Kielle Campbell Horton Living Trust vs Horton Autosport Inc et al

Case Number

23CV03236

Case Type

Hearing Date / Time

Fri, 12/05/2025 - 10:00

Nature of Proceedings

Motion to Quash; Motion to Compel

Tentative Ruling

(1) Motion of Plaintiff to Compel Further Responses to Request for Production at Deposition; Request for Sanctions:

For all the reasons stated herein, plaintiff’s motion to compel is granted in part. On or before December 31, 2025, defendants shall serve supplemental, verified responses in compliance with Code of Civil Procedure sections 2031.210 through 2031.250 and produce responsive documents to Requests for Production Nos. 3, 8, 11, and 12 as modified by the court in the body of this ruling. The court declines to award monetary sanctions in favor of either party.

(2) Motion of Defendants to Quash or Limit Scope of Subpoena for Production of Business Records or Issue Protective Order:

For all the reasons stated herein, defendants’ motion to quash or limit scope of deposition subpoenas is granted in part. As to the two deposition subpoenas to Danny MacMahon, categories 1-4 and 6 in Attachment 3 are limited in scope as discussed in the body of this ruling, and categories 5, 7, and 8 are quashed. As to the two deposition subpoenas to Wapole Advisors, these subpoenas are quashed. The court declines to award monetary sanctions in favor of either party.

Any information or documents compelled in this ruling shall only be used for purposes of this litigation and, after the litigation has concluded, must be destroyed or returned to defendants.

Background:

On July 26, 2023, the Kielle Campbell Horton Living Trust initiated this action by filing an unlawful detainer complaint against defendants Horton Autosport, Inc., dba The Garage (HAI), Jonathan Horton, Bert Linau, and Cristian Mooney.

On March 22, 2024, plaintiff Kielle Horton, trustee of the Kielle Campbell Horton Living Trust, filed a first amended complaint against all defendants.

On May 31, 2024, plaintiff filed the operative second amended complaint (SAC) against defendants HAI and Horton setting forth causes of action for: (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) conversion; (4) common counts; and (5) unjust enrichment.

As alleged in the SAC:

Plaintiff Kielle Horton is the sole trustee of the Kielle Campbell Horton Living Trust. (SAC, ¶¶ 1, 7.)

Defendant Jonathan Horton is an individual residing in the State of California and is the principal, CEO, CFO, and director of defendant HAI. (SAC, ¶ 3.)

Plaintiff is the lessee and sublessor of the commercial real property commonly known as 417 Santa Barbara Street, Suite B4-B6, Santa Barbara, CA (Premises). (SAC, ¶ 7.)

On June 1, 2015, defendant HAI leased the Premises from plaintiff for a fixed-term pursuant to a lease agreement with plaintiff (Lease Agreement). (SAC, ¶ 8, Ex. 1.)

On April 1, 2022, plaintiff and defendant HAI agreed orally to raise the monthly rent obligation pursuant to the Lease Agreement from $4,680.00 to $7,785.89, effective April 1, 2022. Defendant HAI commenced paying rent in that amount to plaintiff on April 1, 2022, thereby ratifying the additional rent obligation. (SAC, ¶ 9.)

Since the agreement was executed in 2015, defendants have used the Premises as an auto repair shop. (SAC, ¶ 11.)

The equipment defendants used during their tenancy to operate the auto repair shop was bought with plaintiff’s funds as an investment to improve the functionality and lease value of the Premises. (SAC, ¶ 12.) Plaintiff’s equipment includes three red Challenger above-ground car lifts, an inground car lift, affixed cabinetry, and light fixtures (collectively referred to herein as fixtures). (Ibid.)

Pursuant to the Lease Agreement, plaintiff’s fixtures were part of the Premises to be surrendered to plaintiff upon lease expiration or termination. (SAC, ¶ 13.) The approximate market value of the fixtures is not less than $60,750. (SAC, ¶ 14.)

