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} Facsimile: (916)
BRUCE A. SCHEIDT, State Bar No. 155088 ELECTRONICALLY
bscheidt@kmtg.com
CHRISTOPHER ONSTOTT, State Bar No. 225968 eee
constotl(@kmig.com County of San Francisco
ERROL C. DAUIS, State Bar No. 279313 10/27/2016
edauis(@kmig.com Clerk of the Court
KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD BY:MADONNA CARANTO
A Professional Corporation Deputy Clerk
400 Capitol Mall, 27" Floor
Sacramento, California 95814
1ephone: (916) 321-4500
4555
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
| GOLDEN PACIFIC BANK, N.A.,
Plaintiff,
Vv.
14 j BILLFLOAT, INC., RYAN GILBERT, SEAN
| O'MALLEY, and DOES 1-50, inclusive,
Defendants.
} BILLFLOAT, INC.
Cross-Complainant,
| GOLDEN PACIFIC BANK, N.A., and ROES
y 1-50.
Cross-Defendants.
4.2 14023-004
Case No. CGC-16-549804
DISCOVERY
GOLDEN PACIFIC BANK'S REPLY TO
OPPOSITION TO MOTION TO COMPEL
FURTHER RESPONSES FROM
RYAN GILBERT AND SEAN O'MALLEY
TO REQUEST FOR PRODUCTION OF
DOCUMENTS, SET ONE
Judge: Hon. Harold E. Kahn
Date: November 3, 2016
Time: 9:00 a.m.
Dept: 302
Case Transferred
from Sacramento County: — January 11, 2016
Trial Date: None Set
PACIFIC BANK’
RESPONSE!
GOLI
REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER
FROM RYAN GILBERT AND SEAN O'MALLEYly I. INTRODUCTION
2i Defendants Ryan Gilbert and Sean O'Malley's (collectively, "Defendants,") Opposition to
3 | Plaintiff Golden Pacific Bank's ("Golden Pacific") Motion to Compel Further Responses attempts
8 } that BillFloat's responses were also improper and are the subject of Golden Pacific's Motion to
9 Compel Further Responses that is set for hearing on November 22, 2016. Indeed, BillFloat failed
14] Defendants also argue that this motion was brought because Golden Pacific "faced the
15 | threat of sanctions,” with respect to its own discovery responses. This argument fails for several
16 |] reasons. These reasons include the fact that Golden Pacific tried for months to mect-and-confer
20 |} Defendants’ argument necessarily ignores the fact that Golden Pacific brought its motion to
21 | compel on October 5, 2016, two days before Defendants brought their motion. Finally, as the
22 | court will see, Defendants are the parties that will be sanctioned for pressing requests for
23 || admissions that conflict with the express language of the statute in a motion to compel. As set
24 }f forth more fully in the motion, Golden Pacific's Motion should be granted because it: (1) has
25 || established that there was good cause for the categories of documents requested; (2) it has
26 || established that Defendants’ statement of compliance was insufficient and evasive; and (3) it has
27 || established that Defendants objections have no merit.
28 Pili
1501554.2 14023-004 1
~~ GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER at
RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEYIl. ANALYSIS
A Defendants Responses are Not Code Compliant.
At bottom, Golden Pacific's motion simply seeks code-compliant responses to discovery
together with all responsive documents in Defendants' possession, custody, or control. What it
received, instead, from Defendants were evasive responses and not a single document produced
with respect to over 90 separate categories of documents demanded.
As set forth in Golden Pacific's opening brief, Defendants provided two separate non-
compliant responses to Golden Pacific's document requests in its original responses:
(1) "Subject to, and notwithstanding, these objections, Responding Party states as
follows: Responding Party is informed and believes and thereon asserts that
records responsive to this request have been and/or will be included in the
production of documents by Better Finance and/or identified in the Privilege Log of
Better Finance. Beyond what is produced and/or identified by Better Finance in
response to this Request, Responding Party has not responsive records in his
possession or control."
(2) "Subject to, and notwithstanding, these objections, Responding Party states as
follows: In coordination with Defendant BillFloat, Inc., Responding Party will make
available responsive documents that are not subject to the attorney/client privilege or
work product privileges currently in Responding Party's possession or control, to the
extent they have not already been produced by Defendant BillFloat, Inc."
Defendants then provided amended responses which stated in boilerplate fashion with
respect to Request Nos. 1-86.
(3) "[A]fter a reasonable and diligent search Responding Party states he does not
have any responsive documents in his custody or control independent of those in
the custody or control of Defendant BillFloat, Inc."
These responses are inherently contradictory because they initially state that Defendants
would produce some documents in their possession, custody or control, but then amend those
responses to evasively state that they have no documents independent of those possessed by
BillFloat. Defendants’ Opposition asserts that it is excused from its responsibilities to provide an
adequate statement of compliance because it "advised that Defendants did not have possession of
any responsive documents outside of what was previously turned over to the company, BillFloat."
