2017-00213135-CU-PA

Sandra Russo vs. Fedex Freight, Inc.

Nature of Proceeding: Motion to Compel Production of Documents

Filed By: Jacobson, Richard M.

Defendants Fedex Freight, Inc.’s and Jeffery Lynn Pitts’ motion to compel compliance with “deposition subpoena for production of business records” is denied as set forth below.

This is a personal injury action stemming from a 2015 automobile accident in which Plaintiff Sandra Russo was injured. Liability has been admitted but the parties are litigating over damages. Defendants learned in discovery that Plaintiff obtained treatment from Greater Sacramento Surgery Center (“GSSC”) from Philip J. Orisek, M.D. (“Orisek”). They also discovered that MedFin Manager, LLC purchased the lien on Plaintiff’s account. Thereafter they sought to obtain discovery from Orisek the amount MedFin paid Orisek on Plaintiff’s account.

The meet and confer correspondence indicates that Orisek’s counsel contacted Defendants regarding a deposition subpoena on December 26, 2017 indicating that the subpoena would require Dr. Khare’s testimony as to five of the categories and Dr. Orisek’s testimony as to the category 6 regarding the medical care provided to Plaintiff.

(Jacobsen Decl. Exh. B.) The only subpoena included with the instant motion was a subpoena for personal appearance for the PMK of Philip L. Orisek, M.D., Inc. (Jacobsen Decl. Exh. A.) Orisek indicated that he considered information related to the sale of the lien to be private information. He also indicated that he would be available for a deposition on a later date. On January 3, 2018, Defendants’ counsel then contacted Orisek’s counsel and indicated that a deposition would likely be futile at that time. (Id. Exh. C.) On January 11, 2018, Defendants’ counsel indicated that he was agreeable to receiving MedFin sale documentation along with a protective order. (Id. Exh. D.) Orisek’s counsel provided a proposed protective order to Defendants’ counsel on January 25, 2018. (Id. Exh. F.) Much time passed and the attorney, with whom Orisek’s counsel previously met and conferred, left Defendants’ counsel’s law firm. A different attorney contacted Orisek’s counsel on September 9, 2018 and indicated that he was not agreeable to receiving MedFin documents pursuant to a protective order. (Id. Exh. G.) Defendants offered to limit what counsel labeled their “deposition notice/document request” to the actual payment received by Orisek from MedFin regarding Plaintiff’s treatment and production of a PMK to discuss the payment and authenticate documents. (Id.) The parties were unable to resolve the dispute and the instant motion followed.

Defendants indicate in their notice of motion that they are moving to compel non-party Orisek’s compliance with a “Deposition Subpoena for Business Records” dated December 11, 2017. However, as mentioned above, the subpoena attached to Defendants’ counsel’s declaration is a deposition subpoena for personal appearance for the PMK of Philip L. Orisek, M.D., Inc. (Jacobsen Decl. Exh. A.) The subpoena sets forth 6 areas of testimony but does not include a single document request. While the meet and confer correspondence set forth above involved discussions regarding documents concerning MedFin’s payments to Orisek, there is no formal request via subpoena included with the motion. Neither party acknowledges the actual content of the subpoena but the absence of any actual subpoena for the production of records precludes this Court from issuing any order which would compel Orisek to comply with a business records subpoena, despite any informal discussions regarding production of the documents. Again, the only subpoena that was submitted with the motion was a deposition subpoena for a personal appearance. (Id.) Further as seen from the meet and confer correspondence, Orisek never refused to appear for a deposition.

To the extent that the subpoena for personal appearance could somehow be construed as a subpoena for the production of business records, again, despite the fact that it does not request any documents, a motion to compel compliance would be untimely. A motion to compel production of documents requested in a business records subpoena “shall be made no later than 60 days after the completion of the record of the deposition…” (CCP § 2025.480(c).) In the case of a business records subpoena calling only for the production of documents from a third party, the record of the deposition is complete at the time objections are served to the subpoena. ( Unzipped Apparel, LLC v. Bader (2007) 156 Cal.App.4th 123, 136.) Here, Orisek’s December 26, 2017 letter set forth objections to the subpoena. The 60 day deadline passed long ago. In reply Defendants argue that the 60 day timeline does not apply because Orisek’s deposition has not been taken so the record is not complete. Yet in the motion they argued that they were seeking to enforce a deposition subpoena for the production of business records. This reply argument highlights the problems identified above. There was in fact no business records subpoena that was ever served on Orisek, only a subpoena for personal appearance which contained no document requests with which the Court could even order Orisek to comply and in

addition, Orisek never refused to appear for a deposition.

