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Tentative Ruling
Judge Colleen Sterne
Department 5 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION

Community West Bank NA vs Gregory Friedman

Case No: 1379965
Hearing Date: Mon Jan 27, 2014 9:30

Nature of Proceedings: Motion to Compel Production of Documents

Case: Community West Bank, N.A., v. Gregory B. Friedman, Case No. 1379965 Hearing Date: January 27, 2014 Motion: Motion of Cross-Defendants Charles G. Logue and Candy S. Logue to Compel Production of Documents Tentative Ruling: As set forth herein, the motion of cross-defendants Charles G. Logue and Candy S. Logue to compel production of documents is granted in part and denied in part. On or before February 3, 2014, Friedman shall verify under penalty of perjury that the indexes to the 2012 Production and the 2013 Production, together with such additional information as is provided with the verification, as necessary, are complete and accurate. In all other respects, the motion of the Logues is denied. Discussion: This is an action for breach of contract arising out of a loan transaction. In the main action, on March 21, 2011, plaintiff and cross-defendant Community West Bank (CWB) filed its complaint against defendant and cross-complainant Gregory Friedman. On December 6, 2011, Friedman filed his original cross-complaint against Bank. There was at that time another action pending between the parties in Ventura County Superior Court entitled, Olive Investments LLC vs. Community West Bank, N.A., Ventura County Superior Court case number 56-2011-00405741-CU-OR-VTA (the Ventura Action). On October 18, 2012, the plaintiff in the Ventura Action, Olive Investments LLC (Olive), served on CWB, a defendant in the Ventura Action, its request for production of documents, set one, in the Ventura Action. (Singer decl., ¶ 2 & exhibit A.) Approximately one month later, Olive received over 1,600 documents from CWB. (Singer decl., ¶ 2.) On December 3, 2012, Friedman and Olive (which is now a cross-complainant in this action) filed their amended cross-complaint against CWB, cross-defendants Charles G. Logue and Candy S. Logue, trustees of the Logue 2000 Family Trust (collectively, the Logues), and T.D. Service Company. On March 8, 2013, CWB substituted its counsel in this action. On April 1, 2013, Friedman and Olive entered into a stipulation with CWB in which these parties agreed among themselves that certain written discovery conducted in the Ventura Action would apply in this action as if propounded and responded to in this action. (Singer decl., ¶ 2 & exhibit B.)) Among the discovery included in this stipulation is the document production request, set one. (Singer decl., exhibit B.) On April 3, 2013, the Logues appeared in this action. On September 10, 2013, counsel for the Logues took Friedman’s deposition. (Singer decl., ¶ 3.) During this deposition, counsel for the Logues confronted Friedman with documents from CWB that were responsive to the document production request of Olive, but which had not previously been produced to Friedman and Olive. (Ibid.) On October 7, 2013, the Logues served their own requests for production of documents on Friedman. (Campbell decl., ¶ 3.) Demand nos. 1 and 2, which are at issue here, requested all document provided to Friedman by CWB. (Id. & exhibit A.) On November 5, 2013, Friedman propounded a second set of requests for production of documents on CWB requesting all documents that had been provided to the Logues but that had not previously been provided to Friedman. (Singer decl., ¶ 4 & exhibit C.) (Note: Because this is the first request propounded in this action, it is also denominated as “set one.”) On November 10, 2013, Friedman responded to the request for production of documents from the Logues objecting to production on the grounds of the work product privilege. (Campbell decl., exhibit B.) Anne Singer, counsel for Friedman, explains that she spent numerous hours analyzing these records, marking them with her notes, and reorganizing them to be best suited to asserting her clients’ claims and defenses in this action. (Singer decl., ¶ 2.) On December 10, 2013, CWB responded to Friedman’s second set of requests for production of documents with 1,500 documents. (Singer decl., ¶ 5.) In CWB’s written response, CWB states that the documents produced by CWB in response to the October 18, 2012, request for production of documents was made by CWB’s prior counsel and was made without bates stamping the documents or maintaining a record of the identity of the documents produced. (Singer decl., exhibit C.) CWB therefore objects that it cannot determine with certainty which documents were previously produced by CWB to Friedman. (Ibid.) The written response nonetheless states that CWB would produce all documents provided to the Logues since March 7, 2013, when present counsel began its representation of CWB in this action. (Ibid.) Prior to the filing of this motion, counsel met and conferred. The Logues presented their contention that the request was designed to ensure that the Logues had available to them the same documents that CWB had produced to Friedman and Olive. (Campbell decl., exhibit C.) Scott Campbell, counsel for