Case Name: John Park v. Peter Lunardi, et al.
Case No.: 17CV315411

I. Factual and Procedural Background

This action filed by plaintiff John Park (“Park”) against defendants Eric Swallow (“Swallow”), Jeanine Lunardi, and Peter V. Lunardi, III (“Mr. Lunardi”) arises out of a failed stock purchase agreement.

As alleged in the second amended complaint (“SAC”), Garden City, Inc. dba Casino M8trix (“Garden City”) is a cardroom located in San Jose, California. (SAC at ¶ 1.) Before June 9, 2017, fifty percent of Garden City’s shares were owned by Swallow and fifty percent were owned by Peter and Jeanine Lunardi (collectively “the Lunardis”). (Ibid.) On April 13, 2015, following several months of discussions and negotiations, Park and Swallow entered into a stock purchase agreement, whereby Swallow agreed to sell his shares in Garden City to Park for a total purchase price of $55 million (the “Stock Purchase Agreement”). (Id. at ¶ 2.)

Park subsequently met with the Lunardis several times to discuss how they would operate Garden City as joint and equal owners. (Id. at ¶¶ 3, 25.) The Lunardis did not indicate they had any problems with the forthcoming partnership at that time but, later, attempted to exercise a purported right of first refusal pursuant to a separate buy-sell agreement they previously entered into with Swallow (“Buy-Sell Agreement”). (Ibid.) The Lunardis contended this right of first refusal allowed them to match any third party’s agreement to purchase Swallow’s shares, which would allow them to obtain complete ownership of Garden City. (Ibid.)

The Lunardis then submitted an application for approval of their attempted purchase of Swallow’s shares to the Bureau of Gambling Control (the “Bureau”). (Id. at ¶ 26.) They also had their attorney, Tracey Buck-Walsh (“Buck-Walsh”), make multiple requests that the Bureau and California Gambling Control Commission (the “Commission”) deny Park’s application to purchase Swallow’s shares; in making these requests, the Lunardis had Buck-Walsh use confidential information she had obtained about Park from her prior representation of him. (Ibid.) Finally, the Lunardis used false and inaccurate financial statements to deceive the lender who was financing their purchase, the arbitrator, the Bureau, the Commission and the City of San Jose, to make their offer to Swallow seem stronger than it was. (Id. at ¶ 31.)

Around September 2015, Swallow submitted a demand for arbitration against the Lunardis to adjudicate the dispute over their attempt to exercise their purported right of first refusal. (Id. at ¶ 32.) Park twice attempted to intervene in these proceedings to protect his interest in Swallow’s shares but the Lunardis opposed his request and the arbitrators ultimately denied intervention because he was not a party to the Buy-Sell Agreement. (Id. at ¶ 33.) Since Park was not permitted to intervene, he brought the present action to protect his contractual right to purchase Swallow’s shares in Garden City. (Id. at ¶ 37.) During the pendency of this action, the arbitrator determined that the Lunardis had the right to purchase Swallow’s shares pursuant to the Buy-Sell Agreement. (Id. at ¶ 38.) The arbitrator, however, did not consider whether Park had the right to purchase Swallow’s shares under the Stock Purchase Agreement, or how that agreement affected the parties’ respective rights. (Ibid.)

Following the arbitrator’s decision, Swallow and the Lunardis entered into a new stock purchase agreement, under which Swallow agreed to sell his shares in Garden City to the Lunardis. (Id. at ¶¶ 9, 39.) On June 9, 2017, Swallow transferred his shares to the Lunardis. (Id. at ¶¶ 9, 40.)

The SAC alleges causes of action for breach of contract, promissory estoppel, and intentional interference with contractual relations.

The Lunardis filed a first amended cross-complaint against Park, seeking declaratory relief and alleging claims for intentional interference with contract and tort of another.

Currently before the Court are Park’s motion to compel further responses to requests for production of documents and motion to compel further responses to special interrogatories. The Lunardis oppose both motions, filed an accompanying request for judicial notice in support of their opposition to the motion to compel further responses to the requests for production, and seek an award of sanctions in connection with both motions.

