Ezequiel Hinojos v. Asset Ventures, LLC, et al.		CASE NO. 113CV256853
DATE: 22 August 2014	TIME: 9:00	LINE NUMBER: 19

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 21 August 2014.  Please specify the issue to be contested when calling the Court and counsel.

On 22 August 2014, the motion of Plaintiff Ezequiel Hinojos to compel initial responses to interrogatories, to compel compliance with a promise to produce and for monetary sanctions was argued and submitted[1].  Defendants Newport Beach Holdings, LLC and Michael Haden did not file formal opposition to the motion.[2]

Background

Plaintiff Hinojos has resided at his residence with his family for over 35 years. This action arises out of a dispute over Plaintiff’s home equity line credit secured by a deed of trust that was obtained from Wells Fargo. Subsequently, there were multiple alleged sales of this loan.

On or about 4 March 2012  (recorded 18 April 2014), Wells Fargo allegedly sold the loan and assigned the deed of trust to Eagle Crest, LLC for $3,500. On or about 9 April 2012 (recorded on 18 April 2014), Eagle Crest, LLC  (“Eagle Crest”) then assigned the deed of trust and sold the loan to Newport Beach Holdings, LLC (“Newport Beach Holding”). Newport Beach Holding then assigned the deed of trust to Asset Ventures on 10 April 2012 and recorded on 20 April 2012.[3]

Plaintiff alleged that Eagle Crest and Newport Beach Holdings had no right to do business in the State of California and therefore the assignment made by Eagle Crest and Newport Beach Holding were defective and are legally void. (See Plaintiff Req. for Judicial Notices No.1-3). Moreover, Defendant Michaela Brychcova, who held herself out to be a corporate officer for both companies, signed the assignments of the deed of trust from Eagle Crest to Newport Beach Holdings and then from Newport Beach Holdings to Asset Ventures.

On 9 April 2013, Defendant Anthony Martinez, President of Asset Ventures, executed a substitution of trustee naming Trustee Corps Trustee and recorded the substitution on 19 April 2013. On 17 April 2013, Trustee Corp executed a Notice of Default and recorded it on April 19, 2013.

On 8 November 2013, the Trustee Corp, on behalf of the defendant, recorded a notice of trustee sale. Asset Ventures purchased the note and deed of trust for $3,500. However, on 12 December 2013, Anthony Martinez stated that the amount was $89,160.15.

On 27 November 27, 2013 Plaintiff filed an action against Defendants. The complaint was amended on 11 March of 2014. Both complaints he made alter ego allegations concerning Anthony Martinez and Asset Ventures.

Discovery Dispute

On 21 January 2014, Plaintiff’s propounded sets of discovery, including requests for the production of documents on Defendants. On 21 March 2014, Defendants responded to the document requests, indicating that they would produce relevant, non-privileged documents related to each request relevant to the instant motion.

On 9 June 2014, Plaintiff’s propounded a set of Special Interrogatories by mail on Defendants. Defendants never responded to these interrogatories.

Dissatisfied with some of Defendants’ document production and with Defendants’ lack of response to the special interrogatories, Plaintiff’s filed the instant motion on 24 July 2014.

Motion to Compel Responses to Interrogatories

A demand to answer interrogatories may be propounded upon an adverse party. Code Civ. Proc. §2030.010. Absent an extension granted by counsel, a party must respond to each interrogatory within 30 days, unless the propounding party grants an extension. Code Civ. Proc. §2030.260. A party making an untimely response waives all objections in that response. Code Civ. Proc. §2030.290(a). A code-compliant response must be as complete and straightforward as the information reasonably available to the party permits. Code Civ. Proc. §2030.220. If a party lacks personal knowledge to provide complete information, that party shall so state, but shall also make a reasonable and good faith effort to obtain such information. Code Civ. Proc. §2030.220(c). A party may seek a motion to compel responses when the adverse party fails to respond to the demand within the timeframe specified by statute or extension. Code Civ. Proc. §2030.290(a).

Plaintiff propounded a set of Special Interrogatories and served them on Defendants by mail on 9 June 2014. Defendants’ responses were due 14 July 2014. Defendants never responded. An order to compel responses is appropriate.

Plaintiff’s motion to compel responses to Special Interrogatories, Set One is GRANTED. Defendants will serve verified, code-compliant responses within 20 days of the date of this order.

Motion to Compel Compliance with Demand to Produce

A party may move to compel compliance with an earlier promise to produce documents. Code Civ. Proc. §2031.320. The moving party must show that the responding party served a statement of compliance, indicating that documents would be produced or allowed for inspection. Code Civ. Proc. §2031.320(a). The movant must also show that the responding party failed to comply with the terms of its statement of compliance. See ibid. The failure to comply can be due to inadequate production by not permitting inspection according to the terms of the statement of compliance.  Code Civ. Proc. §2031.320(a).The motion must include a separate statement outlining the inadequacies of the production or non-production. Cal. Rules of Court, rule 3.1345.