Opp. at 5:1-3. Defendants’ statement is necessarily an admission that they, in fact, each still
possess responsive documents in their possession, custody, or control. Accordingly, Defendants
are required to permit inspection of those documents responsive to the categories requested for
1501554.2. 14023-D04 2
GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER
RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEYdocuments in each of their possession, custody, or control pursuant to Code of Civil Procedure
section 2031.220. See Code Civ. Proc. § 2031.220 (requiring a "statement that the party to whom
ademand for inspection ... has been directed will comply with the particular demand shall state
that the production, inspection, [or] copying ... will be allowed either in whole or in part. and that
all documents or things in the demanded category that are in the possession, custody, or control of
that party and to which no inspection is being made will be included in the production.")
7 (emphasis added). Both Defendants’ original. and amended responses fail to make this required
statement.
This requirement is not simply some technicality being pressed by Golden Pacific. As set
forth in the original motion, the actual documents in cach Defendants' possession, custody, and
| control are inherently relevant to Golden Pacific's fraud claims against Defendants as they tend to
show Defendants’ knowledge of the contents of those documents that are (or were) in their
3
GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER
RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEY[or] copying, ... shall affirm that a diligent search and a reasonable inquiry has
been made in an effort to comply with the demand and a statement that the inability
to comply with the demand is because the particular category has never existed, has
been destroyed, has been lost, misplaced, or stolen, or never been, or is no longer in
the possession, custody, or control of the responding party. The statement shall set
forth the name and address of any natural person or organization known or believed
by that party to have possession, custody, or control of that item or category of
item."
Code of Civ. Proc. § 2031.230 (emphasis added). Defendants' amended responses simply
control and that they will be produced. Code of Civ. Proc. § 2031.240(a). Rather than make that
simple representation, Defendants have instead concocted a theory that they do not need to
provide a compliant response because some other party has been given a copy of the documents,
Again, that position is unsupported by the law. A party cannot say that they gave a copy of the
documents to some other party to avoid his or her own responsibilities to provide an inspection.
Here, no such Code-compliant response was provided by Defendants Gilbert or O'Malley.
Finally, Defendants’ position that they may evade their discovery responsibilities because
another party, BillFloat. Inc., has produced documents is belied by BillFloat's own serial failures
to provide Code compliant responses to similar discovery requests. See Onstott Supp. Decl. at
Exhs. A & B. In those responses, BillFloat repeatedly either failed outright to provide any
responsive documents to the requested categories of documents, or attempted to provide specially
prepared spreadsheets in lie of responsive documents. BillFloat's insufficient responses are
currently the subject of Golden Pacific's Motion to Compel Further Responses from BillFloat, set
for hearing November 22, 2016.
ff 1501554.2 14023-004 4
GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER
RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEYB. There was No Agreement to "Rely" on BillFloat's Production,
Defendants misleadingly assert that there was "agreed upon amended language in the
supplemental responses." Opp. 8:1114. Contrary to the assertion set forth in the Opposition, there
was no agreement between counsel that the responses by BillFloat, Inc. would remove any
obligation on Defendants Gilbert and O'Malley to provide responsive documents to Request Nos.
1-86 and there was no "agreed upon" amended language. Indeed, contrary to Defendants' counsel
declaration, review of Chris Onstott's July 15, 2016 letter to Mr. Lockwood, confirming their
meet-and-confer conversation, (attached as Exhibit J to the Onstott Declaration served with the
moving papers) shows that there was no agreement that to accept the production of BillFloat, Inc.
as if it were produced by Defendants Gilbert and/or O'Malley or that there was "agreed upon
language. See Onstott Supp. Deel. 4 4-5. Rather that letter confirming the meet-and-confer
session between counsel stated:
"Golden Pacific is entitled to a statement that Mr. Gilbert is producing everything
in his pe sion, custody, or control. Based upon our meet-and-confer
conversation, it is my understanding that Mr. Gilbert does not possess or control the
documents located on BillFloat's company server. However, to the extent that Mr.
Gilbert has anything in his possession, custody. or control, such as responsive
information on personal email accounts, text messages on a mobile phone ... files
on his personal computer or tablet, or other hardcopy documents in his possession,
custody or control at the time the request was made, he must respond consistent
with the requirements of the Code of Civil Procedure and produce them."
Onstott Decl. € 8-10, Exh. J. Tellingly, Defendants counsel points to nothing disputing
is statement in confirmation of the meet-and-confer session.
Cc. Golden Pacific is Entitled to Serve Requests for Production On Each Defendant and
rvice of Such Requests is Not Dup ec.
Defendants argue that the Requests served on them are "substantively the same requests as
those propounded on BillFloat." (Opposition at 3:16-23.) However, they provide no authority as
J to why these Requests are improper or otherwise not permitted. While a party may be subject to a
"duplicative" objection for repeated discovery propounded on the same person, that is not what
has been done here. Indeed, the Code makes it clear that a demand may be served on an "any
other party to the action." (CCP section 2031.010(a).) This includes co-partiecs and adverse
parties. (/d.) hus, it is immaterial if Golden Pacific asks for similar categories of documents
42 14023-004 5
GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER
RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEY26
27
28
from each of three different parties. Indeed. such practice should be expected as it is assumed that
different partics to a case may each poss
documents falling within the same category of
documents that are in that defendant's possession, custody or control. Indeed, the code explicitly
requires that each defendant organize their production either "as they are kept in the usual course
of business, or be organized to correspond with the categories in the demand." Code of Civil
Procedure § 2031.280(a). There is no option for co-defendants to mix their documents together
and further allow individual defendants to escape their discovery responsibilities. Indeed. as set
forth below, the fact that Defendants have strongly resisted providing their text messages between
themselves concerning obviously relevant and discoverable topics shows that they possess
documents responsive to the categories requested in Request Nos. 1-86 that they are not providing.