II. Request for Judicial Notice

The Lunardis seek judicial notice of the final arbitration award issued in the arbitration proceeding between them and Swallow, this Court’s (Hon. Maureen Folan) order granting the petition to confirm the arbitration award, and the judgment entered by Judge Folan following the second arbitration proceeding between them and Swallow.

The order confirming the arbitration award and judgment are court records; thus, they are generally judicially noticeable under Evidence Code section 452, subdivision (d). As for the final arbitration award, it is also judicially noticeable under subdivision (d). (See Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486, 525.) With that said, a court need not take judicial notice of a matter unless it “is necessary, helpful, or relevant.” (Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 748, fn. 6.) Here, the Lunardis submit the aforementioned documents to establish they were obligated under the judgment following arbitration to buy Swallow’s shares in Garden City. (See Opp. to MTC Further Responses to RPD at p. 3:13-14.) But, as will become apparent in the discussion below, this fact is not helpful or necessary to resolving the merits of Park’s motions.

As such, the Lunardis’ request for judicial notice is DENIED.

III. Motion to Compel Further Responses to Requests for Production of Documents

Park moves to compel further responses to Requests for Production of Documents, Set Two (“RPD”).

For context, Park served Mr. Lunardi with Requests for Production of Documents, Set One on September 1, 2017. (Garner RPD Decl., ¶ 2.) After Mr. Lunardi responded with a litany of objections, Park filed a motion to compel further responses. (Id. at ¶ 3.) The Court then held an informal discovery conference to discuss the requests, during which time it noted that some of Park’s requests were overbroad. (Id. at ¶ 3.) Consequently, Park withdrew the requests and his motion to compel, and served Mr. Lunardi with the RPD, which were narrower than the previous requests, on July 16, 2018. (See Id. at ¶ 8.) On August 17, 2018, Park received unverified initial responses to the RPD. (Id. at ¶ 9.) Shortly thereafter, Park’s counsel sent Lunardis’ counsel a meet and confer letter, asserting certain of Mr. Lunardi’s objections were meritless and some responses were deficient. (Id. at ¶ 12, Exh. 8.) Around November 13, 2018, Mr. Lunardi served verified amended responses to the RPD. (Id. at ¶ 10.) A few days later, this Court held a second informal discovery conference regarding issues raised relative to the RPD. (Id. at ¶ 4.)

Unable to resolve the dispute, Park filed the present motion to compel further responses to RPD Nos. 98, 102-103, 106, 116-119, 124, 128-130, 149-150, 153-154, 156, and 163-164.

There is a significant issue with the presentation of this motion that makes it difficult for the Court to evaluate its merits. Specifically, it does not appear that Park is moving to compel further responses to the operative responses to the RPD. The Court discerns this from two facts.

First, despite the fact Mr. Lunardi served amended responses to the RPD and Park is clearly aware of these responses, he only includes the text of the original unverified responses in his separate statement. Beyond the fact this is procedurally deficient as a separate statement must include “[t]he text of each response, answer, or objection, and any further responses or answers” (Cal. Rules of Court, rule 3.1345(c)(2), emphasis added), Park’s approach is problematic because the unverified original responses were essentially not even responses. (See Steven M. Garber & Associates v. Eskandarian (2007) 150 Cal.App.4th 813, 817, fn. 4 [“Unverified responses ‘are tantamount to no responses at all.”]; see also Appleton v. Super. Ct. (1988) 206 Cal.App.3d 632, 636 [same].) Moreover, these responses were later replaced by the amended responses that were served in November 2018.

Second, it is otherwise unclear to the Court if even the amended responses referenced by Park are the most recent responses served relative to the RPD. For example, Park’s counsel states in his declaration that amended responses were served around November 13, 2018 but the separate statement represents that “[o]n December 7, 2018, Lunardi amended his responses for a second time[.]” (Sep. Stmt. at p. 18:27-28, emphasis added.) But these second amended responses to the RPD do not appear anywhere in the moving papers nor is the text from these responses included in the separate statement.

