Case Name: Laughing Dogs Family Farm, LLC, et al. v. Morgan, et al.
Case No.: 2017-1-CV-306597

According to the allegations of the complaint, plaintiff Laughing Dogs Family Farm, LLC (“LDFF”) is a limited liability company organized under the laws of the State of Nevada with its principal place of business in Gilroy, California. (See complaint, ¶1.) LDFF’s sole asset is real property located at 10095 Monterey Road in Gilroy, California. (See complaint, ¶ 2.) On February 24, 2012, LDFF purchased the subject property with a loan of $135,000. (See complaint, ¶¶ 5-6.) A promissory note in the amount of $135,000 was executed by LDFF and a deed of trust securing such note was recorded against the subject property. (See complaint, ¶ 6.) The beneficiary of the note was Rainbows End Gold Distributions, LLC. (Id.)

Defendant Jennifer Morgan (“Morgan”) is an officer of LDFF who took an active role in managing the company. (See complaint, ¶¶ 3, 7.) Morgan demanded and was given charge of collecting rents from the Subject Property, making payments on the note on behalf of LDFF, and filing necessary paperwork and paying necessary fees to keep the company active. (See complaint, ¶ 7.) Morgan purported to execute, as “Manager” of LDFF, a grant deed for the subject property from LDFF to herself as an individual. (See complaint, ¶ 11.) This deed purportedly transferring full interest in the subject property to Morgan was not for value, states on its face that there was no compensation for the transfer, and was not authorized, consented to, or otherwise approved by LDFF. (Id.) Morgan recorded the deed in Santa Clara County on January 25, 2017. (Id.) By transferring the subject property to herself, Morgan misappropriated the sole asset of LDFF. (See complaint, ¶ 12.)

On February 21, 2017, plaintiffs LDFF, Veronica Stork, and Ralph Stork (collectively, “Plaintiffs”) filed the operative complaint against Morgan asserting causes of action for: (1) cancellation of deed; (2) quiet title; (3) breach of fiduciary duty; and (4) improper distribution.

On August 24, 2017, Morgan propounded form interrogatories (“FIs”) and requests for production of documents (“RPDs”) on Plaintiffs. Plaintiffs provided responses to both the FIs and RPDs, containing both objections and substantive responses. Defendant moves to compel further responses to FIs 7.1, 8.1, 8.4, 8.7, 8.8, 9.1, 12.1, 14.1, and RPDs 25, 26, 29, 37-39, 42, 43, 45, 46.

Motion to compel further response to FIs

Defendant moves to compel further responses on the ground that “Plaintiff’s Responses each contain preliminary ‘General Limitations and Objections’ that is not permitted, and Plaintiffs’ responses to the Form Interrogatories contain objects [sic] that are without merit or too general.” (See Def.’s motion to compel further responses to FIs, p.2:7-10.)
Among Plaintiffs’ objections in the “General Statement and Objections” are those based on: attorney-client privilege and attorney work product (see ¶ 3); and “competence, relevance, materiality, propriety, admissibility, and any and all other objections and grounds which would or could require the exclusion of any statement herein if the statement were made by a witness present and testifying in court (¶ 4)…”

Plaintiffs do not satisfactorily justify the objections based on competence, relevance, materiality, propriety and admissibility in paragraph 4 of the responses. (See Coy v. Super. Ct. (1962) 58 Cal.2d 210, 220-221 (providing that the burden is on the responding party to justify any objections).) Paragraph 4 of Plaintiffs’ responses to FIs is hereby stricken, with no further action required by Plaintiffs.

However, the objections on the ground of attorney-client privilege and attorney work product are preserved. (See Best Products, Inc. v. Super. Ct. (2004) 119 Cal.App.4th 1181, 1188-1189 (stating that boilerplate assertions of the attorney-client privilege and work product doctrine are sufficient to preserve the objections).)