As provided above, each of the three separate defendants is obligated to provide a Code-compliant
Response to each Request. The individual defendants are not exempt from this requirement.
dD. This Motion Followed Exhausted Meet-and-Confer Efforts.
Defendants claim that Golden Pacific's three-month effort to try to get Defendants to
provide Code-compliant responses and produce responsive documents, somehow was not enough.
Defendants claim that they “amended every single one of their responses and would have
proceeded to do so a second time if GPB had not unilaterally cut off the meet-and-confer
negotiations," is belied by the facts. Opp. 8:7-10. First, Defendants did not amend their responses
to Request Nos. 87-91 for which they provided only objections. Second, the use of the term
“negotiations” demonstrates that Defendants view their discovery obligations as a mere formality
to be negotiated to a lesser standard of compliance. Finally, Golden Pacific did exhaust its meet-
and-confer obligations. As set forth in Golden Pacific's opening brief, Golden Pacific sent
detailed meet-and-confer letters on June 15, 2016 and waited a month for a response from
Defendants. See Onstott Decl. 7¥ 6-10, Exh. E &F. When Defendants response was insufficient,
Golden Pacific arranged (after considerable resistance from Defendants’ counsel) to speak by
telephone concerning the inappropriate responses and followed that up with a confirming letter.
Id. at Exh. J. When the amended responses were again non-compliant, Golden Pacific wrote
another meet-and-confer letter on September |, 2016 outlining specifically what steps needed to
1S01554.2 14023-004 6
GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER
RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEYbe taken to comply with Defendants discovery responsibilities. Onstott Decl. §§ 13-14, Exh. M
(stating that "Golden Pacific is entitled to a statement that [Mr. Gilbert/O'Malley] is producing
everything in his possession, custody, or control."). Even after the letter, Golden Pacific's counsel
provided a follow-up opportunity to Defendants to comply with their discovery responsibilities on
September 16, 2016, stating "A Motion to compel will be filed early next week unless I receive a
substantive response from you sooner that outlines which responses will be amended, how they
will be amended and whether all non-privileged responsive documents in your clients possession,
custody, or control will be produced." Onstott Decl. Exh. N. Even then, on September 22, 2016,
Golden Pacific provided a final opportunity to Defendants to comply, stating by email "Your
client's discovery obligations are clear: they must make a statement of compliance representing
that they will produce all responsive, non-privileged documents in their possession, custody, or
control for cach category requested. ... Despite these obligations, you clients have provided
evasive responses to the discovery propounded and refused to produce a single document.
...Please have amended compliant responses to me by Monday, September 26, 2016." Onstott
Decl. Exh. O. Defendants failed to provide any response to this email. Onstott Decl. {4 16-17.
E. Defendants Objections to Request Nos. 87-91 Fail.
Perhaps the most telling instance of Defendants’ bad faith in providing discovery responses
is their responses (or lack thereof) to Request Nos. 87-91. Each of these discover requests seeks a
discoverable, easily searchable category of documents relevant to each Defendant. These requests
drew objections only and were not amended.
"In their introduction, Defendants Gilbert and O'Malley argue that this Motion is brought because Golden
Pacific was "faced with the threat of sanctions" for its own discovery positions. This argument fails for
several r t, as set forth in detail in Golden Pacific's opening brief, Golden Pacific spent literally
months trying to get Defendants to provide Code-compliant responses and produce responsive documents.
Defendants failed to provide compliant responses and did not produce a single responsive document to any
of the requests. Moreover, Golden Pacific filed is motion to compel on October 5, 2016. Defendants
Gilbert and O'Malley filed their Motion to Compel further Responses to Requests for Admission and Form
gatories on October 7, 2016. Defendants' argument, accordingly, fails This Court's task is to
the Requests at issue in /is Motion and whether Defendants should be compelled to provide
further responses.
7
> BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER
RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEY1. Request No. 87,
Request No. 87 simply sought "ALL text messages between YOU and Ryan Gilbert, Evan
Defendants state that the documents are impermissibly compound because they seek
} communications text messages between specifically identified individuals. Defendants fail to
admissible evidence, Finally, Defendants fail to substantiate any burden in searching text
messages for responsive documents.
2. Request No. 88.
The only difference between Request No. 87 and Request No. 88 is that request 88 seeks
emails as opposed to text messages. Defendants objections fail for the same reasons.
