Calendar Lines 7-8
Case Name: Zhao v. Life Insurance Co. of the Southwest, et al.
Case No.: 16-CV-296445

This is an action for fraud. In late 2012, plaintiff Jackie Yu Zhao (“Plaintiff”) attended a retirement planning seminar hosted by defendants Liru Z. Chang (“Chang”) and Elite Wealth Group (“Elite”) at which Chang represented to attendees that they could rollover funds from their 401(k) accounts into an individual retirement account (“IRA”), and then use that money from the IRA to purchase a life insurance product that would provide lifetime tax-free income while also greatly reducing the IRA distribution tax at the same time. (First amended complaint (“FAC”), ¶ 12.)

In early 2013, Plaintiff attended several more retirement planning seminars hosted by Chang and Elite, and also received several emails regarding the Life Time Tax-free Retirement Plan. (FAC, ¶¶ 13-14.) Chang told Plaintiff that if she used her $330,000.00 in her 401(k) account to purchase the Tax Free Guaranteed Retirement Plan—a universal life insurance policy issued by defendant Life Insurance Company of the Southwest (“LICSW”)—and make annual payments of $66,000.00 for 5 years for a total of $330,000.00, she would be able to withdraw money in 11 years when she turned 65 years old and receive a guaranteed tax-free income of $34,525.00 until she turned 120 years old, or a guaranteed tax free annual income of $59,222.00 if she waited to withdraw until age 70. (Id. at ¶ 15.) Chang also told Plaintiff that if she used her IRA funds to purchase the proposed policy, she could defer the IRA distribution tax up to 5 years and then would only need to pay tax on $210,000.00 of the $330,000.00 distributed from her IRA, and could save $120,000.00 in income taxes. (Id. at ¶ 16.) In fact, these representations were false and Chang and Elite failed to disclose the significant fees and expense charges that dramatically reduced the policies’ value and the up-front commission that Chang and Elite would receive as a result of the purchase of the policies and payment of premiums. (Id. at ¶ 17.)

In April 2013, Plaintiff filled out a Life Insurance Application and other application forms for insurance coverage with LICSW, which were signed by Chang and Elite as a licensed agent of LICSW. (FAC, ¶ 18.) Also in April 2013, Chang worked with Alliance Benefit Group-Pentegra and Alliance Benefit Group Carolinas, Inc. to arrange for the creation of a solo 401(k) plan, entitled the Jackie Zhao Property Management 401(k) Plan (“solo 401(k) plan”) without Plaintiff’s knowledge, authorization or direction. (Id. at ¶ 19.) Chang arranged to create the solo 401(k) plan because she knew Plaintiff could not legally purchase the Policy with funds held in an IRA, and thus needed a vehicle to ensure the receipt of the up-front commission of more than $59,000.00. (Id. at ¶ 20.) Chang repeatedly represented to LICSW that Plaintiff’s solo 401(k) plan was the holder of the Policies, even though that plan never held any assets and the Policies were paid for using funds transferred directly from Plaintiff’s IRA. (Ibid.)

On August 28, 2013, Chang came to Plaintiff’s home and delivered a policy of Flexible Premium Adjustable Life Insurance with an Index-Linked Interest Option with an effective date of June 10, 2013, issued by LICSW and listing her as the insured. (FAC, ¶ 21.) Defendants Cung Q. Thai (“Thai”) and American Brokerage Network (“ABN”) assisted Chang and Elite in obtaining this policy. (Id. at ¶ 20.) Chang then repeated her false representations regarding the purported benefits of the policies. (Id. at ¶ 22.) A printed illustration as required by Insurance Code section 10509.950 that would have demonstrated the falsity of the representations was not provided prior to the sale of the policy. (Ibid.) Chang also failed to disclose the “premium expense charge” of 6% for each premium that Plaintiff paid as well as an exorbitant “monthly expense charge per thousand”, and surrender charges as high as $36,276.00 if Plaintiff had chosen to surrender the policy within a year of the effective date. (Id. at ¶ 23.) Chang also surreptitiously induced Plaintiff into signing the solo 401(k) papers, failing to explain them other than saying that it was related to the policy, and failing to inform her that she would fund the solo 401(k) plan with proceeds from her individual IRA or that Plaintiff had any obligations to fund or perform other administrative functions with respect to the solo 401(k) plan. (Id. at ¶ 24.) In addition, Chang failed to inform Plaintiff that the initial premium payment of $66,000.00 was due upon the issuance of the initial policy so she failed to make an initial payment, resulting in LICSW informing her the policy was not in effect. (Id. at ¶ 25.)

