SOUTHFORK RANCH LLC vs CALIFORNIA NATURAL RESOURCES GROUP LLC

2023CUMC015890: SOUTHFORK RANCH LLC vs CALIFORNIA NATURAL RESOURCES GROUP LLC 09/09/2026 in Department 41 Motion to Quash Deposition Subpoena for Production of Business Records

Below is the Court’s tentative decision with respect to the matter on calendar. The Court may adopt, modify, or change the tentative ruling after hearing. The tentative ruling has no legal effect unless and until adopted by the Court.

If you wish to submit on the Court’s tentative decision without appearing, please send an email to the following address by 8:00 a.m. on the date of the hearing with counsel for all parties copied on your email: courtroom41@ventura.courts.ca.gov. Please state on the subject line of your email: “SUBMISSION ON TENTATIVE”, Case Number, Title and Party. If fewer than all parties submit on the tentative, the hearing will proceed, and the tentative decision is subject to change.

Unless stated otherwise at the hearing, if a formal order is required but not signed at the hearing, the prevailing party shall prepare a proposed order and comply with CRC 3.1312 subdivisions (a), (b), (d) and (e). The signed order shall be served on all parties and a proof of service filed with the Court. A “notice of ruling” in lieu of this procedure is not authorized.

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The Court intends to rule as follows:

The Court denies the Motion to Quash Deposition Subpoena and Motion for Protective Order except as to requiring that CRPC redact any financial information (including settlement amount) from the Maria Fire Litigation settlement agreement.

I.

Background

On October 26, 2023, plaintiff Southfork Ranch, LLC (“Plaintiff” or “Southfork”) filed a complaint against defendant California Natural Resources Group, LLC (“Defendant” or “CalNRG”) pleading a single claim for declaratory relief. On March 13, 2024, defendant/cross-complainant CalNRG filed a cross-complaint for injunctive and declaratory relief against Plaintiff Southfork. On May 6, 2024, Plaintiff/Cross-Defendant Southfork filed a First-Amended Complaint (the “FAC”) against Defendant/Cross-Complainant CalNRG, again alleging a single claim for declaratory relief. Both parties have filed answers to the respective pleading filed against them.

Plaintiff alleges it owns a large parcel of real property in Santa Paula, operates an avocado ranch on the property, and leases to others the right to drill for and produce oil and gas, easements connected to such oil and gas activity, and related activities. Plaintiff entered into multiple oil and gas agreements and easements with California Resources Production Corporation (“CRPC”)

2023CUMC015890: SOUTHFORK RANCH LLC vs CALIFORNIA NATURAL RESOURCES GROUP LLC

beginning in 2014. In 2021, Defendant purchased CRPC’s assets, including certain rights to the property owned by Plaintiff. The purchased assets include an Oil and Gas Lease dated November 11, 2014; two road easements, dated November 11, 2014; two agreements dated November 11, 2014, in which Plaintiff agreed to cooperate with oil and gas operations in exchange for annual payments; and a Construction Agreement dated December 4, 2019. An actual controversy has arisen between Plaintiff and Defendant concerning these oil and gas leases, the grant of and 3-foot and 20-foot easement for road purposes, the cooperation agreement regarding the 30-foot easement, and the nonexclusive easement and water disposal agreement.

Plaintiff contends that it did not consent in writing to any assignment while Defendant claims to be a valid assignee. Plaintiff also disputes that there was a valid transfer of the CPRC agreements.

In June 2022, Southfork sued CRPC and Southern California Edison for damages related to the Maria Fire (the “Maria Fire Litigation”). In approximately December 2024, Plaintiff and CRPC settled the Maria Fire Litigation. Defendant CalNRG served a Deposition Subpoena for Production of Business Records (the “Deposition Subpoena”) on CRPC, seeking a copy of the Maria Fire Litigation settlement agreement. Southfork moves the Court for an order quashing the Deposition Subpoena and requests a protective order to prevent the production of a settlement agreement. (Code Civ. Proc., §§ 1987.1(a), 1987.1(b), 2025.240(a), 2025.410(c), 2025.420(a), 2025.420(b); Evid. Code, § 1152.) Defendant opposes.

II.