Finally, even if all of the above defects were not present, and there were a specific business records subpoena actually requesting the documents, the Court would not issue an order requiring Orisek to produce the financial information regarding payments from MedFin in the form requested by Defendants. Defendants argue that the subject information, specifically, evidence of payments made by a factoring company like MedFin is discoverable and potentially admissible at trial if expert testimony is presented to link payments to the reasonable value of medical services provided. (Uspenskaya v. Meline (2015) 241 Cal.App.4th 996, 1007; see also Moore v. Mercer (2016) 4 Cal.App.5th 424.) Orisek does not quarrel with that premise but points out that he already reached an agreement with Defendants’ counsel regarding production of the information subject to a protective order which the current handling attorney reneged on almost nine months after the agreement was reached. The Court notes that neither Uspenskaya v. Meline (2015) 241 Cal.App. 4th 996 nor Moore v. Mercer (2016) 4 Cal.App.5th 424 addressed Orisek’s claim of privacy despite ruling that information may be discoverable. In fact Moore specifically indicated that it was not considering that issue because it concluded the trial court’s error in refusing to compel disclosure was not prejudicial. (Moore v. Mercer (2016) 4 Cal.App.5th 424, 448 fn. 1.)

An individual has a constitutional right to privacy in one’s financial affairs. (Cobb. v. Superior Court (1979) 99 Cal.App.3d 543, 550.) While Orisek operates as a professional medical corporation, and while corporations may not have a constitutional right to privacy, some right to privacy still exists. (Ameri-Medical Corporation v. Workers’ Compensation Appeals Board (1996) 42 Cal.App.4th 1260, 1286-88.) Orisek’s charges for the care rendered to Plaintiff was based solely on his fee schedule which he independently sets and maintains. (Orisek Decl. ¶ 4.) He also declares that he chose to sell Plaintiff’s account related to the subject surgical services without any input from Plaintiff and the decision was made without any input from Plaintiff and was an internal business decision not to carry the account for an extended period of time. (Id. ¶¶ 6-7.) The amount for which Orisek sells his liens is determined through an independent arm’s length negotiation with MedFin unrelated to the care provided to Plaintiff. (Id. ¶ 9.)

While the documentation [or at least some of it] is discoverable (upon a proper request), the Court sees no reason why (even if there were a proper request for documents to enforce) Orisek should be forced to produce such information without a protective order. Defendants argue that Orisek should be ordered to produce the information without a protective order because a protective order would somehow shield payments made by factoring companies from “the daylight of market analysis.” Defendants’ argument that a protective order would somehow shield factoring corporations from regulation/scrutiny, etc. is entirely unpersuasive and speculative. The parties previously reached an agreement for production of the information subject to a protective order and Orisek has set forth that the amount he sells accounts to MedFin relate to his financial affairs (e.g. strength of business, risk propensity) and how he negotiates with others. There is no reason to not recognize at least some protection for the information. Further, production of the information subject to a protective order in no way harms Defendants as they will still be able to use the information in this litigation to establish plaintiff’s medical special damages. Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal. 4th 541. It merely limits use of the information to the instant litigation. At a minimum, the information appears to be confidential financial information for which a protective order (to which Defendants

previously agreed) is appropriate.

The Court notes that the motion discusses a trade secret objection but Orisek never raised such objection.

As framed, the motion is denied in its entirety. In short, there is no specific business records subpoena requesting any documents from Orisek which this Court could order Orisek to comply with. In any event, even if there were, the motion would be untimely to the extent it was seeking to enforce a business records subpoena, and there is no basis to require Orisek to produce the information without a protective order especially given that one was previously agreed to by these parties.

Nothing in this ruling precludes Defendants from issuing a proper formal document request to Orisek.

Given the above, the Court need not reach Orisek’s other arguments regarding service, the lack of separate statement, etc.

Both parties’ requests for sanctions are denied as the Court finds that sanctions would not be appropriate against either party under the circumstances.

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.