Case Name:   Rosalinda Palomino v. Esperanza Navarro, et al.

 

Case No.:       1-14-CV-259819

 

Motion by Plaintiff Rosalinda Palomino to Quash Deposition Subpoena for Production of Plaintiff’s Wells Fargo Bank Records

 

Plaintiff Rosalinda Palominoalleges she purchased real property located at 1793 Crucero Drive in San Jose (“Property”) on July 13, 2010 for the purchase price of $333,000 plus closing costs of $17,634.18 for a total of $350,634.18. (Complaint, ¶¶6 – 7.) Palomino financed the purchase of the Property with a loan from Bank of America, N.A., in the amount of $328,575 secured by a first deed of trust against the Property. (Complaint, ¶8.) Palomino alleges she paid the balance of $12,272.64 to complete the purchase. (Complaint, ¶8.) [The court calculates a balance of $22,059.18 after applying loan proceeds of $328,575 to a total purchase price of $350,634.18.]

 

From 2010 to the present, Palomino and her family resided at the Property with defendant Esperanza Navarro aka Esperanza Navarro Luna and her family. (Complaint, ¶9.) Palomino and her family resided in the living space attached to the garage while Navarro and her family resided in the living space detached from the garage. (Complaint, ¶9.)

 

In consideration for living at the Property, Navarro agreed that commencing August 1, 2010, Navarro would make the entire monthly payments on the Bank loan. (Complaint, ¶10.) Palomino agreed to and did give $900 each month to Navarro to be included in Navarro’s monthly payment to Bank. (Complaint, ¶10.)

 

On or about September 14, 2011, Palomino and Navarro entered into a written agreement (“Personal Agreement”) whereby Palomino agreed to convey title to the Property to Navarro on the condition that Navarro (1) obtained a new loan and used the loan proceeds to pay off the Bank loan and (2) paid Palomino the sum of $10,000. (Complaint, ¶11.) Until Navarro fulfilled those conditions, Navarro agreed to be responsible for continuing to make timely monthly payments on the Bank loan. (Complaint, ¶11.) Navarro represented to Palomino, among other things, that she would need title to the Property in order to obtain a new loan and Navarro would not record a deed or otherwise claim ownership of the Property until the conditions of the Personal Agreement were met. (Complaint, ¶12.) In reliance on Navarro’s representations, Palomino executed a grant deed on September 21, 2011 transferring title to the Property to Navarro. (Complaint, ¶13.)

 

On May 1, 2012, Palomino loaned Navarro the sum of $5,000 without interest. (Complaint, ¶14.) Navarro agreed to repay the loan commencing May 1, 2012 by effectively crediting Palomino $500 toward the $900 Palomino agreed to contribute to the Bank loan each month (“Repayment Agreement”) for ten months. (Complaint, ¶14.) Palomino continued to pay Navarro $400 each month toward the Bank loan. (Complaint, ¶14.)

 

In November 2013, Palomino discovered Navarro breached the Personal Agreement and Repayment Agreement by, among other things, recording the grant deed from Palomino on July 19, 2013 without obtaining a new loan to replace the Bank loan and without paying Palomino $10,000. (Complaint, ¶15.)

 

On January 30, 2014, Palomino commenced this action by filing a complaint against Navarro along with a lis pendens. On February 28, 2014, Palomino filed a first amended complaint (“FAC”) asserting causes of action for:

 

(1)            Cancellation of Deed

(2)            Constructive Trust

(3)            Resulting Trust

(4)            Quiet Title

(5)            Partition by Sale

(6)            Accounting

(7)            Declaratory Relief

(8)            Breach of Contract

(9)            Specific Performance

(10)         Fraud

(11)         Constructive Eviction

 

On May 9, 2014, Navarro filed her answer to the FAC and also filed a cross-complaint against Palomino and Noe Diaz. On July 1, 2014, Navarro filed a first amended answer to the FAC.

 

Discovery Dispute

 

On May 5, 2014, Navarro issued a deposition subpoena for production of business records to the custodian of records at Wells Fargo Bank seeking “copies of all checks written and deposited between 1-1-10 to present” and “all statements between 1-1-10 to present” related to Palomino’s bank account. (See Declaration of Jill E. Fox in Support of Motion to Quash, etc. (“Declaration Fox”), ¶3 and Exhibit A.) The deposition subpoena required production of any such documents on or before May 30, 2014.