On June 23, 2023, defendants were served with a 15-day notice to pay rent or quit for failure to pay several months’ rent for the Premises in the total amount of $23,357.67. (SAC, ¶ 15.)

On June 23, 2023, defendants were served with a 15-day notice to cure or quit for failure to pay common area maintenance charges and accrued interest for unpaid rent in the total amount of $21,161.41. (SAC, ¶ 16.)

Defendants failed to timely pay all past-due amounts and remained in the Premises after the expiration of the 15-day notice periods. (SAC, ¶ 18.)

On July 26, 2023, plaintiff initiated the instant litigation as an unlawful detainer action for possession of the Premises, costs, damages, past-due rent, attorneys’ fees, common area maintenance charges, past due interest, and forfeiture of the Lease Agreement. (SAC, ¶ 19.)

Between approximately October 19, 2023, and October 23, 2023, after the parties had engaged in settlement negotiations for surrender of the Premises along with the fixtures, defendants dismantled the fixtures and illegally removed them from the Premises to another auto repair shop, Star Tech Auto Repair, located at 490 E. Cota Street, Santa Barbara. (SAC, ¶ 20.) Plaintiff’s counsel objected to these acts and a police report was prepared pertaining to the incident. (Ibid.)

On October 31, 2023, defendants vacated the Premises and surrendered their keys to plaintiff. As a result, possession of the Premises is no longer at issue. (SAC, ¶ 21.)

Defendants are still in possession or control of the fixtures and have not returned them to plaintiff despite plaintiff and her counsel’s requests. (SAC, ¶ 22.)

On June 25, 2024, defendants filed an answer to the SAC, generally denying the allegations and setting forth nine affirmative defenses.

On February 21, 2025, plaintiff served a deposition notice on defendant Horton in his individual capacity and as the person most knowledgeable for defendant HAI. The deposition notice attached sixteen requests for production to be produced at the deposition noticed to take place on April 10, 2025. (Princip Decl., Ex. A.) The deposition transcript was signed by defendant Horton on May 23, 2025. (Princip Decl., Ex. B.)

On May 20, 2025, plaintiff served two deposition subpoenas for the production of documents on defendants’ bookkeeper, Danny MacMahon, and two such subpoenas on defendants’ accountant, Wapole Advisors, all with a production date of June 23, 2025. (Opp., p. 3, ll. 3-20, Exs. A-D.)

On June 26, 2025, defendants filed a motion to quash or limit deposition subpoenas for document production served by plaintiff. Plaintiff clarified in opposition that there are four subpoenas at issue, two served on defendants’ bookkeeper and two served on defendants’ accountant. The court will address both sets of subpoenas in this ruling since the categories for production appear identical except for the definition of defendant being defendant Horton in two of the subpoenas and defendant HAI in two of the subpoenas. (Opp., Exs. A-D.) All parties had notice and an opportunity to be heard on the issues.

On September 30, 2025, plaintiff filed a motion to compel further responses to four requests for production served with the deposition notice on defendant Horton in his individual capacity and as the person most knowledgeable of defendant HAI. This motion is opposed.

On October 24, 2025, the court continued plaintiff’s motion to compel and defendants’ motion to quash or limit the deposition subpoenas and scheduled these motions for this hearing on December 5, 2025.

Analysis:

(1)       Discovery Procedures for Documents Demanded to be Produced at Deposition

“A trial court must be mindful of the Legislature’s preference for discovery over trial by surprise, [and] must construe the facts before it liberally in favor of discovery. . .” (Williams v. Superior Court (2017) 3 Cal.5th 531, 540 (Williams).)

“Unless otherwise limited by order of the court in accordance with this title, any party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action or to the determination of any motion made in that action, if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence. Discovery may relate to the claim or defense of the party seeking discovery or of any other party to the action. Discovery may be obtained of the identity and location of persons having knowledge of any discoverable matter, as well as of the existence, description, nature, custody, condition, and location of any document, electronically stored information, tangible thing, or land or other property.” (Code Civ. Proc., § 2017.010.)

