Case Number: VC064132 Hearing Date: February 17, 2015 Dept: SEC
CREDITORS ADJUSTMENT BUREAU, INC. v. BESTWAY INTERNATIONAL GROUP DBA BESTWAY POWDER
CASE NO.: VC064132
HEARING: 02/17/15

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TENTATIVE ORDER

I. Plaintiff CREDITORS ADJUSTMENT BUREAU, INC.’s motion to compel further responses to Plaintiff’s First Set of Special Interrogatories is GRANTED as to Request Nos. 7 and 9, and DENIED as to Request No. 8. C.C.P. § 2030.300.

II. Plaintiff CREDITORS ADJUSTMENT BUREAU, INC.’s motion to compel further responses to Plaintiff’s First Demand for Identification, Production, Inspection and Copying of Documents is GRANTED as to Request No. 2 and 8, and DENIED as to Request Nos. 7, 9, and 10. C.C.P. § 2031.310. The motion to compel Request No. 1 is MOOT.

III. The request for sanctions is DENIED. C.C.P. §§ 2030.300(d), 2031.310(h).

Defendant BESTWAY INTERNATIONAL GROUP DBA BESTWAY POWDER is the employer of Hyon Joo Pak, who is a judgment debtor in the underlying action (Creditors Adjustment Bureau, Inc. v. Hyon Joo Pak, et al., Case No. VC062106). In order to collect the judgment, Plaintiff CREDITORS ADJUSTMENT BUREAU, INC. obtained a writ of execution to garnish Pak’s wages from employer Defendant. In Kwon, who completed Defendant’s returns in connection with the wage levy, stated that Pak was not employed with Defendant. Plaintiff believes this response is false and that Pak does receive wages from Defendant and is an officer and/or employee of Defendant.

I. Motion to Compel Further Responses to First Set of Special Interrogatories

Procedural Requirements

This motion is timely pursuant to C.C.P. § 2030.300(c). Plaintiff served the First Set of Special Interrogatories (“Interrogatories”) on October 27, 2014. Defendant provided responses on December 1, 2014, which is 45 days from the January 15, 2015 filing of the motion to compel further responses.

Plaintiff’s counsel has satisfied the meet and confer requirement of C.C.P. § 2030.300(b). On December 15, 2014, Plaintiff’s counsel sent a letter to Defense Counsel demanding further response to resolve discovery issues before bringing this motion. Freed Decl., ¶5, Ex. 4. Defense Counsel responded by producing payroll tax returns, but failed to produce any other documents or further responses to the Interrogatories. Freed Decl., ¶ 6, Ex. 5. Due to the inadequacy of the responses, Plaintiff’s Counsel sent a final email to Defense Counsel on January 12, 2015, requesting additional documents and supplemental responses to the Interrogatories, which Defense Counsel did not respond to. Freed Decl., ¶ 7, Ex. 5.

A separate statement shall accompany any motion involving the content of a discovery request or the responses to such a request, including a motion to compel further responses to interrogatories. C.R.C., Rule 3.1345(a)(3). Here, Plaintiff has accompanied this motion with a separate statement.

Discussion

Plaintiff moves to compel further responses to Interrogatories Nos. 7-9.

Interrogatory No. 7 requests the name, address, and telephone number of each and every director and officer of Defendant from the date on incorporation through and including the present. Defendant objected to this request on the ground that it is overly broad, unduly invasive of privacy, privileged material and insufficiently defined.

Defendant fails to support how this information is unduly invasive of privacy or how this material privileged. The request is sufficiently defined as it only seeks the name, address, and telephone number of the directors and officers of Defendant. Although the request seeks information for the past 12 years (as the date of incorporation was February 13, 2003), this is not beyond the scope of the underlying action, as the Complaint alleges that Mr. Pak is believed to be an officer of Defendant. Thus, responses to Interrogatory No. 7 are relevant to the case and are discoverable. The motion to compel further responses as to Interrogatory No. 7 is granted.

Interrogatory No. 8 requests the name, address and telephone number of each and every shareholder of Defendant from the date of incorporation through and including the present. Defendant objected to this request on the same grounds as Interrogatory No. 7. Plaintiff does not state how 12 years of shareholder information is relevant to this action nor are any allegations stated against shareholders of Defendant. However, Defendant failed to object to this request on the ground of irrelevance. Nonetheless, the request is overly broad and invasive of privacy as it seeks 12 years of shareholder’s personal information who are not a part of this action. See Planned Parenthood Golden Gate v. Superior Court (2000) 83 Cal.App.4th 347, 360. As such, the motion to compel further responses as to Interrogatory No. 8 is denied.

Interrogatory No. 9 asks that Defendant identify all deposit, savings, checking, or other accounts at any bank, credit union, savings institution, thrift and loan, or other institution from which Defendant pays its employers, officers, utilities, and all other expenses by setting forth the name, address, and telephone number of the institution as well as the account numbers. Defendant objected to this request on the same grounds as Interrogatory No. 7, arguing that it does not provide for a time period, geographic scope, or any other limitations.

The discovery of confidential financial information may be subject to privacy protections, but this usually includes information given to a bank by a customer or with regard to financial information of local and state public officers. Fortunato v. Superior Court (2003) 114 Cal.App.4th 475, 480; Am. Academy of Pediatrics v. Lungren (1997) 16 Cal.4th 307, 343. The information requested by Plaintiff does not seek the confidential financial information of Defendant, but merely the name, address, and telephone number of places that Defendant holds accounts to pay its employers, officers, utilities and expenses. As such, this request is not overly broad, unduly invasive of privacy, privileged material and insufficiently defined. The motion to compel further responses as to Interrogatory No. 9 is granted.