3. Request No. 89.
Request No. 89 secks "ALL text messages between YOU [i.e. Gilbert or O'Malley] and
2N PACIF ;
RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEYThe reasons Defendants objections fail are set forth in detail in Golden Pacific's Separate
atement. See Separate Statement at pp. 343-344. As set forth above, Defendants objection
based upon text messages is without merit, as is the claim that Defendants cannot figure out what
the term "references" mean. Defendants objection based upon Valley Bank similarly fails for the
multiple reasons set forth in the Separate Statement. Indeed, even if there were third-party
concerns, Defendants are still obligated to provide a response and permit inspection of documents
J not implicating such concerns. See Code of Civil Procedure § 2031.220 (requiring the party to
| represent whether the inspection "will be allowed either in whole or in part, and that all documents
or things in the demanded category that are in the possession, custody, or control of that party and
to which no objection is being made will be included in the production."). The request here is
narrow and searchable and Defendants objections based upon undue burden are unsupported by
any evidence. Mead Reins. Co. v. Superior Court, 1888 Cal.App.3d 313, 322-323 (1986)
(“Oppression must not be equated with burden [] all discovery imposes some burden on the
opposition [] to support an objection of oppression there must be some showing that the ultimate
effect of the burden is incommensurate with the result sought.").
4. Request No. 90.
Request No. 90 asks for "ALL. text messages between YOU [Gilbert or O'Malley] and
ANY PERSON that reference ANY expense referenced in ANY JOINT IP SOW that
BILLFLOAT, INC. delivered to the BANK." As the Separate Statement sets forth, there was
ample good cause for this request as it involves a central allegation in Golden Pacific's complaint.
See Golden Pacific Complaint at § 45. Defendants depend upon the same boilerplate objections as
l] above. Those objections fail for the same reasons.
5. Request No. 91.
Request No. 91 sought "ALL text messages between [Gilbert and O'Malley that reference
| or regard GOLDEN PACIFIC BANK’s participation in the SMARTBIZ program." This was a
1554.2 14023-004 9
GOLDEN PACIFIC
RESPONSE
FROM RYAN GILBERT AND SEAN O'MALLEYF, Chris Onstott's Declaration Mistakenly Used the Word "Opposition".
Defendants attempt to take advantage of a typographical error that appears in counsel's
declaration. That declaration states "In connection with this Motion to Compel and associated
papers, I have expended 41 hours preparing and revising the Opposition and supporting papers.
Accordingly, my fees total $13,325 in connection with preparing this Motion." Onstott Decl. § 21.
This is a typographical error and should read that time was spent "preparing and revising the
Motion and supporting papers." A second typographical error occurred later in the same
paragraph that also incorrectly referenced the word "Opposition" which it should have referenced
the Motion. Supplemental Declaration of Christopher Onstott at | 2. The typographical errors do
not invalidate or otherwise prevent the request for sanctions and the evidence submitted in support
of the request. Moreover, additional time was spent preparing the Reply in support of this Motion.
Accordingly, Golden Pacific requests $16,380 in sanctions against Defendants. See Onstott Supp.
Decl at {| 6.
Ii. CONCLUSION
Defendants assert they can rely on the responses of other parties to the litigation as their
own. They offer no authority for this proposition, yet have steadfastly maintained it through
several months of meeting and conferring on the issue. All Golden Pacific has requested is what it
is entitled to under the Code, a proper statement of compliance and production of non-privileged
documents in the possession, custody, or control of the Defendants. They continue to refuse to
provide Code-compliant responses to any of the Requests for Production or produce the
responsive documents for inspection. Accordingly, Golden Pacific's Motion should be granted,
including its request sanctions against Defendants Gilbert, O'Malley in the amount of $16,380.
Dated: October 27, 2016 KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD
Christopher Onstott
Attorneys for Plaintiff and Cross-Defendant
GOLDEN PACIFIC BANK, N.A.
10
N PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER
RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEYPROOF OF SERVICE
STATE OF CALIFORNIA, COUNTY OF SACRAMENTO
At the time of service, | was over 18 years of age and not a party to this action. | am
employed in the County of Sacramento, State of California. My business address is 400 Capitol
Mall, 27th Floor. Sacramento, CA 95814.
On October 27, 2016, I served true copies of the following document(s) described as
GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL
FURTHER RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEY TO
REQUEST FOR PRODUCTION OF DOCUMENTS, SET ONE on the interested parties in
this action as follows:
SEE ATTACHED SERVICE LIST
BY E-MAIL OR ELECTRONIC TRANSMISSION: Based on a court order or an
agreement of the partics to accept service by e-mail or electronic transmission, I caused the
document(s) to be sent from e-mail address ehamman@kmtg.com to the persons at the e-mail
addresses listed in the Service List. The document(s) were transmitted at or before 5:00 p.m. I did
not receive, within a reasonable time after the transmission, any electronic message or other
indication that the transmission was unsuccessful.
I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct.
Executed on October 27, 2016, at Sacramento, California.
