Aztec Foreclosure Corporation vs. Keefe Roberts

Motion to Quash Subpoena

Cal. Super. - 4th Dist.September 27, 2016

© 0 9 a N n n B A W N = N N N N N N N N N N m m e m e m e m p m p m p m p m c o N I A N W n BR A W N = D O O 0 S N B R A W N = O RICHARD E. QUINTILONE II (SBN 200995) GEORGE A. ALOUPAS (SBN 313112) QUINTILONE & ASSOCIATES 22974 EL TORO ROAD SUITE 100 LAKE FOREST, CA 92630-4961 TELEPHONE NO. (949) 458-9675 FACSIMILE No. (949) 458-9679 EMAIL REQ@QUINTLAW.COM; GAA@QUINTLAW.COM Attorneys for Defendants KEEFE ROBERTS and KEEFE ROBERTS AND ASSOCIATES, PLC SUPERIOR COURT OF CALIFORNIA COUNTY OF ORANGE - CENTRAL JUSTICE CENTER AZTEC FORECLOSURE CORPORATION,a California corporation, Plaintiffs, VS. KEEFE ROBERTS, an individual; KEEFE ROBERTS AND ASSOCIATES, PLC, a California Professional Law Corporation; and DOES 1 through 20, inclusive, Defendants. KEEFE ROBERTS, an individual; KEEFE ROBERTS AND ASSOCIATES, PLC, a California Professional Law Corporation; and DOES1 through 20, inclusive, Cross-Complainants, VS. AZTEC FORECLOSURE CORPORATION, a California corporation, GERALD SHAPIRO, an individual and DAVID KREISMAN,an individual, SHAPIRO & KREISMAN, LLC, an unknown business entity, SHAPIRO, VAN ESS, SHERMAN & MARTH, LLP, an unknown business entity, and ROES 1 through 10, inclusive, Cross-Defendants. Case No.: 30-2016-00877605-CU-NP-CJC Assigned for All Purposes To: Hon. Craig Griffen Dept.: C-17 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO QUASH DEPOSITION SUBPOENAS; MEMORANDUM OF POINTS AND AUTHORITIES [Filed Concurrently with the Declarations of George A. Aloupas, Esq. and Keefe Roberts, Esq.; Separate Statement; and [Proposed] Order] Date: April 9, 2018 Time: 2:00 p.m. Dept.: C-17 Reservation ID#: 72758978 Complaint Filed: September 27, 2016 Cross-Complaint Filed: June 16, 2017 Trial Date: None Set DEFENDANTS’ NOTICE OF MOTION AND MOTION TO QUASH DEPOSITION SUBPOENAS © 0 9 a N n n B A W N = N N N N N N N N N N m m e m e m e m p m p m p m p m c o N I A N W n BR A W N = D O O 0 S N B R A W N = O TO ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE that on April 9, 2018 at 2:00 p.m., or as soon thereafter as the matter may be heard in Department C-17 of the above-entitled Court located at Orange County Superior Court, Central Justice Center, located at 700 Civic Center Drive West., Santa Ana, California 92701, Defendants KEEFE ROBERTS and KEEFE ROBERTS AND ASSOCIATES, PLC (“Defendants”) will, and hereby do, move the Court for an Order Quashing the Deposition Subpoenas for Production of Business Records served by Plaintiff AZTEC FORECLOSURE CORPORATION (“Aztec” or “Plaintiff”), on or around January 24, 2018 with production of those records due March 1, 2018. This Motion is made on the grounds that there is no good cause to seek the records that Plaintiff seeks in the subpoenas; that the records sought by Plaintiff violate Defendants’ right to privacy; and that the records that Plaintiff seeks are overbroad to the point where they impose a great burden on Defendants and are made for the purposes of harassing Defendants. The Motion will be based on this Notice of Motion, the Declarations of George A. Aloupas, Esq. and Keefe Roberts, Esq., the Separate Statement, the Memorandum of Points and Authorities served and filed herewith, on the papers and records on file herein, and on such oral and documentary evidence as may be presented on the hearing of the motion. Dated: February 21,2017 QUINTILONE & ASSOCIATES By: RICHARD E. QUINTILONE II, GEORGE A. ALOUPAS Attorneys for Defendants KEEFE ROBERTS and KEEFE ROBERTS AND ASSOCIATES, PLC -1- DEFENDANTS’ NOTICE OF MOTION AND MOTION TO QUASH DEPOSITION SUBPOENAS © 0 9 a N n n B A W N = N N N N N N N N N N m m e m e m e m p m p m p m p m c o N I A N W n BR A W N = D O O 0 S N B R A W N = O MEMORANDUM OF POINTS AND AUTHORITIES 1. INTRODUCTION There are a total of three (3) checks that are at issue in this litigation, a