As such, the Court is unable to evaluate the merits of Park’s motion, which does not seem to concern the operative responses to the RPD.

Accordingly, the motion to compel further responses to RPD Nos. 98, 102-103, 106, 116-119, 124, 128-130, 149-150, 153-154, 156, and 163-164 is DENIED without prejudice. After complete meet and confer, Park may refile the motion to compel within 30 days, but shall include only the most recent version of the responses in the separate statement.

Turning to the issue of sanctions, Mr. Lunardi requests sanctions against Park and his counsel pursuant to Code of Civil Procedure section 2031.310, subdivision (h), which permits sanctions against any party who unsuccessfully makes or opposes a motion to compel further responses to inspection demands unless the party subject to sanctions acted with substantial justification or other circumstances would make imposing sanctions unjust.

Here, the motion was denied because of a significant defect in Park’s presentation that rendered the Court unable to evaluate it. Moreover, it does not appear Park acted with substantial justification or that other circumstances would make imposing sanctions unjust. As such, an award of sanctions is warranted.

Mr. Lunardi seeks sanctions in the amount of $8,250, representing fifteen hours spent reviewing the motion papers and preparing the opposition at an hourly rate of $550.00. (Harrington Decl., ¶ 15.) The amount of time spent by Mr. Lunardi’s counsel in opposing this motion is excessive. The issues raised in this motion were not complex and the Court observes Mr. Lunardi spent most of his effort arguing the merits of Park’s claims instead of addressing the substance of the motion.

Accordingly, Mr. Lunardi’s request for monetary sanctions is GRANTED IN PART in the amount of $4,400 (8 hours x $550.00). Park and his counsel shall pay this award to Mr. Lunardi’s counsel within 20 calendar days of this Order.

IV. Motion to Compel Further Responses to Special Interrogatories

Park moves to compel further responses to Special Interrogatories, Set One (“SI”) Nos. 8, 14, 20, and 30. Mr. Lunardi opposes this motion and also seeks a request for sanctions.

A. Merits of the Motion

For context, Park served Mr. Lunardi with the SI and Mr. Lunardi provided written responses. (Garner SI Decl., ¶¶ 7-8.) Mr. Lunardi did not verify the responses at the time he served them but served a verification a few months later. (Id. at ¶ 8.) Park’s counsel believed the responses were deficient and met and conferred with Mr. Lunardi’s counsel regarding the same. (Id. at ¶ 9.) Mr. Lunardi, however, refused to amend or supplement his responses. (Ibid.) Park therefore filed the present motion to compel.

A party propounding interrogatories may move for an order compelling further responses if that party deems an answer is evasive or incomplete, the exercise of the option to produce documents is unwarranted, or an objection is without merit or too general. (Code Civ. Proc., § 2030.300, subd. (a).)

Here, Park moves to compel further responses to the subject SI on the grounds the objections lack merit and the responses are evasive, incomplete, and/or provide only irrelevant information. He also requests that the Court compel Mr. Lunardi to “provide code-compliant verifications to his initial and supplemental responses without further delay.” (Mtn. at p. 14:10-11.)

At the outset, Park’s request regarding Mr. Lunardi’s verification of his responses to the SI is anomalous as his counsel’s supporting declaration explicitly states that verifications were, in fact, received on January 10, 2019 (Garner SI Decl., ¶ 6), nearly a week before the filing of this motion. Mr. Lunardi’s counsel also confirms in her opposing declaration that verifications were served and attaches a copy to her declaration. (Supp. Harrington Decl., ¶ 6, Exh. 3.)

Accordingly, Park’s request that verifications be provided will be disregarded and the Court will turn to evaluating the merits of the motion to compel further responses to SI Nos. 8, 14, 20, and 30.

