Case Number: BC644078 Hearing Date: June 07, 2018 Dept: 37

CASE NAME: Hassid v. Cohen-Bashi, et al.

CASE NO.: BC644078

HEARING DATE: 6/7/18

DEPARTMENT: 37

CALENDAR NO.: 9

FILING DATE: 12/16/16

FSC/TRIAL DATE: 10/3/18 (FSC), 10/9/18 (Trial)

NOTICE: OK

SUBJECT: Motion for an Order 1) Compelling Defendant Eyal Cohen-Bashi to appear at deposition, and 2) Compelling Defendant HCB Group, LLC to Designate and Produce a Proper “Person Most Qualified”. 3) Motion to Compel Further Responses to Plaintiff’s Request for Production

MOVING PARTY: Plaintiff Alona Hassid

OPPOSING PARTY: Defendants Eyal Cohen-Bashi and Oren Cohen-Bashi. Defendant HCB Group, LLC has not filed an opposition.
COURT’S TENTATIVE RULING

The court GRANTS Plaintiff’s motion and ORDERS Defendant Eyal Cohen-Bashi to appear and continue his testimony at a noticed deposition to occur within 30 days or on a date by agreement of the parties. The court further ORDERS HCB to designate and educate a PMQ to appear and testify at deposition. Plaintiff’s request for monetary sanctions is GRANTED against Defendant Eyal Cohen-Bashi in the amount of $3,010.

The court CONTINUES Plaintiff’s motion to compel further responses to her requests for production to July 26, 2018 and ORDERS the parties to further meet and confer in good faith regarding the subject discovery. The parties may file amended briefing based on the deadlines set forth in Code of Civil Procedure, section 1005 from the new hearing date.

Counsel for Plaintiff to give notice.
STATEMENT OF THE CASE

This case arises in connection with the real property located at 7911 Beach Street, Los Angeles, CA 90001 (the “Property”). Plaintiff Alona Hassid (“Hassid”) alleges that she is the 50% owner of Defendant HCB Group, LLC (“HCB”) which allegedly owns the Property. Defendants Eyal Cohen-Bashi and Oren Cohen-Bashi *collectively the “Cohen-Bashis”) allegedly each own 25% of HCB.

Plaintiff alleges that the Cohen-Bashis obtained a loan for $950,000 in March 2014, that they allowed the Property be collateralized, and that they further assigned all rents to the bank. The $950,000 allegedly represents all or most of the value of the Property. The proceeds of the loan have allegedly been distributed to the Cohen-Bashis and/or other unknown recipients, and HCB now allegedly has little to no equity in the Property. Plaintiff alleges that the Cohen-Bashis have failed and refused to provide her with complete information about HCB’s financial condition or about the Property including information regarding an updated rent roll, income, and expenses for the property for the years 2015 and 2016, HCB’s profits and losses for 2015 and 2016, and a K-1 for Hassid’s 2015 taxes.

In the First Amended Complaint (“FAC”), Plaintiff alleges 8 causes of action for: (1) breach of fiduciary duty; (2) breach of written contract; (3) violation of Corporations Code, section 17704.10; (4) constructive trust; (5) an accounting; (6) derivative claim and (7) fraud.
MOTIONS TO COMPEL DEPOSITIONS
I. Background

Plaintiff’s counsel Daniel Y. Zohar (“Zohar”) contends that Plaintiff noticed the deposition of Defendant Eyal Cohen-Bashi, Oren Cohen-Bashi, and the person most qualified (“PMQ”) for HCB. (Declaration of Daniel Y. Zohar (“Zohar Depo. Decl.”) ¶ 3.) HCB designated Eyal Cohen-Bashi as the PMQ for HCB and his deposition was taken on November 16, 2017. (Zohar Depo. Decl. Ex. A.) Defendant and his counsel terminated the deposition on the grounds that Plaintiff’s counsel was harassing Eyal Cohen-Bashi. (Id. at 241:2-13.)
II. The Parties’ Meet and Confer Efforts