A deposition notice may specify “with reasonable particularity … any materials or category of materials, including any electronically stored information, to be produced by the deponent.” (Code Civ. Proc., § 2025.220, subd. (a)(4).)

“The service of a deposition notice under Section 2025.240 is effective to require any deponent who is a party to the action or an officer, director, managing agent, or employee of a party to attend and to testify, as well as to produce any document, electronically stored information, or tangible thing for inspection and copying.” (Code Civ. Proc., § 2025.280, subd. (a).)

“The party to whom a demand for inspection, copying, testing, or sampling has been directed shall respond separately to each item or category of item by any of the following:

“(1) A statement that the party will comply with the particular demand for inspection, copying, testing, or sampling by the date set for the inspection, copying, testing, or sampling pursuant to paragraph (2) of subdivision (c) of Section 2031.030 and any related activities.

“(2) A representation that the party lacks the ability to comply with the demand for inspection, copying, testing, or sampling of a particular item or category of item.

“(3) An objection to the particular demand for inspection, copying, testing, or sampling.” (Code Civ. Proc., § 2031.210, subd. (a).)

“If only part of an item or category of item in a demand for inspection, copying, testing, or sampling is objectionable, the response shall contain a statement of compliance, or a representation of inability to comply with respect to the remainder of that item or category.” (Code Civ. Proc., § 2031.240, subd. (a).)

“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 each 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).)

“If, after service of a deposition notice, a party to the action or an officer, director, managing agent, or employee of a party, or a person designated by an organization that is a party under Section 2025.230, without having served a valid objection under Section 2025.410, fails to appear for examination, or to proceed with it, or to produce for inspection any document, electronically stored information, or tangible thing described in the deposition notice, the party giving the notice may move for an order compelling the deponent’s attendance and testimony, and the production for inspection of any document, electronically stored information, or tangible thing described in the deposition notice.” (Code Civ. Proc., § 2025.450, 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 production for inspection of any document, electronically stored information, or tangible thing described in the deposition notice.

“(2) The motion shall be accompanied by a meet and confer declaration under Section 2016.040, or, when the deponent fails to attend the deposition and produce the documents, electronically stored information, or things described in the deposition notice, by a declaration stating that the petitioner has contacted the deponent to inquire about the nonappearance.” (Code Civ. Proc., § 2025.450, subd. (b).)

“If a deponent fails to answer any question or to produce any document, electronically stored information, or tangible thing under the deponent’s control that is specified in the deposition notice or a deposition subpoena, the party seeking discovery may move the court for an order compelling that answer or production.” (Code Civ. Proc., § 2025.480, subd. (a).)

(2)       Request for Production No. 3 – Agreements and Communications with Star Tech Auto Repair

Request for Production No. 3 served by plaintiff demands as follows:

“Any and all DOCUMENTS evidencing, referring to and/or relating to any agreements or COMMUNICATIONS of any definition with YOU, jointly with any other PERSON or entity, such as HORTON AUTOPORT, INC., DBA THE GARAGE, with Star Tech Auto Repair (located at 490 E. Cota, Santa Barbara, CA 93101).” (Sep. Stat., p. 2, ll. 1-5.)

After asserting objections based on burden, privacy, and relevance, defendants respond as follows:

“Subject to, and without waiving the foregoing objections, Responding Party will comply with this request and produce all non-privileged documents in its possession, custody, or control which are not objectionable that are responsive to this request, to the extent such materials have not already been provided in discovery, if any exist, and to the limited extent to which they are relevant to the issues pending before the Court. Discovery is ongoing and Responding Party reserves the right to amend this response.” (Sep. Stat., p. 3, ll. 1-5.)

Defendants’ response to Request No. 3 did not comply with Code of Civil Procedure sections 2031.210 through 2031.250 because, among other reasons, the reader cannot discern what documents exist in defendants’ custody and control, or what documents the defendants have agreed to produce, if any.