check for $4,990.34, a check for $9,416.03, and a check for $50,033.55, totaling $64,439.92. (Complaint 99 20, 38). Plaintiff appears to be of the belief that the three checks at issue give it the right to inspect and examine every one of Defendants’ financial records from the thirty-three (33) months referenced in the subpoenas, including private financial records that have absolutely nothing to do with this litigation and are in no way reasonably calculated to lead to the discovery of admissible evidence. Plaintiff feels as though it has the right to examine and inspect records such as individual Defendants’ loan and mortgage records, and records such as Defendant Keefe E. Robert’s investment and credit records. Since Defendants’ counsel’s meet and confer efforts with Plaintiff’s counsel have been ignored, Defendants are forced to file this present Motion. 2. STATEMENT OF FACTS AND PROCEDURAL HISTORY A. Factual Background On or about April 21, 2008, Alex and Stephanie Vander Weide obtained a loan in the amount of $117,232.00 which was secured by a deed of trust against real property. The borrowers defaulted, and the property was sold at a foreclosure sale on September 16, 2014 at a price of $130,000.00. On or about June 11, 2014, Asif Khan obtained a loan in the amount of $583,200.00 which was backed by a deed of trust against the real property, which was defaulted on, and a foreclosure sale was held on January 5, 2015 where the property sold for $732,000.00. There were surplus funds remaining after the sale in the amount of $9,416.03. On or about July 8, 2011, Douglas and Nicole Barrett obtained a loan in the amount of $201,576.00 secured by a deed of trust against the real property. The loan was defaulted on and a foreclosure sale was held on November 13, 2014 and the property was sold to third party for $226,200.00. On or about May 8, 2015, Plaintiff contacted its attorney, who at the time was Defendants, to file interpleader actions for the Vander Weide, Khan, and Barrett files, and -1- DEFENDANTS’ NOTICE OF MOTION AND MOTION TO QUASH DEPOSITION SUBPOENAS © 0 9 a N n n B A W N = N N N N N N N N N N m m e m e m e m p m p m p m p m c o N I A N W n BR A W N = D O O 0 S N B R A W N = O sent checks to Defendants representing the surplus funds to be deposited with the Court as for disbursementto the claimants. Also, it is undisputed that $10,000.00 of the monies has in fact been returned to Plaintiff on September 26, 2016, so the actual amount in controversy is $54,439.92 rather than $64,439.92. See the concurrently filed Declaration of Keefe E. Roberts, Esq. (hereinafter “Roberts Decl.” § 14). B. Procedural History On September 27, 2016, Plaintiff filed its Complaint alleging four (4) causes of action for: (1) Conversion, Civil Code § 3336, imposition of a constructive trust on proceeds of the embezzled funds, Civil Code § 2224; (2) Fraud and Deceit, Civil Code §§ 1709, 3333.; (3) Unfair competition under Business and Professions Code § 17200, et s&q.; and (4) Attorney’s Breach of Fiduciary Duty. See the concurrently filed Declaration of George A. Aloupas, Esq. in support of this Motion (hereinafter “Aloupas Decl.” q 3). In response to the Complaint, Defendants filed a Cross-Complaint on June 16, 2017 alleging five (5) causes of action for: (1) Breach of Contract; (2) Breach of the Covenant of Good Faith and Fair Dealing; (3) Declaratory Relief, (4) Intentional Interference with Prospective Business Relations; and (5) Defamation. Plaintiff Answered Defendants’ Cross- Complaint on July 24, 2017 and Defendants then Answered Plaintiff’s Complaint on August 10, 2017. (Aloupas Decl. §| 4). On January 24, 2018, Defendants were served with Subpoenas for production of business records regarding personal, private and confidential financial records that are kept at JP Morgan Chase Bank, N.A., with production of those records due on March 1, 2018. (Aloupas Decl. § 5). One of the