SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

SINCO TECHNOLOGIES PTE LTD,

Plaintiff,

vs.

LIEW YEW SOON aka MARK LIEW; SINCO ELECTRONICS (DONGGUAN) CO., LTD.; NG CHER YONG aka CY NG; ML TJOA; and DOES 3 through 20, inclusive,

Defendants.
Case No. 2016-1-CV-301867

TENTATIVE RULING RE: MOTION FOR MONETARY SANCTIONS AND AN ORDER TO SHOW CAUSE WHY DEFENDANT AND/OR DEFENDANT’S ATTORNEYS SHOULD NOT BE SANCTIONED

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on November 8, 2019, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION

This action arises out of alleged trade secret misappropriation. The Third Amended Complaint, filed on July 15, 2019, sets forth the following causes of action: (1) Breach of Contract; (2) Breach of the Covenant of Good Faith and Fair Dealing; (3) Unfair Business Practices; (4) Intentional Interference with Contractual Relations; (5) Intentional Interference with Prospective Economic Advantage; (6) Negligent Interference with Prospective Economic Advantage; (7) Misappropriation of Trade Secrets; (8) Civil Conspiracy; (9) Breach of Duty of Loyalty; and (10) Aiding and Abetting Breach of Duty of Loyalty.

Cross-Complainants Xinge Electronics (Dongguan) Co., Ltd., Liew Yew Soon aka Mark Liew, Ng Cher Yong aka Cy Ng, and Mui Liang Tjoa aka ML Tjoa (collectively, “Cross-Defendants”) have filed a First Amended Cross-Complaint (“FACC”) alleging the case is actually about a scheme of retaliation. The FACC, filed on October 4, 2019, sets forth the following causes of action: (1) Breach of Implied Contract; (2) Breach of Covenant of Good Faith and Fair Dealing; (3) Breach of Fiduciary Duty; (4) Fraud; (5) Negligence; (6) Fraudulent Concealment; (7) Conversion; (8) Accounting; (9) Conspiracy; (10) Intentional Interference with Contractual Relations; (11) Intentional Interference with Prospective Economic Advantage; and (12) Unfair Business Practices.

Plaintiff Sinco Technologies PTE Ltd.’s (“Sinco”) now moves for monetary sanctions against Mark Liew (“Liew”) and for an order to show cause as to why Defendant should not be further sanctioned as originally requested on February 26, 2019.

II. REQUEST FOR JUDICIAL NOTICE

Sinco requests judicial notice of a number of documents filed in this case and in a related federal action – Sinco Technologies PTE Ltd. v. Sinco Electronics (Dongguan) Co. Ltd., et al., Case No. 17-cv-05517-EMC (JCS). The Court can take judicial notice of the documents as court records. (Evid. Code, § 452, subd. (d).) Sinco’s request for judicial notice is GRANTED.

III. DISCUSSION

According to its notice of motion, Sinco moves for: (1) an order imposing monetary sanctions against Liew; and (2) “an order to show cause as to why [Liew] should not be further sanctioned as originally requested on February 26, 2019, and any other sanctions this Court believes are necessary and supported by this motion and supporting declaration.”

A. Order to Show Cause

The Court will first address the request for an order to show cause. Sinco ties this request to the motion filed on February 26, 2019 – a motion for evidentiary sanctions against Liew for failure to comply with Court-ordered discovery. This motion was ultimately heard on June 28, 2019, together with a separate motion for an order to show cause re: Liew for indirect contempt for violating the Court’s order filed on December 1, 2018. On July 2, 2018, the Court denied both motions.

Sinco’s request for further sanctions based on the motion for evidentiary sanctions is motion for reconsideration because Sinco is requesting relief based on a motion already ruled on by the Court. Sinco filed the motion on August 16, 2019. The motion is untimely because a reconsideration motion must be made within 10 days after service of the notice of entry of the underlying order. (See Code Civ. Proc., § 1008, subd. (a).) Consequently, there is no basis to provide the relief requested.

B. Monetary Sanctions

Sinco requests monetary sanctions against Liew for conduct spanning from June 2018 to the present. More specifically, Sinco contends it is entitled to monetary sanctions based on Liew’s failure to comply with the Court’s order of December 17, 2018, and based on Liew’s purported perjury. Sinco seeks sanctions of $93,317.25 for attorneys’ fees, and $111,549 for utilizing the e-discovery platform “Everlaw” to host discovery documents from June 2018 to the present. Sinco also requests $15,000 for work on the current motion for sanctions.

As an initial matter, Liew argues in opposition that the notice of motion is defective. Liew contends the notice does not properly state the grounds for sanctions and also states grounds that are not reasons for imposing sanctions based on a failure to produce documents. This argument lacks merit. The notice states the grounds for the motion, including the failure to comply with the Court’s order of December 17, 2018, and Liew’s purported perjury. The motion is not based solely on Liew’s failure to produce documents.

