Case Number: EC068581 Hearing Date: February 14, 2020 Dept: NCD

TENTATIVE RULING

Calendar: 13

Date: 2/14/20

Case No: EC 068581 Trial Date: None Set

Case Name: WVBAGD, LLC v. Galletly, et al.

MOTION TO COMPEL FURTHER RESPONSES TO DISCOVERY

Moving Party: Plaintiff WVBAGD, LLC

Responding Party: Cross-Complainants Bradley Barnes and BABBB, LLC

RELIEF REQUESTED:

Further Responses to Form Interrogatories, Set One, Special Interrogatories, Set One and Requests for Production of Documents, Set One.

DECLARATION SUPPORTING MOTION:

Executed per CCP §§ 2015.5, 2030(l): ok

Reasonable and good faith attempt to resolve informally: ok, Exhibits 13, 14

CHRONOLOGY

Date Discovery served: August 19, 2019

Date Responses served: October 29, 2019

Date Motion served: December 13, 2019 Timely

FACTUAL BACKGROUND

Plaintiff WVBAGD, LLC alleges that it is the successor in interest to Dove Street Capital Lenders, which loaned the Borrower Defendants, BABBB, LLC, A. Barnes, B. Barnes, DLG, D. Galletly and G. Galletly, the principal sum of $250,000, pursuant to a secured Promissory Note signed by all of the Borrower Defendants. Plaintiff alleges that the Note is secured by two deeds of trust on real property, which have been recorded, and involve real property on Loreto Drive in Glendale (“LA Property”), and on Sandyland Road in Carpinteria (“SB Property”), each of which include an assignment of rents and a consent to the appointment of a receiver to receive or collect rents or otherwise take charge of the realty in the event of default.

The loans, notes and deeds of trust have been assigned to plaintiff, and the assignments recorded. Plaintiff alleges that the Borrower Defendants have defaulted under the deeds of trust by breaching the non-monetary covenants set forth thereunder, including failing to maintain insurance on the SB Property while it is being used as a short-term beachfront vacation rental, transferring title to a non-borrower entity, defendant AMSS, and operating the property in violation of local ordinance and HOA rules and regulations, and transferring title to the LA property to non-borrower individuals, the Transferee Defendants, as well as placing upon both properties junior liens, including judgment liens. It is alleged that various defendants and third parties have used defendant BGM Pasadena, LLC and other parties as alter egos in creating these liens against the subject properties, specifically an East West Deed of Trust, which plaintiff alleges is void. There have also been HOA and BMG foreclosure proceedings against the SB Property.

Plaintiff seeks specific performance of the deeds of trust, in effect, the appointment of a receiver pursuant to the deeds of trust based on the alleged default of the Borrower defendants in failing to make all payments required and the non-monetary breaches, and a declaration as to the respective rights of the parties as to whether the East West Loan has been satisfied and the lien extinguished.

On October 12, 2018, the court, Judge Osorio presiding, heard a motion for a preliminary injunction brought by defendants and cross-complainants AMSS, Barnes and BABBB, which was granted, and plaintiff enjoined from conducting a trustee’s sale or recording another notice of trustee’s sale with respect to either of the subject properties.

The First Amended Complaint filed by AMSS alleges that in May of 2013, it took title to the SB Property by a non-judicial foreclosure sale, subject to a first deed of trust, the East West second deed of trust, and the Dove third trust deed, and has been confirmed as holding title with respect to the HOA. Plaintiff AMSS alleges that the Dove Note has been improperly assigned to AZ Tech Ventures, a nonexistent entity, and then to defendant WVBAGD, which has caused a notice of default to be recorded. AMSS alleges that the Dove Note and Third Trust Deed is not enforceable, as barred by the statute of limitations, including provisions which are improper, including an improper acceleration provision, and was improperly assigned.

On August 7, 2019, a Request for Dismissal was filed by AMSS, requesting that the AMSS complaint be dismissed with prejudice, which dismissal was entered the same date.

