Case Number: 23STCV27922 Hearing Date: April 14, 2025 Dept: 71
Superior Court of California
County of Los Angeles
DEPARTMENT 71
TENTATIVE RULING
| THE CREME SHOP INC.,
vs.
SUNNA OLIVE KIM, et al. |
Case No.: 23STCV27922
Hearing Date: April 14, 2025 |
Plaintiff The Crème Shop, Inc.’s motion to compel Non-parties Theol LLC, Tola LLC, Thelaal LLC, Thela LLC, Theal LLC, Talo LLC, and 2800 Maple LLC to comply with the deposition subpoenas for production of business records issued by Plaintiff is granted. Theol LLC, Tola LLC, Thelaal LLC, Thela LLC, Theal LLC, Talo LLC, and 2800 Maple LLC are to comply with the deposition subpoenas for production of business records and produce all records and documents subpoenaed within 20 days.
Plaintiff’s request for sanctions against Theol LLC, Tola LLC, Thelaal LLC, Thela LLC, Theal LLC, Talo LLC, and 2800 Maple LLC and their counsel of record is granted in the reduced amount of $1,972.50, payable within 20 days.
Plaintiff The Crème Shop, Inc. (“TCS”) (“Defendant”) moves for this Court to compel Non-parties Theol LLC, Tola LLC, Thelaal LLC, Thela LLC, Theal LLC, Talo LLC, and 2800 Maple LLC (collectively, “Property Entities”) to comply with the deposition subpoenas for production of business records issued by Plaintiff. (Notice of Motion, pg. 2.)[1] Plaintiff further requests monetary sanctions against Property Entities and their counsel of record, Russ August & Kabat, individually and severally, in the amount of $17,603.50. (Notice of Motion, pg. 2; C.C.P. §§2023.010, 2023.030, 2023.040, 2025.480.)
Request for Judicial Notice
Plaintiff’s 2/25/25 request for judicial notice of (1) Articles of Organization of Theol LLC filed with the State of California, Office of the Secretary of State on August 17, 2022 (P-RJN, Exh. A); (2) Articles of Organization of Tola LLC filed with the State of California, Office of the Secretary of State on October 12, 2022 (P-RJN, Exh. B); (3) Articles of Organization of Thelaal LLC filed with the State of California, Office of the Secretary of State on October 12, 2022 (P-RJN, Exh. C); (4) Articles of Organization of Thela LLC filed with the State of California, Office of the Secretary of State on September 28, 2022 (P-RJN, Exh. D); (5) Articles of Organization of Theal LLC filed with the State of California, Office of the Secretary of State on October 12, 2022 (P-RJN, Exh. E); (6) Articles of Organization of Talo LLC filed with the State of California, Office of the Secretary of State on October 12, 2022 (P-RJN, Exh. F); (7) Articles of Organization of 2800 Maple LLC filed with the State of California, Office of the Secretary of State on November 8, 2018 (P-RJN, Exh. G); (8) Articles of Incorporation of Pureunbi Corp. filed with the State of California, Office of the Secretary of State on November 14, 2023 (P-RJN, Exh. H); (9) Statement of Information of Pureunbi Corp. filed with the State of California, Office of the Secretary of State on November 20, 2023 (P-RJN, Exh. I); and (10) Statement of Information of Pureunbi Corp. filed with the State of California, Office of the Secretary of State on October 18, 2024 (P-RJN, Exh. J) is granted.
Meet and Confer
A motion to enforce a subpoena duces tecum must be accompanied by a declaration stating facts showing “a reasonable and good faith attempt at an informal resolution of the dispute between the party requesting the personal records and the consumer or the consumer’s attorney.” (C.C.P. §1985.3(g).)
Plaintiff’s counsel declares that on February 13, 2025, and February 18, 2025, the parties met and conferred via letter. (See Decl. of Romeo ¶¶15-17, Exh. I.) Plaintiff’s counsel’s declaration substantially complies with the requirements of C.C.P. §1985.3(g).
Background
On December 12, 2024, Plaintiff served deposition subpoenas to produce business records on Thela LLC, Thelaal LLC, Talo LLC, Tola LLC, and Theal LLC (collectively, “Subpoenas”). (See Decl. of Romeo ¶4.)[2] On December 26, 2024, Plaintiff’s Counsel received an email from Nathan Meyer (“Meyer”), which informed Plaintiff’s counsel that Meyer would be responding to the subpoenas on behalf of all the Property Entities. (Decl. of Romeo ¶5.) On December 27, 2024, Meyer served objections to the subpoenas on behalf of the Property Entities via email. (Decl. of Romeo ¶¶6-14, Exhs. A-H.)
