2012-00135467-CU-PO

Barbara Lovenstein vs. Eskaton Fountainwood Lodge

Nature of Proceeding: Motion for Protective Order

Filed By: Patterson, Jay C.

Defendants Eskaton Fountainwood Lodge and Eskaton Properties, Inc. (collectively “Eskaton”) motion for protective order is ruled upon as follows.

This matter was set on today’s calendar after the Court granted Eskaton’s ex parte application on December 28, 2018.

Eskaton seeks a protective order precluding Plaintiffs from taking the depositions of Todd Murch and Erin Scherer on the basis that they are high level apex employees. Eskaton makes the motion pursuant to Liberty Mutual Ins. Co. v. Superior Court (1992) 10 Cal. App.4th 1282, 1287 [““it amounts to an abuse of discretion to withhold a protective order when a plaintiff seeks to depose a corporate president, or corporate officer at the apex of the corporate hierarchy, absent a reasonable indication of the officer’s personal knowledge of the case and absent exhaustion of less intrusive means of discovery.”] See, also The RUTTER GROUP, Civil Proc Before Trial, Rev. #1 2011, sec. 8:684.6 pg. 8E-100.

“[W]hen a plaintiff seeks to depose a corporate president or other official at the highest level of corporate management, and that official moves for a protective order to prohibit the deposition, the trial court should first determine whether the plaintiff has shown good cause that the official has unique or superior personal knowledge of discoverable information. If not, as will presumably often be the case in the instance of a large national or international corporation, the trial court should issue the protective order and first require the plaintiff to obtain the necessary discovery through less intrusive means.” (Liberty Mutual Ins. Co., supra, at 1289.)

Eskaton submits the declarations of Todd Murch and Erin Scherer. Mr. Murch is the President and CEO of Eskaton. (Murch Decl. ¶ 1.) Ms. Scherer is the Executive Director of Capital Asset Management at Eskaton. (Scherer Decl. ¶ 1.) Ms. Scherer’s primary responsibility is to oversee Eskaton’s capital planning process and standardization program of Living Design including certification. (Id. ¶ 2.) Both declare that they have no direct knowledge regarding the care and treatment provided to Ms. Lovenstein, are not involved in the day to day operation of Fountainwood and are not involved in the recruitment, hiring, or disciplining of any caregiver or manager at Fountainwood. (Murch Decl. ¶¶ 2-4; Scherer Decl. ¶¶ 3-5.)

Plaintiffs indicate in their opposition that they only oppose the motion as to Mr. Murch and that they are withdrawing the deposition notice as to Ms. Scherer. (Oppo. p. 2, fn.1.) Accordingly, the motion is moot as to Ms. Scherer.

Here, the Court finds that Eskaton has failed to demonstrate that Mr. Murch falls within the apex employee exception set forth in Liberty Mutual. Liberty Mutual involved an attempt by a plaintiff to depose the President and CEO of an insurance company. While the case did not specify the exact number of employees of the insurance company the Court made its statements regarding requiring a plaintiff to show good cause in the context of “a large national or international corporation.” (Liberty Mutual, supra, 10 Cal.App.4th at 1289.) By contrast here, there is no showing as to the size of Eskaton. As seen in opposition, Eskaton is smaller local company with fewer than 3,000 employees. (McLaughlin Decl. ¶ 11, Exh. J at p. 37.) In addition, Mr. Murch’s declaration does not demonstrate that he is the type of apex employee contemplated by Liberty Mutual. Mr. Murch simply declares that he is the President and CEO of Eskaton and is not involved in the day-to-day operations at Fountainwood or the recruiting, hiring, or disciplining of caregivers at Fountainwood. (Murch Decl. ¶¶ 1-4.) He provides no other details regarding his duties and responsibilities, for example, the number of employees he supervises. Mr. Murch’s status as President and CEO does not suffice. Absent such evidence, there is no basis to conclude that a deposition of Mr. Murch would be “intrusive” and “unduly burdensome.”