Defendants Bradley Barnes and BABBB, LLC have filed a cross-complaint against WVBAGD alleging that from 1986, Barnes and his wife have resided at the Loreto Property, which was until 2009 owned by them or their estate planning entity, BABBB. On December 1, 2009, the Loreto Property was transferred to Brad and Allison’s children who continue to live at the property. The cross-complaint alleges that the Dove Note, Dove Sandyland Trust Deed and Dove Loreto Trust Deed have been improperly assigned, that cross-defendants have recorded various notices and continued to re-notice foreclosure sale of the Loreto Property in violation of the preliminary injunction, that the settlement of the AMSS complaint was for a sum in excess of what cross-defendant claims is secured by the Dove Deeds of Trust, and that because the Loreto Property Deed of Trust is in third position and those liens exceed the market value of the Loreto Property, WVBAGD would not receive any money through foreclosure. It is also alleged that the Dove Note contains an unenforceable penalty provision for default interest at the rate of 29%, and that enforcement of the Dove Loreto Trust Deed and Dove Note are barred by the statute of limitations.

ANALYSIS:

Procedural

The opposition argues that the motion should be denied because it seeks further responses to three sets of discovery in one motion. The motion is irregular, and should have been brought as three separate motions, with three separate reservations for motions of this nature, primarily to avoid calendar congestion. The reply indicates that three filing fees were paid, in an abundance of caution, but the real issue is that three reservations should have been made.

However, as pointed out in the reply, the opposition does not cite any legal authority affirmatively stating that such motions must be brought separately, relying on Sacramento Superior Court Guidelines, which would not apply to this court, and CRC Rule 3.1345, pertaining to separate statements, which states, in pertinent part:

“(a) Separate statement required

Except as provided in (b), any motion involving the content of a discovery request or the responses to such a request must be accompanied by a separate statement. The motions that require a separate statement include a motion:

(1) To compel further responses to requests for admission;

(2) To compel further responses to interrogatories;

(3) To compel further responses to a demand for inspection of documents or tangible things…”

There is nothing cited which would place the moving party on notice that separate motions were required to be filed. The court requires plaintiff in the future to file separate motions for each set of discovery, and to reserve the appropriate hearings, but will not disregard the motion on this ground at this time, but may do so in the future if separate motions are not filed.

The opposition also argues that plaintiff did not sufficiently meet and confer. However, the moving papers include a detailed meet and confer letter, to which the responding parties did not bother to respond. [Ex. 13]. The motion is denied for failure of plaintiff to have appropriately met and conferred.

Substantive

Under CCP § 2017.010, “any party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action…if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.” The section specifically provides that “Discovery may relate to the claim or defense of the party seeking discovery or of any other party to the action,” and that discovery may be obtained “of the identity and location of persons having knowledge of any discoverable matter, as well as of the existence, description, nature, custody, condition and location of any document, electronically stored information, tangible thing, or land or other property.”

CCP § 2030.300(a) provides that if the party propounding interrogatories deems that an objection “is without merit or too general” or that “an answer to a particular interrogatory is evasive or incomplete”, “the propounding party may move for an order compelling a further response…”

If a timely motion to compel has been filed, the burden is on the responding party to justify any objection or failure to fully respond to discovery. Coy v. Superior Court (1962) 58 Cal.2d 210, 220-221. The granting or denial of a motion to compel is in the discretion of the trial court. Coy, at 221-222. A court should generally consider the following factors:

The relationship of the information sought to the issues framed in the pleadings;

The likelihood that disclosure will be of practical benefit to the party seeking discovery;

The burden or expense likely to be encountered by the responding party in furnishing the information sought.

Columbia Broadcast System, Inc. v. Superior Court (1968) 263 Cal.App.2d 12, 19.