As to relevance, plaintiff alleges in the SAC that between approximately October 19, 2023 and October 23, 2023, defendants dismantled the fixtures and unlawfully moved them to Star Tech Auto Repair, located at 490 E. Cota Street, Santa Barbara. (SAC, ¶ 20.) Plaintiff alleges that defendants breached the underlying Lease Agreement, that the removal constituted conversion, and that defendants were unjustly enriched by the unauthorized use of the fixtures. (SAC, ¶¶ 23-64.)

Defendants dispute that plaintiff owns the fixtures and argue that they belong to defendants based on a May 7, 2009, premarital agreement. (Opp., p. 1, l. 27 – p. 4, l. 5.) Thus, the ownership, transfer and use of the fixtures, as well as the relationship between defendants and Star Tech Auto Repair during the 2023 timeframe, “relate to [a] claim or defense” advanced by the parties in this action. (Code Civ. Proc., § 2017.010.) These issues are discoverable in this litigation. (SAC, ¶¶ 11-20, 23-64.)

Plaintiff argues that good cause for compelling the production exists because defendant Horton referred to text messages between himself and Star Tech Auto Repair during his deposition and that defendants moved plaintiff’s property to Star Tech Auto Repair, effectively converting it to their own use. (Sep. Stat., p. 3, ll. 7-11.) Moreover, plaintiff argues that defendant’s errata statement from his corrected deposition transcript identified an oral ten-year lease with Star Tech Auto Repair. (Sep. Stat., p. 3, ll. 1-14.) Plaintiff requests that defendants produce the text messages and any other agreements or communications that he may have discovered since the deposition, and any additional documents responsive to this request. (Sep. Stat., p. 3, ll. 16-18.)

As to defendants’ other objections, an “objection based upon burden must be sustained by evidence showing the quantum of work required ….” (West Pico Furniture Co. of Los Angeles v. Superior Court (1961) 56 Cal.2d 407, 417.) Defendants did not submit such evidence. As to privacy, “[p]rivacy concerns are not absolute; they must be balanced against other important interests.” (Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 37.) “[C]ourts must balance the right of civil litigants to discover relevant facts against the privacy interests of persons subject to discovery.” (Vinson v. Superior Court (1987) 43 Cal.3d 833, 842.)

“The party asserting a privacy right must establish a legally protected privacy interest, an objectively reasonable expectation of privacy in the given circumstances, and a threatened intrusion that is serious. [Citation.] The party seeking information may raise in response whatever legitimate and important countervailing interests disclosure serves, while the party seeking protection may identify feasible alternatives that serve the same interests or protective measures that would diminish the loss of privacy. A court must then balance these competing considerations.” (Williams, supra, 3 Cal.5th at p. 552.)

Balancing the probative value of the request and the privacy interests raised by the parties, Request for Production No. 3 served by plaintiff is not limited by timeframe or subject matter. Plaintiff’s motion did not show good cause to justify the entirety of Request No. 3. (Code Civ. Proc., §§ 2025.450, subd. (b)(1), 2031.310, subd. (b)(1).) The information sought by plaintiff must either itself be admissible or reasonably calculated to lead to the discovery of admissible evidence. (Code Civ. Proc., § 2017.010.) Communications during or after the 2023 timeframe may contain discussions about the removal or use of the fixtures, and the general relationship between defendants and Star Tech Auto Repair during the relevant timeframe. Communications and agreements wholly unrelated to the issues and timeframes raised by the SAC are not discoverable under these circumstances.

The court, therefore, will grant the motion to compel as to Request No. 3, in part. On or before December 31, 2025, Defendants shall serve a supplemental, verified response in compliance with Code of Civil Procedure sections 2031.210 through 2031.250 and produce responsive documents in response to Request No. 3 as modified by the court: (a) all agreements between defendants and Star Tech Auto Repair that were in effect at any time on or after January 1, 2023; (b) all communications between defendants and Star Tech Auto Repair on or after January 1, 2023; and (c) all communications between defendants and Star Tech Auto Repair at any time that reference the fixtures at issue in this action including those described in paragraph 12 of the SAC.

