Note: This is an unpublished decision. Check your jurisdiction’s rules about citing unpublished decisions before citing this case to a court.
ORIGINAL PROCEEDING; petition for a writ of mandate, Wendell Mortimer, Jr., Judge. Petition denied.
Attorneys and Law Firms
Negele & Associates, James R. Negele, Kenneth H. Coronel; Lascher & Lascher, Wendy C. Lascher and Denise A. Brogna for Petitioner.
Law Offices of Kent G. Mariconda and Kent G. Mariconda for Real Party in Interest Star Iron Works, Inc.
Ford, Walker, Haggerty & Behar, Joseph A. Heath, James O. Miller, Scott J. Sachs; Office of the County Counsel, Robert Reagan and Alan K. Terakawa for Real Party in Interest Los Angeles County Metropolitan Transportation Authority.
No appearance for Respondent.
*1 Based on evidence that a business computer was used for accounting and nothing else (and that there was a risk the hard drive might be purged), the trial court ordered the petitioner to produce the computer's hard drive. We saw a risk of spilled milk, stayed the order for production, and issued an order to show cause. We now realize there was no milk in the bottle, vacate our stay, and deny the petition.
Star Iron Works, Inc., a steel subcontractor for the Los Angeles Metropolitan Transit Authority, retained Oved & Associates Construction Services, Inc. to perform various administrative and accounting services (such as billing, collections from general contractors, and banking) from 1994 to 2000. Oved stopped doing business in 2000.
In early 2000, Star Iron sued Oved and others, alleging that Oved had received millions of dollars on Star Iron's behalf, had commingled it with its own money, then misrepresented to Star Iron that the funds had never been received from the general contractors. A flurry of related lawsuits was filed around the same time, including actions by Oved, the MTA, the general contractors, insurers, bondholders, and others, but the only relevant theory at this stage of this writ proceeding is that both Star Iron and the MTA have claims against Oved for misappropriation of funds. As a result, there are issues about how much money Oved received from the general contractors on Star Iron's behalf, and about where that money went.
In Star Iron's case against Oved, Star Iron sent Oved a demand for the production of documents asking for Oved's financial and accounting records concerning Oved's collections from the general contractors and the allocation of the funds received from the contractors. When Oved objected to all of the demands, Star Iron moved to compel responses. In March 2002, the trial court (Hon. William A. MacLaughlin) overruled Oved's objections, granted Star Iron's motion (with only minor exceptions), ordered Oved to produce within 20 days all documents except those already produced, and ordered Oved to pay about $1,200 in sanctions to Star Iron.
In April, Oved complied with about half of the trial court's order but informed Star Iron by letter that it would “not be producing documents responsive to [10 out of 20 of the demands],” and would instead move for reconsideration of the March order. As to those documents that were
produced, they were “project documents” that Star Iron already had or had access to, and they did not include any of the accounting and financial records that Star Iron needed to trace the funds that were the subject of Star Iron's claim against Oved. Oved made its motion for reconsideration, which was denied, and the trial court gave Oved an additional 15 days to produce the remaining documents.
Three months later, and notwithstanding its April assertion that it was withholding documents, Oved finally “responded” with a claim that all responsive documents had already been produced and would in any event be produced again at an upcoming deposition. Star Iron wrote to Oved, describing the response as a clear violation of the trial court's order but offering Oved additional time to respond.
*2 Meanwhile, in Oved's case against National Union Fire Insurance Co. and others, including Star Iron, Star Iron had sent Oved a similar but not identical demand for the production of financial documents. In November 2002, Oved responded with objections, asserting that all of the documents had already been produced in Star Iron's case against Oved. Around the same time, Oved failed to respond to a similar demand for the production of documents that had been propounded by the MTA. In December 2002, Star Iron and the MTA both moved to compel production, and their motions were granted at the end of January 2003. Oved did not comply with the trial court's orders.
In May, Star Iron (later joined by the MTA) filed a motion for sanctions or, alternatively, to compel production, explaining that Oved had not complied with the January order-and that Oved was claiming it could not find a significant part of its financial records. For this reason, Star Iron sought, in the same motion,
an order compelling Oved to produce its computer hard drive, which Star Iron said was needed “to determine when various information was entered [and] whether any of the information ha[d] been altered since the commencement of litigation.”
In support of the motion, Star Iron presented evidence that (in July 2002) the MTA had asked Oved to preserve its computer hard drives, back-up tapes, and discs, that Oved had “agree[d] that information stored in electronic form [might] be relevant as the case proceed[ed],” and that Oved had asked the MTA to take the same steps it wanted Oved to take to preserve such information. Star Iron also established that Oved's president, Mary Harel, had testified at her deposition that “Mass 90” was the only accounting program used by Oved, and that one computer was “dedicated just for the Mass 90.” When Star Iron asked Oved for the computer hard drive, Oved responded with (1) a conclusory claim that the hard drive contained “documents and information which is privileged, proprietary, and pertains to unrelated matters,” (2) an agreement to copy “the pertinent records from the hard drive onto a disc” and to provide the disc to Star Iron, and (3) an assertion that “the records stored on the hard drive are purged after three years.”
At some point, Oved produced a “CD-ROM” purportedly containing Oved's accounts payable and receivable, bank records, general ledger, job cost, and payroll information. The MTA, concerned that the CD-ROM was incomplete and that Oved's records might be “purged,” propounded special interrogatories to Oved, and Oved responded that it had disposed of “back-ups” during a March 2003 move. Oved never produced the “Mass 90” software, claiming it did “not have a license to give” the software to Star Iron or the MTA, thereby rendering the CD-ROM useless.
Oved opposed Star Iron's motion and the MTA's joinder, claiming it had fully complied with the trial court's orders.
