SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

KERRY WILLIAM SCRIBNER, individually and on behalf of all others similarly situated,

Plaintiff,

vs.

SIMM ASSOCIATES, INC., a Delaware corporation; JEFFREY S. SIMENDINGER, individually and in his official capacity; GREGORY L. SIMENDINGER, individually and in his official capacity; and DOES 1-10, inclusive,

Defendants.

Case No. 17CV312803

TENTATIVE RULING RE: MOTION TO COMPEL FURTHER RESPONSES AND PRODUCTION OF DOCUMENTS

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on April 19, 2019, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION
II.
Plaintiff Kerry Scribner (“Plaintiff”) filed this putative class action on July 10, 2017. Plaintiff alleges defendants Simm Associates, Inc. (“Simm”), Jerry S. Simendinger, and Gregory L. Simendinger failed to provide the notice required under Civil Code section 1812.700(a) as part of collection letters sent to recover “consumer debts” as defined under Civil Code section 1788.2(f).

Before the Court is Plaintiff’s motion to compel that is being made pursuant to Code of Civil Procedure sections 2030.300 and 2031.310. Plaintiff alleges he properly served on Simm three sets of discovery: (1) Request for Production of Documents and Electronically Stored Information (Set Two); (2) Request for Production of Documents and Electronically Stored Information (Set Three); and (3) Special Interrogatories (Set Three). The discovery seeks information about loans Simm received and information about putative class members. Plaintiff alleges that Simm responded to the discovery with unverified boilerplate objections that are without merit.

III. LEGAL FRAMEWORK
IV.
Discovery is generally allowed for any matters that are relevant to the subject matter involved in the action “if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.” (Code Civ. Proc., § 2017.010.) Information is relevant to the subject matter of an action if it might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement. (Gonzalez v. Superior Court (1995) 33 Cal.App.4th 1539, 1546.) “These rules are applied liberally in favor of discovery.” (Ibid.)

A. Motion to Compel Further Responses to Requests for Production
B.
Pursuant to Code of Civil Procedure section 2031.310, a party may move for an order compelling a further response to a document demand on the ground an objection is without merit or too general, a statement of compliance with the demand is incomplete, and/or a representation of inability to comply is inadequate, incomplete, or evasive.

A party moving to compel further responses to document demands “shall set forth specific facts showing good cause justifying the discovery sought by the inspection demand.” (Code Civ. Proc., § 2031.310, subd. (b)(1); see also Kirkland v. Superior Court (2002) 95 Cal.App.4th 92, 98.) A party moving to compel further responses to document demands meets its burden of showing good cause for the discovery “simply by a fact-specific showing of relevance.” (TBG Ins. Services Corp. v. Superior Court (2002) 96 Cal.App.4th 443, 448.)

A party may respond to a document demand by asserting an objection. (Code Civ. Proc., § 2031.210, subd. (a).) Here, Simm asserted objections in response to all of the requests for production of documents at issue. Simm bears the burden of justifying the objections to avoid having to further respond. (See Kirkland v. Superior Court (2002) 95 Cal.App.4th at p. 98; see also Coy v. Superior Court of Contra Costa County (1962) 58 Cal.2d 210, 220.)

C. Motion to Compel Further Responses to Special Interrogatories
D.
Code of Civil Procedure section 2030.300 provides that a party may move for an order compelling further responses to special interrogatories if the party deems an objection is without merit or too general, or if an answer to a particular interrogatory is evasive or incomplete. A party may respond to an interrogatory by asserting an objection. (Code Civ. Proc., § 2030.210, subd. (a)(3).) Here, Simm asserted objections in response to interrogatory at issue. Simm bears the burden of justifying his objections to avoid having to further respond. (See Kirkland v. Superior Court, supra, 95 Cal.App.4th at p. 98; see also Coy v. Superior Court of Contra Costa County, supra, 58 Cal.2d at p. 220.)

V. DISCUSSION
VI.
A. Requests for Production of Documents (Set Two)
B.
To paraphrase and simplify, Requests for Production of Documents (Set Two) seeks documents relating to or evidencing: (1) loans made to Simm; and (2) documents Simm submitted to Continental Bank in support of certain loans.

Simm asserted boilerplate general objections. It then objected to: (1) the temporal scope of RFP #1; and (2) the relevance of the requests. While Simm stated “the requests also seeks confidential and proprietary business information,” it did not state this as an objection, and it further noted that it has already produced “net worth information” pursuant to the Protective Order that was filed with the Court on January 3, 2018, thus suggesting any privacy issues can be easily dispensed with.

With respect to relevance, both sides cite to Civil Code section 1788.17, which incorporates a federal statute that states a class fund shall “not to exceed the lesser of $500,000 or 1 per centum of the net worth of the debt collector.” (15 U.S.C. § 1692k(a)(2)(B).) Simm argues that “net worth” means balance sheet net worth, not fair market value net worth. (Schuchardt v. Law Office of Rory W. Clark, 2016 WL 232435, at *10 (N.D. Cal. January 20, 2016.) Simm thus argues that “all that Plaintiff requires as part of its class analysis is Simm’s audited balance sheet, which Simm has provided.” (Opp. to Mtn to Compel, at 5.)