1501554.2 14023-004
1
_Y TO OPPOSITION TO MOTION TO COMPEL FURTHER
RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEYSERVICE LIST
Golden Pacific Bank, N.A. v. BillFloat, Inc., Ryan Gilbert, Sean O'Malley
San Francisco Superior Court, Case No. CGC-16-549804
neys for BillFloat, Inc.: Attorneys for Ryan Gilbert & Sean O'Malley:
William T. Webb Peter L. Isola
Jennifer D. Yu Robert I. Lockwood
155 Montgomery Street, Ste. 1200 HINSHAW & CULBERTSON LLP
San Francisco, CA 94104 One California Street, 18" Floor
Il Tel.: 415-277-7200 San Francisco, CA 94111
F Pel.: 415-362-6000
‘ax: 415-277-7210
Email: wwebbwwebblegalgroup.com Pax: 415-834-9070
group.com Email:
Jaw.c
rlockwoodia' hinshawlaw.com
2
N PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER
RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEY
Preview
} Facsimile: (916) BRUCE A. SCHEIDT, State Bar No. 155088 ELECTRONICALLY bscheidt@kmtg.com CHRISTOPHER ONSTOTT, State Bar No. 225968 eee constotl(@kmig.com County of San Francisco ERROL C. DAUIS, State Bar No. 279313 10/27/2016 edauis(@kmig.com Clerk of the Court KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD BY:MADONNA CARANTO A Professional Corporation Deputy Clerk 400 Capitol Mall, 27" Floor Sacramento, California 95814 1ephone: (916) 321-4500 4555 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO | GOLDEN PACIFIC BANK, N.A., Plaintiff, Vv. 14 j BILLFLOAT, INC., RYAN GILBERT, SEAN | O'MALLEY, and DOES 1-50, inclusive, Defendants. } BILLFLOAT, INC. Cross-Complainant, | GOLDEN PACIFIC BANK, N.A., and ROES y 1-50. Cross-Defendants. 4.2 14023-004 Case No. CGC-16-549804 DISCOVERY GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEY TO REQUEST FOR PRODUCTION OF DOCUMENTS, SET ONE Judge: Hon. Harold E. Kahn Date: November 3, 2016 Time: 9:00 a.m. Dept: 302 Case Transferred from Sacramento County: — January 11, 2016 Trial Date: None Set PACIFIC BANK’ RESPONSE! GOLI REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER FROM RYAN GILBERT AND SEAN O'MALLEYly I. INTRODUCTION 2i Defendants Ryan Gilbert and Sean O'Malley's (collectively, "Defendants,") Opposition to 3 | Plaintiff Golden Pacific Bank's ("Golden Pacific") Motion to Compel Further Responses attempts 8 } that BillFloat's responses were also improper and are the subject of Golden Pacific's Motion to 9 Compel Further Responses that is set for hearing on November 22, 2016. Indeed, BillFloat failed 14] Defendants also argue that this motion was brought because Golden Pacific "faced the 15 | threat of sanctions,” with respect to its own discovery responses. This argument fails for several 16 |] reasons. These reasons include the fact that Golden Pacific tried for months to mect-and-confer 20 |} Defendants’ argument necessarily ignores the fact that Golden Pacific brought its motion to 21 | compel on October 5, 2016, two days before Defendants brought their motion. Finally, as the 22 | court will see, Defendants are the parties that will be sanctioned for pressing requests for 23 || admissions that conflict with the express language of the statute in a motion to compel. As set 24 }f forth more fully in the motion, Golden Pacific's Motion should be granted because it: (1) has 25 || established that there was good cause for the categories of documents requested; (2) it has 26 || established that Defendants’ statement of compliance was insufficient and evasive; and (3) it has 27 || established that Defendants objections have no merit. 28 Pili 1501554.2 14023-004 1 ~~ GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER at RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEYIl. ANALYSIS A Defendants Responses are Not Code Compliant. At bottom, Golden Pacific's motion simply seeks code-compliant responses to discovery together with all responsive documents in Defendants' possession, custody, or control. What it received, instead, from Defendants were evasive responses and not a single document produced with respect to over 90 separate categories of documents demanded. As set forth in Golden Pacific's opening brief, Defendants provided two separate non- compliant responses to Golden Pacific's document requests in its original responses: (1) "Subject to, and notwithstanding, these objections, Responding Party states as follows: Responding Party is informed and believes and thereon asserts that records responsive to this request have been and/or will be included in the production of documents by Better Finance and/or identified in the Privilege Log of Better Finance. Beyond what is produced and/or identified by Better Finance in response to this Request, Responding Party has not responsive records in his possession or control." (2) "Subject to, and notwithstanding, these objections, Responding Party states as follows: In coordination with Defendant BillFloat, Inc., Responding Party will make available responsive documents that are not subject to the attorney/client privilege or work product privileges currently in Responding Party's possession or control, to the extent they have not already been produced by Defendant BillFloat, Inc." Defendants then provided amended responses which stated in boilerplate fashion with respect to Request Nos. 1-86. (3) "[A]fter a reasonable and diligent search Responding Party states he does not have any responsive documents in his custody or control independent of those in the custody or control of Defendant BillFloat, Inc." These responses are inherently contradictory because they initially state that Defendants would produce some documents in their possession, custody or control, but then amend those responses to evasively state that they have no documents independent of those possessed by BillFloat. Defendants’ Opposition asserts that it is excused from its responsibilities to provide an adequate statement of compliance because it "advised that Defendants did not have possession of any responsive documents outside of what was previously turned over to the company, BillFloat." Opp. at 5:1-3. Defendants’ statement is necessarily an admission that they, in fact, each still possess responsive documents in their possession, custody, or control. Accordingly, Defendants are required to permit inspection of those documents responsive to the categories requested for 1501554.2. 