Alan Cerf v. William Woodward, et al.
Case No: 17CV00808
Hearing Date: Mon Jul 29, 2019 9:30

Nature of Proceedings: Motion Quash Subpoenas for Business Records From Wells Fargo Bank NA and Alan L. Cerf Insurance Services, Inc.

Alan Cerf v. William Woodward, et al., #17CV00808, Judge Sterne

Hearing Date: July 29, 2019

Matter: Motion to Quash Deposition Subpoenas

Attorneys:

For Plaintiff: Steven K. McElroy (Carpenter, Zuckerman & Rowley – Ojai)

For Defendant: Craig A. Livingston (Walnut Creek)

Tentative Ruling: The court denies plaintiff Alan Cerf’s motion to quash deposition subpoenas.

Background: In this action, plaintiff Alan Cerf seeks damages for personal injuries sustained as the result of a golfing incident. Plaintiff alleges that, on December 4, 2016, plaintiff was at the Birnam Wood Golf Club in Santa Barbara and was bending down to place his golf ball on a tee in a marked stall on the driving range when he was hit on the left side of his head by a golf club that had been swung by defendant William Woodward, who was standing in an adjacent stall. Plaintiff alleges that defendant stepped into plaintiff’s space as he swung his golf club. Defendant denies this and alleges that he was standing in his own stall taking a normal swing when the incident occurred. Plaintiff seeks damages for hospital and medical expenses, lost earnings, and pain and suffering

On February 23, 2017, plaintiff filed his complaint for negligence against defendants Woodward and Birnam Wood Golf Club. On January 9, 2019, the court granted Birnam Wood Golf Club’s motion for summary judgment. MSC is scheduled for August 9 and trial for October 7, 2019.

Motion: On May 29, 2019, defendant Woodward issued deposition subpoenas for production of business records from Wells Fargo Bank, N.A., and Alan L. Cerf Insurance Services, Inc. Plaintiff moves to quash the subpoenas in their entirety.

1. The Subpoenas: Plaintiff sells insurance and annuity products through this incorporated business—Alan L. Cerf Insurance Services, Inc. (“ACIS”) The Wells Fargo subpoena seeks records reflecting banking activity in ACIS accounts, including all records, account statements, account summaries, notices, correspondence, checks written (front and back), cancelled checks (front and back), returned checks (front and back), deposits, withdrawals, cash advances, and loans, from January 1, 2012, to present.

The ACIS subpoena seeks for the same time period:

All documents showing gross earnings, net earnings, balance sheets.

All documents concerning expenses, documents showing an accounting of all expenses, underlying invoices, bills form [sic] service providers, rent payments, legal expenses, insurance payments, marketing services payments, credit card statements, accounting software printouts showing expenses, compilations of expenses, expense summaries and any and all other documentation concerning expenses of the business.

Monthly expense files, and summaries of those files, as testified to by Alan L. Cerf, deposition Vol. 1, 71:3-5.

All documents reflecting marketing services provided, including all invoices and evidence of payments, including but not limited to documents from the Sanderling Group, the Sunderland Group, and Vertical Vision, and any others.

All documents including but not limited to correspondences, payments of commissions, bills, invoices, to and from the Sanderling Group, the Sunderland Group, and Vertical Vision.

All documents concerning payment of any kind to Alan L. Cerf, including all payroll records, withholdings records, W-2 forms, bonuses awarded, and any other type of compensation to Alan L. Cerf.

W-2 form from 2015 and 2018.

All documents concerning banking, including documents concerning deposits, withdrawals, bank statements.

All state tax returns.

All federal tax return including but not limited to form 1120 and Schedule C forms.

All California employment tax returns, forms DE-9 and DE-C.

All loan applications.

All documents to or from the Department of Insurance.

All documents to or from your insurance carriers for liability of errors and omissions insurance.

All 1099-M forms received, especially those from 2018.

All 1099-M forms issued.

All business licenses, fictitious business name filings, insurance licenses.

All documents concerning any leases for any premises.

Plaintiff maintains that the subpoenas invade his right to financial privacy. Defendant maintains the documents are necessary for his forensic economist to evaluate plaintiff’s lost earnings claims.