Discussion

A. Legal Standard – Deposition Subpoena for Business Records

The procedure to obtain documents from a nonparty is through a “records only” or “records and testimony” deposition subpoena. (Code Civ. Proc. § 2020.410.) Discovery conducted by way of a business records subpoena is a “deposition.” (Unzipped Apparel, LLC v. Bader (2007) 156 Cal.App.4th 123, 131.)

A party may move to quash a deposition subpoena for records under two different statutes: Code of Civil Procedure sections 1987.1 and 2025.410. Under section 1987.1, the trial court, upon a party’s motion, 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. (Code Civ. Proc., § 1987.1, subds. (a), (b)(1).) Additionally, 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. (Ibid. at subd. (a).)

Under section 2025.410, subdivision (c), a party may move for an order staying the taking of the deposition and quashing the deposition notice. The motion must be accompanied by a meet and confer declaration under Section 2016.040. The taking of the deposition is stayed pending the determination of this motion. (Code Civ. Proc., § 2025.410, subd. (c).)

Before a deposition, a party may move for a protective order. (Code Civ. Proc., § 2025.420, subd. (a).) The motion must be accompanied by a meet and confer declaration. (Ibid.) For good cause shown, the court may make any order that justice requires to protect any party, among others, from unwarranted annoyance, embarrassment, or oppression, or undue burden and

2023CUMC015890: SOUTHFORK RANCH LLC vs CALIFORNIA NATURAL RESOURCES GROUP LLC

expense. This protective order may direct that the deposition not be taken at all. (Ibid. at subd. (b)(1).)

Here, Southfork relies on Code of Civil Procedure sections 1987.1 and 2025.410 in moving to quash the deposition subpoena, and on section 2025.410 to stay the taking of the deposition pending the outcome of this motion. Southfork also seeks a protective order.

B. Procedural Matters

1. Meet and Confer

The requirement under Code of Civil Procedure section 2025.410, subdivision (c), is met here. Southfork’s counsel Gary Byron Roach’s declaration states that meet and confer occurred and was unsuccessful. The opposition does not challenge the meet and confer efforts.

2. Service of the Deposition Subpoena

A deposition shall be scheduled at least 10 days after service of the deposition notice. (Code Civ. Proc., § 2025.270, subd. (a).) Here, the Deposition Subpoena was personally served on CRPC on July 15, 2026 and designated August 11, 2026 as the deposition date. (Velthoen Decl, Exh. B.) CalNRG states it served Southfork’s counsel electronically on July 22, 2026. (Declaration of Michael A. Velthoen, ¶ 4, Exh. B.) Service on July 22, 2026, was more than 10 days before August 11 2026 and thus appears to have complied with section 2025.270. Additionally, Southfork’s motion was filed on July 24, 2026, 18 days in advance of the August 11, 2026 date. Under these circumstances, the subpoena was timely served and moreover, no prejudice to Southfork has been shown.

C. Substantive Matters

The Deposition Subpoena requests, in relevant part, “[a]ll settlement agreements between CRPC and SOUTHFORK relating to the MARIA FIRE LITIGATION.” Southfork opposes on the grounds of relevancy and the right of privacy.

Corporations do not have a right of privacy protected by the California Constitution, because the foregoing only protects the privacy rights of “people.” (SCC Acquisitions, Inc. v. Superior Court (2015) 243 Cal.App.4th 741, 755-756.) While corporations do have a right to privacy, it is not a constitutional right. The corporate right of privacy is a lesser right than that held by human beings and is not considered a fundamental right. (Ibid. at p. 756; see also Ameri-Medical Corp. v. Workers' Comp.

Appeals Bd. (1996) 42 Cal.App.4th 1260, 1287-1288.) Accordingly, whether a request for production infringes on a corporation’s right of privacy is resolved by a balancing test. The discovery's relevance to the subject matter of the pending dispute and whether the discovery appears reasonably calculated to lead to the discovery of admissible evidence is balanced against the corporate right of privacy. (SCC Acquisitions, supra, 243 Cal.App.4th at p. 756; Hecht, Solberg, Robinson, Goldberg & Bagley LLP v.

Superior Court (2006) 137 Cal.App.4th 579, 595.) Doubts about relevance generally are resolved in favor of permitting discovery. (SCC Acquisitions, supra, 243 Cal.App.4th at p. 756.)

