe 4)). According to Plaintiff, these companies were involved with some of the alleged fraudulent transfers at issue in this case. For example, the FAC alleges that, “[i]n August 2006, David and Melissa transferred title to the Hawthorne Avenue Property to D. Solnick Design & Development, LC, which in turn transferred title to D. Solnick Design Five, LLC.” (Decl. of Elliot, Ex. H, ¶ 20.) Plaintiff alleges that, when the limited liability companies sold the Hawthorne property, no consideration flowed back to Melissa, leaving her insolvent. (Id.) The consideration, or lack thereof, that may have flowed from the limited liability companies to Melissa is directly relevant to Plaintiff’s UTFA claims.

Based on the above discussion, the Court finds that Plaintiff has demonstrated that the documents sought by RPD Nos. 5-9 served on David are directly relevant to her claims under the UFTA and that Plaintiff has set forth specific facts justifying the discovery sought. Plaintiff has therefore met her burden of establishing good cause as to RPD Nos. 5-9. The Court also finds that Plaintiff has satisfied the heightened standard of direct relevance for the purposes of the privacy analysis.

D. Defendants’ Objections

Since Plaintiff has established good cause justifying further responses to the RPD, the burden shifts to Defendants to justify their objections. (Kirkland, supra, 95 Cal.App.4th at p. 98.) In their initial responses, Defendants objected to each of Plaintiff’s document requests on the following grounds:

Objection. Responding party objects to this request insofar as it calls for the production of any document protected by the attorney-client privilege, Evidence Code § 950 et seq. Responding party objects to this request on the grounds that it requests information that is not relevant to this proceeding and which will not lead to the discovery of admissible evidence. Responding party objects to this request in that it is over broad and constitutes harassment, in that there is no attempt by plaintiff to limit the scope of the request to the allegations set forth in the complaint. Responding party also objects that this and other requests ask for the disclosure of financial information of the Responding party, and the family of the Responding party, which would violate her and their privacy rights protected by the California Constitution, Article I, Section 1.(Def.s’ Separate Statement, pp. 2-3.)

Although Defendants provided amended responses, which indicated that Defendants would supply some responsive documents, Defendants maintained their initial objections therein and refused to produce some documents on that basis.

The Court addressed the relevance of documents sought by Plaintiff in the previous section and found the documents relevant. Defendants’ objections on the basis of relevance are therefore overruled. Defendants have not attempted to justify their objections on the grounds of harassment or the attorney-client privilege in their opposition to Plaintiff’s motion. Based on their failure to justify the harassment objections, the objections on that basis are overruled. Defendants’ unsupported objections based on the attorney-client privilege do not warrant the denial of Plaintiff’s motion to compel further responses, but the objections are nonetheless preserved. (See Best Products, Inc. v. Sup. Ct. (2004) 119 Cal.App.4th 1181, 1188-1189 [holding that where a defendant asserted the attorney-client and work product privileges in a timely manner, albeit in a boilerplate fashion, the trial court erred in finding a waiver of the privileges].)

The remaining objections, based on overbreadth and privacy are addressed separately below.

1. Overbreadth

Plaintiff’s original complaint only references the Webster Street Property as the real property subject to Plaintiff’s fraudulent transfer claims. Plaintiff’s discovery requests, however, seek documents concerning several additional real properties. According to Defendants, those properties were not at issue in this case until Plaintiff listed the properties in her FAC, which was filed after Plaintiff served the discovery requests. Defendants argue that they, as responding parties, were only required to provide information that was relevant to the discovery requests at the time they were served and that, “[i]f an amended complaint raises new issues, it is the plaintiff’s burden to propound new discovery on the defendants concerning those issues.” (Def.s’ Separate Statement, p. 23-24.) Based on this argument, Defendants object to Plaintiff’s discovery requests on the basis of overbreadth.

Defendants’ argument on this issue misconstrues the relevancy standard applicable in the discovery context. The Code of Civil Procedure authorizes discovery “regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action . . . [and] appears reasonably calculated to lead to the discovery of admissible evidence.” (CCP, § 2017.010, emphasis added.) For purposes of discovery, relevance is construed liberally in favor or disclosure, (see Emerson Electric Co. v. Sup. Ct. (1997) 16 Cal.4th 1101, 1107), and “the standard is relevancy to the subject matter, which is determined by potential, not actual, issues in the case.” (National Steel Products Co. v. Sup. Ct. (1985) 164 Cal.App.3d 476, 492 [emphasis added].) Case law makes clear that the “relevancy of the subject matter” criterion is “a broader concept than ‘relevancy to the issues.’” (Pac. Tel. and Tel. Co. v. Sup. Ct. (1970) 2 Cal.3d 161, 172, quoting Chronicle Publishing Co. v. Sup. Ct. (1960) 54 Cal.2d 548, 560.)

Given the liberal construction of relevance in the discovery context, the Court finds that, even in the absence of the FAC, as discussed more fully above, the documents sought by Plaintiff’s discovery requests are relevant to the subject matter of this case. Plaintiff’s original complaint alleged that Melissa fraudulently transferred her community property interest in real property to David to avoid paying the judgment from the Prior Action. Although Plaintiff’s original complaint only specifically references the Webster Street Property, allegations concerning the fraudulent transfer of additional community property to avoid the paying the judgment from the Prior Action fall within the realm of potential claims raised by the original complaint.