As to the responses in FIs 7.1, 8.1, 8.4, 8.7, 8.8, 9.1, 12.1, 14.1, Defendant asserts that Plaintiffs’ objections to the FIs’ term “incident” as vague and ambiguous is without merit because “[t]he definition for the term ‘INCIDENT’ is the definition established by the Judicial Counsel [sic] of California… [and] has been used for over 30 years… [and] Plaintiffs should not be able to feign an inability to provide a full and complete response to a well establish [sic] definition being applied to the very matters that Plaintiffs have asserted against Defendant.” (See Def.’s memorandum in support of motion to compel further responses to FIs, p.6:21-28.)

However, there is authority that supports the proposition that Form Interrogatories are not properly used in all kinds of cases. In general, the Court often sustains objections to the use of “Incident” form interrogatories in cases like this, and finds that it is likely impossible to provide an appropriate definition of “Incident” in a business tort case alleging multiple events, multiple causes of action, and naming multiple defendants and parties. The Court finds that the use of “Incident” Form Interrogatories is not appropriate in the context of this case. (See California Practice Guide, Civil Procedure Before Trial, §8:933.8, “Objections to certain Official Form Interrogatories are likely to be sustained in cases involving complex business transactions.” [Emphasis in original.])”

However, although Plaintiffs’ responses object to the term “INCIDENT,” they also plainly provide substantive response, stating that they are under the assumption “that INCIDENT means the purported transfer of the real property of 10095 Monterey Road, Gilroy, CA 95020 from Laughing Dogs Family Farm, LLC (herein ‘LLC’) to Defendant Jennifer Morgan.” Here, this response is complete and straightforward, and the objection serves to clarify Plaintiffs’ response. Defendant does not assert how Plaintiffs’ assumed definition of the term “INCIDENT” might otherwise encompass other alleged acts. Plaintiffs justify their objections to 7.1, 8.1, 8.4, 8.7, 8.8, 9.1, 12.1, 14.1 and the objection of vagueness and ambiguity to the term “INCIDENT” is SUSTAINED.

As paragraph 4 of the General Statement and Objections is stricken with no further action by Plaintiffs, and as the remaining objections have been either SUSTAINED or preserved, Defendant’s motion to compel further responses to Form Interrogatories is DENIED.

Motion to compel further responses to RPDs

Defendant also moves to compel further response to RPDs on the ground that “Plaintiff’s responses were untimely served; thus, all and [sic] objections have been waived, and contain objections that are without merit….” (Def.’s motion to compel further responses to RPDs, p.2:8-11.)

Defendant contends that “Plaintiff’s Responses were untimely served on [September] 29, 2017… [and a]s Plaintiffs’ Responses were untimely, all objections were waived.” (Def.’s memorandum of points and authorities in support of motion to compel further responses to RPDs, pp.3:20-21, 4:24-26.) Plaintiffs’ Responses were required to be served on September 28, 2017.” (Id. at p.3:20.) Thus, Defendant argues, “Defendant is entitled to a further response, without objections, and with production of any responsive documents, not produced with Plaintiffs’ original Responses.” (Id. at p.4:27-28.)

Here, Defendant attaches the RPDs propounded to Plaintiffs to her motion. (See Demarest decl., exhs. A-C.) Each of these RPDs states that “[p]roduction for the purposes of inspection and copying is requested to be on October 2, 2017….” (Id.) However, the RPDs thereafter note that “Responding Party is required to submit a written response to this Demand within 30 days, or as otherwise provided in the Code of Civil Procedure, after service of this Demand.”

As to Defendant’s argument that the objections asserted by Plaintiffs are without merit, there is no evidence that Defendant met and conferred about this issue, as is required by Code of Civil Procedure section 2016.040 and the Santa Clara County Bar Association Code of Professionalism. (See Code Civ. Proc. § 2016.040, see also Santa Clara County Bar Association Code of Professionalism, §§ 9 (“Discovery”) (stating that “[a] lawyer should engage in a meaningful and good faith effort to resolve discovery disputes and should only bring discovery issues to the court for resolution after these efforts have been unsuccessful”; also stating that “[a] lawyer should conduct discovery in a manner designed to ensure the timely, efficient, cost-effective, and just resolution of a dispute… [a] lawyer should conduct discovery solely for the purpose of gathering relevant information pertaining to the representation; a lawyer should not conduct discovery to harass, embarrass, or burden a party or witness or cause a party or witness to incur unnecessary costs or fees”), 10 (“Motion Practice”) (stating that “[a] lawyer should engage in a good faith effort to resolve the issue before filing a motion… [i]n particular, civil discovery motions should be filed sparingly”; also stating that “[m]otions should be filed or opposed only in good faith and when the issue cannot be otherwise resolved”); Appendix (standing order by Court adopting Santa Clara County Bar Association Code of Professionalism).) In fact, the meet and confer letters are attached to Plaintiffs’ counsel’s declaration, and they likewise do not indicate that Defendant met and conferred as to the merit of the objections. (See Chun decl. in opposition to motion to compel further responses to RPDs, ¶¶10-12, exhs. G-I.) Thus, the motion may not be granted on this basis.