Plaintiff filed the instant motion on February 25, 2025.[3] On April 1, 2025, Property Entities filed their opposition pertaining only to Plaintiff’s request for sanctions. As of the date of this hearing no reply has been filed.
Discussion
If a deponent fails to answer any question or to produce any document, electronically stored information, or tangible thing 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 answer or production. (C.C.P. §2025.480(a).) “A response to a business records subpoena, namely, objections, is a ‘record of the deposition.’” (Unzipped Apparel v. Bader (2007) 156 Cal.App.4th 123, 127-128.)
Plaintiff seek to compel Property Entities’ answers to Request for Production (“RFP”) Nos. 1, 14, 15, 16, 17, 18, 19, and 20. The requests seek (1) production of documents regarding the entities’ formation, registration, and ownership, including but not limited to articles of incorporation, articles or organization, operating agreements, bylaws, equity/stock plans, equity/stock grants, and filings with the applicable secretary of state(s) (RFP No. 1); (2) all documents demonstrating the entities’ net worth and/or value and/or any valuations from 2023 to present (RFP No. 14); (3) documents pertaining to the entities’ financial performance and condition from 2023 to present (RFP No. 15); (4) corporate tax returns filed from 2023 to present (RFP Nos. 16 and 17); (5) amounts paid to members, partners, employees, officers and/or directors, and which include any Form W-2, Form 1099, and K-1s (RFP No. 18); (6) reports sent by the entities to members, partners, shareholders, or other similar documents relating to the entities’ financial condition from 2023 to present (RFP No. 19); and (7) all documents demonstrating Paul Kim, Sunna (“Olive”) Kim, and Insil (“Christina”) Kim’s compensation, including bonuses, commissions, and equity grants, from the beginning of their employment with the entities to the present (RFP No. 20).
Here, subpoenas are reasonably tailored and calculated to seek evidence directly relevant to TCS’s claims against Defendant Yoon in the instant litigation; specifically, (1) the fact and existence of Defendant Yoon’s involvement in furthering the interests of Lpf Corp./Lpf Agency; (2) the fact and existence of Defendant Yoon’s involvement in furthering the interests of the other Newly Formed Entities; i.e., Toji Co., Pureunbi Corp., and Somi Sunday LLC; (3) the fact and extent of the Newly Formed Entities’ use of TCS’s trade secret data and information that Defendant unlawfully took prior to his resignation; (4) the fact and extent Defendant Yoon conspired with other individuals to further the interests of the Newly Formed Entities and this includes his wife, Olive Kim, who is believed to be one of the “ring leaders” of the wrongful conduct; and (5) the fact and extent to which the Newly Formed Entities benefitted financially from Defendant Yoon’s actions. RFP Nos. 1, 14, 15, 16, 17, 18, 19, and 20 seek the financial records of the Property Entities. The scope of the requests are tailored to further discover the fact and extent of the Property Entities’ financial interests with the Newly Formed Entities, in particular Pureunbi Corp./dearcloud, and explore Olive Kim’s interests and ties to Pureunbi Corp./dearcloud.
Plaintiff is not required to demonstrate a “compelling interest” or “compelling need” to overcome the Property Entities’ property interests. The proposition that a party seeking discovery that intrudes on privacy rights must always show a “compelling interest” or “compelling need” in order to overcome those interests was expressly disapproved by the Supreme Court in Williams v. Superior Court. The Williams Court held that “[t]o the extent prior cases [including Lantz] require a party seeking discovery of private information to always establish a compelling interest or compelling need . . . they are disapproved.” (Williams v. Superior Court (2017) 3 Cal.5th 531, 557.)
“Because the corporate privacy right is not constitutionally protected, the issue presented in determining whether [Plaintiff’s] requests…infringe that right 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, Inc. v. Superior Court (2015) 243 Cal.App.4th 741, 756, citing 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.” (Id.) Here, the subpoenaed records are directly relevant to Plaintiff’s claims against Defendant Yoon and override any limited privacy interests the Property Entities may have.