In any event, and perhaps of more importance to the issue, Plaintiffs have shown that Mr. Murch has unique and superior knowledge. Again, as noted, the court is to first determine whether the plaintiff has shown good cause that the official has unique or superior personal knowledge of discoverable information. To that end, Mr. Murch is identified as Fountainwood’s authorized person to represent the facility and accept licensing reports from the Department of Social Services. (McClaughlin Decl. ¶ 2 & Exh. A p. 6; ¶ 3 & Exh. B p. 13.) Further, Eskaton Properties, Inc. is one of the licensees for the Fountainwood facility. (Id. ¶ 3 & Exh. B pp. 1-2.) As the licensee, Eskaton Properties, Inc. is responsible for compliance with licensing requirements and for the organization, management, operation and control of the licensed facility. (Title 22 CCR § 72501(a).) “The licensee shall employ an adequate number of qualified personnel to carry out all the functions of the facility and shall provide for initial orientation of all new employees, a continuing in-service training program and competent supervision.” (Id. at section (e).) Plaintiffs contend that as an employee of the licensee, Mr. Murch is responsible for compliance with all governing laws. Contrary to Eskaton’s argument that Plaintiffs cannot depose Mr. Murch because he was not involved in the day-to-day care provided to Ms. Lovenstein, Plaintiffs have alleged that managing agents (which would include Mr. Murch) created an environment by purposely utilizing insufficient staff, underpaid staff and insufficiently

supervised staff as a part of an overall plan to maximize profits at the expense of patient care. Mr. Murch also must sign off on all hirings and firings of administrators, including at Fountainwood. (McLaughlin Decl. ¶ 14.) Plaintiffs indicate that Mr. Murch’s job description states that he is “responsible for implementing the plans and managing the company according to the goals approved by the board.” (McLaughlin Decl. ¶ 10 & Exh. I.) The job description describes a major challenge of “maintaining the financial viability of the corporation by keeping abreast of developments in a very competitive industry and markets; managing service delivery mechanisms while ensuring quality services to residents in marginally profitable facilities.” (Id.) Mr. Murch therefore has unique and personal knowledge related to the issues raised in the complaint, has knowledge of what he did personally in his capacity of an individual responsible for ensuring that the licensee of Fountainwood (Eskaton Properties, Inc.) which was bound to ensure appropriate patient care, carried out the goals of the organization.

In short, Eskaton failed to demonstrate that Liberty Mutual applies to Mr. Murch. Yet even if it had, Plaintiffs’ showing demonstrates that he has unique or superior personal knowledge of discoverable information. The motion for protective order is denied as to Mr. Murch. Counsel shall meet and confer to find a mutually agreeable date for Mr. Murch’s deposition. Given the January 29, 2019 trial date, the deposition shall occur no later than January 25, 2019.

As set forth above, Plaintiffs have withdrawn the deposition notice for Ms. Scherer and the motion is moot as to her.

Plaintiffs’ request for sanction in opposition is denied, as Eskaton’s motion was substantially justified.

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

Item 2 2012-00135467-CU-PO

Barbara Lovenstein vs. Eskaton Fountainwood Lodge

Nature of Proceeding: Motion to Compel Production of Documents

Filed By: McLaughlin, Thomas G.

Plaintiffs Barbara Lovenstein, et al.’s motion to compel the deposition of Eskaton Fountainwood Lodge’s (“Fountainwood”) PMQ regarding personnel documents and request for production of documents at deposition is granted as set forth below.

This is an elder abuse action. Ms. Lovenstein is alleged to have suffered neglect while she was a resident at Fountainwood in February and March 2012 including being administered a drug against her doctor’s orders leading to a life-threatening decline in function and deterioration of her overall health. Due to its preferential status, this case is set for trial on January 29, 2019.