Pursuant to Code of Civil Procedure, section 2025.450, subdivision (b)(2), a motion to compel compliance with a deposition notice “ shall be accompanied by a meet and confer declaration under Section 2016.040, or, when the deponent fails to attend the deposition . . . by a declaration stating that the petitioner has contacted the deponent to inquire about the nonappearance.” (Code Civ. Proc., § 2025.450, subd. (b)(2).) [1] The declaration must state facts showing a reasonable and good faith attempt at an informal resolution of each issue presented in the motion. (Code Civ. Proc., § 2016.040.) A reasonable and good faith attempt at informal resolution entails something more than bickering with [opposing] counsel. . . . Rather, the law requires that counsel attempt to talk the matter over, compare their views, consult, and deliberate. (Clement v. Alegre (2009) 177 Cal.App.4th 1277, 1294.) “A determination of whether an attempt at informal resolution is adequate involves the exercise of discretion.” (Stewart v. Colonial W. Agency (2001) 87 Cal.App.4th 1006, 1016.)

Zohar attests that he sent Defendants’ counsels a meet and confer letter on November 20, 2017, objecting to Dolukhanyan’s termination of the deposition and stating that “the only grounds for unilaterally suspending a deposition is if you demand to do so in order to file a motion for protective order on the grounds that the ‘examining party is conducting the examination in bad faith, or in a manner that unreasonably annoys, embarrasses, or oppresses the deponent or party.’ ” (Zohar Depo. Decl. Ex. 3, citing Code Civ. Proc., § 2025.470.) The meet and confer letter further asked Dolukhanyan to state whether she intended to move for a protective order, and to provide additional dates to complete the depositions if Defendant did not. (Ibid.) Defendant’s counsel Milena Dolukhanyan (“Dolukhanyan”) did not file a motion for a protective order, but attests that she subsequently advised Zohar of the Cohen-Bashis’ intent to file a motion for a protective order seeking an appointment of a discovery referee. (Declaration of Milena Dolukhanyan (“Dolukhanyan Depo. Decl.”) ¶ 4.) Plaintiff filed the subject motion on December 22, 2017.

Defendant’s counsel did not contact Plaintiff’s counsel to propose names of discovery referees until January 25, 2018, which was after Plaintiff’s deadline to file the subject motion. (See id. at ¶ 5; see also Code Civ. Proc., § 2025.480, subd. (b) [stating the motion must be made no later than 60 days after the completion of the record of the deposition].) There is no evidence that Defendant HCB’s counsel responded to the letter or that Dolukhanyan’s counsel filed a motion for a protective order. Thus, the court finds that Plaintiff’s meet and confer efforts were sufficient.
III. Analysis

Pursuant to Code of Civil Procedure, section 2025.480, subdivision (a), “[i]f 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.” (Code Civ. Proc., § 2025.480, subd. (a).) Section 2025.470 provides:

The deposition officer may not suspend the taking of testimony without the stipulation of all parties present unless any party attending the deposition, including the deponent, demands that the deposition officer suspend taking the testimony to enable that party or deponent to move for a protective order under Section 2025.420 on the ground that the examination is being conducted in bad faith or in a manner that unreasonably annoys, embarrasses, or oppresses that deponent or party.

(Code Civ. Proc., § 2025.470.) Plaintiff’s presented evidence demonstrates that Defendant Eyal Cohen-Bashi’s counsel terminated the November 16, 2017 without the agreement of any other party present and that this Defendant did not subsequently file a motion for a protective order. Accordingly, Plaintiff has demonstrated she is entitled to relief under section 2025.480, subdivision (a).

Defendant Eyal Cohen-Bashi contends that Plaintiff’s counsel conducted the deposition in an inappropriate, abusive and aggressive manner, and this Defendant requests the court appoint a discovery referee. (Depo. Opp. 3-6.) Defendant did not file a motion for a protective order under section 2025.420, as is required, and the court will not consider this Defendant’s request or arguments regarding Zohar’s conduct on Defendant’s opposition to the subject motion. (See Code Civ. Proc., § 2025.420.)

Accordingly, the court GRANTS Plaintiff’s motion in-part and ORDERS Eyal Cohen-Bashi to appear and continue his testimony at a noticed deposition to occur within 30 days of this order or on a date by agreement of the parties.

