Motion-Secondary: Dykstra -v - Michael Lyon et al Print

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                                1   Kevin J. Abbott, State Bar No. 281312
                        Email : kabbott@fennemorelaw. com
                    2   FENNEMORE LLP
                        550 E. Hospitality Lane, Suite 350
                    J   San Bernardino, CA 92408
                        Tel: (909) 890-4499 lFax: (909) 890-9877
                    4
                        Richard Dreitzer, Nevada State Bar No. 6626                       ELECTRONICALLY FILED (Auto)
                    5   (Admitted Pro Hac Vice)                                           SUPERIOR COURT OF CALIFORNIA
                        Email : rdreitzer@fennemorelaw.com                                COUNTY OF SAN BERNARDINO
                    6   FENNEMORE CRAIG, P.C.                                             4/19/2024 2:24 PM
                        9275W. Russell Road, Suite 240
                    7   Las Vegas, NV 89148
                        Tel: (702) 692-8000 lFax: (702) 692-8099
                    8
                        John W. Phillips, Califomia State Bar No. 147117
                    9   Email : jphillips@fennemorelaw.com
                        Jaskaran S.    Gill, Califomia State Bar No. 316615
                   10   Email : j gill@fennemorelaw. com
                        FENNEMORE DO\ilLING AARON
                   11   8080 N. Palm Avenue, Third Floor
                        Fresno,   CA937ll
                   12   Tel: (559) 432-4500 I Fax: (559) 432-4590

                   13   Attorneys for Defendants, MICHAEL LYON, an
                        individual, DAVID OLLIS, an individual, ERICH
                   t4   BROESEL, an individual, STEVE HENRY, an
                        individual, JASON KARGER, an individual, JAMES
                   15   HUGHES, an individual, and AARON HAND, and
                        individual
                   l6
                                             SUPERIOR COURT OF THE STATE OF CALIFORNIA
                   17
                                            COUNTY OF SAN BERNARDINO (JUSTICE CENTER)
                   18

                   t9   PRECIOUS T. DYKSTRA, an individual,                    Case No. CIVSB2318301
                                               Plaintiff,                      [Hon. Jeffrey R. Erickson, Dept. S14]
                   20
                        V.
                                                                               DEFENDANTS' REPLY BRIEF
                   2l                                                          IN SUPPORT OF MOTION TO
                        MICHAEL LYON, an individual, DAVID                     QUASH DEPOSITION
                   22   OLLIS, an individual, ERICH BROESEL, an                SUBPOENA TO THE
                        individual, STEVE HENRY, an individual,                CALIFORNIA FRANCHISE TAX
                   23   JASON KARGER, an individual, JAMES                     BOARD.
                        HUGHES, an individual, and AARON HAND,
                   24   and individual;                                        Date: Apnl26,2024
                                               Defendants.
                                                                               Time: 8:30 a.m.
                   25                                                          Dept.: S14
                        OTV INVESTMENT GROUP LLC, aNevada
                   26   limited liability company, and OAK TREE
                        MOUNTAIN LLC, a Nevada limited liability
                   2l   company.
                                               Nominal Defendants.
                   28
                                                                           I
AroRN¡:Ysar Law         REPLY BRIEF IN SUPPORT OF DEFENDANT'S MOTION TO QUASH DEPOSITION SUBPOENA ISSUED TO THE CALIFORNIA
SaN BIiRNAR¡)tNo
                        FRANCHISE TAX BOARD
                    I             Defendants MICHAEL LYON ("Defendant" or "Mr. Lyon") hereby submit the following

                    2   Reply Brief in Support of his motion for an order to quash the deposition subpoena issued by
                    a
                    J   Plaintiff Precious T. Dykstra ("Plaintiff' or "Ms. Dykstra") requiring the custodian of records of

                    4   the California Franchise Tax Board to produce Mr. Lyon's tax return records.

                    5                                            I.   INTRODUCTION
                    6             Defendant Michael Lyon ("Mr. L)¡on") has moved to quash a deposition subpoena (the

                    7   "Motion to Quash") issued by Plaintiff Precious Dykstra's ("Ms. Dykstra") counsel to the
                    8   California Franchise Tax Board (the "FTB"). California recognizes a strong privilege protecting

                    9   taxpayer records during the course of litigation. There are only very naffow circumstances when a

                   10   taxpayer's records may be disclosed during the discovery process and no exception applies in this

                   11   case. (,See e.g., Schnabel v. Superior Court (1993) 5 Cal.4th 704,121.) Courts against counsel

                   12   against the compelled disclosure of a party's tax returns except in those very rare instances when

                   13   the narrow exceptions apply. (Weingarten v. Superior Court (2002) i02 Cal.App.4th 268, 276-

                   14   271   .) ft is Ms. Dykstra's burden to demonstrate a clear exception to the taxpayer privilege. (See

                   15   Goro v. Flowers Foods, Inc. (5.D. Cal. 2018) 334 F.R.D. 275,280 citing Schnabel v. Superior

                   t6   Court (1993) 5 Cal.4th704,721.)

                   17            In her opposition to the Motion to Quash, Ms. Dykstra effoneously             asserts that the

                   l8   taxpayer's privilege does not apply in this case because: (1) the gravamen of the claims or defenses

                   T9   asserted by   Mr. Lyon are inconsistent with the privilege; and (2) public policy interests in deterring

                   20   fraud and obtaining information for punitive damages pu{poses outweigh Mr. Lyon's interest in

                   2I   keeping his tax returns confidential. Ms. Dykstra's position is untenable and the Motion to Quash

                   22   must be granted by this Court.

                   23            First, Mr. Lyon has not placed his tax return records at issue and he has not waived his

                   24   ability to assert the tax-payer's privilege by placing the contents of his tax retums at issue in this
                   25   case.   (c.f., Wilsonv. Superior Court ("Wilson") (1916) 63 Cal.4pp.3d825,828.) In addition, Ms.

                   26   Dykstra has not supported her opposition with any specific examples about how any cause of action

                   27   or defense would be "impossible" to support without Mr. Lyon's tax retum records. (See lbíd.)

                   28
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AmoRNIaYs AT LAw
                        REPLY BRIEF IN SUPPORT OF DEFENDANT'S MOTION TO QUASH DEPOSITION SUBPOENA ISSUED TO THE CALIFORNIA
SAN Bf,RNARI)¡No
                        FRANCHISE TAX BOARD