14023-D04 2 GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEYdocuments in each of their possession, custody, or control pursuant to Code of Civil Procedure section 2031.220. See Code Civ. Proc. § 2031.220 (requiring a "statement that the party to whom ademand for inspection ... has been directed will comply with the particular demand shall state that the production, inspection, [or] copying ... will be allowed either in whole or in part. and that all documents or things in the demanded category that are in the possession, custody, or control of that party and to which no inspection is being made will be included in the production.") 7 (emphasis added). Both Defendants’ original. and amended responses fail to make this required statement. This requirement is not simply some technicality being pressed by Golden Pacific. As set forth in the original motion, the actual documents in cach Defendants' possession, custody, and | control are inherently relevant to Golden Pacific's fraud claims against Defendants as they tend to show Defendants’ knowledge of the contents of those documents that are (or were) in their 3 GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEY[or] copying, ... shall affirm that a diligent search and a reasonable inquiry has been made in an effort to comply with the demand and a statement that the inability to comply with the demand is because the particular category has never existed, has been destroyed, has been lost, misplaced, or stolen, or never been, or is no longer in the possession, custody, or control of the responding party. The statement shall set forth the name and address of any natural person or organization known or believed by that party to have possession, custody, or control of that item or category of item." Code of Civ. Proc. § 2031.230 (emphasis added). Defendants' amended responses simply control and that they will be produced. Code of Civ. Proc. § 2031.240(a). Rather than make that simple representation, Defendants have instead concocted a theory that they do not need to provide a compliant response because some other party has been given a copy of the documents, Again, that position is unsupported by the law. A party cannot say that they gave a copy of the documents to some other party to avoid his or her own responsibilities to provide an inspection. Here, no such Code-compliant response was provided by Defendants Gilbert or O'Malley. Finally, Defendants’ position that they may evade their discovery responsibilities because another party, BillFloat. Inc., has produced documents is belied by BillFloat's own serial failures to provide Code compliant responses to similar discovery requests. See Onstott Supp. Decl. at Exhs. A & B. In those responses, BillFloat repeatedly either failed outright to provide any responsive documents to the requested categories of documents, or attempted to provide specially prepared spreadsheets in lie of responsive documents. BillFloat's insufficient responses are currently the subject of Golden Pacific's Motion to Compel Further Responses from BillFloat, set for hearing November 22, 2016. ff 1501554.2 14023-004 4 GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEYB. There was No Agreement to "Rely" on BillFloat's Production, Defendants misleadingly assert that there was "agreed upon amended language in the supplemental responses." Opp. 8:1114. Contrary to the assertion set forth in the Opposition, there was no agreement between counsel that the responses by BillFloat, Inc. would remove any obligation on Defendants Gilbert and O'Malley to provide responsive documents to Request Nos. 1-86 and there was no "agreed upon" amended language. Indeed, contrary to Defendants' counsel declaration, review of Chris Onstott's July 15, 2016 letter to Mr. Lockwood, confirming their meet-and-confer conversation, (attached as Exhibit J to the Onstott Declaration served with the moving papers) shows that there was no agreement that to accept the production of BillFloat, Inc. as if it were produced by Defendants Gilbert and/or O'Malley or that there was "agreed upon language. See Onstott Supp. Deel. 4 4-5. Rather that letter confirming the meet-and-confer session between counsel stated: "Golden Pacific is entitled to a statement that Mr. Gilbert is producing everything in his pe sion, custody, or control. Based upon our meet-and-confer conversation, it is my understanding that Mr. Gilbert does not possess or control the documents located on BillFloat's company server. However, to the extent that Mr. Gilbert has anything in his possession, custody. or control, such as responsive information on personal email accounts, text messages on a mobile phone ... files on his personal computer or tablet, or other hardcopy documents in his possession, custody or control at the time the request was made, he must respond consistent with the requirements of the Code of Civil Procedure and produce them." Onstott Decl. € 8-10, Exh. J. Tellingly, Defendants counsel points to nothing disputing is statement in confirmation of the meet-and-confer session. Cc. Golden Pacific is Entitled to Serve Requests for Production On Each Defendant and rvice of Such Requests is Not Dup ec. Defendants argue that the Requests served on them are "substantively the same requests as those propounded on BillFloat." (Opposition at 3:16-23.) However, they provide no authority as J to why these Requests are improper or otherwise not permitted. While a party may be subject to a "duplicative" objection for repeated discovery propounded on the same person, that is not what has been done here. Indeed, the Code makes it clear that a demand may be served on an "any other party to the action." (CCP section 2031.010(a).) This includes co-partiecs and adverse parties. (/d.) hus, it is immaterial if Golden Pacific asks for similar categories of documents 42 14023-004 5 GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEY26 27 28 from each of three different parties. Indeed. such