subpoenas was for individual Defendant Keefe E. Roberts, Esq., and the other subpoena is for the records of Defendant Keefe Roberts and Associates, PLC. (Id.) The subpoenas at issue demand the following from J.P. Morgan chase, N.A.: For Keefe Roberts the individual: “Any and all documents, including without limitation, deposit slips, account statements, cancelled checks, loan documents, mortgage documents, investment 2- DEFENDANTS’ NOTICE OF MOTION AND MOTION TO QUASH DEPOSITION SUBPOENAS © 0 9 a N n n B A W N = N N N N N N N N N N m m e m e m e m p m p m p m p m c o N I A N W n BR A W N = D O O 0 S N B R A W N = O documents and correspondence relating to any bank account, including checking, savings, investment, revolving credit accounts, from May 1, 2015 through and including February 1, 2018 held by or for Keefe E. Roberts, account no. 996018081.” For Keefe Roberts and Associates, PLC: “Any and all documents, including without limitation, deposit slips, account statements, cancelled checks, loan documents, mortgage documents, investment documents and correspondence relating to any bank account, including checking, savings, investment, revolving credit accounts, from May 1, 2015 through and including February 1, 2018 held by or for Keefe Roberts and Associates, PLC.” (Aloupas Decl. § 5). On February 20, 2018, Defendants’ counsel sent correspondence via email to Plaintiff’s counsel in an attempt to meet and confer on the subpoenas with the goal of narrowing the scope of the subpoenas to bank accounts and financial transactions that deal with the 3 checks that are the subject ofthe litigation. Aloupas Decl. § 6, Exhibit “A”). On the morning of February 21, 2018, George A. Aloupas, Esq. called Plaintiffs counsel in another attempt to meet and confer regarding the narrowing of the scope of the subpoenas at issue. Mr. Aloupas left Plaintiff’s counsel a voicemail explaining the purpose of the call, and then followed up the voicemail with a follow-up email detailing Defendants’ counsel’s desire to meet and confer to narrow the scope of the information requested in the subpoenas at issue. (Aloupas Decl. § 7, Exhibit “B”). As of the date of filing of this Motion, Defendants’ counsel has not heard from Plaintiff’s counsel regarding meeting and conferring in order to narrow the scope of these subpoenas or otherwise resolving the impasse informally. (Aloupas Decl. § 8). 11 11 11 11 3 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO QUASH DEPOSITION SUBPOENAS © 0 9 a N n n B A W N = N N N N N N N N N N m m e m e m e m p m p m p m p m c o N I A N W n BR A W N = D O O 0 S N B R A W N = O 3. ARGUMENT A. The Information Demanded is Not Reasonably Calculated to Lead to the Discovery of Admissible Evidence Discovery such as subpoenas extends to any information that reasonably might lead to other evidence that would be admissible at trial. Thus, the scope of permissible discovery is one of reason, logic and common sense. Lipton v. Superior Court (Lawyers' Mut. Ins. Co.) (1996) 48 Cal.App.4th 1599, 1611. Admissibility at trial is not required. Rather, the test is whether the information sought might reasonably lead to other evidence that would be admissible. Code Civil Procedure § 2017.010; see Davies v. Superior Court (State of Calif.) (1984) 36 Cal.3d 291, 301; Volkswagen of America, Inc. v. Superior Court (Rusk) (2006) 139 Cal.App.4th 1481, 1490-1491. Although the phrases “relevance to the subject matter” and “reasonably calculated to lead to discovery of admissible evidence” standards are applied liberally, see Colonial Life & Acc. Ins. Co. v. Superior Court (Perry) (1982) 31 Cal.3d 785, 790, there are limits to discovery and courts tend to limit discovery when more burden is placed upon the adversary than the value of the information warrants. Calcor Space Facility, Inc. v. Sup.Ct. (Thiem Industries, Inc.) (1997) 53 Cal.App.4th 216, 225. Here, most of the information being requested in