Epicor Software Corp. v. Mac Cal Company, Inc., et al.		CASE NO. 113CV247338
DATE: 25 April 2014	TIME: 9:00	LINE NUMBER: 23

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 defendant Mac Cal Company, Inc. (“Mac Cal”) to compel further responses to special interrogatories, set two (“SI”) and for monetary sanctions was argued and submitted.  Plaintiff Epicor Software Corporation (“Epicor”) filed a formal opposition to the motion.

All parties are reminded that all papers must comply with California Rules of Court, rule 3.1110(f).[1]

Statement of Facts

This is a breach of contract action arising out of MacCal’s alleged failure to pay for the use of Epicor’s software. Epicor alleges that on 30 March 2013, it agreed to provide MacCal with the use of its Epicor Express software in exchange for MacCal’s promise to pay roughly $2,000 per month for no less than 60 months. Plaintiff claims that Mac Cal breached the agreement and has refused to pay its monthly bills. In its operative first amended complaint, Epicor asserts two causes of action against MacCal for breach of contract.

Mac-Cal filed a cross-complaint against Epicor in which it alleges Epicor’s software was unsuited to MacCal’s needs and Epicor’s employees negligently misrepresented that the software would work with MacCal’s systems. In its operative second amended cross-complaint, MacCal asserts causes of action against Epicor for breach of express and implied warranty, negligent misrepresentation, and declaratory relief.

Discovery Dispute

On 27 June 2013, Epicor demurred to MacCal’s first amended cross-complaint. On 26 July 2013, the Court sustained the demurrer with ten days leave to amend. On 5 August 2013, MacCal filed its operative second amended cross-complaint.

On 12 December 2013, MacCal served the SI on Epicor. Epicor served responses, containing objections and substantive responses, on 13 January 2014.

On 30 January 2014, MacCal’s counsel sent a letter to Epicor’s counsel, indicating that the objections lacked merit. Epicor’s counsel sent a letter in response on 17 February 2014, stating that the SI seek information irrelevant to the action.

On 25 February 2014, to allow additional time to meet and confer, the parties agreed to extend the time to file a motion to compel further responses to 4 April 2014.

On 6 March 2014, MacCal reiterated that the information sought by the SI is relevant to the action and requested amended responses. On 7 March 2014, Epicor again stated that the information sought by the SI is not relevant.

Dissatisfied with the progress of the meet-and-confer process, on 1 April 2014, MacCal filed this motion to compel further responses to the SI. On 8 April 2014, it filed a notice of errata as to MacCal’s Memorandum of Points and Authorities and the Declaration of Jonathan Jackel. Epicor filed its opposition on 11 April 2014. On 18 April 2014, MacCal filed its reply.

Discussion

I. Motion to Compel Further Responses to the SI

MacCal moves to compel further responses to SI Nos.16-21. The SI seek facts concerning whether Epicor has ever built a similar “Configurator” add-on for use with its Epicor Express software for another customer and the number and identity of these customers (SI Nos.16-18), and whether Epicor has ever built a similar “Configurator” add-on for use with its Epicor 9 software for another customer and the number and identity of these customers (SI Nos. 19-21). Epicor responded to SI Nos. 16 and 19 only with objections, SI Nos. 17 and 20 with substantive responses, and SI Nos. 18 and 21 with both objections and substantive responses.

A. Legal Standard

A party propounding interrogatories may move for an order compelling further responses if that party deems an objection is without merit or too general or a response is incomplete.  (Code Civ. Proc., § 2030.300, subd. (a).)  The statute does not require any showing of good cause in support of a motion.  (See Code Civ. Proc., § 2030.300, subd. (a); see also Coy v. Superior Court (1962) 58 Cal.2d 210, 220-221.)  The burden is on the responding party to justify any objections or failure to fully answer.  (Coy v. Superior Court, supra, 58 Cal.2d at pp. 220-221.)

B. Procedural Issues

As an initial matter, Epicor contends that Mac Cal’s motion is defective because (1) it is based on Mac Cal’s superseded first amended cross-complaint, (2) Mac Cal failed to submit the second amended cross-complaint in support of its motion (i.e. only the first amended cross-complaint is attached as an exhibit to the Declaration of Jonathan Jackel), and (3) Mac Cal’s notice of errata substituting the first amended cross-complaint for the second amended cross-complaint does not cure the defect. Epicor’s contentions are without merit.