In this elder abuse action, Plaintiffs noticed the depositions of Fountainwood’s PMQs regarding personnel files of certain employees in addition to requesting records in the personnel files related to employee performance. Plaintiffs seek the employees’

personnel file which they defined as “the employee’s initial application, all performance evaluations, and all other material in the employee’s personnel file that relates in any way to employee performance this request specifically does not include personal identifying information such as date of birth, social security number, medical information, or other material that does not bear on employee performance…”

Plaintiffs served all of the individuals whose files were requested a “Notice to Consumer” form informing them that they had a right to object and that the failure to do so may result in disclosure, either by serving the notice on Fountainwood’s counsel, or at the employee’s last known address if the employee was identified as a former employee. The deposition was originally set for December 20, 2018. Defendant objected to the deposition notice on December 12, 2018 including asserting objections to the document requests on the basis that they violated third party privacy rights. On December 14, 2018, Plaintiffs’ counsel sought to meet and confer on the objections and obtain a mutually agreeable time for the depositions. The parties were unable to resolve the dispute.

In opposition Fountainwood argues that Plaintiffs’ motion is not based on any identified discovery statute. While true that the notice of motion did not identify a specific statute, it is clear that Plaintiffs are seeking an order pursuant to CCP § 2025.450 requiring Fountainwood to produce a PMQ for deposition and the requested documents. Fountainwood also argues that Plaintiffs failed to include a separate statement with the motion pursuant to CRC 3.1345. While there was no separate statement, the Court retains the discretion to entertain the motion and does so here given that the document requests in the PMQ deposition included a single request for production of personnel records of the 18 employees at issue.

Fountainwood next argues that the motion is premature to the extent it is premised on CCP § 2025.450 because it has not refused to produce a PMQ and only objected to the date unilaterally set by Plaintiffs and that it has yet to refuse to produce documents because the time for production is at the deposition which has yet to begin. The Court rejects these arguments. As seen from the meet and confer correspondence, Fountainwood specifically stated that it would not produce a PMQ for the noticed deposition or produce the documents requested in the PMQ deposition notice. (McLaughlin Decl. ¶¶ 8, 9 & Exhs. F, G.) Thus the motion is not premature because Fountainwood has made clear that it will not proceed with the deposition or produce the documents requested in the deposition notice and CCP § 2025.450 allows for a motion in that circumstance. (CCP § 2025.450(a).)

Fountainwood also argues that Plaintiffs failed to comply with CCP § 1985.6(b)(3) with respect to the personnel files of former employees requested in the PMQ deposition notice. To that end it asserts that Plaintiffs served the Notice to Consumer only one day before they served the PMQ deposition notice rather than the five days required by CCP § 1985.6(b)(3). However, CCP § 1985.6 applies to subpoenas for production of employment records and the documents here were requested in a deposition notice to a part and that section technically does not apply here. Nevertheless, Plaintiffs served the former employees with a Notice to Consumer and while it may not have been five days prior to service of the PMQ deposition notice, it was served in such a manner to provide the former employees an opportunity to object prior to the December 20, 2018 deposition date. No employee objected. The Court does not find this argument to be a basis to deny the motion.

The real dispute here is not whether Fountainwood should produce a PMQ for the deposition, indeed, as set forth above it indicates that it is not refusing to do so, but instead whether Fountainwood must produce the documents requested from the employees’ personnel files. Fountainwood contend that the documents are protected by the employees’ rights to privacy.

Generally, third-party personnel records and third-party medical information are protected by rights of privacy. (See Board of Trustees v. Superior Court (1981) 119 Cal.App.3d 516, 530; Board of Med. Quality Assurance v. Gherardini (1979) 93 Cal.App.3d 669, 679.) In ruling on discovery motions directed at such private documents or information, the Court must balance competing rights–Plaintiffs’ rights to discover relevant facts and the right of individual third parties to “maintain reasonable privacy.” (Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652, 657; see also Shaffer v. Superior Court (1995) 33 Cal.App.4th 993, 999.)