2023CUMC015890: SOUTHFORK RANCH LLC vs CALIFORNIA NATURAL RESOURCES GROUP LLC

1. Relevancy of the Settlement Agreement

CalNRG argues that the Maria Fire Litigation settlement agreement is relevant to this dispute because in that case, Southfork sued CRPC for breach of the very same agreements that are in dispute here. CalNRG posits that the settlement presumably resolved that dispute and may include terms that bear on whether the terms of any of the agreements were altered, terminated, or affirmed. CalNRG further contends that Southfork refused to consent to the assignment of the agreements to CalNRG because of the then-pending Maria Fire litigation. Lastly, CalNRG notes that the settlement agreement may contain a release of CalNRG or CRPC’s successors or assigns.

CalNRG’s arguments have merit. A copy of the Maria Fire Litigation complaint filed on June 30, 2022, by Southfork against CRPC shows that the first cause of action was for “breach of leases.” (Opp., Exh. A.) The Maria Fire Litigation complaint alleges the existence of the same easements/agreements at issue in the current action and alleges that CRPC breached the provision prohibiting assignments without Southfork’s consent. (See Opp., Exh. A, p. 27, ¶ 60 [“CRPC breached the Oil and Gas Lease, and assignment, Exhibit “1”, paragraph 33, by ceding, assigning, subleasing, or otherwise transferring this lease or any interest therein without Lessor's prior written consent.”].)

Further, on or about August 3, 2021, Southfork’s managing partner Robert J McDonough sent a letter to CRPC refusing to consent to the assignments of CRPC’s Easements/Agreements. In the letter, McDonough stated in relevant part: “The current dispute over damages from the 2019 Maria Fire, is an active default under the Agreement. While I have every expectation that these concerns will be resolved in a fair and equitable manner, I cannot give consent at this time.” (Mtn, Exh. 3.) What he meant by “active default under the Agreement” is unclear but certainly, the Maria Fire Litigation complaint alleged a breach of the assignment clause, which is also alleged here. How that claim is dealt with in the settlement agreement might have bearing on this action.

Southfork also contends that Evidence Code section 11521 prevents disclosure of the settlement agreement. Evidence Code 1152 applies to bar admission when a party tries to introduce a past settlement agreement to prove that someone admitted fault, is liable for damages, or acted wrongfully in the underlying dispute. Therefore, as CalNRG argues, section 1152 governs the admissibility of settlement offers and negotiations, not their underlying relevance.

Based on the foregoing, CalNRG has shown that the settlement agreement entered into between Southfork and CRPC may have some relevance to this litigation. 1Evidence Code section 1152, subdivision (a) provides: “Evidence that a person has, in

compromise or from humanitarian motives, furnished or offered or promised to furnish money or any other thing, act, or service to another who has sustained or will sustain or claims that he or she has sustained or will sustain loss or damage, as well as any conduct or statements made in negotiation thereof, is inadmissible to prove his or her liability for the loss or damage or any part of it.”

2023CUMC015890: SOUTHFORK RANCH LLC vs CALIFORNIA NATURAL RESOURCES GROUP LLC

2. Balancing of Right of Privacy with Right to Discovery

As stated above, a corporation’s right of privacy is less than that of a human being and is not a fundamental right. (SCC Acquisitions, supra, 243 Cal.App.4th at p. 755-756.) In the instant motion, Southfork only alleges that the settlement agreement is confidential (presumably by its terms) and nothing more. To the extent that Southfork contests disclosure on the basis of relevancy, the court finds, as stated above, that the agreement may be relevant to the instant action, especially in light of the fact that the first cause of action in the Maria Fire Litigation complaint alleged breach of the leases, inclusive of the assignment at issue here.

To the extent the settlement agreement contains the settlement amount, CalNRG’s counsel offered to have such information redacted. (Mtn, Exh. 1.) Importantly, Southfork does not describe what harm would befall it should the agreement be produced. Southfork’s main objection appears to be that it simply does not want the settlement agreement produced (e.g., “Southfork does not want its private transactions exposed to the world” [Opp. 3:14]).

Given the foregoing, in balancing the settlement agreement’s relevance to the subject matter of this dispute against the corporate right of privacy, right to discovery should prevail. No in camera review by the Court is necessary.

III.

Conclusion

The Court denies the Motion to Quash Deposition Subpoena and Motion for Protective Order except as to requiring that CRPC redact any financial information (including settlement amount) from the settlement agreement.

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