1. SI No. 8

SI No. 8 requests that Mr. Lunardi identify all individuals involved in decisions about whether Garden City profits should be distributed to Swallow from January 2014 to the present.

Mr. Lunardi objected to this request on the grounds of vagueness and ambiguity, overbreadth, unlikeliness it would lead to the discovery of admissible evidence, attorney-client privilege, the work product doctrine, and the constitutional right to privacy to financial information. Subject to and without waiving the objections, he also provided a substantive response.

As the objecting party, Mr. Lunardi bears the burden of substantiating his objections to the discovery requests. (See Kirkland v. Sup. Ct. (2002) 95 Cal.App.4th 92, 98.) In his opposition, Mr. Lunardi attempts to justify each of these objections.

With respect to the vagueness and ambiguity objection, Mr. Lunardi states that, starting from 2014, he and Garden City were bound by an amended emergency order that restricted all but estimated tax payments to Swallow. He concludes the request is vague and ambiguous “to the extent [the interrogatory] asks who made the ‘decision’ to comply with the Amended Emergency Order and the law[.]” (Opp. at p. 20-22.) This assertion is off point and difficult to understand.

A vagueness and ambiguity objection should only be sustained when the nature of the information sought is not apparent. (See Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 783; see also Standon v. Sup. Ct. (1990) 225 Cal.App.3d 898, 903 [stating that an objection on this ground is frequently considered a nuisance objection].) Here, it is readily apparent what information Park is seeking, namely the identities of those individuals involved in decisions about whether profit distributions should be made to Swallow. It does not ask about who made the decision to comply with the referenced amended emergency order and, even if it did, it would still be apparent what information is being sought. Thus, the vagueness and ambiguity objection is baseless.

As for the issue of overbreadth, Mr. Lunardi simply states the following: “For the identity of persons involved in the issuance or drafting of the Amended Emergency Order, it is overbroad and calls for speculation.” (Opp. at p. 3:22-24.) He does not further elaborate. As such, the meaning and import of this argument is unclear.

With respect to the privacy objection, Mr. Lunardi baldly asserts that the profits of Garden City, a non-party to this action, “deal[] with private finances that are not the subject of this action.” (Opp. at p. 3:25-26.) He does not further elaborate. This is insufficient as he is required to demonstrate that disclosure of the information sought would invade a legally protected privacy interest (see Alch v. Super. Ct. (2008) 165 Cal.App.4th 1412, 1423) and, here, he does not do so. While it is true that financial information is protected by the right to privacy (Moskowitz v. Superior Court (2017) 137 Cal.App.3d 313, 315, disapproved of on other grounds by Williams v. Superior Court (2017) 3 Cal.5th 531), Mr. Lunardi does not explain how information relating to the identities of individuals involved in Garden City’s financial decisions is itself financial information. As such, no privacy interest has been established. The privacy objection is therefore not sustainable.

Finally, Mr. Lunardi asserts he is “not required to identify every counsel with whom he may have discussed the Amended Emergency Order,” stating the content of his communications with counsel are protected from disclosure, irrelevant, and not likely to lead to the discovery of admissible information since this information is privileged. (Opp. at 4: 13-20.) This contention is baseless. SI No. 8 clearly does not seek the identification of all counsel with whom he may have discussed any amended emergency order nor the contents of those communications; the SI does not even reference this order. As such, the objections on the grounds of attorney-client privilege, attorney work product, and unlikeliness to lead to the discovery of admissible evidence lack merit.

In sum, Mr. Lunardi has not advanced any meritorious objections to this SI. The Court will therefore turn to evaluate the sufficiency of his substantive response.

Mr. Lunardi responded to SI No. 8 as follows:

[T]he Amended Emergency Order prohibited all but limited payments to Mr. Swallow beginning in 2014; Responding Party would be speculating in stating what individuals were involved in the decision to issue the Amended Emergency Order. Decisions regarding the filing of legal actions, including the interpleader action filed in Sacramento Superior Court and the action pending in Santa Clara Superior Court were made by Peter and Jeanine Lunardi as directors of GARDEN CITY, with the input of counsel which included Robert S. Lindo, Bernard S. Greenfield and Maureen A. Harrington.