Plaintiffs also contend that due to Plaintiffs’ counsel’s mistake, it provided responses and documents a day late as it was confused as to the date for providing responses. (See Pls.’ opposition to motion to compel further responses to RPDs, p.3:7-28, 4:1-11; see also Chun decl. in opposition to motion to compel further responses to RPDs, ¶¶ 2-9.) As Defendant argues, Code of Civil Procedure section 2031.260 requires the party to whom the RPD is directed to serve a response within 30 days after service. (See Code Civ. Proc. § 2031.260, subd. (a).) Further, as Defendant argues, Code of Civil Procedure section 2031.300 states that if a responding party fails to provide a timely response, the responding party waives any objection to the RPD, including those based on privilege or work product. (See Code Civ. Proc. § 2031.300, subd. (a).) However, section 2031.300, subdivision (a) also may relieve the responding party from such waiver on the Court’s determination that the party has subsequently served a response that is in substantial compliance with the Code of Civil Procedure, and that the party’s failure to serve a timely response was the result of mistake, inadvertence or excusable neglect. (See Code Civ. Proc. § 2031.300, subds. (a)(1)-(2).) Here, it appears that Plaintiffs have substantially complied with sections 2031.210, 2031.220, 2031.230, 2031.240, and 2031.280, and that Plaintiffs’ failure to serve a timely response was the result of mistake, inadvertence or excusable neglect. However, as Defendant argues, section 2031.300 states that the Court may relieve the responding party from waiver of objections “on motion.” The Court is thus inclined to continue this matter for an additional 60 days to allow Plaintiffs to properly file a noticed motion for relief of waiver of objections, attaching a declaration by their counsel regarding his mistake, inadvertence or excusable neglect. The Court indicates that based on the showing made at this point, the Court might be inclined to grant such a motion.

Unless the moving party gives notice that the motion to compel further responses to RPDs is off calendar, the parties’ counsel are required to appear at the March 29, 2018 hearing in Department 9 to discuss dates for the continued hearing on the motion to compel further responses to RPDs, and filing dates for hearing and the motion for relief of waiver of objections. If counsel for moving party does not appear, the Court will order the motion off calendar.

Requests for monetary sanctions

In connection with her motion to compel further responses to FIs, Defendant requests monetary sanctions against Plaintiffs and their counsel in the amount of $1,500.00. In connection with their opposition to the motions to compel further responses to FIs, Plaintiffs request monetary sanctions in the amount of $2,105.00 against Defendant. Defendant did not substantially prevail on its motion, and there are circumstances that make imposition of the sanctions unjust against either party. Accordingly, the parties’ requests for monetary sanctions in connection with the motion to compel further responses to FIs is DENIED.

In connection with her motion to compel further responses to RPDs, Defendant requests monetary sanctions against Plaintiffs and their counsel in the amount of $1,700.00. In connection with their opposition to the motions to compel further responses to RPDs, Plaintiffs request monetary sanctions in the amount of $2,000.00 against Defendant. Although it appears that there are circumstances that make imposition of the sanctions unjust, as the motion to compel further responses to RPDs is continued, the hearing on the requests for monetary sanctions in connection with the motion will also be continued to the date for the continued hearing on the motion to compel further responses to RPDs and potential motion for relief of waiver of objections, as agreed by parties’ counsel at the March 29, 2018 hearing.

The Court shall prepare the Order.