the Logues, offered to have a copy service go to Singer’s office to pick up the documents, scan them, and return them. (Ibid.) Singer responded by rejecting the offer, noting that the documents have been marked and reorganized and that if Singer discovered anything different in the documents produced in response to Friedman’s second document production request, she would let Campbell know. (Campbell decl., exhibit D.) Singer undertook to determine the differences between the documents originally produced by CWB and the documents produced by CWB in response to the later production request. (Singer decl., ¶ 7.) On January 9, 2014, Singer sent a letter to counsel for CWB, copied to Campbell, which attach alphabetical lists of documents from the two productions highlighted to show documents duplicated in the two productions. (Singer decl., ¶ 7 & exhibit H.) (Note: The highlighting is mentioned in the letter, but is not visible in the court’s copy attached to this motion.) The letter concludes by requesting that CWB provide the documents identified as produced in the first production but not in the second production to the Logues. (Singer decl., exhibit H.) The Logues filed this motion to compel on December 24, 2013, and requests monetary sanctions in the amount of $3,060.00. Friedman opposes the motion. Both parties’ positions are essentially unchanged from their meet and confer discussions. Analysis: All parties agree that the Logues are entitled to obtain a copy of all documents produced by CWB to Friedman and Olive. The problem arises here because the Logues demand those documents from Friedman, as the recipient of the documents, rather than from CWB, as the source of the documents. The Logues argue that Friedman is the only available source of these documents because CWB’s prior counsel did not record the identity of the documents originally produced. On the other hand, Friedman argues that the copy received by Friedman is no longer available because Friedman has reorganized and marked up those documents so that the existing copy is attorney work product protected. In an attempt to resolve that problem, Friedman compiled an index of the documents (with a substantial expenditure of time) so that the missing documents could be obtained directly from CWB. The Logues rejected this attempt because the Logues will not rely upon Friedman’s editorial determination as to what was or was not included between these two productions. (1) Terminology To facilitate this discussion, the court will refer to the following: “2012 Document Request” will refer to the original request for production of documents, set one, dated October 18, 2012, from Olive to CWB in the Ventura Action. “2012 Production” will refer to the documents produced by CWB to Olive in response to the 2012 Document Request. “2013 Document Request” will refer to the request for production of documents, set one, dated November 5, 2013, by Friedman to CWB. “2013 Production” will refer to the documents produced by CWB to Friedman in response to the 2013 Document Request. “Logues Document Request” will refer to the request for production of documents, dated October 7, 2013, from the Logues to Friedman that is at issue in this motion. (2) Attorney Work Product Privilege “A writing that reflects an attorney’s impressions, conclusions, opinions, or legal research or theories is not discoverable under any circumstances.” (Code Civ. Proc., § 2018.030, subd. (a).) “The work product of an attorney, other than a writing described in subdivision (a), is not discoverable unless the court determines that denial of discovery will unfairly prejudice the party seeking discovery in preparing that party's claim or defense or will result in an injustice.” (Code Civ. Proc., § 2018.030, subd. (b).) “The language of section 2018.030 does not otherwise define or describe ‘work product.’ Courts have resolved whether particular materials constitute work product on a case-by- case basis [citation], although they have sometimes taken different approaches. Some courts have attempted to answer the question by distinguishing between ‘derivative’ or ‘nonderivative’ material, or between ‘interpretative’ and ‘evidentiary’ material. [Citations.] These cases have concluded that 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.’ [Citation.] 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. [Citations.] [¶] Other courts, instead of distinguishing between derivative and nonderivative material, have determined the scope of protected work product by relying primarily upon the policies underlying the work product statute and its legislative history.” (Coito v. Superior Court (2012) 54 Cal.4th 480, 488-489.) Here, a distinction needs to be made between the 2012 Production, i.e., the documents themselves, and the organization of and annotations on the 2012 Production subsequently made by Friedman’s counsel. The documents themselves that constitute the 2012 Production are evidentiary in nature. The 2012 Production, as and when they were produced, did not include any attorney input from Friedman’s counsel. Thus, the 2012 Production did not, and does not, contain any attorney work product. After the 2012 Production was delivered to Friedman’s