the subpoenas at issue is neither relevant to the subject matter nor reasonably calculated to lead to the discovery of admissible evidence. For example, the subpoena for Defendant Keefe Roberts and Associates, PLC demands “[a]ny and all documents” relating to “loan documents, mortgage documents, investment documents and correspondence relating to any bank account.” Loan, mortgage, and investment documents of Defendant Keefe Roberts and Associates, PLC have nothing to do with the 3 checks that are at issue in this litigation from May 8, 2015. Moreover, the subpoena for individual Defendant Keefe E. Roberts, Esq. also demands “[alny and all documents” relating to “loan documents, mortgage documents, investment documents and correspondence relating to any bank account.” These records have even less relevance to the litigation at hand, as Plaintiff pled that the monies at issue from the 3 checks 4- DEFENDANTS’ NOTICE OF MOTION AND MOTION TO QUASH DEPOSITION SUBPOENAS © 0 9 a N n n B A W N = N N N N N N N N N N m m e m e m e m p m p m p m p m c o N I A N W n BR A W N = D O O 0 S N B R A W N = O were deposited into Defendant Keefe Roberts and Associates, PLC Client Trust Account on May 13, 2015. (Complaint qq 22, 40). Since the monies were deposited into the Client Trust Account of Defendant Keefe Roberts and Associates, PLC, there is no relevance in discovering the mortgage records, loan records, and personal investment records of individual Defendant Keefe E. Roberts, Esq. Finally, most of the time period that encompasses the subpoenas, “from May 1, 2015 through and including February 1, 2018” is also not relevant to the subject matter nor reasonably calculated to lead to the discovery of admissible evidence. Looking at Plaintiff's own assertions in the Complaint, the monies were first entrusted to Defendants on May 8, 2015 and the monies were deposited into the Client Trust Account on May 13, 2015. (Complaint qq 20, 22, 38, and 40). Plaintiff then asserts that on March 23, 2016 and March 24, 2016 that Plaintiff sent a messenger to pick up the files and monies and that individual Defendant Keefe Roberts, Esq. stated that “there was nothing to give.” (Complaint q9 26, 27, 44, and 45). Based on what Plaintiff has pled, the relevant time period for the information requested in the subpoenas should be from May 8, 2015 through 2016. As such, financial information that is being demanded by Plaintiff in the subpoenas which goes into 2017 and through February 1, 2018 is not relevant to this litigation and is not reasonably calculated to lead to admissible evidence. As such, Defendants’ Motion to Quash Plaintiff’s deposition subpoenas should be granted. B. The Information Demanded in the Subpoenas Violates Defendants’ Right to Privacy Article 1, section 1 of the California Constitution provides: “All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.” Hill v. National Collegiate Athletics Assn. (1994) 7 Cal.4th 1, 15. The phrase “and privacy” was added to California Constitution, article I, section 1 by an initiative adopted by the voters on November 7, 1972. 1d. 5 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO QUASH DEPOSITION SUBPOENAS © 0 9 a N n n B A W N = N N N N N N N N N N m m e m e m e m p m p m p m p m c o N I A N W n BR A W N = D O O 0 S N B R A W N = O Regarding personal financial information, which is the information that is presently being demanded by the subpoenas at issue, a bank customer reasonably expects the bank to maintain the confidentiality of private financial matters. Burrows v. Superior Court (1974) 13 Cal.3d 238, 243. While there is no “bank-customer privilege akin to the lawyer-client privilege” or other statutory privileges, confidential financial information given to a bank by its customers is protected by the right to privacy that became a part of the California Constitution after the judicial formulation of the tax-return privilege. Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652, 656; Cal. Const., art. I, § 1.) Thus, there is a right to privacy in confidential customer information whatever form it takes, whether that form be tax returns, checks, statements, or other account information. (See ibid.; Schnabel v. Superior Court (1993) 5 Cal.4th at 712-713. Even if confidential customer information is not “wholly privileged [or] insulated from scrutiny by civil litigants,” a court faced with a motion for protective order should carefully balance “the right ofcivil litigants to discover relevant facts, on the one hand, with the right of bank customers to maintain reasonable privacy regarding their financial affairs, on the other.” Fortunado v. Superior Court (2003) 114 Cal.App.4th 475, 481; Valley Bank of Nevada v. ceSuperior Court (1975) 15 Cal.3d at 657. Considerations should include “‘the purpose of the information sought, the effect that disclosure will have on the parties and on the trial, the nature of the objections urged by the party resisting disclosure, and ability of the court to make an alternative order which may grant partial disclosure, disclosure in another form, or disclosure only in the event that the party seeking the information undertakes certain specified burdens which appear just under the circumstances.’ Id. at 658. Here, the subpoenas at issue demand account statements and other confidential, private financial information relating to Defendants. Not only that, the phrase “any bank account” also encompasses the client trust account of Defendant Keefe Roberts and Associates, PLC. As the courts have held that such information is not only protected under the right to privacy but is also protected based on a lawyer’s duty of confidentiality that he or she owes to every client. See Rules of Professional Conduct 3-100(A). As such, all records of Keefe Roberts and Associates, -6- DEFENDANTS’ NOTICE OF MOTION AND MOTION TO QUASH DEPOSITION SUBPOENAS © 0 9 a N n n B A W N = N N N N N N N N N N m m e m e m e m p m p m p m p m c o N I A N W n BR A W N = D O O 0 S N B R A W N = O PLC Client Trust Account that have nothing to do with the 3 checks that were allegedly deposited into that Client Trust Account on May 13, 2015 are irrelevant, overbroad, and clearly violate not only Defendants’ right of privacy, but the privacy rights of all of Keefe Roberts and Associates, PLC clients. Therefore, The Court should grant this Motion and limit the subpoena to records in the Client Trust Account that relate only to the 3 checks at issue. C. The Information Requested in the Subpoenas are Overbroad, Burdensome, and Harassing When discovery requests such as subpoenas are grossly overbroad on their face, and hence do not appear reasonably related to a legitimate discovery need, a reasonable inference can be drawn of an intent to harass and improperly burden. Obregon v. Superior Court (1998) 67 Cal.App.4th 424, 431. Here, there are only 3 checks that are at issue in this case. Information that requests “any and all documents” and “correspondence relating to any bank account” is clearly overbroad in scope and because of the vast overbreadth of the information demanded, this Motion should be granted by the Court. As was stated multiple times in Defendants’ counsel’s attempts to meet and confer with Plaintiff’s counsel, Defendants’ counsel has no qualms about having Defendants’ financial records produced that relate to the 3 checks that are at issue in the litigation, and the bank accounts that relate to those checks. However, demands for records such as “mortgage documents” and “investment documents of individual Defendant Keefe E. Roberts, Esq., have nothing to do with the litigation at hand, are clearly overboard, and are being sought for the purposes of harassing Defendants. 