Plaintiff relayed this information to Chang, who then accompanied Plaintiff to Charles Schwab and assisted Plaintiff with transferring $66,000.00 from her individual IRA to LICSW as the first premium payment. (FAC, ¶ 26.) Although LICSW should have realized the policy should not be issued since it was not possible to purchase the policy with IRA assets without incurring taxes and penalties for early distribution of the IRA funds, on May 7, 2014, LICSW instructed Chang to obtain a new application for the Plaintiff’s policy, but did not return the $66,000.00 or conduct any investigation as to whether she was in a position to purchase the policy using funds held by a 401(k) plan, or conduct any investigation as to whether Chang accurately explained the terms and features of the policy or whether Plaintiff understood what she was purchasing. (Id. at ¶ 27.)

On May 8 and 9, 2014, Chang and her assistant, Daisy Fan (“Fan”), had Plaintiff fill out other forms without explaining their contents; however, Chang and Elite, with assistance from Thai and ABN, obtained a second insurance policy through LICSW, entitled the LSW SecurePlus Advantage 79 (“Policy 2”), without disclosing to Plaintiff that she was acquiring a second, different policy. (FAC, ¶¶ 28-30.) On June 15, 2014, at Chang’s direction, Fan again visited Plaintiff at her residence to have her sign additional documents for Policy 2 without explanation, without the required complete and accurate illustration, and without the presentation of the policy itself. (Id. at ¶ 31.) Moreover, LICSW did not return the $66,000.00 premium payment. (Ibid.) Thai and ABN were aware of Chang’s representations, yet made no attempt to obtain coverage consistent with those representations, and instead aided and assisted Chang in obtaining the two insurance policies from LICSW whose terms of coverage were wholly inconsistent with Chang’s representations and Plaintiff’s expectations. (Id. at ¶ 32.) Thai and ABN were also aware that Plaintiff never received a complete and accurate illustration of the terms of either insurance policy as required by Insurance Code section 10509.950. (Ibid.)

On December 17, 2014, Plaintiff went to Charles Schwab to make a second premium payment of $66,000.00 on Policy 1, but noticed that Chang specifically wanted her to reference Policy 2—a policy of which she was previously unaware. (FAC, ¶ 33.) Upon asking Chang about this discrepancy, Chang explained that the first policy was life insurance and the second policy was her pension—which was untrue. (Id. at ¶ 33.) Upon receiving the $66,000.00, Plaintiff asserts that LICSW realized or should have realized that Plaintiff was not an appropriate candidate to purchase Policy 2, Policy 2 should not have been issued, and the $66,000.00 should be returned to Plaintiff’s IRA. (Id. at ¶ 34.) As a result of inducing Plaintiff to purchase the two policies, Chang and Elite obtained a commission of $59,255.00 in 2014 and further commissions in 2015. (Id. at ¶ 35.)

In September 2015, Plaintiff spoke to another financial advisor about the policies and the financial advisor told her that she needed to request the illustration on the policies that had not been provided. (FAC, ¶ 36.) Chang told Plaintiff that she did not have an illustration and needed to request it from LICSW. (Ibid.) On September 16, 2015, Cathy Ho of ABN provided Plaintiff a copy of documents that Plaintiff had been required to sign by Fan, but including a Policy Cost and Benefit Summary that was not previously provided. (Ibid.) In late September 2015, LICSW provided a life insurance illustration dated September 14, 2015 that led Plaintiff and her financial advisor to suspect that the policies were an improper investment and retirement planning vehicle. (Id. at ¶¶ 37-39.)
Plaintiff asserts the following six causes of action: (1) Professional negligence (against all defendants); (2) Professional negligence (against LICSW, Thai and ABN as principals liable for the conduct of their agent); (3) Breach of fiduciary duty (against Chang and Elite); (4) Aiding and abetting breach of fiduciary duty (against Thai and ABN); (5) Fraud (against Chang, Elite and LICSW); and (6) Unfair business practices under Business & Professions Code section 17200, et seq. (“UCL”) (against all defendants).