2. Separate Statement: CRC 3.1345(a)(5) requires a separate statement to accompany a motion “to compel or to quash the production of documents or tangible things at a deposition.” CRC 3.1345(b) provides that no separate stamen is required “when no response has been provided to the request for discovery.” But when a party moves to quash a deposition subpoena, necessarily no documents have been produced. To apply CRC 3.1345(b) to negate all situations where one moves to quash a subpoena would completely abrogate CRC 3.1345(a)(5) as it applies to motions to quash. In the construction of a statute or instrument, the court must adopt a construction as will give effect to all provisions. CCP § 858. “An interpretation that renders statutory language a nullity is obviously to be avoided.” Williams v. Superior Court, 5 Cal.4th 337, 357 (1993).

A separate statement was required and plaintiff has failed to comply with the rule. For this reason alone, the court will deny the motion.

3. Meet and Confer: Defendant says plaintiff made no effort to meet and confer regarding the ACIS subpoena. The correspondence refers to subpoenas, using the plural, e.g., Exhibits C and D. Plaintiff simply said the request is overbroad and an invasion of privacy. He did not propose a resolution or support his claims with any analysis.

Defendant does not cite a statute requiring plaintiff to meet and confer prior to filing a motion to quash a subpoena duces tecum, nor is there such a statute. Defendant cites CCP § 1985.3(g), but that only requires a meet and confer declaration when a party requesting a consumer’s personal records brings a motion under CCP § 1987.1 to enforce the subpoena. There is no mention of a motion to quash in CCP § 1985.3(g).

4. Merits of Motion:

The right of privacy is “an ‘inalienable right’ expressly protected by force of constitutional mandate. (Cal. Const., art. I, § 1.)” Valley Bank of Nev. v. Superior Court, 15 Cal.3d 652, 656 (1975). “[T]he right of privacy extends to one’s confidential financial affairs as well as to the details of one’s personal life.” Id. In resolving conflicts between the right to discovery and a privileged right, the court must carefully balance the right of privacy with the need for discovery. Id. at 657.

A corporation “does not have standing to assert a right to privacy under article I, section 1 of the California Constitution and does not have a right to privacy in a fundamental sense….” Roberts v. Gulf Oil Corp., 147 Cal.App.3d 770, 795 (1983). “Although corporations have a lesser right to privacy than human beings and are not entitled to claim a right to privacy in terms of a fundamental right, some right to privacy exists.” Id. at 796.

Defendant recounts efforts to obtain financial information regarding plaintiff’s income from ACIS. Plaintiff has produced some documents, including some 1099 forms and W-2 forms. He produced Schedule C from his 2012 and 2013 tax returns showing expenses amounting to 100% of the company’s gross income. At his deposition, plaintiff testified he did not know what his business expenses were. He said that he keeps bills and monthly expense files. However, he has not produced these documents.

Plaintiff has put his lost earnings directly at issue before the court. It is clear from the declaration of defendant’s forensic economist that the requested documents to necessary to an accurate assessment of plaintiff’s pre-accident and post-accident earnings, “which are the two main building blocks supporting possible lost earnings.” [Jennifer L. Polhemus Dec. ¶5] “Further, the documents contain information that will help me to unpack and identify which business activities were affected by the subject accident, as well as rule out possible other causes for changes in the plaintiff‘s business performance.” [Id.] W-2 forms alone are insufficient for the analysis, as a business owner has control over the forms and timing of compensation. [Id. at ¶7] Corporate tax returns that plaintiff produced are substantially incomplete. [Id. at ¶9] Bank records assist with documentation of business expenses. [Id. at ¶11] As for the time covered by the subpoenas, “five years before an accident is generally accepted by forensic economists as a period likely to reflect a reasonable track record for trend analysis but not so long as to be distorted by remote events.” [Id. at ¶12]

The court finds any privacy right in the corporation’s records is substantially outweighed by defendant’s need to analyze plaintiff lost earnings claim. The court denies plaintiff Alan Cerf’s motion to quash deposition subpoenas.