practice should be expected as it is assumed that different partics to a case may each poss documents falling within the same category of documents that are in that defendant's possession, custody or control. Indeed, the code explicitly requires that each defendant organize their production either "as they are kept in the usual course of business, or be organized to correspond with the categories in the demand." Code of Civil Procedure § 2031.280(a). There is no option for co-defendants to mix their documents together and further allow individual defendants to escape their discovery responsibilities. Indeed. as set forth below, the fact that Defendants have strongly resisted providing their text messages between themselves concerning obviously relevant and discoverable topics shows that they possess documents responsive to the categories requested in Request Nos. 1-86 that they are not providing. As provided above, each of the three separate defendants is obligated to provide a Code-compliant Response to each Request. The individual defendants are not exempt from this requirement. dD. This Motion Followed Exhausted Meet-and-Confer Efforts. Defendants claim that Golden Pacific's three-month effort to try to get Defendants to provide Code-compliant responses and produce responsive documents, somehow was not enough. Defendants claim that they “amended every single one of their responses and would have proceeded to do so a second time if GPB had not unilaterally cut off the meet-and-confer negotiations," is belied by the facts. Opp. 8:7-10. First, Defendants did not amend their responses to Request Nos. 87-91 for which they provided only objections. Second, the use of the term “negotiations” demonstrates that Defendants view their discovery obligations as a mere formality to be negotiated to a lesser standard of compliance. Finally, Golden Pacific did exhaust its meet- and-confer obligations. As set forth in Golden Pacific's opening brief, Golden Pacific sent detailed meet-and-confer letters on June 15, 2016 and waited a month for a response from Defendants. See Onstott Decl. 7¥ 6-10, Exh. E &F. When Defendants response was insufficient, Golden Pacific arranged (after considerable resistance from Defendants’ counsel) to speak by telephone concerning the inappropriate responses and followed that up with a confirming letter. Id. at Exh. J. When the amended responses were again non-compliant, Golden Pacific wrote another meet-and-confer letter on September |, 2016 outlining specifically what steps needed to 1S01554.2 14023-004 6 GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEYbe taken to comply with Defendants discovery responsibilities. Onstott Decl. §§ 13-14, Exh. M (stating that "Golden Pacific is entitled to a statement that [Mr. Gilbert/O'Malley] is producing everything in his possession, custody, or control."). Even after the letter, Golden Pacific's counsel provided a follow-up opportunity to Defendants to comply with their discovery responsibilities on September 16, 2016, stating "A Motion to compel will be filed early next week unless I receive a substantive response from you sooner that outlines which responses will be amended, how they will be amended and whether all non-privileged responsive documents in your clients possession, custody, or control will be produced." Onstott Decl. Exh. N. Even then, on September 22, 2016, Golden Pacific provided a final opportunity to Defendants to comply, stating by email "Your client's discovery obligations are clear: they must make a statement of compliance representing that they will produce all responsive, non-privileged documents in their possession, custody, or control for cach category requested. ... Despite these obligations, you clients have provided evasive responses to the discovery propounded and refused to produce a single document. ...Please have amended compliant responses to me by Monday, September 26, 2016." Onstott Decl. Exh. O. Defendants failed to provide any response to this email. Onstott Decl. {4 16-17. E. Defendants Objections to Request Nos. 87-91 Fail. Perhaps the most telling instance of Defendants’ bad faith in providing discovery responses is their responses (or lack thereof) to Request Nos. 87-91. Each of these discover requests seeks a discoverable, easily searchable category of documents relevant to each Defendant. These requests drew objections only and were not amended. "In their introduction, Defendants Gilbert and O'Malley argue that this Motion is brought because Golden Pacific was "faced with the threat of sanctions" for its own discovery positions. This argument fails for several r t, as set forth in detail in Golden Pacific's opening brief, Golden Pacific spent literally months trying to get Defendants to provide Code-compliant responses and produce responsive documents. Defendants failed to provide compliant responses and did not produce a single responsive document to any of the requests. Moreover, Golden Pacific filed is motion to compel on October 5, 2016. Defendants Gilbert and O'Malley filed their Motion to Compel further Responses to Requests for Admission and Form gatories on October 7, 2016. Defendants' argument, accordingly, fails This Court's task is to the Requests at issue in /is Motion and whether Defendants should be compelled to provide further responses. 7 > BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEY1. Request No. 87, Request No. 87 simply sought "ALL text messages between YOU and Ryan Gilbert, Evan Defendants state that the documents are impermissibly compound because they seek } communications text messages between specifically identified individuals. Defendants fail to admissible evidence, Finally, Defendants fail to substantiate any burden in searching text messages for responsive documents. 2. Request No. 88. The only difference between Request No. 87 and Request No. 88 is that request 88 seeks emails as opposed to text messages. Defendants objections fail for the same reasons. 