(3)       Request for Production No. 8 – Documents and Communications Related to Insurance Policies

Request for Production No. 8 served by plaintiff demands as follows:

“Any and all DOCUMENTS and COMMUNICATIONS evidencing, referring to and/or relating to all insurance policies for YOU individually and/or with any other PERSON, including but not limited to liability, premises, garage keepers, and umbrella coverage.” (Sep. Stat., p. 3, ll. 19-22.)

After asserting objections based on burden, privacy and relevance, defendants respond as follows:

“Without waiving the foregoing objections, DEFENDANTS respond as follows: Subject to, and without waiving the foregoing objections, Responding Party will comply with this request and produce all non-privileged documents in its possession, custody, or control which are not objectionable that are responsive to this request, to the extent such materials have not already been provided in discovery, if any exist, and to the limited extent to which they are relevant to the issues pending before the Court. Discovery is ongoing and Responding Party reserves the right to amend this response.” (Sep. Stat., p. 4, ll. 15-21.)

Plaintiff argues good cause exists to compel the production of insurance information because these documents may evidence the value of the fixtures and demonstrate that defendants assert ownership over them. (Sep. Stat., p. 5, ll. 1-3.) According to plaintiff, defendant Horton testified that defendants have liability insurance coverage. (Sep. Stat., p. 4, ll. 23-25.) Plaintiff is entitled to discovery of documents or communications which evidence the value, status or alleged ownership of the fixtures referenced in the parties’ Lease Agreement. (Code Civ. Proc., § 2017.010; SAC, ¶¶ 11-20, 23-64.) However, insurance policies which have no relationship to the fixtures at issue are not discoverable because they are not related to the claims and defenses in this action. Plaintiff’s motion did not show good cause to justify the entirety of Request No. 8.

The court will, therefore, grant the motion to compel as to Request No. 8, in part. On or before December 31, 2025, Defendants shall serve a supplemental, verified response in compliance with Code of Civil Procedure sections 2031.210 through 2031.250 and produce responsive documents in response to Request No. 8 as modified by the court: all documents and communications pertaining to insurance coverage of any fixtures at issue in this action including those described in paragraph 12 of the SAC.

(4)       Request for Production No. 11 – Documents Evidencing Indebtedness

Request for Production No. 11 served by plaintiff demands as follows:

“Any and all DOCUMENTS evidencing or reflecting all invoices, billings or statements that show any balances owed on all indebtedness in YOUR name, whether alone or jointly with any other PERSON, and/or any business YOU have ownership or operational roles with any other PERSON or entity.” (Sep. Stat., p. 5, ll. 4-8.)

After asserting objections based on burden, privacy and relevance, defendants respond as follows:

“Without waiving the foregoing objections, DEFENDANTS respond as follows: Subject to, and without waiving the foregoing objections, Responding Party will comply with this request and produce all non-privileged documents in its possession, custody, or control which are not objectionable that are responsive to this request, to the extent such materials have not already been provided in discovery, if any exist, and to the limited extent to which they are relevant to the issues pending before the Court. Discovery is ongoing and Responding Party reserves the right to amend this response.” (Sep. Stat., p. 6, ll. 1-7.)

Plaintiff argues that good cause exists to compel production because defendant Horton stated in his deposition that he hired a company to physically remove trade fixtures affixed by cement at the Premises, that he hired a company to transport plaintiff’s property to Star Tech Auto Repair, and that there were other expenses associated with these activities. (Sep. Stat., p. 6, ll. 13-18.) Invoices, billings or statements that show balances pertaining to the removal and use of the fixtures are relevant to the claims and defenses in the SAC and therefore discoverable. These documents relate to plaintiff’s claim in this action that defendants moved the fixtures from the Premises to another location. However, invoices pertaining to transactions that are not related to the claims and defenses in this action are not discoverable. Plaintiff’s motion did not show good cause to justify the entirety of Request No. 11.

