Pacific Lighting Leasing Co. v. Superior Court

• Decision Date: 27 July 1976
• Citation: 60 Cal.App.3d 552,131 Cal.Rptr. 559
• Court: California Court of Appeals Court of Appeals
• Parties: PACIFIC LIGHTING LEASING COMPANY, a California Corporation, Petitioner, v. SUPERIOR COURT of the State of California FOR the COUNTY OF LOS ANGELES, Respondent; Marvin MASON et al., Real Parties in Interest. Civ. 48159.

Page 559

131 Cal.Rptr. 559

60 Cal.App.3d 552

PACIFIC LIGHTING LEASING COMPANY, a California Corporation, Petitioner, v. SUPERIOR COURT of the State of California FOR the COUNTY OF LOS ANGELES, Respondent Marvin MASON et al., Real Parties in Interest.

Civ. 48159.

Court of Appeal, Second District, Division 3, California.

July 27, 1976.

Hearing Denied Oct. 28, 1976.

Patrick G. Bowen, Los Angeles and Lawrence H. Eisenberg Law Corp., Sherman Oaks, for petitioner.

No appearance by respondent.

Harold Blaisch, Fncino, for real party in interest Snyder.

Wilbur F. Littlefield, Public Defender of Los Angeles County, Cal.; Harold E. Shabo, Mitchell J. Grossman, and Dennis A. Fischer, Deputy Public Defenders, for real party in interest McCollum.

Roger J. Rosen, Los Angeles, for real party in interest Wire.

POTTER, Associate Justice.

Petitioner, Pacific Lighting Leasing Company, seeks a writ of mandate requiring respondent Superior Court of the State of California for the County of Los Angeles to vacate its order of March 16, 1976, requiring petitioner to make available for inspection and/or copying on March 22 and March 23, 1976, certain personal property lease files of petitioner, its corporate articles, by-laws and minutes of meetings, all licenses and license applications by petitioner to engage in the basiness of leasing, and the regularly prepared year-end financial statements of petitioner. ¹

Statement of Facts

Real Parties in Interest Marvin Mason, Louis Keith Snyder, James D. McCollum, Phillip Wire and Peter J. Buffo are defendants in a criminal prosecution, Los Angeles Superior Court No. A 320778, initiated by a grand jury indictment charging a conspiracy to commit grand theft and 19 counts of grand theft from petitioner. John K. Van De Kamp, District Attorney for the County of Los Angeles, was added as a real party in interest upon application of petitioner.

The indictment arose out of transactions between petitioner and defendants which took the form of personal property leases. The People claim that the defendants defrauded petitioner by the device of having confederates generate fictitious invoices purporting to reflect the delivery to defendants of the personal property which was the subject of the lease, the petitioner's funds advanced in payment of the invoices being shared by the conspirators. Defendants contend, however, that the transactions were understood by all parties to be loans to the purported leasees with no personal property actually involved and that the lease form was imposed by petitioner in order to victimize defendants with exorbitant interest charges and to enable petitioner to make false claims for accelerated depreciation of nonexistent property and thus avoid taxes.

The defendants' efforts to obtain discovery of petitioner's records was initiated by applications for subpoenas duces tecum, each of which was supported by a declaration by the attorney for a defendant. These declarations set forth defendants' contention as to the nature of the transactions, and asserted generally that the items requested would be relevant and necessary to the proper defense of the case by disclosing the existence of other transactions of the same type. Declarants made assertions that they 'contemplated' that the records would show petitioner 'was the perpetrator of a massive fraud against the federal government, state government and individual citizens of the State of California,' and that the defendants were made defendants 'only because of a massive cover up of the above mentioned scheme.' They further stated general conclusions that the documents requested would show petitioner's 'company policy regarding loans made under the guise of leases.' In this connection, the declarations specified various ways in which this policy allegedly would be shown. For example, (1) that the lease files 'will provide defense counsel with information that these transactions were loans and not leases, such as financial statements with weighted net worth in realty, bad or marginal credit ratings, poor payment records, statements between lessors and lessees indicating a loan transaction,' and (2) 'the financial statements of lessees that were rejected . . . will show that the company was relying on ability to repay loans and not to be protected by equipment allegedly leased.' No declarant, however, stated on the basis of personal knowledge any specific fact from which it could be inferred that there existed in petitioner's files any such financial statements, and inasmuch as each of them was a defendant's attorney claiming no familiarity with the records of petitioner, it was apparent that these assertions were mere assumptions.