 

Palomino’s counsel declares that between April 10, 2014 and May 1, 2014, Palomino offered to informally provide the documentary evidence Navarro sought through the deposition subpoena, but that Navarro’s counsel declined to the informal exchange. (See Declaration Fox, ¶5.) In reviewing the supporting e-mails, the court notes that Palomino’s offer to informally provide documentary evidence was apparently conditioned upon Navarro’s agreement to mediate this dispute.

 

Between May 19 – 22, 2014, Palomino’s counsel met and conferred with regard to the deposition subpoena, but did not reach a compromise or resolution. (See Declaration Fox, ¶4.)

 

On May 23, 2014, Palomino filed this motion.

 

Requests for Judicial Notice

 

In support of its motion to quash, plaintiff Palomino requests judicial notice of the FAC. Evidence Code section 452, subdivision (d) states that the court may take judicial notice of “[r]ecords of any court of this state.” This section of the statute has been interpreted to mean that the trial court may take judicial notice of the existence of the court’s own records. Evidence Code section 452 and 453 permit the trial court to “take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached—in the documents such as orders, statements of decision, and judgments—but [the court] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.” (People v. Woodell (1998) 17 Cal.4th 448, 455.) Accordingly, the request for judicial notice in support of motion to quash deposition subpoena for production of plaintiff’s Wells Fargo Bank records is GRANTED. However, the court takes judicial notice of the existence of the document, not necessarily the truth of any matters asserted therein.

 

In opposition, Navarro asks the court to take judicial notice of her motion to expunge lis pendens and her cross-complaint in case number 1-14-CH—005539. Navarro’s request for judicial notice is DENIED for failure to comply with California Rules of Court, rule 3.1113, subdivision (l) which states, in relevant part, “Any request for judicial notice must be made in a separate document” and rule 3.1306, subdivision (c) which states, “A party requesting judicial notice of material under Evidence Code sections 452 or 453 must provide the court and each party with a copy of the material. If the material is part of a file in the court in which the matter is being heard, the party must … [m]ake arrangements with the clerk to have the file in the courtroom at the time of the hearing.”

 

Motion to Quash

 

Palomino argues the motion to quash should be granted because the documents being sought are irrelevant, private, overbroad, and Navarro did not use less intrusive means to obtain the information.

 

Navarro contends the motion to quash should be denied because the documents being sought are relevant, Palomino has placed her financial records at issue in this action, the deposition subpoena is as narrowly tailored as possible, and Palomino has refused to produce the information through a less intrusive informal exchange or through other propounded formal discovery.

 

Legal Standard

 

The court may, “upon motion reasonably made by a [party] … make an order quashing [a] subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare ….”  (Code Civ. Proc., § 1987.1, subds. (a) and (b)(1).)  The party objecting to a discovery request bears the burden of explaining and justifying its objection. (See Fairmont Ins. Co. v. Super. Ct. (2000) 22 Cal. 4th 245, 255.)

 

Privacy

 

Palomino’s primary objection is that the deposition subpoena seeks private financial documents. The zone of privacy protected by the California Constitution has been held to extend to a person’s confidential financial affairs. (See e.g., Fortunato v. Sup. Ct. (2003) 114 Cal.App.4th 475, 480 [recognizing privacy interest in a person’s financial affairs]; see also Valley Bank of Nevada v. Sup. Ct. (1975) 15 Cal.3d 652, 656-657.)  Where the right to privacy is implicated, 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.) The broad “relevance to subject matter” standard is not enough as the information must be directly relevant to a cause of action or defense, i.e., that it is essential to determining the truth of the matters in dispute.  (Id., at 859.)  Discovery will not be ordered if the information sought is available from other sources or less intrusive means.  (See Allen v. Super. Ct. (1984) 151 Cal.App.3d 447, 449.)

 

Here, Navarro contends the documents sought by the deposition subpoena are directly relevant to establish the truth of Palomino’s allegations, among others, that Palomino paid $12,272.64 toward the purchase of the Property, that Palomino paid Navarro $900 per month from August 1, 2010, that Palomino loaned Navarro $5,000, and that she paid Navarro $400 per month beginning May 1, 2012.