The court will, therefore, grant the motion to compel as to Request No. 11, in part. On or before December 31, 2025, Defendants shall serve a supplemental, verified response in compliance with Code of Civil Procedure sections 2031.210 through 2031.250 and produce responsive documents in response to Request No. 11 as modified by the court: any invoices, billings or statements that show incurred expenses or indebtedness pertaining to the removal or use of the fixtures at issue in this action including those described in paragraph 12 of the SAC.

(5)       Request for Production No. 12 – Documents Evidencing Financial Statements

Request for Production No. 12 served by plaintiff demands as follows:

“Any and all DOCUMENTS evidencing financial statements for any business YOU have ownership or operational roles, including but not limited to INCOME statements, balance sheets, and profit and loss statements.” (Sep. Stat., p. 6, ll. 19-22.)

After asserting objections based on burden, privacy and relevance, defendants respond as follows:

“Subject to, and without waiving the foregoing objections, Responding Party will comply with this request and produce all non-privileged documents in its possession, custody, or control which are not objectionable that are responsive to this request, to the extent such materials have not already been provided in discovery, if any exist, and to the limited extent to which they are relevant to the issues pending before the Court. Discovery is ongoing and Responding Party reserves the right to amend this response.” (Sep. Stat., p. 7, ll. 15-21.)

Plaintiff is entitled to discovery relating to her allegations that defendants breached the Lease Agreement and were unjustly enriched by the removal and wrongful use of the fixtures referenced in the parties’ Lease Agreement. (Code Civ. Proc., § 2017.010; SAC, ¶¶ 11-20, 23-64.) Defendants’ financial statements during the relevant 2023 timeframe are discoverable as to the alleged unjust benefit obtained by defendants by the removal and continued use of the fixtures. Financial statements that show income or expenses related to the transfer or use of the fixtures are also relevant. However, financial statements that do not relate to the fixtures or timeframes raised by the claims and defenses in this action are not discoverable. Plaintiff’s motion did not show good cause to justify the entirety of Request No. 12.

The court, therefore, will grant the motion to compel as to Request No. 12, in part. Defendants shall serve a supplemental, verified response in compliance with Code of Civil Procedure sections 2031.210 through 2031.250 and produce responsive documents in response to Request No. 12 as modified by the court: financial statements of defendant HAI for any period on or after January 1, 2023 through the date of this order.

(6)       Defendants’ Motion to Quash Deposition Subpoenas to Danny MacMahon

Plaintiff served two deposition subpoenas for production of business records on Danny MacMahon, defendants’ bookkeeper, with a production date of June 23, 2025. (Motion, Ex. 2; Opp., Exs. C-D.) Plaintiff also served defendant Horton with notices to consumer informing defendant of his rights to object.

“If a subpoena requires the attendance of a witness or the production of books, documents, electronically stored information, or other things before a court, or at the trial of an issue therein, or at the taking of a deposition, the court, upon motion reasonably made by any person described in subdivision (b), or upon the court’s own motion after giving counsel notice and an opportunity to be heard, may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare, including protective orders. In addition, the court may make any other order as may be appropriate to protect the person from unreasonable or oppressive demands, including unreasonable violations of the right of privacy of the person.” (Code Civ. Proc., § 1987.1, subd. (a).) Defendant Horton is permitted to file a motion to quash or limit the deposition subpoenas at issue. (Code Civ. Proc., § 1987.1, subd. (b).)

Plaintiff notes the motion to quash was due five days prior to the production date and defendants’ motion is untimely since it was filed three days after the date of production. The court will, in its discretion, treat the motion as timely since all parties have had notice and an opportunity to be heard.

The deposition subpoenas to Danny MacMahon seek the production of the following records:

“1. Produce any and all QuickBooks files or other accounting software files used to maintain the financial records of DEFENDANT, including native files (e.g., .QBW, .QBB, or exported .CSV files), for the period from January 1, 2020, through the DATE OF PRODUCTION.

“2. Produce all profit and loss statements, whether monthly, quarterly, or annual, for DEFENDANT from January 1, 2020, through the DATE OF PRODUCTION.

