ZF Micro Solutions v. Trepel		CASE NO. 113CV241111
DATE: 25 April 2014	TIME: 9:00	LINE NUMBER: 16

This matter will be heard by the Honorable Judge Socrates Peter Manoukian in Department 19 in the Old Courthouse, 2nd Floor, 161 North First Street, San Jose. Any party opposing the tentative ruling must call Department 19 at 408.808.6856 and the opposing party no later than 4:00 PM Thursday 24 April 2014.  Please specify the issue to be contested when calling the Court and counsel.

On 25 April 2014, the motion of Anthony J. Trepel (“Defendant”)[1] for an order compelling Plaintiffs ZF Micro Solutions, Inc. and David Feldman (“Plaintiffs”) to respond to Defendant’s first set of special interrogatories, form interrogatories and request for production of documents sanctions, deeming requests for admissions, set one, to be admitted, imposing monetary sanctions Against Plaintiffs in the amount of $1355.00 was argued and submitted.

Plaintiffs did not file formal opposition to the motion.[2]

Statement of Facts

This is an action for legal malpractice.  According to the allegations of the second amended complaint (“SAC”), in March of 2002 defendants Anthony J. Trepel (“Trepel”) and Trepel Law Offices (“Trepel Law”) began representing plaintiffs ZF Micro Solutions, Inc. (“Solutions”) and David Feldman (“Feldman”) (collectively, “Plaintiffs”), its chief executive officer, in connection with a dispute between Feldman, Solutions and a predecessor corporation, ZF Micro Devices (“Devices”), and National Seminconductor (“NSC”).  (SAC, ¶ 8.)  The litigation included Solutions as assignee of the claims of Devices.  (Id., ¶ 9.)  During the course of the litigation, NSC made a claim that the assignment of the assets to Devices to Solutions was insufficient to assign the tort claims, hence Solutions was not the real party in interest or otherwise did not have standing.  (Id.)

Despite the frivolity of NSC’s claim, Trepel and Trepel Law advised Feldman to obtain shareholder written consent and approval to assignment of the tort claims of Devices to Solutions.  (SAC, ¶ 10.)  Trepel and Trepel law were negligent in obtaining such approval, thereby leaving Plaintiffs open to claims by Devices’ shareholders.  (Id., ¶ 11.)  Indeed, shareholders TAT Capital Partners, Ltd. (“TAT”) and Sands Brothers Venture Capital LLC and SB New Paradigm Associates LLC (collectively, “Sands”) sued Plaintiffs (and other shareholders) in the Santa Clara Superior Court action entitled TAT Capital Partners, Ltd., et al. v. ZF Micro Solutions, Inc., et al., Case No. 1-05-CV-035531 (the “TAT Action”).  (SAC, ¶ 12.)  That litigation also consisted of Plaintiffs’ claims against TAT and Sands in a cross-complaint.  (Id.)  The court severed the cross-complaint and tried the claims of TAT and Sands, which resulted in a multi-million judgment against Feldman, Solutions and others.  (Id.)  Plaintiffs allege that the defendants committed professional negligence in the course of representing them in the TAT Action and include a laundry list of purportedly negligent conduct.  (SAC, ¶ 28.)

Trepel and a successor entity (whether in reality Trepel Law or Trepel McGrane Greenfield LLP (“TMG”) a/k/a Trepel Greenfield Sullivan & Draa a/k/a Greenfield Sullivan Draa & Harrington LLP (“TGSD”)) continued to represent Plaintiffs in the TAT Action until December 2012.  (SAC, ¶ 13.)

In July 2010, Trepel, on behalf of himself and Trepel Law or TMG suggested that Feldman and his sister Marsha Armstrong each deposit with him $100,000 for the prosecution of the cross-complaint on behalf of Solutions to its conclusion, advisement on their pending appeal and possible bankruptcy and assistance in their legal difficulties.  (SAC, ¶¶ 14-16.)  Plaintiffs’ primary goal was to stop the collection efforts of TAT and Sands on the judgment they had obtained.  (SAC, ¶ 16.)  Unbeknownst to Feldman at that time, Trepel and Trepel law were in the process of joining with defendant TMG, a fact all defendants agreed to conceal and did conceal from Plaintiffs.  (Id., ¶ 17.)  Feldman ultimately signed a fee agreement drafted by Trepel and signed by Trepel Law which was unconscionable and illegal.  (Id., ¶ 18 and Exhibit A.)  Trepel Law and TMG completed their merger on or about August 28, 2010, with its individual partners assuming Trepel’s obligations to Plaintiffs.  (SAC, ¶ 19.)  None of the defendants sought or obtained Feldman’s written or oral permission to the substitution of TMG as his or Solutions’ attorney, nonetheless, the substitution took place, with TMG and later TGSG representing Plaintiffs until December 2012.  (SAC, ¶ 20.)

The defendants continued to conceal from Feldman and the court both the merger and the fact that Trepel Law no longer existed and was incapable of performing services and made representations that the relationship to the other defendants was only a change in name and address.  (SAC, ¶ 22 and Exhibit B.)  Defendant Bernard Greenfield conspired with Trepel to conceal the merger in order to assist in the embezzlement of the retainer paid by Feldman.  (SAC, ¶ 23.)

