Interface Rehab, Inc. vs. 4545 Shelley Court Opco, LLC

The Court finds that since Defendants are skilled nursing facilities, Defendants fall under the definition of “witnesses” under CCP section 1985.3, subdivision (a)(1). And since NewGen essentially acts as Defendants’ third-party agent in handling medical billing and other administrative services, the Court also finds that NewGen, by extension, falls under the definition of “witness” to the extent NewGen possesses documents that are of the kind that section 1985.3 aims to protect. The Court finds that this construction of section 1985.3 is consistent with its purpose as “an outgrowth of the then-recent amendment to the California Constitution that elevated the right of privacy to an alienable right.” (Foothill Federal Credit Union v. Super. Ct. (2007) 155 Cal.App.4th 632, 639.)

The Court also finds that at least some of Plaintiff’s document request categories, as phrased, implicate “personal records” under section 1985.3, subdivision (a)(1). The Court also notes that as part of the parties’ meetand-confer efforts, Plaintiff “acknowledge[d] that some responsive records could include patient information” and agreed that NewGen may “redact patient identifiers to the extent necessary.” (ROA #236, Exh. C [Pl.’s 12/5/2025 meet-and-confer letter].)

In any case, as Plaintiff did not serve any notice on the consumers or patients whose personal records were implicated by its originally broadly worded deposition subpoena, the Court finds that Plaintiff failed to comply with the notice requirements of section 1985.3.

“Failure to comply with [section 1985.3’s notice requirements] shall be sufficient basis for the witness to refuse to produce the personal records sought by a subpoena duces tecum.” (CCP, § 1985.3, subd. (k).) Therefore, NewGen was within its rights to initially refuse to produce the records sought by Plaintiff’s deposition subpoena.

However, on 12/5/2025, after Plaintiff received NewGen’s 12/2/2025 objections, Plaintiff sent a meet-and-confer letter clarifying that although “some responsive records could include patient information; however, this is not the information Interface is seeking, and New Gen may redact patient identifiers to the extent necessary.” (ROA #236, Exh. C.) The parties then engaged in months of meet-and-confers, resulting in NewGen producing some business records in response to the deposition subpoena. (See ROA #410, Supp. Aube Decl., ¶ 3.) The parties also ultimately also stipulated to a protective order to address confidentiality, which the Court signed and entered on 5/5/2026 (ROA #271.).

The Court therefore finds that Plaintiff has sufficiently “modified” its document request categories by clarifying that NewGen may redact any patient-identifying information and may designate relevant documents as confidential, such that notice to consumers is no longer necessary. Accordingly, NewGen must comply with the deposition subpoena.

“If a deponent fails . . . to produce any document . . . 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 . . . production.” (CCP, § 2025.480, subd. (a).) “If the court determines that the . . . production sought is subject to discovery, it shall order that . . . the production be made.” (Id., subd. (i).)

After the parties’ continuous meet-and-confers and NewGen’s partial productions, the parties were able to narrow their disputes to just six (6) document requests at issue on this motion:

• Request No. 1: Documents showing payments received from Medicare related to services provided by Interface; • Request No. 2: Documents showing payments received from Medi- Cal related to services provided by Interface; • Request No. 3: Documents showing payments received from commercial insurance carriers related to services provided by Interface; • Request No. 4: Documents showing payments received from patients related to services provided by Interface; • Request No. 12: Documents evidencing or relating to payments received by Defendants related to services provided by Interface; and • Request No. 23: Documents showing payments made by NewGen to Interface.

(ROA #410, Supp. Mot. P&A, p. 6.)

“[A] civil litigant’s right to discovery is broad.” (Williams v. Super. Ct. (2017) 3 Cal.5th 531, 541.) “[A]ny party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action . . . if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.” (CCP, § 2017.010.) “[S]tatutes governing discovery must be construed liberally in favor of disclosure unless the request is clearly

improper by virtue of well-established causes for denial.” (Williams, supra, 3 Cal.5th at p. 541, internal quotes omitted.) “This means that disclosure is a matter of right unless statutory or public policy considerations clearly prohibit it.” (Id., internal quotes omitted.)

“For discovery purposes, information is relevant if it might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement.” (Gonzalez v. Super. Ct. (1995) 33 Cal.App.4th 1539, 1546, italics original, internal quotes omitted.) “[D]oubts as to relevance should generally be resolved in favor of permitting discovery.” (Pacific Telephone & Telegraph Co. v. Super. Ct. (1980) 2 Cal.3d 161, 173.)