In response, Plaintiff argues the loan documents are relevant for determining Simm’s net worth. (Reply Memo., at 8.) Plaintiff specifically seeks “information provided to Continental Bank by Simm prior to the approval of loans in the amount of a $350,000 SBA Express secured revolving line of credit, $2,090,000 SBA 7(a) secured term loan, and $3,693,000 secured commercial mortgage.” (Ibid.)

In support of his motion to compel Plaintiff lodged copies of Simm’s consolidated financial statements captioned “December 31, 2016 and 2015.” Those statements show total assets and total liabilities. A vast majority of the total liabilities derive from loans. Note 2 in the financial statements discusses in some detail a note payable to Delaware Community Development Corporation. It also discusses a note payable to Continental Bank and a mortgage payable to Continental Bank.

The substantial liabilities set forth in Simm’s financial statements affect Simm’s net worth and are thus information about those liabilities is “admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.” (Code Civ. Proc., § 2017.010.) That information might also reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement. Plaintiff has thus met the good cause standard with a fact-specific showing of relevance.

Plaintiffs motion to compel further responses and production of documents is thus GRANTED with respect to the three requests set forth in Plaintiff’s Requests for Production of Documents (Set Two). The Court ORDERS Simm to provide verified, code-compliant further responses to the requests, without objections, within 20 days. Documents responsive to those requests must be served on Plaintiff within 45 days.

C. Requests for Production of Documents (Set Three) and Special Interrogatories (Set Three)
D.
Special Interrogatories (Set Three) includes a single interrogatory that seeks the “number, names, addresses and telephone numbers of all California residents to whom you sent” collection letters in the form of Exhibit 1 from July 10, 2016 to the present in an effort to collect debt allegedly owed to Paypal Credit.

The Requests for Production of Documents (Set Three) includes a single request for documents relating to or evidencing “the number, names, and addresses of any California residents to whom you sent” collection letters in the form of Exhibit 1 from July 10, 2016 to the present in an effort to collect debt allegedly owed to Paypal Credit.

The information sought in Special Interrogatories (Set Three) and Requests for Production of Documents (Set Three) is relevant. (See Williams v. Superior Court (2017) 3 Cal.5th 531, 544 (“[T]he default position is that such information is within the proper scope of discovery, an essential first step to prosecution of any representative action.”).) While some who received the collection letters might not be “natural persons,” Defendant has not suggested any way to separate “natural persons” from partnerships, corporations, limited liability companies, trusts, estates, cooperatives, associations or other similar entities. (See Civ. Code §§ 1788.2, subds. (f) & (g).) While some who received the collection letters might not have entered into arrangements meeting the definition of “consumer debt” or “consumer credit,” it is possible that many, including Plaintiff, did. Producing the names, addresses and telephone numbers of all recipients of the suspect letters thus appears reasonably calculated to lead to the discovery of admissible evidence. Protection of third party privacy rights can be achieved by following the procedures for a Belaire-West notice.

The Motion to Compel further responses and production of documents is thus GRANTED with respect to the one request set forth in Plaintiff’s Requests for Production of Documents (Set Three) and the one request set forth in Plaintiff’s Special Interrogatories (Set Three). The Court ORDERS the parties to follow the procedures for a Belaire-West notice. The parties shall immediately meet and confer regarding the logistics for the Belaire-West notice. Simm shall provide the number, names, and addresses of any California residents to whom it sent the subject collection letters to a third-party administrator on or before May 15, 2019. The Court ORDERS Simm to provide verified, code-compliant further responses to the requests, without objections, within 15 days of the end of the opt-out period, but shall exclude any parties who opted out. Documents responsive to the request made in Plaintiff’s Requests for Production of Documents (Set Three) must be served on Plaintiff within 15 days of the end of the opt-out period. The names, addresses and phone numbers of parties who opt-out shall be redacted.

VII. LODGED DOCUMENTS
VIII.
On February 4, 2019, Plaintiff filed and served a “Notice of Documents Lodged Conditionally Under Seal.” Pursuant to Rule 2.551, subdivision (b)(3)(B) of the California Rules of Court:

If the party that produced the documents and was served with the notice under (A)(iii) fails to file a motion or an application to seal the records within 10 days or to obtain a court order extending the time to file such a motion or an application, the clerk must promptly transfer all the documents in (A)(i) from the envelope, container, or secure electronic file to the public file.

The Court’s files do not include any motion or application to seal the records that were conditionally filed under seal on February 4, 2019. The Court therefore ORDERS those documents be transferred to the public file.

The Court will prepare the final order if this tentative ruling is not contested.