3. Request No. 89. Request No. 89 secks "ALL text messages between YOU [i.e. Gilbert or O'Malley] and 2N PACIF ; RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEYThe reasons Defendants objections fail are set forth in detail in Golden Pacific's Separate atement. See Separate Statement at pp. 343-344. As set forth above, Defendants objection based upon text messages is without merit, as is the claim that Defendants cannot figure out what the term "references" mean. Defendants objection based upon Valley Bank similarly fails for the multiple reasons set forth in the Separate Statement. Indeed, even if there were third-party concerns, Defendants are still obligated to provide a response and permit inspection of documents J not implicating such concerns. See Code of Civil Procedure § 2031.220 (requiring the party to | represent whether the inspection "will be allowed either in whole or in part, and that all documents or things in the demanded category that are in the possession, custody, or control of that party and to which no objection is being made will be included in the production."). The request here is narrow and searchable and Defendants objections based upon undue burden are unsupported by any evidence. Mead Reins. Co. v. Superior Court, 1888 Cal.App.3d 313, 322-323 (1986) (“Oppression must not be equated with burden [] all discovery imposes some burden on the opposition [] to support an objection of oppression there must be some showing that the ultimate effect of the burden is incommensurate with the result sought."). 4. Request No. 90. Request No. 90 asks for "ALL. text messages between YOU [Gilbert or O'Malley] and ANY PERSON that reference ANY expense referenced in ANY JOINT IP SOW that BILLFLOAT, INC. delivered to the BANK." As the Separate Statement sets forth, there was ample good cause for this request as it involves a central allegation in Golden Pacific's complaint. See Golden Pacific Complaint at § 45. Defendants depend upon the same boilerplate objections as l] above. Those objections fail for the same reasons. 5. Request No. 91. Request No. 91 sought "ALL text messages between [Gilbert and O'Malley that reference | or regard GOLDEN PACIFIC BANK’s participation in the SMARTBIZ program." This was a 1554.2 14023-004 9 GOLDEN PACIFIC RESPONSE FROM RYAN GILBERT AND SEAN O'MALLEYF, Chris Onstott's Declaration Mistakenly Used the Word "Opposition". Defendants attempt to take advantage of a typographical error that appears in counsel's declaration. That declaration states "In connection with this Motion to Compel and associated papers, I have expended 41 hours preparing and revising the Opposition and supporting papers. Accordingly, my fees total $13,325 in connection with preparing this Motion." Onstott Decl. § 21. This is a typographical error and should read that time was spent "preparing and revising the Motion and supporting papers." A second typographical error occurred later in the same paragraph that also incorrectly referenced the word "Opposition" which it should have referenced the Motion. Supplemental Declaration of Christopher Onstott at | 2. The typographical errors do not invalidate or otherwise prevent the request for sanctions and the evidence submitted in support of the request. Moreover, additional time was spent preparing the Reply in support of this Motion. Accordingly, Golden Pacific requests $16,380 in sanctions against Defendants. See Onstott Supp. Decl at {| 6. Ii. CONCLUSION Defendants assert they can rely on the responses of other parties to the litigation as their own. They offer no authority for this proposition, yet have steadfastly maintained it through several months of meeting and conferring on the issue. All Golden Pacific has requested is what it is entitled to under the Code, a proper statement of compliance and production of non-privileged documents in the possession, custody, or control of the Defendants. They continue to refuse to provide Code-compliant responses to any of the Requests for Production or produce the responsive documents for inspection. Accordingly, Golden Pacific's Motion should be granted, including its request sanctions against Defendants Gilbert, O'Malley in the amount of $16,380. Dated: October 27, 2016 KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD Christopher Onstott Attorneys for Plaintiff and Cross-Defendant GOLDEN PACIFIC BANK, N.A. 10 N PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEYPROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF SACRAMENTO At the time of service, | was over 18 years of age and not a party to this action. | am employed in the County of Sacramento, State of California. My business address is 400 Capitol Mall, 27th Floor. Sacramento, CA 95814. On October 27, 2016, I served true copies of the following document(s) described as GOLDEN PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEY TO REQUEST FOR PRODUCTION OF DOCUMENTS, SET ONE on the interested parties in this action as follows: SEE ATTACHED SERVICE LIST BY E-MAIL OR ELECTRONIC TRANSMISSION: Based on a court order or an agreement of the partics to accept service by e-mail or electronic transmission, I caused the document(s) to be sent from e-mail address ehamman@kmtg.com to the persons at the e-mail addresses listed in the Service List. The document(s) were transmitted at or before 5:00 p.m. I did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on October 27, 2016, at Sacramento, California. 1501554.2 14023-004 1 _Y TO OPPOSITION TO MOTION TO COMPEL FURTHER RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEYSERVICE LIST Golden Pacific Bank, N.A. v. BillFloat, Inc., Ryan Gilbert, Sean O'Malley San Francisco Superior Court, Case No. CGC-16-549804 neys for BillFloat, Inc.: Attorneys for Ryan Gilbert & Sean O'Malley: William T. Webb Peter L. Isola Jennifer D. Yu Robert I. Lockwood 155 Montgomery Street, Ste. 1200 HINSHAW & CULBERTSON LLP San Francisco, CA 94104 One California Street, 18" Floor Il Tel.: 415-277-7200 San Francisco, CA 94111 F Pel.: 415-362-6000 ‘ax: 415-277-7210 Email: wwebbwwebblegalgroup.com Pax: 415-834-9070 group.com Email: Jaw.c rlockwoodia' hinshawlaw.com 2 N PACIFIC BANK'S REPLY TO OPPOSITION TO MOTION TO COMPEL FURTHER RESPONSES FROM RYAN GILBERT AND SEAN O'MALLEY