Form Interrogatories Nos. 2.3, 2.4, 2.11, 2.12, 2.13, 4.1, 4.2, 7.1, 7.2, 7.3, 8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.7, 8.8, 9.1, 9.2, 13.1, 13.2, 14.1, 14.2

There are several form interrogatories which have been propounded, requesting information such as whether cross-complainants have a driver’s license, or other permit to operate a vehicle, a residence address, , whether the responding parties were acting as employees or agents for other persons, insurance, damages to a vehicle or other property, loss of income or earning capacity, employment, monthly income, and loss of income, surveillance, and violation of statute, ordinance or regulation, documents pertaining to each agreement alleged in the pleading.

The response to each interrogatory is, “Objections: the term “INCIDENT” does not apply to this lawsuit allegedly involving multiple parties over a period of months and years.”

The interrogatories are not all a perfect fit with this lawsuit, and the propounding party has chosen not to define the term “Incident.” However, it would appear that an attempt to provide information could be made here, as each interrogatory relates to the overall dispute here with respect to the repayment of the loan, such as providing information concerning damages being claimed, whether there is insurance available, and whether the parties were acting within an employment context. If there has been no surveillance or damage to property, the responses can simply say so.

Under CCP § 2030.220:

“(a) Each answer in a response to interrogatories shall be as complete and straightforward as the information reasonably available to the responding party permits.

(b) If an interrogatory cannot be answered completely, it shall be answered to the extent possible.”

The opposition does not explain why any particular interrogatory cannot be responded to due to the use of the term incident, or why any particular interrogatory would not apply in this matter. The responding party has accordingly failed to meet its burden to justify the objection and failure to fully respond, and the motion should be granted as to these interrogatories.

Form Interrogatory No. 2.5

This interrogatory requests a present residence address. An address is provided, but all subparts are not responded to. A further response responding to all subparts is ordered to be served.

Form Interrogatories Nos. 12.1-12.7

These interrogatories request information concerning witness statements, interviews, photographs, films, diagrams, and reports.

The same objection is made concerning the use of the term incident, and the responses are also “work product privilege.”

The opposition points out that the 12 series of form interrogatories has come under some criticism for calling for work product material. However, the opposition and separate statement fail to set forth any foundational facts showing that the privilege would apply to particular information sought here.

The opposition relies on Coito v. Superior Court (2012) 54 Cal.4th 480, in which the California Supreme Court addressed the issue of whether witness statements obtained by counsel constituted work product. The court conducted a review of the legislative and case history of the work product doctrine, and concluded:

“In sum, we disapprove Fellows v. Superior Court, supra, 108 Cal. App. 3d 55, People v. Williams, supra, 93 Cal. App. 3d 40, Rodriguez v. McDonnell Douglas Corp., supra, 87 Cal. App. 3d 626, and Kadelbach v. Amaral, supra, 31 Cal. App. 3d 814 to the extent they suggest that a witness statement taken by an attorney does not, as a matter of law, constitute work product. In addition, Greyhound, supra, 56 Cal.2d 355, which was decided before the Legislature codified the work product privilege, should not be read as supporting such a conclusion. At the same time, we reject the dicta in Nacht & Lewis, supra, 47 Cal.App.4th at page 217 that said “recorded statements taken by defendants’ counsel would be protected by the absolute work product privilege because they would reveal counsel’s ‘impressions, conclusions, opinions, or legal research or theories’ … .” Instead, we hold that a witness

statement obtained through an attorney-directed interview is entitled as a matter of law to at least qualified work product protection. A party seeking disclosure has the burden of establishing that denial of disclosure will unfairly prejudice the party in preparing its claim or defense or will result in an injustice. (§ 2018.030, subd. (b).) If the party resisting discovery alleges that a witness statement, or portion thereof, is absolutely protected because it “reflects an attorney’s impressions, conclusions, opinions, or legal [*500] research or theories” (§ 2018.030, subd. (a)), that party must make a preliminary or foundational showing in support of its claim. The trial court should then make an in camera inspection to determine whether absolute work product protection applies to some or all of the material.”

Coito, at 499-500.