The instant matter involves a discovery dispute. On April 19, 2017, Plaintiff served special interrogatories, set one (“SI”) and requests for production, set one (“RPD”) on Thai and ABN. (Kim Decl., ¶¶ 7-8; Exhs. 6-7.) Thai and ABN timely responded on May 30, 2017. (Id. at ¶¶ 9-10; Exhs. 8-9.) Plaintiff considered the objections meritless and the substantive responses deficient, and attempted to informally resolve the dispute with Thai and ABN. (Id. at ¶¶ 11, 14; Exhs. 10, 13.) The parties could not come to an agreement and Plaintiff subsequently filed the separate motions to compel Thai and ABN to provide further responses to the SI and RPD, which are currently before the Court. In addition, Thai and ABN request an award of monetary sanctions.

I. Request for Judicial Notice

In support of her motions, Plaintiff requests judicial notice of the FAC. The subject document is a proper subject for judicial notice pursuant to Evidence Code section 452, subdivision (d), which allows courts to judicially notice court documents. In addition, the court record is relevant to issues raised by the motions. (See People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [any matter to be judicially noticed must be relevant to a material issue].) Accordingly, the request for judicial notice is GRANTED.
II. Motion to Compel As to Thai

A. SI

A party may respond to an interrogatory by objecting. (Code Civ. Proc., § 2030.210, subd. (a).) The propounding party may move for an order compelling further responses if that party deems an objection is meritless. (Code Civ. Proc., § 2030.300, subd. (a).) Thai’s responses to SI Nos. 1-9 solely consisted of objections and Plaintiff moves to compel further responses.
As an initial matter, in opposition, Thai argues Plaintiff failed to show that good cause exists to discover the information sought in the SI. However, the good cause requirement only applies to a motion to compel further responses to requests for production of documents (Code Civ. Proc., § 2031.310, subds. (a), (b)) and Plaintiff is not required to demonstrate good cause in order to compel a further response to an interrogatory (Code Civ. Proc., § 2030.300). This error renders much of Thai’s argument inapplicable, as he repeatedly asserts Plaintiff has failed to carry her burden in establishing good cause.

SI Nos. 1, 4, and 7

SI Nos. 1, 4, and 7 seek information regarding the number of LICSW life insurance policies sold from 2011 to the present. Thai objected on the grounds of privacy, vagueness and ambiguity, irrelevance, overbreadth, and undue burden. It is Thai’s burden to justify these objections. (See Kirkland v. Sup. Ct. (2002) 95 Cal.App.4th 92, 98 (“Kirkland”) [objecting party must justify its objections].)
Thai fails to justify any objections. The entirety of his argument is predicated on the premise Plaintiff must establish good cause for the information sought; however, as discussed above, good cause is not a requirement here. Further, Thai misconstrues what the SI actually seek. Thai apparently thinks the SI seek the identities of other policy holders as he argues Plaintiff has not established good cause to seek their identities. However, SI Nos. 1, 4, and 7 only seek the number of policies sold.

As to the privacy objection, the right to privacy protects an individual’s “reasonable expectation of privacy against a serious invasion.” (Pioneer Electronics, Inc. v. Sup. Ct. (2007) 40 Cal.4th 360, 370.) A party seeking to prevent discovery on the basis of the right of privacy must demonstrate that a legally protected privacy interest exists, there is a reasonable expectation of privacy under the particular circumstances, and the disclosure of the information would constitute a serious invasion of that interest. (Alch v. Sup. Ct. (2008) 165 Cal.App.4th 1412, 1423 (“Alch”).) Where a serious invasion of the right to privacy is shown, the proponent of the discovery must demonstrate that the information sought is directly relevant to an issue in the litigation. (Britt v. Sup. Ct. (1978) 20 Cal.3d 844, 850.) Once direct relevance has been shown, the proponent of discovery must demonstrate that the information sought is not available through less intrusive means. (Allen v. Sup. Ct. (1984) 151 Cal.App.3d 447, 449 (“Allen”).) In order to fairly balance the competing interests, courts must weigh the party’s privacy interest against the requesting party’s need for the information, the state’s interest, if any, and any other relevant interests presented. (Alch, supra, 165 Cal.App.4th at pp. 1432-1434.)
Thai argues the nonparty insurance files and its confidential financial affairs constitute private information, and Plaintiff must show “these documents” are directly relevant to her claim. Thai fails to demonstrate this information is private in the first instance; he does not explain how revealing a total number of policies sold during the time period implicates any privacy interests. Thai’s argument is further misplaced as there are no “documents” sought here. As such, the privacy objection is overruled.