counsel, counsel made two changes to the 2012 Production that implicate attorney work product. First, Singer annotated documents “marking them up with my notes (which reflected my impressions, opinions, legal theories, and litigation strategy).” (Singer decl. ¶ 2.) These annotations, considered separately from the documents on which they are written, constitute work product subject to the absolute privilege of section 2018.030, subdivision (a). (See Coito v. Superior Court, supra, 54 Cal.4th at p. 496.) Second, Singer reorganized the 2012 Production into an order making the documents best suited to be useful in addressing her clients’ interests in this litigation. (Singer decl., ¶ 2.) At the time of the 2012 Production, CWB was obligated to produce the documents in compliance with the Code of Civil Procedure: “Any documents produced in response to a demand for inspection, copying, testing, or sampling shall either be produced as they are kept in the usual course of business, or be organized and labeled to correspond with the categories in the demand.” (Code Civ. Proc., § 2031.280, subd. (a).) In her declaration, Singer does not assert that the organization, unlike the annotations, separately reflects attorney opinions. (See Singer decl., ¶ 2.) However, the organization constitutes work product subject to the qualified privilege of section 2018.030, subdivision (b), because of the significant attorney effort used to create this organization. (See Coito v. Superior Court, supra, 54 Cal.4th at p. 501.) “It is the policy of the state to do both of the following: “(a) Preserve the rights of attorneys to prepare cases for trial with that degree of privacy necessary to encourage them to prepare their cases thoroughly and to investigate not only the favorable but the unfavorable aspects of those cases. “(b) Prevent attorneys from taking undue advantage of their adversary’s industry and efforts.” (Code Civ. Proc., § 2018.020.) The problem here is that it is not immediately possible for Friedman to produce the 2012 Production without also producing the attorney work product contained in the annotations and in the organization of the documents. This problem exists only because neither CWB nor Friedman retained a copy of the 2012 Production in the form in which it was originally produced. In the case of Friedman, this is puzzling because use of documents in deposition or in trial would presumably require a clean, unannotated copy of each such document and none apparently now exist in Friedman’s possession. Nonetheless, it is not Friedman’s responsibility to maintain a separate, clean copy of documents obtained from another party to this action for the benefit and use of his adversaries. The work product that exists in the annotations may, at least potentially, be sufficiently removed by redaction. (See Coito v. Superior Court, supra, 54 Cal.4th at p. 496.) The work product that exists in the organization cannot be so easily removed because the documents cannot be put back in the order in which they were produced. In either case, substantial additional effort would be required by Friedman to conceal or to remove the work product in order to produce a copy of the 2012 Production to the Logues without revealing attorney work product. (3) Requests and Completeness The two document production requests at issue are: “Any and all DOCUMENTS provided to YOU in THIS ACTION by COMMUNITY WEST BANK.” (Logues Document Request, request no. 1.) “Any and all DOCUMENTS produced to YOU in THIS ACTION by COMMUNITY WEST BANK.” (Logues Document Request, request no. 2.) The written responses to these document production requests were objections on the grounds of attorney work product privilege. “On receipt of a response to a demand for inspection, copying, testing, or sampling, the demanding party may move for an order compelling further response to the demand if the demanding party deems that any of the following apply: “(1) A statement of compliance with the demand is incomplete. “(2) A representation of inability to comply is inadequate, incomplete, or evasive. “(3) An objection in the response is without merit or too general.” (Code Civ. Proc., § 2031.310, subd. (a).) “A motion under subdivision (a) shall comply with both of the following: “(1) The motion shall set forth specific facts showing good cause justifying the discovery sought by the demand. “(2) The motion shall be accompanied by a meet and confer declaration under Section 2016.040.” (Code Civ. Proc., § 2031.310, subd. (b).) A motion to compel a further response to a request for production of documents requires a showing of specific facts demonstrating good cause. (Greyhound Corp. v. Superior Court (1961) 56 Cal.2d 355, 388.) A motion to compel production of documents subject to the qualified work product privilege requires a showing of unfair prejudice or an injustice. (Code Civ. Proc., § 2018.030, subd. (b).) Material subject to the absolute work product privilege are not discoverable. (Id., subd. (a).) The focus of both of these requests is in obtaining documents originating with CWB and transferred to Friedman either informally (request no. 1) or formally (request no. 2). The Logues point out that because CWB did not retain any