The dispute here is not in a posture where the propounding party is yet seeking any actual witness statements, only information concerning their existence. The Court in Coito, in fact, noted that under the case law:

“only derivative or interpretive material—material created by or derived from an attorney’s work reflecting the attorney’s evaluation of the law or facts—constitutes work product. Examples of such material include “diagrams prepared for trial, audit reports, appraisals, and other expert opinions, developed as a result of the initiative of counsel in preparing for trial.” ( [*489] Mack, at p. 10.) Nonderivative material—material that is only evidentiary in nature—does not constitute work product. Examples of such material include the identity and location of physical evidence or witnesses. (Ibid.; City of Long Beach, at p. 73.)

Coito, at 489-490.

In McVeigh v. Recology San Francisco (2013) 213 Cal.App.4th 443, the court of appeal vacated a trial court order denying a motion to compel production of interview notes and the names of witnesses interviewed during an investigation of a report by an attorney and accountants assisting the attorney. The court of appeal discussed Nacht in light of the decision in Coito, and quoted the standard set forth in Coito with respect to Form Interrogatory No. 12.3:

“This holding in Nacht was significantly limited in Coito, where the court wrote: “Because it is not evident that form interrogatory No. 12.3 implicates the policies underlying the work product privilege in all or even most cases, we hold that information responsive to form interrogatory 12.3 is not automatically entitled as a matter of law to absolute or qualified work product privilege. Instead, the interrogatory usually must be answered. However, an objecting party may be entitled to protection if it can make a preliminary or foundational showing that answering the interrogatory would reveal the attorney’s tactics, impressions, or evaluation of the case, or would result in opposing counsel taking undue advantage of the attorney’s industry or efforts. Upon such a showing, the trial court should then determine, by making an in camera inspection if necessary, whether absolute or qualified work product protection applies to the material in dispute.” (Coito, supra, 54 Cal.4th at p. 502.)

McVeigh, at 474.

The court of appeal then concluded:

“Because the discovery issue here was not argued under the standards now established by Coito, reversal of the ruling on the witness list is required. If McVeigh chooses to renew his motion to compel production of the witness list, the motion can be resolved in accordance with Coito.

McVeigh, at 474.

This matter is not in a posture where the responding parties have justified this work product objection as to each of the subject interrogatories. Further responses are ordered to be served.

Form Interrogatories Nos. 50.1-50.6

These interrogatories call for information concerning each agreement alleged in the pleading. The response to each is “Discovery is continuing.” This response is nonsense, as the action clearly involves agreements, and plaintiff is entitled to the information which responding parties now have concerning this matter, which, as emphasized in the reply, involves events dating back to 2008, and this action was filed two years ago. Further responses which do not include this language are ordered to be served.

Special Interrogatories Nos. 1-35

These interrogatories ask for a statement of facts, witnesses or documents supporting allegations quoted from the First Amended Cross-Complaint.

The responses are, “Objection: not reasonably calculated to lead to the discovery of admissible evidence because the First Amended Complaint is no longer operative.

First, the interrogatories are not directed to the complaint, but the cross-complaint.

In addition, although there is now pending a verified Fourth Amended Cross-Complaint, it is not explained in the opposition how each of the quoted allegations have been somehow eliminated from the current pleading, so would no longer give rise to discoverable information. This is not an appropriate response, as the pleadings need not be settled for discovery to be undertaken. Under CCP § 2030.020 (a), “A defendant may propound interrogatories to a party to the action without leave of court at any time.” Plaintiff as cross-defendant here has done just that.

Moreover, as set forth above, the code expressly permits the propounding of contention interrogatories.

CCP § 2030 .010(a) specifically permits the propounding of contention interrogatories:

“An interrogatory may relate to whether another party is making a certain contention, or to the facts, witnesses, and writings on which a contention is based. An interrogatory is not objectionable because an answer to it involves an opinion or a contention that relates to fact or the application of law to facts or would be based on information obtained or legal theories developed in anticipation of litigation.”