Plaintiff additionally contends that Eyal Cohen-Bashi’s responses at deposition were evasive and requests that the court order HCB to properly designate and educate a PMQ to appear and testify at deposition. Defendant HCB did not file an opposition to the subject motion. Defendant Eyal Cohen-Bashi, in turn argues that HCB properly designated him as its PMQ because HCB is a member-managed LLC that is owned by Eyal and Oren Cohen-Bashi and because Eyal was responsible for the management of HCB. (Depo. Opp. 8.) HCB is not represented by Eyal and Oren Cohen-Bashi’s counsel and these Defendants’ counsel cannot raise objections or arguments on HCB’s behalf. [2] Accordingly, Eyal Cohen-Bashi’s arguments and objections regarding the parties’ conduct with regard to his testimony as the PMQ for HCB fail.

As such, the court GRANTS Plaintiff’s motion in-part and ORDERS HCB to designate and educate a PMQ to appear and testify at deposition. HCB’s designate PMQ must be able to provide substantive, non-evasive answers to questions including: 1) how much rent HCB is currently collecting and has collected since 2014, 2) how many units are in HCB’s only building, 3) the names of the current tenants and any tenants since 2014, 4) whether HCB reported to the IRS that Plaintiff was a 50 percent member and whether HCB reported to the IRS that Hassid made a capital contribution to HCB of $90,000. [3] HCB may again designate Eyal Cohen-Bashi as its PMQ, but in those circumstances, Eyal Cohen-Bashi must comply with the court’s order as stated.

IV. Monetary Sanctions

Section 2025.480, subdivision (j) requires the court to impose a monetary sanction 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.” (Code Civ. Proc., § 2025.480, subd. (j).) As Defendant Eyal Cohen-Bashi’s counsel unilaterally terminated the deposition without the consent of the other parties present and did not subsequently seek a protective order, the court does not find that this Defendant and his counsel acted with substantial justification or that other circumstances would make the imposition of a sanction unjust.

Plaintiff’s counsel requests $6,032.50 in fees in connection with the subject motion and reply. The court has reviewed the submitted papers and finds that it is appropriate to award Plaintiff’s counsel $3,010 in monetary sanctions to reflect 2.5 hours of counsel Zohar’s time at $500 per hour and 4 hours of counsel Todd M. Foreman’s time at $425 per hour along with the $60 motion fee. Monetary sanctions are GRANTED in this amount against Defendant Eyal Cohen-Bashi.

MOTION TO COMPEL PRODUCTION OF DOCUMENTS
I. Plaintiff’s Requests for Production

Plaintiff’s counsel, Zohar, attests that Plaintiff served Defendants with written discovery on January 23, 2018 by mail. (Zohar RFP Decl. ¶ 3.) Defendants’ responses were therefore due by February 27, 2018. (Code Civ. Proc., §§ 2031.260, subd. (a); 1013.) According to Zohar, Defendant Oren Cohen-Bashi obtained an extension to March 2, 2018 and thereafter served his written responses on that date. (Zohar RFP Decl. ¶¶ 4-5.) Zohar states that HCB’s counsel did not request or obtain an extension and that it did not serve its responses until March 12, 2018.

Defendant Oren Cohen-Bashi’s counsel, Dolukhanyan, allegedly sent a meet and confer letter on April 27, 2018, stating that all responsive documents that are in the Cohen-Bashi’s possession, custody, and control have already been produced. (Zohar RFP Decl. ¶ 13, Ex. 2.) According to Zohar, Oren Cohen-Bashi has not produced any documents in response to the requests. (Id. at ¶ 17.) HCB produced documents to Plaintiff n April 18, 2018; Zohar asserts that these documents are exact duplicates of documents produced by Defendant Eyal Cohen-Bashi in 2017. (Zohar RFP Decl. ¶ 11.)
II. The Parties’ Meet and Confer Efforts