Petitioner made a motion to quash the subpoenas, supported by a declaration of petitioner's attorney. Petitioner attacked the subpoenas upon the grounds (1) that defendants had not complied with the requirements for depositions in criminal cases and that discovery of documents (inspection and copying) is not available 'as against private citizens' in criminal proceedings, and (2) that no showing was made justifying the search and seizure of petitioner's records as required by the Fourth Amendment to the United States Constitution and article I, section 13, of the Constitution of the State of California.

At the March 1, 1976 hearing of the motion to quash, the court stated its intent to consider the subpoenas duces tecum 'in the nature of requests to produce documents prior to trial,' and to order production of the specific categories of documents other than those claimed to be 'privileged documents or work product of counsel,' denying further discovery to defendants at that time without prejudice to later renewal. The formal order of March 16, 1976 carried out the court's indicated ruling.

The petition to this court was filed March 3, 1976, and on March 10, 1976, we issued a stay of 'all further proceedings based on the discovery order made by the Respondent Court on March 1, 1976,' insofar as it required petitioner to make available its files and records for examination and duplication by defendants. Thereafter, on April 16, 1976, we issued our alternative writ requiring vacation of the discovery order or that cause be shown in this court why a peremptory writ of mandate should not issue. The action of this court in granting the temporary stay and the alternative writ of mandate was taken to permit examination of the question whether the order of March 1, 1976, as embodied in the formal order of March 16 (hereinafter referred to as the 'March 16 order') was supported by an adequate showing in light of petitioner's assertion of the right to be free from unreasonable searches and seizures.

Thereafter, defendants applied to respondent court for the issuance of subpoenas duces tecum to require the production by petitioner of documents, including most of those which were the subject of the March 16 order, such documents to be produced at the May 10, 1976 trial of the charges against defendants. A hearing was had on said application on May 3, 1976. At the hearing, petitioner contended that further proceedings looking toward discovery of the documents in question was stayed by the order of this court. The trial court, however, construed both the stay and the alternative writ issued by this court as relating to 'pretrial discovery,' not 'matters that would otherwise be produced for trial' which the orders of this court did not stay. In answer to petitioner's reassertion of its right to be free from unreasonable search and seizure, the court stated that it contemplated the production of the documents in court and that 'the court would then entertain the Fourth Amendment . . . objection at that time, but they should be addressed specifically to the documents.' The formal order, authorizing the issuance of the subpoenas duces tecum sought, was signed and filed May 5, 1976. That order contained the following recitation:

'It is noted that the District Court has issued its alternative writ of mandate with respect to the issue of the subpoena duces tecum re pretrial discovery. This court, The trial court, does not intend to vacate its prior order and intends, by this order, to allow issuance of a subpoena duces tecum for the production of documents for trial finding that said documents are necessary for the defense.' (Emphasis added.)

Further explanation of the intent of the May 5, 1976 order is found in the transcript of the proceedings on May 10, 1976. At that time, it apppeared that the subpoena had not been served upon an appropriate corporate officer. A continuance of the trial was necessitated, and in the course of the discussion the court expanded upon the procedure to be followed in considering petitioner's objections, saying in this respect: '(I) would specifically take each objection as to each document and set a day aside for doing that.'

On May 19, 1976, petitioner filed an application for a supplemental stay order and for an order expanding the scope of the alternative writ to include the May 5 order for a subpoena duces tecum re trial. On May 25 this court issued its order denying such application. However, on the basis of the trial court's above quoted statements of intent to give due consideration to petitioner's objections to the production of the documents based upon its rights under the Fourth Amendment and under Article I, section 13 of the California Constitution, we stated in our order the following:

'We assume the respondent trial court will require an appropriate showing that the subpenaed records are relevant to the defense of the real parties in interest. This may be accomplished by an in camera inspection of the documents in order to determine the existence of good cause justifying the seizure of documents of a nonparty to the litigation. (See U.S.Const., 4th Amend.; Cal.Const., art. I, § 13; Pitchess v. Superior Court, 11 Cal.3d 531, 535, 538 (113 Cal.Rptr....