With respect to the relevance objection, information is relevant to the subject matter if it might reasonably assist a party in evaluating its case, preparing for trial, or facilitating settlement. (Gonzalez v. Sup. Ct. (1995) 33 Cal.App.4th 1539, 1546.) “Admissibility is not the test and information, unless privileged, is discoverable if it might reasonably lead to admissible evidence.” (Ibid., emphasis in original.) Courts liberally construe the relevance standard, and any doubts as to whether a request seeks information within the scope of discovery are generally resolved in favor of allowing discovery. (Colonial Life & Accident Ins. Co. v. Sup. Ct. (1982) 31 Cal.3d 785, 790.) Thai does not discuss this standard as it applies to these discovery requests, but rather only discusses relevance in a privacy context, where the requirement is direct relevance (see Binder v. Sup. Ct. (1987) 196 Cal.App.3d 893, 901) or in the context of requests for production, which are not at issue here (see Glenfeld Development Corp. v. Sup. Ct. (1997) 53 Cal.App.4th 1113, 1117 [plaintiff must provide a fact-specific showing for relevance]). Thai fails to show the information will not help Plaintiff evaluate her case, prepare for trial, or facilitate settlement. (See Kirkland, supra, 95 Cal.App.4th at p. 98 [defendants must justify objections].) The objection is thus overruled.

Next, Thai only attempts to justify the vagueness and ambiguity objection by reciting them verbatim; Thai states the terms “universal life insurance products” and “offered by LICSW” are vague and ambiguous. Thai fails to explain why these terms are vague and ambiguous, and in any event, they are not. Their plain meaning is straightforward: the universal life insurance products are those sold to Plaintiff and offered by LICSW means products it sells. Therefore, the objection is overruled. (See Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 783 [ambiguity objection should be sustained only when the nature of the information sought is not apparent]; Standon v. Sup. Ct. (1990) 225 Cal.App.3d 898. 903 [stating that a vague and ambiguous frequently considered a nuisance objection].)

Turning to the objection on the ground of overbreadth, Thai states the requests are so overbroad that they encompass documents covered by the attorney-client privilege or attorney work product doctrine. There is a fundamental flaw in this argument: the interrogatory does not seek the production of any documents. It appears this argument was made in response to the SI in error and was meant to address the RPD discussed below. In any event, Thai did not even object to the SI on the ground of the attorney-client privilege or attorney work product doctrine, and thus to the extent this objection is predicated on that, it is overruled. (See Scottsdale Ins. Co. v. Sup. Ct. (1997) 59 Cal.App.4th 263, 273 [objection not asserted in response is waived].)

Last, Thai similarly fails to justify its objection on the ground of undue burden. To substantiate an objection based on undue burden, the party must make a particularized showing of facts demonstrating hardship, such as an estimate of the total man hours required to accomplish the task. (See West Pico Furniture Co. v. Sup. Ct. (1961) 56 Cal.2d 407, 417-418.) Thai does not put forth any facts demonstrating hardship, such as an estimate of hours it would take to produce the records sought. Instead, Thai’s counsel merely states it would be an oppressive burden on the personnel to sift through material to find responsive information. This statement is insufficient as it is not a particularized showing of hardship. The objection is thus overruled.

Because all objections are overruled, further responses to SI Nos. 1, 4, and 7 are warranted.

1. SI Nos. 3, 6, and 9

SI Nos. 3, 6, and 9 seek information regarding the identity of the persons sold insurance from 2011 to the present. Again, Thai objected on the grounds of privacy, vagueness and ambiguity, irrelevance, overbreadth, and undue burden.
With the exception of the privacy objection, Thai’s objections to SI Nos. 3, 6, and 9 suffer from the same deficiencies as they did relative to SI Nos. 1, 4, and 7. Thai’s justifications here are identical to his attempted justifications relative to SI Nos. 1, 4, and 7. Thai therefore failed to substantiate these objections and they are overruled.