Based on the above discussion, the Court finds that Plaintiff was not limited to seeking discovery solely about the Webster Street Property merely because it was the only real property listed in the original complaint. For the same reasons, Defendants’ objections to Plaintiff’s discovery requests on the basis of overbreadth are overruled.

2. Privacy

As to each of Plaintiff’s document requests, Defendants asserted that the requests seek private financial information and are therefore protected from disclosure under Article I, Section 1 of the California Constitution.

The right of privacy established by the California Constitution protects an individual’s “reasonable expectation of privacy against a serious invasion.” (Pioneer Electronics, Inc. v. Sup. Ct. (2007) 40 Cal.4th 360, 370.) There is a legally recognized privacy interest in a person’s financial affairs. (See Fortunato v. Sup. Ct. (2003) 114 Cal.App.4th 475, 480; see also Valley Bank of Nevada v. Sup. Ct. (1975) 15 Cal.3d 652, 656-657 (“Valley Bank”).) The right to privacy, however, is not absolute, and where privacy rights are implicated, the court must “carefully balance” the right of privacy and the right of civil litigants to discover relevant facts. (Valley Bank, supra, 15 Cal.3d at 657.)

To obtain private information, the party seeking discovery must show that the discovery sought is directly relevant to a particular cause of action or defense. (Britt v. Sup. Ct. (1978) 20 Cal.3d 844, 859-862.) “Direct relevance” is a higher standard than the “relevancy to the subject matter” standard generally applicable to discovery requests. (Id., at p. 859.) According to the California Supreme Court, direct relevance means that the discovery sought is essential to the fair resolution of a matter in dispute. (Id.)

As discussed above, the Court finds that the requested documents are directly relevant to Plaintiff’s fraudulent transfer claims.

The Court must next balance the right of privacy, on the one hand, and the right of civil litigants to discover relevant facts, on the other. (Valley Bank of Nevada v. Sup. Ct. (1975) 15 Cal.3d 652, 657.)

Defendants have identified no harm flowing from the disclosure of the financial information sought by Plaintiff other than Plaintiff using the information to collect on the judgment entered in the Previous Action. Given that the information is directly relevant to Plaintiff’s fraudulent transfer claims, the nature of the potential harm identified by Defendants from the disclosure of the documents (or lack thereof), and the assertion by Plaintiff that the information cannot be obtained through another source (which Defendants do not contest), the Court finds that Plaintiff’s right to discovery of the information outweighs Defendants’ right to privacy. (See Valley Bank, supra, 15 Cal.3d at 657-658 [holding that a justifiable interest exists in requiring the disclosure of financial information “[i]n order to facilitate the ascertainment of truth and the just resolution of legal claims”].) Defendants’ privacy objections are therefore overruled.

E. Conclusion

Because Plaintiff has established good cause justifying the discovery sought and Defendants have failed to justify their objections to the requests, Plaintiff’s motion to compel further responses to RPD Nos. 1, 2, and 4 served on Melissa and RPD Nos. 1-3, 5-10, and 12 served on David is GRANTED.

III. Requests for Sanctions

Both parties seek monetary sanctions under Code of Civil Procedure section 2031.310, subdivision (h), in connection with Plaintiff’s motion to compel further responses to its document requests. Section 2031.310, subdivision (h), provides that the court shall impose monetary sanctions against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel further response to 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. (CCP, § 2031.310, subd. (h).) Monetary sanctions may be imposed in the amount of the reasonable expenses, including attorney’s fees, incurred as a result of the sanctionable conduct. (CCP, § 2023.030.)

A. Plaintiff’s Request

Plaintiff requests monetary sanctions against Defendants in the amount of $4,975. Plaintiff prevailed on her motion to compel further responses, Defendant did not act with substantial justification, and no other circumstances render the imposition of a sanction unjust. Therefore, a monetary sanction shall be imposed to compensate for the reasonable expenses, including attorney’s fees, incurred as a result of Defendant’s conduct. (CCP, § 2023.030, subd. (a).)

Counsel for Plaintiff declares that, at an hourly rate of $225, he spent 19.8 hours working on the motion and separate statement. Counsel also declares that, at an hourly rate of $325, attorney Marc Shea spent 1.6 hours reviewing the motion. The Court finds that more than 20 hours of time spent working on the motion is unreasonable. The Court will therefore reduce the amount of time spent by half and award $2,770 (10 hours x $225/hr + 1.6 hours x $325).

Accordingly, Plaintiff’s request for monetary sanctions against Defendants is GRANTED IN PART in the amount of $2,770.

B. Defendants’ Request

Defendants did not successfully oppose Plaintiff’s motion to compel further responses and are therefore not entitled to an award of sanctions. Accordingly, Defendants’ request for monetary sanctions is DENIED.

Conclusion and Order

Defendants’ request for judicial notice is GRANTED.

Plaintiff’s motion to compel further responses is GRANTED. Accordingly, Defendants shall serve verified, code-compliant further responses, without objection (except for attorney-client privilege which has been preserved) to RPD Nos. 1, 2, and 4 served on Melissa and RPD Nos. 1-3, 5-10, and 12 served on David, and documents in conformity with those responses, within 20 calendar days of the filing of this Order. To the extent any additional documents are withheld based upon attorney-client privilege, Defendants shall also provide a privilege log identifying all documents withheld and providing a factual basis for the privilege claimed.

Plaintiff’s request for monetary sanctions is GRANTED IN PART in the amount of $2,770. Accordingly, Defendants shall pay $2,770 to counsel for Plaintiff within 20 calendar days of the filing of this order.

Defendants’ request for monetary sanctions is DENIED.