Park contends this response is completely non-responsive. The Court agrees. Mr. Lunardi’s response is evasive and does not respond to the clear call of the question which seeks the identities of those individuals involved in making decisions regarding the distribution of profits to Swallow from 2014 and on.

Accordingly, the objections to SI No. 8 are overruled and a further substantive response is warranted.

2. SI No. 20

SI No. 20 requests the date and amount of each bonus Mr. Lunardi received from Garden City between January 2014 and January 2017.

Mr. Lunardi objected to this request on the grounds of vagueness and ambiguity, and the right to financial privacy. Subject to and without waiving the objections, he also provided a substantive response.

In opposition, Mr. Lunardi only attempts to substantiate his privacy objection. The remaining undefended objection is therefore overruled. (See Kirkland, supra, 95 Cal.App.4th at 98.)

Mr. Lunardi contends he has a right to financial privacy in the bonuses he received. This assertion is well-taken. As stated earlier, financial information is protected by the right to privacy. (Moskowitz, supra, 137 Cal.App.3d at 315.) As such, Park must demonstrate the information sought is directly relevant. (See Alch, supra, 165 Cal.App.4th at 1426-27, 1433.)

Park argues information relating to the bonuses received by Mr. Lunardi is directly relevant to whether or not he will be able to assert a defense of justification relative to the claim of intentional interference with contractual relations. Specifically, he asserts that, as pled in the SAC, the Lunardis interfered with the Stock Purchase Agreement by submitting a competing application for purchase of Swallow’s shares but this application was based on falsified financial information. This falsified information included the Lunardis misclassifying $12 million in distributions owed to Swallow as Garden City’s retained earnings. Park contends Mr. Lunardi disguised some of his distribution payments as bonuses to avoid the regulatory authorities discovering the discrepancy between the distributions to Lunardi and Swallow; he concludes the information sought is directly relevant. This is not persuasive.

There is nothing in the pleadings indicating that the Lunardis disguised distribution payments to Mr. Lunardi as bonuses. Nor does Park assert that information has been revealed in discovery that supports this act occurred. As such, it is unclear how information relating to the date and amount of bonuses received by Mr. Lunardi would assist in proving that his conduct was unjustified or otherwise wrongful for purposes of the intentional interference claim.

As such, the privacy objection relative to this SI is sustained and no further response is required.

3. SI No. 14

SI No. 14 requests the date on which Buck-Walsh, the Lunardis’ attorney, started representing Garden City.

In response, Mr. Lunardi stated Buck-Walsh has been representing him and his wife since May 2014, including providing advice in their capacity as directors and officers of Garden City, and entered into a written fee agreement with Garden City on June 5, 2017. He also states he cannot provide further information, invoking the attorney-client privilege and attorney work product doctrine in support.

At the outset, it is unclear if Mr. Lunardi intended to object to the SI on the basis of attorney-client privilege and attorney work product doctrine. He does not state in his response that he is objecting to this interrogatory and only references the attorney-client privilege and work product doctrine relative to his statement he “cannot provide further detail” for his substantive response. (Sep. Stmt. at p. 6:8-10.)

To the extent Mr. Lunardi is objecting on the ground of attorney-client privilege and the work product doctrine, he does not adequately substantiate these objections. In his opposition, Mr. Lunardi asserts that, at all times during Buck-Walsh’s representation of him, he was the president of Garden City and a member of its board. Thus, he contends “there is the potential for cross-over advice that could be construed as advice as to the entity which can only be determined by revealing work product or attorney-client communications.” (Opp. at p. 7:6-8.) This is not persuasive.

The attorney-client privilege is codified at Evidence Code section 954 and protects against the disclosure of a “confidential communication between client and lawyer.” As for the attorney work product doctrine, it protects from discovery writings that contain an “attorney’s impressions, conclusions, opinions, or legal research or theories.” (Code Civ. Proc., § 2018.030, subd. (a); see also League of California Cities v. Superior Court (2015) 241 Cal.App.4th 976, 993.)