information as to what specific documents it provided or produced to Friedman as the 2012 Production, CWB cannot now respond to these requests with any certainty that the response would be complete. Thus, the Logues argue that Friedman should be compelled to provide those documents to the Logues. The categories of documents requested in the Logues Document Request are not directed to any specific issue in this litigation. The categories are solely directed to the documents provided by CWB to Friedman. These documents are relevant to this litigation only to the extent that Friedman requested documents relevant to this litigation. The good cause for production argued by the Logues is for production of clean copies of the 2012 Production so that the Logues can confirm that all parties were working with the same documents. The Logues make no showing—good cause or otherwise—that any of the work product privileged information, i.e., the annotations or the organization made by Friedman’s counsel, is discoverable. As noted above, Friedman does not now possess documents responsive to the Logues Document Request which are not subject, in whole or in part, to an absolute or a qualified work product privilege. However, the 2012 Production is obtainable as clean copies from the originals in the possession CWB. To obtain copies from Friedman requires that Friedman redact the annotations and conceal in some way the new organization of the documents. The difference between the Logues’ obtaining the 2012 Production from CWB or from Friedman is the party on whom the cost is imposed and the potential for error in the completeness of the production. If the Logues had served CWB with a document production request that was identical to the 2012 Document Request, and CWB made no errors in identifying documents responsive to that request in creating the 2012 Production, the Logues would obtain all of the documents in the 2012 Production regardless of whether CWB retained any record of what documents comprised the 2012 Production. This is so because the 2012 Production was a response to the 2012 Document Request and the same documents would be responsive to the same request whether that request was given in 2012 or in 2013. The cost of that hypothetical production would be borne by CWB and would include the cost of having to repeat the same exercise in identifying the responsive documents. CWB, however, has shown that it was not error-free in identifying documents responsive to the 2012 Document Request. This is apparent by the additional responsive documents that were informally provided to the Logues (but not to Friedman) and by the documents in the 2013 Production that have been identified as not being in the 2012 Production. On the other hand, Friedman has all of the documents that were in the 2012 Production and can provide those documents. Such a production would be at substantial cost to Friedman because Friedman would have to redact and to conceal the work product that Friedman incorporated in his version of the 2012 Production. This cost would be the direct result of CWB’s failure (1) to maintain any identifying information as to the documents included in the 2012 Production and (2) to produce a complete set of responsive documents in the 2012 Production. Singer has already created and provided an index to the 2012 Production and to the 2013 Production, with the differences highlighted. These essentially function as privilege logs for the attorney work product privilege asserted by Friedman. As such, these documents provide all of the information necessary for the Logues to obtain missing documents from their original source (CWB) and without improperly invading the attorney work product privilege. The Logues’ objection to using Singer’s indexes is that the Logues do not want to trust Singer’s index. This problem is frequently encountered in the context of privilege logs. Because of the privilege, the receiving party is forced to rely upon the descriptions of documents provided by the creator of the log. It is, however, the most practical solution to this problem. Given the work product privilege, the opportunity of the Logues to obtain all of the underlying documents as clean copies from a better source, without invading work product, and without requiring redaction, the court will deny the Logues’ motion to compel documents as failing to meet their burden to show good cause. Requiring a further production from Friedman would simply function to permit the Logues to “‘ride free’ on the opponent’s industry.” (See Greyhound Corp. v. Superior Court, supra, 56 Cal.2d at p. 401.) However, to ensure completeness, the court will require Friedman to certify that the indexes to the 2012 Production and the 2013 Production provided by Singer are complete and accurate on or before February 3, 2014. This disposition is without prejudice to a further motion, following a full and specific meet and confer process, to require a further specification of such documents or to require the production of one or more specific documents no longer available from CWB. The court finds that the circumstances make the imposition of sanctions unjust and will deny the Logues’ request for monetary sanctions.