The motion was heard by a discovery referee (Hon. Edward Y. Kakita, Ret.) on June 19, 2003, at which time Star Iron pointed out that Oved had been stalling for over two years, and that the only way Star Iron, the MTA, and the other parties could ever verify any financial information would be by an expert's inspection of Oved's hard drive. The MTA informed the court that Oved had produced some records (sans verification) after the current motion was filed, but others were still missing. The MTA's lawyer (who had figured out how to view the CD-ROM provided by Oved) showed the referee the limited nature of the information on the disc, and explained the concerns that arose when Oved claimed it had lost or purged its back-up tapes and discs.
*3 Star Iron and the MTA pointed to the absence of any evidence suggesting there was any privileged or confidential information on the hard drive, emphasizing testimony by Oved's president that the computer in question was dedicated to accounting and, by then, out of date and not in use. Indeed, Harel had testified that Oved had “stopped doing business in March of 2000” and had received its last payment “from any source ... in January of 2001.” Although Oved argued
that the hard drive contained privileged, confidential, and personal information, including e-mails to and from its lawyers, it did not offer any
evidence of any kind to support that argument.
The referee submitted his report on July 15, 2003, recommending to the trial court that Oved be ordered to produce the missing documents within 20 days, that “the production [should include Oved's] computer hard drive, which maintained Oved's accounting information from 1994 through 2000,” and that Oved and its lawyers should be ordered to pay about $2,000 in sanctions to Star Iron. The referee recommended that the MTA's joinder be denied as untimely.
Two days later, on July 17, the trial court (Hon. Wendell Mortimer, Jr.) approved and adopted the referee's report.
On July 28, Oved moved to vacate the July 17 order on the ground that it had not been afforded sufficient time to file objections to the referee's report (and explained its objections in its motion to vacate). The trial court considered Oved's motion and its objections to the referee's report, read the transcript of the hearing held by the referee, then (on August 14) denied Oved's motion to vacate.
On August 27, Oved's lawyer wrote to Star Iron's lawyer to say he would make the hard drive available at his office so that he could monitor the inspection. He said he assumed Star Iron's lawyer was “interested in obtaining copies of non-privilege[d] records” stored on the hard drive, and said he would furnish “a privilege log within the next few days.” Star Iron's lawyer disagreed, stating in his response that Oved's lawyer had to know it was Star Iron's intent to “obtain a mirror image, bit for bit, of [Oved's] hard drive”-and reminding Oved's lawyer that there was no evidence that the hard drive contained any confidential or privileged information.
Undeterred, Oved's lawyer wrote to Star Iron's lawyer on September 3 to offer a “workable compromise”-he offered to produce the hard drive if Star Iron and the MTA would agree to specified “procedures” to protect “the documents and files for which Oved ... is claiming a privilege.” Then, without waiting for a response, Oved notified Star Iron that it was submitting an ex parte application to “clarify” the August 14 order. In fact, the ex parte application was not for clarification-it was a request to establish a “fair and complete procedure for the copying of Oved['s] hard drive”-something that had never before been requested by Oved. The application was denied.
*4 Oved then filed a petition for a writ of mandate and a request for a stay in which it asked us to compel the trial court to vacate its orders for production of the hard drive and for the payment of sanctions to Star Iron “on the grounds that Oved ha[d] already produced all requested documents and that [Star Iron] never made a proper request for production of the hard drive....” In the alternative, Oved asked us to order the trial court to impose procedures to protect Oved's privileged and confidential information, “and to protect against risk of loss or damage” to the hard drive. We stayed production, issued an order to show cause, and set the matter for hearing.
Our order to show cause issued based on Oved's one-sided recitation of the facts. Now, with the complete picture in front of us, we state without reservation or qualification that the trial court's orders were necessary and appropriate, that the trial court did not abuse its discretion, that there was not a scintilla of evidence properly before the trial court to support Oved's claim that the hard drive contains anything other than stale accounting information, and that reasonable minds could view this petition as frivolous in light of Oved's admissions that it is no longer in business, and that the only information on the hard drive is accounting information relevant to the issues in this case.
The petition lacks all merit and is denied. (Code Civ. Proc., §§ 2016, subd. (b)(3), 2017, subd. (a), 2031; Evid.Code, § 250; TBG Ins. Services Corp. v. Superior Court (2002) 96 Cal.App.4th 443, 448-449, 117 Cal.Rptr.2d 155; Playboy Enterprises, Inc. v. Welles (S.D.Cal.1999) 60 F . Supp.2d 1050, 1051-1055.)
The order to show cause is discharged, the stay is vacated, and the petition is denied. Star Iron and the MTA are awarded their costs of these writ proceedings.
We concur: SPENCER, P.J., and MALLANO, J.
In support of Oved's ex parte application to “clarify” the court's August 14 order, Oved offered a “print out of all files stored on the hard drive [that purportedly were] attorney-client communications.” The ex parte application can be characterized in a number of ways, including as an untimely request for reconsideration supported by stale information that had long been in Oved's possession. So construed, the application was properly denied, and the proffered evidence was not properly before the trial court. (Code Civ. Proc., § 1008.)
In a traverse to Star Iron's return to Oved's petition, Oved offers a new declaration from its president in which she suggests (for the first time) that her deposition testimony has been “misconstrued,” and that the computer in question has been used by her to communicate with Oved's lawyers during the course of this litigation. Aside from the fact that Harel's current spin is entirely inconsistent with her earlier testimony, we agree with the MTA that this declaration should not be considered by us because it was not before the trial court at the time the challenged rulings were made. (Cal. Rules of Court, rule 56(c); Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, 184, fn. 1, 151 Cal.Rptr. 837, 588 P.2d 1261.)
End of Document.