The Court finds that Plaintiff is entitled to discovery the documents requested by the disputed requests. They are relevant to Plaintiff’s claims and Defendants’ defenses. Plaintiff seeks recovery for services Plaintiff performed but for which Plaintiff was not paid, and the complaint alleges causes of action for (1) breach of contract; (2) account stated; (3) open book account; (4) quantum meruit; and (5) unjust enrichment. (ROA #2.) Defendants have contended that Plaintiff provided “substandard performance of services”; that Defendants “dispute[] . . .

Interface’s contractual performance and the amounts alleged owed”; and that “[w]ell before the initiation of this lawsuit, the value of services provided and the amounts stated in the invoices have been in dispute.” (See, e.g., ROA #315, Opp. to App. for Right to Attach Order, pp. 5-6.) Defendants have also since filed a cross-complaint against Plaintiff, alleging, inter alia, claims for quantum meruit and unjust enrichment.

Defendants oppose the instant motion to compel on two basic grounds: (1) patient privacy rights and (2) the subject requests “seek aggregate reimbursement information that does not identify payments attributable to Plaintiff’s services and necessarily contains protected information regarding numerous non-party patients and unrelated services.” (Opp. at p. 7-9.)

These arguments are unavailing. First, the patient privacy concerns have already been addressed by the parties’ agreement that NewGen may redact patient-identifying information and by the stipulated protective order. Second, Defendants do not dispute that the requested documents concern payments Defendants received for services provided by Plaintiff. Defendants have not cited any authority holding that Plaintiff is not entitled to relevant payment or billing records just because such information is recorded in “aggregate” terms. Once the records are produced, the parties may also engage in additional discovery to clarify what those “aggregate” numbers mean and to determine how much of the “aggregate” is attributable to Plaintiff’s services.

Therefore, the Court GRANTS Plaintiff’s motion to compel and ORDERS NewGen, LLC to serve all responsive documents, properly redacted to protect patient-identifying information but without further objections, in response to Requests Nos. 1-4 and 12-13 of the deposition subpoena within 21 days of notice of this ruling.

Sanctions

Under CCP section 2025.480, subdivision (j), “[t]he court shall impose a monetary sanction . . . against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel an answer or production, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.”

Even when “no opposition is filed, or opposition to the motion was withdrawn, or the requested discovery was provided to the moving party after the motion was filed,” the court has discretion to award sanctions in favor of the moving party. (Cal. Rules of Court, rule 3.1348(a).)

Monetary sanctions may include “reasonable expenses, including attorney’s fees.” (Code Civ. Proc., § 2023.030, subd. (a).)

The Court finds that NewGen acted with substantial justification in refusing to respond to Plaintiff’s initially overbroad deposition subpoena that also failed to comply with consumer notice requirements. However, the Court also finds that NewGen did not act with substantial justification in refusing to comply with the deposition subpoena after the parties entered into a stipulated protective order on 5/5/2026.

Plaintiff’s counsel attests to spending 2.5 hours preparing the supplemental motion and anticipates spending 3 hours replying to the opposition and an additional 2 hours preparing for and appearing at the hearing on this motion, all at $600 per hour, plus $60 in motion filing fees. While the anticipated hours seem somewhat inflated, the Court also recognizes that Plaintiff’s counsel spent time continuing to meet and confer with NewGen in an attempt to obtain the subpoenaed documents after NewGen failed to produce responsive records after 5/5/2026. Accordingly, the Court finds that $4,560 is a reasonable amount for monetary sanctions on this motion.

The Court notes that Plaintiff requests sanctions against both NewGen and NewGen’s counsel. Unlike monetary sanctions against a party, which are based on the party’s misuse of the discovery process, monetary sanctions against the party’s attorney require a finding the “attorney advis[ed] that conduct.” (Ghanooni v. Super Shuttle (1993) 20 Cal.App.4th 256, 261.) Here, Plaintiff has presented no evidence tending to show that NewGen’s counsel advised NewGen not to respond to the outstanding discovery. Thus, the Court will award monetary sanctions only against NewGen and not against counsel.

Accordingly, sanctions in the amount of $4,560 are GRANTED in favor of Plaintiff and against NewGen, LLC, payable to Plaintiff’s counsel within 30 days of notice. Sanctions are DENIED as to NewGen’s counsel.

Moving party shall give notice.