Here, Mr. Lunardi does not explain how the date on which Buck-Walsh began representing Garden City would necessitate the disclosure of a confidential communication with his attorney or writings containing his attorney’s impressions, conclusions, opinions or legal research or theories. As such, the objection on the basis of attorney-client privilege and attorney work product doctrine is unsubstantiated.

Turning to the sufficiency of Mr. Lunardi’s substantive response, Park asserts it is evasive as it only references when Garden City entered into a formal written fee agreement with Buck-Walsh and when she began representing the Lunardis. The Court agrees this response does not clearly answer the call of the question.

Accordingly, a further response to SI No. 14, without objections, is warranted.

4. SI No. 30

SI No. 30 asks that Mr. Lunardi describe all statements made in his presence about Park during the June 12, 2014 Garden City board meeting.

Mr. Lunardi objected to this SI on the grounds it is vague and ambiguous, overbroad, irrelevant, seeks information protected by the attorney-client privilege and attorney work product doctrine, seeks the information of non-parties to the action, and seeks information protected by the right to privacy. He also provided a substantive response to this request.

In opposition, Mr. Lunardi only attempts to substantiate his objection on the ground of attorney-client privilege. The remaining undefended objections are therefore overruled. (See Kirkland, supra, 95 Cal.App.4th at 98.)

In addressing the attorney-client privilege, Mr. Lunardi focuses on one particular statement Buck-Walsh made at the June 12, 2014 meeting, which related to her assertion Park was not a licensed provider of proposition player services, and contends her communications at that meeting are subject to the attorney-client privilege. This argument is not well-taken.

As previously stated, the attorney-client privilege protects confidential communications between a lawyer and client from disclosure. Evidence Code section 952 provides in relevant part that a “confidential communication” is “information transmitted between a client and his or her lawyer in the course of that relationship and in confidence by a means which, so far as the client is aware, discloses the information to no third persons other than those who are present to further the interest of the client in the consultation[.]”

Here, Mr. Lunardi does not explain how any statements made by Buck-Walsh at the June 12, 2014 meeting were confidential communications protected by the attorney-client privilege. Moreover, even assuming Buck-Walsh’s statements were privileged, that does not compel the conclusion that everything anyone else said at that meeting pertaining to Park are protected by the attorney-client privilege.

As such, there is no apparent basis for sustaining the objection on the ground of the attorney-client privilege.

Turning to the substantive response provided, Mr. Lunardi stated: “Ms. Buck-Walsh did not at any time state that Mr. Park was not licensed as a TPPPPS provider. One of the bids that we received to replace our existing vendor came from an entity that was not licensed, but that entity was not owned by Mr. Park.” (Sep. Statement at p. 6:22-25.)

Park asserts this response is incomplete because it focuses on a sole statement made by Buck-Walsh when the SI seeks all statements made about Park at the meeting. The Court agrees. Mr. Lunardi’s response clearly does not respond to the call of the question.

As such, a further response, without objections, is warranted.

5. Conclusion

For the reasons stated, the motion to compel further responses is GRANTED as to SI Nos. 8, 14 and 30 but DENIED as to SI No. 20. Mr. Lunardi shall serve Park with verified code-compliant further responses to SI Nos. 8, 14 and 30, without objections, within 20 calendar days of this Order.

B. Request for Sanctions

Mr. Lunardi requests sanctions against Park and his counsel pursuant to Code of Civil Procedure section 2023.010. This request is flawed.

Section 2023.010 merely lists various misuses of the discovery process and does not authorize sanctions at all. As such, Mr. Lunardi does not cite an enabling statute to support his request for sanctions. Moreover, Park largely prevailed in his motion. Thus, an award of sanctions is not warranted. (See Code Civ. Proc., § 2030.300, subd. (d).)

The Court shall prepare the Order.