There seems to be an argument that because plaintiff provided objections in response to this form interrogatory, it somehow has unclean hands, so cannot compel a further response by the responding parties to the same form interrogatory. This response is nonsense, and if the responding parties believed they were entitled to further responses to discovery from plaintiff, they should have made a motion to compel. Responding parties in opposition have failed to justify this objection, and further responses are ordered to be served.

Special Interrogatories Nos. 36-111

These contention interrogatories are also responded to with an objection that the First Amended Complaint is no longer operative, and with an objection, “improper interrogatory in excess of 35 without a sufficient declaration of necessity.”

Under CCP § 2030.030, a party may propound to another party “(1) Thirty-five specially prepared interrogatories that are relevant to the subject matter of the pending action.”

Under subdivision (b),

“Except as provided in Section 2030.070, no party shall, as a matter of right, propound to any other party more than 35 specially prepared interrogatories.”

CCP § 2030.040 permits the propounding of more than 35 special interrogatories with a supporting declaration:

“(a) Subject to the right of the responding party to seek a protective order under Section 2030.090, any party who attaches a supporting declaration as described in Section 2030.050 may propound a greater number of specially prepared interrogatories to another party if this greater number is warranted because of any of the following:

(1) The complexity or the quantity of the existing and potential issues in the particular case.

(2) The financial burden on a party entailed in conducting the discovery by oral deposition.

(3) The expedience of using this method of discovery to provide to the responding party the opportunity to conduct an inquiry, investigation, or search of files or records to supply the information sought.

(b) If the responding party seeks a protective order on the ground that the number of specially prepared interrogatories is unwarranted, the propounding party shall have the burden of justifying the number of these interrogatories.”

CCP section 2030.050 provides requirements for the declaration for additional discovery, requiring “a declaration containing substantially the following…” including a paragraph stating

“8. This number of questions is warranted under Section 2030.040 of the Code of Civil Procedure because __________ (Here state each factor described in Section 2030.040 that is relied on, as well as the reasons why any factor relied on is applicable to the instant lawsuit.)”

The declarations here comply with the statute and state the number of questions is warranted “because of the large number of allegations of the Defendant/Cross-Complainants’ Complaint and the complexity of the matters alleged.” [Exs. 3, 4].

The moving papers do not set forth any further facts in support of the declaration of necessity or to justify the number of interrogatories, as might be expected. However, the declaration appears facially compliant, and since the responding parties did not bother to seek a protective order, the burden is not on the propounding party to justify the number; the burden remains on responding parties to justify their objection and failure to completely respond. Moreover, even if the burden had shifted, it appears from a review of the file and the pleadings, including the blue lined version of the Fourth Amended Cross-Complaint, that the matter raises complexities, which, as conceded by responding parties in their opposition to the motion in connection with form interrogatories, are not neatly addressed by form interrogatory discovery. The motion is granted, and further responses are required to be served.

Document Requests

CCP § 2031.310 provides that a party demanding a document inspection may move for an order compelling further responses to the demand if the demanding party deems that:…

(3) An objection in the response is without merit or too general.”

Under CCP § 2031.310 (b)(1), “The motion shall set forth specific facts showing good cause justifying the discovery sought by the demand.”

The burden is on the moving party to show both relevance to the subject matter and specific facts justifying discovery. Glenfed Develop. Corp. v. Superior Court (1997, 2nd Dist.) 53 Cal.App.4th 1113, 1117. Once good cause is established by the moving party, the burden then shifts to the responding party to justify any objections made to document disclosure. See Hartbrodt v. Burke (1996, 2nd Dist.) 42 Cal.App.4th 168, 172-174.

The requests seek documents referring or relating to specific quoted contentions in the First Amended Cross-Complaint. These are clearly directly relevant to the matters which cross-complainants themselves have placed in issue in this matter.

The responses are “Objection: not reasonably calculated to lead to the discovery of admissible evidence because the First Amended Complaint is no longer operative.”