First, the right to discovery generally does not depend on the status of the pleadings (i.e. deficiencies in the pleadings do not affect either party’s right to conduct discovery). (Budget Finance Plan v. Superior Court (1973) 34 Cal.App.3d 794, 797; Mattco Forge, Inc. v. Arthur Young & Co. (1990) 223 Cal.App.3d 1429, 1436.) In addition, the SI at issue do not refer to allegations found solely in the first amended cross-complaint. In other words, the second amended cross-complaint is framed with reference to the same general allegations as the first amended cross-complaint. Therefore, whether the motion is based on the first amended cross-complaint or second amended cross-complaint does not affect the outcome of this motion. Second, Epicor has provided no authority for the proposition that a moving party must submit a pleading in support of a motion to compel. Therefore, the submission of the superseded first amended cross-complaint does not render the motion defective. Finally, as the motion is not defective due to the submission of the superseded first amended cross-complaint, whether the notice of errata “cured” the purported defect does not affect the outcome of the motion.

Accordingly, the Court will reach the merits of this motion.

C. Objections to the SI

Epicor raised a number of objections to SI Nos. 16, 18, 19, and 21. In its opposition, Epicor only attempts to justify its objections on the ground of relevance as to SI Nos. 16 and 19. The remaining objections are therefore overruled. (See Coy, supra, 58 Cal.2d at pp. 220-221.)

With regard to the issue of relevance, discovery is allowed for any matter that is not privileged, relevant to the subject matter involved in the action, and reasonably calculated to lead to the discovery of admissible evidence. (Code Civ. Proc., § 2017.010.) The “relevance to the subject matter” and “reasonably calculated to lead to the discovery of admissible evidence” standards are applied liberally with any doubt generally resolved in favor of discovery. (Colonial Life & Acc. Ins. Co. v. Superior Court (1982) 31 Cal.3d 785, 790.) Moreover, for discovery purposes, information is “relevant to the subject matter” if it might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement. (Gonzalez v. Superior Court (1995) 33 Cal.App.4th 1539, 1546.)

SI No. 16 asks, “Did Epicor build a Configurator for any person before March 29, 2012, for the purpose of enabling said person to use the Epicor Express software to prepare cost quotations for building multiple level assemblies, with an unlimited bill of materials tree structure, starting with parts manufactured with raw materials.” SI No. 19 asks the same question concerning the building of a Configurator for use with the Epicor 9 software.

Epicor contends that the information sought is not relevant. In particular, it argues that the specific contract specifications demanded by MacCal were unique. Therefore, it reasons that information concerning other customers using the “Configurator” software add-on has no relevance to this action.

In opposition, MacCal argues that the information is relevant to its cause of action for negligent misrepresentation. MacCal alleges that Epicor’s employees falsely represented that Epicor Express, coupled with the Configurator software add-on, would meet MacCal’s needs as a contract manufacturer. (See Second Amended Cross-Complaint, ¶¶  28-29.) In this regard, MacCal specifically alleges that during Epicor’s sales pitch, Epicor’s employees represented that it had previously built similar software systems using Epicor Express for other contract manufacturers. (See Second Amended Cross-Complaint, ¶ 12.) Mac Cal reasons that the responses to SI Nos. 16 and 19 will assist it in determining whether the alleged representation was false and/or whether Epicor’s employees had a reasonable ground to believe that Epicor’s software would meet Mac Cal’s needs.

MacCal’s argument is persuasive. Determining whether Epicor’s employees falsely represented that they had built similar systems for other contract manufacturers and whether they had a reasonable ground to believe that Epicor’s software would work for Mac Cal might reasonably assist it in discovering admissible evidence in support of its negligent misrepresentation claim. Therefore, Epicor’s objections on the ground of relevance are overruled.

Accordingly, Epicor’s objections to SI Nos. 16, 18, 19 and 21 are OVERRULED.  It’s

D.         Substantive Responses

Epicor provided substantive responses to SI Nos. 17-18 and 20-21.  MacCal contends that further responses are warranted because the substantive responses may be affected by further responses to SI Nos. 16 and 19.