However, as to the privacy objection, there is merit in this instance. Unlike SI Nos. 1, 4, and 7, these SI seek the identities and contact information for other individuals who purchased insurance policies. Whether providing identities and contact for information is covered by privacy was discussed in detail by the Supreme Court of California in Pioneer Electronics (USA), Inc. v. Superior Court (2007) 40 Cal.4th 360 (“Pioneer”). There, the plaintiff filed a class action lawsuit alleging a DVD player he purchased from the defendant was defective. (Id. at p. 364.) In response to certain discovery requests, the defendant had produced a redacted document reflecting approximately 700 to 800 customers had filed complaints regarding the same DVD player. (Ibid.) The plaintiff then sought the identities of the customers who had filed the complaints. (Ibid.) Thus, Pioneer addressed whether the identities of individuals who filed complaints about defective DVD players were private and consequently could not be disclosed to the plaintiff. (Id. at pp. 370-373.) The court found in that instant there were minimal privacy concerns and the individuals could be contacted by mail to inquire whether their information would be provided to the plaintiff. (Id. at pp. 374-375.) In coming to this decision, the court observed that in those circumstances, there was a reduced privacy interest and the invasion of that privacy was minimal. The court reasoned there was a minimal privacy interest because the individuals had already complained about the DVD players, and thus presumably did not object to their contact information being disseminated in connection with those complaints. (Id. at pp. 371-372.) The court considered the invasion to be minimal because the contact information regarding the identity of other class members is generally discoverable so that the named plaintiff may learn of other individuals who could assist in the case. (Id. at pp. 372-373.)

In contrast, here, the third parties did not file complaints or voluntarily submit their information in hopes of resolving a dispute. They are simply individuals who purchased the subject insurance policies. Further, this is not a class action case where their identities are generally discoverable information. Indeed, there appears to be little similarity between Plaintiff’s situation and that of the third parties other than they purchased life insurance from Thai. As such, revealing their names would constitute a serious invasion of privacy. For the same reasons, Plaintiff fails to establish the identities of these individuals is directly relevant to her claims. In this regard, “[i]t is not enough that the information might lead to relevant evidence,” which could be sufficient to establish general relevance for discovery purposes absent a privacy objection. (Binder v. Sup. Ct. (1987) 196 Cal.App.3d 893, 901.) “Mere speculation as to the possibility that some portion of the records might be relevant to some substantive issue does not suffice.” (Davis v. Sup. Ct. (1992) 7 Cal.App.4th 1008, 1017.) Plaintiff does not meet this more exacting relevance standard as she only speculates that some identities of third parties may help reveal a fraudulent scheme. The information sought is not limited in any way to render the information directly relevant to her claims, such as limiting it to individuals who have complained about Thai, ABN, or Chang’s misrepresentations about their life insurance policies. As such, the privacy objection is sustained.

2. SI Nos. 2, 5, and 8

SI Nos. 2, 5, and 8 seek information relating to the commission earned by Thai for the same life insurance policies sold to Plaintiff. In response, Thai objected on the grounds of privacy, vagueness and ambiguity, relevance, overbreadth, and undue burden. For the same reasons stated above, the objections on the grounds of relevance, vagueness and ambiguity, overbreadth, and undue burden are overruled.
With respect to the privacy objection, Thai contends the financial information sought is protected by the constitutional right to privacy. Plaintiff disputes the commission amounts do not implicate the right to privacy because Thai is not required to produce financial statements and the commission amount does not reveal anything about his financial condition. Plaintiff’s argument is not persuasive because the amount Thai received by commission will still necessarily reveal financial information, i.e. a portion of his earnings, even though it does not reveal his total income. Thus, revealing the commission earned would certainly expose financial information. It is well-settled law that the right to privacy protects an individual’s financial information from disclosure. (Hecht, Solberg, Robinson, Goldberg & Bagley v. Sup. Ct. (2006) 137 Cal.App.4th 579, 593.)

As Thai has established a privacy right is implicated, Plaintiff must demonstrate the information sought is “directly relevant” to a claim or defense and “essential to the fair resolution of the lawsuit.” (Alch, supra, Cal.App.4th at p. 1425.) Plaintiff contends the information sought is directly relevant to her claims because it relates to whether there was a pattern and practice of selling insurance in order to generate excessive commission fees, as alleged in the Complaint. This argument is well-taken. The response will reflect the amount earned by Thai in connection with his sale of allegedly fraudulent insurance policies. This information, in turn, will help Plaintiff prove Thai’s financial motivations for allegedly aiding and abetting Chang’s fraudulent insurance scheme. Thus, the discovery sought will help reveal Thai’s financial motivation behind the scheme.