As discussed above, this is not a proper response. The opposition fails to justify this objection, and the motion is granted, and further responses are ordered to be served.

Sanctions

CCP § 2030.300 (d) provides that the court “shall impose a monetary sanction…against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel a further response to interrogatories, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” A similar provision applies to motions to compel further responses to document demands. CCP § 2031.310 (h).

Under CCP § 2023.010, misuse of the discovery process includes “(e) making, without substantial justification, an unmeritorious objection to discovery”; and “(f) making an evasive response to discovery.” Where there has been a misuse of the discovery process, under Section 2023.030(a), the court “may impose a monetary sanction ordering that one engaging in the misuse of the discovery process, or any attorney advising that conduct, or both pay the reasonable expenses, including attorney’s fees, incurred by anyone as a result of that conduct.”

The burden is on the party subject to sanctions to show substantial justification or injustice. Mattco Forge, Inc. v. Arthur Young & Co. (1990, 2nd Dist.) 223 Cal.App.3d 1429, 1436.

Here, the responses served included objections which responding parties have failed to justify and responding parties have made this motion necessary. Sanctions should be awarded. The sanctions sought in the moving papers are $3,460. These fees appear reasonable. The reply seeks an additional sum for the three filing fees, which the court will award.

RULING:

Motion of Plaintiff WVBAGD to Compel Further Responses and Production of Documents of Bradley Barnes and BABBB, LLC is GRANTED.

Cross-Complainants Bradley Barnes and BABBB, LLC are ordered to serve further verified responses to the

subject Form Interrogatories, Set One and Special Interrogatories, Set One, without objection. The further response to Form Interrogatory No. 2.5 must provide all information requested and respond to all subparts. All further responses are to fully comply with the requirements under the Discovery Act, including, under CCP § 2030.210 (a)(1) answers “containing the information sought to be discovered.” The responding parties must also comply fully with CCP § 2030.220:

“(a) Each answer in a response to interrogatories shall be as complete and straightforward as the information reasonably available to the responding party permits.

(b) If an interrogatory cannot be answered completely, it shall be answered to the extent possible.

(c) If the responding party does not have personal knowledge sufficient to respond fully to an interrogatory, that party shall so state, but shall make a reasonable and good faith effort to obtain the information by inquiry to other natural persons or organizations, except where the information is equally available to the propounding party.”

The court does not find acceptable a response to discovery which states that discovery is continuing. All further responses are to be without objection. The court has reviewed the objections and finds them to be without merit and that responding parties have failed in opposition to justify them, so objections are overruled.

Cross-Complainants Bradley Barnes and BABBB, LLC are further ordered to serve further responses to Requests for Production of Documents, Set One, without objection and to permit inspection and copying of all responsive documents within ten days. The further responses must fully comply with CCP §§ 2031.210, 2031.220 and 2031.230, including for each request either 1) a statement that responding parties will comply with the particular demand, including a statement that the production, inspection, and related activity demanded will be allowed either in whole or in part, and that all documents or things in the demanded category that are in the possession, custody, or control of plaintiff and to which no objection is being make will be included in the production, or 2) a statement of inability to comply, which statement shall specify whether any inability to comply is because the particular item or category has never existed, has been destroyed, has been lost, misplaced, or stolen, or has never been, or is no longer, in the possession, custody, or control of the responding party, and which sets forth the name and address of any natural person or organization known or believed by that party to have possession, custody, or control of that item or category of item. Further responses are to be without objection, as the court finds the objections asserted to be without merit.

Monetary sanctions in the amount of $3,460.00 [$3,460 requested] plus costs of $180.00 are awarded against cross-complainants Bradley Barnes and BABBB, LLC payable within 30 days. CCP sections 2030.300(c), 2031.310 (h), 2023.010 (e) and (f), and 2023.030(a).

Moving parties are cautioned in the future that separate motions should be filed as to each set of discovery, and separate hearing reservations must be scheduled to avoid improperly oversetting the court’s calendars with motions to compel further responses to discovery.