A motion to compel further responses to a request for production “shall be accompanied by a meet and confer declaration.” (Code Civ. Proc., § 2031.310, subd. (b)(2).) The declaration must state facts showing a reasonable and good faith attempt at an informal resolution of each issue presented in the motion. (Code Civ. Proc., § 2016.040.) “[A] reasonable and good faith attempt at informal resolution entails something more than bickering with [opposing] counsel. . . . Rather, the law requires that counsel attempt to talk the matter over, compare their views, consult, and deliberate.” (Clement v. Alegre (2009) 177 Cal.App.4th 1277, 1294.) “A determination of whether an attempt at informal resolution is adequate involves the exercise of discretion.” (Stewart v. Colonial W. Agency (2001) 87 Cal.App.4th 1006, 1016, internal ellipses omitted.) Where a party fails to make any real effort at informal resolution, a particularly egregious failure may justify an immediate and outright denial of further discovery. (Obregon v. Superior Court (1998) 67 Cal.App.4th 424, 433-34, citing Townsend v. Superior Court (1998) 61 Cal.App.4th 1431, 1437.)

Plaintiff’s counsel Zohar attests to his efforts to meet and confer with Defendants’ counsels regarding the subject discovery. (Zohar RFP Decl. ¶¶ 9-16.) The parties’ correspondence indicates that Plaintiff’s counsel was discussing the need for further production of documents with both Defendants’ counsels at the time of the filing of the subject motion.

According to Zohar, his office emailed HCB’s counsel, Rabin Saidan (“Saidan”), on May 1 and May 8, 2018, pointing out deficiencies in the production. (Id. at ¶ 14.) Saidan responded that he would be out of the country until May 15 and would not be able to respond until that date. (Ibid.) Zohar also attests that his office emailed Defendant Oren Cohen-Bashi’s counsel regarding this Defendant’s discovery responses on May 8, 2018. (Zohar RFP Decl. ¶ 15.) Dolukhanyan provided a response to Plaintiff’s May 8, 2018 email on May 14, 2018, stating that her client would provide supplemental responses and updated files within two weeks. (Declaration of Milena Dolukhanyan (“Dolukhanyan RFP Decl.”) ¶¶ 8-9, Exs. B, C.)

Although Zohar contends that Plaintiff was forced to file the subject motion on May 15, 2018 due to the motion deadline, it is unclear how Plaintiff calculated that date. Zohar attests that HCB Group produced documents on April 18, 2018 and that Oren Cohen-Bashi provided supplemental responses on April 27, 2018. Assuming these responses were verified, Plaintiff’s deadline to move for supplemental responses would appear have been June 4 and June 11, 2018, respectively. (See Code Civ. Proc., § 2031.310, subd. (c).) Furthermore, the parties’ correspondence does not indicate that Zohar requested an extension or otherwise sought to continue the meet and confer process in response to HCB’s response regarding its counsel’s availability and Oren Cohen-Bashi’s offer to supplement his responses, as would have been permitted under the Code. (See Code Civ. Proc., § 2031.310, subd. (c).)

In these circumstances, the court finds it appropriate to CONTINUE the matter to July 26, 2018 and to ORDER the parties to further meet and confer regarding the subject discovery, in good faith. The parties are granted leave to file amended briefs pursuant to the briefing schedule set forth in Code of Civil Procedure, section 1005, according to the new hearing date.

[1] All subsequent statutory references will be to the Code of Civil Procedure unless otherwise specified.

[2] The testimony of an entity’s PMQ is made on the entity’s behalf, and any testimony offered in such a role is made in his or her role as the representative of the entity and is distinct from testimony made in his or her individual capacity. (See Code Civ. Proc., § 2025.230.)

[3] Plaintiff requests that the court order HCB’s PMQ to provide a yes or no answer to item 5); however, Plaintiff has not presented legal authority that would require a deponent to answer a deposition question with only a “yes” or “no” answer. Plaintiff cites the Rutter Guide on Civil Trial and Evidence to argue that Eyal Cohen-Bashi’s deposition testimony was evasive. (Depo. Mot. 5, citing Wegner, Fairbank & Epstein, Cal. Practice Guide Civil Trials and Evidence (The Rutter Group 2017) ¶ 10:196.) The cited section relates to cross-examining a witness at trial—not the applicable standards at deposition. Depositions are described in the Rutter Guide for Civil Procedures Before Trial and operate under different standards. (See Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2018) ¶ 8:695 et seq.) Accordingly, Plaintiff has not demonstrated she is entitled to the order requested.