Plaintiffs argue that the requested documents are highly relevant to help Plaintiffs prove that a managing agent of Fountainwood or the Corporate Defendants had advance knowledge of the unfitness of an employee who engaged in conduct that constituted the neglect; that the managing agent approved of the neglect (e.g., if the files show none of the employees suffered disciplinary action); that Defendants systematically failed to supervise and oversee employees (e.g., if the files contain a lack of any negative performance evaluations, Plaintiffs contend this shows a lack of oversight); and to show an absence of bias of the employees (Plaintiffs believe that in the event an employee testifies adversely to Defendants at trial that defense counsel will imply that he or she is only doing so because of an adverse action taken against the employee).

As noted, “It is clear…personnel records and employment history are within the [privacy] protection provided by the state and federal Constitutions.” (San Diego Trolley, Inc. v. Superior Court (2001) 87 Cal.App.4th 1083, 1097.) “A showing of relevancy may be enough to cause the court to balance the compelling public need for discovery against the fundamental right of privacy. [citation] However, the balance will favor privacy for confidential information in third party personnel files unless the litigant can show a compelling need for the particular documents and that the information cannot reasonably be obtained through depositions or from nonconfidential sources.” ( Harding Lawson Associates v. Superior Court (1992) 10 Cal.App.4th 7, 10 [disapproved by Williams, supra, 3 Cal.5th 531 only to the extent that the case assumed without conducting the Hill analysis that a compelling need is automatically required when a party seeks discovery of private information].) “Even when the balance does weigh in favor of disclosure, the scope of disclosure must be narrowly circumscribed.” (Id.) The right to privacy provided for in Cal. Const., art. I, § 1 may be invoked by a litigant as justification for refusal to answer questions or respond to requests for information that unreasonably intrude on that right. A plaintiff asserting a privacy claim has the burden of establishing each element, specifically: 1. A legally protected privacy interest; 2. A reasonable expectation of privacy; and 3. A serious invasion of the privacy interest. (See, e.g. Hill v. National Collegiate Athletic Assn. (1994) 7 Cal. 4th 1) A showing of direct relevance is required.

The Court finds that Plaintiffs have shown a compelling need for the information requested from the personnel files regarding employee performance issues. The Court agrees that information contained in the personnel files related to performance issues of such employees would assist Plaintiffs in demonstrating that a managing

agent of Defendants had advance knowledge of the unfitness of an employee who engaged in the alleged neglect at issue. The Court agrees that documents could show, for example, lapses in performance related to patient care would be highly relevant to establishing that Fountainwood and/or the Corporate Defendants had advance knowledge of an employee’s unfitness and therefore employed unfit individuals with conscious disregard of the rights and safety of others. (Welf. & Inst. Code § 15657(c); Civ. Code § 3294(b).) Public policy concerns underlying the Elder Abuse Act also weigh in favor of disclosure given the purpose of the act is “to encourage enforcement of laws to protect a particularly vunerable sector of the population from abuse and custodial neglect.” (Sanders v. Lawson (2008) 164 Cal.App.4th 434, 439.)

The cases cited by Fountainwood in opposition are not persuasive as they discuss instances where discovery of an entire personnel file was not appropriate. (E.g., El Dorado Savings & Loan Assn. v. Superior Court (1987) 190 Cal.App.3d 342.) But here, Plaintiffs do not seek the entire personnel files of the identified individuals, only the documents that bear upon employee performance. Specifically, Plaintiffs are not seeking employee identifying and/or medical information that might be in the files. Other cases involved situations where a trial court permitted disclosure of employee information with no procedural protections to the third parties before their information was disclosed and failed to evaluate whether a compelling need for the information outweighed any privacy interest taking into consideration whether less intrusive means existed. (Life Technologies Corp. v. Superior Court (2011) 197 Cal.App.4th 640, 655.) Here, however, the Court has engaged in the balancing and as set forth above, the employees were all provided a Notice to Consumer and given an opportunity to object to disclosure and none did. Further, Plaintiffs are agreeable to a protective order to prevent dissemination of the information to persons outside of the litigation.