Sinco asserts the deposition of Liew and document production did not occur as ordered by the Court on December 17, 2018. While this is technically true because both were not completed by the ordered dates in early January 2019, the deposition eventually took place on March 8, 2019, and there has also been a response to the discovery at issue – Request for Production of Documents, Set Four, request nos. 81-172 – although Sinco contends the response is not code-compliant.

In opposing the motion, Liew argues no monetary sanctions should be imposed because most of the problems have been the fault of Liew’s former counsel, not Liew, and Sinco has not met its burden of proof as to what amount of attorneys’ fees is reasonable, if any. Sinco’s second point is dispositive.

In its papers, Sinco goes through a lengthy history of the discovery proceedings in this case and then comes up with a total amount of fees relating to all of the conduct. In support of the amount of fees, Sinco provides billing entries in chronological order starting on August 14, 2018, and ending on June 24, 2019. (Declaration of Daniel Gaitan in Support of Motion for (1) Monetary Sanctions Against Defendant, and (2) An Order to Show Cause Why Defendant and/or Defendant’s Attorneys Should not be Sanctioned (“Gaitan Decl.”), Ex. AA.) The billing entry exhibit is 35 pages long. Each page is titled “Total Fees.” There are approximately eight billing entries on each page, so there are approximately 280 entries in all, so of which include multiple tasks or subtasks. The moving papers do not segregate the requested fees in any way that can be linked to specific sanctionable conduct. It is not the Court’s job to do so.

Sinco later filed the Supplemental Declaration of Daniel Gaitan in Support of Plaintiff’s Motion for Monetary Sanctions (“Gaitan Supp. Decl.”). The supplemental declaration includes a table of various subject entries, showing hours spent and amounts billed for each entry. The entries are listed as: (1) Meet & Confer Re: Deposition; (2) Meet & Confer Re: Documents and Depositions; (3) Deposition Rescheduling; (4) Motion to Compel Documents and Depositions; (5) Informal Discovery Conference: Failure to Appear; (6) Order to Show Cause of Contempt; (7) Evidentiary Sanctions; (8) Evidentiary Sanctions + OSC for Contempt; (9) Monetary Sanctions Motion; and (10) Everlaw Database: Hosting Discovery. (Gaitan Supp. Decl., p.2:9-15.)

The supplemental declaration includes items for which discovery sanctions are not generally awarded, such as meeting and conferring and deposition rescheduling. It also includes requests for sanctions in connection with at least one motion on which Sinco did not prevail – the motion for evidentiary sanctions. Sinco has not attempted to show whether it already received sanctions for any of the listed motions, or whether it was already denied sanctions requests. With regard to the monetary sanctions motion now before the Court, Sinco provides no evidence of the time spent on the motion, simply stating the amount billed is “estimated” at $15,000 (or more). Sinco also provides no basis for awarding sanctions for the Everlaw Database. For all of these reasons, it cannot be determined based on the papers presented what amount of sanctions is reasonable and how the amounts requested connect to conduct for which sanctions can be awarded.

Further, “[t]he sanctions the court may impose are such as are suitable and necessary to enable the party seeking discovery to obtain the objects of the discovery he seeks, but the court may not impose sanctions which are designed not to accomplish the objects of discovery but to impose punishment.” (Laguna Auto Body v. Farmers Ins. Exchange (1991) 231 Cal.App.3d 481, 488, citing Motown Records Corp. v. Superior Court (1984) 155 Cal.App.3d 482, 489.) As stated previously, Liew’s deposition has already taken place and document production is in progress. It is not clear how the requested sanctions will aid Sinco in obtaining discovery as opposed to just punishing Liew.

In addition to Liew’s failure to comply with the December 2018 order, Sinco argues Liew has committed perjury. Sinco asserts Liew signed a verification on April 29, 2019, acknowledging his knowledge of Sinco’s request for production of documents, set four, but on June 17, 2019, he signed a declaration stating he was ignorant of the request for production of documents. (Gaitan Decl., ¶¶ 4 and 6, Exs. A and C.)

The Court’s order dated July 2, 2019 addressed the issue of Liew’s purported perjury and concluded the evidence indicated Liew did not completely understand his discovery obligations. (See Order Re: Motion for OSC Re: Contempt; Motion for Discovery Sanctions, pp. 3:27-4:2.) To the extent the Court can consider this issue again (which is arguably an untimely motion for reconsideration), the Court finds no reason to deviate from its original conclusion. While the evidence submitted by Sinco raises some doubts as to Liew’s truthfulness, the evidence does not clearly demonstrate Liew intentionally committed perjury because it can be construed as showing a misunderstanding of the obligations to both provide a discovery response and to produce documents in connection with the response.

In sum, the Court finds Sinco has not met its burden to establish a right to the requested sanctions.

C. Conclusion

Sinco’s motion for monetary sanctions and an order to show cause why Defendant and/or Defendant’s attorneys should not be sanctioned is DENIED.

The Court will prepare the order if this tentative ruling is not contested.