11 11 11 11 11 11 11 7- DEFENDANTS’ NOTICE OF MOTION AND MOTION TO QUASH DEPOSITION SUBPOENAS © 0 9 a N n n B A W N = N N N N N N N N N N m m e m e m e m p m p m p m p m c o N I A N W n BR A W N = D O O 0 S N B R A W N = O 4. CONCLUSION For the foregoing reasons, Defendants respectfully request that the Court Grant Defendants’ Motion to Quash the Deposition Subpoenas for Production of Business Records, and for an Order limiting the scope of the information demanded in the subpoenas solely to the financial information relating to the three checks that are at issue. Dated: February 21, 2018 QUINTILONE & ASSOCIATES RICHARD E. QUINTILONE II, GEORGE A. ALOUPAS Attorneys for Defendants KEEFE ROBERTS and KEEFE ROBERTS AND ASSOCIATES, PLC -8- DEFENDANTS’ NOTICE OF MOTION AND MOTION TO QUASH DEPOSITION SUBPOENAS © 0 9 O N n m B A W N = N N N N N N N N N N N m m e m e m e m e m e m p m p m c o J I a N n n k A W I N D = O O O N N R A W = O o PROOF OF SERVICE I, the undersigned, declare as follows: I am a citizen of the United States, over the age of 18 years, and not a party to the within action. I am an employee of or agent for Quintilone & Associates, whose business address is 22974 El Toro Rd., Suite 100, Lake Forest, CA 92630-4961. On February 21, 2018, I served the foregoing document(s): DEFENDANTS’ NOTICE OF MOTION AND MOTION TO QUASH DEPOSITION SUBPOENAS on the following parties in this action addressed as follows: SEE ATTACHED SERVICE LIST __X___ (BYMAIL)I caused a true copy of each document, placed in a sealed envelope with postage fully paid, to be placed in the United States mail at Lake Forest, California. I am "readily familiar" with this firm's business practice for collection and processing of mail, that in the ordinary course of business said document(s) would be deposited with the U.S. Postal Service on that same day. I understand that the service shall be presumed invalid if the postal cancellation date or postage meter date on the envelope is more than one day after the date of deposit for mailing contained on this affidavit. (BYPERSONAL SERVICE) delivered each such document by hand to each addressee above. (BY OVERNIGHT DELIVERY) 1 caused a true copy of each document, placed in a sealed envelope with delivery fees provided for, to be deposited in a box regularly maintained by Federal Express or Overnight Express. I am readily familiar with this firm's practice for collection and processing of documents for overnight delivery and know that in the ordinary course of Quintilone & Associates’ business practice the document(s) described above will be deposited in a box or other facility regularly maintained by Federal Express or Overnight Express or delivered to a courier or driver authorized by Federal Express or Overnight Express to receive documents on the same date it is placed at Quintilone & Associates for collection. (BY FACSIMILE) By use of facsimile machine number 949.458.9679, I served a copy of the within document(s) on the above interested parties at the facsimile numbers listed above. The transmission was reported as complete and without error. The transmission report was properly issued by the transmitting facsimile machine. XxX_ (BYELECTRONIC SERVICE) 1 delivered each such document by electronic means pursuant to California Civil Code, Code of Civil Procedure, the Local Rules and/or FRCP § 5(b)(2), et seq. Executed on February 21, 2018 at Lake Forest, California. (FEDERAL) I declare under penalty of perjury that the aboveis true and correct. X (STATE) I declare under penalty of perjury that the above is true and correct. GEORGE A. ALOUPAS -1- PROOF OF SERVICE © 0 9 O N n m B A W N = N N N N N N N N N N N m m e m e m e m e m e m p m p m c o J I a N n n k A W I N D = O O O N N R A W = O o Darlene Palagana Hernandez, Esq. Shapiro, Vaness, Sherman, Marth, LLP 949 South Coast Drive, Suite 475 Costa Mesa, CA 92626 Tel: 877.257.0717 Fax: 847.879.4836 E-mail: dhernandez@logs.com Q&A Case No.: 17.01296 SERVICE Attorneys for Plaintiff and Cross-Defendant Aztec foreclosure Corporation 2 PROOF OF SERVICE