As the discovery sought is directly relevant to a subject matter in this action, the Court must balance the need for discovery and the privacy interests and consider whether there are less intrusive means to obtain the information sought. (See Allen, supra, 151 Cal.App.3d at p. 449.) Plaintiff does not explicitly state there are no less intrusive means to obtaining the discovery sought, however, the Court is unaware of any means less intrusive than a special interrogatory inquiring as to only an amount earned. Often, an interrogatory or a deposition is a means less intrusive than requesting the production of documents. (See Harding Lawson Associates v. Sup. Ct. (1992) 10 Cal.App.4th 7, 10 [overruling an order requiring the production of documents because the party seeking private information did not show information could not be obtained by deposition or other less intrusive means]; see also El Dorado Savings & Loan Assn. v. Sup. Ct. (1987) 190 Cal.App.3d 342, 346 [noting courts should take into consideration whether it is possible to obtain the discovery sought by deposition instead of production of documents]; Allen, supra, 151 Cal.App.3d at p. 449 [same].) Responding to this interrogatory only requires stating the amount earned; it does not require providing any other personal information. As such, there is not a less intrusive means of obtaining the information sought.

In weighing the competing interests, the favor weighs in ordering disclosure of Thai’s commission. In the present circumstances, only providing the amount of commission is a relatively minor privacy invasion. Plaintiff does not seek specific financial statements or documents reflecting Thai’s total income. The intrusion is outweighed by Plaintiff’s need for the discovery sought. As such, the privacy objection to SI Nos. 2, 5, and 8 is overruled and further responses are warranted.

B. RPD

Code of Civil Procedure section 2031.310, subdivision (a) provides a propounding party may move for an order compelling a further response to an inspection demand if it deems an answer is evasive or an objection is without merit. The propounding party must make a threshold showing of good cause for the discovery sought. (Code Civ. Proc., § 2031.310, subd. (b)(1).) If good cause is shown, the burden shifts to the responding party to justify any objections. (See Kirkland, supra, 95 Cal.App.4th at p. 98.) Plaintiff moves to compel further responses to RPD Nos. 5-8, 12, 15-18, 21, and 24.

1. Good Cause

Thai objected to each request at issue on the basis it seeks irrelevant information. Plaintiff argues good cause exists for the discovery sought because it will help her prove elements of her claims. In opposition, Thai attempts to justify his relevance objection because the requests do not seek relevant information.

To establish good cause for the discovery sought, the moving party must make “a fact-specific showing of relevance.” (Glenfeld Development Corp. v. Sup. Ct. (1997) 53 Cal.App.4th 1113, 1117.) Information is relevant to the subject matter if it might reasonably assist a party in evaluating its case, preparing for trial, or facilitating settlement. (Gonzalez v. Sup. Ct. (1995) 33 Cal.App.4th 1539, 1546.) “Admissibility is not the test and information, unless privileged, is discoverable if it might reasonably lead to admissible evidence.” (Ibid., original italics.) Courts liberally construe the relevance standard, and any doubts as to whether a request seeks information within the scope of discovery are generally resolved in favor of allowing discovery. (Colonial Life & Accident Ins. Co. v. Sup. Ct. (1982) 31 Cal.3d 785, 790.)

RPD Nos. 5-7 seek documents relating to any sale of universal life insurance policy in which Thai was involved from 2011 to the present. Plaintiff asserts good cause exists for the discovery sought because she alleges Thai engaged in a fraudulent scheme whereby he aided and abetted Chang in the fraudulent insurance scheme. The Court agrees. Documents relating to Thai’s sale of insurance policies will help Plaintiff evaluate her case and prepare for trial. The subject insurance policies are limited to the same that were sold to Plaintiff. The documents sought will necessarily help Plaintiff determine the scope of the alleged fraudulent scheme and establish whether there is any merit to her claims.

RPD No. 8 requests documents reflecting any commission Thai earned from selling LICSW universal life insurance policies from 2011 to the present. As aptly argued by Plaintiff, and echoing the reasons stated above relative to the SI, the commission received by Thai for his sale of LICSW will help her evaluate her claim that he knowingly aided and abetted Chang in order to receive excessive commission.

