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Vestin Realty Mortgage II, Inc. v. Klaas

October 25, 2010

VESTIN REALTY MORTGAGE II, INC., FOR AND A SUCCESOR TO VESTIN FUND II, LLC, ET AL., PLAINTIFF,
v.
KENNETH D. KLAAS, AND DOES 1 THROUGH 50, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Hon. Anthony J. Battaglia U.S. Magistrate Judge United States District Court

Order Granting In Part and Denying in Part Motion to Compel; Denying Motion for Protective Order [Doc. Nos. 34 and 35]

The Plaintiffs' filed a motion to compel further responses to Interrogatory Nos. 6, 7, 18 and 19, and Requests for Production of Documents Nos. 1-6, 10-13, 16, 18-32. This discovery was propounded on June 17, 2010 and the responses were received on July 20, 2010, however, no privilege log has been produced to date for documents withheld by Defendant Klaas. The Plaintiffs also moves the Court for an Order compelling an additional five hours of deposition time for the Defendant, Kenneth Klaas, and seeks attorney fees and costs in the amount of $32,120 associated with bringing the instant motion.

The Defendant has filed an opposition to Plaintiff's motion to compel and also filed a motion for protective order to foreclose inquiry into: 1) communications between Klaas and any co-plaintiffs in the Nevada action as of the date they indicated their intent to become a party to that action; 2) fee and cost arrangements concerning the Nevada action; 3) investors or investments concerning the Plaintiffs; 4) documents available to the Plaintiffs or already produced in this or the Nevada action; and 5) defendant's relationship or interactions with Ms. Goodspeed.

Background

On May 21, 2005, Plaintiff and Defendant entered into a contract providing defendant with access to the Vestin Client List for certain specified purposes. Pursuant to the terms of the contract, Defendant made a formal written request for the Vestin Client List. Defendant signed a sworn affidavit would not use the Client List in any venture and that the Client List would only be used to conduct the business of Vestin Fund II, LLC. Plaintiff believes that defendant used the Client List to solicit plaintiffs for a lawsuit against Vestin Fund II. These efforts were successful and as a result, Vestin now faces litigation in Nevada state court. Plaintiff claims that once Defendant finished using the Client List to solicit clients for his own lawsuit, he bartered Vestin's Client List to an attorney for the purpose of assisting that attorney in soliciting plaintiffs to bring a class action lawsuit in San Diego Superior Court.

The Plaintiffs assert causes of action for Breach of Contract; Breach of the Covenant of Good Faith and Fair Dealing; Intentional Misrepresentation; Negligent Misrepresentation; Conversion; Misappropriation of Trade Secrets; and Interference with Business Interest based on Klaas' alleged use of the Vestin Client List for: (1) the solicitation of plaintiffs for the lawsuit in Nevada (see paragraph of the complaint) and (2) the "selling" of the list to attorneys Shustek & Partners, P.C. that allowed them to solicit plaintiffs for a class action lawsuit in San Diego. The Plaintiffs seek compensatory damages in excess of $1,000,000; judicial declaration that defendant return all benefits received, including the goods he bartered for in exchange for the Client List and any proceeds received in the action entitled Klaas v. Vestin Mortgage, (the Nevada case); preliminary and permanent injunction; punitive and exemplary damages; costs of suit and attorney's fees.

Discussion

At issue in the instant motion to compel are: (1) Defendant's responses to Interrogatory Nos. 6, 7, 18 and 19; (2) Defendant's responses to Requests for Production of Documents Nos. 1-6, 10-13, 16, 18-32; (3) Plaintiffs' request that the Defendant appear for an additional 5 hour deposition; and (4) fees and costs in the amount of $32,120 for bringing the instant motion. Alternatively, the Defendant seeks a motion for protective order to limit the above discovery.

1. Interrogatories 6, 7, 18 and 19

The Court has reviewed the Interrogatories in question and finds the Defendant's claims of privilege regarding the information sought regarding fees in Interrogatory Nos. 6 and 7 to be without*fn1 Ralls v. United States, 52 F.3d 223, 225 (9th Cir.1995); U.S. v. Blackman, 72 F. 3d 1418, 1424 (9th Cir. 1995). Plaintiffs' motion to compel further responses to these requests is GRANTED.

With regard to Interrogatory Nos. 18 and 19,*fn2 which seek information concerning transactions agreements with Dinah Goodspeed, the Court finds the information sought discoverable but limits these requests to the time period of May 21, 2005 to present. The Plaintiffs' motion to compel further responses to these requests is hereby GRANTED with this limitation. Defendant's supplemental responses must be served by November 9, 2010.

2. Document Request Nos. 1-6, 10-13, 16, 18-32

The Court has reviewed the document requests at issue and finds as follows. The Court finds Plaintiffs' Request for Production of Documents Nos. 1-6 to be over broad and burdensome on their face. As such, the Plaintiffs' motion to compel further responses to these requests is DENIED.

The Plaintiffs' Request for Production of Documents Nos.10, 12 and 13 are hereby limited to all non-privileged documents. The Plaintiffs' motion to compel further responses to these ...


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