Likewise, the privileged nature of the Property Entities’ tax returns must give way to the greater public policy interest of protecting Plaintiff’s right to its employees’ duties of loyalty. (See Miller v. Superior Court (1977) 71 Cal.App.3d 145, 149 [“We conclude, and the foregoing statutes provide strong support for our conclusion, that the time has arrived when a policy favoring the confidentiality of tax returns must give way to the greater public policy”]; Schnabel v. Superior Court (1993) 5 Cal. 4th 704, 721 [“As we explain, this exception has been narrowly construed, and has been applied only when warranted by a legislatively declared public policy.”]; Lab. Code §2863 [“An employee who has any business to transact on his own account, similar to that entrusted to him by his employer, shall always give the preference to the business of the employer.”].)
Notwithstanding the Property Entities’ limited privacy interests, the Stipulated “two-tiered” Protective Order entered on April 16, 2024, addresses how the parties agreed to protect documents exchanged and/or subpoenaed that implicate “privacy rights.” (4/16/24 Protective Order, pg. 8 at ¶13 [“Any Information that may be produced by a non-Party witness in discovery in the Proceeding pursuant to subpoena or otherwise may be designated by such non-Party as ‘Confidential’ or ‘Highly Confidential’ under the terms of this Stipulation and Protective Order, and any such designation by a non-Party shall have the same force and effect, and create the same duties and obligations, as if made by one of the undersigned Parties hereto.”].) Therefore, there should not be a serious risk of invasion of privacy. (Alch v. Superior Court (2008) 165 Cal.App.4th 1412, 1424 [“Protective measures, safeguards and other alternatives may minimize the privacy intrusion.”].)
Accordingly, Property Entities are ordered to produce all records and documents responsive to the subpoenas within 20 days.
Sanctions
C.C.P. §2025.480(j) provides, “[t]he court shall impose a monetary sanction under Chapter 7 (commencing with Section 2023.010) 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.”
Plaintiff requests $17,603.50 in sanctions. In support of its $17,603.50 fee request, Plaintiff’s counsel claims 32.85 hours spent on the motion—3.10 hours by Romeo at $1,360/hour and 29.75 hours by Richard Kim (“Kim”) at $450/hour. Though most of the claimed hours are for work performed by Kim, there is no declaration from him—only Romeo, whose declaration fails to provide foundational facts establishing the time claimed for Kim. Further, Romeo’s declaration indicates his billed hours were for Plaintiff’s Motion for an Order Enforcing Deposition Subpoena for Business Records of Pureunbi Corp., which is not the instant motion. (Decl. of Romeo ¶30.) The request is excessive, particularly due to the fact that Plaintiff’s motion improperly combines seven motions into one.
Plaintiff’s request for sanctions against Property Entities is granted in the reduced amount of $1,972.50, calculated as follows:
Kim- [($450/hour x 29.75 hours)/7 Entities] + $60.00 filing fee = $1,972.50
Accordingly, Plaintiff’s request for sanctions is granted in the reduced amount of $1,972.50, against Property Entities and the counsel of record, payable within 20 days.
Conclusion
Plaintiff’s motion to compel Property Entities to produce all records and documents responsive to the subpoenas within 20 days is granted.
Plaintiff’s request for sanctions against Property Entities and their counsel of record is granted in the reduced amount of $1,972.50, payable within 20 days.
Moving Party is to give notice of this ruling.
Dated: April _____, 2025
| Hon. Daniel M. Crowley |
| Judge of the Superior Court |
[1] The Court notes Plaintiff’s motion improperly combines seven motions to compel subpoena duces tecum pertaining to seven different discovery requests into a single motion. A motion must be brought separately against each party and discovery method at issue. The instant motion should have been filed as seven separate motions and seven filing fees paid. Instead, Plaintiff filed only one motion and paid one filing fee. “[P]ayment of filing fees is both mandatory and jurisdictional.” (Hu v. Silgan Containers Corp. (1999) 70 Cal.App.4th 1261, 1269.) Therefore, Plaintiff owes this Court $360.00 in filing fees.
[2] The Court notes the Declaration of Romeo does not indicate when Plaintiff served a deposition subpoena on 2800 Maple LLC. (See Decl. of Romeo ¶4.) [3] Pursuant to correspondence exchanged on February 18 and February 19, 2025, the parties mutually agreed to extend the deadline for Plaintiff to file its motion to compel to March 13, 2025. (See Decl. of Romeo ¶¶17-18, Exhs. I, J.)