Discovery Dispute

112 February 2014, defendant served the foregoing discovery.  The time to respond to the discovery was 19 March 2014.  No responses were received, and this motion was filed on 26 March 2014.

Although no meet and confer is required for this motion, the parties are always encouraged to work out their differences informally so as to avoid the necessity for a formal order.  (McElhaney v. Cessna Aircraft Co. (1982) 134 Cal.App.3d 285, 289.)   If no response has been made to discovery requests within the time permitted by Code of Civil Procedure, the “meet and confer” rule does not come into play, and compliance therewith is not prerequisite to a motion to compel answers.  See Code of Civil Procedure, § 2030.290(b); see Sinaiko Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007) 148 Cal. App. 4th 390, 404; Leach v. Superior Court (1980) 111 Cal. App. 3d 902, 906.)

The motion is GRANTED.  Plaintiffs shall respond to Defendant’s first set of special interrogatories, form interrogatories and request for production of documents sanctions without objection and within 20 days of the date of the filing of this Order.

Defendant’s motion deeming requests for admissions, set one, to be admitted is GRANTED.  The requests are deemed ADMITTED.

Sanctions

Defendant makes a request for monetary sanctions.  The request, while somewhat problematic, is code-compliant.

Code of Civil Procedure, § 2023.040 states: “A request for a sanction shall, in the notice of motion, identify every person, party, and attorney against whom the sanction is sought, and specify the type of sanction sought. The notice of motion shall be supported by a memorandum of points and authorities, and accompanied by a declaration setting forth facts supporting the amount of any monetary sanction sought.”

Defendant requests an award of monetary sanctions against Plaintiffs pursuant to Code of Civil Procedure sections 2023.010, 2023.020, and 2023.030.

Section 2023.010 defines acts that constitute misuses of the discovery process, and does not itself set forth any provisions regarding the issuance of a monetary sanction.  Next, section 2023.030 provides that sanctions may be imposed for misuses of the discovery process “[t]o the extent authorized by the chapter governing any particular discovery method or any other provision of this title. . .”  As such, section 2023.030 does not provide an independent basis for an award of sanctions.  Finally, although section 2023.020 authorizes an award of sanctions against a party or attorney for failure to satisfy a meet and confer obligation, Defendant did not have any such obligation in this matter.

A party filing a discovery motion for which no opposition was filed recover sanctions under Code of Civil Procedure, §§ 2030.300(d), 2031.310(h), 2031.320(b) and 2033.290(d) because the responding party did not “. . . unsuccessfully make[ ] or oppose[ ]. . .” the motions.[3]   Since no opposition was filed, the correct citation of authority would have been Rule of Court 3.1348(a) which states:

“The court may award sanctions under the Discovery Act in favor of a party who files a motion to compel discovery, even though no opposition to the motion was filed, or opposition to the motion was withdrawn, or the requested discovery was provided to the moving party after the motion was filed.”

In the future, counsel would be advised to add the following language in the notice of your motion: “If you wish to oppose the relief requested in this motion, you must timely file a written opposition in compliance with all Court rules.  If you fail to do so, the court may treat your failure to oppose the motion as a waiver of your right to oppose this motion and may grant the relief requested pursuant to Rule of Court 3.1348(a).”

However, this Court still believes that Defendant is entitled to monetary sanctions because elsewhere in his supporting memorandum of points and authorities he cites the cases of Sinaiko v. Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007) 148 Cal App 4th 390[4] which provides some support for the imposition of sanctions when a motion is unopposed.  In Appleton v. Superior Court (1988) 206 Cal. App. 3d 632, the imposition of sanctions following a “deemed admitted” motion is mandatory whether the motion is opposed or not.[5]

Another issue with the request for monetary sanctions is the failure to break down the seven hours claimed between preparing the motion, responding to the opposition and to the appearance at the hearing on this motion.  Sanctions should be awarded only for expenses actually incurred.  (See Tucker v. Pacific Bell Mobile Services (2010) 186 Cal.App.4th 1548, 1551.)

It is preferable that the hourly time be broken down between the various tasks.  That was not done here.  The Court will allow three hours for the preparation of the motion and $60 for the filing fee.

The request for monetary sanctions is GRANTED.  Plaintiffs shall pay the sum of $615.00 to counsel for Defendant within 20 days of the date of the filing of this Order.

 

 

Conclusion

The motion to compel discovery responses is GRANTED as follows:  Plaintiffs shall respond to Defendant’s first set of special interrogatories, form interrogatories and request for production of documents sanctions without objection and within 20 days of the date of the filing of this Order.

Defendant’s motion deeming requests for admissions, set one, to be admitted is GRANTED.  The requests are deemed ADMITTED.

The request for monetary sanctions is GRANTED.  Plaintiffs shall pay the sum of $615.00 to counsel for Defendant within 20 days of the date of the filing of this Order.