II. Motion to Compel Further Responses to First Demand for Identification, Production, Inspection and Copying of Documents

Procedural Requirements

For the same reasons as above, this motion has been timely filed, moving party has satisfied the meet and confer requirement, and a separate statement accompanies this motion.

Discussion

Plaintiff moves to compel further responses to the First Demand for Identification, Production, Inspection and Copying of Documents (“Document Request”) Nos. 1, 2, and 7-10.

Document Request No. 1 seeks copies of all employer’s federal quarterly tax returns (941) and all employer’s state quarterly contribution returns (DE-3) for the period from January 1, 2014 to the present. Plaintiff acknowledges that the payroll tax returns were produced. As such, the motion to compel Document Request No.1 is moot.

Document Request No. 2 seeks copies of all writings pertaining to Defendant’s payroll during the period of January 1, 2014 through the present, including but not limited to Defendant’s general ledger and charts of accounts, payroll journals, cash disbursements journal, individual earnings records, 1099s, and time cards. Defendant objected to this request on the ground that it is overly broad, unduly invasive of privacy, privileged material and insufficiently defined. Furthermore, in the opposition, Defendant states that no such documents including general ledgers, charts of accounts, payroll journals, cash disbursement journals, individual earning records, and 1099s exist.

Document Request No. 2 is not overly broad as it only requests one year of payroll documents. Furthermore, corporations or business entities generally do not have a fundamental right of privacy, such as individuals. Roberts v. Gulf Oil Corp. (1983) 147 Cal.App.3d 770, 793. Defendant states that it has already produced the payroll tax returns, which contains all of the information sought in Request No. 2, which included the payroll taxes of the two owners of Defendant. This raises questions as to whether the payroll taxes of other employees and officers have been produced. The motion to compel further responses as to Document Request No. 2 is granted only to the extent that payroll tax documents exist for other employees and officers.

Document Request No. 7 requests copies of all checks written from any bank accounts of Defendant from January 1, 2014 to the present. As stated above, there is a reasonable right of privacy by a bank’s customer regarding the financial affairs or information. Alch v. Superior Court (2008) 165 Cal.App.4th 1412, 1424 (citing Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652 (recognizing that not all bank customer information is wholly privileged and insulated from civil litigants)). This request is overly broad as it seeks all checks written from any bank accounts of Defendants. This request is not limited to issues pertinent to this action. The motion to compel further responses as to Document Request No. 7 is denied.

Document Request No. 8 requests the production of any and all writings, which evidence or reflect any and all monies due to employees and officers of Defendant, including but not limited to, salaries, bonuses, pensions, and/or retirement plans, and draws since January 1, 2014. The cases cited by Defendant in opposition regarding the disclosure of financial affairs, privacy, and personnel records are not applicable here. See Planned Parenthood Golden Gate v. Superior Court (2000) 83 Cal.App.4th 347 (stating privacy standard; involving personal information about staff and volunteer’s home address and telephone numbers); Am. Academy of Pediatrics v. Lungren (1997) 16 Cal.4th 307, 326 (discussing another case’s holding that disclosure of private financial information of local and state public officers was unconstitutional); Alch v. Superior Court (2008) 165 Cal.App.4th 1412, 1432 (regarding work history information). The request does not involve public employees or seek private or employee-file information. Instead, this request only seeks the disclosure of writings regarding compensation for Defendant’s employees from the limited time of January 1, 2014 to the present. Thus, the motion to compel further responses as to Document Request No. 8 is granted.

Plaintiff fails to address Document Request No. 9 in the separate statement. The motion to compel further responses as to Document Request No. 9 is denied.

Document Request No. 10 requests the production of checkbook(s) from which Defendant paid all employees, officers and expenses since January 1, 2014 to the present. Defendant objected to this request on the ground that it is overly broad, unduly invasive of privacy, privileged material and insufficiently defined. This request is overbroad as it seeks Defendant’s entire checkbooks, which may include information outside the scope of Plaintiff’s request. Furthermore, this seeks checkbooks from which Defendant has paid “expenses,” which has not sufficiently been defined, limited, or necessarily relevant to this action. As such, the motion to compel further responses as to Document Request No. 10 is denied.

III. Sanctions

The court shall impose a monetary sanction against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel further responses to interrogatories or demands, 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. C.C.P. §§ 2030.300(d), 2031.310(h), 2023.030(a).

Plaintiff requests $2,060.00 in monetary sanctions based on the reasonable fees incurred to bring the motion to compel further responses to the Plaintiff’s Special Interrogatories (3 hours to prepare the motion, 2 hours to travel and appear at the hearing at an hourly billing rate of $400, and $60 filing fees). Plaintiff also requests $2,460.00 in monetary sanctions based on the reasonable fees incurred to bring the motion to compel further response to Plaintiff’s Request for Identification, Production, Inspection and Copying of Documents (4 hours to prepare the motion, 2 hours to travel and appear at the hearing at an hourly billing rate of $400, and $60 filing fees). As these motions were only partially meritorious, the Court denies the request for sanctions.

Evidentiary Objections

Defendant submits evidentiary objections to the declaration of Carol Rossi in connection with the motions to compel further responses to the special interrogatories and production of documents. The objection regarding Carol Rossi’s declaration as to page 12, lines 12-15 is sustained.

Defendant submits evidentiary objections to the Exhibit 1 in connection with the motion to compel further production of documents, which is a credit application completed by Hyon Joo Pak showing that Pak is manager of Defendant. The objection is sustained.