The Court also rejects Fountainwood’s argument that Plaintiffs failed to demonstrate the requisite compelling need. The second amended complaint alleges that Ms. Lovenstein suffered neglect at Fountainwood including being given the drug Ativan despite an order from her doctor to cease administration of the drug. Ms. Lovenstein was allegedly given the drug despite the order from her doctor multiple times a day which led her to suffer from dysphagia, aspiration pneumonia and other complications prior to her death. (SAC ¶¶ 18-22.) Counsel’s declaration attaches a summary he prepared setting forth how the employees were either assigned to Ms. Lovenstein during her residency and thus directly involved in her care and/or responsible for overseeing operations at the facility. (McLaughlin Decl. ¶ 5, Exh. C.) The Court rejects the argument that the declaration is insufficient to demonstrate that Plaintiffs’ counsel has personal knowledge of the employee’s roles or that it is impermissible hearsay. Plaintiffs’ counsel has been involved in this case and the Court has no problem concluding that he has personal knowledge of the roles the employees at issue played in this action.

The Court is aware of Fountainwood’s argument that Plaintiffs failed to show that they could not obtain the information through depositions of the employees or non-confidential sources. Fountainwood argues that Plaintiffs in fact deposed one of the employees and have noticed the depositions of the other 17. However, as shown in reply by Plaintiffs’ counsel, who has deposed hundreds of skilled nursing facility employees, the employees many times have incomplete and inaccurate information regarding the contents of the performance aspects of their personnel files. (Collins Reply Decl. ¶ 3.) Many times there are significant discrepancies between the

employee’s testimony regarding what they believe is in their file and what is actually in the file. In other cases involving these same Defendants, and even some of the employees whose records are at issue here, the employees did not recall specific personnel actions taken against them though the actions were reflected in the personnel records which had been voluntarily produced. (Id. ¶ 3.) The Court is satisfied by this showing that the information sought in the records cannot reasonably be obtained through non-confidential sources.

Fountainwood also argues that the Court must consider the ultimate inadmissibility of disciplinary measures in the files as subsequent remedial measures. As framed by Fountainwood in this argument, this is incorrect as admissibility is not the standard for discovery. “For discovery purposes, information is relevant if it might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement.” [citations omitted] Admissibility is not the test and information, unless privileged, is discoverable if it might reasonably lead to admissible evidence.” (Lipton v. Superior Court (1996) 48 Cal.App.4th 1599, 1611-1612 [emphasis in original].

Fountainwood also argues that the Court should consider whether the files contain quality assurance committee records which are not discoverable pursuant to Evidence Code § 1157. However, Fountain provided no support to show that such documents would be included within the requested personnel files. In any event, to the extent that any such documents existed, Fountainwood could indicate as much on a privilege log.

The Court finds that the compelling need for the information outweighs the employees’ interest in the privacy of the requested information in the personnel files. Indeed, the entire personnel files are not being sought, only the records bearing on performance and none of the employees objected to disclosure. The Court, however, on its own, will further limit that to records bearing on performance related to patient care. In addition, the requests specifically exclude identifying information such as date of birth, social security numbers, medical information, and other like material. Further, the Court will limit the time frame of the requests. Ms. Lovenstein was a resident at the facility from February 24, 2012 to March 22, 2012. The Court will limit the records to two years prior to her residency through two years after the residency (February 2010 to March 2014). In addition, the records shall be subject to a protective order which the parties shall meet and confer upon. Given these limitations the Court finds that the Plaintiffs have demonstrated a compelling need for the documents which outweighs any privacy rights and that the disclosure is narrowly tailored.

As a result, the motion is granted, subject to the limitations identified above. Fountainwood is ordered to produce a PMQ regarding the documents for deposition and produce the documents requested in the deposition notice. The parties shall meet and confer as to the time and place for the deposition/production. Given the upcoming January 29, 2019, trial, the deposition/production shall take place no later than January 22, 2019.

The Court need not address Plaintiff’s other three arguments regarding why a compelling interest exists for production.

Plaintiffs’ request for sanctions is denied. The Court finds that Fountainwood’s actions in objecting to disclosure on the basis of its employees’ privacy rights and opposing the instant motion were substantially justified.

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