RPD Nos. 12, 15, 21, and 24 seek communications relating to the sale of universal life insurance products between Thai and Fan, ABN, LICSW and Chang. Plaintiff contends good cause exists for the discovery sought because all identified individuals in the requests allegedly played a major role in the fraudulent and wrongful sale of life insurance products to Plaintiff. Plaintiff asserts that, as a result, the communications will reasonably lead to relevant evidence regarding whether there was a pattern and practice of engaging in the improper sale of life insurance products to consumers similarly situated to Plaintiff. This argument is well-taken. Communications between the subject individuals will likely help Plaintiff evaluate her contention that they were orchestrating a scheme to defraud individuals and purchase policies in their names.

RPD Nos. 16-18 request documents Thai gave Chang regarding the underwriting, sale, and/or marketing of universal life insurance products. Plaintiff persuasively argues these documents will reflect whether Thai’s documents influenced the way in which Chang marketed the policies to insureds. Plaintiff alleges Thai aided and abetted Chang in the alleged fraudulent scheme and helped market it to unsuspecting individuals. The documents sought will undoubtedly help Plaintiff assess Thai’s level of involvement in Chang’s fraudulent scheme and evaluate whether he knowingly contributed to it.

In light of the above, good cause exists for the discovery sought and the relevance objection is overruled.

2. Objections

Thai objected to each RPD at issue on the grounds of privacy, vagueness and ambiguity, irrelevance, overbreadth, the attorney-client privilege, attorney work product doctrine, and undue burden. It is Thai’s burden to justify these objections. (See Kirkland, supra, 95 Cal.App.4th at p. 98.)

a. Privacy

Thai objected to each RPD at issue on the ground of privacy. A party seeking to prevent discovery on the basis of the right of privacy must demonstrate that a legally protected privacy interest exists, there is a reasonable expectation of privacy under the particular circumstances, and the disclosure of the information would constitute a serious invasion of that interest. (Alch, supra, 165 Cal.App.4th at p. 1423.)

Thai contends all RPD at issue seek private information. The Court agrees with respect to RPD Nos. 5-8, 12, 15-18, 21, and 24. As to RPD No. 8, it seeks documents reflecting the commission earned by Thai for all policy sales from 2011 to the present. For the same reasons discussed above relative to SI Nos. 2, 5, and 8, the right to privacy protects an individual’s financial information, including commission received. (See Hecht, Solberg, Robinson, Goldberg & Bagley v. Sup. Ct., supra, 137 Cal.App.4th 579, 593.) Next, RPD Nos. 5-7 seek all documents concerning any sale of universal life insurance policy in which Thai was involved from 2011 to the present, and RPD Nos. 12, 15, 21, and 24 seek communications relating to the sale of universal life insurance products between Thai and Fan, ABN, LICSW and Chang. These requests are so broad that although the precise language itself does not request documents revealing the identities of third parties, Thai asserts it is likely that he must produce such documents in order to fully comply. That point is well-taken as all documents reflecting any sale of life insurance will surely require the production of policies sold to other individuals. Further, communications between Thai and the subject individuals regarding the sale of life insurance policies will also necessarily encompass communications relating to specific sales to individuals.

RPD Nos. 16-18 seek documents regarding the underwriting, sale, and/or marketing of life insurance policies that Thai gave to Chang. In his opposition, Thai does not specifically address whether these RPD seek private information. However, again, these requests are so broad, it is apparent that individual private information would be included within the broad categories of “underwriting, sale and/or marketing of life insurance policies.”

As Thai has established a privacy right is implicated relative to RPD Nos. 5-7, 8, 12, 15-18, 21, and 24, Plaintiff must demonstrate the information sought is “directly relevant” to a claim or defense” and cannot be obtained by any less intrusive means. (Alch, supra, Cal.App.4th at p. 1425.) Similar to the discussion relative to the SI, Plaintiff fails to address whether the information sought may be obtained by less intrusive means as to any of the RPD at issue. It appears some of the information sought—such as the commission received by Thai or what forms of documents were given to Chang—could be obtained by deposition, although it is not apparent that Plaintiff could seek discovery of the identity of other customers which is still private information. (See Harding Lawson Associates v. Sup. Ct., supra, 10 Cal.App.4th at p. 10; Allen, supra, 151 Cal.App.3d at p. 449.) As such, Plaintiff fails to carry her burden by establishing she is entitled to the documents sought.