An interrogatory response must be as complete and straightforward as the information available to the responding party permits.  (Code Civ. Proc., § 2030.220, subd. (a).)  The responding party must make a reasonable and good faith effort to obtain the information by inquiry to other persons or organizations, and if the responding party lacks sufficient personal knowledge to fully respond to a request, it shall so state. (Code Civ. Proc., § 2030.220, subd. (c).)

SI Nos. 17 and 18 seek the number of customers and the identity of customers for whom Epicor has built a “Configurator” add-on for use with its Epicor Express software if the answer to SI No. 16 is “yes”. SI Nos. 20 and 21 seek the number of customers and the identity of customers for whom Epicor has built a “Configurator” add-on for use with its Epicor 9 software if the answer to SI No. 19 is “yes”.

In its substantive responses to SI Nos. 17 and 18, Epicor stated, “n/a, The answer to special interrogatory is not yes” and “The answer to special interrogatory 16 is not ‘yes’”, respectively. Its substantive responses to SI Nos. 20 and 21 are, respectively, “The answer to special interrogatory 19 is not ‘yes’” and “n/a. The answer to special interrogatory 18 is not ‘yes’.”

In regards to SI Nos. 17-18 and 20-21, Epicor’s substantive responses are technically straightforward and complete. While it may be the case that Epicor changes its answers to SI Nos. 16 and 19 in the future, at the time Epicor answered SI Nos. 17-18 and 20-21, it did not answer SI Nos. 16 and 19 in the affirmative. Therefore, it had no obligation to provide the additional information concerning the number and identity of customers sought by SI Nos. 17-18 and 20-21.

As a practical matter, however, further responses may be necessary as to SI Nos. 16 and 19, and since the responses to SI Nos. 17-18 and 20-21 are tethered to those responses, further responses to SI Nos. 17-18 and 20-21 may also be required. Thus, in the event Epicor answers “yes” to SI Nos. 16 and/or 19, Epicor is ordered to provide further responses to SI Nos. 17-18 and/or 20-21.

E. Conclusion

MacCal’s motion to compel further responses to the SI is GRANTED as follows: The motion is GRANTED as to SI Nos. 16 and 19. Furthermore, in the event Epicor answers “yes” to SI Nos. 16 and/or 19, Epicor shall provide further responses to SI Nos. 17-18 and/or 20-21.

II. Mac Cal’s Request for Monetary Sanctions

MacCal requests an award of monetary sanctions against Epicor pursuant to Code of Civil Procedure section 2030.300.[2] Code of Civil Procedure section 2030.300, subdivision (d) provides that the court shall impose a monetary sanction against any party or attorney who unsuccessfully makes or opposes a motion to compel further responses to interrogatories unless the party or attorney acted with substantial justification or other circumstances make the imposition of a sanction unjust.

Here, Epicor’s opposition was largely unsuccessful, it did not act with substantial justification and no other circumstances exist that would make the imposition of a sanction unjust.  Thus, an award of monetary sanctions is warranted.

MacCal requests $4,010 in monetary sanctions. Its counsel, Jonathan Jackel, declares that he bills at an hourly rate of $350 and spent 11.2 hours preparing the motion (for a total of $3,920). While the hourly rate is reasonable, the amount of time spent preparing the moving papers is not. The Court finds 5 hours a reasonable time for counsel to draft the motion. Finally, MacCal seeks to recoup the $90 filing fee and court reporter fee for the motion. These costs constitute reasonable expenses.  Accordingly, MacCal’s request for monetary sanctions against Plaintiff is GRANTED IN PART in the amount of $1,840.

Conclusion and Order

MacCal’s motion to compel further responses to the SI is GRANTED as follows: The motion is GRANTED as to SI Nos. 16 and 19. Furthermore, in the event Epicor answers “yes” to SI Nos. 16 and/or 19, Epicor shall provide further responses to SI Nos. 17-18 and/or 20-21. Accordingly, within 20 calendar days of the date of the filing of this Order, Epicor shall serve verified code-complaint further responses, without objections, to SI Nos. 16 and 19, and in the event Epicor answers “yes” to SI Nos. 16 and/or 19, Epicor shall serve verified code-compliant further responses, without objections, to SI Nos. 17-18 and/or 20-21.