 

While Palomino seemingly concedes specific bank records might be directly relevant, Palomino contends the deposition subpoena, as presently phrased, is entirely overbroad and would encompass bank records which have no “direct relevance” in determining the truth of any allegations made in the FAC. For instance, the deposition subpoena seeks bank records dating from January 1, 2010 through present yet the Property was purchased in July 2010.

 

In opposition, Navarro explains that in her cross-complaint, Navarro asserts that she provided $20,000 in funds for escrow, not Palomino. Further, Navarro alleges the funds were deposited into escrow in February 2010 for the purchase of a different property, but later transferred for use toward the purchase of the subject Property. Navarro contends Palomino’s bank records dating back to January/February 2010 would disprove Palomino’s allegation that she provided the funds for purchase of the Property. Palomino is correct that the deposition subpoena as currently phrased is overbroad and not all the documents encompassed would be directly relevant in determining the truth of matters in dispute in this litigation.

 

Additionally, Palomino argues Navarro has not conducted any preliminary discovery to determine whether Palomino’s Wells Fargo Bank account is the source of Palomino’s funds referenced in the FAC. Palomino’s argument suggests the source of the funds is some other account, but Palomino does not deny the subject bank account is the source.  However, until Navarro conducts discovery to narrow down the source of the funds to this Wells Fargo Bank account, Navarro’s deposition subpoena targeting this particular account is entirely speculative and does not establish the direct relevance necessary to overcome Palomino’s privacy objection.

 

Furthermore, less intrusive means are available for Navarro to obtain the information she seeks. In her opposition, Navarro states that she has repeatedly made informal requests for the evidence as well as formal discovery in the form of a request for production of documents, but that Palomino has not provided and/or refuses to provide responsive documents. Navarro has not exhausted those means. In particular, Navarro’s remedy when faced with Palomino’s refusal to produce responsive documents is to bring a motion to compel further responses. There is no indication that Navarro has availed herself of this remedy.

 

For the above stated reasons, Palomino’s motion to quash deposition subpoena for production of her Wells Fargo Bank records is GRANTED.

 

Request for Attorney’s Fees

 

In making an order pursuant to Code of Civil Procedure section 1987.1, the court “may in its discretion award the amount of the reasonable expenses incurred in making or opposing the motion, including reasonable attorney’s fees,” if it finds that the motion was “made or opposed in bad faith or without substantial justification or that one or more of the requirements of the subpoena was oppressive.” (Code Civ. Proc., §1987.2, subd. (a).)  “Substantial justification” is generally defined as being justified to a degree that could satisfy a reasonable person, or stated another way, that it has a reasonable basis both in law and fact. The burden for proving “substantial justification” for failing to comply with a discovery order is on the losing party claiming that it acted with “substantial justification.”  Doe v. U.S. Swimming, Inc. (2011) 200 Cal.App.4^th 1424, 1434-1435. Here, Navarro has not met her burden to show that she acted with substantial justification. Therefore, Navarro is ordered to pay Palomino within ten days of notice, the sum of $1,823 as and for attorney’s fees.

 

In opposition, Navarro asks this court to impose monetary sanctions against Palomino pursuant to Code of Civil Procedure section 128.7. The request is procedurally defective for at least two reasons. First, “A motion for sanctions under this section shall be made separately from other motions or requests and shall describe the specific conduct alleged to violate subdivision (b).” (Code Civ. Proc., §128.7, subd. (c)(1).) Second, Code of Civil Procedure section 128.7, subdivision (c)(1) provides for a “safe-harbor” provision which states that any such motion “shall not be filed or presented to the court unless, within 21 days after service of the motion … the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected.” (See also Barnes v. Department of Corrections (1999) 74 Cal.App.4th 126, 130.)  Navarro has not demonstrated compliance with the “safe-harbor” provision. “No sanctions can be imposed under a motion filed before expiration of the 21-day ‘safe harbor’ no matter how improper the conduct sought to be sanctioned. (Weil & Brown et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2014) ¶9:1206.10, p. 9(III)-31 citing Goodstone v. Southwest Airlines Co. (1998) 63 Cal.App.4th 406, 418 – 419.) Accordingly, Navarro’s request for monetary sanctions pursuant to Code of Civil Procedure section 128.7 is denied.