In opposition, Plaintiff insists the privacy concerns may be assuaged because she is willing to provide notice to third parties that their information and insurance files will be produced in connection with this litigation. However, such measure is to be considered only if Plaintiff demonstrates an entitlement thereto. (See Pioneer, supra, 40 Cal.4th at p. 374 [only discussing whether notice may be provided to third parties after conducting a privacy analysis in the first instance].) As Plaintiff failed to show the discovery sought could not be obtained by less intrusive means, the privacy objection is sustained as to RPD Nos. RPD Nos. 5-7, 8, 12, 15-18, 21, and 24.

b. Remaining Objections

As stated above, Thai also objected on the grounds of vagueness and ambiguity, irrelevance, overbreadth, the attorney-client privilege, attorney work product doctrine, and undue burden. In opposition, Thai advances the same arguments in an attempt to justify his objections here as he did relative to the SI. For the reasons discussed above, Thai inadequately supports his objections and fails to substantiate them. The Court observes that in this instance, unlike in response to the SI, Thai did object on the grounds of the attorney-client privilege and the attorney work product doctrine. However, he fails to justify these objections in any way. He simply states the requests are overbroad in such a way as to implicate documents covered by the attorney-client privilege and the attorney work product doctrine. As it is Thai’s burden to justify his objections, this explanation is deficient. (See Kirkland, supra, 95 Cal.App.4th at p. 98.) Additionally, it does not appear to the Court that the attorney-client privilege or the attorney work product doctrine is implicated in the requests. The objections are therefore overruled.

B. Conclusion

Accordingly, for the reasons set forth above, Plaintiff’s motion to compel Thai to further respond to SI and RPD is GRANTED IN PART and DENIED IN PART. The motion is DENIED as to SI Nos. 3, 6, and 9 and RPD Nos. 5-8, 12, 15-18, 21, and 24. The motion is GRANTED as to SI Nos. 1, 2, 4, 5, 7, and 8. To the extent the motion is granted, Thai shall serve verified, code-compliant responses, without objections, within 20 days of the date of this order.

I. Motion to Compel as to ABN

Plaintiff seeks to compel further responses to SI Nos. 1-9 and RPD Nos. 5-8, 12, 15, 21, and 24. Plaintiff’s requests and ABN’s responses thereto are identical to those discussed in the motion relative to Thai. Further, Plaintiff’s motion to compel ABN to provide further responses to the SI and RPD is indistinguishable from the motion to compel relative to Thai. Thai and ABN filed a joint opposition and separate statement, and Plaintiff filed a single reply addressing both parties. As such, the outcome here is identical to the resolution of the motion relative to Thai.

Accordingly, for the reasons set forth above, Plaintiff’s motion to compel ABN to further respond to SI and RPD is GRANTED IN PART and DENIED IN PART. The motion is DENIED as to SI Nos. 3, 6, and 9 and RPD Nos. 5-8, 12, 15, 21, and 24. The motion is GRANTED as to SI Nos. 1, 2, 4, 5, 7, and 8 and RPD Nos. 16-18. To the extent the motion is granted, ABN shall serve verified, code-compliant responses, without objections, within 20 days of the date of this order.

II. Request for Sanctions

Thai and ABN request an award of monetary sanctions against Plaintiff and her counsel in the amount of $3,280.00 pursuant to Code of Civil Procedure sections 2031.320, subdivision (b) and 2031.320, subdivision (b), which provide that sanctions shall be imposed against any party who unsuccessfully makes or opposes a motion to compel further responses to an inspection demand or compel compliance with an agreement to produce unless the party subject to sanctions acted with substantial justification or other circumstances would make imposing sanctions unjust. Thai and ABN’s request is misplaced because it is in part predicated on the statute governing motions to compel compliance, which is not at issue here. Further, Thai and ABN fail to cite to the proper statute governing awarding sanctions relative to motions to compel further responses to interrogatories. In any event, Plaintiff was partly justified in bringing these motions as they were granted in part. As such, the imposition of monetary sanctions is not warranted. Accordingly, the request for sanctions is DENIED.

The Court will prepare the order.