Plaintiff moves to compel compliance with a promise to produce on seven requests for production. The operative language in each of Defendants’ responses is, “Responding party will produce all relevant, non-privileged documents responsive to this request.” The language of this response indicates that Defendants have in their possession at least one document responsive to each category.

Defendants produced no documents for Requests numbered 2, 3, 5, 7,and 8. Defendants’ response, signed under penalty of perjury, indicated that at least one document existed for each category. Defendants’ compliance as to these requests is lacking. Defendants will be ordered to produce documentation responsive to these requests. If no such documentation exists, then Defendants will need to modify their response accordingly.

As to Requests numbered 18 and 19, Defendants’ produced some documents responsive to the request. Plaintiff alleges that more documents must exist. Defendants’ response is code-compliant and Defendant made production of documents. The Court has no evidence before it that other documents responsive to this request exist. It cannot order Defendants to produce documents that do not exist.

Plaintiff’s motion to compel compliance with a promise to produce is GRANTED IN PART. Defendants will produce documents responsive to Requests 2, 3, 5, 7, and 8 within 20 days of the date of this order.

Plaintiff’s motion to compel compliance with a promise to produce is DENIED WITHOUT PREJUDICE to filing a new motion if evidence comes to light that more documents exist but are not produced, as to requests 18 and 19.

Request for Monetary Sanctions

Plaintiff makes a request for monetary sanctions against Defendant and Defendant’s counsel.  The request is code-compliant.

In support of the request for sanctions, Plaintiff cites Code of Civil Procedure, §§ 2023.010, 2023.030, 2030.290(c) and 2030.300(c).  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 and thus is not self-executing.  In other words, to invoke section 2023.030 as a basis for sanctions, the moving party must first be authorized to seek sanctions under the provisions in the Civil Discovery Act applicable to the discovery requests at issue.

Section 2030.290(c) addresses sanctions when a party fails to make a timely response to interrogatories. Section 2031.300(c) similarly addresses sanctions when a party fails to make a timely response to demands for production of documents. Both of these sections state that a monetary sanction is appropriate when a party is unsuccessful in filing or opposing a motion. However, when no opposition papers are filed, the proper source of authority for monetary sanctions is Rule of Court 3.1348(a).

Monetary sanctions are appropriate in this matter.

Plaintiff’s counsel declares[4] that his customary billing rate is $495.00 per hour. This is a reasonable rate within Santa Clara County for an attorney of counsel’s experience.

Counsel declares that he spent 6 hours on the instant motion. The Court does not agree that an individual of counsel’s experience should have taken 6 hours for a motion of this level of complexity. The Court will award sanctions for 3 hours of work.

Counsel also seeks reimbursement of the $90.00 filing fee for this motion. This is a reasonable expenditure and the Court grants reimbursement for this fee.

Counsel refers to costs for printing 8 copies of 268 pages each, but does not declare those costs.[5]

Plaintiff’s request for monetary sanctions is GRANTED IN PART. Defendants Newport Beach Holding, LLC and Michael Haden will pay Plaintiff’s counsel $1575.00 within 20 days of the date of this Order.

Conclusion and Order

Plaintiff’s motion to compel responses to Special Interrogatories, Set One is GRANTED. Defendants will serve verified, code-compliant responses within 20 days of the date of this order.

Plaintiff’s motion to compel compliance with a promise to produce is GRANTED IN PART. Defendants will produce documents responsive to Requests 2, 3, 5, 7, and 8 within 20 days of the date of this order.

Plaintiff’s motion to compel compliance with a promise to produce is DENIED IN PART WITHOUT PREJUDICE to filing a new motion if evidence comes to light that more documents exist but are not produced, as to requests 18 and 19.

Plaintiff’s request for monetary sanctions is GRANTED IN PART. Defendants Newport Beach Holding, LLC and Michael Haden will pay Plaintiff’s counsel $1575.00 within 20 days of the date of this Order.

 

 

________________­­­____________ DATED:

_________________________­­­________________________ HON. SOCRATES PETER MANOUKIAN Judge of the Superior Court County of Santa Clara

 

[1] The caption of the notice of motion refers to the motion as one to compel further responses to interrogatories and the production of documents. The authority cited in the notice of motion speaks to seeking initial responses to interrogatories and the production of documents. Plaintiff’s memorandum of points and authorities makes clear that he seeks initial responses to interrogatories and to compel compliance with a promise to produce, and cites authority to that effect. Counsel is again reminded to proofread motions before submitting them to the Court.

[2] “The failure to file a written opposition or to appear at a hearing or the voluntary provision of discovery shall not be deemed an admission that the motion was proper or that sanctions should be awarded.”  Rule of Court 3.1348(b).

[3] Dates of transfer are not in chronologically order with the other recorded assignment.

[4] While not required by code, the Court prefers that declarations be filed between memoranda of points and authorities and exhibits. This makes it easier for the Court to review the file. The declaration’s position in the instant motion, after the Separate Statement, made it difficult to locate and was initially seen as part of the Separate Statement.

[5] There is a footnote in the declaration that has an unattributed $275 figure, but the Court will not speculate as to its meaning.