“3. Produce all balance sheets, income statements, and cash flow statements prepared for DEFENDANT from January 1, 2020, through the DATE OF PRODUCTION, whether in draft or final form.

“4. Produce all general ledgers, journals, or transaction detail reports for DEFENDANT from January 1, 2020, through the DATE OF PRODUCTION.

“5. Produce all bank reconciliations, including reconciliation reports, for all business accounts of DEFENDANT for the period January 1, 2020, through the DATE OF PRODUCTION.

“6. Produce all accounts receivable and accounts payable reports, including aging reports, for DEFENDANT for the period January 1, 2020, through the DATE OF PRODUCTION.

“7. Produce all COMMUNICATIONS between YOU (or any member of YOUR staff) and any owner, officer, or employee of DEFENDANT concerning financial statements, QuickBooks entries, or bookkeeping practices from January 1, 2020, through the DATE OF PRODUCTION.

“8. Produce any and all DOCUMENTS provided to YOU by any representative of DEFENDANT in connection with bookkeeping services, including receipts, invoices, bank statements, or other supporting DOCUMENTS used to input or verify transactions for the period January 1, 2020 through the DATE OF PRODUCTION.” (Motion, Ex. 2, attach. 3.)

“Defendant” is defined as defendant Horton in one of the subpoenas and as defendant HAI in the other one. (Motion, Ex. 2, attach. 3; Opp., Exs. C-D, attach 3.)

Defendants argue the information sought is protected by privacy rights, and is unduly burdensome, overbroad, and irrelevant. Defendants dispute that the fixtures at issue in this action belong to the plaintiff. Plaintiff argues the information is relevant to the subject matter of the dispute and the subpoenas were necessary because defendants failed to properly respond to discovery.

Plaintiff is entitled to discovery pertaining to her claims in this action, but the categories in Attachment 3 seek some information outside the scope of discovery and seek confidential financial information. (Code Civ. Proc., § 2017.010; SAC, ¶¶ 11-20, 23-64.) “Our right to privacy is guaranteed and protected by state and federal Constitutions.” (Ameri-Medical Corp. v. Workers’ Comp. Appeals Bd. (1996) 42 Cal.App.4th 1260, 1287.)

Defendants have asserted a legally protected privacy interest in their financial information. However, Plaintiff has established a valid need for discovery as to some of this financial information because it relates to the alleged conversion of the fixtures, unauthorized use of the fixtures, and resulting unjust enrichment to defendants. (Williams, supra, 3 Cal.5th at p. 552.) “The phrase ‘unjust enrichment’ is used in law to characterize the result or effect of a failure to make restitution of or for property or benefits received under such circumstances as to give rise to a legal or equitable obligation to account therefor.” (Ajaxo Inc. v. E*Trade Financial Corp. (2010) 187 Cal.App.4th 1295, 1305.) “There is no standard formula to measure it. A defendant’s unjust enrichment might be calculated based upon cost savings or increased productivity.” (Id.)

After balancing the probative value of the categories and the privacy interests raised by the parties, the court will grant defendants’ motion to quash or limit the subpoenas, in part as follows:

As to category 1 for accounting files, the court limits this category as follows: HAI accounting files for any period on or after January 1, 2023. This category is otherwise quashed.

As to category 2 for profit and loss statements the court limits this category as follows: HAI profit and loss statements for any period on or after January 1, 2023. This category is otherwise quashed.

As to category 3 for balance sheets, the court limits this category as follows: HAI balance sheets for any period on or after January 1, 2023. This category is otherwise quashed.

As to category 4 for general ledgers, the court limits this category as follows: HAI general ledgers for any period on or after January 1, 2023. This category is otherwise quashed.

As to category 5 for bank reconciliations, this category is quashed. This category implicates confidential information, and at least a significant portion of the information sought is unrelated to the claims and defenses in this action.

As to category 6 for accounts receivable and accounts payable reports, the court limits this category as follows: HAI accounts receivable and accounts payable reports for any period on or after January 1, 2023. This category is otherwise quashed.

As to category 7 for communications concerning financial statements, this category is quashed. This category implicates confidential information, and at least a significant portion of the information sought is unrelated to the claims and defenses in this action.

As to category 8 for supporting documents used to verify accounting entries, this category is quashed. This category implicates confidential information, and at least a significant portion of the information sought is unrelated to the claims and defenses in this action.

(7)       Defendants’ Motion to Quash Deposition Subpoenas to Wapole Advisors

Plaintiff served two deposition subpoenas for production of business records on Wapole Advisors, defendants’ accountant, with a production date of June 23, 2025. (Motion, Ex. 1; Opp., Exs. C-D.) Plaintiff also served defendant Horton with notices to consumer informing defendant of his rights to object.

The deposition subpoenas seek the production of the following records:

“1. For the period January 2020 through the DATE OF PRODUCTION, YOUR entire file relating to DEFENDANT, including but not limited to all DOCUMENTS provided to YOU by the DEFENDANT, all draft versions of tax returns, all workpapers or spreadsheets used in preparing the returns (including calculations), and all amended returns or correspondence with the IRS or state tax authorities. This request is not limited to finalized or filed tax returns. It specifically includes all materials and documents related to DEFENDANT's 2024 tax return, whether complete or incomplete, and any related work or communications.

“2. For the period January 2020 through the DATE OF PRODUCTION, any and all DOCUMENTS or materials YOU reviewed, considered, or relied upon in connection with to the preparation of any federal and/or state tax returns for DEFENDANT including, but not limited to, DEFENDANT?'s 2024 tax return whether completed, incomplete, or in draft form.

“3. For the period January 2020 through the DATE OF PRODUCTION, all COMMUNICATIONS between YOU (or any member of YOUR staff) and DEFENDANT, including but not limited to, all emails, letters, messages, text messages and any notes, memoranda, or other documents memorializing oral communications.

“4. Produce any and all engagement letters, retainer agreements, or other documents that reflect the terms of YOUR engagement with DEFENDANT, including any amendments or modifications thereto.

“5. For the period January 2020 through the DATE OF PRODUCTION, all billing records pertaining to DEFENDANT including invoices, time logs, payment records and other billing statements or documentation reflecting services rendered or charges incurred.” (Motion, Ex. 1, attach 3.)

Plaintiff is entitled to discovery pertaining to her claims in this action, but the categories are overbroad and seek confidential financial information (some of which is protected by the tax privilege). “California courts … have interpreted state taxation statutes as creating a statutory privilege against disclosing tax returns.” (Li v. Yan (2016) 247 Cal.App.4th 56, 66.)

After balancing the probative value of the categories and the privacy interests raised by the parties, the court will grant defendants’ motion to quash the subpoenas as follows:

As to category 1 for the entire file related to defendant HAI, this category is quashed. This category implicates confidential information including potential tax filings, and at least a significant portion of the information sought is unrelated to the claims and defenses in this action.

As to category 2 for documents reviewed, considered, or relied upon in connection with HAI’s tax returns, this category is quashed. This category implicates confidential information including potential tax filings, and at least a significant portion of the information sought is unrelated to the claims and defenses in this action.

As to category 3 for communications with defendant HAI, this category is quashed. This category implicates confidential information including potential tax filings, and at least a significant portion of the information sought is unrelated to the claims and defenses in this action.

As to category 4 for engagement letters, this category is quashed. The accounting engagement letters are not related to the claims and defenses in this action.

As to category 5 for billing records, this category is quashed. The accounting billing records are not related to the claims and defenses in this action.

(8)       Protective Order

Given that defendants have raised valid privacy concerns, the court orders that any documents or information compelled in this ruling shall only be used for purposes of this litigation and, after the litigation has concluded, must be destroyed or returned to defendants.

For all the foregoing reasons, plaintiff’s motion to compel is granted in part. Defendants’ motion to quash or limit subpoenas is granted in part. The court declines to award monetary sanctions in favor of either party pertaining to these motions.